Sunteți pe pagina 1din 20

1

2 3
4

5
6 7 8
9

HARMEET 1<. DHILLON, ESQ. (SBN: 207873) NITOJ P. SINGH, ESQ. (SBN: 265005) DHILLON & SMITH LLP 177 Post Street, Suite 700 San Francisco, California 94108 Telephone: (415) 433-1700 Facsimile: (415) 520-6593 Attorneys for Hive Mind, Inc.

!FEB 0 8 20 2

SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF ALAMEDA - UNLIMITED JURISDICTION

10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26
1.

Hive Mind, Inc., a Delaware corporation, Plaintiff,


v.

Case Number: COMPLAINT Breach of Fiduciary Duty - Wright Breach of Fiduciary Duty - Parekh Fraud Intentional Interference with Prospective Economic Advantage 5. Misappropriation of Trade Secrets 6. Declaratory Relief Jury Trial Demanded 1. 2. 3. 4.

William R. Wright, an individual; Stupid Fun Club, LLC; a Delaware limited liability company; and Raj Parekh, an individual, Defendants.

>,~t)~
,;","1lCS',

Hive Mind, Inc., by and through its attorneys, Dhillon & Smith LLP, files this Complaint against Stupid Fun Club, LLC; Raj Parekh; and William Wright. Upon personal knowledge (unless otherwise indicated) Hive Mind, Inc. alleges as follows: THE PARTIES Plaintiff Hive Mind, Inc. ("Hive Mind") is a Delaware limited liability

Complaint
-1-

DHILLON

& SMITH LLP

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

company with its principal place of business in Berkeley, California, in Alameda County. 2. Defendant William Wright (Wright), upon information and belief, is an

individual residing in Alameda County, California. Wright is a former director of Hive Mind. 3. Defendant Stupid Fun Club, LLC (SFC) is a Delaware limited liability

company with its principal place of business in Berkeley, California, in Alameda County. Upon information and belief, Wright is a member of SFC and sits on SFCs Board of Directors. 4. Defendant Raj Parekh (Parekh), upon information and belief, is an

individual residing in Los Altos, California, in Santa Clara County. JURISDICTION AND VENUE 5. This Court has personal jurisdiction over defendants as they all reside in

California, and venue is proper in this Court, because one or more defendants reside in this county. FACTUAL ALLEGATIONS Initial Formation of Hive Mind 6. In or around June 2011, Jawad Ansari (Ansari) partnered with Wright to

explore whether the two could implement and monetize a new cross-platform, crossmedia, social gaming experience (the Concept) that Wright had envisioned. 7. Wright is the creator of the successful Sims series of videogames and the

Spore videogame. He is also the creator of other video games. Wrights attachment to the Concept instantly provided a high level of credibility to the project. 8. In 2008, Wright left Electronic Arts and created the SFC, a think tank to

generate IP and find partners for each of media and entertainment platforms. Electronic Arts invested $10,000,000 in 2009 for approximately 40% -50% ownership of SFC and a
Complaint -2-

DHILLON & SMITH LLP

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

seat on SFCs Board of Directors. Joel Linzner, Executive VP of Electronic Arts has since been the Board member of SFC representing Electronic Arts. 9. Ansari and Wright envisioned that the Concept would turn a video game

or social game players everyday life into part of the interactive experience by building upon alternate reality games and tapping streams of personal information on phones, tablets, social networks, and computers. 10. The Concept would not only include games across platforms, but would

include, inter alia, broadcast television shows featuring the Concept. 11. Ansari and Wright ultimately formed what became known as Hive Mind

to develop, produce, and license the Concept. 12. Prior to the formation of Hive Mind, Wright was not able to attract

significant interest in the Concept, nor was he able to find strategic partners to help develop the Concept. In addition, since obtaining funding from Electronic Arts for $10,000,000 in 2009, Wright was unable to successfully close any deal to generate revenues and establish SFC as a going concern. 13. While Wright was a skilled and proven game designer, Ansari held the

complementary skills that could bring the Concept into reality. Ansari had significant experience investing in and building and representing emerging private companies, including video and social game and media companies. Ansaris experience and personal connections in the global investment, telecom, technology, video game and media industries would lead to opportunities and partnerships that had not previously been available to Hive Mind. 14. The business model for Hive Mind was to develop and publish games

based on the Concepts intellectual property and then market strategic partnerships globally in each of the mediums contemplated by the Concept, including, inter alia, games, television, movies, internet and merchandise.
Complaint -3-

DHILLON & SMITH LLP

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

15.

