David versus Googleiath: Last week, architect Eli Attia and Max Sound Corp. (OTC: MAXD) filed a suit in the Superior Court of California, County of Santa Clara against search-engine giant Google and its co-founders Sergey Brin and Larry Page. The suit is also filed against Flux Factory, and a group of Google senior executives who were involved in the affair as part of Google X, the secret development laboratory, who now work for Flux, the most prominent among them being Sebastian Thrun, Eric (Astro) Teller, Nicholas Chim, Michelle Kaufmann, Augusto Roman, and Jennifer Carlile.
The suit charges that Google and senior executives stole Eli Attia's invention, which is a technology that shortens and makes significantly cheaper the design and construction process, mainly for high-rise and large buildings. Google estimates that the invention has potential revenue of $120 billion annually.
The affair was first revealed by two articles in "Globes" - Architect Eli Attia: Google stole my life's work on 20.10.13, and Google spin: Eli Attia's building technology renamed on 21.5.14.
Genie: The spirit that came out of the bottle
Eli Attia is considered one of the world's foremost experts in designing high-rise towers. He is the designer of prominent office high-rises in the US and the Shalom (Azrieli) Center in Tel Aviv. He has developed a new method of design and and construction that integrates architecture, engineering, construction and maintenance, for which he filed patent applications. His technology, which dramatically improves all planning and construction processes, is called Engineered Architecture, EA for short. The invention needs to be developed as sophisticated software so that it can be used by the construction industry.
In the summer of 2010, Attia was invited by Google to present the invention before the company's top management at corporate headquarters in Mountain View, California, in Silicon Valley. The meeting was attended by Page. At that time, Google had no know-how on construction. At the end of the presentation, Attia claims, Page spoke at length with him about buildings and construction, a field that he was not familiar with. Following the meeting, Attia was asked by senior executives at Google, to respond to a series of questions.
Several weeks later, Page and Brin approved the development program as part of Google X, Google's secret department, which handles new developments that are not part of the company's core business. Attia and Google signed nondisclosure and employment agreements making it clear that the IP and know-how were Attia's. It was agreed that in the event that the technology was proven to be viable and that EA would develop a prototype, then a partnership agreement would be signed between Google and Attia to apply the technology in the global real estate market.
The project got underway in January 2011 in the greatest secrecy. In various stages, between 10 and 30 people were involved: computer engineers and senior programmers, economists, real estate marketing specialists who were hired especially for the project. The team gave the name Genie to the project after the spirit released from the lamp by Aladdin in the famous 1001 Arabian Nights story.
The technology that will change the global construction industry
As the project progressed, team members presented the invention to prominent people in the area of design and construction in the US who were colleagues of Attia in the field. Despite the traditional conservative attitudes of the construction sector, their responses were enthusiastic. The renowned architect Richard Meier said, "If the technology was available, then I would use it immediately." Mike Riddle, the inventor of the architect's software AutoCAD, called it, "An amazing solution." Peter Marchetto, North America president of Tishman Construction, said, "This is genius. This is the future of the building industry." Trammel Crow, one of the largest real estate developers in the US, said, "This is the most thoughtful, systematic, and credible approach to holistically alter existing delivery and management processes and unleash real and measurable cost and timing efficiencies."
The Google X team estimated that EA technology could dramatically save about 50% of overall construction costs for high-rise and large buildings. In a top secret executive summary that Google X sent to Page, Brin and other Google leading executives in June 2011, the Google X Genie development team estimated that EA technology could generate annual revenue of $120 billion for Google.
The executive summary said, "Early this year, a small team at Google X began working with Eli Attia, an architect, the creator of Genie technology, to explore opportunities in the building construction industry." It adds, "Eli's work led him to the creation of 'Engineered Architecture', which provided key concepts and technology behind Genie."
Genie, the development team told Google's management, "is a platform with a web-based design application that assists the design architect through the design process, and is mainly intended for the construction of large and tall buildings. The application incorporates design rules from expert architects and engineers, and advanced analysis and simulation tools. Genie enables the standardization and automation of design and construction processes, with unlimited design options, which allow an architect to preserve the uniqueness of the building in the urban environment."
