OtterBox, which makes the top-selling protective case for smartphones, has announced the acquisition of LifeProof for an undisclosed amount.

News of the acquisition comes one day after a lawsuit filed by OtterBox against LifeProof for patent infringement was dismissed. OtterBox told the North Carolina Business Report that the acquisition was not related to the lawsuit or any settlement. Headquartered in San Diego, LifeProof also makes protective cases and accessories for smartphones and tablets.

Over the next 30 days, OttberBox will beginning incorporating the LifeProof brand into OtterBox’s product lineup. More information about product availability and alignment will be available after that period. OtterBox currently has about 650 employees worldwide, while LifeProof, which was founded in 2009, employs about 250 people, who the companies say will remain in their San Diego location “for the foreseeable future.”

“Our strategy is to utilize our combined brand momentum, and world-class talent to create a great customer experience that generates OtterBox brand ambassadors for life,” Thomas said in the acquisition announcement.

In addition to its extremely durable smartphone cases, which are designed to withstand drops, water immersion and debris, OtterBox also makes protective coverings for other mobile devices such as tablets, as well as screen protectors and accessories. LifeProof’s cases are designed for people with very active lifestyles (or who are especially accident prone around mountains, concrete and bodies of water). Both companies’ cases performed well when they were subjected to abuse in the name of consumer research by TechCrunch during CES in January.

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Ditto, a startup that helps users virtually try on different pairs of eyeglasses, has launched an Indiegogo campaign to help fight a big threat — the company says it’s being sued by 1-800-CONTACTS and another company called Lennon Imaging Technology.

Ditto’s technology allows users to create webcam recordings of their faces, which they then use to see how different designer glasses will look with their facial shape and size. Both Lennon Imaging and 1-800-CONTACTS are claiming that this technology infringes their own patents. But Ditto’s campaign describes them as “patent troll” lawsuits — Lennon is a non-practicing company, meaning that it doesn’t have a product or service of its own, and Ditto co-founder and CEO Kate Endress said 1-800-CONTACTS (which is owned by WellPoint) didn’t purchase the patent in question until after the company’s CEO visited the Ditto website.

1-800-CONTACTS did not respond when I emailed for comment. However, the Electronic Frontier Foundation published its own blog post in support of Ditto saying that 1-800-CONTACTS has “a long record of using the courts to bully its competitors.” That prompted a complaint from the company’s lawyer saying that 1-800-CONTACTS is not a patent troll. The EFF writes:

Sure, the company is not a classic patent troll — a shell company that does nothing but buy patents and sue—but it’s little better. Patent trolls generally want to use the club of litigation to extort licensing fees. But all indications are that 1-800-CONTACTS isn’t interested in a license from Ditto. Rather, it wants to destroy the competition.

Indeed, Endress said she’s in a tough spot, where “we cannot afford to win” — in other words, the company doesn’t have enough money to defend itself in court, and even though Ditto has raised venture funding, the threat of litigation scares off any additional investment. The company has already had to lay off three engineers, Endress said.

That’s why the company has turned to Indiegogo to fund its legal efforts. (Endress said the money will only go towards legal costs.) So far, it has raised about $5,700 of its $30,000 goal. However, the campaign page states that Ditto is looking at $30,000 to $100,000 in legal fees over the next three to six months (and potentially much more afterwards), so I’m guessing Ditto could use a lot more help if possible.

Update: A 1-800-CONTACTS spokesperson just sent me the following statement:

1-800 CONTACTS has a history putting the consumer first by promoting competition. In fact, 1-800 CONTACTS spent years working in concert with consumer advocacy groups to support the passage of the Fairness to Contact Lens Consumers Act. This legislation was passed by Congress and gives all Americans the right to their contact lens prescription so they can choose where to purchase contact lenses. 1-800 CONTACTS also compelled the largest contact lens manufacturers to sell to Internet retailers. Both efforts were successful and led to a more open and competitive market that has benefitted numerous online competitors and ultimately, millions of consumers.

As a leading vision retailer, 1-800 CONTACTS recognized the need to improve the online purchasing options for eyeglasses and began developing an enhanced virtual try on system that would vastly improve the consumer experience. As part of our due diligence when developing our virtual try on technology, we investigated the existing rights in this space, as is standard practice. The granted patent that 1-800 CONTACTS purchased in 2012 entitled “Interactive try-on platform for eyeglasses” was filed in 2001 and granted in 2006. Like most other companies operating a business that depends on technology, 1-800 CONTACTS purchased this patent for a reason – the patent covered what the business was doing so the patent either needed to be licensed or purchased. Ditto could have licensed or purchased the same patent, but chose to ignore it and launched their website with an infringing virtual try on feature anyway.

