Professional Documents
Culture Documents
19 3. Plaintiff CultureSphere is a corporation duly organized and existing under the laws of
20 the State of Delaware, with its principle place of business in Silicon Valley.
21 4. Plaintiff is informed and believes, and alleges thereon, that Defendant HCL is a
22 corporation duly organized and existing under the laws of the State of California, with its principle
23 places of business in Sunnyvale, California. HCL does business throughout the United States,
24 including California.
25 5. Plaintiff is informed and believes, and alleges thereon, that Defendant BEYONDigital
26 is a corporate entity of unknown corporate form, but Plaintiff is informed and believes, and alleges
27 thereon, that BEYONDigital is a business unit of HCL without any separate or independent corporate
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2 California.
3 6. Plaintiff is unaware of the true names and capacities of defendants sued herein as
4 DOES 1 through 10, inclusive, and therefore sues these defendants by such fictitious names. Plaintiff
5 is informed and believes, and thereon alleges, that each of said fictitiously-named defendants is in
6 some manner responsible for the acts, omissions, injuries and/or damages alleged herein. Plaintiff
7 will amend this complaint to allege the true names and capacities of said fictitiously-named
9 7. Plaintiff is informed and believes, and thereon alleges, that at all times herein
10 mentioned, each of the defendants was the agent, employee, representative, partner, joint venturer,
11 and/or alter ego of each of the other defendants and, in doing the things alleged herein, was acting
12 within the course and scope of such agency, employment, representation, on behalf of such
13 partnership or joint venture, and/or as such alter ego, with the authority, permission, consent, and/or
14 ratification of each of the other defendants. In particular, HCL has provided legal representation for
15 BEYONDigital and instructed Plaintiff’s counsel that all matters regarding BEYONDigital must go
16 through HCL’s in-house legal department, including lawyers located in HCL’s Sunnyvale, California
17 office.
19 8. This Court has subject matter jurisdiction over Plaintiff’s claims pursuant to Article VI
20 § 10 of the California Constitution because this case is not given by statute to any other court.
21 9. This Court has personal jurisdiction over the Defendants pursuant to section 410.10 of
22 the California Code of Civil Procedure because they are residents of, organized under the laws of,
23 and/or have their principal place of business in the State of California. Moreover, the unlawful
24 conduct alleged in this Complaint occurred in and/or was directed at this State. Furthermore, this
25 Court has jurisdiction over each Defendant because their wrongful conduct challenged in this
26 Complaint was directed at, and intended to have its primary effect in, this State.
27 10. This Court is authorized to grant injunctive relief pursuant to sections 525 and 526 of
28 the California Code of Civil Procedure.
2 Code of Civil Procedure, because Plaintiff and Defendants reside in this county and/or operate their
3 respective principle places of business within Santa Clara County. Additionally, Defendants made
4 material representations and breached their contractual obligations, as explained herein, to Plaintiff
5 while residing in this county. Moreover, the acts complained of herein arose out of conduct that
6 originated in this judicial district, and the situs of the harm caused by that conduct is located in this
7 judicial district.
8 FACTUAL BACKGROUND
9 12. In the rapidly changing landscapes of social media, mobile engagement, and digital
10 advertising, successful organizations must find ways to maximize internal and external branding
11 strength to grow revenues. Traditional forms of advertising and customer engagement fail to
12 capitalize on the strength and reach of digital and social networks.
13 13. CultureSphere is a technology development company that has pioneered a novel
14 platform and unique application for mobile advertising and branding. CultureSphere’s core focus is
15 on proprietarily combining and integrating the social media of a company’s employees and customers
16 through employee generated content and customer/user generated content, enhancing and promoting
17 both the employee experience and customer experience in one mobile platform. CultureSphere’s
18 proprietary integration enables expanded branding like never before.
19 14. CultureSphere’s approach to brand marketing has been widely recognized as one of
20 the most important marketing tools for businesses in the 21st century. Indeed, after his
21 BEYONDigital team witnessed the CultureSphere platform, HCL’s former Chief Executive Officer,
22 Anant Gupta, publicly declared (image below) that merging an exceptional customer experience with
23 a vibrant employee experience is the “holy grail” for every company:
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13 15. Plaintiff is informed and believes that HCL is an information technology services
15 management, engineering and R&D and business services. Plaintiff is informed and believes that
16 HCL’s business unit, BEYONDigital, provides digitization services to companies in order to make
17 their operations and business functions digital from end to end and enabling such clients to market
18 their product and business services more effectively in the digital world.
