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Wal-Mart sues Amazon
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October 16, 1998: 5:43 p.m. ET
Discount retailer charges online bookseller with stealing trade secrets
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NEW YORK (CNNfn) - Wal-Mart Stores Inc. on Friday filed a lawsuit in an Arkansas court against Amazon.com Inc., claiming the online bookseller has infringed on its trade secrets.
Wal-Mart, the Bentonville, Ark.-based discount retail giant, is known for its innovative use of marketing and distribution technologies, which the company said has helped it gain "tremendous competitive advantage" in the retail industry.
The company charged Amazon with violating the Arkansas Trade Secrets Act, claiming the company obtained classified distribution, merchandising and warehousing technologies from former Wal-Mart employees hired by the company.
The company has asked the court to issue an injunction against Amazon to prevent it from replicating proprietary Wal-Mart technology.
Wal-Mart noted that Amazon, by way of its sales of compact discs, computer games and other entertainment products, is a direct competitor.
Wal-Mart also named Drugstore.com and venture-capital firm Kleiner Perkins Caufield & Byers, which holds ownership interest in both Amazon and Drugstore.com, in its suit.
The company believes Amazon has hired at least 15 people who have knowledge of Wal-Mart's trade secrets, including Chief Information Officer Richard Dalzell, who joined the company in 1997 after serving as Wal-Mart vice president, information systems division.
The company is also asking the court to prevent Amazon and the other company from hiring former Wal-Mart employees in capacities that would enable those individuals to use Wal-Mart trade secrets against them.
Wal-Mart (WMT) shares closed at 66-5/8, up 2. Amazon (AMZN) shares finished at 99-7/16, up 2-3/8. 
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Wal - Mart sales surge - Oct. 6, 1998
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