Michael Arrington says CrunchPad litigation is 'imminent,' provides more details -- but where's the contract?
By Nilay Patel 
posted December 5th 2009 5:54PM
posted December 5th 2009 5:54PM
- Arrington claims he's the "outright owner of the CrunchPad trademark," but that's simply not true: the CrunchPad trademark was only applied for on November 17, the same day Arrington says Fusion Garage notified him of the split. Oops -- and even stranger because Arrington's said the CrunchPad was due to be launched on November 20. Why wasn't this sewn up months ago?
- Assuming there isn't some secret CrunchPad patent application we don't know about, the only major IP rights we can see TechCrunch asserting to the CrunchPad device have to do with the copyright to the code , and that's a total mess. Since Arrington apparently didn't draw up a contract giving him sole copyright to the CrunchPad's code, he and his lawyers are arguing that TechCrunch and Fusion Garage are "joint owners" to any rights, and that's just about the weakest position Arrington can be in. Joint copyright owners are legally considered to have equal rights to the entire product, and unless there's a written agreement (see how that keeps coming up?) saying they both have to sign off, each joint owner is allowed to non-exclusively sell the entire thing without the other's approval. In our experience it's pretty rare for joint copyright ownership to be an ideal business arrangement, and we can't imagine how Arrington got to within three days of launching the CrunchPad without hammering out the details of who owned what.
- In fact, the most notable thing about the letter from Arrington's lawyers to Fusion Garage is that it doesn't contain any contractual language whatsoever -- it only references emails and conversations between the two companies. That's particularly odd because the letter to Pegatron says TechCrunch will be suing for breach of contract, so you'd think Arrington's attorneys would be laser-focused on his contractual rights if he could assert them. Then again, you'd think Arrington would have known better than to start this project without doing the appropriate paperwork first, so really anything's possible.
@FerrumMihi You're right, the court can probably figure out what each party's responsibilities to the other are based on emails and other documents -- although I would argue that there's an interesting statute of frauds problem here, since the development of the CrunchPad probably couldn't have been completed in a year.
But you're talking about a figurative contract -- I'm talking about the absence of actual contract that was memorialized and signed by each party. As a law student, would you advise anyone to begin a venture like the CrunchPad without writing out a contract? And can you explain why Michael Arrington, who once represented NeXT as it was being sold to Apple, is now in the unenviable position of depending on parol evidence to defend his rights?
@Nilay Patel It's pretty simple really. [Something] happened about 2 or 3 weeks ago and Arrington realized the exact position he was in. He assumed too much and he was strung along, or fed a line of crap to get him to shut up. After [Something] happened, he went scorched earth with the matter. What the problem here is, that he decided he'd go scorched earth to paint Fusion Garage into a corner. However, Fusion Garage is playing this cool and collected, and have planned not only a public reaction to MA's claims, but have not humored anything other than confirming that MA is pretty much deciding he's going to scream loudly as oppose to actually fight.
MA is obviously holding a lot of cards here, and MA has called them. The thing is, when you want to call someone, you should be fairly sure you're correct on their bluff. Poker terminology withstanding, MA went all in hoping there wouldn't be a full house in Fusion Garage's hand.
So they've been called, and will show their cards on Monday.
I suspect that they just wanted to get all their ducks in a row before they decide to bitchslap MA on Monday. Pending what all they have on Monday, MA may be trying to claim TM infringement, but that's not going to pan out so well if he's hit with a defamation suit.
I'll wait until Monday before I make any real judgments, but I think you're right. If you're going to make the claims MA has, you probably should show your smoking gun.
@Nilay Patel
> Statute of Frauds -- A point that was harped on in class, and may be different in whatever Jurisdiction the things are settled in, is that the completed withihn year concept is applied by the court to inspect if it is prohibited from being completed within one year, not if it is a situation where the terms would likely be completed in one year. The policy I recall being discussed was to allow the court to avoid speculation about the probability of a task being completed within a one year period AND allowing parties to contract as freely as possible, while preventing/avoiding failings of memory (much of contracts pays heed to the failings of human memory and so the risk of someone forgetting a task that they agree to do 20 years in advance is much higher and more dangerous than endeavoring for 20 years at the same task that was agreed to... this also saves from needing a new contract every year of the 20 years where the duites were established in the first instance). If it were not finals now I would happily hunt through my old outlines for some cites... buuuut... maybe later :)
>"Figurative" v. "Actual" contract -- At least from what I have learned, *both* could be actual contracts, because *both* are legal obligations that would arise from a meeting of the minds between the parties where there may have been an offer and acceptance. I TOTALLY find it interesting that an attorney would not arrange for a specific written record of the events so as to memorialize it better. I would attribute this to the sad fact of joyful hope that may exist where parties are working closely and think that they are free from being like "everyone else" and will get along "forever"... which is why marriage is a contractual agreement :0p Again, I think we have to agree to disagree because an "actual contract" is a legally binding agreement between the parties, and my contention is that the document that you are arguing should exist (and I am NOT disagreeing about that, he should have reduced the agreement to a signed writing) is a written memorialization of a contract... but not the only means of creating a contract..
>As a law student -- "I am *not* an attorney," I have only "provided my thoughts about the information presented. I do not give legal advice, nor should this be taken as legal advice, and it is NOT legal advice. "
>My Opinion about beginning any business with partners -- WRITTEN AGREEMENT STATING OBLIGATIONS... will probably save time and heartache because, when there are questions down the road, it is written down so there is no confusion (hopefully)! Look! We have a Constitution for EXACTLY that reason! If it was good enough for the founders of our nation, it should be good enough for someone starting a business. :)
>Explaining why an attorney would have to depend on parole evidence to defend his rights: 42
Well, trademarks do not require registration in order to provide certain protections. For example, if there is some proof that Arrington was an owner of the trademark (un-registered) and then another company uses the same trademark and damages the original trademark holder's business, then the trademark, even un-registered could provide legal protection.
