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Oracle directors give blessing to shareholder lawsuit against Larry Ellison and Safra Catz

Published August 22, 2019

Three years after closing a $9.3 billion deal to acquire NetSuite, several Oracle board members have written an extraordinary letter to the Delaware Court, approving a shareholder lawsuit against company executives Larry Ellison and Safra Catz over the 2016 deal. Reuters broke this story.

According to Reuters’ Alison Frankel, three board members, including former U.S. Defense Secretary Leon Panetta, sent a letter on August 15th to Sam Glasscock III, vice chancellor for the Court of the Chancery in Georgetown, Delaware, approving the suit as members of a special board of directors entity known as the Special Litigation Committee.

The lawsuit is what is called in legal parlance a derivative suit. According to the site Justia, this type of suit is filed in cases like this. “Since shareholders are generally allowed to file a lawsuit in the event that a corporation has refused to file one on its own behalf, many derivative suits are brought against a particular officer or director of the corporation for breach of contract or breach of fiduciary duty,” the Justia site explained.

The letter went on to say there was an attempt to settle this suit, which was originally launched in 2017, through negotiation outside of court, but when that attempt failed, the directors wrote this letter to the court stating that the suit should be allowed to proceed.

As Frankel wrote in her article, the lawsuit, which was originally filed by the Firemen’s Retirement System of St. Louis, could be worth billions:

One of the lead lawyers for the Firemen’s fund, Joel Friedlander of Friedlander & Gorris, said at a hearing in June that shareholders believe the breach-of-duty claims against Oracle and NetSuite executives are worth billions of dollars. So in last week’s letter, Oracle’s board effectively unleashed plaintiffs’ lawyers to seek ten-figure damages against its own members.

It’s worth pointing out, as we reported at the time of the NetSuite acquisition, that Larry Ellison was involved in setting up NetSuite in the late 1990s and was a major shareholder at the time of the deal.

Oracle was struggling to find its cloud footing in 2016, and it was believed that by buying an established SaaS player like NetSuite, it could begin to build out its cloud business much faster than trying to develop something like it internally. A June Synergy Research SaaS marketshare report, while admitting the market was fragmented, still showed Oracle was far behind the pack in spite of that deal three years ago.

SaaS Q119 1

While there have been bigger deals in tech M&A history, including Salesforce’s acquisition of Tableau for $15.7 billion earlier this year, it’s still stands with some of the largest.

We reached out to Oracle regarding this story, but it declined to comment.

 

 

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Pro gamer Tfue files lawsuit against esports org over ‘grossly oppressive’ contract

Published May 21, 2019

Turner “Tfue” Tenney, one of the world’s premier streamers and esports pros, has filed a lawsuit against esports organization Faze Clan over a “grossly oppressive, onerous and one-sided” contract, according to THR.

The complaint alleges that Faze Clan’s Gamer Agreement relegates up to 80% of the streamer’s earnings from branded content (sponsored videos) to Faze Clan, and that the contract hinders Tfue from pursuing and earning money from sponsorship deals that Faze Clan hasn’t approved.

Tfue’s lawyer, Bryan Freedman of Freedman + Taitelman, took the complaint to the California Labor Commissioner with issues that span far beyond financial contracts. Freedman wrote that Faze Clan takes advantage of young artists and actually jeopardizes their health and safety, noting an incident where Tfue was allegedly pressured to skateboard in a video and injured his arm. Freedman also wrote that Faze Clan pressured Tfue to live in one of its homes where he was given alcohol before being 21 years old, and encouraged to illegally gamble.

From the complaint:

In one instance, Tenney suffered an injury (a deep wound that likely required stitches) which resulted in permanent disfigurement. Faze Clan also encourages underage drinking and gambling in Faze Clan’s so-called Clout House and FaZe House, where Faze Clan talent live and frequently party. It is also widely publicized that Faze Clan has attempted to exploit at least one artist who is a minor.

