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Silicon (11-163)

Silicon (11-163)

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Published by: Aerst2 on Sep 10, 2011
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IN
THE
UNITED
STATES
DISTRICT
COURT
FOR
THE
DISTRICT
OF
DELAWARE
SILICONECONOMICS.I
NC.,
PlainlilT.
v.
FINANCIAL
ACCOUNTING FOUNDATION.
and
FINANCIAL
ACCOUNTING
STANDARDS
BOARD.
Defendants.
CIVIL
ACT
IONNO.
11-163
MEMORANDUM
ON
MOTION TO
I>ISMISS
B:lylson,
J. August 17,2011
SiliconEconomics. Inc.("'SE''')filed this actionseeking
damages
and clarification
of
its
ow
nershipinterestinits invention, ·'E<.lrningsPowcr Accounting." which isthesubject
of
U.S.Patent7.620.573 (the"Invention").
SE
I
claims
that the FinancialAccollntingFoundationC'pAF")andtheFinancial
AccountingStan
dardsBoard
('rASa:'
collectivelywith
FAr,
"Defendants").have unlawfully cJa.imcd aroyalty-freelicense in the
In
vention
and
refusetorelease any ownership interest
in
the
In
vention.
SE
Iclaims violations
of
federalantitrust
law
and
Ca
lif
ornia's
UnfairCompetitionLaw. SEIal
so
seeksdeclaratory
relicrunder
Californialaw.Defendants have moved to
dismiss
pursuant to
Federal
Rule
ofeivil
Procedure
12(b)(I)
for lack
of
standing
and
under Rule
12(b)(6)
for insufficient pleading
of
cachclaim.
(Mo
l.
toDismiss.
ECF No.
18
.)
Atlcr
ca
refulconsideration
or
Defendants' Motion
<mel
the
parties'brieling
and
oral
argument
on
August
11.2011.
the
Court will grant
Defendants'Motion, allowingSEI leave to
amend
theComphJinl.
-1-
 
I.
Faclua
t
and
Pruccdunltl-listor
yAccordingtotheComplaint
in
thismatter.FASB
is
'·the principal organization
in
theprivatesectorfor establishingstandards
of
fi
nancialaccou
ll
ting whichgove
rn
th
e preparation
of
financialstatementsbypubliccompanies
in
theUnitedStates." (Compl.,ECF
No.
I
~
9.) FAFisa private. non-governmental.non-profitfoundationthatgoverns FAS
B.
iliL
'1
4.)
SEIallegesthat FASH
"has
atleast
90%
ofthemarket l
or
establishing
an
d decreeingfinanci
al
accounting standards
inth
eUnitedState
s:'
and
th
eremainder
of
the marketconsists
of
individual
s,
academics.governmentbodies,corporation
s.
andaccounting firmsthatarticulate accountingstandards.as well as the
Int
ernationalAccountingStandardsBoard.
lliL.
10.)SEIisone
OfU
1
CSC
other participantsandisattemptingto estab
li
sh moreef
re
ctiveaccounting standardsindirectcompetitionwithFASB.
(llL.
13.)
To
t
ha
tend.SEIdcveloped lhe
In
vention.
an
equation tbat"improvles
.l
theaccuracy ofnetincomemeasurementand embracesmark-to-market accounting
of
assetandliabilityvaluesIto
1
y
ic1dl1
accurateandcurrent
ba
lance sheet
s:'
(1..4"
4J
19.)
SE
IeOlllendsthe Invention
re
solvesthe
fu
nd
amentalaccounting problem,i.c. eitherthebalancesheetor
th
e
in
co
mesheetcan
be
accuratea
nd
u
sef
ul
,butnotboth.
(Ill
'il1
4.19
.)Pertinent to
thi
slitigation. on July 6.2006.FASBrequestedpubliccomments "conccming themostbasic objects tor
fin
ancialreportingandhowto accomp
li
shsuchobjects."
(Jd
.
'120.)
FA
SB
's
in
vita
ti
onalso statedthat"all commentsreceived
by
theFASB arc cons
id
eredpublic infonnation. Thosecomments will
be
posted
10
the
FASB's
website and will
be
includcd inthe project's public record."
(kL.
21.)
SEIprovidedcomment
s.
includ
in
gbriefingon
th
e
Inv
e
nti
on.
(lei.
'122.)
SE
I
th
enparticipated
in
aroundtable discussion and
SE
J'
s
-2-
 
founder.JoelJameson('·Jameson").privately mcl with the FASB regarding the
In
vention.
(llL.)
Several monthslater.Jameson becameaware
of
certainterms andconditionson F
ASB's
website. namely:"Any information or material you transmit.
..
by
...
sendingane-mail
...
includinginformationsuchas personal data.comments a
nd
suggestions (whcther
in
response
to
a specificqueryorotherwise) witl
be
treated as non-confidential and
nOIl-
proprietary
....
Unlesswe agrce
in
writing
in
advance. anythingyou
transmit
whether electronically
or
in
hard copy may be used
by
the FAF/FASB and itsaffiliates for any purpose. including. but not limited
to.
reproduction.disclosure,transmission. publication, broadcast and posting. Thismeans
thallhe
FAf-/FASBmay use theideas,concepts. know-how
or
techniques youtransmit
...
,"
(ld:.
23)(the"Webs
it
e Tcnns"). Unaware
of
the Website Terms prior
to
submittinghiscomments
in
July2006.Jameson contacted
FAS13
to clarify andeonlirm
FASI3
didnotclaim anyownershipinterest
in
the
In
vention.(Jd.24.)Afier
re
ceivingno response for more thantwo years. Jameson again
co
ntactedFASB through legalcounsel.
(~'125.)
In
response,FASB"cla
im
edthat
it
ha[sl a royalty-free ownership interest
in
the SEllnvention.
..
and categoricallyrefused
to
release
<lny
suchinterest."
iliL.)
After another few months passed. SEI filedsuit
in
California federalcourt,but the complaintwas dbmisscd forlackof' personal jurisdiction over Defendants.
(llL.
~
26):see
Si
licon£con.,
In
c.
v.
Fin. Accounting Found
.No.
10-1939.2010
WI..
4942468,
al
·7
(N.D. Cal. Nov.24.2010).During thecourse
of
thatliti
ga
tion.however.counselfor Defendants expressly disavowed a license to practice the Inventionoranyclaim
or
ownersh
ip
imcrest therein_andallimledDefendantshave
no
intention
of
c1.aiming
any ownership interest.(Com
pi.
'127.)
HOespitetheseadmissions. [Defendants haver refused
10
release rtheir] purported ownership
daims
in
th
e
pnv
ention]."
(.ll:L.)
,
-0
-

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