Startup Litigation – Morley or Sherlock’s Moriarity – The Strange Case of Morley v Square, Inc.

Have to love a United States District Court complaint that starts as follows:

“The publicized origin story of Square, Inc. is a fabrication. The business now known as Square was not created solely by Jack Dorsey and James McKelvey. It was Professor Robert Morley— and Dr. Morley alone— who invented the Square card reader, and Dr. Morley coinvented the corresponding magnetic stripe decoding algorithms of the Square app. Dr. Morley had over a decade of experience in the credit card industry, spanning card reader technology,
industry contacts, and business operations. In contrast, Messrs. Dorsey and McKelvey had no noteworthy experience in the credit card industry. Dorsey, Morley, and McKelvey worked together in a joint venture with the goal of entering the mobile credit card transaction industry inventing the Square card reader, which enabled Square’s entry into the mobile credit card transaction industry, Dr. Morley contributed his technological expertise and knowledge of the credit card industry to the joint venture. But Messrs. Dorsey and McKelvey betrayed the joint venture by incorporating Square, Inc., dictating the ownership of the newly incorporated company, and cutting Dr. Morley completely out of the enterprise.And in an attempt to whitewash these transgressions, Square has embroiled Dr. Morley in years of litigation and proceedings before the United States Patent and Trademark Office— forcing him to defend himself against the company he helped create. This lawsuit seeks justice for Dr. Morley, redress and redemption.”

For you startup litigation geeks:

Count One – Breach of Joint Venture Agreement

Count Two – Breach of Fiduciary Duty

Count Three – Unjust Enrichment

Count Four – Patent Infringement

Count Five – Consturctive Trust

Count Six – Civil Conspiracy

Count Seven – Negligent Misrepresentation

Count Eight – Fraud

Count Nine – Fraudulent Nondisclosure

Count Ten – Correction of Inventorship

Count Eleven – Conversion

Count Twelve – Misappropriation of Trade Secrets

Aaron Swartz, Civil Disobedience, and Harvard Ethics – Republish of July 2011 Post

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Sorry, Aaron, I did not speak long enough or hard enough.

[The July 14, 2011 United States criminal indictment of activist Aaron Swartz, inventor of RSS, for downloading mass quantities of academic journals, is Here.]

The relevant American newspapers have two different takes on the Swartz indictment.

Boston: “Aaron Swartz, a Cambridge web entrepreneur and political activist who has lobbied for the free flow of information on the Internet, was charged in federal court with hacking into a subscription-based archive system at MIT and stealing more than 4 million articles, including scientific and academic journals.

New York Times: “A respected Harvard researcher who also is an Internet folk hero has been arrested in Boston on charges related to computer hacking, which are based on allegations that he downloaded articles that he was entitled to get free.”

I suggest we view this indictment of a Harvard ethics fellow in the following context: “Civil disobedience is the active, professed refusal to obey certain laws, demands, and commands of a government, or of an occupying international power. Civil disobedience is commonly, though not always, defined as being nonviolent resistance. It is one form of civil resistance. In one view (in India, known as ahimsa or satyagraha) it could be said that it is compassion in the form of respectful disagreement.”

JSTOR, the academic archiving service from which the documents were downloaded, has published an ambiguous at best account of its position on this case:

“It is important to note that we support and encourage the legitimate use of large sets of content from JSTOR for research purposes. We regularly provide scholars with access to content for this purpose. Our Data for Research site (http://dfr.jstor.org) was established expressly to support text mining and other projects, and our Advanced Technologies Group is an eager collaborator with researchers in the academic community….Even as we work to increase access, usage, and the impact of scholarship, we must also be responsible stewards of this content. We monitor usage to guard against unauthorized use of the material in JSTOR, which is how we became aware of this particular incident.”

The JSTOR statement also implies that it has already settled with Swartz with respect to the nature of his use of the downloaded content.

I respectfully suggest that the solution here is for JSTOR to publish its complilation of 1,000 academic journals on a non-exclusive basis under a Creative Commons License.

I applaud Aaron Swartz for his efforts.

Isreali Startups Raise Money and Create Jobs in Silicon Alley Manhattan


As reported in the Huffington Post:

“It’s estimated that New York’s startup community consists of at least 200 active startups founded by Israelis alone, including Conduit, Taboola, Kaltura and Fiverr. The majority of these Israeli-founded startups have raised at least $10 million in funding each: Conduit raised $110 million, Taboola raked in $40 million, Kaltura $68 million and Fiverr counts $20 million under its belt. With Israel on the fast track to revolutionizing the tech landscape, in the next decade we can expect to see even more cash flowing into Israeli startups – and importantly, their counterparts in NYC.”