Recently, Total Recall Technologies, a Hawaii-based company, filed a lawsuit in a California U.S. District Court claiming fraud, breach, and other allegations against Oculus VR Inc. The lawsuit involves reality glasses, a product that has been touted by Oculus VR over the past three years, according to news reports. In 2014, social media giant Facebook purchased Oculus for a reported $2 billion. Now, Total Recall Technologies alleges that patented information from the company was taken by Oculus founder Palmer Luckey during the time he was employed by the company to develop a prototype head-mounted display product.

Luckey signed a confidentiality agreement, according to the complaint which requests punitive and compensatory damages from Oculus. The lawsuit also alleges that Luckey developed the converted information in order to market the Oculus Rift, his own virtual reality headset, violating agreements with Total Recall Technologies. While Luckey may argue that he used his own plans and knowledge in the development of the virtual reality headset, news article say the dispute is quite complex and highly fact-specific, entailing a thorough discovery process in order to learn what Luckey knew and whether he did actually breach or violate any specific provisions in the contracts between the two companies.

Did Luckey develop his product in a way that is different and unique from the products he may have worked on when associated with TRT, based on his own knowledge and plans, or were the agreements of any contracts between the two companies violated? A Reuters article states that Luckey was hired in 2011 by TRT to build a prototype head mounted display; at that time, he signed a confidentiality agreement, however the founder of Oculus is accused of using information he learned from his partnership when launching the Facebook Oculus Rift VR (virtual reality) headset.

Total Recall Technologies is seeking an unspecified amount in compensatory and punitive damages in the lawsuit against Luckey and Oculus.

Strangely, it is a bit curious as to why TRT has waited so long to bring a lawsuit against Oculus VR and Luckey. Perhaps the company decided to go forward at a point when Facebook became the owner of Oculus? A representative for the company says that the case is “meritless,” and that Oculus will be vigorous in its defense against TRT.

The lawsuit claims, according to Polygon, that “Without informing TRT, Luckey took the information he learned from the partnership, as well as the prototype that he built for the TRT using design features and other confidential information and materials supplied by the partnership, and passed it off to others as his own.”

Of the current modern virtual reality headsets, the Oculus Rift is the most widely known according to a Forbes article, and is scheduled to become available in the market during the first quarter of 2016 following a hugely successful Kickstarter campaign that resulted in raising $2.4 million, a drop in the bucket when compared to the $2 billion Facebook invested.

As highly experienced Los Angeles business attorneys and intellectual property attorneys, we understand that working with new technological advances may complicate already complex industries. Yet the huge majority of costly lawsuits and conflicts such as these are avoidable with the help of an experienced legal professional. If you are a former employee or an employer facing similar circumstances, contact Spotora & Associates, PC for the best way to proceed today.

Recently, a $90 million award against ABM Security was overturned by a California appeals court after the court found that the facts of the case were indisputable. The security company provided security guards with regular rest breaks, and the guards took them. In question was whether it was lawful for the security company to require the guards to leave radios/pagers on during these breaks, in addition to responding to security issues as needed while on break.

Essentially, plaintiffs in the case, which went to trial almost three years ago, claimed that ABM Security was not in compliance with California law because the company required guards to remain “on call” even during rest breaks. Plaintiffs maintained that during rest breaks, they should be relieved of all duties and not be required to respond to security issues, or leave pagers and radios on during these breaks. Following a lengthy court battle, plaintiffs in the case, Augustus v. ABM Security, which included thousands of former and current security guards with the company, were awarded a summary judgment.

The appeals court found that while meal breaks, or breaks that are unpaid, do not require security guards to remain on call, rest breaks do not require that employees are relieved of being on duty, only that security guards are relieved of performing actual work while on rest breaks under state law. The appeals court determined that being on call did not mean that employees perform work, however being available to work was not one and the same as performing actual work. The Court also noted that security guards for ABM engaged in activities such as making personal telephone calls and surfing the Internet while on rest break.

Ultimately, the California appeals court specified that meal breaks required that guards or employees are relieved of all duty in regards to work, while the definition of rest breaks contained no similar language.

What did this mean for employers? The bottom line is that while Department of Labor Standards Enforcement opinions and prior court rulings do not agree in regards to the extent of control employers have over employees during rest breaks, employers are not required to relieve employees of all duties during these breaks, but cannot require that security guards or other employees perform actual work.

As experienced Los Angeles employment lawyers, we realize the issues employers face in regards to employment policies and issues. For unsurpassed legal guidance and support, trust the skilled and dedicated staff at Spotora & Associates.

The creative process that is so closely tied to the success of the entertainment industry often raises questions regarding ownership of creative works. While copyrights usually rest with the creator of a work, certain agreements can be made that transfer these rights to another party.

Generally, copyrights rest with the author or authors who originally create a work. However, the Copyright Act of 1976 contains a major exception, the “Work Made for Hire” Doctrine, which challenges the fundamental principle that copyright ownership lies with the individual who creates the work. In the case of a “Work Made for Hire,” the party for whom the work was completed is considered the author and thus holds the copyrights to the work created rather than the party who actually authored the work.

A Work Made for Hire is not, however, any work that you pay someone to create for you. In addition, it is not any work that you and a developer simply agree is a Work Made for Hire. Rather, “Work Made for Hire” is a specifically defined term in Copyright Law and applies only when certain conditions are met.

Disputes over what constitutes a “Work Made for Hire” often arise over two main issues: the distinction between an employee and a non-employee or independent contractor and whether or not the work in question qualifies as one or more of the nine categories outlined in the Copyright Act.

Section 101 of the Copyright Act defines a “work made for hire” as either:

1.  a work prepared by an employee within the scope of his or her employment; or

2.  a work by a freelancer (independent contractor) which is specially ordered or commissioned for use as a translation, as a part of a motion picture or other audiovisual work, as a contribution to a collective work, as an atlas, as a compilation, as an instructional text, as a test, as answer material for a test, or as a supplementary work such as a preface to a book, a forward or a musical arrangement, if the parties expressly agree in a written instrument signed by them that the work shall be considered a work made for hire.

If the condition of category one is met, copyright ownership belongs to the employer unless an employment contract specifies that the creation of copyrightable material is not within the scope of employment. If the creation of the work falls outside the scope of employment then the employee, and not the employer, would have copyright ownership of the work.

If the conditions in category two are met, then the party hiring the freelancer would own the copyrights. If, however, these requirements are not strictly followed and the work falls outside the nine categories enumerated by the Copyright Act or a written agreement does not exist, then the freelancer would retain copyright ownership in the work.

Los Angeles intellectual property attorney, Anthony Spotora, commented, “It is the lack of a written instrument specifying the intended “Work-Made-for-Hire” relationship with independent contractors that commonly creates “Work-Made-for-Hire” copyright ownership issues. All too often, the intended owner seeks to argue that a “Work-Made-for-Hire” relationship was agreed upon, although it was stated only verbally. Subsequently, authorship of the work at issue ultimately winds up with its creator, rather that the intended owner. The second biggest misperception in freelance arrangements is that a written agreement specifying that a work is intended to be created on a “Work-Made-for-Hire” basis makes it so when, in fact, that is only the case if the work falls into one of the nine exceptions listed in Section 101 of the U.S. Copyright Act.”

Anthony Spotora is a Los Angeles entertainment lawyer and Los Angeles business attorney. To learn more, visit Spotoralaw.com.

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