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.
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.
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):
"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.
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 ?
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.
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).
* 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!)
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.
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.
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?
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?
Maybe not for FG, but I think we can comfortably characterize TC as being amateur in the hardware arena. Has Arrington ever run a business whose product end users paid for?
Yeah a few people on the blog are wondering the same thing. But I don't see how that would make Fusion Garage look good. Unless you think they're both making it up for PR.
Agreed. I keep having to remind myself there's two sides to every story (and the only side we've heard so far has a widely read blog to use as a mouthpiece).
Still, Fusion Garage has a lot of explaining to do.
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.
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.
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?
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.
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.