Hooked Media V Apple

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1 ZACHARY J. ALINDER (State Bar No. 209009)
Email: zalinder@sideman. com
2 PETER M. COLOSI (State Bar No. 252951)
Email: pcolosi@sideman. com
3 ELLEN P. LIU (State Bar No. 280459)
Email: eliu@sideman.com
4 SIDEMAN & BANCROFT LLP
One Embarcadero Center, Twenty-Second Floor
5 San Francisco, California 94111-3711
Telephone: (415) 392-1960
6 Facsimile: (415) 392-0827
7 Attorneys for Plaintiff
Hooked Media Group, Inc.
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SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF SANTA CLARA
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HOOKED MEDIA GROUP, INC., CASE No.1 4 c V 2 6 5 8 1
Plaintiff,
v.
APPLE, INC., CHANDRASEKAR
VENKATARAMAN, and DOES 1 through
20, inclusive,
Defendants.
1
COMPLMNTFORDAMAGESAND
INJUNCTIVE RELIEF FOR:
1. MISAPPROPRIATION OF TRADE
SECRETS;
2. INTERFERENCE WITH CONTRACT;
3. INTERFERENCE WITH
PROSPECTIVE ECONOMIC
ADVANTAGE;
4. FRAUD;
5. NEGLIGENT MISREPRESENTATION;
6. VIOLATIONS OF THE CALIFORNIA
COMPUTER DATA ACCESS AND
FRAUD ACT;
7. BREACH OF FIDUCIARY DUTY;
8. MDING AND ABETTING BREACH OF
FIDUCIARY DUTY;
9. BREACH OF CONTRACT;
10. UNJUST ENRICHMENT/
RESTITUTION; and,
11. STATUTORY UNFAIR BUSINESS
PRACTICES.
Demand for Jury Trial
COMPLAINT FOR DAMAGES AND INJUNCTIVE RELIEF
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1 Plaintiff Hooked Media Group, Inc. ("Hooked Media"), for its Complaint against
2 Defendants Apple Inc. ("Apple"), Chandrasekar "Chandru" Venkataraman ("Mr. Venkataraman"
3 or "Venkataraman"), and Does 1 through 20, inclusive (collectively referred to as "Defendants"),
4 complains and alleges as follows:
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INTRODUCTION
1. This case is about the willful theft of intellectual property and the reckless
destruction of a promising young company from the inside-out by Apple and Hooked Media's
former CTO, Mr. Venkataraman. During months of intense acquisition negotiations between
Apple and Hooked Media, Apple and Mr. Venkataraman conspired to and succeeded in stealing
Hooked Media's most vital trade secrets, sabotaging Hooked Media's business, and raiding
Hooked Media's core engineering team. Mr. V enkataraman capped off the scheme by leaving for
Apple in the middle of the night, taking copies of Hooked Media's intellectual property with him,
and deleting and/or otherwise removing computer files from Hooked Media's computer systems
that were essential for Hooked Media to operate and to continue to do business with competitors
of Apple, like HTC. When Hooked Media confronted Apple in the immediate aftermath,
questioning how it could engage in such egregious behavior, the acquisition lead for Apple stated
flatly that he was just following his orders and that "Apple is going to do what Apple is going to
do," i.e. without any regard for the fact that these actions destroyed Hooked Media.
2. Hooked Media had until that time enjoyed a rapid rise at the leading edge of the
application ("app") search, discovery, and recommendation space. With the proliferation of apps
across mobile platforms, it is not surprising that app search, discovery and recommendations have
become very valuable market space. Hooked Media is a venture-backed company, located in San
Francisco, that developed an innovative app discovery and monetization platform, that gives users
customized recommendations of apps they will find most rewarding. Hooked Media's
recommendation engine employs proprietary machine learning technology to yield the best
26 possible results.
27 3. By the end of2013, Hooked Media's business was generating a million dollars in
28 revenue each month and pending contracts were set to multiply that in 2014. Hooked Media was
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1 not only succeeding in the marketplace, but also had drawn significant attention in the press for its
2 innovative technologies, including a November 12, 2012 story on AllThingsD and a May 23, 2013
3 story in V entureBeat entitled, "Hooked Media turns in an entirely new take on app
4 recommendation- one that Apple can't kill." As detailed in this Complaint, Apple appears to
5 have taken this VentureBeat title as a challenge.
6 4. In sum, Apple and Mr. V enkataraman decided to cut Hooked Media out of its own
7 acquisition, take its intellectual property, and destroy its ability to even service its own customers
8 to complete the circle. Through this Complaint, Hooked Media seeks to recover for the willful
9 and malicious damages, theft, interference, and other harm caused by Apple and Mr.
10 V enkataraman.
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12 5.
PARTIES
Hooked Media is and was at all relevant times a venture-backed California
13 company that used to have its principal place of business at 115 Sansome Street, San Francisco,
14 CA 94104. Due to the actions alleged in this Complaint, Hooked Media has since been required to
15 move to new offices in San Francisco.
16 6. Apple is and was at all relevant times a California corporation with its principal
17 place of business at 1 Infinite Loop, Cupertino, California.
18 7. Mr. Venkataraman is and was at all relevant times an individual with his principal
19 residence in Palo Alto, California and is currently an employee of Apple.
20 8. At all times relevant to this action, each defendant, including those fictitiously
21 named, was the agent, servant, employee, partner, joint venturer, accomplice, conspirator, alter
22 ego or surety of the other defendants and was acting within the scope of such capacity or
23 capacities with the knowledge and consent or ratification of each of the other defendants in doing
24 the things alleged in this Complaint. As such, Hooked Media alleges and refers in this Complaint
25 to two or more defendants acting in concert together, as "Defendants."
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JURISDICTION AND VENUE
This Court has personal jurisdiction over Defendants because Defendants have
28 transacted business and have caused injury to Hooked Media within Santa Clara County,
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1 California.
2 10. Venue for this action properly lies in Santa Clara County pursuant to pursuant to
3 Cal. Civ. Proc. Code 395(a) because Defendants committed acts in furtherance of their scheme
4 within this county and are located in this county.
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7 11.
GENERAL ALLEGATIONS
HOOKED MEDIA GROUP AND ITS TECHNOLOGY
Hooked Media was founded in 2008 by Hooked Media Chief Executive Officer
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8 Prita Uppal.
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As described above, Hooked Media provides an app discovery and monetization
platform that includes, among other things, a mobile game discovery app that gives users
customized recommendations of games they will find most rewarding. Hooked Media's
proprietary machine learning technology is groundbreaking.
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12. By the summer of2013, Hooked Media was bringing in around $250,000 a month.
By the end of 2013, Hooked Media's revenues were approximately $1 million per month. Hooked
Media had also executed a contract with HTC in early 2013 that would be worth millions of
dollars per month of recurring revenue and was in the process of building the product it had
committed to provide to HTC. In addition, Hooked Media had a signature-ready contract with
Deutsche Telekom that was projected to bring in over $20 million a year, as Hooked Media had
already begun building out this product for Deutsche Telekom in late 2013. In addition, Hooked
Media was in serious negotiations to provide services to a number of other prospective customers,
including Amazon, T-Mobile, AT&T, Sprint, and Samsung.
13. One of Hooked Media's first employees, and its first in the technology area, was
Mr. Venkataraman, who joined in April2008 and served as its Chief Technology Officer. For
more than five years, he and Ms. Uppal worked side-by-side to build Hooked Media from the
ground up, and, as a result, had developed an extremely close and trusting relationship. Mr.
Venkataraman was the principal architect of Hooked Media products and also set up and oversaw
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As Mr. Venkataraman is aware, the company formally changed its name from Gamook, Inc. to
Hooked Media Group, Inc. in 2009.
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1 Hooked Media's internal information technology during the entire time he worked there. As a
2 result, Mr. Venkataraman made himself the administrator of Hooked Media's computer systems,
3 including but not limited to, its email servers, virtual private networks, and Github cloud storage
4 accounts.
5 14. In addition to Mr. Venkataraman, Hooked Media's two lead engineers on its app
6 discovery platform were Daniel Cartoon and Paul Irvine, who both previously worked with Mr.
7 Venkataraman.
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APPLE STARTS ACQUISITION DISCUSSIONS WITH HOOKED MEDIA
15. In May 2013, Apple and Hooked Media began discussing a possible acquisition of
Hooked Media by Apple. On or about June 4, 2013, Ms. Uppal met with Ben Keighran at Apple
to discuss the potential acquisition at a high level. Hooked Media is informed and believes, and
thereon alleges, that Mr. Keighran is a director at Apple, and at the time worked on corporate
development and acquisitions. Before joining Apple, Mr. Keighran was the CEO of Chomp, Inc.,
a company that had recently been acquired by Apple reportedly for approximately $50 million.
The acquisition of Chomp was expected to help solve the problems that Apple had with app search
and discovery on its App Store. But, as a recent Macworld article by Michael Simon articulated,
"when Chomp was fully implemented with iOS 6, it not only didn't live up to expectations, it
made things worse." Not surprisingly, it was clear from Ms. Uppal's initial discussion with Mr.
Keighran that Hooked Media's app discovery and monetization platform would add tremendous
20 value to Apple.