19 16. In July 2015, CultureSphere launched the first and only mobile platform that fostered
20 the production, consumption, and viral circulation of employee generated content for both internal
21 and external brand marketing and advertising. CultureSphere’s platform and application allows
22 businesses to create tailor-made advertisements for public social media and private business-owned
23 social channels generated from and distributed by and to customers and employees. The technology
24 further allows companies to utilize proprietary algorithms designated for curators to find, source, and
25 approve content to be delivered to public social networks on the web as well as private business-
26 owned social channels for communities of employees and customers, generating significant market
27 penetration and high demand for the business’ brand. CultureSphere’s unique and novel platform and
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3 17. Upon its launch, CultureSphere’s platform was hailed by the industry as the “missing
4 link” in corporate branding. An article in Forbes called CultureSphere, “A Social Media Platform
5 For Business That Will Profoundly Transform Branding.” W. Burns, Forbes (June 18, 2015)
6 (http://www.forbes.com/sites/willburns/2015/06/18/a-social-media-platform-for-business-that-will-
7 profoundly-transform-branding/#3d60b3237f9c).
8 18. In the following months, CultureSphere was contacted by and met with numerous
9 companies about its digital mobile branding platform and application. CultureSphere signed
10 agreements with a wide range of Global 2000 companies to deploy its platform and application across
11 certain business segments. Throughout the next year, CultureSphere met with numerous parties who
12 were interested in financing and/or acquiring CultureSphere and its novel technology.
15 19. Almost one year after the successful launch of the CultureSphere application,
16 executives at CultureSphere and BEYONDigital started discussing the terms and conditions of a
18 20. Plaintiff is informed and believes that at that time, neither BEYONDigital nor HCL
19 had any technology, platform, design, or service-offering for digital mobile branding and nothing
21 21. On July 19 and July 20, 2016, CultureSphere’s founder and Chief Executive Officer
22 (CEO), Daniel Gordon, exchanged emails with HCL’s Chief Marketing Officer, Matt Preschern to set
24 22. On July 28, 2016, Mr. Gordon and Mr. Preschern had that conversation and Mr.
25 Preschern expressed great interest in acquiring CultureSphere. Mr. Preschern explained to Mr.
26 Gordon that he would be travelling to India shortly, where he would discuss the acquisition with HCL
27 executives.
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2 Preschern met with in India was Jaco Van Eeden, the Executive Vice President and Global Head of
3 BEYONDigital. Plaintiff is also informed and believes that the meeting in India produced very high
4 interest among the HCL executives regarding the CultureSphere platform and technology. Indeed, as
5 a result of the meeting, Mr. Van Eeden was instructed by the HCL executives to meet with Mr.
7 24. On Thursday, August 11, 2016, Mr. Van Eeden emailed Mr. Gordon to set up a
8 meeting. Mr. Van Eeden and his assistant promptly invited Mr. Gordon to BEYONDigital’s offices
10 25. On Monday, August 15, 2016, Mr. Gordon met with Mr. Van Eeden at
11 BEYONDigital. During that meeting, Mr. Van Eeden was very explicit about HCL’s intent and
12 desire to acquire CultureSphere and to obtain possession of CultureSphere’s platform and application
13 for BEYONDigital which was just getting ready to go-to-market. In order to move forward, Mr. Van
14 Eeden requested that BEYONDigital obtain access to CultureSphere’s confidential and proprietary
15 information so as to view the inner workings of CultureSphere’s proprietary platform. The parties
16 agreed that the information and materials that would be shared by Mr. Gordon would be treated by
17 BEYONDigital and HCL as “highly confidential,” and that BEYONDigital and HCL would only use
18 such information and materials for the purpose of BEYONDigital’s acquisition of CultureSphere (the
19 “Agreement”).
20 26. Pursuant to the parties’ Agreement, Mr. Gordon presented confidential information
21 regarding CultureSphere’s platform including its functionality, its integration, its user experience
22 flows and its interactive design. Mr. Gordon used a slide deck he had previously provided to
23 BEYONDigital marked “Confidential – this document is for the sole purpose of HCL Technologies –
24 Internal Use Only” to explicate each operation of the CultureSphere application. Upon his
25 completion, Mr. Van Eeden presented confidential slides and information concerning BEYONDigital
26 and HCL. Once Mr. Van Eeden finished his presentation, Mr. Gordon gave Mr. Van Eeden a full,
27 live demonstration of the CultureSphere platform, which showcased in detail its power, potential, and
2 included the means by which CultureSphere created a unique digital platform with the capability of
3 combining the employee experience and customer experience into a digital and mobile asset for any
4 business. Mr. Gordon provided BEYONDigital with confidential details regarding CultureSphere’s
5 systems architecture, software development environment, and Internet and web infrastructure
6 environment. Mr. Gordon also explained CultureSphere’s technological infrastructure, including its
7 network, database, source code, custom application software, how its data is analyzed and stored for
8 determining what variables are analyzed, and related technical descriptions and analyses.