Ansari entered into a Stock Purchase Agreement with Hive Mind (Ansari

SPA), pursuant to which Ansari paid cash for his equity interest in Hive Mind. 16. As it was Wrights company, SFC, that originally held the intellectual

property rights to the Concept, SFC entered into a Stock Purchase Agreement with Hive Mind (SFC SPA), pursuant to which SFC assigned all intellectual property rights it had to the Concept to Hive Mind in exchange for substantial equity in Hive Mind. To ensure that Hive Mind would adequately commercialize the Concept intellectual property, a contingency was placed in the SFC SPA which required Hive Mind to possess at least $5,000,000 in cash within 120 days of the date of the execution of the SFC SPA (the Contingency). Should Hive Mind not raise $5,000,000 within 120 days (by on or about November 14, 2011), SFC could repurchase the intellectual property rights to the Concept in exchange for SFCs shares. 17. Pursuant the SFC and Hive Minds Intellectual Property Assignment

Agreement, Concept intellectual property rights assigned to Hive Mind specifically included rights to, inter alia: a. A Platform interactive system designed to utilize location and situational awareness of an individual to enable entertainment, social and lifestyle software applications; b. The Futures television and internet-based application that allows viewers and/opr players to browse, create, experience and rate various visions of what the future will look like; c. The Hive Mind electronic games working in association with a television show in which the show and game connect users pursuing game goals within a group of users via the Internet in real-time using through specifically designed apparatus; d. The ShadowNet game system combining location-based, and homeComplaint -4-

DHILLON & SMITH LLP

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 20. 18.

based players in a large scale, spy-themed online game; e. All derivatives of the Platform, Futures, Hive Mind, and ShadowNet; f. All embodiments of the Platform, Futures, Hive Mind, and ShadowNet; and g. All intellectual property rights of the Platform, Futures, Hive Mind, and ShadowNet. Per the parties agreements, both Ansari and SFC became shareholders of

Hive Mind. Ansari and Wright also were elected to Hive Minds Board of Directors and Ansari would serve as Hive Minds CEO, President, and Secretary. 19. Parekh, the founder and Executive Managing Director of Redwood

Venture Partners, a prominent Silicon Valley venture capital firm, joined Hive Mind shortly thereafter as a minority shareholder pursuant to a Stock Purchase Agreement he entered into with Hive Mind (the RP SPA). Under the RP SPA, Parekh contributed cash for his shares of Hive Mind stock. Parekh also was elected to Hive Minds Board of Directors. Founders Roles and Duties As Ansari was most experienced in obtaining investment and directing

investment to companies of a similar nature, he was charged with the development and optimization of a business plan, financial projections, executive summary, and related collateral for Hive Mind. Ansari was then asked to seek and develop business partnerships and to raise capital for Hive Mind. Ansari, as the CEO of HiveMind was also in charge of overseeing the game development, publishing and all of the operations. 21. As Parekh was similarly experienced in raising capital, he too was

charged with working to raise capital for Hive Mind. 22.


Complaint -5-

Wright took upon himself the development of the Concept. While Wright DHILLON & SMITH LLP

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

was not involved with Ansaris day-to-day attempts to raise capital and pursue business partnerships for Hive Mind, Wrights position as a director of Hive Mind, and his standing in the industry, essentially provided him with substantial control over any opportunity presented to Hive Mind. Defendants Frustrate Hive Minds Efforts to Raise Capital and Seek Partnerships for Hive Mind 23. Early in Hive Minds life, the company was able to garner significant

interest from both potential business partners and investors. 24. For example, in or around July 2011, John Riccietiello, CEO of Electronic

Arts, Inc. (EA) (a world-leading developer, marketer, and publisher of video games) verbally committed to EA investing $5,000,000 in Hive Mind, based on a $100,000,000 valuation of Hive Mind. 25. Rather than pursuing the EA offer, Wright instead worried in an August

4, 2011, email that Hive Mind asking EA to invest in the company would sour SFCs relationship with EA. EA is a substantial shareholder of SFC. 26. Wrights refusal aggressively to pursue the EA opportunity placed Hive

