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`SUPREME COURT OF THE STATE OF NEW YORK
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`COUNTY OF NEW YORK
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`MUZIK INC., a Delaware corporation;
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`Date Purchased: January 17, 2020
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`Plaintiff,
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`Index No.
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`vs.
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`SUMMONS
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`PERKINS COIE LLP, a Washington partnership; Plaintiff designates New York County as
`PERKINS COIE CALIFORNIA, P.C., a California
`the place of trial.
`corporation and DOES 1 through 10 inclusive,
`
`Venue is proper pursuant to CPLR §503
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`Defendants.
`
`TO THE ABOVE NAMED DEFENDANT:
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`YOU ARE HEREBY SUMMONED to answer the complaint in this action and to serve a
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`copy of your answer on Plaintiff’s attorney within twenty (20) days after the service of this
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`summons, exclusive of the day of service, or within thirty days (30) after the service is complete
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`if this summons is not personally delivered to you within the State of New York. Venue is proper
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`for this action, because Plaintiff is informed and believes, that Defendant Perkins Coie LLP has
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`offices in New York City, and committed some, if not all, of the acts alleged in the complaint in
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`New York City.
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`In case of your failure to answer, judgment will be taken against you by default
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`for the relief demanded herein.
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`Dated: January 17, 2020
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`GREENSPOON MARDER LLP
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`7mm
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`
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`By:
`Wendy Michael
`
`Christopher Gismondi
`590 Madison Avenue, Suite 1800
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`New York, New York 10022
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`(212) 524-5000
`
`&
`
`Jayesh Patel (pending pro hac vice app.)
`Neil Thakor (pending pro hac vice app.)
`Kelly Doyle (pending pro hac vice app.)
`1875 Century Park East, Suite 1900
`Los Angeles, CA 90067
`(323) 880-4520
`
`ROBINS KAPLAN LLP
`
`Craig Weiner
`399 Park Avenue, Suite 3600
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`New York, New York 10022
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`(212) 980-7400
`
`&
`
`Roman Silberfield (pending pro hac vice app.)
`2049 Century Park East, Suite 3400
`Los Angeles, California 90067
`(310) 552-0130
`
`Attorneys for Piar'im'fir
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`2 of 14
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`FILED: NEW YORK COUNTY CLERK 01/17/2020 04:07 PM
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`SUPREME COURT OF THE STATE OF NEW YORK
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`COUNTY OF NEW YORK
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`Index No.
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`COMPLAINT
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`DEMAND FOR JURY TRIAL
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`MUZIK INC., a Delaware corporation;
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`
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`Plaintiff,
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`vs.
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`
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`
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`PERKINS COIE LLP, a Washington partnership;
`PERKINS COIE CALIFORNIA, P.C., a California
`corporation and DOES 1 through 10 inclusive,
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`Defendants.
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`COMPLAINT
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`Plaintiff Muzik, Inc. (“Muzik” or “Plaintifi”) alleges as follows:
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`INTRODUCTION
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`1.
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`Perkins Coie, LLP (“Perkins Coie" or “Defendant”) attorney, Sean Grygiel
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`(“Grygiel”) tried to cover up repeated failures in seeking and securing patents, at one point by
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`manufacturing false patent application numbers, costing its client, Muzik, hundreds of millions of
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`dollars in lost royalty rights and millions of dollars in fruitless development costs. As a
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`consequence, Muzik unwittingly disclosed key technology without the protection that Grygiel and
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`Perkins Coie represented to be in place, losing out in revenue streams from technologies that are
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`currently being widely used in “smart” electronic devices. Relying on Grygiel’s written
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`assurances, Muzik used significant capital and energy in developing products that were
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`unprotected, instead of focusing on its other inventions that it is now exploiting.
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`2.
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`In approximately 2012, Muzik’s Chief Executive Officer and primary inventor,
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`Jason Hardi (“Hardi”), developed an overarching design for a fully-integrated, connected, remote'
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`control headphone system. The headphones system incorporated the use of a processor which
`3 of 14
`facilitated a voice and touch control system to allow the user to connect to, and operate, a variety
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`of applications and programs. Many of the underlying ideas and designs, such as the ability to
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`initiate commands in connected devices with voice control, would later be used in many popular
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`“smart" devices.
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`3.
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`Starting in 2012, Muzik retained Grygiel to obtain patents for not only the broad,
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`overarching, idea of voice and touch activated “smart” headphones, but to obtain patents for the
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`technologies underlying the headphone system as well as designs and features that derived from
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`the core concepts.
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`4.
