WebProNews

Tag: Lawsuit

  • Google Pays Fine Over AutoComplete Suggestion In France

    Google Pays Fine Over AutoComplete Suggestion In France

    A Paris court found in favor of a local insurance company against Google last month regarding a dispute offer the search engine’s AutoComplete search results.

    Apparently, when users typed in the name of the firm, “Lyonnaise de Garantie”, into Google, AutoComplete offered the term “escroc” associated with the term. “Escroc” means “swindler” or “crook”.

    Google explained to the court that it did not influence the results of its AutoComplete technology, but rather the suggestions were the result of other users’ searches. That is to say, other people were searching for results about that insurance company being crooked. Google makes no representation as to whether the statement implied is true, accurate, etc. It simply is there because other people put it there.

    As reported on Fierce Government IT:

    “The French court in its ruling said Google can, or should, exercise “human control over the functionality” adding that absent a delegation of powers, every company head “is personally responsible for the information content that the company, according to his purpose, issues to the public.” The fine amounts to approximately $65,000.”

    The notion of a party trying to hold Google responsible for simply impersonally reflecting the state of things on the Internet is not unfamiliar to Americans. Former Pennsylvania Senator Rick Santorum, now a Republican Candidate for President, has tried to do that himself, with no success.

    As Josh Wolford reported last week, Rick Santorum has had a “Google problem“. And, as is the nature of things online, when he tried to fight it directly, it only got worse. Finally he approached Google as a corporation and demanded that the offensive search results be removed. Google refused.

  • Amazon Kindle Fire Lawsuit Flickers and Fades

    Back in October of last year, Amazon was hit with a lawsuit. Seemed an odd claim at the time.

    Smartphone Technologies, the plaintiff in the suit, accused Amazon of violating patents that it holds. Upon closer examination, these patents are more for “methods” rather than devices. One patent, for example, was for:

    “A method for software control using a user-interactive display screen feature is disclosed that reduces stylus or other manipulations necessary to invoke software functionality from the display screen… [A] graphical feature having a surface area is displayed on a touch-sensitive screen. The touch-sensitive screen is coupled to at least one processor and the graphical feature is generated by an operating system and uniquely associated with a particular software program by the operating system.”

    See? This “patent” could apply to any number of devices that have come about in the past few years. Hardly seems like something that any knowledgeable Patent Office official would have let pass. It was filed in May of 2000, back when all this hocus-pocus probably seemed very “Minority Report” and likely to be controlled by one manufacturer in the future.

    Which is probably why this Smartphone Technologies company bought the patent. Not to use it for invention or manufacture, but for lawsuit fodder.

    So, for reasons unknown to the public, Amazon and Smartphone have somehow come to an agreement that keeps the whole thing out of court. Speculation abounds. Maybe Amazon bought the patent, or partnered with Smartphone to go after other tablet makers. Maybe they paid them to go away. Maybe someone found a horses head in… never mind.

    Point is: There was a lawsuit. Now there isn’t. Carry on.

  • Apple Settles Patent Lawsuit For $5 Million

    Taiwanese news agencies are reporting that Apple has agreed to pay Elan Microelectronics $5 million as part of an out of court settlement of the two companies’ ongoing patent infringement case. The companies also agreed to exchange access to one another’s patent portfolios, giving Apple license to use the patents in question, and giving Elan similar access to Apple’s patents.

    Elan, a tech company that focuses on touchscreen technology, sued Apple in 2009 for violation of two of the company’s patents. In June of last year, the U.S. International Trade Commission ruled that Apple had not violated any American laws.

    Settling this suit lightens Apple’s legal load by only a small amount. The company is currently embroiled in a number of patent infringement actions with Samsung, HTC, and others. Samsung is accused of copying Apple’s phone and tablet designs in its Galaxy line. HTC, meanwhile, was just on the losing side of a ruling by the ITC, which held that the smartphone manufacturer had violated one of Apple’s patents.

    [Source: Taiwan News]

  • Exclusive: Microsoft Discusses Comet Lawsuit

    This morning we reported that Microsoft had filed suit against British retailer Comet for illegally reproducing Windows software. Customers who purchase Windows-based computers at Comet are offered the opportunity to purchase recovery discs as well. The recovery discs are produced in-house by Comet, however, and not by either Microsoft or the computer manufacturers. Microsoft apparently found this practice unacceptable, and has filed suit.

