Big Business Battles

Major lawsuits are always popular news fodder, and when big businesses lock horns, the media frenzy escalates to an even higher degree of intensity.  When a large and well-known company finds itself confronted by another company’s claims, the fate of popular and long-standing business empires — and millions or even billions of dollars — hangs in the balance.  In this entry, we’ve compiled five big business battles.


HP v. Oracle

HP, or Hewlett Packard, is probably most famous for their printers, though they also sell computers, software, scanners, fax machines, and a host of other office accouterments.  Oracle, another technology giant, is eclipsed in software revenues only by Microsoft.  HP and Oracle may share industry similarities, but that didn’t stop them from battling it out in a massive lawsuit that began in 2011.

In addition to their line of consumer products, HP also offers more pricey and powerful tech tools designed to help businesses; for example, their high-end business servers.  These servers are powered by Itanium microprocessors.  The problems began when Oracle decided that HP’s market for Itanium technology wasn’t large enough to outweigh costs on their end.  HP didn’t respond well to the news, to put it lightly: rather than passively accepting Oracle’s plans for discontinuation, the company filed a lawsuit against Oracle seeking four billion in damages.

Unfazed, Oracle bit back, stating: “HP made false and misleading statements to Oracle, the public, analysts, the press, customers, potential customers and investors, all with the intent to mislead these audiences about the vitality and future prospects of Itanium and material amounts of HP’s associated revenue stream.”

Ultimately, HP won the case on the basis of breach of contract.

Google v. Oracle

Oracle just can’t seem to keep its fingers out of the litigation pie.  In 2010, Oracle found itself going head-to-head with an even bigger adversary than HP: Google.  On the plaintiff side this time around, Oracle filed a lawsuit against Google for six billion dollars, claiming that everyone’s favorite search engine had infringed on Oracle’s patents for Java.  Did they succeed?

Well, Oracle’s claims did lead to a pay-out.  Of $4 million.  To Google.

Federal Judge William Alsup, who presided over the case, was scornful of Oracle’s cost-calculating tactics, saying,  “…Oracle has no one to blame but itself, given that twice now it has advanced improper methodologies obviously calculated to reach stratospheric numbers.”  Alsup ultimately ruled that Oracle had no claim to the patents in question, determining that the APIs (application programming interfaces) in question were not copyrightable.


Barnes & Noble v. Microsoft

Ten years ago, anyone who heard of a lawsuit between Barnes & Noble and Microsoft would probably be confused.  Of course, after e-readers like Nook came onto the scene, low-tech books and high-tech software began to find themselves intersecting — and not always amicably.

Microsoft had been in the practice of demanding license fees from companies to use their Android technology; but unlike other, more compliant businesses, Barnes & Noble fought back against Microsoft’s demands, describing the software titan’s monetary requests as “shockingly high.”

However high tensions may have been at the outset of the feud, the suit never got the chance to explode into a bitter brawl.  Instead, the patent litigation came to a quiet, apparently peaceful ending, with former enemies opting to settle the dispute.  Bookseller and software company put aside their litigation efforts and found a new path they could walk together, with Microsoft later announcing a $300 million investment in a new partnership with Barnes & Noble, Newco, leading to a dramatic 79% spike in Barnes & Noble stock.


Apple v. Psystar

One of Apple’s biggest claims to fame is its sleek, trendy, youthful aesthetic.  Apple products like iPods, iPads, and Macs are instantly recognizable to anyone with even a modicum of technological awareness, thanks to their trademark slim frames, retro colors, and of course, the telltale apple emblazoned on the back.  But Apple products — particularly Mac computers — are prized for more than just their visual appeal.  Their powerful, high-speed operating systems makes them a beloved tool in the arsenal of millions of casual and business users alike.

Miami-based Psystar Corporation, founded by Robert and Rudy Pedraza, took notice of the popularity of Apple’s Mac computers.  What if they could offer users the same technology at competitive prices?  The answer: their so-called “hackintosh” computers, non-Macs which users could nonetheless order pre-loaded with Mac OS X Leopard.

The other answer: an enormous, crippling lawsuit.  Apple alleged that Psystar had committed “direct and contributory copyright infringement, trademark and trade dress infringement, and violation of state and common law unfair competition laws,” not to mention violating the Digital Millennium Copyright Act.

The timeline says it all.  In December of 2009, Psystar agreed to fork over $2.7 million to Apple.  In January of 2010, Psystar announced plans to appeal the decision.  By August of 2010, the company — website, store and all — had simply vanished.


Snapchat v. Snapchat

Apps are a hot market, and Snapchat is one of the hottest apps available on that market.  Snapchat, which “snaps” photos and videos intended for short-lived, temporary sharing between users (media can expire within seconds), was released in September of 2011.  Today, Snapchat enjoys over 30 million active users and 60 million installs.  Snapchat can be used on iPads, iPhones, iPod Touches, and Androids, and offers users continually expanding and improving features.

If all this sounds like a commercial for Snapchat’s happy life, that’s because the app really is enjoying smooth sailing without any major spots of turbulence — at least, not from outside sources.  The only battle Snapchat is embroiled in is the battle against itself.

Snapchat was not the product of one mind, but a collaboration between many.  Evan Spiegel and Bobby Murphy are two of Snapchat’s five original developers (alongside Daniel Smith, David Kravitz, and Leo Noah Katz).  Reggie Brown is one of the company’s co-founders, along with developer Spiegel.

Brown and Spiegel were fraternity brothers at Stanford University during their college days, when Snapchat was just a wisp of an idea.  Now, Brown is alleging that Spiegel and Murphy stole his brainchild, whose worth is estimated at two billion, and cut him out of the picture.  Spiegel and Murphy are dismissive of Brown’s claims. Brown, however, insists that Snapchat’s distinctive time-limit feature — arguably the secret to its success — was his idea, and he wants credit (money) where credit (money) is due.

Brown claims that he and Spiegel (and later, Murphy) agreed to split equity in the company.  Spiegel claims that he doesn’t remember that particular verbal exchange, though he does admit that Brown “may deserve something,” once again reiterating the importance of documenting such arrangements in writing.

If your business is suffering as a result of breach of contract, copyright infringement, or other commercial matters, our business litigation lawyers can help.  At Maselli Warren, we have over 25 years of experience assisting companies of all types recover their financial losses.  Whether your company is a partnership, corporation, or LLC, our business litigation attorneys are ready to evaluate your case.  To arrange for a confidential consultation with one of our highly qualified commercial litigation lawyers, contact our law offices online, or call us today at (800) 891-2657.