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Joojoo lawsuit shocker! Court rules Fusion Garage and TechCrunch were business partners, tosses most everything else

Nilay Patel
08.29.10
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It's been a few blissful months since we've thought about or had to interact with the Joojoo, but the court case Michael Arrington and TechCrunch filed against Fusion Garage just reached a significant milestone: the judge threw out several of Arrington's claims while importantly holding that TechCrunch and Fusion Garage were in fact business partners with legal obligations to each other. Here's the basic timeline so far: since there was (unbelievably) never a contract between TechCrunch and Fusion Garage to develop the CrunchPad / Joojoo, TechCrunch had to rely on a variety of alternative arguments in its initial complaint, which reached a zenith of optimistic fabrication in something called "misappropriation of business ideas." (We ran down the whole list way back in December, and also broke down Fusion Garage's subsequent motion to dismiss in February.)

The court didn't buy most of those arguments and dismissed everything but the breach of fiduciary duty claim in this latest ruling, which is both a significant loss and a significant win for TechCrunch: breach of fiduciary duty has always struck us as TechCrunch's strongest argument, and the court's now effectively ruled that Fusion Garage and TechCrunch were indeed involved in a joint business venture with legal obligations to protect each others' interests. That's not a bad position from which to proceed -- although TechCrunch now has to prove that Fusion Garage actually violated its duty by releasing the Joojoo on its own, which is a whole new fight. (The court also gave TechCrunch 20 days to try and amend some of its other claims, but "misappropriation of business ideas" was basically thrown out the window entirely.) So what's next? We're guessing another few months of cheerfully hostile motions accusing the opposing party of thwarting discovery and some firecracker depositions, all culminating in a matched pair of snippy motions for summary judgment. The suits, they dine well tonight.

P.S.- How or why either company continues to pay for all these legal bills is beyond us, but we've actually heard rumors of a Joojoo 2, so things could get even crazier. And potentially even less responsive to touch-based events.

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