Oculus Faces Messy Ownership Claims Over Its Head Mounted Display–Total Recall v. Luckey

3 06 2016

Palmer Luckey, who ultimately developed the much-hyped Oculus Rift, entered into an agreement with a company called “Total Recall”. Although it was not crystal clear, the agreement was technically with Thomas Seidl, one of the partners of Total Recall. The agreement required Luckey to develop a prototype based on feedback from Seidl.

The parties corresponded via email, and Seidl asked for confirmation from Luckey regarding exclusivity:

[j]ust so we are on the same page. With the initial payment . . . I would like excusive rights to your design unless we decide not to use it. I need to cover myself if we pay for development and then end up paying for a competitor.

Luckey responds affirmatively:

[y]es we are on the same page here . . . I am sure we can put together a contract of some sort to finalize it all.

Seidl transferred $798 via PayPal. [Ouch. That Seidl made less than a thousand dollar payment for what turned into a much bigger problem for Luckey is a bummer. Perhaps it will be a minor blip on his radar screen in light of Oculus’s success, but still.]

A few months later, the parties entered into a “Nondisclosure, exclusivity and payments agreement”. It was between Seidl and Luckey and aimed at protecting confidential information, which it broadly defined as “all information or material that has or could have commercial value or other utility in the business in which Disclosing Party is engaged.” It had the standard carveouts from the definition of confidential information. It also included a non-disclosure and exclusivity provision:

The Receiving party shall keep all details including drawings and part suppliers of the Head Mounted Display [a term not defined anywhere in the agreement] confidential and shall not aid any other person or entity in the design of a Head Mounted Display other than the disclosing party. Unless within a twelve month period from 1st july 2011 the receiving party has not received a minimum payment in royalties of 10,000 US dollars by the disclosing party. The exclusivity shall remain in place for a period of 10 years providing a minimum of 10,000 US dollars is paid from the disclosing party to the receiving party per annum.

Luckey developed a prototype and modified the prototype based on feedback from Seidl. Luckey never returned the modified prototype (Seidl does not allege asking for its return). Luckey went on to form Oculus, LLC, and develop Rift, which became a blockbuster on Kickstarter and was ultimately sold to Facebook for 8 figures.

Total Recall asserted a range of contract and tort claims. (The Total Recall partners appear to be involved in some internal dispute regarding their pursuit of this lawsuit, including separate litigation in Hawaii, but the court’s order did not focus on that.)

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Case Citation: Total Recall Techs v. Palmer Luckey and Oculus, 2016 WL 199796 (N.D. Cal. Jan. 16, 2016)

 

The content in this post was found at http://blog.ericgoldman.org/archives/2016/01/oculus-faces-messy-ownership-claims-over-its-head-mounted-display-total-recall-v-luckey.htm and was not authored by the moderators of freeforafee.com. Clicking the title link will take you to the source of the post.



IP Protection for Biologics in the TPP: Trading Away Future Treatments and Cures

2 12 2015

IPWatchdog

October 26, 2015

Dr. Kristina Lybecker

Globally there are approximately 7,000 medicines in development to treat and cure a wide variety of diseases. Of these, more than 5,000 are in development in the United States. It’s difficult to argue that the strength and success of the U.S. biopharmaceutical industry is uncorrelated with the IP protection available here. It is, therefore, disappointing that the recently negotiated Trans-Pacific Partnership (TPP) Trade Agreement fails to deliver sufficient IP protection for biologics. Much of the continuing controversy plaguing the TPP Agreement surrounds data exclusivity protection for biologic medicines and the future of the agreement may hinge on precisely this issue.

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The content in this post was found at http://www.ipwatchdog.com/2015/10/26/ip-protection-for-biologics-in-the-tpp-trading-away-future-treatments-and-cures/id=62692/ and was not authored by the moderators of freeforafee.com. Clicking the title link will take you to the source of the post.



Seyfarth Shaw’s 50 State Desktop Reference Ebook: What Employers Need To Know About Non-Compete and Trade Secrets Law

8 09 2015

 Seyfarth Shaw’s 50 State Desktop Reference Ebook: What Employers Need To Know About Non-Compete and Trade Secrets Law

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The content in this post was found at http://www.seyfarth-ebooks.com/2015-50state/index.html and was not authored by the moderators of freeforafee.com. Clicking the title link will take you to the source of the post.

 



Employer’s Action for Misappropriation of Trade Secrets Against Former In-House Counsel Who Engaged in Competitive Activities Not Subject to Anti-SLAPP Motion

28 08 2015

shutterstock_299407832There are indeed limits to the reach of the anti-SLAPP statute, particularly in the trade secret context.  In West Hills Research and Development, Inc. v. Terrence M. Wyles, a California appellate court ruled that engaging in activity to set up a competing business is not protected activity under the anti-SLAPP statute.

 

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The content in this post was found at http://www.tradesecretslaw.com/2015/08/articles/trade-secrets/employers-action-for-misappropriation-of-trade-secrets-against-former-in-house-counsel-who-engaged-in-competitive-activities-not-subject-to-anti-slapp-motion/  and was not authored by the moderators of freeforafee.com. Clicking the title link will take you to the source of the post.



Webinar Recap! State Specific Non-Compete Oddities Employers Should Be Aware Of

24 08 2015

We are pleased to announce the webinar “State Specific Non-Compete Oddities Employers Should Be Aware Of ” is now available as a podcast and webinar recording.

In Seyfarth’s sixth installment, attorneys Michael Baniak and Paul Freehling discussed the significant statutory changes to several jurisdictions’ laws regarding trade secrets and restrictive covenants and pending legislation proposed in additional jurisdictions over the past year.  As trade secrets and non-compete laws continue to evolve from state to state in piecemeal fashion, companies should continually revisit their trade secrets and non-compete strategies in light of the evolving legal landscape and legislative trends.