Mind in a precarious situation. Hive Mind was in desperate need of operating capital so that it could pay for expenses associated with the marketing of Hive Mind to investors and business partners, and so that it could raise the $5,000,000 and satisfy the Contingency. Otherwise, SFC could purchase the Concept intellectual property back from Hive Mind with its equity in Hive Mind. 27. Hive Minds ability to satisfy the Contingency became the pressing focus

of the company as its failure to satisfy the Contingency would lead to the certain failure of the Company. The problem was compounded by investors who did not wish to invest in Hive Mind when it was subject to the Contingency and had no products or intellectual property apart from the Concept intellectual property.

Complaint -6-

DHILLON & SMITH LLP

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

28.

Ansari, having seen first-hand how the Contingency was chilling

investors, recommended that the Contingency be removed from the SFC SPA. 29. Wright pushed back on attempts to remove the Contingency from the SFC

SPA. Wright understood that the Concept intellectual property would revert back to his other company, SFC, should Hive Mind fail to satisfy the Contingency. Wright also began to interfere with Hive Minds fundraising efforts. 30. Undaunted by setbacks regarding Wrights refusal to remove the

Contingency, Ansari continued to pursue business partnerships for Hive Mind. 31. Ansari signed agreements to bring Dan Romenelli (Romenelli), the

founder of Warner Bros. World Wide Consumer Products division and its president for 23 years, and Doug Frank (Frank), the former President of Music Operations for Warner Bros. Pictures, to serve as Senior Vice Presidents for Hive Mind. 32. Ansari worked with Romenelli and Frank to arrange for meetings with

significant players in the entertainment industry with Hive Mind, including: a. David Luner (Luner), Executive Vice President of FremantleMedia Enterprises (the owners of the American Idol and X Factor television franchises); b. Thomas Lesinski (Lesinski), then President of Paramount Digital Entertainment; and c. Thomas Gewecke (Gewecke), President of Warner Bros. Digital Distribution. 33. However, possibly seeing that these meetings would easily lead to

$5,000,000 in investment in Hive Mind, Wright, on or around August 22, 2011, ordered that the meetings with Luner, Lesinski, and Gewecke be cancelled. 34. Wright further ordered that Ansari not not setup any external meetings

without [Wrights] express approval in an August 22, 2011, email, and to stay away
Complaint -7-

DHILLON & SMITH LLP

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

from product development in an August 17, 2011, email. 35. As Wright would routinely cancel meetings that Ansari arranged, ordered

Ansari not to set up any more external meetings, and instructed Ansari to stay away from product development, Ansari was effectively precluded from participating or contributing to Hive Mind by Wright. 36. On August 25, 2011, Ansari learned that his administrator rights for the

Hive Mind email server, which he ahd set up and personally paid for, had been revoked by unauthorized hacking into the server. Prior to August 25, 2011, Ansari had super administrator rights; however, after that day, he had been relegated to administrator level rights only. Ansari had not shared his Hive Mind email server account password with anyone, nor had he authorized others to remove him as a super administrator. Upon information and belief, Wright and SFC directed SFC and Hive Mind employees to remove Ansari as a super administrator of the Hive Mind email servers, and replace him with SFC personnel who had no interest in Hive Mind. 37. Having already limited Ansaris ability to raise capital for Hive Mind, to

seek business partnerships, to assist in product development, or even to manage the email servers, Wright proposed formally removing Ansari from any official function at Hive Mind. In a September 1, 2011, email Wright explicitly presented two options: A) Ansari resign as a director, hold no official title or role in Hive Mind going forward, but remain a shareholder in Hive Mind; or B) Hive Mind die as an entity. 38. The tone of the September 1, 2011, email seemed to indicate that Wright

would be willing to destroy Hive Mind should Ansari not completely resign from the company. As Hive Mind was developed around Wrights concept, and business partners were only interested in working with Hive Mind with Wrights blessing, Wright was attempting effectively to kill the company and destroy its property rights. ///
Complaint -8-

DHILLON & SMITH LLP

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 39.