21 16. The next day, Mr. Keighran emailed Ms. Uppal about having Hooked Media
22 employees return to Apple to have a deeper technical discussion around Hooked Media's
23 recommendation technology.
24 17. On June 25,2013, Ms. Uppal, Mr. Venkataraman, Mr. Cartoon, and Mr. Irvine
25 went to Apple for a "tech deep dive" meeting that included key product and technology and
26 corporate development personnel at Apple, including Mr. Keighran.
27 18. Hooked Media requested that Apple sign a non-disclosure agreement ("NDA'').
28 Apple (through Mr. Keighran) represented to Hooked Media in writing that it does not sign NDAs
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1 for companies that it is interested in acquiring. Apple did however promise and guarantee that all
2 information shared by Hooked Media would be maintained with the utmost confidentiality.
3 Hooked Media is informed and believes, and thereon alleges, that one of Hooked Media's bankers
4 on the acquisition, Kelemen Papp, asked Apple the same thing, and that Apple also confirmed to
5 Mr. Papp that Apple did not sign NDAs, but that everything would be completely confidential.
6 Hooked Media relied on Apple's promises regarding complete confidentiality and fidelity in going
7 forward with the "tech deep dive" meeting and later meetings with Apple and would not have
8 proceeded with any further meetings or negotiations with Apple but for Apple's promises.
9 19. At the June 25th meeting, Apple was represented by a number of senior level
10 executives and engineers. In reliance on Apple's promises of complete confidentiality during, and
11 fidelity to, the acquisition process, Hooked Media put together and presented detailed slides
12 regarding its business, its team, and the confidential and proprietary details of its technologies. It
13 was also at this meeting that Apple brought in Venkat Sundaranatha, who had recently joined
14 Apple as its Senior Engineering Manager. Mr. Sundaranatha had been hired to lead Apple's
15 expansion in the app discovery and recommendation space, and Apple represented that he was the
16 key decision-maker for the acquisition.
17 20. Hooked Media reasonably believed that this was a fortuitous event because Mr.
18 Venkataraman and Mr. Sundaranatha have known each other for nearly two decades, since their
19 time together at the Birla Institute of Technology and Science in the early 1990s. At that time, Mr.
20 Sundaranatha taught Mr. Venkataraman and Mr. Venkataraman in tum later worked for Mr.
21 Sundaranatha. Though it did not become clear to Hooked Media until December 2013, it turned
22 out that Mr. Sundaranatha's control over Mr. Venkataraman by virtue of this longstanding power
23 relationship overpowered all other obligations and duties for Mr. Venkataraman, including his
24 fiduciary duties to Hooked Media as its CTO.
25 21. The events after the June 25th meeting, however, supported Hooked Media's belief
26 that the relationship between Mr. Venkataraman and Mr. Sundaranatha would be very helpful in
27 the acquisition discussions with Apple. After the June 25th meeting concluded, Mr. Keighran
28 asked Ms. Uppal and Mr. Papp to remain behind in the conference room to discuss a few more
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details. Mr. Keighran told Ms. Uppal and Mr. Papp that he thought the meeting went very well
and that he was amazed at how attentive everyone was, including Apple's senior level executives.
When Ms. Uppal emerged from the conference room, she found Messrs. Venkataraman, Cartoon,
Irvine and Sundaranatha all talking closely together, deep in follow-up discussions.
22. On the evening of June 25,2013, Mr. Venkataraman spoke with Ms. Uppal and
informed her that, although he did not give Mr. Sundaranatha his cell phone number, Mr.
Sundaranatha had called him that night on his personal cell phone to discuss Hooked Media and
its employees, including Mr. Cartoon and Mr. Irvine. While this was improper and unauthorized,
Mr. Venkataraman convinced Ms. Uppal that his longstanding, close relationship with Mr.
Sundaranatha would work to Hooked Media's benefit during the acquisition negotiations.
Although Ms. Uppal instructed Mr. Venkataraman not to divulge confidential information, Mr.
Sundaranatha called Mr. Venk:ataraman again later in the evening on June 25, 2013 and they spoke
at length about the acquisition and Mr. Sundaranatha' s questions about Hooked Media's
technology. While these communications outside of the acquisition process were troubling,
Hooked Media did not shut down the acquisition process at that point in continued reliance on
Apple's promises and agreement of complete confidentiality of all information shared between the
parties and of their fidelity to the acquisition process.
23. After the June 25th technical meeting, the acquisition negotiations continued
steadily. By July 26, 2013, Mr. Keighran had brought in Matt Clare, from Apple's corporate
development team, to be more directly involved in the acquisition process. At this stage, Apple
requested both technical and business operational information consistent with their stated intent to
acquire Hooked Media. For example, Mr. Clare wrote in an August 14, 2013 email to Ms. Uppal,
"I'd like to have a side bar conversation with you about high level business questions: customers,
business model, carrier integration plans, cash bum, that sort of thing." During a phone
conversation later that week, Mr. Clare explained to Ms. Uppal that Apple wanted to fully
understand the technology developed by Hooked Media. In an August 14, 2013 to Ms. Uppal, Mr.
Clare wrote, "One area you might want to start prepping around is your algorithmic approach."
24. As the discussions between Apple and Hooked Media continued, Mr. Sundaranatha
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and Mr. Venkataraman also continued to engage in discussions and improperly exchange
information outside the formal acquisition process. Even the senior business people on the deal
from Apple noted that the communications between Mr. Sundaranatha and Mr. Venkataraman had
crossed the line. In an August 1, 2013 email to Ms. Uppal, Mr. Keighran noted that Mr.
Sundaranatha had discussed a further tech meeting with someone at Hooked Media outside formal
channels, and agreed that Hooked Media should "work through" him or Mr. Clare. Despite their
inappropriate nature, the discussions between Mr. Sundaranatha and Mr. V enkataraman did not
stop, and included requests by Mr. Sundaranatha for Mr. Venkataraman to disclose to him outside
the formal process Hooked Media confidential, trade secret information about how Hooked
Media's recommendation platform adapts to various scenarios. At one point in time, Mr.
Venkataraman even asked Mr. Cartoon to put algorithms together to send to Mr. Sundaranatha,
well after his usual work hours. Again, Hooked Media did not shut down the acquisition
negotiations in continued reliance on Apple's promises of complete confidentiality and their
representations that the acquisition process was going great.
25. Meanwhile, Hooked Media had acquisition interest from other competitors of
Apple in the app search, discovery and recommendations space, including Deutsche Telekom and
Amazon. Mr. Keighran and other Apple employees were well aware that Hooked Media was
being pursued by other companies for acquisition, and also knew that Hooked Media had
numerous other business deals ongoing and in the pipeline (i.e. T-Mobile, Sprint, AT&T, and
others). However, by August 2013, Mr. Venkataraman had become no more than an extension of
Mr. Sundaranatha and Apple, collecting paychecks from Hooked Media, but working in Apple's
interest rather than Hooked Media's. As such, Mr. Venkataraman actively impeded acquisition
negotiations with Deutsche Telekom and Amazon and claimed that the acquisition by Apple was
the only option. For example, when asked to provide technical information to potential acquirers,
other than Apple, Mr. Venkataraman would not follow through, would not send them any
information, would misrepresent that he had done work he had not, and often would leave the
office for long periods of time or not come into work at all. Mr. Venkataraman attempted to
conceal his deceit by working from home consistently on his laptop, where others at Hooked
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1 Media could not supervise his work directly, and by blaming his work failures and absences on
2 marital issues. Because Ms. Uppal considered Mr. Venkataraman a very close friend, not just a
3 colleague, she not only believed his representations about his personal issues, but felt very sorry
4 for him and did not further scrutinize his erratic behavior.
5 26. Meanwhile, as far as Hooked Media was aware, the acquisition discussions with
6 Apple appeared to be reaching a successful conclusion. As the next step to button-up the
7 acquisition, Apple requested that Hooked Media arrange an August 19,2013 meeting at Hooked
8 Media's offices to discuss Hooked Media's technology in depth with more of Apple's senior
9 executives and engineers. As of August 2013, Hooked Media had been valued at approximately
10 $60 million.
11 27. Before the August 19, 2013 meeting, Ms. Uppal re-raised her concerns to Mr. Clare
12 several times about Hooked Media disclosing its confidential and proprietary business and
13 technical information to Apple. These concerns included having the meeting at Hooked Media's
14 offices, as Apple insisted, given the open workplace culture of Hooked Media and given Apple's
15 continued refusal to sign an NDA. A few days before the August 19,2013 meeting, Mr. Clare
16 confirmed yet again to Ms. Uppal that, although Apple had claimed it does not sign Non-
17 Disclosure Agreements, everything discussed at the meeting would be kept completely
18 confidential. Relying on these representations and promises again, Hooked Media engineers met
19 with a large team of Apple engineers at Hooked Media's offices on August 19th, including
20 product leads for the Apple App Store and other high-level Apple executives, for more than five
21 hours to go over 1 00-plus Power Point slides and further discuss confidential, trade secret details of
22 Hooked Media's business operations, its team, and its technology, including its monetization
23 strategies. Mr. Sundaranatha and Payam Mirrashidi, Director of Engineering at Apple, both
24 attended the meeting. Several times during that meeting, Mr. Sundaranatha and
25 Mr. Venkataraman left the conference room and had sidebar conversations to discuss the Hooked
26 Media technology in their native language, so no one else could understand what they said. When
27 Ms. Uppal told Mr. Venkataraman that she was very uncomfortable with them having separate
28 meetings, particularly because they involved Hooked Media's intellectual property, Mr.