    While preparing the story this morning, I attempted to contact representatives of both Microsoft and Comet. I was unable to get in touch with anyone from Comet, however a representative from Microsoft replied via email earlier this afternoon. They sent me the following statement, attributed to David Finn, Associate General Council, Worldwide Anti-Piracy and Anti-Counterfeiting at Microsoft:

    Today, Microsoft filed a legal action against UK retailer Comet in the High Court in London. This action focuses on Comet’s unauthorized production of recovery discs, which are one type of recovery solution. Recovery solutions allow customers to repair an operating system, or to reinstall it in the rare event of a system failure.

    In 2008 and 2009, Comet approached tens of thousands of customers who had bought PCs with the necessary recovery software already on the hard drive, and offered to sell them unnecessary recovery discs for £14.99. Not only was the recovery software already provided on the hard drive by the computer manufacturer but, if the customer so desired, a recovery disc could also have been obtained by the customer from the PC manufacturer for free or a minimal amount.

    Illegally replicating software and then selling it is counterfeiting. We’ve often encouraged our customers to buy from a trusted retailer. In this case, it is disappointing that a well-known retailer created so many unwitting victims of counterfeiting.

    To sum up, then, Comet has been copying Microsoft’s software without permission, and using it to sell consumers recovery discs they either don’t need, or could obtain for less money directly from their computer’s manufacturer. All in all, it looks like Microsoft has a pretty good point on this one.

  • Microsoft Sues British Retailer Comet Over Recovery Discs

    UPDATE: Microsoft attorney David Finn has responded to my request for comment. Click here for the full statement.

    Microsoft announced this morning that they have filed suit against Comet, a British retailer that specializes in electronics and appliances. The suit accuses Comet of “creating and selling more than 94,000 sets of counterfeit Windows Vista and Windows XP recovery CDs.” The recovery discs were sold to customers who bought Windows PCs. In years past, Microsoft supplied such discs itself, but has stopped doing so.

    In their statement, Microsoft insists that “Comet’s actions were unfair to customers,” and emphasized their concern to “ensure people get what they pay for,” and to shield customers from pirated versions of their software.

    Meanwhile, Comet have issued a statement of their own. In it they insist that they are the ones who acting in the consumers’ best interests, based on their belief that “customers had been adversely affected by the decision to stop supplying recovery discs with each new Microsoft Operating System based computer.” Comet also asserted that their actions do not constitute infringement, and stated their intention to defend against the suit “vigorously.”

    A request for comment from Microsoft has not yet been answered. This situation presents an interesting problem, in that both companies claim to be acting in the best interest of consumers. Moreover, Comet does not appear to be selling the discs to consumers independently. The only way to get them is to purchase a Windows-based PC from Comet. Which means that in effect, Comet’s customers are only receiving a product that they have already paid for. This is definitely a story worth watching. Check back for updates as it unfolds.

    What do you think? Should Comet be allowed to make Windows recovery discs for customers who have bought Windows computers? Let us know in the comments.

    [Sources: Microsoft Press Release; Comet Statement]

  • Apple Sued By French Retail Partner For Unfair Competition

    French retailer eBizcuss, of Apple’s biggest retail partners in France, has announced that they are suing Apple over unfair business practices. In an interview with Le Figaro, eBizcuss CEO François Prudent said that Apple’s failure to honor orders for MacBook Airs, iPads, and iPhones had significantly harmed eBizcuss’s business.

    Prudent attributed the decline in his company’s ability to acquire Apple products to the opening of an Apple retail store in Paris in 2009. Once Apple had its own store in France, its willingness to send its products to other French retailers steadily waned. What’s more, Prudent complained, this occurred just two years after his company spend $6.5 million to bring itself into line with requirements Apple places on retailers. Prudent also accuses Apple of directly contacting eBizcuss’s business customers, in an effort to lure them away from

    This most recent suit is just one in a string of lawsuits that Apple has faced from retail partners over the years. The story has remained fairly consistent: as Apple moves its own retail stores into an area, the resellers that were already there begin to complain of anti-competitive practices, with some even being driven out of business.

    [Source: ifoAppleStore]

  • Homeland Security Sued Over Proposed Facebook, Twitter Monitoring

    The Electronic Privacy Information Center (EPIC), has filed suit in US District Court against the Department of Homeland Security. The grounds for the suit is a refusal by DHS to reply to a Freedom of Information Act request filed by EPIC in April of this year.

    According to EPIC’s press release, the center of the issue is a plan by DHS to create fake accounts on social networking sites and use those accounts to monitor the networks for certain key words – such as “drill,” “infection,” “strain,” “virus,” “trojan,” and others. The complaint was filed in the District of Columbia, and asks the court to compel DHS to process EPIC’s FOIA request, as well as to order DHS to produce the records EPIC has requested, to acknowledge EPIC as news media, and to pay EPIC’s legal bills for the suit.