The Parties October 2011 Agreement Faced with the possibility that Hive Mind would be destroyed under

Wrights option B, Ansari agreed to resign as President and CEO of Hive Mind pursuant to an October 2011 Joint Action by Written Consent of the Board of Directors and the Stockholders in Lieu of Special Meeting and Omnibus Amendment to Agreements (the October 2011 Agreement). Ansari entered into the October 2011 Agreement as a result of Parekh and Wright representing that the sale of Hive Mind was the last opportunity to profit from the venture, and that they would work to ensure that the company would be sold for the benefit of all shareholders. 40. The October 2011 Agreement was purportedly entered into the by Hive

Mind, Ansari, Wright, Parekh, and SFC. Pursuant to the October 2011 Agreement, Ansari would resign as CEO, President, and Secretary; Wright would be appointed as Chief Fun Officer and Chairman of the Board; and Parekh would be appointed as CEO and Secretary. 41. The October 2011 Agreement also required Ansari and SFC to convert

their super voting Class F stock to single-voting Class A stock; rescinded the previous grant of stock to Parekh; and caused Hive Mind to sell Parekh 500,000 Class A shares at a purchase price of $0.01 per share. The October 2011 Agreement further provided for SFC to sell 1,500,000 shares of Class A stock to Wright, and 1,000,000 Class A shares to Parekh. The October 2011 Agreement specified that the shares sold to Parekh and Wright remained obligated under Hive Minds right of first refusal as detailed in SFC SPA, Section 7. 42. Ansari, Parekh, and Wright agreed in writing to undertake reasonable

efforts to sell Hive Mind for a period of 90 days following the execution of the October 2011 Agreement. They noted that SFC could continue any other activities so long as such activities did no not conflict or compete with Hive Minds sales process. SFC
Complaint -9-

DHILLON & SMITH LLP

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

agreed similarly to extend the period in which the Contingency could be satisfied for another 90 days. Should Hive Mind not be sold within the 90 days specified in the October 2011 Agreement, SFC would have the option of purchasing Ansari and Parekhs Hive Mind shares pursuant to the October 2011 Agreement. Defendants Breach the October 2011 Agreement 43. Within days of executing the October 2011 Agreement, it became clear that

SFC, Parekh, and Wright had no interest in honoring the agreement, and instead, sought only to wait out the 90 day period and then purchase Ansaris shares, shutting down Hive Mind and taking its intellectual property. 44. Ansari had arranged for meetings with Zynga, News Corp., and other

potential acquirers, but it seemed as though Wright was only interested in making his and SFCs own deal with Zynga, cutting Hive Mind out of the picture. 45. In November 2, 2011, email from Wright, it appeared that Wright was

actively engaged in developing television shows for Hive Mind and SFC instead of attempting to sell Hive Mind. Hive Mind previously had been kept in the dark about the development of the television shows and would not have entered into the October 2011 Agreement had it known the status of the shows. 46. Wright had been informing Parekh of the developments with the

television shows, and Parekh had been acting as a gate keeper with respect to what information was to be released to Ansari and Hive Mind. 47. Within a few days of the signing the October 2011 Agreement, Ansari was

specifically instructed by both Wright and Parekh not to contact EA or Warner Bros. regarding their interest in purchasing Hive Mind. Ansari was informed that as Wright had preexisting relationships with these companies, it would be better if Wright contacted them, and that Parekh and Wright would decide how EA and Warner Bros. would be contacted. Wright then did not bother to contact EA or Warner Bros. for
Complaint -10-

DHILLON & SMITH LLP

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

several weeks following the October 2011 Agreement. 48. Additionally, in November 2011 discussions with Zynga, Wright

represented that the goal was to combine Hive Mind and SFC not sell Hive Mind for the benefit of Hive Minds shareholders. Wright represented that the combined Hive Mind/SFC entity would then be open to investment from Zynga or an acquisition by Zynga. Wright provided Parekh with information regarding the potential Zynga acquisition or investment, and Parekh would decide what information to release to Hive Mind and Ansari. 49. Based on representations that Zynga was interested in acquiring Hive