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1 Venkataraman repeatedly instructed Mr. Uppal to trust him and that Mr. Sundaranatha had assured
2 him that things were going very well.
3 28. The August 19th meeting concluded in the late afternoon on a high note with
4 everyone discussing the need to celebrate the impending acquisition of Hooked Media by Apple.
5 Mr. Venkataraman went to celebrate with Hooked Media's two engineering leads, Mr. Irvine and
6 Mr. Cartoon, and other Hooked Media employees. Meanwhile, Ms. Uppal was scheduled to have
7 a drink with Apple's corporate lead, Mr. Clare. Mr. Clare canceled at the last minute, claiming
8 ominously that something had come up at work and that he had to return to his office. So, Ms.
9 Uppal met up with Messrs. Venkataraman, Cartoon, and Irvine. When Ms. Uppal discussed her
~ 10 concern about Mr. Clare cancelling, Mr. Venkataraman reassured her and told her not to
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19 29. These representations were not remotely true and everything unraveled quickly
20 from there. Two days after the last tech deep dive meeting where Hooked Media shared much of
21 its confidential, trade secret information with Apple based on Apple's continued promises and
22 representations of complete confidentiality, Mr. Clare informed Ms. Uppal that Apple's plans had
23 changed. Instead of purchasing Hooked Media, Apple was now only interested in an "acqui-hire"
24 of Messrs. Venkataraman, Irvine, and Cartoon- in other words, they wanted to take Hooked
25 Media's core engineering team for its app discovery platform, along with their accumulated
26 knowledge in developing Hooked Media's technologies. This "acqui-hire" would of course bring
27 tremendous value to Apple- the lack of a successful app discovery platform for Apple's app store
28 is a well-known, significant problem for Apple and was a key reason why Apple engaged Hooked
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1 Media in acquisition discussions from the start. Despite this, Apple only offered the amount of
2 capital Hooked Media had raised from its investors, $4.5 million. Ms. Uppal was stunned that
3 Apple would attempt to cut Hooked Media out of its own acquisition, then estimated to be about
4 $60 million, by inducing Hooked Media to disclose its confidential information and trade secrets,
5 including all the details regarding its core engineering team responsible for building its app
6 discovery and monetization platform, and then attempting to hire away all of those engineers to
7 work on this same technology for Apple for less than a tenth of what had been discussed prior to
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30. At the same time, and though Mr. V enkataraman literally swore on everything that
was important to him that he remained completely loyal to Hooked Media, he continued to work
against Hooked Media's interests and for Apple's benefit. He lobbied incessantly for Hooked
Media to agree to the acqui-hire deal proposed by Apple. To induce Hooked Media to go along
with this plan, Mr. V enkataraman further represented that he would not go to Apple, but that
Hooked Media had to proceed with the acqui-hire of Mr. Irvine and Mr. Cartoon by Apple. When
Ms. Uppal offered to speak separately to Mr. Irvine and Mr. Cartoon to offer salary and equity
increases, Mr. V enkataraman threatened to leave Hooked Media because he said that showed that
Ms. Uppal did not trust him. Mr. Venkataraman insisted that there was no option but to agree to
let Apple acqui-hire Irvine and Cartoon. Throughout August and September 2013, Hooked Media
is informed and believes, and thereon alleges, that Mr. V enkataraman, Mr. Irvine, and Mr. Cartoon
continued to have discussions with Apple regarding Hooked Media's confidential and trade secret
information, and about structuring an acqui-hire deal that would move all of Hooked Media's
engineering team over to Apple without Apple having to pay to acquire Hooked Media at all.
31. Despite the appalling nature of what had occurred, Hooked Media considered the
acqui-hire proposal, because Mr. Venkataraman demanded it and in reliance on his continued
representations that he was going to stay, and that Hooked Media could move forward and sign the
deal with Deutsche Telekom, continue its ongoing work with HTC, and/or be successfully
acquired by another company. Hooked Media informed Apple that hiring its CTO, Mr.
Venkataraman, could not be part of any such deal, as that would leave Hooked Media without any
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1 engineering team and unable to continue its substantial business with Apple's competitors, like
2 HTC.
3 32. While Hooked Media considered the "acqui-hire" proposal from Apple, Hooked
4 Media (through Ms. Uppal) had one requirement- that all the negotiations needed to run through
5 Ms. Uppal. Apple promised and represented that these negotiations would all go through Ms.
6 Uppal, though again those representations ended up being false. Mr. Sundaranatha and other
7 Apple employees continued to reach out to Mr. Irvine and Mr. Cartoon (and of course Mr.
8 Venkataraman) behind Ms. Uppal's back.
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33. Meanwhile, Mr. V enkataraman continued to represent that he would not leave
Hooked Media, and in fact sought and accepted a raise including profit-sharing in mid-October
2013, which became effective November 1, 2013. He continued however to claim that acceding to
Apple's demands in hiring Mr. Cartoon and Mr. Irvine was the only thing Hooked Media could
do. These representations were false and, based on information and belief, were made to help
conceal that Mr. V enkataraman continued to work on the side with Mr. Sundaranatha and Apple to
broker the hiring of all three men in a phased way to avoid undue suspicion by Ms. Uppal.
34. Next, during a follow-up phone conversation in late September 2013, Mr. Clare
informed Ms. Uppal that for reasons he did not understand, Apple was no longer willing to pay
even the $4.5 million it had previously offered to Hooked Media for the "acqui-hire." Instead,
Apple would pay only a "finder's fee" of 30% of each employee's salary. Ms. Uppal was
astonished that Apple was now even going back on its offer of $4.5 million for the "acqui-hire."
This new offer was offensive, but again, and even though it would have left a huge hole in his own
team, Mr. Venkataraman argued that Hooked Media had to take the further reduced deal. But for
this new deal to happen without significant impact to Hooked Media's current and future business,
Hooked Media would have first had to hire replacements, arrange for continuity of service for
Hooked Media's customers, and fully transition the engineering and technical knowledge from
Irvine and Cartoon. Apple was aware of this, but pressed its proposal anyway.
35. In addition to coercing and threatening Hooked Media that it had to take the
"finder's fee" offered by Apple even though such a deal made no sense for Hooked Media, Mr.
12
1 V enkataraman continued not showing up to work and sabotaging deals that did not involve Apple.
2 Hooked Media is informed and believes, and thereon alleges, that instead Mr. V enkataraman
3 continued working with and for the benefit Apple, along with Mr. Cartoon and Mr. Irvine, even
4 though Hooked Media was still their employer. Defendants' scheme continued into early
5 November 2013, while Ms. Uppal was out of the office for health reasons. When she returned to
6 the office on November 12, 2013, she received a call from HireRight (a provider of employment
7 background checks) on behalf of Apple, and through this call found out that Apple had already
8 gone around her, despite Apple's promises to the contrary, and that Mr. Cartoon and Mr. Irvine
9 were leaving for Apple at the end of the week, even though no deal had been finalized and even
10 though neither had sufficiently arranged for continuity of service to customers or transitioned his
11 work with Hooked Media.
12 36. On Friday, November 15, 2013, Mr. Cartoon and Mr. Irvine left Hooked Media to
13 go to Apple, having given just two days' notice to Hooked Media. They both had copies of
14 confidential and proprietary Hooked Media intellectual property on their computers. Neither
15 made arrangements to confirm with Hooked Media that they had removed these materials from
16 their computers. Hooked Media is informed and believes, and thereon alleges, that the next
17 Monday, they started work at Apple.
18 37. Also on November 15, 2013, Ms. Uppal overheard Mr. Venkataraman tell Mr.
19 Cartoon and Mr. Irvine that he would see them the following Friday, November 22, 2013. Mr.
20 Venkataraman did not come to work at Hooked Media the following Friday. Hooked Media is
21 informed and believes, and thereon alleges, that Venkataraman was working at or with Apple
22 instead.
23 38. Meanwhile, Apple's conduct became even more brazen. In a November 22,2013
24 email, Mr. Sundaranatha revised his proposed "finder's fee" amount to 15%, a total of $45,000.
25 At the same time, Mr. Venkataraman acted like Apple's hiring of these two critical engineers was
26 not a problem because he could keep things going alone. Mr. Venkataraman continued to assure
27 Ms. Uppal that he intended to remain at Hooked Media "until the end." Mr. Venkataraman
28 omitted however that he intended to "end" Hooked Media shortly thereafter, and that he had
13
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MR. VENKATARAMAN LEAVES FOR APPLE, COPIES IP, AND REMOVES KEY DATA
39. The next week, starting November 25th, Mr. Venkataraman continued to act
erratically, failed to do his job, and continued to undermine Hooked Media with its customers,
including Deutsche Telekom. Hooked Media is informed and believes, and thereon alleges, that
Mr. Venkataraman was intentionally baiting Ms. Uppal into firing him, so he could officially join
Cartoon and Irvine at Apple as soon as possible. As a result, on November 26, 2013, Ms. Uppal
confronted Mr. V enkataraman about his poor performance, and he tendered his resignation,
effective that day. He did not confirm however that he would be going to Apple, or even say that
he had another job lined up. Ms. Uppal was shocked by this betrayal, as they had worked side-by-
side for the past five years and had put everything they had into building Hooked Media as a team.