Faze Clan issued the following statement on Twitter following the news:

A follow-up from FaZe Clan on today’s unfortunate situation. pic.twitter.com/qm6sK8v88B

— FaZe Clan (@FaZeClan) May 21, 2019

Faze Clan claims that it has taken no more than 20% of Tfue’s earnings from sponsored content, which amounts to a total of $60,000. The owner of Faze Clan, Ricky Banks, took to Twitter to make his case, showing the incredible growth of Tfue’s popularity across Twitch and YouTube since signing with Faze Clan.

I recruited Tfue to FaZe Clan in April of 2018. These are graphs from both his YouTube & Twitch channels following the mark of our relationship. pic.twitter.com/c7m3QwsoTZ

— FaZe Banks (@Banks) May 20, 2019

As it stands now, Tfue boasts more than 120 million views on Twitch, more than 10 million YouTube subscribers and 5.5 million followers on Instagram.

Banks also reiterated Faze Clan’s official statement saying that the company has taken 20% of Tfue’s earnings from branded deals, totaling $60,000.

OK LAST TWEET – To clarify Turners contract does outline splits in prizes, ad revenue, stuff like that. But again we’ve collected absolutely none of it with no plans to and that was very clear to him. We have collected a total of $60,000 from 300k in brand deals (20%). That’s it

— FaZe Banks (@Banks) May 20, 2019

The Tfue claim, however, seems to take issue with the content of the agreement, not necessarily its execution, and the general legality of these types of gamer agreements across the esports landscape. Moreover, the complaint alleges that Tfue lost potential earnings due to his agreement with Faze Clan and their own conflicts of interest with various brands interested in a sponsorship.

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Facebook sues analytics firm Rankwave over data misuse

Published May 11, 2019

Facebook might have another Cambridge Analytica on its hands. In a late Friday news dump, Facebook revealed that today it filed a lawsuit alleging South Korean analytics firm Rankwave abused its developer platform, and has refused to cooperate with a mandatory compliance check regarding how it used Facebook data.

TechCrunch has attained a copy of the lawsuit that alleges that Rankwave misused Facebook data outside of the apps where it was collected, purposefully delayed responding to a cease-and-desist order, claimed it didn’t violate Facebook policy, lied about not using its apps since 2018 when they were accessed in April 2019, and then refused to comply with a mandatory audit of its data practices.

“By filing the lawsuit, we are sending a message to developers that Facebook is serious about enforcing our policies, including requiring developers to cooperate with us during an investigation” Facebook’s director of platform enforcement and litigation Jessica Romero wrote. Facebook tells TechCrunch that “To date Rankwave has not participated in our investigation and we are trying to get more info from them to determine if there was any misuse of Pages data.”

 

Facebook explains that “Rankwave used the Facebook data associated with Rankwave’s apps to create and sell advertising and marketing analytics and models — which violated Facebook’s policies and terms”  and that it “failed to comply with Facebook’s requests for proof of Rankwave’s compliance with Facebook policies, including an audit.”

More specifically, Facebook cites that its “Platform Policies largely restrict Developers from using Facebook data outside of the environment of the app, for any purpose other than enhancing the app users’ experience on the app.” But Rankwave used Facebook data outside those apps.

Facebook alleges that “Rankwave’s B2B apps were installed and used by businesses to track and analyze activity on their Facebook Pages . . . Rankwave operated a consumer app called the “Rankwave App.” This consumer app was designed to measure the app user’s popularity on Facebook by analyzing the level of interaction that other users had with the app user’s Facebook posts. On its website, Rankwave claimed that this app calculated a user’s ‘Social influence score’ by ‘evaluating your social activities’ and receiving ‘responses from your friends.’”

Facebook is seeking monetary damages plus injunctive relief restraining Rankwave from accessing the Facebook Platform, requiring it to comply with Facebook’s audit, requiring that it delete all Facebook data.

You can learn more about Rankwave’s analytics practices from this 2014 presentation.

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Smartcar accuses $50M-funded rival Otonomo of API plagiarism

Published April 23, 2019

Ruthless copying is common in tech. Just ask Snapchat. However, it’s typically more conceptual than literal. But car API startup Smartcar claims that its competitor Otonomo copy-and-pasted Smartcar’s API documentation, allegedly plagiarizing it extensively to the point of including the original’s typos and randomly generated strings of code. It’s published a series of side-by-side screenshots detailing the supposed theft of its intellectual property.