The development team's report to Google's management presented Genie as revolutionary technology for creating sustainable and environmentally friendly buildings, at a quality exceeding anything known. The technology was presented as technology that can change the conservative global construction industry through a fundamental and revolutionary change in the way buildings are designed, built, and maintained, saving trillions of dollars.
In the report, the Google X team estimated that the EA technology would cut current direct construction costs by 30%, and the current time from the start of design to market by more than 30%.
Bottom line, in the report to management, the team estimated that the EA platform had the potential of generating $120 billion in annual revenue for Google.
Google creates a spin-off
As the project moved forward, the development team tried to cut corners in EA's development plan, probably in an attempt to speed up commercial use of parts of the technology. However, Attia objected to cutting corners. Brin summoned a meeting of the Genie project in which Attia was supposed to review development progress. At the last minute, without any explanation, Brin cancelled the meeting.
According to the claim, with the completion of the initial development stage, and the construction of an EA prototype, senior Google managers proposed the idea of creating a spin-off. In other words, continuing development through a separate company connected to Google. Everybody awaited the final decision of Page and Brin.
At the start of December 2011, at the same time as Attia received financial offers for his share in the spun-off company, Nicholas Chim, head of the Google X team, unexpectedly told Attia and the team members that Genie was finished.
However, without the knowledge of Attia, Google X had spun off the EA project. At the same time as saying that Genie was finished, in effect behind Attia's back, a new company had been set up called Vannevar Technology, and senior members of the Genie team had been transferred there, and had continued their employment in developing Attia's technology.
After "Globes" had revealed details about the Vannevar spin-off, Google changed the name of the company, and continued development and marketing of EA technology through a company called Flux Factory, which employed those same senior team members that had previously worked on Attia's EA technology, initially as part of Google X's Genie project and then as part of Vannevar. Investors in Flux had been told that the final product for the construction industry would be presented in 2015.
Like a fox caught in the henhouse
Following publication of the "Globes" article, the management of Max Sound, a technology company traded OTC on Wall Street, and operating mainly in the audio systems industry, made contact with Attia. On May 22 2014, Eli Attia signed an agreement with Max Sound for the continued development of EA technology, including a representation agreement, as part of which Max Sound was granted exclusive rights to enforce the IP rights of EA technology.
In a joint suit filed in the court by Attia and Max Sound, they describe Google's plot to push Attia out of the Genie project:
"While Google was pumping Mr. Attia for all his proprietary information and know-how, Defendants Google, Page, Brin, Thrun, Teller, Kaufmann, Carlile, Roman and Chim were plotting to squeeze Mr. Attia out from his own project.
"At some point known to Defendants but not to Mr. Attia, Defendants decided that stealing Mr. Attia's ideas would not violate their own "Don't be evil" code of conduct. In 2011, they implemented their plan to squeeze Mr. Attia out of the new venture, to misappropriate Mr. Attia's proprietary information, to deprive Mr. Attia of the economic benefits of his labor and his inventions, and to appropriate for themselves (and Google), the economic benefits of Mr. Attia's proprietary information and know-how.
"Indeed, for about eight months, unbeknownst to Mr. Attia, Google was using Mr. Attia's proprietary information and know-how to develop products in a manner disapproved by Mr. Attia and behind Mr. Attia's back. Google and its agents specifically concealed this misuse of Mr. Attia's technology from Mr. Attia. In fact, when Mr. Attia unexpectedly walked into a conference room where such a meeting was being held, the participants immediately stopped all conversation, each staring at the others like a fox caught in the henhouse, until defendant Chim ordered everyone to disperse.
"While the Defendants were meeting secretly, they slashed Mr. Attia's compensation and then proceeded to completely purge him from the project and joint venture.