9 28. In addition, Mr. Gordon provided critical details as to how the “curator” operation
10 functions and provides a novel mobile marketing and branding experience on public social networks
11 and on business-owned social channels. It is through the business-owned social channels where Mr.
12 Gordon demonstrated to Mr. Van Eeden the proprietary method of eliminating marketing emails,
13 interacting with unlimited communities of employees and customers, and virally engaging talent and
14 customer prospects via social media advertising. Mr. Gordon also furnished CultureSphere’s
15 capabilities and plans to embed artificial intelligence and machine learning into its curator
16 algorithms. And, Mr. Gordon explained in detail how CultureSphere’s platform and application
17 provides a unique set of tools for tracking content distribution and approvals relating to that
18 distribution.
19 29. Mr. Gordon also disclosed and discussed the strategic marketing opportunities for
20 CultureSphere’s platform and application and its sales pipeline and revenue projections to be
21 expected by BEYONDigital. Mr. Gordon shared confidential research and analysis that
22 CultureSphere conducted on the market opportunities that existed for CultureSphere. Mr. Gordon
23 also shared sensitive and strategic cost and pricing information for the CultureSphere application and
24 demonstrated its anticipated growth potential. The amount and extent of confidential information
25 that CultureSphere shared with BEYONDigital pursuant to the Agreement far exceeded any other
26 disclosures that CultureSphere made to any other company that expressed interest in a potential
27 acquisition.
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2 to all of the confidential and proprietary information owned by CultureSphere that was necessary to
3 make, host and launch a version of CultureSphere’s platform as a service to BEYONDigital’s and
4 HCL’s clients. BEYONDigital was not, however, permitted to use the information and materials in
5 such manner. To do so would be a direct violation of Mr. Van Eeden’s explicit promises as well as
8 31. Upon viewing and receiving CultureSphere’s confidential and proprietary information
9 and materials, BEYONDigital and HCL expressed a clear and unwavering commitment to acquire
10 CultureSphere. Mr. Van Eeden stated that the Defendants believed that CultureSphere would be a
11 tremendous revenue-generating asset for HCL, and that BEYONDigital had nothing like
13 32. Mr. Van Eeden concluded the meeting by laying out the terms of an acquisition of
14 CultureSphere. Mr. Van Eeden discussed the structure of the transaction, the timing, the cash and
16 target price which the parties agreed would be approximately $20 million. Mr. Van Eeden also
17 discussed the obvious synergies between the two companies and how CultureSphere would be run
19 33. Within one hour of the August 15 meeting concluding, Mr. Van Eeden emailed the
20 HCL Corporate Development Executive Vice Presidents, Anand Birje and Darren Oberst, to extoll
21 the virtues of CultureSphere and its platform, and to move forward with the transaction.
22 34. Plaintiff is informed and believes, and thereon alleges, that BEYONDigital was eager
23 to acquire CultureSphere’s proprietary “holy grail” platform and application because BEYONDigital
24 had nothing in its portfolio that resembled CultureSphere’s platform or application, nor could it have
25 independently known how to engineer or integrate the customer and employee experiences in the
26 manner and way in which CultureSphere had done so. It was clear from the parties’ discussions that
27 BEYONDigital needed CultureSphere and its technology for its digitization clients.
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2 of the acquisition, the parties identified and spelled out all of the necessary steps needed to integrate
3 the CultureSphere platform and technology so BEYONDigital could start offering the product as a
4 service to their current customers and further attract the overall market. To facilitate that transfer and
5 transition, the parties discussed and agreed that Mr. Gordon would come on-board at BEYONDigital
6 and directly report to Mr. Van Eeden. And finally, the parties discussed a closing date for the
7 acquisition of September 15, 2016, and that Mr. Gordon would begin work at BEYONDigital on
8 October 1, 2016.
9 C. BEYONDigital Abruptly Ends Discussions And Later Announces Its Own Version of
the CultureSphere Platform
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11 36. Within a week of the August 15 meeting, however, it became clear that HCL and
12 BEYONDigital never actually intended to honor their promises of confidentiality and acquisition.
13 After Mr. Birje and Mr. Oberst ceased communicating with Mr. Gordon, Mr. Gordon followed-up
14 with emails to several HCL and BEYONDigital representatives to find out what was going on.