40. Mr. Venkataraman agreed that he would make sure to transition all of his work and
operational knowledge to a contract engineer Hooked Media immediately hired and that his last
day would be December 13, 2013. After November 26, 2013, Mr. Venkataraman's actions were
no longer as the CTO of Hooked Media, but rather he was authorized and permitted by Hooked
Media only to access, copy, change, or make any other use of Hooked Media's computer systems
or intellectual property solely to transition his work and operational knowledge.
41. Despite their falling out, Ms. Uppal was still hopeful that Mr. Venkataraman would
change his mind and not betray Hooked Media. However, Ms. Uppal also attempted to mitigate
the damage to Hooked Media by hiring contract engineers to help with the transition. Meanwhile,
she continued to express her grave concerns to Mr. V enkataraman about how Apple had gone
behind her back to raid Hooked Media's core engineering team, which they had learned of through
confidential acquisition meetings and related confidential discussions. Apple's actions were all
the more galling because Apple was fully aware of the importance of Mr. Cartoon and Mr. Irvine
(not to mention Mr. Venkataraman) to Hooked Media's technology, business, and operations,
including the current and prospective business deals described above, as a result of these
numerous technical acquisition meetings. Hooked Media would never have participated in any of
those acquisition meetings and shared those critical and confidential details of its technologies and
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1 business operations, but for its reliance on Apple's repeated promises of complete confidentiality.
2 42. Following Ms. Uppal's discussions with Venkataraman, on or about December 2,
3 2013, Mr. Sundaranatha called Ms. Uppal more than a dozen times, including on private numbers
4 never given to Mr. Sundaranatha and not generally known. Ms. Uppal was alarmed by this bizarre
5 intrusion by Mr. Sundaranatha, following directly after her discussions with Mr. Venkataraman
6 about her grave concerns about what had occurred.
7 43. December 9, 2013 was the final day that Hooked Media existed as a viable
8 company. Mr. Venkataraman had been acting particularly erratic and nervous that day. Hooked
9 Media is informed and believes, and thereon alleges, that Mr. V enkataraman knew at that point
10 that the writing was on the wall because Ms. Uppal had uncovered his plan to move to Apple to
11 join Cartoon and Irvine.
12 44. In the early afternoon on December 9th, Ms. Uppal finally spoke with
13 Mr. Sundaranatha by telephone, re-raising her concerns that Mr. Sundaranatha had hired Messrs.
14 Cartoon and Irvine (and it appeared now Venkataraman) to transplant Hooked Media's trade
15 secrets to Apple and that Mr. Venkataraman had been taking steps with Apple that were
16 apparently designed to sabotage Hooked Media's business with Apple's knowledge and help. She
17 also noted that Messrs. Sundaranatha and Venkataraman had engaged in private side conversations
18 throughout the acquisition process, including Mr. Venkataraman's admissions that
19 Mr. Sundaranatha was asking for (and received) the confidential and trade secret details of
20 Hooked Media's app discovery and monetization platform. Mr. Sundaranatha responded that he
21 was only doing what Apple had instructed him to do and stated flatly that "Apple is going to do
22 what Apple is going to do."
23 45. Later that afternoon, Ms. Uppal sent an email summarizing parts of that
24 conversation to Mr. Sundaranatha, cc'ing Mr. Clare and Mr. Mirrashidi. She also notified them
25 that Messrs. Cartoon and Irvine had continuing obligations not to use or disclose Hooked Media's
26 confidential, proprietary and/or trade secret information to any subsequent employer. Ms. Uppal
27 did not include Mr. Venkataraman, as she still hoped that he would reconsider given their five plus
28 years of work together. That hope soon vanished.
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46. Rather than staying through December 13th as he had promised or even confirm
with Hooked Media that he was leaving to join Apple, the night of December 9th, under cover of
darkness, Mr. Venkataraman returned to Hooked Media's offices to take what he needed to bring
to Apple, and before departing for good, Mr. Venkataraman used the knowledge and access he had
obtained through being the former CTO to eviscerate Hooked Media before he left.
Contemporaneously with his departure that night, thousands of emails and other files were
systematically removed from Hooked Media's computer systems. These included:
all contents of the "Engineering" folder in Mr. Venkataraman's Hooked email
account, going back to April 2008;
all contents of the "Prita" (Ms. Uppal's first name) folder in Mr. Venkataraman's
Hooked email account, going back to April2008;
all contents of the "Inbox" after December 31, 2012 in Mr. Venkataraman' s
Hooked email account;
all contents ofthe "Product" folder after May 29, 2013 in Mr. Venkataraman's
Hooked email account;
all emails after May 21, 2013 in a folder labeled "HTC"; and
emails in the Hooked account used by Mr. Irvine going back to 2008, including
technical documents and related communications.
4 7. At the same time, other folders, containing non-essential information, were
19 undisturbed. Upon information and belief, the deletion and/or removal of Mr. Venkataraman's
20 emails was targeted on the basis of factors including date and folder topic to cause the most
21 damage, as Venkataraman knew that Hooked Media could not operate without this data.
22 48. In his last moments that night before walking out the door from Hooked Media,
23 Mr. Venkataraman copied Hooked Media's entire code base to a personal storage account and
24 made numerous unknown and unexplained changes to the code base. Mr. Venkataraman also took
25 with him his desktop, which had contained Hooked Media's entire code set and documentation for
26 every piece of technology Hooked had built since its inception in 2008. Mr. Venkataraman also
27 had other copies of Hooked Media's code and its confidential, proprietary and trade secret
28 information on his laptop, which he also took with him. That same night Mr. Venkataraman
16
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created three new Github users to access Hooked Media's code base, at least one of which appears
to have been named in order to conceal that they were for his continued use after that night. Mr.
Venkataraman neither told anyone else about creating an apparent backdoor to the code base, nor
did he share the login credentials with anyone else at Hooked Media. On December 9, Mr.
V enkataraman also accessed an account named "Prita" on Github, an account of which Ms. Uppal
had no knowledge. To this day, Mr. Venkataraman is still the only person with access to those
accounts and the information from Hooked Media on them. Hooked Media intends to fully
discover what occurred, however, and will amend its complaint as appropriate.
49. Hooked Media is informed and believes, and thereon alleges, that after Mr.
V enkataraman left Hooked Media, he continued to access, without authorization, Hooked Media's
cloud storage accounts through his personal storage account and through the fake user accounts
that he created before he left Hooked Media on December 9, 2013. Further, Mr. Venkataraman
still had access to the Hooked Media's Github from his own personal "vchandru" account, which
records show that he finally logged on to Github to disable on December 18, 2013 - 22 days after
he had resigned as CTO and 9 days after he had left Hooked Media in shambles.
THE FATAL IMPACT OF THE SCHEME
50. In addition to actively deleting and/or otherwise removing numerous necessary
business and operational files from Hooked Media's computer systems, which he had no reason,
permission or authorization to do, Mr. Venkataraman also took with him critical operational
information that he alone was aware of as the systems administrator, including login and password
information for Hooked Media's computer systems and cloud storage accounts. He did not
transition that critical operational information and did not make sufficient arrangements for
continuity of service for Hooked Media's customers and partners. Accordingly, by structuring the
departure of the core engineering team without requisite notice or transition plans, leaving himself
without requisite notice or transition plans, and deleting and/or otherwise removing critical data,
documents and related Hooked Media information on his way out the door, Mr. Venkataraman
made it impossible for Hooked Media to continue operating and doing business, including with
28 Apple's competitors like HTC. In short, it appears that Mr. Venkataraman ensured that Hooked
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1 Media would be unable to compete with any similar product he and Hooked Media's core
2 engineering team would create at Apple, for Apple, using Hooked Media's own intellectual
3 property and team.
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51. In the end, Apple was able to "acqui-hire" Hooked Media's core engineering team
for free, based on its knowledge of the confidential and trade secret information shared by Hooked
Media, to bring to Apple the same technology Hooked Media also shared in confidence with
Apple, from June through at least August of2013. The actions of Apple, together with Mr.
Venkataraman, left Hooked Media unable to even continue its substantial work with HTC, sign its
finalized contract with Deutsche Telekom, or attempt to re-start acquisition discussions with the
other suitors that had expressed interest. Defendants' actions also prevented Hooked Media's app
recommendation and monetization platform from continuing to function at all because there was
no engineering support left and the engineering and operational knowledge of Hooked Media's
core engineering team was never transferred properly. In short, VentureBeat was correct that
Hooked Media's app recommendation platform was "one that Apple can't kill," but only insofar
as Apple needed Mr. Venkataraman to accomplish that final result.
FIRST CAUSE OF ACTION
(Misappropriation of Trade Secrets)
Against All Defendants
52. Hooked Media incorporates the preceding paragraphs of this Complaint as if fully
20 set forth herein.
21 53. Defendants acquired trade secret information obtained from Hooked Media during
22 the acquisition discussions and outside the formal acquisition process as they were passed by Mr.