Smartcar CEO Sahas Katta says “We do have evidence of several of their employees systemically using our product with behavior indicating they wanted to copy our product in both form and function.” Now a spokesperson for the startup tells me “We’ve filed a cease-and-desist letter, delivered to Otonomo this morning, that contains documented aspects of different breaches and violations.”

The accusations are troubling given Otonomo is not some inconsequential upstart. The Israel-based company has raised over $50 million since its founding in 2015, and its investors include auto parts giant Aptiv (formerly Delphi) and prestigious VC firm Bessemer Ventures Partners. Otonomo CMO Lisa Joy provided this statement in response to the allegations, noting it will investigate but is confident it acted with integrity:

Otonomo prides itself on providing a completely unique offering backed by our own intellectual property and patents. We take Smartcar’s questions seriously and are conducting an investigation, but we remain confident that our rigorous standards of integrity remain uncompromised. If our investigation reveals any issues, we will immediately take the necessary steps to address them.

Both startups are trying to build an API layer that connects data from cars with app developers so they can build products that can locate, unlock, or harness data from vehicles. The 20-person Mountain View-based Smartcar has raised $12 million from Andreessen Horowitz and NEA. A major deciding factor in who’ll win this market is which platform offers the best documentation that makes it easiest for developers to integrate the APIs. 

“A few days ago, we came across Otonomo’s publicly available API documentation. As we read through it, we quickly realized that something was off. It looked familiar. Oddly familiar. That’s because we wrote it” Smartcar explains in its blog post. “We didn’t just find a few vague similarities to Smartcar’s documentation. Otonomo’s docs are a systematically written rip-off of ours – from the overall structure, right down to code samples and even typos.”

The screenshot above comparing API documentation from Smartcar on the left and Otonomo on the right appears to show Otonomo used nearly identical formatting and the exact same randomly generated sample identifier (highlighted) as Smartcar. Further examples flag seemingly identical code strings and snippets.

Smartcar founder and CEO Sahas Katta

Otonomo has pulled down their docs.otonomo.io documentation website, but TechCrunch has reviewed an Archive.org Wayback Machine showing this Otonomo site as of April 5, 2019 featured sections that are identical to the documentation Smartcar published in August 2018. That includes Smartcar’s typo “it will returned here”, and its randomly generated sample code placeholder “”4a1b01e5-0497-417c-a30e-6df6ba33ba46” which both appear in the Wayback Machine copy of Otonomo’s docs. The typo was fixed in this version of Otonomo’s docs that’s still publicly available, but that code string remains.

“It would be a one in a quintillion chance of them happening to land on the same randomly generated string” Smartcar’s Katta tells TechCrunch.

Yet curiously, Otonomo’s CMO told TechCrunch that “The materials that [Smartcar] put on their post are all publicly accessible documentation, It’s all public domain content.” But that’s not true, Katta argues, given the definition of ‘public domain’ is content belonging to the public that’s uncopyrightable. “I would sure hope not, considering . . . we have proper copyright notices at the bottom. Our product is our intellectual property. Just like Twilio’s API documentation or Stripe’s, it is published and publicly available — and it is proprietary.”

Otonomo’s Lisa Joy noted that her startup is currently fundraising for its Series C, which reportedly already includes $10 million from South Korean energy and telecom holdings giant SK. “We’re in the middle of raising a round right now. That round is not done” she told me. But if Otonomo gets a reputation for allegedly copying its API docs, that could hurt its standing with developers and potentially endanger that funding round.

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VSCO sues PicsArt over photo filters that were allegedly reverse engineered

Published April 5, 2019

Photo-editing app-maker VSCO has filed a lawsuit against competitor PicsArt.

The suit focuses on 19 PicsArt filters that were supposedly “reverse engineered from VSCO’s filters,” with VSCO alleging it has become a legal issue involving false advertising and violations of the app’s terms of service.

“VSCO has invested significant time and resources in developing its presets [a.k.a. filters], which represent valuable intellectual property of VSCO,” the company writes.