    The impetus for EPIC’s request was an announcement by DHS that it planned to implement a Social Media Monitoring and Situation Awareness Initiative, whereby it would monitor social media sites in order to gain realtime information on events. The DHS announcement states that the goal of the initiative is not to collect personally identifiable information except in extreme cases – e.g., a person trapped in rubble with their mobile phone who is posting their status (as happened during the Japanese tsunami).

    Though at first glance – and thanks in no small part to EPIC’s description of it – the DHS program sounds awfully “Big Brother.” Upon closer reading of DHS’s actual statement, though, it seems that the goal of the program is to monitor developing situations in realtime, rather than to monitor individuals for subversive behavior.

  • Follow-Up: PhoneDog Discusses Twitter Lawsuit

    On Tuesday we ran a story about a lawsuit brought by PhoneDog against one of their former employees, Noah Kravitz. When Kravitz left the company in October 2010 he took the Twitter account – formerly Phonedog_Noah, now NoahKravitz – with him. The company asked only that he continue to post about them periodically. Then, eight months later, PhoneDog sued Kravitz for $340,000 – $2.50 per month for each of the 17,000 followers he had when he left. The suit claimed that Kravitz’s followers were a “customer list,” and therefore PhoneDog’s property.

    In the course of preparing Tuesday’s story, I sent a request to PhoneDog for comment. This morning they replied. Here’s what they had to say.

    First, they asserted that the Twitter account in question was created specifically as a marketing tool for PhoneDog:

    The primary objectives of the account were to promote PhoneDog’s published paid for content, giveaways, and live blogging events, and to provide the audience a way to follow Noah during his daily activities as a representative for the company. PhoneDog has always strived to provide a very personal user experience by frequently communicating with its audience, and all of our editors were and are encouraged to tweet personal aspects of their life to the account.

    In other words, though Kravitz’s account may have included personal tweets, its primary purpose was spreading Phonedog’s brand. They also assert that the Phonedog_Noah name was chosen according to their company’s naming policies:

    When creating the account, PhoneDog management permitted and directed Noah to establish the account using the PhoneDog_Noah naming convention. An additional email memo was sent to the editorial staff in January of 2009 reiterating the Company’s Twitter naming policy.

    Furthermore, PhoneDog asserts that the 17,000 followers Kravitz had when leaving the company were acquired because of his association with PhoneDog:

    As a representative for PhoneDog, Noah published and was compensated for hundreds of blog posts and videos created during his career with PhoneDog. All of the content included the PhoneDog_Noah Twitter account information for users to follow. Our YouTube channel http://www.youtube.com/phonedog and web properties www.phonedog.com, facebook.com/phonedog and other Twitter accounts attract millions of users each month. The size and the targeted nature of the PhoneDog audience were the primary drivers to grow the account’s followers.

    PhoneDog’s statement concludes:

    Since the creation of our very first account, our primary Twitter accounts have utilized a naming convention with the PhoneDog trademark to purposefully promote the brand along with the company’s editorial team. All of our social media accounts, content, and their related websites are extensions of our online publications. Our social media efforts were established to increase exposure for our web properties and to increase the brands’ identity and not any one individual after he or she departs the company. The costs and resources invested by PhoneDog Media into growing its followers, fans, and general brand awareness through social media are substantial and are considered property of PhoneDog Media LLC. We intend to aggressively protect our customer lists and confidential information, intellectual property, trademark and brands. Many of the statements made regarding the facts of the case are inaccurate. We intend to prove this in due process.

    So, to sum up, PhoneDog’s claim is that Kravitz’s Twitter account was created specifically to market PhoneDog’s brand, and that those 17,000 followers came from Kravitz’s association with PhoneDog. If that is so, then PhoneDog may have a point. There are still a few unanswered questions, however. For example, what is PhoneDog hoping to gain from the suit (apart from $340,000)? Do they want the account back? Do they want only those 17,000 followers? It seems a victory for PhoneDog could give them a pretty significant logistical problem, too. How would they sort those 17,000 from Kravitz’s current 25,000 followers (assuming all 17,000 still follow him)? I asked about that in my original request for comment. The response I received included the above-quoted statement, and a promise of “more to say after the holiday break.”

    Given the potential ramifications for social media in the business world, this is definitely a story that we’ll be keeping an eye on.

    What do you think? Should employees be allowed to take their company Twitter accounts with them? Sound off in the comments.

