Michael Arrington says CrunchPad litigation is 'imminent,' provides more details -- but where's the contract?
By Nilay Patel 
posted Dec 5th 2009 5:54PM
posted Dec 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.
This is a worldwide PR stunt to draw attention to the product before its launch. If you look around you can see production ready examples with packaging etc.
They have taken the Apple concept and fused it with a Paris Hilton style sex tape saga.
Now where do I order?.....
@Lee Bandoni It doesn't really smack of a PR stunt to me. But in any case, I'm really enjoying following the soap opera. Can't wait for the press conference!
@Lee Bandoni
I hope so! I still would like to throw down $250 on one of these (not $300, though).
@Lee Bandoni "They have taken the Apple concept"
You mean an Apple Fan boy concept. The last time I checked Apple hasn't released anything concept or otherwise.
@Lee Bandoni I doubt Arrington would risk the journalistic integrity of his blog, just to move a couple more pads. It's taken him (and his team) years to build. Why throw it all away just to get publicity on a product that would have done alright on its on.
@youngluck: "journalistic integrity", that's a joke. These blogs are just a frat party for them, there is nothing serious about it. They have the same journalistic integrity Glen Beck has.
"i'ma gonna let you finish, mike arrington, but chandra ratha... ratha... ratha..." ah forget about it
@dypeterc
Screw you Arrington!
I believe Leo Laporte said it best about Arrington.
@Xionic
That's twice I've heard that statement. What's the story behind it?
@Xionic
What did he say
@kris120890 arrington was giving leo crap about getting a pre-release palm pre for review and leo went off on him on the Gilmore Gang and killed the broadcast/recording and kicked the show off the TWIT network on a live stream.
@kris120890 He threw him off his podcast show, check Youtube
@Xionic
What did he say?
@jupigare
Screw you Arrington!
http://www.youtube.com/watch?v=2Jnpi-uBiIg
@Decoy
Thanks for posting the vid.
Originally I was siding with Arrington in the whole CrunchPad debacle, but after realizing that was him in the YouTube clip, I hope everyone gets screwed over!
It'll be good to see how this goes.
BTB: Is it me or has engadget changed their font.
@kris120890
Yep... I don't want to be that guy, but the old look felt simpler and easier to use. This new Engadget is too tricked out for my likings.
@Decoy Agreed, I hate the new font. For the most part I like the redesign, but the font is awful. Makes me come around less often, to be sure.
@schammy Also the extra clicks to see replies.
This reeks of a cynical publicity stunt by TechCrunch. Pretty much like everything else they do.
One must register a federal trademark in order to litigate on it. Trademarks are valid without federal registration. Trademark rights can be established by use in the marketplace. That explains his registration date for the trademark. He only registered it once he realised that he would be litigating on it.
@jadalias He hasn't used it in the marketplace -- there's no product. In any event, he should have filed an intent to use application months ago.
@Nilay Patel There's no product and no intent to use app? That's just irresponsible.
Nice summary Nilay. Interesting stuff. Any idea about the product itself? Does it even work?
I'm very interested to see what Fusion Garage has to say about Arrington's accusations. To tell you the truth, my opinion for Arrington is not the best. One month ago, I've read an article about Arrington and the all Crunchpad stunt which had some very interesting points, accusing him for all PR shit. Unfortunately I can't find the article but the poster was proven 100% correct.
Either way, I don't judge Techcrunch articles quality by one persion even if it's the founder. But I wiill wait to see if he will be verified about the Google phone rumors before I make up my mind about how trustworty he is or just a person who lost his way under PR exposing.
Yes! Take that Times New Roman!
It's amusing that someone posted a comment on MA's own blog nearly a year ago saying this could happen.
http://www.techcrunch.com/2009/01/19/techcrunch-tablet-update-prototype-b/#comment-2599900
He pretty much nailed every detail of the current situation.
I sure would love to buy this product as long as Arrington doesn't profit from it. So I really have no qualms with Fusion Garage's stance in the matter.
Who cares? It's not like anyone believed this thing would see the light of day anyhow! Move along, there's nothing to see here....
i've got a feeling there's more than it meets the eye.
Arrington is a dope and a compulsive liar.
Arrington is a joke, a senile joke now. Should just pack it up.
File this under "Who Gives a Shit."
I hate TechCrunch and their self-publicizing. I hate when supposed journalists insert themselves into the story that they are reporting on. No more crunch awards, no more techcrunch50, no more techcrunch products. Please just report on real tech companies. Because that's what you are great at.