23 Venkataraman to Mr. Sundaranatha and Apple, as well as from the data, documents, and other
24 related trade secrets that Mr. Venkataraman took with him upon leaving Hooked Media, including
25 but not limited to, Hooked Media's customers, business model and monetization strategy,
26 algorithms, proprietary recommendation strategies, clustering and predictive technologies, and
27 carrier integration plans. In addition, Defendants learned confidential and trade secret details
28 regarding the makeup, skills, and contributions of Hooked Media's core engineering team during
18
1 the same acquisition discussions and through Mr. V enkataraman outside the acquisition process
2 that allowed Defendants to specifically target Hooked Media's core engineering team. Upon
3 information and belief, during his last day at Hooked Media, Mr. V enkataraman also made at least
4 fourteen (14) changes to Hooked Media's code and accessed the latest copy of Hooked Media's
5 entire code base, effectively giving him continued access to a local copy of all of Hooked Media's
6 internal, closed-source data even after Mr. Venkataraman left Hooked Media for Apple.
7 Defendants acquired Hooked Media's trade secrets through improper means and/or where there
8 was a duty to maintain its secrecy or limit its use, including but not limited to because Defendants
9 knew and/or had reason to know that the trade secrets are Hooked Media's intellectual property
10 and that Defendants were under a duty of confidentiality and were aware that Mr. Venkataraman
11 also had fiduciary duties to Hooked Media by virtue of his privileged position as the CTO.
12 54. Hooked Media is informed and believes, and on that basis alleges, that Defendants
13 are now using Hooked Media's trade secrets, without its consent, to recreate Hooked Media's
14 technology for Apple.
15 55. The confidential information acquired by Defendants is proprietary and highly
16 confidential, derives substantial economic value by not being known to the public, and is
17 specifically not known to Hooked Media's customer and competitors.
18 56. Hooked Media has undertaken all reasonable efforts to maintain the secrecy of its
19 confidential information, including requiring its employees to agree in writing that they will not
20 disclose Hooked Media's confidential information without Hooked Media's consent. Further,
21 Hooked Media required and obtained the agreement of Apple to keep the same information
22 completely confidential. Such confidential information constitutes trade secrets within the
23 meaning of California Civil Code Section 3426.1.
24 57. Defendants' misconduct detailed herein constitutes misappropriation of Hooked
25 Media's trade secrets and violates Sections 3426 et seq. of the California Civil Code. As a direct
26 and proximate result of Defendants' conduct, Hooked Media has been damaged in amount to be
27 proven at trial, including but not limited to being unable to continue its substantial business
28 relationship with HTC, execute its finalized contract with Deutsche Telekom, and/or re-start
1 acquisition discussions with other interested companies.
2 58. Pursuant to Section 3426.2 of the California Civil Code, Hooked Media is entitled
3 to an injunction to prohibit Defendants from using, disclosing and/or otherwise benefiting from
4 Hooked Media's trade secrets, to eliminate any commercial advantage to Defendants which may
5 otherwise derive from their misappropriation, and to require Defendants to immediately return to
6 Hooked Media all confidential information, documents, and any other materials which they have
7 wrongfully obtained.
8 59. Pursuant to Section 3426.3 of the California Civil Code, Hooked Media is entitled
9 to recover its damages incurred by virtue of Defendants' wrongful misappropriation of their trade
10 secrets, in addition to disgorgement of all amounts by which Defendants have been unjustly
11 enriched, or the payment of a reasonable royalty, in an amount to be proven at trial.
12 60. In performing the conduct described herein, Defendants acted willfully and
13 maliciously, intending to injure Hooked Media and to wrongfully obtain an advantage at Hooked
14 Media's expense and detriment. Pursuant to Section 3426.3(c) of the California Civil Code,
15 Hooked Media is entitled to an award of punitive and exemplary damages against Defendants, two
16 times the damages and unjust enrichment, or reasonable royalty, awarded for the misappropriation
17 above.
18 61. Pursuant to Section 3426.4 of the California Civil Code, Hooked Media is also
19 entitled to an award of its attorneys' fees and costs incurred in this action.
20
21
22
23 62.
SECOND CAUSE OF ACTION
(Interference with Contract)
Hooked Media incorporates the preceding paragraphs of this Complaint as if fully
25 63. As described herein, Hooked Media had existing business relationships, which
26 generated approximately $1 million a month in revenue to Hooked Media by late 2013, and
27 additional existing business relationships that would have multiplied that amount starting in 2014.
28 64. Defendants were and are aware of the existing contracts Hooked Media had,
20
1 including but not limited to its contract with HTC, and intentionally interfered with Hooked
2 Media's receipt of those benefits for their own commercial gain.
3 65. Because of Defendants' misconduct alleged herein, Hooked Media has been
4 damaged in amount to be proven at trial, including but not limited to being unable to continue its
5 substantial business relationship with HTC, execute its finalized contract with Deutsche Telekom,
6 and/or re-start acquisition discussions with other interested companies.
7 66. Defendants' conduct has been malicious, fraudulent, and oppressive and entitles
8 Hooked Media to an award of punitive and/or exemplary damages.
9
10
11
12 67.
THIRD CAUSE OF ACTION
(Interference with Prospective Economic Advantage)
14 68. As described in more detail herein, Hooked Media had prospective business
15 relationships and those clients and potential clients posed a high probability of future economic
16 benefit to Hooked Media.
17 69. Defendants were and are aware of the prospective business relationships and
18 potential benefits to Hooked Media and intentionally interfered with Hooked Media's receipt of
19 those benefits for their own commercial gain.
20 70. Because of Defendants' misconduct alleged herein, Hooked Media has been
25 Hooked Media to an award of punitive or exemplary damages.
26 II
27 //
28 //
21
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FOURTH CAUSE OF ACTION
(Fraud)
5 set forth herein.
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73. At all relevant times, Mr. V enkataraman was the CTO of Hooked Media and owed
duties to Hooked Media to keep Hooked Media fully and honestly informed as to all matters
pertinent to Hooked Media's interests, to disclose to Hooked Media all facts coming to his
attention during the course and scope ofhis duties which were material to Hooked Media's
business, and not to misrepresent any material facts to Hooked Media. Meanwhile, as described
above, Apple made false promises that it would keep confidential Hooked Media's proprietary
technology and information and not use confidential information disclosed to it during the
acquisition discussions against Hooked Media. Apple further made false promises that it would
negotiate and deal directly with Hooked Media's CEO and instead went behind her back to
acquire the engineers it wanted from Hooked Media, based on confidential information it learned
during the acquisition process, without paying anything to Hooked Media. Apple further
concealed its true plans to use the confidential information it learned during the acquisition
discussions and through Mr. Venkataraman to raid Hooked Media's core engineering team,
thereby preventing Hooked Media from being able to transition their knowledge and duties
properly and from continuing its business operations.
74. Because of Mr. Venkataraman's position of trust and confidence with Hooked
Media, Hooked Media justifiably relied on Mr. Venkataraman to keep Hooked Media fully
informed, to make Hooked Media aware of all material information coming to his attention and
which concerned Hooked Media's business, and to not misrepresent or conceal material facts to
Hooked Media which concerned Hooked Media's business. Similarly, Hooked Media justifiably
26
27
relied on Apple's multiple affirmative representations and promises that it would keep the
information shared by Hooked Media with the utmost confidentiality and would not misuse that
28 information. Hooked Media also justifiably relied on Defendants' misrepresentations because
22
1 they actively concealed their true motives from Hooked Media.
2 75. Mr. V enkataraman knowingly and intentionally failed and refused to keep Hooked
3 Media fully informed of material information by concealing the material information from Hooked
4 Media, i.e., failing to inform Hooked Media about the nature and extent of the Hooked Media
5 confidential information he and Apple were sharing and that Apple was at the same time inducing
6 him to leave Hooked Media and take its core engineering team with him. Mr. V enkataraman also
7 affirmatively misrepresented the true facts about his relationship with Apple and his work with
8 Apple to sabotage and undermine Hooked Media. Hooked Media is also informed and believes,
9 and thereon alleges, that Apple also knowingly and intentionally made the false promises and
10 concealments described herein with the intent to cause Hooked Media to rely on their false
11 promises because, for example, their team lead admitted that he was following orders and that
12 Apple was going to do what Apple was going to do, i.e. regardless of the consequences for
13 Hooked Media.
14 76. At the time of the affirmative misrepresentations, promises, and omissions
15 described herein, Defendants knew that the affirmative misrepresentations, promises, and
16 omissions were of information relevant and material to Hooked Media and its current and future
17 business plans.
18 77. Defendants made the affirmative misrepresentations, promises, and omissions
19 described herein with the intent to cause Hooked Media's reliance to its detriment.
20 78. Hooked Media did rely to its detriment on Defendants' affirmative
21 misrepresentations, promises, and omissions described herein. As a proximate result of the
22 misconduct of Defendants, Hooked Media has been damaged in amount to be proven at trial,
23 including but not limited to being unable to continue its substantial business relationship with
24 HTC, execute its finalized contract with Deutsche Telekom, and/or re-start acquisition discussions
25 with other interested companies.
27 Hooked Media to an award of punitive and/or exemplary damages.
28 II
23
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4 80.
FIFTH CAUSE OF ACTION
(Negligent Misrepresentation)
5 set forth herein.