Mind and SFC together, Wright, Ansari, and Parekh entered into an agreement on November 17, 2011, to allow the joint sale and distribute sales proceeds amongst the two entities and their shareholders. The November 17, 2011, agreement was not executed by SFC and its validity was subsequently questioned by Ansari on behalf of Hive Mind, as SFC had not entered into the Agreement. 50. The question of the validity of the November 17, 2011, agreement proved

to be moot, as Zynga seemingly dropped all interest in acquiring Hive Mind. Wright and Parekh Resign from Hive Mind 51. 52. 53. On December 19, 2011, Parekh resigned as CEO of Hive Mind. On December 23, 2011, Wright resigned as a Board Member of Hive Mind. Following the resignations of Parekh and Wright, Ansari was elected as

CEO, President, and Secretary of Hive Mind on December 25, 2011. 54. Upon information and belief, following the resignation of Parekh and

Wright from the Board of Hive Mind, Wright and Parekh have been attempting to sell the intellectual property rights to the Concept to third-parties through SFC and/or related vehicles without disclosing that all rights to the Concept belong to Hive Mind. 55.
Complaint -11-

Upon information and belief, Wright has caused SFC and another DHILLON & SMITH LLP

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

company he owns, Friendly Gravity, to continue to develop aspects of the Concept beyond the control of Hive Mind. 56. Upon information and belief, Defendants falsely have been marketing the

Concepts intellectual property as belonging to Wright, SFC, and/or Friendly Gravity. 57. Upon information and belief, Defendants have continued to develop

television shows based on the Concept, but have done so for the benefit of SFC and/or Friendly Gravity, while specifically excluding Hive Mind, the Concepts owner. Defendants Breach Their Respective Stock Purchase Agreements and Attempt to Elect Directors in Violation of Hive Mind Bylaws 58. On January 31, 2012, SFC attempted to purchase Ansaris shares in Hive

Mind pursuant to the October 2011 Agreement. SFC argued that it was entitled to purchase the shares as Hive Mind had not been sold within the 90 days following the October 2011 Agreement. SFC attempted to complete the transaction within a day despite knowing the that Ansari was obligated to first present the shares to Hive Mind pursuant to the companys right of first refusal for any bona fide offer for purchase of the shares. 59. On February 1, 2012, Parekh attempted to sell his shares to SFC for an

undisclosed amount. Parekh attempted to sell his shares to SFC without first offering the same to Hive Mind as required by the company right of first refusal for any bona fide offer for purchase of the shares. 60. Following its alleged acquisition of Parekhs shares, SFC attempted to

elect Wright and Randy Breen (Breen) to Hive Minds Board of Directors by written consent. As Ansari did not agree to the election, nor was he notified of the election, the election was not by unanimous written consent. Hive Minds Bylaws only permit an election of Directors by a non-unanimous majority written consent when all of the director positions are vacant:

Complaint -12-

DHILLON & SMITH LLP

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

The Company shall not be required to hold an annual meeting of stockholders, provided that (i) the stockholders are permitted to act by written consent under the Companys certificate of incorporation and these bylaws, (ii) the stockholders take action by written consent to elect directors and (iii) the stockholders unanimously consent to such action or, if such consent is less than unanimous, all of the directorships to which directors could be elected at an annual meeting held at the effective time of such action are vacant and are filled by such action. Hive Mind, Bylaws, Section 1.2 (emphasis added). 61. Based on SFCs illegitimate attempt to elect directors to Hive Minds

Board of Directors, Wright and Breen attempted to call a February 9, 2012 meeting of the Board of Directors via a February 6, 2012, letter from counsel for Wright and Breen. 62. However, as Breen and Wright were not duly elected to Hive Minds

Board, Hive Mind does not and cannot recognize their attempt to call a meeting of Hive Minds Board of Directors. FIRST CAUSE OF ACTION Breach of Fiduciary Duty (Against Wright) 63. Hive Mind incorporates every allegation contained in paragraphs 1

through 61 above, as though set forth fully herein. 64. As a Director of Hive Mind, Wright owed to Hive Mind a fiduciary duty,

the duty of loyalty, and the duty of care. 65. Wright breached his fiduciary duty to Hive Mind by, inter alia, actively

frustrating attempts by Hive Mind directors and officers to obtain investment in and business for Hive Mind; not honoring Hive Minds right of first refusal for any sale or transfer of company stock; by threatening to destroy Hive Mind should certain individuals not resign from the company; by directing Hive Mind corporate opportunities to other companies controlled by him, including SFC and Friendly Gravity; by misappropriating Hive Minds intellectual property rights to the Concept;
Complaint -13-