1-800 CONTACTS began working on our virtual try on system for Glasses.com long before Ditto was formed as a company. Glasses.com had a working demonstration of its more robust 3D virtual try on system running in 2011 – before Ditto launched its website in April 2012. Members of the 1-800 CONTACTS team visited Ditto’s website to try the virtual try on technology when it launched. Viewing competing products that are on the market is not unusual, and is in fact a responsible business practice.

1-800 CONTACTS has offered to discuss an amicable resolution to the lawsuit through licensing or other options, but instead of responding to our offer, Ditto has spent time and energy engaging in online discussions and issuing an inaccurate and misleading press release.

Ditto has found its strongest supporter in the Electronic Frontier Foundation (EFF), who has been quoted multiple times in blog articles and in Ditto’s press release. What Ditto and the EFF failed to disclose is that three members of the advisory board at the Electronic Frontier Foundation all work for Durie Tangri – the same law firm representing Ditto in this case. It is disappointing that the EFF concealed this inherent bias from the public, instead holding itself out as an impartial observer.

1-800 CONTACTS will launch our virtual try on technology next month, providing an enhanced consumer shopping experience. Our approach has taken longer to bring to market, as we developed a revolutionary virtual try on system customized for the iPad. We were honored to present our ground-breaking technology at TED in February, where we also demonstrated the app 1,650 times on 100 iPads.

Complaint 1-800-Contact v. Ditto by TechCrunch

999 016 – Ditto Motion to Dismiss With Memo (00354120) by TechCrunch

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New York City is one step closer to having regulator-approved e-hail apps, thanks to the end of litigation against the New York Taxi and Limousine Commission. That’s because a judge today dismissed a controversial lawsuit filed by the black car industry against the regulator.

The lawsuit, which was designed to block the TLC from starting a trial of mobile apps that would allow users to hail a cab electronically, claimed that the pilot program would have violated several local ordinances. It also claimed that the TLC’s program would have blurred the lines between cabs, which users typically hail on the street, and for-hire vehicles, which they call ahead to schedule a ride. But the judge in the case, Justice Carol Huff, rejected those claims and dismissed the case.

The ruling was a victory for the TLC and for the companies that have planned to be a part of the e-hail trial. The program was expected to launch in February, but was delayed due to the lawsuit filed by the black car lobby. Without the litigation hanging over it, the TLC is once again free to move on with the application and approval process.

That said, not every e-hail app will qualify. Participants in the trial are expected to integrate with the taxi’s existing meter and payment system, and be approved by the NY TLC before they begin operating. But it’s something that e-hail companies such as Hailo, Taxi Magic and Flywheel say they are prepared to do.

Hailo CEO Jay Bregman told me by phone that his company has thousands of drivers trained and ready to go, and the company is just waiting for the TLC to give it the green light to launch. But it’s not clear how long it will be before companies that have applied and had their apps approved will get the go-ahead to begin rolling out services in New York City.

Another company that may participate in the trial is Uber, which previously had tried to launch an unsanctioned version of its own UberTAXI service in New York, long before the TLC announced the trial. But Uber ultimately shut down its own taxi trial, in part because the TLC at the time “put up obstacles and roadblocks” to its trial. For what it’s worth, a representative for Uber said the company had submitted an application and received the blueprint schematics for compliance with the TLC’s program.

With the launch of New York’s e-hail trial seemingly imminent, it’s probably as good a time as any to mention that we’ll be discussing all these issues next week at Disrupt NY 2013, where we’ll have representatives from the TLC, Hailo, and ride-sharing startup SideCar on a panel about urban transportation. This’ll give us one more thing to talk about.

Photo Credit: Vincent_AF via Compfight cc

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There’s a new wrinkle in SideCar‘s ongoing battle with local authorities in Austin. Just a day after announcing that it’s offering free transportation to SXSW Interactive attendees, the ride-sharing startup has decided to take the city’s transportation department to court.

The suit is just the latest in a series of battles with the city since SideCar acquired Austin-based ride-sharing startup HeyRide a few weeks ago as part of its expansion into seven new markets. After launching in San Francisco last summer, the company is in the midst of a big nationwide expansion.