  • Company Sues Former Employee Over Twitter Account

    In 2006 Noah Kravitz went to work for Phonedog, a news site specializing in mobile phone related news. During his four years as a writer for Phonedog, his Twitter profile, Phonedog_Noah, picked up 17,000 followers. When he left the company last October, he was told that he could keep the account, provided he tweeted about Phonedog once in a while. When he left, Kravitz changed the profile’s name to NoahKravitz, and proceeded to continue tweeting – including the occasional mention of Phonedog, as requested.

    Now, however, the company is taking Kravitz to court. Over the summer Phonedog filed suit against him, claiming that his 17,000 followers were a customer list, and therefore Phonedog’s property. They are seeking $340,000, or $2.50 per follower per month for the eight months between Kravitz’s departure from the company and the filing of the suit.

    A request for comment from Phonedog has not yet been answered, however the company told the New York Times that they intended “to aggressively protect our customer lists and confidential information, intellectual property, trademark and brands.” In what way Kravitz’s Twitter followers constitute “confidential information,” and how his tweets are supposed to infringe on Phonedog’s “intellectual property, trademark and brands,” is unclear.

    There is, however, another wrinkle: Kravitz is a vested partner in Phonedog, and believes that the lawsuit is a retaliation for asserting his claim for his share of the sites gross ad revenue. Whatever the reasons behind it, however, the results of this lawsuit could have significant ramifications, establishing precedents on ownership of employee social media accounts and the valuation of social media followers.

    What do you think? Do company’s have any ownership rights to their employees’ social media accounts? Sound off in the comments.

  • Segway Demonstration Accident? That’ll Be $10 Million…

    Segways are kind of like the “next big thing” that never really took off. Sure, they’re recognizable and still have a sense of novelty attached to them, but they never became the next step in human transportation that Dean Kamen envisioned. Instead, besides seeing the occasional mobile police unit, Segways are not part of the mainstream, unless, of course, you count the Segway accidents that pop up on YouTube.

    Take the video that’s leading the argument. It simply showed how much fun Segways are, especially at the expense of others; that is, until the person falling off the Segway gets injured enough to win a lawsuit against the vehicle’s makers. Take John Ezzo, for instance. Ezzo took part in a Segway demonstration at Southern Connecticut University in 2009. The demo included a trip through an obstacle course designed and set up by the Segway team.

    The stipulation? Ezzo was to navigate the course while blindfolded, which lead to the head injury that resulted in the lawsuit. According to the Claims Journal publication, Ezzo has been awarded $10 million for his suffering, which apparently led Ezzo to drop out of school and become a handyman. Considering the damages he’s been awarded, Ezzo now has the funds to finance one hell of a handyman business, provided he stays with that career. A new van, complete with a fresh new logo can work wonders, even for word-of-mouth businesses.

    In light of Ezzo’s winning lawsuit, here are a few more videos of people wrecking on Segways, because laughing at the expense of others never gets old, especially on the Internet:


    Perhaps these guys should’ve contacted the same legal team Ezzo did.

  • NBA Referee, AP Settle Twitter Beef

    Considering the open, instant nature of Twitter combined with people’s growing sensitivity to public reaction, it’s actually surprising this kind of thing isn’t more commonplace. What we have is an agreement between two entities concerning a potentially defaming tweet from AP reporter Jon Krawczynski concerning NBA referee William Spooner.

    As indicated during WebProNews’ initial coverage, the tweet in question suggested Spooner had missed a call and was going to “get it back” for the Minnesota Timberwolves later on during the game. The reporter in question, Krawczynski, apparently overhead the exchange and tweeted it out for the masses with the following post:

    “Ref Bill Spooner told Rambis he’d ‘get it back’ after a bad call. Then he made an even worse call on Rockets. That’s NBA officiating folks.”

    When WebProNews previously covered the story, we also made a screenshot of Krawaczynski’s tweet, which has since been removed:

    NBA Tweet

    Because of the implication behind the message, Spooner filed suit against Krawczynski in March, claiming the tweet in question defamed his character. Fast forward to the end of the year and Spooner has agreed to drop his lawsuit, provided Krawcxynski removed the tweet in question and agreed to pay $20,000 towards the referee’s court costs.

    A statement was also released concerning the settlement, one both parties agreed upon, which says:

    “AP and its reporter Jon Krawczynski learned through discovery that referee Bill Spooner and coach Kurt Rambis have both consistently and independently denied that Mr. Spooner told the coach ‘he’d get it back’ in an exchange that occurred after a disputed call against the Timberwolves on Jan. 24, 2011, as Mr. Krawczynski had tweeted from courtside that night. Mr. Spooner has testified that he instead told the coach he would ‘get back’ to him after reviewing videotape of the play during a halftime break.

