Infoflows vs. Corbis leads to $20 million judgment

Stock photography company Corbis faces a $20 million judgment in the end-play of a 3 year lawsuit initiated by Infoflows, an Internet technology company. Corbis says it will appeal the judgment

UPDATED

Corbis has released the following statement: 

Corbis is disappointed by the outcome in the trial and believes the trial court made substantial legal errors, resulting in an unjustified windfall verdict for Infoflows. Corbis and InfoFlows had a binding written contract that governed the terms of their relationship, which both parties thoroughly negotiated with the benefit of counsel.  The terms were clear that Corbis would pay InfoFlows to build a license management solution conceived and designed by Corbis, and that Corbis would own any resulting intellectual property.  Infoflows failed to perform its contractual duties and never delivered anything of value, which caused Corbis to terminate the agreement for cause and file suit against Infoflows.  Unfortunately, the court in this case deviated from standing Washington law and applied incorrect legal standards to the parties’ claims.  Corbis will vigorously pursue its appeal and is confident that it will ultimately prevail.

PRESS RELEASE

As reported today by the New York Times, Infoflows Corporation, a small Seattle-area technology start-up, announced that a King County Superior Court has issued a final judgment upholding a sweeping jury verdict in favor of Infoflows in an intellectual property dispute against Corbis Corporation, whose sole shareholder is Bill Gates. The judgment stems from a three-year legal battle over the ownership of Infoflows’ Fedmark technology. At trial, a 12-member jury found Corbis liable on two claims of fraud, arising from Corbis’ secret and undisclosed filing of a patent application based in large part on Infoflows’ technology and its fraudulently inducing Infoflows to enter into a software development agreement. The jury also found that Corbis misappropriated Infoflows’ trade secrets, breached its contract obligations, and acted in bad faith.

After hiring Infoflows to perform development work and gaining exposure to Infoflows proprietary technology, Corbis prematurely terminated its contract with Infoflows and then claimed ownership of significant portions of the Infoflows technology. The involvement of senior Corbis executives and team members in the underlying conduct was extensive, and included back-channel meetings and communications, the replication and distribution of Infoflows’ documents, and contract back-dating.

The jury awarded Infoflows over $36 million in damages, finding in favor of Infoflows on all claims. Following trial, the judge reduced the damage award and also issued a permanent injunction preventing Corbis from claiming any ownership over Infoflows’ Fedmark system and from developing any similar license management system that relies on Infoflows’ trade secrets and proprietary Fedmark technology. Corbis is appealing the judgment.

“We are pleased with the final judgment and permanent injunction issued against Corbis,” said Steve Stone, founder of Infoflows and one of the inventors of the Fedmark technology. “This was a complex intellectual property case, but the jury evaluated the credibility of the witnesses and the evidence, and came away with a very clear picture of what really went on – ultimately ruling in our favor on all claims. We are a small company and our intellectual property is our life blood. Sometimes David really can stand up to Goliath.”

For additional information, including Superior State of Washingon case material, please go to Infoflows v Corbis.

About Infoflows

Infoflows (www.Infoflows.com) is a software services company that provides digital content business intelligence services.  Through the application of digital object recognition, search and advanced internet tracking technology, Infoflows is able to provide to our customers valuable business information on the use and abuse of their digital content.  Infoflows is currently focused on the digital video, print publishing and the stock photography markets where our Fedmarksm Service enables customers to self monitor their licensed intellectual property. Led by recognized technology entrepreneurs, Infoflows is a privately held company headquartered in Sammamish, Washington.