15 Initially, Mr. Gordon was told that the lack of communication had nothing to do with CultureSphere
16 or the transaction, but instead was due to HCL taking a “relook” of BEYONDigital’s structure within
17 the HCL organization. Mr. Van Eeden told Mr. Gordon that an acquisition would only be discussed
19 37. Then, three days later on August 27, Mr. Gordon was told that HCL was reconsidering
20 its commitment entirely. In a moment of candor, Mr. Birje explained that HCL was now exploring
21 whether it could build the same platform itself and any acquisition discussion would have to occur in
22 mid to late October. Mr. Gordon was justifiably outraged at HCL and BEYONDigital’s actions.
23 38. Finally, on September 12, Mr. Gordon was informed that HCL would “not . . . acquire
24 any product/platform for our Beyond Digital [sic] practice as of now.” Having induced Mr. Gordon
25 to disclose CultureSphere’s confidential and proprietary information concerning its “holy grail”
26 digital platform and application, and having strung Mr. Gordon along initially with talk of acquisition
27 terms, BEYONDigital now told Mr. Gordon that Defendants would not complete the acquisition, but
28 instead would develop their own platform to compete with CultureSphere. HCL and BEYONDigital
4 confidential and proprietary information for HCL’s own ends. On November 8, 2016, HCL’s Chief
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17 Human Resources Officer, Prithvi Shergill, tweeted out publicly (below) that HCL was “on the way”
18 to delivering the very same platform and application that CultureSphere had designed, developed and
19 confidentially disclosed to HCL and BEYONDigital.
20 40. The CultureSphere platform and application represents years of investment,
21 programming, development, and ingenuity. As highlighted above, CultureSphere shared its
22 confidential and proprietary material and information with BEYONDigital pursuant to the Agreement
23 and in reliance upon BEYONDigital’s representations that it sought to lawfully acquire
24 CultureSphere through an arm’s length transaction.
25 41. As described above, BEYONDigital had no product or offering similar to
26 CultureSphere’s platform, nor did it have any similar platform in development at the time
27 CultureSphere shared its confidential and proprietary information pursuant to the Agreement.
28 Plaintiff is informed and believes, and alleges thereon, that BEYONDigital could not create a
2 without having misused and misappropriated CultureSphere’s confidential and proprietary materials
3 and information.
6 purchase the platform and application that HCL and BEYONDigital praised, Defendants used
7 CultureSphere’s confidential and proprietary materials and information and are now promoting,
9 43. Based on the foregoing, it is readily apparent that HCL and BEYONDigital induced
10 CultureSphere to reveal its confidential and propriety materials and information through false
11 promises of confidentiality and non-use restrictions and the promise of acquisition that, with the
12 benefit of hindsight, HCL and BEYONDigital never intended to honor. Defendants will improperly
13 and wrongfully compete with CultureSphere in the development and sale of CultureSphere’s own
19 45. A contract was formed between CultureSphere and Defendants when CultureSphere
20 (via Mr. Gordon) and BEYONDigital (via Mr. Van Eeden) entered into a valid and binding oral
21 agreement on August 15, 2016, referenced above and herein as the “Agreement.”
22 46. The Agreement provided that all of the evaluation materials and information that Mr.
23 Gordon shared with HCL and BEYONDigital concerning CultureSphere would be treated as
24 confidential and used for the sole purpose of BEYONDigital’s acquisition of CultureSphere, and that
25 the evaluation materials and information would not be used by HCL and BEYONDigital for any
27 47. The evaluation materials and information included, but were not limited to, the
28 technological infrastructure (including the network, database, and systems architecture), product
2 system flows, and graphical user interface), technological capabilities (including programmed source
3 code and related technical descriptions and analyses), financial information, business plans,
4 strategies, techniques, customer information, and business data, of CultureSphere. Said evaluation
6 CultureSphere, and Defendants’ obtaining, using, and further developing of such information was
8 48. CultureSphere performed all of its obligations and commitments under the Agreement
9 by furnishing and providing all of the evaluation materials and information requested by HCL and
10 BEYONDigital. To that end, Plaintiff did all of the things the Agreement required of it.
11 49. All conditions necessary for Defendants to perform the contract have occurred.
12 50. Defendants breached the contract by using CultureSphere’s proprietary materials and
13 information to design, develop and/or launch a competing platform and application in violation of the
14 Agreement to not use such information for such purposes or to the detriment of CultureSphere.
15 51. As a direct and proximate cause of the breach, CultureSphere has sustained injury and
18 (Against All Defendants For Breach of the Covenant of Good Faith and Fair Dealing)
19 52. Plaintiff hereby incorporates by reference as though fully set forth herein, paragraphs
21 53. There was a contract between the parties, as CultureSphere and Defendants entered
22 into the valid and binding Agreement in August 2016. As a matter of law, the Agreement includes an
23 implied covenant of good faith and fair dealing between the parties.