After getting rebuffed by local officials here, SideCar has fired back at the Austin Department of Transportation with a lawsuit that it hopes will legitimize ride sharing in the city. The filing hit today, just a few weeks after the Austin city council passed an ordinance that would effectively make it illegal for SideCar or others to operate there. The ordinance allows for local police to impound the vehicles of drivers who aren’t licensed to provide taxi or limo rides if they’re caught giving rides for pay.

In response, SideCar, which launched in Austin just ahead of SXSW Interactive, decided to give rides for free. Instead of getting paid “donations” by passengers after a ride, SideCar is paying its drivers an hourly rate as “brand ambassadors” during the conference.

Now it’s going on the offensive against the city, with a lawsuit filed in Austin City Court today that’s designed to reverse the ordinance. Not just that, but SideCar hopes that by taking Austin to court, it will make clear that its ride-sharing service and others like it are legal under local regulations.

In SideCar v. The City of Austin, Texas, the company makes the following claims:

• SideCar is not a transportation service. SideCar is a technology platform that enables peer-to-peer ridesharing.
• The City Code regulates “chauffeured vehicles”. We don’t own or operate vehicles, dispatch drivers or mandate shifts.
• The City Code regulates “chauffeured vehicles” for a fee. Members of the SideCar rideshare community pay what they want and it’s voluntary.
• SideCar is protected under federal law.

Austin isn’t the only place where SideCar has been under fire from local regulators and city officials. Like Uber before it, SideCar received a cease-and-desist order and fines from the California Public Utilities Commission for operating an unlicensed charter party (i.e. limo) service in San Francisco. It’s also come under fire in Philadelphia, where three of its drivers had their cars impounded by the local police there.

I had a conversation with SideCar co-founder Nick Allen this morning at SXSWi, where he talks about the company’s free rides in Austin during the conference, as well as the lawsuit. Check out the whole video above.

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David Einhorn has dropped the suit filed against Apple over a proposal the company intended to bring to a vote at its shareholder meeting this past week, Bloomberg reports. The proposal included a provision that would require a common shareholder vote before Apple could issue any preferred stock, something Einhorn and his hedge fund Greenlight Capital have been seeking from Apple to unlock more of the value of Apple’s cash pile for shareholders.

A judge sided with Einhorn earlier this week, issuing a preliminary injunction to block Apple from holding its vote on the proposition at its shareholder meeting. That would seem to have been enough to satisfy Einhorn and Greenlight: with the vote off the table and the shareholder meeting out of the way for another year, Greenlight has little to gain by pursuing the lawsuit, except for creating what Apple CEO Tim Cook called a “silly sideshow” that distracts the company they hold a considerable stake in from its actual business.

Apple has said it will “thoroughly consider” Einhorn’s proposal around preferred stock, Cook has said. At the shareholder meeting on Wednesday, he reiterated both the belief that the lawsuit was a “silly sideshow, regardless of how the judge ruled,” and that the company was still “seriously considering” the issue of returning cash to shareholders, according to CNBC.

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Well this is interesting: New York-based cable company Cablevision is suing cross-town content partner Viacom. The lawsuit is over Viacom’s requirement for Cablevision to carry a bunch of channels its users don’t watch, in order to have access to a bunch of channels they do.

The idea behind the lawsuit is basically that Viacom has eight core channels that Cablevision wishes to carry, but Viacom bundles in a bunch of channels that viewers don’t watch and its customers don’t care about. Even though those ancillary networks don’t actually have any viewership, Cablevision has to pay for them anyway. And that, in effect, drives up the cost of cable TV for everyone.

According to the press release — a redacted version of the lawsuit itself won’t be available until later — Cablevision is accusing Viacom of violating antitrust laws, by “illegally” forcing Cablevision to carry and pay for 14 low-rated ancillary networks. Those include channels that you’ve never heard of, like Centric, Logo, and Palladia, as well as some ham-handed add-ons attached to popular brands, like MTV Hits, MTV Tr3s (WTF?!?!), Nick Jr., Nicktoons, VH1 Classic, and VH1 Soul.

The lawsuit states:

“The manner in which Viacom sells its programming is illegal, anti-consumer, and wrong. Viacom effectively forces Cablevision’s customers to pay for and receive little-watched channels in order to get the channels they actually want. Viacom’s abuse of its market power is not only illegal, but also prevents Cablevision from delivering the programming that its customers want and that competes with Viacom’s less popular channels.”

