

CrunchPad Litigation Imminent - vrobancho
http://www.techcrunch.com/2009/12/04/crunchpad-litigation/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+Techcrunch+(TechCrunch)&utm_content=Google+Reader

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rjurney
Kinda ironic for a Techcrunch product fiasco to become fodder for its own
articles.

Is the crunchpad dead?

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jacobian
No, it's just pining for the fjords.

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rjurney
I had to look that up.
[http://www.urbandictionary.com/define.php?term=pining+for+th...](http://www.urbandictionary.com/define.php?term=pining+for+the+fjords)

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flybrand
These kinds of issues are very common in hardware; electronics (pure IC),
devices, batteries, any kind of physical good with an outsourced manufacturer.

Partner / Supplier diligence is just as important as a good idea. Techcrunch
is hurting their ability to find future partners in the way they are handling
this, regardless of who is at fault.

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Herring
Reputation evolved to solve this problem. I wonder if there's a way of
implementing a (better) feedback system.

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flybrand
Interesting. Hadn't thought about it previously, but a global version of Yelp
focused on supply chain partners and their production facilities would be very
valuable. You'd need to start with a narrow vertical (textiles, wire-bonding,
nonwovens, automation equipment, etc.), but it could be a very useful software
fix to a broader problem.

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rjurney
mfg.com

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dgallagher
_There is just no way to argue that TechCrunch is not the joint owner of all
intellectual property of the CrunchPad, and outright owner of the CrunchPad
trademark._

The trademark for "CrunchPad" was filed on November 17, 2009. It's registered
under Interserve, Inc. doing business as TechCrunch (apologies if the link
goes dead - sometimes they use weird sessions on USPTO.gov):

[http://tess2.uspto.gov/bin/showfield?f=doc&state=4002:t9...](http://tess2.uspto.gov/bin/showfield?f=doc&state=4002:t9m119.2.1)

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jeremymims
They may have some claim to use the word "crunch" since all of their websites
have this in the name.

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gvb
"Interserve, Inc. doing business as TechCrunch" - the phrase "doing business
as" (aka "dba") is a legal term, technically known as an assumed name. This
means TechCrunch _is_ Interserve and thus owns the trademark.

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sandGorgon
Actually, I am interested to know how much does it cost to get a hardware
PROTOTYPE built. Say, if I have a really cool idea about a new 3g device , how
much would it cost me to get it prototyped - what happens to the intellectual
property rights in that case. Is it shared ownership or do I own all IP ?

Anybody have any idea about pricepoints...

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gvb
I don't have much experience, but I'll throw out some guesses to prime the
pump. The CrunchPad is a _very_ non-trivial design, there is probably a couple
million invested either as real money or contributed effort ("IP").

a) Cost of a prototype... it depends. :-) Your hypothetical is badly
underspecified.

In the boat owner world, we use a unit known as a Boat Unit of Cost (BUC)
which is typically defined as $1000 ($100 if you are cheap like me, $1,000,000
if you are Larry Ellison <http://en.wikipedia.org/wiki/Larry_Ellison#Sailing>
<http://en.wikipedia.org/wiki/Rising_Sun_%28yacht%29>).

Lets define a "Prototype Unit of Cost" (PUC) to be $100,000.

Designing the hardware (schematic, mechanical) if you don't do it yourself.

    
    
      1.0 PUC for a starting point for design to schematic capture.
      0.5 PUC for a simple layout.
      0.5 PUC for mechanical design.
    

Software, assuming you are using open source (say porting U-Boot and a Debian-
based linux distribution to your device). If you add custom application
software on top of this, you will add 1-10 more PUCs.

    
    
      1.0 PUC (linux boots and runs well)
    

Fabbing a 1-4 layer board is pretty cheap for prototype quantities, a couple
hundred to a few thousand dollars. This is probably your cheapest purchase.
:-/

    
    
      0.1 PUC
    

If you are using small surface mount parts (i.e. need to use automated
machines to place parts), it costs a LOT for the first unit, but the next
10,000 are pretty cheap. If you promise to build large quantities, the
assembly outfit will build the first few prototypes at a fairly reasonable
price. If you stiff them and don't go to production, well, that probably only
happens once. Ever.