DHILLON & SMITH LLP

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

and by placing the interests of his other companies, including SFC and Friendly Gravity, above those of Hive Mind. 66. Wrights actions, described above, were grossly negligent and constituted

intentional misconduct and/or a knowing violation of law. 67. As a direct and proximate result of Wrights breach of his fiduciary duties,

Hive Mind has been damages in an amount to be determined at trial. SECOND CAUSE OF ACTION Breach of Fiduciary Duty (Against Parekh) 68. Hive Mind incorporates every allegation contained in paragraphs 1

through 66 above, as though set forth fully herein. 69. As a Director of Hive Mind, Parekh owed to Hive Mind a fiduciary duty,

the duty of loyalty, and the duty of care. 70. Parekh breached his fiduciary duty to Hive Mind by, inter alia, actively

frustrating attempts by Hive Mind directors and officers to obtain investment in and business for Hive Mind; not honoring Hive Minds right of first refusal for any sale or transfer of company stock; and by complying with or assisting Wright with his attempts to usurp Hive Mind corporate opportunities for the benefit of SFC and/or Friendly Gravity. 71. Parekhs actions, described above, were grossly negligent and constituted

intentional misconduct and/or a knowing violation of law. 72. As a direct and proximate result of Parekhs breach of his fiduciary duties,

Hive Mind has been damaged in an amount to be determined at trial. THIRD CAUSE OF ACTION Fraud (Against all Defendants) 73. Hive Mind incorporates every allegation contained in paragraphs 1

Complaint -14-

DHILLON & SMITH LLP

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

through 71 above, as though set forth fully herein. 74. Prior to entering into the October 2011 Agreement, Defendants falsely

represented that it was their intention to sell Hive Mind and that Defendants would use reasonable efforts to achieve that goal. SFC and Wright specifically represented that SFC would not do anything that would conflict with the sale of Hive Mind. These representations were written into the October 2011 Agreement itself: Each of Ansari, Parekh and Wright agrees that he shall take reasonable efforts (as requested by the Chief Executive Officer) from the date hereof until 90 days from the date hereof (such period the Sales Period) to sell the Company. For the sake of clarity, SFC may continue any other activities so long as such activities do not conflict or compete with the Companys sales process. October 2011 Agreement, Section 4. 75. These misrepresentations were made in person, through emails, and

ultimately in the October 2011 Agreement. The misrepresentations were made to Hive Mind with the intent to induce it into entering into the October 2011 Agreement. 76. In reality, Defendants never intended to sell Hive Mind. In November

2011 discussions with Zynga, Wright represented that it was Defendants goal to combine Hive Mind and SFC. Defendants then wished to seek investment for that combined entity or sell the combined entity. 77. Hive Mind, at the time the representations were made, was ignorant of

Defendants intention not to perform and could not, in the exercise of reasonable diligence, have discovered Defendants intention. In reliance on Defendants representations concerning their intent to sell Hive Mind, Hive Mind entered into the October 2011 Agreement. Had Hive Mind known the true nature of Defendants intent, it would have never have entered into the October 2011 Agreement. 78.
Complaint -15-

As a direct result and proximate result of Defendants fraud described DHILLON & SMITH LLP

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

above, Hive Mind has been damaged in an amount to be determined at trial. 79. The conduct of Defendants was malicious, fraudulent and/or oppressive,

thereby warranting an award of punitive damages in an amount according to proof. FOURTH CAUSE OF ACTION Intentional Interference with Prospective Economic Relations (Against all Defendants) 80. Hive Mind incorporates every allegation contained in paragraphs 1

through 78 above, as though set forth fully herein. 81. Hive Mind was engaged in several economic relationships with third-

parties, including, inter alia, Zynga, Warner Bros., News Corp., Google, FremantleMedia, Paramount, Discovery, and Disney (collectively, the Prospective Partners) that probably would have resulted in an economic benefit to Hive Mind. 82. Defendants knew that Hive Mind was engaged in the economic

relationships with the Prospective Partners and intentionally disrupted those economic relationships in the manner alleged in the preceding paragraphs. 83. As defendants served on Hive Minds Board of Directors and were

majority shareholders of Hive Mind, defendants owed to Hive Mind a duty not to interfere in Hive Minds economic relationships. 84. Defendants cancelled meetings between Hive Mind and Prospective

Partners, refused to contact Prospective Partners that had shown significant interest in Hive Mind, and instead directed the Prospective Partners instead to enter into deals with SFC and/or Friendly Gravity. 85. As a direct result and proximate result of Defendants interference

described above, Hive Mind has been damaged in an amount to be determined at trial. 86. The conduct of Defendants was malicious, fraudulent and/or oppressive,

thereby warranting an award of punitive damages in an amount according to proof. ///


Complaint -16-

DHILLON & SMITH LLP

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 87.