Cablevision is claiming that Viacom “abused its market power over commercially critical networks” such as Nickelodeon, Comedy Central, and MTV. And by doing so, the content company allegedly coerced Cablevision into taking an unfair deal by “threatening to impose massive financial penalties” if it didn’t agree. Like, making an offer Cablevision couldn’t refuse.

And here’s what Cablevision really wants: The lawsuit seeks to void its 2012 carriage agreement with Viacom. You know, the one that it signed under duress at the 11th hour to avoid a blackout of the networks. And the ability to renegotiate that deal under different terms, without having to carry stuff like MTV Tr3s. (Seriously, what is that?)

But more importantly, Cablevision is seeking a permanent injunction that would bar Viacom from requiring carriage of ancillary networks in order to also have MTV, Comedy Central, and the like. And this is where things get tricky. Because if the court rules in Cablevision’s favor, it will be setting a precedent not just for Viacom, but for any of the big media conglomerates that bundle their must-have programming with a bunch of crappy channels that no one watches.

If that happens, Disney will no longer be able to package “The Ocho” with regular ESPN, and Comcast won’t be able to make other cable companies carry NBC just to get USA Network or SyFy. (That’s a joke, guys!) And, the content guys will tell you, their business models will collapse, there will be pandemonium in the streets, cats and dogs will start living together, and Western Civilization will cease to exist as we know it.

Well lookit that! Viacom responded:

“At the request of distributors, Viacom and other programmers have long offered discounts to those who agree to provide additional network distribution. Many distributors take advantage of these win-win and pro-consumer arrangements. Reflecting the highly competitive cable programming business, these arrangements have been upheld by a number of federal courts and on appeal. Viacom will vigorously defend this transparent attempt by Cablevision to use the courts to renegotiate our existing two month old agreement.”

Ok, then.

Article courtesy of TechCrunch

The “silly sideshow” around Greenlight Capital and Apple issuing preferred stock, as Apple CEO Tim Cook put it, will go on according to a ruling today by U.S. District Judge Richard Sullivan in NYC today. Sullivan sided with Greenlight Capital manager David Einhorn, blocking Apple from being able to proceed with a shareholder vote on whether or not the company can issue preferred stock.

In the now infamous “Proposal No. 2,” Apple would have taken away its ability to directly issue any preferred stock, instead putting that power in the hands of shareholders via a vote. Einhorn’s lawsuit challenged the proposal on the grounds that it violated SEC rules by packing in the preferred shares issue with two other matters in a single proxy vote issue. Einhorn is angling for Apple to begin issuing preferred stock as a way to spread out more of Apple’s $137 billion stockpile to shareholders, looking for a perpetual 4 percent dividend on select shares.

For its part, Apple has been nothing but dismissive of the lawsuit spearheaded by Einhorn. In a keynote interview with Cook February 12th, the Apple CEO shared that he found the entire movement against Proposal No. 2 and a shareholder vote on preferred stock bewildering.

“[F]rankly I find it bizarre that we would find ourselves being sued for something that’s good for consumers,” Cook said. “I think it’s a … it’s a silly sideshow, honestly.” He went on to say that the entire thing was little more than a buzzing fly around Apple’s head. “We’re not going to do a mailing campaign on it,” he said. He characterized it as “a waste of shareholder money, and it’s a distraction, and it’s not a seminal issue for Apple.” Cook further added that the company would insist on a common vote from shareholders before any issuance of preferred stock, whether or not the proposal went through.

Judge Sullivan blocked the proposal from being voted on at the February 27 annual stockholders meeting, issuing a temporary injunction pending further investigation by the cour on the matter. Einhorn argues that Apple is missing out on delivering a lot of additional value to shareholders by blocking the proposal, but other shareholders don’t see the wisdom in the move.

“Our concern is that Apple’s proposal is a very pro-shareholder resolution that is being hijacked,” Rich Clayton, research director at CtW Investment Group, a company that advises funds owning some 2 million in Apple stock, told Bloomberg in a recent interview. “It’s in no way, shape or form necessary to oppose shareholder Proposal 2 for [Einhorn's plan] to happen. Greenlight’s tactics don’t make a lot of sense.”

Greenlight Capital released the following statement regarding the Judge’s ruling today:

This is a significant win for all Apple shareholders and for good corporate governance.  We are pleased the Court has recognized that Apple’s proxy is not compliant with the SEC’s rules because it bundles different matters in Proposal 2.  We look forward to Apple’s evaluation of our iPref idea and we encourage fellow shareholders to urge Apple to unlock the significant value residing on its balance sheet.

