Researcher on both sides of HP bug battle

NEWS An unusual legal case involving an allegedly flawed floppy drive chip has taken another strange turn: The man who brought the issue to public attention is now representing one of the computer makers he sued for shipping laptops containing the chip. According to court documents unsealed in the past two weeks, former IBM engineer Phillip Adams was paid $27m, or about £17.3m, by Hewlett-Packard to help the computer maker defend lawsuits over the very bug Adams had publicised. Adams was at the centre of many of those lawsuits, including a case in which he had sued computer makers on behalf of the state of California. Adams' flip-flop from plaintiff to defendant's aide is the latest development in the odd saga, which began several years back when Adams claimed that certain floppy drive controllers were hampered by a flaw that, under particular circumstances, could cause data to be incorrectly written to a floppy disk, leaving customers with faulty data yet unaware there was a problem. The alleged bug attracted little notice until late 1999, when Toshiba agreed to a settlement worth up to $2.1bn, even though there appeared to be few, if any, customers claiming to have lost data as a result of a flaw. The Toshiba settlement sent shockwaves through the computer industry. Days after the settlement was made public, class-action lawyers sued five additional computer makers, including Hewlett-Packard, in what the computer companies called copycat actions. The case then largely fell off the radar screen, but it re-emerged on Monday after newly unsealed documents in the California case revealed that Adams had inked a deal with Hewlett-Packard to provide a fix for the bug and help the company defend private legal actions over the chip. Although it had denied there was a problem, HP quietly struck a deal with Adams in May 2000, paying him more than $27m for a license to use a software patch he had developed and to retain him as a consultant in defending against a lawsuit he had helped bring. In August of the same year, HP placed ads in major newspapers, pointing customers to a Web site where they could determine if their PC might be affected and, if so, download a software patch. The state of California charges that the computer maker and Adams tried to hide the deal, which it says thwarted its effort to pursue the claim that Adams himself had initiated under the state's False Claims Act, a law that allows private citizens to sue on behalf of the state. In a statement, HP defended its actions in paying millions to Adams, saying that by licensing a software patch for the problem "the company acted entirely ethically and in the best interests of consumers". HP maintains that it was upfront about retaining Adams, saying it identified the bug fix on its Web site as having come from him and sent the state a copy of its contract with Adams in September 2000. In late 2000, California asked the judge in the case to prevent HP from using Adams' information to defend against the suit. For several months, HP and the state battled over whether HP could use the information. In October 2001, the two sides agreed to an order removing one of HP's law firms and preventing Adams from assisting in HP's defense of the California claim. Adams remains free, however, to help the company defend against other actions, including Texas-based class-action suits against HP and recently acquired Compaq Computer. The wranglings only became public in recent weeks as the court documents became unsealed, after what some in the attorney general's office describe as an intense effort by HP to keep the squabble out of the public eye. A representative for state attorney general Bill Lockyer said the state took action against HP over its deal with Adams in an effort to prevent future whistle-blowers from jumping ship. "The actions of Mr. Adams and HP in this case were extraordinary," the representative said. The state wants to make sure a repeat of this case does not occur, "specifically, a whistle-blower coming forward, working with our office, and then behind our backs cutting a deal with the other side." HP declined to comment beyond its statement.

---