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`While Gyrgiel’s representation of Muzik began while Grygiel worked at Fish &
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`Richardson, LLP, in 2014, Gyrgiel persuaded Muzik to retain Perkins Coie after he joined the firm
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`as a Partner. Specifically, Grygiel represented to Muzik that it would benefit the company to
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`follow him to Perkins Coie as a client, given Grygiel’s familiarity with and unique understanding
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`of Muzik’s patent portfolio, his encompassing strategy for protecting all of Muzik’s inventions,
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`and his ongoing awareness of the company’s engineering and design development for purposes of
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`continuity and efficiency.
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`5.
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`However, retaining Perkins Coie was a fatal mistake for Muzik. Throughout
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`Perkins Coie’s representation of Muzik, it repeatedly breached its fiduciary duties of loyalty and
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`its duty of care owed to Muzik while collecting hundreds of thousands of dollars in fees. This
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`included, among numerous other things:
`
`a.
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`Failing to file applications that would have protected the detailed overarching
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`design shared by Muzik, including products derived from that design, or advising as to why such
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`protection would not be available;
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`b.
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`Failing to communicate critical developments in the patent application process,
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`including USPTO actions;
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`c.
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`Failing to include critical information regarding Muzik’s technology in provisional
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`patent applications;
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`d.
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`4 of 14
`Representing directly to Muzik’s investors that patent protection had been obtained
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`designs;
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`e.
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`Allowing certain provisional applications that were filed to lapse, without any
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`notice to Muzik or consent from the client;
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`f.
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`Claiming to file certain patent applications that were never filed, and then
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`manufacturing fake patent application numbers to induce Muzik into thinking the application were,
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`in fact, filed.
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`6.
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`Had Grygiel and Perkins Coie acted within the standard of care, Muzik would have
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`the rights to royalties, and the advantage of being first to market, on core technologies in the rapidly
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`growing field of connected device controls.
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`THE PARTIES
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`7.
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`Plaintiff Muzik is, and at all times relevant was, a Delaware corporation, currently
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`engaged in business in Los Angeles County, California.
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`8.
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`Upon information and belief, Defendant Perkins Coie is, and at all times relevant
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`herein was, a Washington limited liability partnership engaged in business in numerous different
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`cities and states in the United States. For purposes of the services rendered to Plaintiff, Perkins
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`Coie provided those legal services out of its New York City offices.
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`9.
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`Upon information and belief, for the relevant conduct by Grygiel, an individual and
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`an attorney, Grygiel and Perkins Coie held Grygiel out as a Partner of the law firm with ostensible
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`authority to act on its behalf in providing legal services out of its New York City offices.
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`10.
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`Plaintiff is unaware of the true names and capacities, whether individual, corporate,
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`associate or otherwise, of the Defendants named herein as Does 1
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`through 10, inclusive, and
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`therefore sues those defendants by such fictitious names. Plaintiff will seek leave to amend this
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`Complaint to allege the true names and capacities of such Doe defendants when the same have
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`been ascertained. Plaintiff is informed and believes, and thereon alleges, that each of the
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`defendants designated as a Doe is responsible in some manner for the events and happenings
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`5 of 14
`referred to herein and proximately thereby caused damages and injury to Plaintiff.
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`FILED: NEW YORK COUNTY CLERK 01/17/2020 04:07 PM
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`JURISDICTION AND VENUE
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`l l.
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`Jurisdiction is proper pursuant to CPLR § 301, because Perkins Coie regularly does,
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`or transacts, business in the State of New York, and because this action arises out of tortious
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`conduct committed by Perkins Coie within the State of New York.
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`12.
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`New York County is the proper venue for this action pursuant to CPLR §503,
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`because Plaintiff is informed and believes that Defendant Perkins Coie has offices in New York
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`County, and committed some, if not all, of the acts alleged herein in New York County.
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`A. Muzik’s IP:
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`GENERAL ALLEGATIONS
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`13.
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`Muzik developed an overarching design for a fully-integrated, connected, remote-
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`control headphone system. The headphones system incorporated using a processor which
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`facilitated a voice and touch control system to allow the user to connect to, and operate, a variety
`
`of applications and programs. Many of the underlying technologies would later be used in many
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`popular “smart” devices. These technologies included:
`
`a.
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`an interconnected speaker
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`for accepting input and controlling a second
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`interconnected speaker (“Interconnected Speaker”);
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`b.
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`a pair of headphones that could control a remote device (such as a mobile phone)
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`by sensing finger tap(s) on the headphone (“Finger Tap Controls”);
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`c.
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`a system and method for programming and using buttons for translating gestures
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`into a command on a wearable (headphone) device, and transmitting that command
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`to a remote device (mobile phone) to act upon the command;
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`(I. a system and method for associating input on a remote or wearable device, such as
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`touch, finger-tap, or voice input, translating the input into a short message, signal,
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`or command, transmitting that short message, signal or command to a base device,
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`such as a mobile phone or smart speaker, and executing a command (“Short
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`Message Commands Invention”).
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`6 of 14
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`14.