As mentioned, Apple clearly sees little value in making a big deal out of this case against it, but Einhorn definitely doesn’t seem as eager to let things lie low. The shareholder meeting on February 27 could be the scene of some major fireworks, depending on how things proceed.

Article courtesy of TechCrunch

According to InsideSocialGames, Zynga and EA have settled their legal dispute over the former’s alleged copying of EA’s popular game “The Sims.” It was clear to many that once Zynga started teasing “The Ville,” it took some major elements from EA’s classic. A source has told TechCrunch that no money has exchanged hands as part of the settlement.

At the time of the lawsuit, companies threw barbs back and forth with EA alleging that Zynga “doesn’t understand copyright.” Details as to what the terms of the settlement are haven’t been made available, but we’ve reached out to both companies, and people familiar with the case, for more information. At one point, Zynga countersued for “anti-competitive” practices, turning this into an online gaming bloodbath of epic proportions.

Things quieted down since August, and today it appears that both lawsuits are resolved.

EA and Zynga spokespeople have issued the following statements:

EA and Zynga have resolved their respective claims and have reached a settlement of their litigation in the Northern District of California.

Here is the copy of the proposal to dimiss the case, via AllThingsD:

eavszynga

This is developing.

[Photo credit: Flickr]

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Another big enterprise deal to report as New Relic, an app performance monitoring service, has raised $80 million analyzing and is looking at an IPO.

Insight Venture Partners led the financing, which also included T. Rowe Price. Other participants included Dragoneer Investment Group LLC, Passport Ventures LLC, and the company’s existing investors Benchmark Capital, Trinity Ventures, Tenaya Capital, and Allen & Company.

Like a number of young enterprise companies, New Relic has had significant growth for its app performance technology. It has 35,000 active customers with 5,000 paying for the service. The company’s valuation is $750 million, said New Relic CEO Lew Cirne. He said the company is planning to do an IPO.

Cirne is one of the pioneers of performance monitoring. He sold his company, Wily Technology to CA in 2006 for $350 million. Soon after he started New Relic to offer real-time monitoring.  In November, CA filed a lawsuit against New Relic, seeking “undisclosed damages” for lost profits. It is also seeking an injunction against New Relic prohibiting the infringement of CA patents and the misuse of the company’s intellectual property. Cirne said they learned of the lawsuit one hour before CA released a press announcement. He says he is confident New Relic will prevail in the lawsuit.

New Relic will use the funds to bolster development of a real-time monitoring service for mobile apps. It also plans to harness the data it continually monitors which is in excess of 85 billion metrics a day. The company will also add support in Europe and increase the size of the engineering team by 80%.

New Relic competes to somer extent with App Dynamcics though the market opportunity is locked in the catacombs of enterprise software companies that have traditionally served the market.

App performance fits square in the middle of the cloud computing market where a new infrastructure is developing and with it the need for companies to monitor everything from their apps to their server clusters.

Article courtesy of TechCrunch

Remember that time Apple, Google, Intel and other major tech companies were named in a civil suit where ex-employees claimed that they had all conspired to eliminate hiring competition at the top of the U.S. tech world? Well in a new development, Judge Lucy Koh said in a Thursday hearing that Apple CEO Tim Cook would have to testify and be questioned by the plaintiff’s attorneys in that case for a duration of four hours, Reuters reports.

Koh is in the process of figuring out whether the lawsuit should proceed as a class action, in which case the plaintiffs will be able to pursue a much larger settlement. The judge said that during the time that no poaching arrangements were agreed upon by the defendants in the case, it seems that ranking executives at each of the companies involved believed that joining forces was a better strategy than dealing with individual employees. In other words, they saw real financial benefits resulting from the infringement, which means Koh definitely does see merit in the civil complaint.

As for testifying executives, Koh said that attorneys were being too slow scheduling depositions from top brass according to Reuters. Apple in fact tried to avoid putting Cook on the stand at all, claiming since he was COO and CEO at the time the agreements were formed, he wasn’t involved in their creation. Koh wasn’t having any of that, however, and responded that she found it “hard to believe” Cook wouldn’t be involved in such high-level discussions related to employee compensation given his role as COO.

Others called to talk to the court include exiting Intel CEO Paul Otellini and Google Executive Chairman Eric Schmidt. The anti-poaching arrangement previously came under fire from the U.S. Department of Justice, too, but that investigation was wrapped up way back in 2010 when the government body arranged a settlement with the companies that involved them agreeing not to enter into any future no solicitation agreements for employees.

Article courtesy of TechCrunch