    “The NBA promptly investigated at the time and concluded that Mr. Spooner had acted properly. AP was initially unaware of the investigation and does not contest the NBA’s finding. During the game, Mr. Krawczynski tweeted what he believed he had heard. Mr. Krawczynski acknowledges the possibility that he misunderstood what Mr. Spooner said and has therefore removed the Tweet from his APKrawczynski Twitter feed.”

    The tweet has also been removed, although, it still shows up in the results, or, at least it’s listed as a search result when you search for Krawczynski’s Twitter account:

    Google Result

    As for the NBA’s investigation, it makes perfect sense the league would stand by its referees, because if there was an admittance of fault, it would confirm what basketball fans already knew cast doubt on the way the officials do their jobs. That being said, when an independent sports blog took a look at the game in question, it discovered the following:

    Despite what was or wasn’t actually said, the play-by-play from that night’s game shows that Patrick Patterson was called for an offensive foul less than 30 seconds after the original foul was called and then called for a foul on the defensive end 10 seconds later. Patrick Patterson has had his share of foul trouble this season, but two fouls in ten seconds following the alleged exchange does seem interesting.

    Make of that what you will, but from a sports fan’s perspective, make up calls are an expected — and accepted — part of sports, just don’t ask the referees about it.

  • Another Courtney Love Twitter Fail?

    Another Courtney Love Twitter Fail?

    While she gained fame for being married to Kurt Cobain, and then furthering said fame with the band Hole, it’s apparent Courtney Love is going down in history for something completely different: being the most sued person in relation to their Twitter account. After reaching a settlement with fashion designer Dawn Simorangkir earlier this year, Love is once again being sued for a tweet she issued concerning another business relationship.

    While Love’s Twitter account is currently not incredibly interesting, unless you’re looking for some advice related to life skills, it’s clearly been the source for consternation for those who are involved with Love on a business level. Although Love’s tweets consist of this kind of content:

    Brick walls are there for a reason: they let us prove how badly we want thingsless than a minute ago via web Favorite Retweet ReplyCourtney Love
    CourtneyLoveUK


    And:

    How inappropriate to call this planet earth when it is quite clearly Oceanless than a minute ago via web Favorite Retweet ReplyCourtney Love
    CourtneyLoveUK


    As well as litany of pro Kurt Cobain posts, she’s also used the account to apparently defame others she’s had dealings with. Whether it’s a verbal beatdown of the aforementioned fashion designer, leading the infamous settlement or complaining about previous business relationships with legal teams, it’s clear Love’s word carries a great deal of weight, and is apparently impossible to ignore.

    Just ask Rhonda Holmes, who previously represented Love in a legal sense. According to reports, after Holmes refused to continue their business relationship, Love issued the following tweet:

    I was f***ing devastated (sic) when Rhonda J Holmes Esq of San Diego was bought off […]

    And now she’s once again being taken to court over something she said on the Internet — with 140 characters or less! Holmes indicates Love’s tweet, as well as a follow-up interview where Love once again blasted Holmes, has severely damaged her legal career and her reputation. If this is indeed true, and not just a “I’ll show you” response, it means at least one thing I wasn’t aware of: Courtney Love’s opinion still matters.

    The Hollywood Reporter’s post has some more details:

    The complaint, filed by Holmes’ firm, alleges causes of action for libel, false light invasion of privacy and intentional interference with a prospective economic advantage. It seeks unspecified damages.

    Considering Love’s luck with previous Twitter-related lawsuits, it wouldn’t be the least bit surprising if Love lost this and lost big. The previous tweet-based lawsuit she faced resulted in a settlement. It wouldn’t be surprising if, because of the initial incident, Love is even more severely punished for speaking her mind.

    In light of all this, perhaps Love should limit herself to self-improvement and Kurt Cobain tweets.

  • Apple, Facebook, Google Sued By Walker Digital

    Today in Delaware, Walker Digital LLC filed multiple suits against top companies for the violation of intellectual property rights.  In total, 15 suits were filed against over 100 companies including giants like Facebook, Google, Microsoft, Apple, Amazon, eBay and Wal-Mart.  Walker Digital says that company efforts failed to obtain commercial licenses.

    Walker Digital is an information technology company most widely known as the people behind priceline.com, launched in 1998.  The company is active in development for the retail, gaming, vending and security industries among others and holds over 450 international and U.S. patents, with hundreds pending.