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`Each of these technologies has specific patentable components. Based on
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`discussions with Grygiel, Muzik understood these technologies were to be covered by l 1 separate
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`patents. For the purposes of this Complaint, the technologies covered by the 11 patents shall be
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`referred herein as the “Muzik IP."
`
`B. Muzik Retains Grygiel; Discloses Specifications Of The Muzik IP For Patent
`Prosecution:
`
`15.
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`Muzik first retained Grygiel while he was working at Fish & Richardson, LLP.
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`Grygiel was retained to obtain patents for not only the broad, overarching, idea of voice and touch
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`activated “smart” headphones, but also to obtain patents for the technologies underlying the
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`headphone system as well.
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`16.
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`During this time, Muzik disclosed significant information to Grygiel regarding the
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`Muzik IP. This included detailed specification drafts of each of the technologies, as well as weekly
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`calls where Muzik shared additional details and solutions that Grygiel claimed he needed to file
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`provisional applications.
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`17.
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`By November 14, 2014, Grygiel started working at Perkins Coie, and brought in
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`Muzik as a client. Grygiel represented to Muzik that it would benefit the company to follow him
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`to Perkins Coie as a client, given his familiarity with Muzik’s patent portfolio, strategy, and
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`engineering and design development for purposes of continuity and efficiency. Accordingly,
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`Muzik signed a Representation Agreement with Perkins Coie. After Grygiel convinced Muzik to
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`follow him to Perkins Coie, Muzik continued to share detailed information on its inventions with
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`Grygiel and others at Perkins Coie, incurring approximately $1 million in fees for work done by
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`Perkins Cole.
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`18.
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`In or around the same time, Muzik began discussions with several major investors
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`centered on the Muzik IP. Muzik made Grygiel aware of these discussions to emphasize the
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`importance of obtaining patents for the Muzik IP. Grygiel himself participated in discussions with
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`potential investors, some of whom actually invested in Muzik, and represented that Muzik’s patent
`7 of 14
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`portfolio was secure.
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`19.
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`Unfortunately, however, Grygiel’s representation of Muzik during his time at
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`Perkins Coie was marred with a lack of communication, incomplete legal work, and at times
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`outright misrepresentations. This included failing to disclose significant USPTO actions on the
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`Muzik IP, letting provisional applications expire, and manufacturing information to conceal his
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`faflures.
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`20.
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`For example, in December of 2014, Muzik’s Vice-President of Strategic Operation,
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`Chip Hardt (“Hardt”), was scheduled to attend a conference where he was invited to discuss
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`discrete portions of the Muzik IP, called Drum Sticks. Grygiel advised Muzik that Hardt could
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`discuss the “Drum Stick” technology at the conference because a patent application would be filed
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`before then. However, a patent application for the Drum Stick technology was not filed before the
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`conference.
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`21.
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`Similarly, in November of 2015, Grygiel failed to inform Muzik that one of its
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`patent applications related to the Short Message Commands Invention was rejected due to a prior
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`art reference. Instead of notifying Muzik of this development so it could add information to
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`overcome any prior art barrier, Grygiel instead simply kicked the can down the road with a
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`continuation application.
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`22.
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`Perhaps most egregiously, while at Perkins Coie, Grygiel engaged in a pattern and
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`practice of misrepresenting when — and in some cases if - certain patent applications were filed.
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`23.
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`For example, in November of 2015, Muzik first learned that four of the more critical
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`patentable technologies, known as the “Core Four," which describes technologies for the hardware,
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`connectivity user interface, moments functionality, and chat functionality for Muzik‘s headphones
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`had not yet been filed. These technologies were to have related back to the original, broader, patent
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`filings that Perkins and Grygiel were to have originally filed and refined.
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`24.
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`Nonetheless, on November 16, Muzik instructed Grygiel to get the appropriate
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`applications filed “ASAP" and once again reiterated the importance of protecting its IP portfolio
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`8 of 14
`to its ability to raise funds and run a business. On November 19, Grygiel said that he was ready
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`25.
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`On December 23, Grygiel provided Muzik a summary of its IP, listing the Core
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`Four Applications that would incorporate prior provisional applications to result in “approximately
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`12 quality utility patent applications.” Shortly thereafter, in a written communication to Muzik,
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`Grygiel identified the Core Four applications with numbers 14/982,741, 14/982,749, 14/982,844
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`and 14/982,863.
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`26.
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`Grygiel continued to represent that the Core Four applications were filed all the
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`way until Muzik terminated its relationship with Grygiel.
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`27.
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`However, Grygiel’s repeated representations that patent application were filed for
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`the Core Four technologies werejust false. The Core Four applications never received application
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`numbers.
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`Indeed, the applications were never filed at all, and upon and information and belief,
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`Grygiel provided false application numbers to Muzik to conceal his failure to file the applications.
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`28.
