Max Sound Corp. Files Two Lawsuits Against Google, Accusing Search Giant of Misappropriating Proprietary Digital Video Streaming Technology

WILMINGTON, Del. and SAN CLARA, Calif., Aug. 12, 2014 /PRNewswire/ -- Leading audio technology company Max Sound Corp. (OTCQB: MAXD) has simultaneously filed trade secret and patent infringement lawsuits in two separate courts against Google and its subsidiaries YouTube and On2Technologies.

The suits allege that Google misappropriated proprietary and patented digital video streaming technology owned by Vedanti Systems Limited, a London-based technology company, and its U.S. parent company, VSL Communications, Inc.Max Sound, under agreement with VSL Communications, is enforcing Vedanti's intellectual property rights on its behalf.

Noted litigation law firm Grant & Eisenhofer filed the two suits on behalf of Max Sound and Vedanti Systems. The patent infringement complaint was brought in U.S. District Court for the District of Delaware, and the trade secret suit was filed in Superior Court of California, County of Santa Clara.  Intellectual property law firm BuetherJoe & Carpenter is co-counsel in both suits, while prominent West Coast firm Walkup, Melodia, Kelly & Schoenberger is co-counsel in the trade secret action.

The lawsuits contend that Google executives met with Vedanti Systems founders over several months in 2010 to discuss the possibility of acquiring Vedanti's patented digital video streaming techniques and other proprietary methods, which greatly enhance the streaming of audio and video files online.  At the time, Google's own existing standards for streaming video still resulted in "jittery, low-quality video and sound for large-sized video files," the patent complaint notes. 

Vedanti claims that throughout 2010, Google gained access to and received technical guidance regarding Vedanti Systems' proprietary codec, a computer program capable of encoding and decoding a digital data stream or signal.  As the complaint notes, Vedanti's codec "implemented a propriety and unique system of optimizing data transmission using methods for key frame positioning, slicing and analyzing pixel selection of video content to significantly reduce the volume of digital video files, while minimizing any resulting loss of video quality."  By any measure, Vedanti's technology was far superior to what Google had possessed to that point for streaming dense video files online.

The complaints allege that soon after the two companies initiated negotiations, Google began implementing Vedanti's technology into its own WebM/VP8 video codec without informing Vedanti, and without compensating it for its use. The WebM/VP8 video codec is widely used by Google in numerous products and websites, including YouTube.com, Google TV, the Android operating system, and Chrome web browser, significantly improving delivery of video content to desktop computers, laptops, tablets, and smartphones.

Plaintiffs are seeking a permanent injunction against Google, and compensatory damages, as well as treble damages, in view of the willful nature of the alleged infringement.

"The use of new technology by established companies should be based on original creation and innovation," said Adam Levitt, head of Grant & Eisenhofer's Consumer Protection practice, who is representing the plaintiffs. "Vedanti Systems created groundbreaking digital video technology -- technology that has forever changed the way that video content is streamed and displayed over the Internet." 

The lawsuits allege that Google wilfully infringed Vedanti Systems' patent and was fully aware of the value of Vedanti's technology, while simultaneously recognizing the shortcomings of its own video streaming capabilities at the time.  Plaintiffs further allege that Google met with Vedanti Systems executives under false pretenses, and misappropriated its proprietary codec and other, non-patented, methods, incorporating it into Google's own video technology – thus violating Google's core 'Don't Be Evil' maxim.  The suits seek to hold Google accountable for its alleged patent infringement and trade secret misappropriation.

The cases are captioned as: Vedanti Systems Ltd. and Max Sound Corp. v. Google, Inc., YouTube, LLC, and On2 Technologies, Inc., No. 1:14-cv-01029 (D. Del., filed Aug. 9, 2014) and Max Sound Corp., VSL Communications Ltd., et al. v. Google, Inc., et al., No. 114-cv-269231 (Cal. Sup Ct.)

About Grant & Eisenhofer
Grant & Eisenhofer P.A. represents plaintiffs in a wide range of complex financial litigation. G&E's clients include institutional investors, whistleblowers and other stakeholders in bankruptcy litigation, securities class actions, derivative lawsuits, consumer class actions, antitrust suits, and cases involving the False Claims Act. G&E has recovered more than $13 billion for investors in the last five years and has consistently been cited by RiskMetrics for securing the highest average investor recovery in securities class actions. Grant & Eisenhofer has been named one of the country's top plaintiffs' law firms by The National Law Journal for the past ten years. For more information, visit www.gelaw.com.

About Buether Joe & Carpenter
Buether Joe & Carpenter, LLC is an intellectual property and commercial litigation boutique law firm focusing on patent, copyright, trademark, trade secret, and unfair competition lawsuits, as well as antitrust, contract and other business disputes for both plaintiffs and defendants. BJC offers clients the expertise of attorneys with decades of experience in handling complex litigation in an effective and efficient manner. For more information, visit www.bjciplaw.com.

About Walkup, Melodia, Kelly & Schoenberger
Walkup, Melodia, Kelly and Schoenberger is one of the premier plaintiffs' trial firms on the West Coast.  Our partners have successfully prosecuted cases throughout the United States, on matters ranging from product defect to insurance disputes. For more information, visit http://www.walkuplawoffice.com.

Contact:

Allan Ripp 212-262-7477 [email protected]Elise Martin 302-622-7004 [email protected]

SOURCE Grant & Eisenhofer