In a statement, PicsArt denied the suit’s claims:

VSCO is not a direct competitor, but they clearly feel threatened by PicsArt. VSCO’s claims are meritless. It’s disappointing that they have made these false claims against us. PicsArt will vigorously defend itself against these baseless claims and all options are under consideration.

Specifically, VSCO says that at least 17 PicsArt employees created VSCO accounts — probably not an uncommon competitive practice, but the suit claims they used those accounts to reverse engineer the filters, thus violating the terms in which users “agree not to sell, license, rent, modify, distribute, copy, reproduce, transmit, publicly display, publicly perform, publish, adapt, edit or create derivative works from any VSCO Content.”

In addition, the suit accuses PicsArt of engaging in false advertising by describing the filters in its PicsArt Gold subscription as “exclusive” and “only for [PicsArt] Gold users.”

Why is VSCO so sure that the PicsArt filters were based on its own? The suit says:

VSCO’s color scientists have determined that at least nineteen presets published by PicsArt are effectively identical to VSCO presets that are only available through a VSCO account. Specifically, VSCO determined that those PicsArt filters have a Mean Color Difference (“MCD”) of less than two CIEDE2000 units (in some cases, far less than two units) compared to their VSCO counterparts. An MCD of less than two CIEDE2000 units between filters is imperceptible to the human eye and cannot have been achieved by coincidence or visual or manual approximation. On information and belief, PicsArt could have only achieved this degree of similarity between its filters and those of VSCO by using its employees’ VSCO user accounts to access the VSCO app and reverse engineer VSCO’s presets.

The suit goes on to claim that VSCO’s lawyers sent PicsArt a letter in February demanding that the company identify and remove any filters that were reverse engineered or copied from VSCO. The letter also demanded “an accounting of all profits and revenues generated from such filters” and that PicsArt identify any employees who had created VSCO accounts.

In VSCO’s telling, PicsArt then responded that it was “in the process of replacing certain underperforming filters and modifying others,” including the 19 filters in question, but it only removed 17 — and supposedly two of the new filters “were similarly reverse engineered from VSCO’s proprietary presets.” The suit also says PicsArt has failed to provide the information that VSCO demanded.

VSCO does not appear to be suing for a specific monetary value, but the suit asks for “disgorgement of any proceeds obtained from PicsArt’s use of VSCO filters,” as well as injunctive relief, compensatory damages and “the costs of corrective advertising.”

You can read the full complaint below.

VSCO Complaint by on Scribd

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Startup Law A to Z: Regulatory Compliance

Published April 4, 2019

Startups are but one species in a complex regulatory and public policy ecosystem. This ecosystem is larger and more powerfully dynamic than many founders appreciate, with distinct yet overlapping laws at the federal, state and local/city levels, all set against a vast array of public and private interests. Where startup founders see opportunity for disruption in regulated markets, lawyers counsel prudence: regulations exist to promote certain strongly-held public policy objectives which (unlike your startup’s business model) carry the force of law.

Snapshot of the regulatory and public policy ecosystem. Image via Law Office of Daniel McKenzie

Although the canonical “ask forgiveness and not permission” approach taken by Airbnb and Uber circa 2009 might lead founders to conclude it is strategically acceptable to “move fast and break things” (including the law), don’t lose sight of the resulting lawsuits and enforcement actions. If you look closely at Airbnb and Uber today, each have devoted immense resources to building regulatory and policy teams, lobbying, public relations, defending lawsuits, while increasingly looking to work within the law rather than outside it – not to mention, in the case of Uber, a change in leadership as well.

Indeed, more recently, examples of founders and startups running into serious regulatory issues are commonplace: whether in healthcare, where CEO/Co-founder Conrad Parker was forced to resign from Zenefits and later fined approximately $500K; in the securities registration arena, where cryptocurrency startups Airfox and Paragon have each been fined $250K and further could be required to return to investors the millions raised through their respective ICOs; in the social media and privacy realm, where TikTok was recently fined $5.7 million for violating COPPA, or in the antitrust context, where tech giant Google is facing billions in fines from the EU.