    In a press release, Walker Digital’s CEO Jon Ellenthal said, “Filing these lawsuits is not a step we sought or preferred.  We have reached out to a wide range of companies that are engaging in commercial activities that clearly depend on inventions created and owned by Walker Digital. Unfortunately, many of these companies have refused to engage in meaningful negotiations that acknowledge the market value they derive from the use of our property.”

    And ties the suit into the (way) larger picture…

    “Patent protection is a key part of our business model. It provides us with a period of exclusive ownership during which we can recoup our investment in innovation and generate the profits necessary to continue our invention efforts. This model dates back to our nation’s founding when encouraging and protecting innovation was incorporated into the U.S. Constitution. The founding fathers recognized the value of a strong patent system as an important element in securing America’s economic advancement.”

    As PCMag points out, this isn’t Walker Digital’s first rodeo.  They previously sued Facebook over the technology of “friending” and has sued Microsoft, Dell and HP in the past.

    Chairman Jay Walker says, “Our goals are two-fold. Obviously we want to realize a fair return on the use of our property. Who would want any less? But we also hope this effort will contribute to the process of moving the asset class of patents and Intellectual Property out of the stone age of litigation and into an efficient market which, in the end, would benefit America and its economy.”

    The press release is vague regarding specific patent violations and does not mention compensation of damages.

  • Winklevoss Twins / Facebook Battle Over?

    Winklevoss Twins / Facebook Battle Over?

    Earlier this year, Cameron and Tyler Winklevoss as well as Divya Narendra decided that the settlement they had reached with Mark Zuckerberg and Facebook was no longer satisfactory.  They elected to turn down the agreement in order to seek more from the world’s largest social networking company.

    As most of you have been following this story since the beginning and/or have seen the Academy Award nominated faux-documentary The Social Network, we shall keep the background to a minimum.

    While all of the players in this suit attended Harvard University, the twins (from now on known as Winklevii) created ConnectU, a social networking startup.  They claimed that Zuckerberg ripped off their idea when he created Facebook, and feel as though they are entitled to a large percentage of its worth.  Zuckerberg denies the claim.  The original settlement was for Facebook to pay the Winklevii $20 million in cash and $45 in stock.  In January, the Winklevii argued that Facebook did not disclose certain internal valuations, and therefore their payout should have been much larger.

    Well, today the battle may be over as the 9th U.S. Circuit Court of Appeals decided that the original settlement will be enforced.  As quoted in Reuters:

    “At some point, litigation must come to an end,” Chief Judge Alex Kozinski wrote. “That point has now been reached.”

    So, the Winklevii were ripped off by the callous Zuckerberg or they scored a whole bunch of dough for doing absolutely nothing – either way it seems as though the drawn out litigation might be over.  Sadly, there now may not be enough material for Social Network 2 :  The Legend of Zucky’s Gold.

    (Image courtesy of AP)

  • Howard Stern Sues Sirius XM for Millions

    Howard Stern Sues Sirius XM for Millions

    The self described “King of all Media” wants his royalties.  On Tuesday Stern’s production company One Twelve Inc. and agent Don Buchwald were named plaintiffs in a lawsuit against Stern’s employer, Sirius XM satellite radio.  The lawsuit claims breach of contract and states that Sirius reneged on guaranteed stock bonuses for Stern based on successful performance.  Buchwald is also demanding his guaranteed consulting fee of 10% of One Twelve payments.

    By October 2004, Howard Stern was already in the upper echelon of his profession.  The Howard Stern Show, broadcast in New York City, garnered 20 million listeners at its peak.  Stern was the first radio host to be number one in both NYC and Los Angeles simultaneously.  As the suit takes time to explain, nobody could argue against Howard Stern’s incredible popularity:

    Howard Stern is a world renowned radio and entertainment personality.  Stern is a unique talent who is widely credited with revolutionizing talk radio.  His brand of free-wheeling discourse and reality programming is enormously popular and has made Stern into a household name.

    The suit identifies Stern a a superstar – one who took an enormous risk by agreeing to take his widely popular show to an unproven satellite radio company.  At the time of the contract, Sirius only had 700,000 subscribers, a distant second behind industry leader at the time XM who had upwards of 2.5 million.

    Sirius needed Stern more than Stern needed Sirius. Stern was unsure if he wanted to continue in radio. He was under pressure to perform, keeping a grueling schedule that required getting up at 4 am., and was seriously thinking of retiring. Moving to satellite radio, and especially to Sirius, was a significant risk for Stern. Stern and Buchwald wanted assurances that if Stern made Sirius a success, they would share in that success.

