Total Recall Technologies v. Luckey

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This is from a federal district judge who is aggravated:

Pending now are seven administrative motions to seal covering over a hundred documents filed in connection with defendants’ summary judgment and Daubert motions, as well as documents related to the Court’s prior order on supplemental briefing (Dkts. 312, 322, 327, 328, 329, 346, 352). The Court has reviewed these administrative motions and is shocked to see the parties wish to seal such trivia as:

  • a. The statement Can’t wait to try it (Dkt 346-9, Exh. 16) as well as a reference to that statement in a brief (Dkt 346-3, Supp. Br. at 22);
  • b. Luckey’s statement in a 2012 email to Seidl that Luckey Can’t wait to get into this, very enthused along Luckey’s name, email address, and the email’s send date (Dkt. 349-37, Exh. 36);
  • c. Just the words attached is an invoice and From: Palmer Luckey in a 2012 email (Dkt 346-11, Exh 25);
  • d. A reference in a brief that Ron Igra stated he would get rich from the success of Oculus (Dkt. 312-8, Br. at 7);
  • e. The words 3D is essential in an email from Seidl to Luckey (Dkt. 346-16, Exh. 54);
  • f. The statement Talking with John Carmack (id Software) about the possibility of designing future games for use with my open-source head mounted display design posted on social media (Dkt 349-2, Exh. 24).

This is beyond the pale. The indiscriminate use of the confidentiality stamp alone warrants the denial of the entirety of the motions. The only arguably legitimate request that the Court can so far find is a request to seal a spreadsheet containing the names and addresses of multiple uninvolved third parties (Dkt. 325-14, Exh. 87).

. . . .

The United States District Court is not a wholly owned subsidiary of either TRT or Facebook Technologies. If the parties wanted to proceed in total privacy, they should have arbitrated this dispute. Instead, they brought this dispute to a public forum that belongs to the people of the United States, not TRT or Facebook. The United States people have every right to look over our shoulder and review the documents before the Court. The standard under Kamakana is not met for any document.

. . . .

All motions are DENIED.

Link to the rest at Total Recall Technologies v. Luckey, No. C-15-02281-WHA, United States District Court, Northern District of California

The core claim was that Oculus VR used a design that founder Palmer Luckey created when he worked at Total Recall Technologies. Total Recall stated that Luckey was hired to design a virtual reality headset, for which Total Recall would have the exclusive rights. The plaintiff further alleged that Luckey took the design with him when departing the company, only to form his own company and use this design at Oculus VR. 

Total Recall is owned by a company called Convergint Technologies, a systems integrator. A systems integrator is someone who puts complex computer systems together and sometimes maintains them as well. It’s a well-established business category that includes some large organizations, but there’s lots of competition from other systems integrators.

These days, virtual reality technology is close to a license to print money and Oculus VR, owned by Facebook, produces one of the top-selling VR headsets, selling for several hundred dollars apiece and a first-class ticket for a child, teenager (or adult) into the exciting world of multi-player highly-realistic virtual reality gaming.

PG isn’t familiar with the details (which are likely complex) of this case, but suspects that Total Recall would make a great deal more money for its owners if it could get a piece of Oculus VR’s pie.

To bring this back to authors and their writings, the design of the VR headset that Palmer Luckey allegedly created for Total Recall and is, presumably, related to Oculus VR’s current products in a meaningful way, is intellectual property, just like the manuscript an author creates is intellectual property.

The document that is at the core of the dispute is a written agreement between Luckey and Total Recall signed many years ago under which Total Recall claims Luckey granted it rights to intellectual property that Luckey created.

In March 2014, Facebook acquired Oculus for $2.3 billion in cash and stock.

While the details differ, the underlying creator/publisher agreement governs rights to books an author writes falls into the same category of agreements affecting a creator’s rights to use her/his creations.

Photo of some of its products from Oculus VR

4 thoughts on “Total Recall Technologies v. Luckey”

  1. I understand that it is not uncommon for judges in the 9th circuit to be aggravated by such requests. Back in 2018 for example, we had Judge Chhabria issuing an order ‘to show cause why their attorneys should not each be sanctioned $500. At the subsequent hearing, counsel for the parties discussed the pressure attorneys face to seal documents. Judge Chhabria’s order admonished the lawyers that the correct answer to this pressure is “to firmly explain…that litigation is a public process, and that the public has the right to know what the litigation is about, subject to very limited exceptions” which do not include “mere embarrassment to a corporation.”’

    So I guess that the attorneys in the latest case got off lightly.

  2. This is a long-overdue comment by a district judge. And it’s driven in large part by insurance company imperatives, even more than Mike Hall notes: It’s not just “embarassment to corporations,” but fear that “another litigant will use information to make a valid claim that we have to pay, and we’re directing the defence, and paying the defense lawyers to be intransigent.” It’s been my experience in a wide variety of federal litigation situations that when there’s no insurer involved, it’s at least possible to negotiate narrower motions to seal in advance. This has been true even for massive defendant media companies that were either self-insured or were operating outside the scope of their insurance coverage.

    • I believe the court has stated that “The mere fact that the production of records may lead to a litigant’s embarrassment, incrimination, or exposure to further litigation will not, without more, compel the court to seal its records.” It sounds as if insurers are reluctant to accept the part about “further litigation”. Why am I not surprised?

      • I should have been clearer: What insurance companies hate more than litigation is having no viable defense so they have to pay a claim made before litigation (when they disproportionately win… and get to deduct their legal bills as a claim-processing cost, with extremely advantageous tax treatment, even when they lose). The judge was vastly understating insurers’ motivation; insurers will happily fight class-action-suit after class-action-suit, so long as there’s some possibility of success. What they reallyreallyreally hate is having to pay claims or face bad-faith denial penalties. (And if the plaintiff didn’t have the data already in hand at the time the action was filed, it’s extra-hard to win those bad-faith denial penalties; basically, just having a good claim that was rejected isn’t enough.)

        Insurance in the sense of “pooling of risks” is a valuable economic (and social) concept. Creating ever-larger behemoths of passive investments while refusing to pay out valid claims, in the name of increasing the bottom line on the next quarterly report… not so much. Promoting claims adjusters based on the number of claims they reject… not so much.

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