Former Netflix Exec Says Trade Secret Theft Allegations Were False

by Sheldon Mak & Anderson on April 22, 2014

 A former Netflix Inc. executive has sued the company, claiming that it tried to “blacklist” him after he took a job with rival Amazon.com Inc. by claiming that he had stolen confidential trade secrets.

Amazon fired Jerry Kowal, a former Netflix content executive, from its digital video division after Netflix made the trade secret theft charges.

Kowal claims that Netflix used its position as a major customer of Amazon’s cloud storage services to pressure Amazon to fire him.

Amazon is also named as a defendant in the complaint.

Kowal characterized the action as a “David and Goliath” campaign “to effectively blacklist a once valued and profitable executive.”

Kowal worked for Netflix for about a year from 2012 to 2013, responsible for licensing content for the company to stream to its customers.  He claimed in his complaint that Netflix’s “cold and hostile” atmosphere made him eager to leave the company and join Amazon.

About one week after Kowal left for Amazon, Netflix executives told employees that he was being investigated for leaking proprietary documents to Amazon and told them to stop any contact with him.  Soon after, Netflix wrote to Kowal, accused him of trade secret theft, and demanded access to his personal computer.

Kowal complied, on the advice of Amazon’s attorney.  However, he was fired by Amazon before the investigation of his computer was completed.

Kowal said that a data forensics company found no evidence on his computer that he had in fact sent confidential information to Amazon.  Despite this, he was fired because of Amazon’s “strict liability policy” – a policy Kowal said he did not know of when he was hired.

Kowal is suing the defendants for causes of action including defamation, interference with employment, and wrongful termination. He is seeking damages of least $1 million.

If you believe that an employee or former employee has stolen your company’s trade secrets, contact our office to arrange a free initial consultation with one of our trade secret lawyers.

At Sheldon Mak & Anderson, we recognize that innovation is your competitive edge - and it needs protection. Recognized as one of the country’s “Best Law Firms” by U.S. News and Best Lawyers, Sheldon Mak & Anderson was established in 1983 and is one of Pasadena’s oldest law firms. Our full-service IP firm provides local, regional, national, and international legal services in the following areas: patents, trademarks, copyrights, trade secrets, IP litigation, international patent and trademark prosecution, licensing, alternative dispute resolution, and green technology.

Contact our knowledgeable intellectual property attorneys today TOLL FREE at 1-855-UR IDEAS (1-855-874-3327) or email us at tri@usip.com to find out how we can provide powerful protection for your unique ideas.

We have offices conveniently located in Pasadena (626-796-4000, 100 Corson Street Third Floor, Pasadena, CA 91103-3842);  Riverside (951-787-7770, 5885 Brockton Avenue, Riverside, CA 92506-1863); Upland (909-946-3939, 222 N. Mountain Avenue, Suite 210, Upland, CA 91786-5714); and Orange County (855-874-3327, 2102 Business Center Drive, Suite 130, Irvine, CA 92612-1001).

Disclaimer: We fully comply with all laws related to attorney marketing and this posting is considered an advertisement.

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Jack Kirby Heirs Ask Supreme Court to Hear Marvel Copyright Dispute

by Sheldon Mak & Anderson on April 21, 2014

 The heirs of comic book artist Jack Kirby have asked the US Supreme Court to reverse a decision by the Second Circuit Court of Appeals finding that Marvel Comics Worldwide Inc. owns the rights to comic franchises created by Kirby.

The franchises at issue include “The Fantastic Four,” “The Incredible Hulk,” and “X-Men.”

Kirby’s children notified Marvel in 2009 that they were terminating their father’s assignment of copyrights to Marvel for 45 works he created between 1958 and 1963.

Kirby’s children sought termination of the assignments under the termination clause of the Copyright Act, 17 U.S. Code § 203.

The termination clause states, in pertinent part:

 (a) Conditions for Termination.— In the case of any work other than a work made for hire, the exclusive or nonexclusive grant of a transfer or license of copyright or of any right under a copyright, executed by the author on or after January 1, 1978, otherwise than by will, is subject to termination under the following conditions:

(1) In the case of a grant executed by one author, termination of the grant may be effected by that author or, if the author is dead, by the person or persons who, under clause (2) of this subsection, own and are entitled to exercise a total of more than one-half of that author’s termination interest….