6 81. As described herein, Defendants made multiple untrue representations of past or
7 existing material facts. They made these representations without any reasonable ground for
8 believing them to be true and/or in a manner not warranted by their own information.
9
10
82.
83.
Defendants intended that Hooked Media rely on their negligent misrepresentations.
Hooked Media reasonably and justifiably relied to its detriment on the negligent
11 misrepresentations made by Defendants.
12 84. As a proximate result of the misconduct of Defendants, Hooked Media has been
16 SIXTH CAUSE OF ACTION
17 (Violations of the California Computer Data Access and Fraud Act, Cal. Pen. Code 502)
18 Against Mr. Venkataraman
19 85. Hooked Media's computer systems and computer data are essential to Hooked
20 Media's operations and financial well-being as they contain login and password information,
21 information about Hooked Media's code and other critical information necessary to operate
22 Hooked Media's business and service its customers.
23 86. Mr. Venkatararnan is a savvy technical expert, the former CTO of the company,
24 and former systems administrator with the most knowledge about Hooked Media's computer
25 systems and cloud storage accounts and services. As described herein, Mr. Venkatararnan
26 knowingly accessed Hooked Media's computer network and data with the intent to disrupt or deny
27 services to Hooked Media, even though he lacked authorization or permission after his resignation
28 to access Hooked Media's computer network for any purpose other than transition his work and
24
1 operational knowledge. After he had resigned from his position at Hooked Media and while he
2 was permitted only to help transition his work and operational knowledge, Mr. Venkataraman
3 altered, damaged, removed, and/or destroyed emails and files within Hooked Media's computers
4 and servers and related cloud storage accounts, including in order to disrupt and/or deny access to
5 Hooked Media's data and property in violation of California Penal Code Section 502.
6 87. As described herein, after he left Hooked Media, Hooked Media is informed and
7 believes and thereon alleges that Mr. Venkataraman also knowingly accessed Hooked Media's
8 data on its cloud storage account without Hooked Media's permission in violation of California
9 Penal Code Section 502, including through his vchandru account which he finally logged on and
10 then disabled on December 18th, as well as the other accounts described above, which
11 Venkataraman created in his final hours in Hooked Media's office and still apparently has access
12 to.
13 88. As a direct result of Mr. V enkataraman' s willful acts in violation of California
14 Penal Code Section 502, Hooked Media's access to its essential computer files was disrupted
15 and/or denied and Hooked Media has been damaged in an amount to be proven at trial, including
16 but not limited to being unable to continue its substantial business relationship with HTC, execute
17 its finalized contract with Deutsche Telekom, and/or re-start acquisition discussions with other
18 interested companies.
19 89. Mr. Venkataraman's conduct has been malicious, fraudulent, and oppressive and
20 entitles Hooked Media to an award of punitive and/or exemplary damages.
21
22
23
24 90.
SEVENTH CAUSE OF ACTION
(Breach of Fiduciary Duty)
Against Mr. Venkataraman
26 91. Until November 26,2013, Mr. Venkataraman was acting as the CTO of Hooked
27 Media, at least as far as Hooked Media believed, and up until December 9, 2013 still owed duties
28 to Hooked Media as he purported to transition his work. Prior to November 26, 2013, Mr.
25
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1 V enkataraman participated in the management of Hooked Media's business and exercised
2 discretionary authority on Hooked Media's behalf. Mr. Venkataraman owed fiduciary duties to
3 Hooked Media including the duties of loyalty and due care, to account to Hooked Media and to
4 keep Hooked Media fully and honestly informed as to all matters pertinent to Hooked Media's
5 interest. As such, Mr. Venkataraman was required to act in Hooked Media's best interests and not
6 for his own benefit or the benefit of third parties in all matters pertinent to Hooked Media's
7 interests.
8
9
10
11
12
13
14
15
16
17
18
19
20
92. Mr. Venkataraman acted on Hooked Media's behalf for purposes of negotiating
Hooked Media's possible acquisition by Apple. However, as described further herein, during the
course of the discussion between Hooked Media and Apple, Mr. Venkataraman disclosed to Apple
and Apple employees, outside the formal process, confidential information about Hooked Media's
technology, business plans and personnel. Mr. Venkataraman also hatched a plan with Apple to
structure a departure of all of Hooked Media's engineering team, including himself, in such a way
that prevented a proper transition of their engineering and operational knowledge, so as to destroy
Hooked Media and its ability to fulfill its contractual obligations and service its own customers.
93. In addition, before Mr. Venkataraman left Hooked Media for Apple, he deleted
and/or otherwise removed massive amounts of critical electronic files that were Hooked Media's
property. Mr. Venkataraman also took his desktop when he left and had a separate laptop
computer that he used, both of which contained Hooked Media's code, Hooked Media's trade
secrets, and documentation for every piece of technology Hooked Media had built since its
21 inception in 2008.
22 94. Upon information and belief, during his last day at Hooked Media, Mr.
23 Venkataraman also made at least fourteen (14) changes to Hooked Media's code and accessed the
24 latest copy of Hooked Media's entire code base, effectively giving him continued access to a local
25 copy of all of Hooked Media's internal, closed-source data even after Mr. Venkataraman left
26 Hooked Media for Apple.
27 95. By disclosing confidential information to Apple outside the formal negotiation
28 process and by sabotaging Hooked Media's electronic files, Mr. Venkataraman failed to act as a
1 reasonably careful CTO would have acted under the similar circumstances and therefore breached
2 his fiduciary duty to Hooked Media.
3 96. As a result of Mr. V enkataraman' s breach of fiduciary duty, Hooked Media has
4 been damaged in amount to be proven at trial, including but not limited to being unable to
5 continue its substantial business relationship with HTC, execute its finalized contract with
6 Deutsche Telekom, and/or re-start acquisition discussions with other interested companies.
7 97. Mr. Venkataraman's conduct was malicious, fraudulent and oppressive and entitles
8 Hooked Media to an award of punitive or exemplary damages.
9
10
11
12 98.
EIGHTH CAUSE OF ACTION
(Aiding and Abetting Breach of Fiduciary Duty)
Against Apple
14 99. Apple knew that Mr. Venkataraman was the CTO of Hooked Media and therefore
15 had fiduciary duties to Hooked Media to act in Hooked Media's best interests and to keep Hooked
16 Media fully and honestly informed as to all matters relating to Hooked Media's interest. Apple
17 intended to and did in fact aid and abet Mr. V enkataraman in breaching his fiduciary duties to
18 Hooked Media by providing substantial assistance or encouragement to Mr. Venkataraman to so
19 act. Hooked Media is informed and believes and on that basis alleges that Apple offered Mr.
20 Venkataraman employment and other consideration in exchange for the acts described herein that
21 were in breach of Mr. Venkataraman's duties to Hooked Media. By encouraging Mr.
22 Venkataraman to breach his fiduciary duty, Apple aided and abetted that breach.
23 100. As a result of Apple's substantial encouragement and/or assistance to have Mr.
24 Venkataraman breach his fiduciary duties to Hooked Media, Hooked Media has been damaged in
25 an amount to be proven at trial, including but not limited to being unable to continue its substantial
26 business relationship with HTC, execute its finalized contract with Deutsche Telekom, and/or re-
27 start acquisition discussions with other interested companies.
28 101. Apple's conduct was malicious, fraudulent and oppressive and entitles Hooked
27
1 Media to an award of punitive and/or exemplary damages.
2
3
4
NINTH CAUSE OF ACTION
(Breach of Contract)
Against Mr. Venkataraman
5 102. Hooked Media incorporates the preceding paragraphs of this Complaint as if fully
6 set forth herein.
7 103. In connection with his employment at Hooked Media, Mr. Venkataraman entered
8 into several agreements relevant to that employment, including but not limited to a Non-
9 Disclosure Agreement, in the form of which is attached hereto as Exhibit A, along with his
10 signature page attached as Exhibit B.
2
11 104. The Non-Disclosure Agreement Mr. Venkataraman signed upon becoming
12 employed at Hooked Media provides in pertinent part his agreement to use "Confidential
13 Information only in the performance of [his] duties for (Hooked Media]" and to "take all action
14 reasonably necessary to protect the Confidential Information from being disclosed to anyone other
15 than persons authorized by the Company." "Confidential Information," as defined in the Non-
16 Disclosure Agreement includes not only trade secrets, but "any other technical, operating,
17 financial and other business information that has commercial value." In addition, the agreement
18 requires Mr. Venkataraman to complete a form of acknowledgement upon separation, swearing
19 under oath, that he "understand[s] that all of the Company's materials (including without
20 limitation, written or printed documents, email and computer disks or tapes, whether machine or
21 user readable, computer memory, and other information reduced to any recorded format or
22 medium), whether or not they contain Confidential Information (as that phrase is defined in the
23 Agreement), are and remain the property of the Company. I have delivered to authorized
24 Company personnel, or have destroyed, all of those documents and all other Company materials in
25 my possession." (emphasis added).
26
27
2
As described in Footnote No. 1, the company formally changed its name from Gamook, Inc. to
Hooked Media Group, Inc. in 2009.
28
28
1 105. Hooked Media performed all obligations required of it under its contracts with Mr.
2 V enkataraman and at no time were there any outstanding conditions precedent to the required
3 performance of Mr. Venkataraman of his contractual obligations to Hooked Media.