Suffice it to say, regulation is not a low-stakes table game. In 2017 alone, according to Duff and Phelps, US financial regulators levied $24.4 billion in penalties against companies and another $621.3 million against individuals. Particularly in today’s highly competitive business landscape, even if your startup can financially absorb the fines for non-compliance, the additional stress and distraction for your team may still inflict serious injury, if not an outright death-blow.

The best way to avoid regulatory setbacks is to first understand relevant regulations and work to develop compliant policies and business practices from the beginning. This article represents a step in that direction, the fifth and final installment in Extra Crunch’s exclusive “Startup Law A to Z” series, following previous articles on corporate matters, intellectual property (IP), customer contracts and employment law.

Given the breadth of activities subject to regulation, however, and the many corresponding regulations across federal, state, and municipal levels, no analysis of any particular regulatory framework would be sufficiently complete here. Instead, the purpose of this article is to provide founders a 30,000-foot view across several dozen applicable laws in key regulatory areas, providing a “lay of the land” such that with some additional navigation and guidance, an optimal course may be charted.

The regulatory areas highlighted here include: (a) Taxes; (b) Securities; (c) Employment; (d) Privacy; (e) Antitrust; (f) Advertising, Commerce and Telecommunications; (g) Intellectual Property; (h) Financial Services and Insurance; and finally (i) Transportation, Health and Safety.

Of course, some regulations may touch on multiple regulatory areas, for example, the “Fair Credit Reporting Act” is a law ultimately about privacy, but it impacts many financial and employment-related services as well. Certain laws may therefore be cross-listed in more than one regulatory area. Also, since we can’t look at every U.S. state and city, this article will focus primarily on the federal and California state laws.

After you focus on the particular regulatory areas that may implicate your business, next reference the short quotations and links to relevant primary and secondary sources below, then work to identify the specific compliance risks you face. This is where other Extra Crunch resources can help. For example, the Verified Experts of Extra Crunch include some of the most experienced and skilled startup lawyers in practice today. Use these profiles to identify attorneys who are focused on serving companies at your particular stage and then seek out any further guidance you need to address the regulatory matters pertinent to your startup.

With that as context, the Startup Law A to Z – Regulatory Compliance checklist is below:

Taxes

Securities

Employment

Privacy

Antitrust

Advertising, Commerce and Telecommunications

Intellectual Property

Financial Services and Insurance

Transportation, Health & Safety

Before diving into further detail, it may be helpful for some readers to note the distinction between a law and a regulation. Simply put, regulations provide more detailed direction on how certain laws should be followed. So regulations are not technically laws, but they carry the force of law (including penalties for violation), since they are adopted by governmental agencies under authority granted by statute. Beyond that, understanding how laws and regulations are actually enacted is helpful to illustrate the extent to which the process is politically driven.

In the U.S., a bill must first pass both legislative branches of government, then, if signed by the executive branch, it will be codified in statute as law (Schoolhouse Rock anyone?). Once codified, the legislative branch will authorize the relevant executive department or agency to determine whether specific regulations are necessary to give the law effect. If so, those executive departments or agencies will determine what further rules are needed, and in turn, work to enforce them.

At the federal level, for example, proposed regulations are developed first through a “Notice of Proposed Rulemaking,” listed in the Federal Register and filed in the corresponding executive agency’s official docket (available at Regulations.gov). This affords the public an opportunity to comment on the regulations. After receiving comments, the filing agency may revise the proposed regulation before final rules are issued, which again will be published in the Federal Register and then filed in the agency’s official docket at Regulations.gov, before they are codified in the Code of Federal Regulations (CFR).

At nearly every step in this process then, institutions, government, and interest groups are working – sometimes at cross purposes – to shape what the law will be and how it will impact your startup.

The Startup Law A to Z – Regulatory Compliance reference guide is below:

A. TAXES

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How to make sure that your product is accessible to all users

Published March 27, 2019
Beth Franssen
Contributor

Beth Franssen is an expert in digital accessibility, WCAG and Section 508 compliance. She helps fintech, retail and payment companies implement digital accessibility strategies for Nexient, a leading provider of 100% US-based Agile software product development.