24 54. As part of the implied covenant of good faith and fair dealing, CultureSphere agreed to
25 disclose confidential and proprietary information to BEYONDigital for the sole purpose of pursuing
27 55. CultureSphere performed all of its obligations under the Agreement, by doing all or
2 without the intent of abiding by the Agreement’s restrictions, HCL and BEYONDigital breached the
3 implied covenant of good faith and fair dealing. HCL and BEYONDigital’s conduct, even if it does
4 not amount to a technical transgression of the Agreement, clearly frustrates CultureSphere’s rights to
6 57. All conditions that were necessary for Defendants to perform under the Agreement
8 58. Because of Defendants’ actions, BEYONDigital and HCL unfairly interfered with
9 CultureSphere’s rights to receive the benefits of the Agreement, namely, to be free from competition
10 from other businesses using CultureSphere’s own confidential and proprietary information. Thus,
11 Defendants acted in a manner that deprived CultureSphere of its rights to receive benefits and
13 59. As a direct and proximate result of Defendants’ breaches, CultureSphere has suffered
20 and information in a way that conferred upon Defendants a valuable benefit despite their wrongful
21 actions, and but for such wrongful actions, Defendants would not have otherwise received such
22 confidential and proprietary materials and information. Thus, Defendants have benefited and will
23 profit from the receipt and improper use of CultureSphere’s confidential and proprietary materials
24 and information.
25 62. As a result of the improper actions outlined above, Defendants were unjustly enriched
27 63. Under principles of equity and good conscience, Defendants should not be permitted
28 to use and retain the proprietary and confidential materials and information belonging to
2 and/or launch of any similar platform or application; and CultureSphere should be compensated for
3 the loss of the benefit that was provided to Defendants having received and misused CultureSphere’s
9 65. As noted above, Jaco Van Eeden is the Executive Vice President and Global Head of
10 BEYONDigital. As a result of holding these positions of senior management, Mr. Van Eeden had
13 66. On or about August 15, 2016, while meeting at BEYONDigital’s offices in Texas, Mr.
14 Van Eeden verbally promised Mr. Gordon that Defendants would preserve the confidentiality of
16 67. That same day during the same meeting, Mr. Van Eeden also promised that
17 Defendants would use the information only for the agreed purpose of evaluating the acquisition of
18 CultureSphere.
19 68. Mr. Van Eeden also stated that Defendants were then engaged in a good faith process
21 69. At the time Mr. Van Eeden made these promises and misrepresentations on
22 Defendants’ behalf, they were false and he and the Defendants knew them to be false. Defendants
23 had no intention of honoring the promises above when they were made.
24 70. Instead, Mr. Van Eeden made these statements with the intent to cause Plaintiff to
25 detrimentally rely on them by sharing Plaintiff’s proprietary and confidential business information,
26 knowing full well that Defendants would usurp Plaintiff’s technology for their own gain rather than
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2 Agreement, and Mr. Gordon only gave an extensive presentation to Mr. Van Eeden highlighting
3 CultureSphere’s technology, based on the promises that CultureSphere’s information would be kept
4 confidential and not be used to CultureSphere’s detriment or for any other purpose than evaluating
5 the acquisition.
6 72. As a proximate cause of Defendants’ actions, Plaintiff has been damaged in an amount
11 73. Plaintiff hereby incorporates by reference as though fully set forth herein, paragraphs
13 74. Defendants’ acts and practices constitute unlawful and unfair business practices within
15 75. Defendants acted in a way to restrain competition or the free exercise of business
16 activity.
17 76. Defendants’ acts were unlawful because they constitute an unfair attempt to gain a
18 competitive edge against CultureSphere. Such unlawful restraint on trade is evidence of unfair
19 competition.
20 77. Defendants’ wrongful conduct is unfair because the harm to CultureSphere far
21 outweighs any lawful utility or justification. Such harm is substantial and such conduct is immoral,
23 78. As a direct and proximate cause of these acts, CultureSphere has sustained injury and
2 enriched;
5 (d) attorneys’ fees, costs, and disbursements in prosecuting this action to the extent
6 permitted by law;
7 (e) declaratory and injunctive relief as this Court may deem necessary and proper;
9 (g) such other and further relief as this Court deems just and proper.
13 By:
Paul J. Collins
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Attorneys for Plaintiff CULTURESPHERE INC.
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