@(Unverified) This is the sort of thing that builds a strong family of marks though... and that might be *great* for TechCrunch...
This is the type of thing when people are in a hurry to market and don't think about contracts. Happens even to people who should know better
@(Unverified) Clearly!
Fusion Garage is on the path of killing the Crunch Pad permanently. If they go into litigation, development will be stopped, and this product will never get out into the market place until long after all the major market players will have brought their own devices to market.
Going public to argue their case in front of the public ensures litigation will ensue, and thus the death knell of the Crunch Pad. At which point, Chandra's investors will sue him for misrepresentation of his company's position.
It is my understanding that even though he didn't apply for the trademark until the 17th, he has been actively using it for nearly (or over) a year now. That alone gives him trademark rights. Of course, these rights are probably shared between him and Fusion Garage.
@mmurfin87 Just saying that you're developing a product called the CrunchPad doesn't give you any rights -- you'd have to actually use the mark in commerce to claim common law protection, and Arrington hasn't sold a single CrunchPad. Even then, it's a super-weak claim compared to an intent-to-use registration, which would have cost like five grand and totally protected him.
@Nilay Patel BUT, even though it may be relatively weak protection, I did not see any mention of a TM infringement claim, but simply a claim that TechCruch owns the TM as a mark associated with them as the source. Seems like as long as it is not some how messed up through this litigation, the filing of the mark on the 17th is sufficient. ALSO, you might want to consider facts like Intel's offer for cheap chips to use in the CrunchPad project that is alleged by TechCrunch. If true, you may be able to extrapolate that other companies had come to associate the mark with TechCrunch. It is likely important that there was great publicity of the association of the CrunchPad and also that TechCrunch, CrunchGear, and other such marks may establish a family of marks that would provide protection of the claim to the mark. Use in commerce may be an issue, but it seems like you need more facts before just jumping to the conclusion that it was not used in commerce.
@FerrumMihi Let's say I grant you all of that. You've still got to litigate past the fact that there's no product in the marketplace called a CrunchPad in order to claim common law protection, which isn't going to be easy and cost a hell of lot more than filing the ITU app would have.
In the end, none of this actually matters -- they've filed now, and I'm sure they'll get the mark registered. But it's strange for Arrington to claim he owns the mark outright when he's got so little to back it up.
@Nilay Patel
Firstly, I hope this is not all too much negative nancy and is all meant with the utmost respect. :)
Secondly, I fully support your idea registration is the way to go! You are bang on the money in my opinion as to what people *should* do with an eye to the future... BUT I think that if he as savvy as you suggest and TechCrunch does potentially have a family of marks for the use of Crunch & some other word, it would be prudent to assume that he has more than a little backup for his idea, and that he may have some stronger support than made evident thus far and as alluded to in his letter.
Further, lack of sales of the CrunchPad device may not be despositive. At least for my exam on Friday, the answer I am supposed to put about actual sales of the product in the market place is that it does not matter. That it is all about 2 things: 1) evidence showing that the mark was adopted, and; 2) use in a way sufficiently public to identify or distinguish the marked good in an appropriate segment of the public mind (even without evidence of actual sales). Since those may be here, it might not be that much of a stretch.
Whatev, I'm buying the Apple Tablet.
@(Unverified) I'm buying the VaporWare Tablet. It's rumoured to be much better than the ImaginaryTablet and the iTablet.
How did Arrington find himself in this mess? He's an arrogant prick.
@TonyRockyHorror
he stupidly thought blogger = industrial designer = steve jobs
I am sorry, I love you still, but I think you are incorrect. A contract may exist even in the absence of the documents that most people would attribute to being a contract. A contract IS a legally binding obligation that is formed by a process of offer and acceptance where a legally binding obligation is adopted, *not* a specific document that says CONTRACT on the top.
I disagree with the analysis "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," because it does not aptly show that a contract does not exist between the parties, it only suggests that one does not because an email is the medium of communication. HOWEVER, binding contracts can be formed verbally or in writing so long as it satisfies certain standards (like the statute of frauds) and an email is a document that is probably signed by the party against whom it would be enforced, which is a great start.
Based on what you have indicated in the article, I would not count anyone out yet because nothing in the article sounded particularly damning, though certainly not as ideal as one might hope. Given the facts alleged in the attached documents I would certainly say there is a hunk of factual details missing that needs to be reviewed before any sort of decision about the existence of a contract can be made.
I am *not* an attorney, I am but a lowly law student who has completed a course on contracts and 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.