Every founder wants an eye-catching website or app, but it’s easy to overlook a basic fact: not all your potential visitors will experience your content with their eyes. If you haven’t considered whether a user with differing visual, motor or hearing abilities can easily navigate your software, it’s time to get serious about digital accessibility.

As tempting as it might be to prioritize a stunning visual and mobile experience over an accessible design, accessibility is a legal requirement—not an option—for many businesses.

Just ask high-profile founder Beyoncé Knowles. In January, Beyoncé’s Parkwood Entertainment was hit with a class-action lawsuit that includes “all legally blind individuals in the United States who have attempted to access Beyonce.com.” The lawsuit claims that the site’s lack of visual alternatives make the site inaccessible to blind users like the plaintiff and therefore illegal.

Failing to accommodate people with disabilities not only limits your market (blind people buy concert tickets and merchandise too), it can also bring legal and reputational consequences.

The Americans with Disabilities Act (ADA) requires US businesses that serve the public to provide equal access and accommodations to everyone, whether through a physical building or a digital experience. Just as stores provide ramps as well as stairs, websites need to accommodate people with varying abilities, from movement disorders to visual and auditory impairments. The number of website accessibility lawsuits raised against private companies more than doubled last year. A single plaintiff won $100K in a similar ADA lawsuit in 2017.

While ADA is the enforcing legislation in the United States for the private sector, the Web Content Accessibility Guidelines (WCAG) provide de facto global standards web designers should follow. The guidelines are based on four principles: content must be perceivable, operable, understandable and robust.

If you’re not sure whether your digital content (websites, apps, e-books, etc) is WCAG-compliant, have a certified accessibility consultant conduct an assessment immediately, and contact your legal team should you identify any risks.

However, simple compliance is only the first step. Understanding how accessibility is defined will broaden your understanding of the overall user experience, so you can create better content for all users.

This article is part of Extra Crunch’s exclusive “Startup Law A to Z” series, following previous articles on employment law, customer contracts, intellectual property (IP) and corporate matters. This series is designed to provide founders the information needed to assess legal risks in the areas common to most startups.

Should you identify legal risks facing your startup after reading this or other articles in the series, Extra Crunch resources can help. You can reach out to the Verified Experts of Extra Crunch, who focus on serving companies at your stage, for further guidance in the particular issues at hand.

The Web Content Accessibility Checklist:

  • Perceivable
    • Time-based media
    • Text alternatives
    • Adaptable
    • Distinguishable (Use of color)
  • Operable
    • Keyboard accessible
    • Navigable
    • Input modalities
    • Enough time
    • Seizures and physical reactions
  • Understandable
    • Readable
    • Predictable
    • Input assistance
  • Robust
    • Compatible for various assistive technologies (Links can be programmatically determined)

Perceivable

A website must present content so that users of different abilities can perceive it. That means providing alternatives for any non-text content, like images or music.

For time-based media (audio and video), captions, content descriptions and sign language are acceptable options. 

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It’s a draw in latest Qualcomm v Apple patent scores

Published March 27, 2019

It’s Qualcomm 1, Apple 1 in the latest installment of the pair’s bitter patent bust-up — the litigious IP infringement claim saga that also combines a billion-dollar royalties suit filed by Cupertino alleging that the mobile chipmaker’s licensing terms are unfair.

The iPhone maker filed against Qualcomm on the latter front two years ago and the trial is due to kick off next month. But a U.S. federal court judge issued a bracing sharpener earlier this month, in the form of a preliminary ruling — finding Qualcomm owes Apple nearly $1 billion in patent royalty rebate payments. So that courtroom looks like one to watch for sure.

Yesterday’s incremental, two-fold development in the overarching saga relates to patent charges filed by Qualcomm against Apple back in 2017, via complaints to the U.S. International Trade Commission (ITC) in which it sought to block domestic imports of iPhones.

In an initial determination on one of these patent complaints published yesterday, an ITC administrative law judge found Apple violated one of Qualcomm’s patents — and recommended an import ban.

Though Apple could (and likely will) request a review of that non-binding decision.