For a deceased author, rights may be exercised by the author’s widow, widower, children, grandchildren, executor, administrator, etc.

Termination may only occur within a defined window of time:

Termination of the grant may be effected at any time during a period of five years beginning at the end of thirty-five years from the date of execution of the grant; or, if the grant covers the right of publication of the work, the period begins at the end of thirty-five years from the date of publication of the work under the grant or at the end of forty years from the date of execution of the grant, whichever term ends earlier.

As noted above, termination rights do not apply when a work is “made for hire” (as by an employee). Kirby’s children say that their father worked freelance and thus the works were not “made for hire.”

Marvel sued Kirby’s children in 2010, claiming that the termination notices were invalid.  A New York district court agreed, saying that the drawings were, in fact, works for hire.

Kirby’s children appealed and the Second Circuit affirmed, finding that although Kirby worked as a freelancer he worked so closely with Marvel as to make him a work-for-hire employee.

The Supreme Court appeal is based on Kirby’s children’s’ contention that the Second Circuit improperly expanded the scope of the “work for hire” doctrine.

If you have questions about copyright licenses and the termination of rights, contact our office to arrange a free initial consultation with one of our copyright attorneys.

At Sheldon Mak & Anderson, we recognize that innovation is your competitive edge - and it needs protection. Recognized as one of the country’s “Best Law Firms” by U.S. News and Best Lawyers, Sheldon Mak & Anderson was established in 1983 and is one of Pasadena’s oldest law firms. Our full-service IP firm provides local, regional, national, and international legal services in the following areas: patents, trademarks, copyrights, trade secrets, IP litigation, international patent and trademark prosecution, licensing, alternative dispute resolution, and green technology.

Contact our knowledgeable intellectual property attorneys today TOLL FREE at 1-855-UR IDEAS (1-855-874-3327) or email us at tri@usip.com to find out how we can provide powerful protection for your unique ideas.

We have offices conveniently located in Pasadena (626-796-4000, 100 Corson Street Third Floor, Pasadena, CA 91103-3842);  Riverside (951-787-7770, 5885 Brockton Avenue, Riverside, CA 92506-1863); Upland (909-946-3939, 222 N. Mountain Avenue, Suite 210, Upland, CA 91786-5714); and Orange County (855-874-3327, 2102 Business Center Drive, Suite 130, Irvine, CA 92612-1001).

Disclaimer: We fully comply with all laws related to attorney marketing and this posting is considered an advertisement.

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Federal Circuit Tosses Dog Jersey Patent as Obvious

April 18, 2014

The Federal Circuit Court of Appeals has affirmed the dismissal of a patent infringement lawsuit involving sports jerseys for dogs, finding that a lower court properly held that the patents were obvious in light of prior art and thus invalid. In the case of MRC Innovations Inc. v. Hunter Manufacturing LLP, MRC was the owner […]

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Trademark Appeals Board Defines when Catalogs Are Merely Advertising

April 17, 2014

The Trademark Trial and Appeal Board (TTAB) of the US Patent and Trademark Office has provided an analysis of the elements required to convert a catalog from “mere advertising” to an acceptable “point of sale” specimen for the purpose of trademark registration. The case of In re Tsubaki Inc. involved U.S. Tsubaki’s use-based trademark application […]

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Tarantino Says Gawker’s Publication of Script Was Not Fair Use under Copyright Law

April 16, 2014

  At a hearing on Gawker’s motion to dismiss his copyright infringement claim, Academy Award-winning writer and director Quentin Tarantino contended that the site’s link to his screenplay for a Western called “The Hateful Eight” was not fair use. Gawker had included a hyperlink to the script posted by anonymous users on AnonFiles.com in its […]

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PTO Glossary Program Will Expedite Software Patent Application Process

April 15, 2014

The US Patent and Trademark Office is introducing a pilot program to use glossaries to speed up the processing of software-related patent applications. The program will launch on June 2 and run until December 12. The Glossary Initiative arose out of a Software Partnership Meeting held by the USPTO at UC Berkeley School of law […]

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