    In order to tempt Stern to come on board, Sirius drew up a plan that involved a series of escalating stock awards, payable to Stern’s production company One Twelve if Stern himself attracted 2 million new subscribers or if Sirius exceeded their own yearly estimates for subscribers by more than 2 million.

    In addition, for each additional 2 million subscribers per year, Stern was to receive stock bonuses.  Those subscribers had to either be directly attributed to Stern or simply be total users above Sirius’ own projections.  The bonuses were to be paid for increases in subscriptions in multiples of 2 million, capping at 10 million.  In lawyer speak:

    Sirius was required to pay One Twelve a second performance-based stock award if the Agreement remained in effect and, on or before December 31, 2010, either (i) Sirius had acquired a total number of 4 million or more HS-Generated Subscribers or (ii) the total number of Sirius subscribers at the end of any calendar year exceeded the “Siri Internal Estimate” year-end subscriber target for such year by more than 4 million subscribers.

    And so on and so forth, up 10 million subscribers each year.  The lawsuit quotes Sirius as justifying the stock bonuses by drawing on the overwhelming good Stern would do for the company.

    Sirius acknowledged that it was “obligated to make substantial stock-based incentive payments under the agreement if [it] significantly exceed[ed] agreed upon year-end subscriber targets during the term of the agreement.” But Sirius stated that any such payments would be more than offset because its “agreement with Stem [would] have material positive benefit to [its] business, including a positive impact on consumer awareness, average revenue per subscriber, churn and partner relations.”

    Well, it seems as though Stern did his part in drumming up subscribers.  Before he even went on the air in 2006, Sirius had nearly 3 million more listeners waiting for his arrival.  By the end of 2006, Sirius had gained nearly another 3 million listeners, having more than 6 million total.  They promptly paid Stern his bonuses.  It wasn’t until Sirius acquired XM in a merger in 2008 that things began to go off the rails a bit.

    The acquisition of XM caused a enormous leap in Sirius’ subscriber numbers. Here are the statistics the lawsuit throws at us:

    By the end of 2008, the total number of Sirius subscribers had reached 19,003,856, exceeding the estimate contained in the Agreement by more than 10 million subscribers. By the end of 2009, the total number of Sirius subscribers had dipped slightly to 18,772,758, exceeding the estimate contained in the Agreement by more than 8 million subscribers. By the end of  2010, the last year of the Agreement, the total number of Sirius subscribers had reached an all-time high of 20, 190,964 total subscribers, exceeding the estimate contained in the Agreement by more than 8 million subscribers.

    According to the agreement quoted previously, it seems as though Stern earned his bonuses, by an incredible margin.  Sirius feels differently, as explained in the suit.  As Stern was re-negotiating his contract in 2010, he was also asking about his bonuses.  When pestered enough about them, Sirius’ lead counsel told Stern that subscribers on the XM platform didn’t count towards that total number of Sirius subscribers mark that he was shooting for.

    The lawsuit argues two major points in the contention of the above claim.  First, it argues that without Stern, Sirius never would have been able to acquire XM.  It was his popularity, they say, that even put Sirius on the map and made them a competitor in the satellite radio world.  The subscriber growth numbers seem to support that conclusion, as they are staggering.  Second, the suit argues that the original agreement differentiates between Howard Stern specific generated subscribers and total subscribers over the yearly projections.  Even if all those subscribers couldn’t be directly attributed to Stern himself, Sirius’ total subscribers obviously beat their yearly projections at least 2 million – 8 million in 2010.

    The suits’ closing argument, per say:

    In 2004, when Sirius desperately needed Stern to make its business viable, it induced him to move to Sirius by offering him a chance to share in the success of the company.  Now that Stern has put the company on the map, brought in millions of subscribers, and helped it conquer its chief rival, Sirius has unilaterally decided that Stern has been paid enough. The amounts owed to One Twelve and Buchwald represent a fraction of the revenues that Stern enabled Sirius to achieve, yet Sirius refuses to honor its commitments to him and Buchwald.

    And so ends a straightforward and quite reader-friendly brief. Howard Stern has been an enormous draw for Sirius XM, however, is he solely responsible for their early success that allowed them to grow and acquire more market share?  That’s debatable.  Stern’s argument looks pretty strong to this writer, however we have yet to hear Sirius’ defense.  All we know is that Sirius says it is “surprised and disappointed” according to Reuters.  Last time Stern had beef with his bosses, he turned it into the film Private Parts and only boosted his notoriety.  Could another ongoing struggle with his employer bring even more listeners to Stern?

  • NBA Referee Calls Foul On Reporter Tweet

    The relationship between sports referees and fans/followers of sport has been, at best, a contentious one filled with unending amounts of distrust, at least from the perspective of those doing the sports-watching.