    
    
      1.0 PUC.  Maybe less, likely more.
    

If you need a custom or semi-custom enclosure, $$$ (my crystal ball has no
experience, and it will be heavily dependent on what the enclosure is).

    
    
      0.1 - 1.0 PUC
    

If you need FCC/CE/UL certification (i.e. not a hobbyist device), add a lot
more. Again, my crystal ball is inexperienced, say...

    
    
      1.0 PUC assuming passing the first time (perhaps with some minor mods).
    

So, having said all that, my gut feel is:

* Hobbyist device... $1,000..$10,000

* "Collection of already certified modules" simple commercial device, mostly self-designed... $100,000..$500,000.

* Outsourced design, software, with a more integrated design (less buying of pre-certified modules)... $500,000..$5,000,000

b) You own all the IP that you paid to have developed. The legal doctrine that
covers this is "work for hire." <http://en.wikipedia.org/wiki/Work_for_hire>
(Disclaimer: IANAL, you _always_ want _your_ lawyer to CYA for you on this!)

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raheemm
I look forward to learning the other side of this fiasco.

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Herring
_Chandra also forwarded an internal email from one of his shareholders. My
favorite part of the email: “We still acknowledge that Arrington and
TechCrunch bring some value to your business endeavor…If he agrees to our
terms, we would have Arrington assume the role of
visionary/evangelist/marketing head and Fusion Garage would acquire the rights
to use the Crunchpad brand and name. Personally, I don’t think the name is all
that important but you seem to be somewhat attached to the name.”_

I just don't see how you could possibly spin that. It's clearly out of the
blue & they're clearly trying to push TechCrunch out.

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9oliYQjP
Something's sketchy. Wouldn't the TechCrunch lawyer have referred to a
contract covering their partnership arrangement? The letter by the lawyer is
pure scare tactics. It does not point to any specific violation of a written
contract anywhere. Was there even a Letter of Intent signed by TechCrunch and
these folks? If not, that's just amateur hour over there.

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dgallagher
You raise a very good question. Was there a legally binding contract/agreement
between both parties, or was it done "on a handshake" without really having a
solid legal backing?

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flipbrad
It does mention breach of contract several times. but not what contract...
perhaps they're trying to imply a contract/rely on oral contract?

does anyone know if there's precedent showing how a court would react to the
publication of letters and emails concerning a legal rift and running up to
proceedings - will courts look favourably on that at all?

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spolsky
Reminds me of Hearst running the headline, "How do you like the Journal's
War?" taking credit for the Spanish-American war.

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amix
I wonder what kind of problems TechCrunch is going to face suing a company in
Singapore... The laws in Singapore might be very different and Fusion Garage
might be favorable since it's a local company. At best they can sue
distributors of CrunchPad in USA, but Fusion Garage could just target Asia and
Europe.

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vaksel
well it was inevitable...and I wish them luck.

But suing someone in another country seems like an impossible proposition.
It's one of the inherent risks of offshoring, if the other person screws you
over, you really don't have any real recourse.

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9oliYQjP
I'm not a lawyer but is it not possible that if a lawsuit proceeds,
TechCrunch's own inaccurate, often speculative, bordering on drama queen news
posts could work against them? A lawyer could paint TechCrunch as the kind of
entity that blows everything out of proportion, including their involvement in
this project. Surely the lawyer could dig up some TechCrunch stories spewing
inaccurate rumours and speculation as proof. Seeing as how it would be a civil
case, this sort of evidence could surely be brought up could it not?

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nikcub
you're right, you are not a lawyer

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cmelbye
I must have missed the part in the article where Arrington says why I should
care about this publicity stunt.

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jeremymims
I think we've passed the point for publicity stunt speculation. There's enough
blood spilled that this couldn't have been the intent.

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cmelbye
Fair enough. Replace "publicity stunt" with "drama". Stuff being leaked and
shady things happening are not new things to happen on TechCrunch by any
means.

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bumblebird
Who cares? really. Lets not give Techcrunch so much attention for some
vaporware.