4 106. Mr. Venkataraman breached his contract with Hooked Media, including but not
5 limited to provisions 2.2 and 2.3, by, among other things, the misconduct detailed herein without
6 legal justification or excuse.
7 107. As a direct and proximate result of Mr. Venkataraman's breaches of contract with
8 Hooked Media, Hooked Media has sustained damages in an amount to be proven at trial, including
9 but not limited to being unable to continue its substantial business relationship with HTC, execute
10 its finalized contract with Deutsche Telekom, and/or re-start acquisition discussions with other
11 interested companies.
12
13
14
TENTH CAUSE OF ACTION
(Unjust Enrichment/Restitution)
17 1 09. As a result of Defendants' misconduct, misrepresentations, breaches of duties,
18 and/or aiding and abetting breaches of duty, they have been unjustly enriched by being
19 compensated for and profiting from such misconduct.
20 110. Defendants' unjust enrichment was obtained at Hooked Media's direct expense as
21 described herein and their retention of the property, benefits and profits from their wrongful
22 misconduct is unjust.
23 111. Defendants hold all such property, profits, and benefits, of any form, and all assets
24 into which any such compensation and benefits have been transferred or transmuted, or are
25 otherwise traceable, in constructive trust for the benefit of Hooked Media. Hooked Media is
26 entitled to an order requiring Defendants to make restitution to Hooked Media of all such
27 property, profits, and benefits.
28 II
29
1
2
3
ELEVENTH CAUSE OF ACTION
(Unfair Business Practices, Cal. Bus. & Prof. Code 17200 et seq.)
5 set forth herein.
6 113. The misconduct of Defendants described herein constitutes unlawful, unfair and/or
7 fraudulent business practices in violation of California Business and Professions Code 17200,
8 et seq. The misconduct was unlawful in that it violated the laws and statutes described above.
9 The misconduct was fraudulent as described above. Further, it was unfair in that the actions
10 significantly threatened and/or harmed competition, including but not limited to preventing
11 Hooked Media from being able to develop, market and sell its app discovery platform in
12 competition with Apple and from continuing and/or expanding its business relationships with
13 competitors of Apple, like HTC.
14 114. As a direct and proximate result of Defendants' unlawful, unfair and/or fraudulent
15 business practices, Hooked Media has suffered and will continue to suffer substantial pecuniary
16 losses and irreparable injury to their business reputation and goodwill. As such, Hooked Media's
17 remedy at law is not adequate to compensate for injuries inflicted by Defendants. Accordingly,
18 Hooked Media is entitled to temporary, preliminary, and permanent injunctive relief against
19 Defendants.
20 115. In addition, Defendants must restore any property and other benefits and
21 compensation unjustly taken from Hooked Media as a result of the unlawful, unfair and/or
22 fraudulent business practices by Defendants.
23 PRAYER FOR RELIEF
24 WHEREFORE, Plaintiff Hooked Media prays for judgment in its favor, as follows:
25 1. That the Court issue a preliminary and permanent injunction returning Hooked
26 Media's intellectual property and enjoining Defendants, their successors, officers, agents, and
27 employees, and anyone acting in concert with or at their behest, from further misappropriation of
28 Hooked Media's intellectual property;
30
1 2.
2 proof at trial;
3
4
5
3.
4.
5.
That Hooked Media be awarded actual and consequential damages according to
That Hooked Media be awarded prejudgment interest;
That Hooked Media be awarded reasonable attorneys' fees;
That Hooked Media be awarded Defendants' unjust enrichment and full restitution,
6 including but not limited to wrongful profits and actual gains;
7
8
6.
7.
That Hooked Media be awarded reasonable royalties, as provided by law;
That Hooked Media be awarded punitive and/or exemplary damages, including but
9 not limited to doubled damages and unjust enrichment under Cal. Civ. Code Section 3426;
10
11
7.
8.
That Hooked Media be awarded the costs of prosecuting this claim;
That Hooked Media be awarded such other injunctive and provisional remedies, as
12 appropriate, as well as an accounting; and,
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
9. That Hooked Media be granted such other and further relief as the Court deems just
and proper.
DATED: May 28, 2014 Respectfully submitted,
SIDEMAN & BANCROFT LLP
By:
31
Attorneys for Plaintiff
1 JURY DEMAND
2 Plaintiff Hooked Media Group, Inc. hereby demands trial by a jury on all issues herein so
3 triable.
4
DATED: May 28, 2014 Respectfully submitted,
5
SIDEMAN & BANCROFT LLP
6
7
8
By:
l'
Attorneys for Plaintiff
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EXHIBIT A
NON-DISCLOSURE AND INVENTION ASSIGNMENT AGREEMENT
California Form
I am already a paid employee of Gamook, Inc., a Delaware corporation (the "Company''). I am
making this agreement in consideration of my continued employment by the Company. This agreement
applies to the entire period of my employment.
1. Representations and Warranties
1.1 No Conflict with any Other Agreement or Obligation. I represent and warrant that I
am not bound by any agreement or arrangement with or duty to any other person that would conflict with
this agreement. Except for any obligation descnoed on Exhibit A attached to this agreement, I do not
have any non-disclosure, confidentiality, non-competition or other similar obligations to any other person
concerning proprietary, secret or confidential information that I learned of during any previous
engagement, employment or association nor have I had any obligation to assign contributions or
inventions of any kind to any other person. I shall not disclose to the Company or induce the Company to
use any proprietary, trade secret or confidential information or material belonging to others, including any
other clients.
1.2 No Infringement of Third Party Intellectual Property Rights. I represent and warrant
that the Inventions (as defined in Section 3 below) will not infringe any patent, copyright, trade secret or
other proprietary right of any third party.
1.3 No Open Source. I represent and warrant that the Inventions will not include any open
source software, except with the prior written consent of the Company.
2. Confidential Information
2.1. Definition of Confidential Information. (a) "Confidential Information" means all of
the trade secrets, know-how, ideas, business plans, pricing information, the identity of and any
information concerning customers or suppliers, computer programs (whether in source code or object
code), procedures, processes, strategies, methods, systems, designs, discoveries, inventions, production
methods and sources, marketing and sales information, information received from others that the
Company is obligated to treat as confidential or proprietary, and any other technical, operating, fmancial
and other business information that has commercial value, relating to the Company, its business, potential
business, operations or finances, or the business of the Company's affiliates or customers that I have
previously or may in the future develop or acquire knowledge of during my work for the Company, or
from my colleagues while working for the Company.
2.2. Protection of Confidential Information. I will use the Confidential Information only in
the performance of my duties for the Company. I wi11 not disclose the Confidential Information, directly
or indirectly, at any time during or after my engagement by the Company except to persons authorized by
the Company to receive this information. I will not use the Confidential Information, directly or
indirectly, at any time during or after my engagement by the Company, for my personal benefit, for the
benefit of any other person or entity, or in any manner adverse to the interests of the Company. I will
take all action reasonably necessary to protect the Confidential Information from being disclosed to
anyone other than persons authorized by the Company.
2.3 Return of Confidential Information. When my engagement by the Company
terminates, I will immediately return or destroy all materials (including without limitation, written or
1
AND INVENTION ASSIGNMENT AGREEMENT
California Form
I am already a paid employee of Gamook, Inc., a Delaware corporation (the "Company"). I am
making this agreement in consideration of my continued employment by the Company. This agreement
applies to the entire period of my employment.
1. Representations and Warranties
1.1 No Conflict with any Other Agreement or Obligation. I represent and warrant that I
am not bound by any agreement or arrangement with or duty to any other person that would conflict with
this agreement. Except for any obligation described on Exhibit A attached to this agreement, I do not
have any non-disclosure, confidentiality, non-competition or other similar obligations to any other person
concerning proprietary, secret or confidential information that I learned of during any previous
engagement, employment or association nor have I had any obligation to assign contributions or
inventions of any kind to any other person. I shall not disclose to the Company or induce the Company to
use any proprietary, trade secret or confidential information or material belonging to others, including any
other clients.
1.2 No Infringement of Third Party Intellectual Property Rights. I represent and warrant
that the Inventions (as defined in Section 3 below) will not infringe any patent, copyright, trade secret or
other proprietary right of any third party.
1.3 No Open Source. I represent and warrant that the Inventions will not include any open
source software, except with the prior written consent of the Company.
2. Confidential Information
2.1. Definition of Confidential Information. (a) "Confidential Information" means a11 of
the trade secrets, know-how, ideas, business plans, pricing information, the identity of and any
information concerning customers or suppliers, computer programs (whether in source code or object
code), procedures, processes, strategies, methods, systems, designs, discoveries, inventions, production
methods and sources, marketing and sales information, information received from others that the
Company is obligated to treat as confidential or proprietary, and any other technical, operating, fmancial
and other business information that has commercial value, relating to the Company, its business, potential
business, operations or finances, or the business of the Company's affiliates or customers that I have
previously or may in the future develop or acquire knowledge of during my work for the Company, or
from my colleagues while working for the Company.