    Every bad call, every missed call and every call that goes against your team comes back on the officials, whether the judgment call was made with malice or not. Referees have been accused of everything from fixing games to favoring certain teams over others; from deliberately missing calls and to making up calls to correct previous mistakes. The fact is, it’s hard to find any other profession that is publicly scrutinized in such a severe manner.

    Politicians maybe, but it’s doubtful the level of distrust aimed at public officials is that much higher than sports referees.

    A word to wise, however: If you are going to criticize these guys, you might want to be somewhat vague with your accusation, especially if you’re using Twitter to voice your complaint. Just ask Jon Krawczynski, a reporter for the Associated Press. While reporting on an NBA game between Houston Rockets and the Minnesota Timberwolves on January 24 of this year, Krawczynski posted the following tweet about referee Bill Spooner:

    Ref Bill Spooner told [Minnesota Timberwolves head coach] Rambis he’d “get it back” after a bad call. Then he made an even worse call on Rockets. That’s NBA officiating folks.

    And now, Spooner is suing Krawczynski for defamation. For his troubles, Spooner is asking for “more than $75000,” and he’s asking the tweet in question be removed, while Krawczynski issues a retraction.

    While this writer is certainly not an expert in libel and defamation, because Krawczynski’s tweet was so specific, Spooner’s lawsuit may just have some legs. Had the post been more benign, something like “Looks like Spooner’s going the make-up call route” or something along those lines, one would think the lawsuit would simply fizzle out and die. That, however, is not the case. Krawczynski’s tweet, which still stands as of this writing, reads like he’s attributing a quote directly to Spooner.

    Again, I’m not entirely sure if that distinction makes any difference, but it wouldn’t be surprising if Spooner got his way. With that in mind, The legal counsel for the AP is standing by Krawczynski and his tweet.

    As for the calls in question, the Minnesota sports portal at SBNation.com offers this take on Spooner’s behavior:

    Despite what was or wasn’t actually said, the play-by-play from that night’s game shows that Patrick Patterson was called for an offensive foul less than 30 seconds after the original foul was called and then called for a foul on the defensive end 10 seconds later. Patrick Patterson has had his share of foul trouble this season, but two fouls in ten seconds following the alleged exchange does seem interesting.

    Make-up calls are an unwritten part of sports, so unwritten in fact, the very idea sounds like it comes from the Fight Club script: “The first rule of make-up calls is we do not talk about and/or even acknowledge make-up calls, especially on Twitter.”

    Now we’ll see if it’s an enforceable rule.

    Of course, if the legal proceedings are conducted much like an NBA game is officiated, Krawczynski better hope he’s the home team.

  • Limewire Looking To Be Put Out Of Business By Music Publishers

    bers of the National Music Publishers’ Association (NMPA) have filed a massive copyright infringement lawsuit against LimeWire. The suit follows a recent action filed by the RIAA that resulted in a court decision holding LimeWire liable for inducing copyright infringement leaving and leaving the company just days to show why the service image from www.mp3.ltd.uk should not be shut down. The publishers’ suit is filed as a related case. 

    The music publishers filed the lawsuit against LimeWire and its top executives in US District Court for the Southern District of New York. They  are asking $150,000 for each song illegally distributed  by the company which could bring total damages to hundreds of millions of dollars.

    "Pervasive online infringement…
    has consequences for everyone in the music chain."

    The eight plaintiffs come from the ranks of North America’s top music publishers including companies affiliated with all four major label groups: EMI Music Publishing, Sony/ATV Music Publishing, Universal Music Publishing Group, Warner/Chappell Music, Inc., Bug Music, MPL Music Publishing, Peermusic, and The Richmond Organization. Named as defendants are LimeWire LLC, Lime Group LLC, LimeWire CEO Mark Gorton, former COO and CTO Greg Bildson, and M.J.G. LimeWire Family Limited Partnership. 

     “The pervasive online infringement facilitated by LimeWire and others like them has consequences for everyone in the music chain,” NMPA President and CEO David Israelite declared at the NMPA’s Annual Meeting in New York City yesterday. "Operations like LimeWire must understand the songs that make their illegal venture lucrative don’t appear out of thin air. Behind every song is a vast network of people – a songwriter, a publisher, a performer, a record label. They have robbed every individual in that chain by selling their site as an access point for music and then refusing to properly license the music. It is a scheme the U.S. Supreme Court spoke on five years ago in its landmark Grokster decision, and a scheme that the U.S. District Court ruled was a violation of copyright law in the record labels’ hard-fought case.”

    Comments