Judge Rules Fusion Garage, TechCrunch Were Partners

Remember that other tablet, which came out right around the same time the iPad was released? Yeah, the joojoo, by Fusion Garage. During its development, it was known as the CrunchPad, and emerged out of some form of collaboration between Michael Arrington’s TechCrunch and Chandrasekhar Rathakrisnan’s Fusion Garage. Things went sour between the two, and eventually, Fusion Garage released the joojoo on its own. Consequently, Arrington sued, and we’ve got the first major court decision.

Let’s back up a little – to December 2009, to be exact. We’re talking December 7, 2009, and Fusion Garage just unveiled the joojoo, formerly known as the CrunchPad. They do so after their collaboration with TechCrunch went sour. Consequently, Arrington sued Fusion Garage only a few days later. It took a few months, but in February 2010, Fusion Garage filed a motion to dismiss TechCrunch’s suit.

Arrington wrote that the causes for the suit “include Fraud and Deceit, Misappropriation of Business Ideas, Breach of Fiduciary Duty, Unfair Competitition and Violations of the Lanham Act”. Fusion Garage motioned to have all of these dismissed, and in today’s ruling, the judge does pretty much that; except for the breach of fiduciary duty, the judge sides with Fusion Garage on all accounts.

This seems like a major loss for Arrington, but it actually isn’t that bad. The other claims were so incredibly vague (the word “hodgepodge” is dropped by the judge) that they were pretty much useless anyway (as Engadget already noted when the suit first got out). Breach of fiduciary duty is a good base to work from, and gives the lawyers the opportunity to focus on what was already the strongest aspect.

The big problem seems to be what everybody already anticipated: lack of a decent written contract between TechCrunch and Fusion Garage. This makes it very hard for Arrington to make any claims, but thanks to jurisprudence, the judge came to the conclusion that there was a joint venture between the two parties – even if they didn’t have it in writing. Partnerships and joint ventures – more or less the same thing legally, states the judge – can be implied as well, and that was clearly the case here.

Arrington has 20 days to amend some of his complaints, and the breach of fiduciary duty thing will have to be handled in court. At this point, does anybody even care, though?


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