Some complaints are a morass of technical jargon and legalese. Others read like the makings of a zany crime-comedy by Steven Soderbergh. One new lawsuit filed against Google for copying the technology to compress video and audio files falls into the latter category, due primarily to allegedly incriminating Post-It notes accidentally handed over to the victim.
Comic potential aside, the claims are far-reaching, alleging that Google used trade secrets to "enhance the streaming and downloading features of virtually all Google services," reports The Recorder. That list includes YouTube, AdSense, Google Maps, Google Drive, Google Chromecast, and many more. The allegations also involve top Google executives, including former sales boss Nikesh Arora and Megan Smith. It will likely provide a fount of schadenfreude for every startup that ever alleged that Google used acquisition talks to pilfer their inventions.
In a press release, the plaintiffs Vedanti System Limited (VSL) and Max Sound noted that they filed two suits against Google. Max Sound acquired the licensing rights to data transmission technology originally owned by VSL Communications. One lawsuit, filed in Santa Clara County Superior Court, is related to trade secrets. The other suit, filed in U.S. District Court for the District of Delaware, accuses Google of willful patent infringement. Both complaints are now embedded below.
According to the patent complaint, the problem began in March, 2010 when VSL's CEO met with Arora to discuss "licensing or acquiring" VSL's patented technology for digital video streaming. The filing also says that Smith, then Google's vice president of business development, signed an NDA in order to discuss VSL's technology. And that if VSL's patent portfolio met a certain requirement, Laura Majerus, part of Google's in-house counsel, then Google would "seek to buy the technology or to acquire VSL."
(Arora, who recently left for a plum position at the tech conglomerate SoftBank, was Google's highest-paid executive in 2012, with a compensation package of $51 million.)
The suit says that when negotiations between VSL and Google "stalled" and "terminated," Majerus shipped materials back to VSL pursuant to the NDA. Those materials were allegedly crawling with incriminating Post-It notes. The complaint claims that one Post-It said Google should "try" to destroy email evidence, one that said Google worried its infringement might be "reckless," and one that said Google should consider a "design around" or face litigation:
The returned VSL material, it should be noted, included a working VSL codec for Google to test and analyze, copies of patents and patent applications, and a chart comparing their inventions to existing standards.
When VSL's CEO Alpesh Patel met with Arora in 2010, it was with the understanding that Google's video tech " was in desperate need of improvement." The Recorder reports:
Sure enough, Google in 2010 had begun to amend its preexisting patent applications and to file new applications using VSL's technology, according to the complaint. In 2012, VSL noticed that the video quality of Google's Android operating system and other Google software had significantly improved. In June, VSL staff analyzed Google's publicly available code and discovered it contained VSL trade secrets.
I reached out to Google. A spokesperson said "We've got no comment on the complaint." Welp, in that case, please leave your casting recommendations in the comments.
Update: This post has been changed to clarify that the plaintiffs filed two separate lawsuits, both the patent infringement one and the trade secret suit. Sorry for any confusion.
To contact the author of this post about these lawsuits or other infringement allegations, please email email@example.com.
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