2.2. Protection of Confidential Information. I will use the Confidential Information only in
the performance of my duties for the Company. I will not disclose the Confidential Information, directly
or indirectly, at any time during or after my engagement by the except to persons authorized by
the Company to receive this information. I will not use the Confidential Information, directly or
indirectly, at any time during or after my engagement by the Company, for my personal benefit, for the
benefit of any other person or entity, or in any manner adverse to the interests of the Company. I will
take all action reasonably necessary to protect the Confidential Information from being disclosed to
anyone other than persons authorized by the Company.
2.3 Return of Confidential Information. When my engagement by the Company
terminates, I will immediately return or destroy all materials (including without limitation, written or
1
printed documents, email and computer disks or tapes, whether machine or user readable, computer
memory, and other information reduced to any recorded format or medium) containing, summarizing,
abstracting or in any way relating to the Confidential Information. At the time I return these materials I
will acknowledge to the Company, in writing and under oath, in the form attached as Exhibit C, that I
have complied with the terms of this agreement
3. Inventions
3.1. Definition of Inventions. The term "Inventions" means:
(a) contributions and inventions, discoveries, creations, developments, improvements, works
of authorship and ideas (whether or not they are patentable or copyrightable) of any kind that are
conceived, created, developed or reduced to practice by me, alone or with others, while I am engaged by
the Company that are either: (i) conceived during regular working hours or at my place of work, whether
located at Company, affiliate or customer facilities, or at my own facilities; or (ii) conceived, regardless
of whether they are conceived or made during regular working hours or at my place of work, that directly
or indirectly relate to the Company's business or potential business, result from tasks assigned to me by
the Company or that are conceived or made with the use of the Company's resources, facilities or
materials; and
(b) any and all patents, patent applications, copyrights, trade secrets, trademarks, domain
names and other intellectual property rights, worldwide, with respect to any of the foregoing.
(c) The term "Inventions" does not include any invention for which no equipment, supplies,
facility or trade secret information of the Company was used and which was developed entirely on my
own time, unless (i) the invention related to (A) the Company's business, or (B) the Company's actual or
demonstrably anticipated research or development, or (ii) the invention results from any work performed
by me for the Company.
3.2 All Inventions are Exclusively the Property of the Company. (a) I will promptly
disclose all Inventions, in fuU detail, to persons authorized by the Company. I will not disclose any
Invention to anyone other than persons authorized by the Company, without the Company's express prior
written instruction to do so.
(b) I agree that all Inventions which I make, conceive, reduce to practice or develop (in
whole or in part, either alone or jointly with others) during my employment shall be the sole property of
the Company to the maximum extent permitted by Section 2870 of the California Labor Code, a copy of
which is attached as Exhibit D. This assignment shall not extend to Inventions, the assignment of which
is prohibited by Labor Code Section 2870. The Company shall be the sole owner of all patents,
copyrights and other intellectual property or other rights in connection therewith. I further acknowledge
and agree that such Inventions, including any computer programs, programming documentation, and
other works of authorship, are "works made for hire" for purposes of the Company's rights under
copyright laws. I hereby assign to the Company any rights I may have or acquire in such Inventions. At
any time during or after my engagement by the Company that the Company requests, I will sign whatever
written documents of assignment are necessary to formally evidence my irrevocable assignment to the
Company of any Invention.
(c) At all times during or after my engagement by the Company I will assist the Company in
obtaining, maintaining and renewing patent, copyright, trademark and other appropriate protection for any
Invention, in the United States and in any other country, at the Company's expense.
2
3.3. Excluded Information. On Exhibit B attached to this agreement I have included a
complete list, with non-confidential descriptions, of any inventions, ideas, reports and other creative
works that I made or conceived prior to my engagement by the Company (collectively, the "Excluded
Information"). I intend that the items on that list and only the items on that list shall be excluded from the
restrictions set forth in this agreement. I will not assert any right, title or interest in or to any Invention or
claim that I made, conceived or acquired any Invention before my engagement by the Company unless I
have specifically identified that Invention on the attached Exhibit B. In the event that any Excluded
Information is incorporated into any Invention, I hereby grant Company a perpetual, worldwide, royalty
free, non-exclusive license to use and reproduce the Excluded Information for commercial, internal
business and all other purposes.
4. Non-Solicitation. I agree that during the period beginning on the initial date of my engagement
with the Company and ending one (1) year after termination of my engagement with the Company for any
reason, I will not directly or indirectly, whether as owner, sole proprietor, partner, shareholder, director,
member, consultant, agent, founder, co-venture partner or otherwise, (i) do anything to divert or attempt
to divert from the Company any business of any kind, including, without limitation, solicit or interfere
with any of the Company's customers, clients, members, business partners or suppliers, or (ii) solicit,
induce, recruit or encourage any person engaged by the Company to terminate his or her engagement.
5. Options and Restricted Stock. The Company may grant you options to purchase shares of
common stock or shares of restricted stock pursuant to a stock option grant agreement or award
agreement, as applicable, under the Company's 2008 Equity Incentive Plan. Options and shares of
restricted stock shall only be granted if approved by the Company's board of directors. Options shall be
issued at a per share exercise price equal to the fair market value of one share of the Company's common
stock as of the date of grant as determined by the board of directors.
6. Miscellaneous.
6.1 Interpretation and Scope of this Agreement. (a) Each provision of this agreement
shall be interpreted on its own. If any provision is held to be unenforceable as written, it shall be enforced
to the fullest extent permitted under applicable law.
(b) I understand and agree that if I breach or threaten to breach any of the provisions of this
agreement the Company would suffer immediate and irreparable harm and that monetary damages would
be an inadequate remedy. I agree that, in the event of my breach or threatened breach of any of the
provisions of this agreement, the Company shall have the right to seek relief from a court to restrain me
from using or disclosing Company Confidential Information or Inventions or otherwise violating the
provisions of this agreement.
(c) The validity, construction and effect of this agreement and all extensions, modifications
and amendments of this agreement shall be governed by the laws of the State of California, without
giving effect to the principles of conflicts of laws or choice of law of that State. I hereby irrevocably
submit to the exclusive jurisdiction of the state and federal courts located in California for any such
claims that directly or indirectly arise out of or relate to this agreement, and hereby waive any objections
to the laying of venue in such courts.
6.2 Captions. The captions and section headings in this agreement are included solely for
convenience of reference and are not intended to affect the interpretation of any provision of this
agreement.
3
6.3. Counterparts. This agreement may be executed in counterparts, each of which shall be
deemed an original agreement, but all of which together shall constitute one and the same agreement.
[Signatures on following page]
4
Signature pages attached separately
EXH1BIT A
Obligations to Other Persons:
[Securely attach additional pages if necessary]
6
EXIITBITB
Excluded Information:
[Securely attach additional pages if necessary]
7
EXID.BITC
Form of Acknowledgment
My engagement as an employee to Gamook, Inc. (the "Company") is now terminated. I have
reviewed my Non-Disclosure and Invention Assignment Agreement with the Company, dated
_______ __, 200 _(the "Agreement''), and I swear, under oath, that:
I have complied and will continue to comply with all of the provisions of the Agreement.
I understand that all of the Company's materials (including without limitation, written or printed
documents, email and computer disks or tapes, whether machine or user readable, computer
memory, and other information reduced to any recorded format or medium), whether or not they
contain Confidential Information (as that phrase is defined in the Agreement), are and remain the
property of the Company. I have delivered to authorized Company personnel, or have destroyed,
all of those documents and all other Company materials in my possession.
Signature
Name (please print clearly)
Address
STATE OF ____ _
)
) ss.:
COUNTY OF _____
BE IT REMEMBERED, that on this __ day of ____, before me, the
subscriber, a notary public of the State of personally appeared
_________ ___, who being by me duly sworn on his oath, deposed and made proof to my
satisfaction that (s)he is the person named in the within instrument, to whom I first made known the
contents thereof, and thereupon (s)he acknowledged that (s)he signed, sealed and delivered the same as
his/her voluntary act and deed for the uses and purposes therein expressed.
[SEAL] Notary Public
8
EXHIBITD
Section 2870 of the California Labor Code
(a) Any provision in an employment agreement which provides that an employee shall assign, or
offer to assign, any of his or her rights in an invention to his or her employer shall not apply to an
invention that the employee developed entirely on his or her own time without using the employer's
equipment, supplies, facilities, or trade secret information except for those inventions that either:
(1) Relate at the time of conception or reduction to practice of the invention to the employer's
business, or actual or demonstrably anticipated research or development of the employer; or
(2) Result from any work performed by the employee for the employer.
(b) To the extent a provision in an employment agreement purports to require an employee to assign
an invention otherwise excluded from being required to be assigned under subdivision (a), the provision
is against the public policy of this state and is unenforceable.
9
EXHIBITB
By signing this agreement below, (1) I agree to be bound by each of its terms, (2) I
acknowledge that I have read and understand this agreement and the important restrictions it
imposes upon me, and (3) I have bad an opportunity to consult with legal counsel of my own
choosing to review this agreement.
WITNEssAr
By:
OJ

Name: l.J .<;" 0 1> ftl Name:
Address: f121 fm..Se-M. qt-..5:1..5"
$Jw &Acl Cl!.$ en CA= '1'-'f:-t o7
O_<i __ _
Date: ott lcz.q 2"
Accepted by Company:
Gamook, Inc.
By: ___________ _
Name: __________ _
Title: ___________ _
Date: ___________ _
5

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