FIFTH CAUSE OF ACTION Misappropriation of Trade Secrets (Against all Defendants) Hive Mind incorporates every allegation contained in paragraphs 1

through 85 above, as though set forth fully herein. 88. At all relevant times, Hive Mind owned and was in possession of valuable

trade secrets, technology, intellectual property, business plans, and confidential information related to the Concept. 89. Hive Minds trade secrets, technology, intellectual property, business

plans, and confidential information related to the Concept have tremendous economic value in that they are not generally known and have caused Hive Mind to be valued at at least $100,000,000. 90. Defendants have misappropriated and unfairly used Hive Minds trade

secrets, technology, intellectual property, business plans, and confidential information related to the Concept. 91. Defendants wrongful misappropriation and use of Hive Minds trade

secrets, technology, intellectual property, business plans, and confidential information related to the Concept have caused severe and irreparable injury to Hive Mind, and will continue to cause severe and irreparable injury to Hive Mind unless and until Defendants are enjoined and restrained by order of this Court. 92. As a direct result and proximate result of Defendants misappropriation

described above, Hive Mind has been damaged in an amount to be determined at trial. 93. The conduct of Defendants was malicious, fraudulent and/or oppressive,

thereby warranting an award of punitive damages in an amount according to proof. /// /// ///
Complaint -17-

DHILLON & SMITH LLP

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 ///
Complaint

SIXTH CAUSE OF ACTION Declaratory Relief (Against all Defendants) 94. Hive Mind incorporates every allegation contained in paragraphs 1

through 92 above, as though set forth fully herein. 95. An actual controversy as arisen and exists between Hive Mind and

defendants regarding the validity of the October 2011 Agreement. 96. 97. Hive Mind contends that the October 2011 Agreement is invalid. Hive Mind is informed and believes, and on that basis alleges, that

Defendants contend that that the October 2011 Agreement is a valid agreement. 98. Hive Mind seeks a declaratory judgment that its contentions as alleged

herein are correct, and that Defendants contentions as alleged herein are not correct. ///

///

///

///

///

///

///

DHILLON & SMITH LLP


-18-

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26
Complaint

PRAYER FOR RELIEF WHEREFORE, Hive Mind prays for judgment against Defendants as follows: 1. For all damages legally and/or proximately caused to Hive Mind by

Defendants in an amount to be proven at trial; 2. 3. For pre-judgment and post-judgment interest; For a permanent injunction against Defendants directing them from

refraining from developing, using, marketing, or selling any intellectual property related to the Concept; 4. For a permanent injunction against Defendants directing them from

refraining from interfering with Hive Minds economic relationships; 5. 6. For costs of suit incurred herein; and For such other and further relief as the Court deems just and proper. DHILLON & SMITH LLP

Date: February 8, 2012

By: ________________________________________ Harmeet K. Dhillon Nitoj P. Singh Attorneys for Hive Mind, Inc.

DHILLON & SMITH LLP


-19-

, , , ,
5

VER IFI CATION The u nd ersigned, on behalf of Plaintiff H ive Mind, Inc., decla res: I am the C hief Executive OffiC<'r of H ive Mind , Inc" plaintiff in the above-entitled action. I have read the foregoing compla int know the contents thereof. The same is true of my own knowledge, exC<'pt as to matler< stated therein on information or belief; and as to those matlers, I believe them to be true, Executed this 8th day of Februa ry, 2012, at Palo Alto, California.
I decla re under penally of perjury und er the laws of the Sta

, " ,
W
H

of alifomia that

the foregoing is true and correct.

" n

"
" " " "

"

"
"
ComptAin.
OIHLLOS

" " " "

'"

& SMITII LLP

S-ar putea să vă placă și