Last month, a San Francisco tech company accused several motion picture studios of using stolen intellectual property to forge dazzling breakthroughs in graphics technology, fueling the success of blockbusters such as “Beauty and the Beast” and “Terminator: Genisys.”
Rearden LLC, the incubator operated by tech entrepreneur Stephen Perlman, says a former employee absconded with cameras, lighting and computer software that make up MOVA Contour Reality Capture technology and sold it to a rival graphics company, which then hired LaSalle into a key leadership role. Perlman accuses the studios of working with the employee’s new company, Digital Domain, when they knew or should have known that Perlman’s company owned the technology.
Does this have a familiar ring? If it doesn’t, then we hereby offer six reasons Perlman’s dispute with Greg LaSalle, Digital Domain, The Walt Disney Co., Paramount Pictures Corp. and Twentieth Century Fox Film Corp. reminds us of Google Inc.’s dispute with Anthony Levandowski, Otto Trucking LLC and Uber Technologies Inc.
1. Perlman’s company, Rearden LLC, is blaming a “renegade employee” for stealing the IP. Like Anthony Levandowski, who was allegedly meeting with Uber CEO Travis Kalanick while still employed by Google, Greg LaSalle, Rearden’s point man on the MOVA technology, is accused of stealing the camera and lighting rig and the computer software and selling it to an affiliate of Digital Domain while still drawing a paycheck from Rearden.
2. The alleged “renegade” employee was a technology specialist who felt that the owner wasn’t moving quickly enough to develop the technology. And he might also have seen an opportunity to make more money. MOVA had failed under Perlman’s watch and was sold to a creditor. In 2013 Perlman arranged to buy it back for $1 and install LaSalle as CEO to drive it forward. LaSalle seems to have taken that arrangement a step further by selling the company to Digital Domain for $25,000, an employment contract, and a promise to indemnify him against claims by Perlman. Legal or not, MOVA does seem to have taken off after moving away from Rearden and into Digital Domain. MOVA won a Sci-Tech award from the Academy of Motion Pictures Arts and Sciences in 2015.
3. The company bringing the lawsuit is fond of spin-offs. Google couldn’t be happy just being Google. It created holding company Alphabet Inc. and spun off various businesses, including driverless car division Waymo LLC. Perlman, who cut his teeth at Apple and Microsoft, is fond of similar asset shuffling—and that’s where the trouble with the studios seems to have started.
He spun off MOVA as part of a company called OnLive, then sold OnLive as an assignment to benefit creditors when the company failed. Later he arranged for LaSalle to create a company called MO2 LLC and re-acquire the MOVA assets for $1. Using LaSalle as the frontman for the transaction, while masking Perlman’s involvement, was “a ploy to drive down the sale price of the MOVA assets, and it worked,” Judge Jon Tigar said from the bench last fall.
The movie studios haven’t responded to Perlman’s suits yet, but it won’t be surprising if they claim they were fooled too.
4. There are parallel adjudications that could affect the outcome of the dispute. Waymo is in arbitration with Levandowski but sued Uber in the Northern District of California. Perlman, LaSalle and Digital Domain are hashing out the ownership rights to MOVA before Tigar. Following a bench trial last December, Tigar tentatively indicated that Rearden owns the rights, because LaSalle had agreed as part of his employment contract to assign all IP acquisitions to Rearden.
Tigar hasn’t issued a formal ruling yet, but that hasn’t stopped Rearden from suing the studios, saying they knew or should have known that Rearden was the true owner. On the off chance Tigar changes his mind, it could throw a big wrench into Perlman’s suits against the studios.
5. Google and Perlman are looking for crippling injunctions. Google has already obtained a preliminary injunction that forced Levandowski out of Uber and its driverless car program. Perlman’s demand is even more ambitious—he’s seeking an order destroying all infringing copies of “Beauty and the Beast,” “Guardians of the Galaxy,” “Terminator: Genisys,” “Deadpool” and others.
6. The cases are full employment acts for law firms. Uber and its allies are being represented by Morrison & Foerster; Boies Schiller & Flexner; Goodwin Procter; Kirkland & Ellis and Ramsey & Ehrlich. In his MOVA litigation, Perlman has already drawn on Durie Tangri; Turner Boyd and Kerr & Wagstaffe in the dispute with LaSalle and Digital Domain, while Hagens Berman Sobol Shapiro was tapped to roll out the complaints against the movie studios.
Kilpatrick Townsend & Stockton represents Digital Domain and its affiliates. No word yet on who’s representing the studios—or whether they’ll put together a joint defense group like Uber and Levandowski.