"Even while squeezing Mr. Attia out of the project, defendant Teller asked Mr. Attia for a 'license for (his) pre-existing IP' again acknowledging that 'Genie' employed Mr. Attia's proprietary information and know-how. Google, Page, Brin, Thrun and the other Defendants fully understood 'Genie' was essentially a manifestation of Mr. Attia's proprietary information and know-how.
"Google then pretended to kill the Genie project. On December 7, 2011, another date which will live in infamy, defendant Chim informed the Genie team by e-mail that he was torpedoing project Genie. 'We learned a new industry,' he wrote, 'solved very interesting technical problems and wow'd the industry with the ambitiousness of our vision.' He stated flatly, 'Effective Friday, we'll stop working on Genie.' That very same day, defendant Teller wrote to Mr. Attia, 'I'm very sorry Genie will end. It would have been a great thing to make for the world,' Chim and Teller were sinking Mr. Attia's dream.
"Within a week, however, Mr. Attia learned that rather than Genie being shut down, again without his knowledge, defendant Chim had been speaking to the same potential partners and investors they had visited, and he was telling them that Mr. Attia was no longer involved with Genie but that he, Chim, had the right to continue.
"On December 16, only nine days after being informed that Genie was being shut down, Mr. Attia informed Defendant Thrun, 'I've just heard the fourth version of Nick's pitch to industry leaders. And (defendant Chim stated), 'I've got the license and control of Genie's IP.'
"On December 21, exactly two weeks after acknowledging 'with regret' the end of Genie, defendant Teller sent an e-mail to Mr. Attia containing a proposed agreement between defendant Chim and Mr. Attia, ending with the words, 'Eli will continue to pursue his path and the Genie team will continue with a different path.' 'The Genie team will continue.'
"In removing Mr. Attia from the project and by continuing to misappropriate Mr. Attia's proprietary information and know-how, Google deprived him of the economic benefits of his labor and of his inventions, and appropriated for itself the economic benefits of Mr. Attia's work."
Stealing IP and violating agreements
Attia and Max Sound claim in their suit that Google, Page, Brin, Flux and the other senior Google executives being sued carried out acts of: misappropriation of trade secrets, breach of contract (NDA), breach of contract (ISA), breach of confidence, breach of the covenant of good faith and fair dealing, slander of title, conversion, unfair competition, fraud/deceit, and declaratory relief.
To remedy the situation, known in legal jargon as "Prayer for Relief," the plaintiffs "pray for judgment as follows,"
"That Defendants be enjoined temporarily and permanently from misappropriating Plaintiffs' confidential and proprietary information and know-hoe including, without limitation, any development, use, or manipulation of Genie-related materials;
"Actual, incidental, and consequential damages from Defendants, together with interest, in an amount to be proven at trial;
"Recovery of amounts by which Defendants were unjustly enriched;
"For an order requiring that any funds and all profits that Google acquires or has already acquired by wrongful conduct and any funds and all profits that Flux Factory acquires or has already acquired by wrongful conduct be placed into a constructive trust for the sole benefit of plaintiff;
"For restitution and/or disgorgement of all revenues, earnings, profits, compensation, and benefits, which may have been obtained by Defendants as a result of such unfair, unlawful, and/or fraudulent business acts and practices;
"For punitive damages in an appropriate amount to be determined by the Court;
"Declaratory relief clarifying the parties' rights under the NDA, ISA and SOW;
"For Plaintiff's attorneys' fees and costs in this matter, and
"For such other and further relief as the Court may deem just and proper."
Max Sound Corp. CEO John Blaisure said, "Eli Attia is notably one of the most brilliant architects of our time. He has designed some of the world's most acclaimed skyscrapers and created a system to build structures faster and more efficiently with greater economic benefits to the world than anything else currently available. Google premeditated the theft of Mr. Attia's life's work and we intend to see that he is vindicated."
In response Google told "Globes," "We have no comment on the matter."
Published by Globes [online], Israel business news - www.globes-online.com - on December 14, 2014
© Copyright of Globes Publisher Itonut (1983) Ltd. 2014 .