Related: A different ITC judge found last year that Apple had violated another Qualcomm patent but did not order a ban on imports — on “public interest” grounds.

ITC staff also previously found no infringement of the very same patent, which likely bolsters the case for a review. (The patent in question, U.S. Patent No. 8,063,674, relates to “multiple supply-voltage power-up/down detectors.”)

Then, later yesterday, the ITC issued a final determination on a second Qualcomm v Apple patent complaint — finding no patent violations on the three claims that remained at issue (namely: U.S. Patent No. 9,535,490; U.S. Patent No. 8,698,558; and U.S. Patent No. 8,633,936), terminating its investigation.

Qualcomm said it intends to appeal.

The mixed bag of developments sit in the relatively “minor battle” category of this slow-motion high-tech global legal war (though, of the two, the ITC’s final decision looks more significant), along with the outcome of a jury trial in San Diego earlier this month, which found in Qualcomm’s favor over some of the same patents the ITC cleared Apple of infringing.

Reuters reports the chipmaker has cited the contradictory outcome of the earlier jury trial as grounds to push for a “reconsideration” of the ITC’s decision.

“The Commission’s decision is inconsistent with the recent unanimous jury verdict finding infringement of the same patent after Apple abandoned its invalidity defense at the end of trial,” Qualcomm said in a statement. “We will seek reconsideration by the Commission in view of the jury verdict.”

Albeit, given the extreme complexities of chipset component patent suits, it’s not really surprising a jury might reach a different outcome to an ITC judge.

In the other corner, Apple issued its now customary punchy response statement to the latest developments, swinging in with: “Qualcomm is using these cases to distract from having to answer for the real issues, their monopolistic business practices.”

Safe to say, the litigious saga continues. And iPhones continue being sold in the U.S.

Other notable (but still only partial) wins for Qualcomm include a court decision in China last year ordering a ban on iPhone sales in the market — which Apple filed an appeal to overturn. So no China iPhone ban yet.

And an injunction ordered by a court in Germany forced Apple to briefly pull certain iPhone models from sale in its own stores in January. By February the models were back on its shelves — albeit now with Qualcomm not Intel chips inside.

But it’s not all been going Qualcomm’s way in Germany. Also in January, another court in the country dismissed a separate patent claim as groundless.

A decision is also still pending in the U.S. Federal Trade Commission’s antitrust case against Qualcomm.

In that suit the chipmaker is accused of operating a monopoly and forcing exclusivity from Apple while charging “excessive” licensing fees for standards-essential patents. The trial wrapped up in January and is pending a verdict.

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U.S. federal court jury finds Apple infringed three Qualcomm patents

Published March 16, 2019

Mobile chipmaker Qualcomm has chalked up another small legal victory against Apple in another patent litigation suit.

A jury in a U.S. federal court in San Diego found Friday that Apple owes Qualcomm about $31M for infringing three patents, per Reuters.

As we reported earlier the San Diego patent suit relates to the power consumption and speed of boot-up times for iPhones sold between mid-2017 and late-2018.

Qualcomm had asked to be awarded up to $1.41 in unpaid patent royalties damages per infringing iPhone sold during the period.

The chipmaker has filed a number of patent suits against the iPhone maker in the U.S., Europe and Asia in recent years. The suits are skirmishes in a bigger battle between the pair over licensing terms that Apple alleges are unfair and illegal.

In a statement on on the San Diego trial outcome Qualcomm executive vice president and general counsel, Don Rosenberg, said:

Today’s unanimous jury verdict is the latest victory in our worldwide patent litigation directed at holding Apple accountable for using our valuable technologies without paying for them. The technologies invented by Qualcomm and others are what made it possible for Apple to enter the market and become so successful so quickly. The three patents found to be infringed in this case represent just a small fraction of Qualcomm’s valuable portfolio of tens of thousands of patents. We are gratified that courts all over the world are rejecting Apple’s strategy of refusing to pay for the use of our IP.