TM and ® are both legal trademarks. One is registered and one is not, but they both provide trademark protection against infringement.
And yes Ferrum Mihi is right, emails and other documents can act as proof of a contractual agreement.
This is "Day's of Our Lives" but for the netheads, we have a villian a hero ,all we need is a hot female to be the love interest, a zany but kookyside kick, a cute pet ( CGI preffered), and evil goverment department trying to crush the "little guy", and of course Raptors,,,,,,,,,,,lots of Raptors,
I don't understand the people who think that this is some sort of publicity stunt on TC's part. It's pretty clear from what we've seen so far that the project will not move forward - how can they promote something that they'll never sell? And why would TC put in all the work they have into the CrunchPad over the past several months and go through all this drama and incur all of these legal fees just for the sake of publicity? That wouldn't make any sense.
How is it not shipping with Chrome OS? This thing was made for Chrome OS...
The /fail in this whole thing is kind of amusing, but is there really enough interest in all this to warrant multiple Engadget articles?
Eh, who cares, it is probably a really crappy product anyway. I really wasn't impressed by the software aspect of it, and hearing Arrington say that it was going a couple hours without crashes doesn't sound too reassuring. Now with ChromeOS....this could be a decent device.
I tend to believe Fusion Garage's comment (if they did say it) that Arrington didn't provide much of value. I can't see how Arrington cold be a *real" hardware guy (but I admit that I don't know his background). It's just that I know real hardware people that design ebooks, and PDAs, and media devices and they don't have the time to be internet gadflys and run a big name blog. I have also known people who think they "designed" something because they said, "Wouldn't it be cool if it did this and did that!" without having any idea about the heavy lifting necessary to make "this and that" happen. Just because he might have had an idea to make a tablet doesn't mean squat. Ideas are a dime a dozen. It's getting them made in the real world that counts.
@appsman
Steve Jobs isn't a "hardware" guy, however I'd argue that most products wouldn't exist in the form we know them without his influences.
If this is some kind of publicity stunt I hope the is some sort of backlash, Arrington can come across as very arrogant at times and this is no way to put grow faith in a brand or product!
Attorney of records: Andrew P. Bridges
He's on a bowling team with Ben Dover and I.P. Freely, swell guy.
Please Arrington, just go away, I labeled your tablet as vaporware from day 1.
People are missing the fact that Arrington has seized control of the media on this mother of all epic fails by leveraging his powerful media outlet. The only way he can stop fusion garage from selling this device would be to obtain a legal order on the basis of infringement and based on his actions I'd say it's anything but certain that he could obtain such an order.
The letters sent by his attorney only serve to demonstrate just how caught off gaurd Mike was taken on this matter. The fact that FGs team rented a house in the valley is not the basis of any legal argument. Lot's of startup's rent houses in the valley. His other arguments and assertions are incredibly weak. Trust me, if Arrington had a smoking gun email he would have posted it right away. That is what he does. Instead, we get his one-sided and highly public opinion pieces, disguised as "blog" updates on TC. FG is wise to cease all discussions with TC. It's a legal matter now.
Personally, I hope FG plows ahead and sells the device. I really couldn't care less about the back story -- just want the device.
After thinking about all of this I'm starting to wonder if Arlington had decided to kill the CrunchPad, note that we were supposed to have an update on the CrunchPad back in July/August and didn't hear anything not even a, "it will be another month for an update".
Seeing how Fusion Garage was a partner and not just a hired hardware company, who at least from what I've heard seem to have equal rights on everything except maybe the actual name CrunchPad. They may have wanted to go ahead without Arlington, offered to buy him out. Arlington dragged his feet, so FG sent off the e-mail saying fine screw you will just do it and you'll get nothing.
But then again does anything Arlington do legal wise even matter FG is a foreign company from Singapore or China? They could just not sell in the US and I doubt Arlington has the power to get foreign countries to honor any US ruling. Were I worked the Russians stole a product design from us and nothing we did legally was any use, even though we won every time. Luckily they went bankrupt on their own.
It's unfortunate that a search for 'first use" on this page failed to find anything after 60+ posts. The author should be aware that trademarks are protected from the date of first use -- not from the date of filing. "Crunchpad" is indisputably the property of TechCrunch.
@ciparis Where's the use? There's no product on the market, and both Arrington and Fusion Garage had been posting updates on the CrunchPad's development on their respective websites. That's a pretty weak foundation for use in commerce.
Again, I'm not saying that Arrington won't prevail in this part of his case -- he probably will. I'm just saying that it's strange for him to be claiming that he owns a mark "outright" when he doesn't have a registration, and even stranger that a Silicon Valley attorney didn't cover all his bases in this matter.
@Nilay Patel It's not strange, Nilay. Arrington is highly prone to exaggeration.
in how many languages can we engadget readers spell vapoware ?
Arrogant Arrington fucked up and he's trying to elicit sympathy for the "underdog". Don't fall for this bullshit!!!!
Arrington has a less-than-stellar record when it comes to court, and occasionally seems not to understand the law. His recent suing by Sam Sethi illustrated this perfectly. No matter the merits of the case, declining to appear or respond isn't going to get the judge to throw out the case - it simply gets you summary judgement.
what could you do on this? Yeah, browse the web...what else...i have 2 laptops and an iphone that could!