As a conclusion to this well-received webinar, we compiled a list of key takeaway points, which are listed below.

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The content in this post was found at http://www.tradesecretslaw.com/2015/08/articles/trade-secrets/webinar-recap-state-specific-non-compete-oddities-employers-should-be-aware-of/ and was not authored by the moderators of freeforafee.com. Clicking the title link will take you to the source of the post.



Hawaii Bans Non-Compete and Non-Solicit Agreements with Technology Workers

10 07 2015

Hawaii joined the small list of states that prohibit certain non-compete agreements with employees.

On June 26, 2015, Hawaii’s governor David Ige signed Act 158 which voids any “noncompete clause or a nonsolicit clause in any employment contract relating to an employee of a technology business.”

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The content in this post was found at http://www.tradesecretslaw.com/2015/07/articles/trade-secrets/hawaii-bans-non-compete-and-non-solicit-agreements-with-technology-workers/ and was not authored by the moderators of freeforafee.com. Clicking the title link will take you to the source of the post.



Congress Should MOVE To Restrict Employee Non-Compete Clauses (Forbes Cross-Post)

10 07 2015
Newly hired employees routinely must accept non-compete restrictions as a condition of employment, but don’t interpret the ubiquity of non-compete clauses as a signal that they are a good idea. By restricting future competition for employees’ labor, employee non-competition clauses hurt marketplace efficiency just like you’d expect. Indeed, one of the key ingredients in Silicon Valley’s “secret sauce” is California’s long-standing categorical rejection of employee non-competes, compared to other states’ tolerance for such restrictions. Undoubtedly, society would benefit if we eliminated these distortions on marketplace competition for labor.

Fortunately, Congress is taking notice. In an effort to crack down on the overuse of employee non-compete restrictions, several Senators are sponsoring S. 1504, the “Mobility and Opportunity for Vulnerable Employees Act” (or MOVE Act).

The Act has two main provisions. First, the Act makes it illegal to impose non-compete restrictions on “low-wage” employees, generally defined as employees earning less than $15/hour (or minimum wage, if higher) or an annual salary of $31,200. These dollar thresholds escalate over time. Second, for all other employees working in interstate commerce, the law requires employers to disclose that they will require non-compete restrictions early in the job search process. The Act says such disclosure should be “at the beginning of the process for hiring such employee.” Violations are enforced by the Department of Labor.

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The content in this post was found at http://blog.ericgoldman.org/archives/2015/07/congress-should-move-to-restrict-employee-non-compete-clauses-forbes-cross-post.htm and was not authored by the moderators of freeforafee.com. Clicking the title link will take you to the source of the post.



Court, Applying Pennsylvania And California Law, Declines To Enjoin Alleged Violation Of Worldwide Non-Compete

25 06 2015

A non-competition covenant prohibited employees of Adhesives Research (AR), a company based in Pennsylvania, from performing services for a competitor of AR anywhere in the world for two years after termination. Newsom, AR’s western U.S. manager of medical products, worked out of her home in California. When she quit and joined another adhesives manufacturer, AR sued and moved for entry of a preliminary injunction. The court denied the motion.

Status of the case. The covenant contained a Pennsylvania choice of law provision and mandated that litigation be filed in that state. Responding to the motion, Newsom argued that Pennsylvania law was inapplicable and asserted that California law applied. It is less friendly to employers. The court concluded that the worldwide geographic scope was overbroad under both states’ legal principles, that blue penciling was impermissible because of AR’s unclean hands in attempting to enforce an oppressive covenant, and that in any event the new employer did not compete with AR. Adhesives Research, Inc. v. Newsom, Civ. No. 1:15-CV-0326 (M.D. Pa., Apr. 13, 2015) (Caldwell, J.).

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The content in this post was found at hhttp://www.tradesecretslaw.com/2015/05/articles/trade-secrets/court-applying-pennsylvania-and-california-law-declines-to-enjoin-alleged-violation-of-worldwide-non-compete/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+TradingSecrets+%28Trading+Secrets%29 and was not authored by the moderators of freeforafee.com. Clicking the title link will take you to the source of the post.



Amazon sues ex-employee who went to work for Google Cloud

9 12 2014

Lawsuits over “non-compete” contracts aren’t seen often in the tech sector, even though such agreements are commonplace. In part, that’s because such agreements are generally banned in California, where many tech companies are based. The deals are legal in most states, however, so litigation does occur, usually over key employees in hot sectors.

Last week, Amazon sued Zoltan Szabadi, who worked for Amazon Web Services until May, when he moved to a job working at Google Cloud Platform. The lawsuit, first reported by Geekwire, was filed on June 27 in King County Superior Court in Seattle.

 

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The content in this post was found at http://arstechnica.com/tech-policy/2014/07/amazon-sues-ex-employee-who-went-to-work-for-google-cloud/ and was not authored by the moderators of freeforafee.com. Clicking the title link will take you to the source of the post.



Florida Court Finds That Employer Without Knowledge That Employees It Just Hired Have Non-Competes Are Not Liable For Tortious Interference With Contract

8 12 2014

A defendant company was unaware, when it hired two individuals, that they had entered into non-competition agreements with their prior employer.  As a result, according to a Florida federal court, the prior employer did not have a valid cause of action against the new employer for intentionally interfering with those non-compete obligations.

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The content in this post was found at http://www.tradesecretslaw.com/2014/07/articles/practice-procedure/a-defendant-without-knowledge-that-employees-it-just-hired-have-existing-non-competes-cannot-be-found-liable-for-tortious-interference-with-contract/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+TradingSecrets+%28Trading+Secrets%29 and was not authored by the moderators of freeforafee.com. Clicking the title link will take you to the source of the post.