The iPhone models involved in the patent suit are iPhone 7, 7 Plus, 8, 8 Plus and X, which were found to infringe two Qualcomm patents, U.S. Patent No. 8,838,949 (“flashless booting”), and U.S. Patent No. 9,535,490 (data management between the applications processor and the modem); and the iPhone 8, 8 Plus and X which were found to infringe Qualcomm’s U.S. Patent No. 8,633,936 (high performance rich visual graphics with power management).

The patents are not contained in modems and are not standards-essential to cellular devices, Qualcomm said.

Reuters suggests the jury’s damages award could have wider significance if it ends up being factored into the looming billion dollar royalties suit between Apple and Qualcomm — by putting a dollar value on some of the latter’s IP, the San Diego trial potentially bolsters its contention that its chip licensing practices are fair, it said.

At the time of writing it’s not clear whether Apple intends to appeal the outcome of the trial. Reuters reports the iPhone maker declined to comment on that point, after expressing general disappointment with the outcome.

We’ve reached out to Apple for comment.

In a statement provided to the news agency Apple said: “Qualcomm’s ongoing campaign of patent infringement claims is nothing more than an attempt to distract from the larger issues they face with investigations into their business practices in U.S. federal court, and around the world.”

Cupertino filed its billion dollar royalties suit against Qualcomm two years ago.

It has reason to be bullish going into the trial, given a preliminary ruling Thursday — in which a U.S. federal court judge found Qualcomm owes Apple nearly $1BN in patent royalty rebate payments (via CNBC). The trial itself kicks off next month.

The U.S. Federal Trade Commission also filed antitrust charges against Qualcomm in 2017 — accusing the chipmaker of operating a monopoly and forcing exclusivity from Apple while charging “excessive” licensing fees for standards-essential patents.

That trial wrapped up in January and is pending a verdict from Judge Lucy Koh.

At the same time, Qualcomm has also been pursuing several international patent suits against Apple — also with some success.

In December Apple filed an appeal in China to overturn a preliminary ruling that could have blocked iPhone sales in the market.

While in Germany it did pull older iPhone models from sale in its own stores in January. But by February it was selling the two models again — albeit with Qualcomm chips, rather than Intel, inside.

This report was updated with comment from Qualcomm

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Former CEO Zain Jaffer files wrongful termination lawsuit against Vungle

Published March 12, 2019

Vungle founder Zain Jaffer filed a lawsuit today accusing the mobile advertising company of wrongfully terminating him from the role of CEO.

The lawsuit cites a section of the California labor code that it says “expressly and specifically prohibits discrimination and retaliation by employers based upon an arrest or detention that did not result in conviction.”

Jaffer was arrested in October 2017 in an incident involving his young son — the charges included performing a lewd act on a child and assault with a deadly weapon. Last year, the charges were dropped, with the San Mateo District Attorney’s Office saying it did “not believe that there was any sexual conduct by Mr. Jaffer that evening,” while “the injuries were the result of Mr. Jaffer being in a state of unconsciousness caused by prescription medication.”

Afterwards, Jaffer began looking into either selling his Vungle shares or pursuing a leadership change at the company, something he alludes to in his statement on the suit:

Once I was absolved of any wrongdoing, I was looking forward to a friendly relationship with the Company. Instead, Vungle unfairly and unlawfully sought to destroy my career, blocked my efforts to sell my own shares or transfer shares to family members, and tried to prevent me from purchasing shares in the Company.

When reached by TechCrunch, a Vungle spokesperson declined to comment on the lawsuit.

The suit does not specify the amount that Jaffer is seeking, but his attorney Joann Rezzo reportedly told Bloomberg that he has suffered at least $100 million worth of harm. When asked about damages, Jaffer’s spokesperson sent us the following statement from Rezzo:

The amount to be awarded would be entirely within the discretion of the jury. My firm won almost $20M for an employee who asserted similar claims against Allstate Insurance Company. Mr. Jaffer’s potential recovery is much, much higher.

The suit she’s referring to involved a former Allstate employee who was awarded $18.6 million after he was fired following an arrest for domestic violence and possession of marijuana paraphernalia. All the charges were eventually dismissed.

You can read Jaffer’s full lawsuit below.

Jaffer v. Vungle Conformed … by on Scribd

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