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`Muzik only discovered this fact after Perkins Coie had turned over all the client
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`papers and files to Muzik’s new patent counsel.
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`29.
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`As a direct and proximate result of the foregoing acts and omissions of Defendants,
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`Plaintiff has been damaged in an amount not currently known, but in a sum of not less than
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`$150,000,000.00.
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`TOLLING
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`30.
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`Plaintiffs incorporate by reference Paragraphs 1 through 29, inclusive, as if fully
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`set forth herein.
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`31.
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`Perkin Coie continued to represent Muzik in representing its interests in its IP,
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`including with respect to the Core Fore patent applications and other Muzik 1P, until the final
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`termination of the parties’ relationship in or around October 2017.
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`32.
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`On December 27, 2018,
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`the parties entered an agreement
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`(the “Tolling
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`Agreement") whereby,
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`in exchange for an agreement by both parties not to commence any
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`litigation relating to the legal services provided by Defendant while the Tolling Agreement was in
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`9 of 14
`place, the parties agreed to toll the statute of limitations for any and all potential claims and causes
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`contract, breach of oral contract, breach of the implied covenant of good faith and fair dealing,
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`andlor breach of fiduciary duty, that arose from or should be construed to have arisen from legal
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`services Perkins Coie provided Muzik with respect to various patent and other intellectual property
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`unatters.
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`33.
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`Pursuant to the terms of the Tolling Agreement, the parties agreed to toll
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`the
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`relevant statutes of limitations from the effective date of the agreement, December 27, 2018, until
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`the earlier of (a) notice of termination of the Tolling Agreement; or (b) six (6) months from the
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`effective date of the agreement.
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`34.
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`The terms of the Tolling Agreement also provided that the agreement could be
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`extended in writing signed by the parties. Pursuant to this term, the parties mutually agreed to
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`extend the Tolling Agreement six times. The first amendment to the Tolling Agreement was made
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`on June 27, 2019, and extended the tolling period until August 27, 2019. The second amendment
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`to the Tolling Agreement was made on August 22, 2019, and extended the tolling period until
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`October 28, 2019. The third amendment to the Tolling Agreement was made on October 23, 2019,
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`and extended the tolling period until December 6, 2019. The fourth amendment to the Tolling
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`Agreement was made on December 6, 2019, and extended the tolling period until December 20,
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`2019. The fifth amendment to the Tolling Agreement was made on December 20, 2019, and
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`extended the tolling period until January 3, 2020. The sixth amendment to the Tolling Agreement
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`was made on December 30, 2019, and extended the tolling period until January 17, 2020.
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`35.
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`The Tolling Agreement terminated on January 17, 2020.
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`FIRST CAUSE OF ACTION
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`Legal Malpractice
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`(Plaintiff against Perkins Coie and Does 1-10)
`
`36.
`
`Plaintiff incorporates by reference Paragraphs 1 through 35, inclusive, as if fully
`
`set forth herein.
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`37.
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`Starting in 2012, Plaintiff retained Grygiel
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`10 of 14
`to obtain patents for technologies
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`Grygiel was hired by Perkins Coie in 2014, he persuaded Muzik to allow him to continue
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`representing them in obtaining the necessary IP protection. Accordingly, Muzik and Perkins Coie
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`entered into a Representation Agreement (the “Agreement”) with Perkins Coie, which is a valid
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`and enforceable contract.
`
`38.
`
`Under the Agreement, Perkins Coie agreed to represent Muzik in its endeavors to
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`obtain patent protection for the Muzik IP with reasonable care and diligence.
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`39.
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`As Muzik’s attorney, Perkins Coie owed Muzik a duty to act reasonably in
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`obtaining patent protection for Muzik’s IP.
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`In rendering its services, Perkins Coie fell woefully
`
`below the standard of care for attorneys providing the legal work and guidance for which Perkins
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`Coie billed Muzik.
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`40.
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`Perkins Coie failed to exercise the care, skill, and diligence commonly possessed
`
`and exercised by members of the legal profession in, among other things:
`
`a.
`
`Filing inadequate patent applications based on the information provided by Muzik
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`that compromised the nature and scope of the protections to which Muzik would otherwise have
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`been entitled;
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`b.
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`Failing to adequately advise Muzik as to whether or not prior art might impede or
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`prevent patent protections that Muzik sought to procure;
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`c.
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`Failing to communicate critical developments in the patent application process,
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`including USPI‘O actions;
`
`:1.
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`Failing to include critical information regarding Muzik’s technology in provisional
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`patent applications;
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`e.
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`Allowing what provisional applications that were filed to lapse without any notice
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`to Muzik;
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`f.
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`Claiming to file patent applications that were not filed, and then manufacturing fake
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`patent application numbers.
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`41.
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`11 of 14
`By virtue of the attorney/client relationship between Perkins Coie and Muzik,
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`Muzik’s IP. Perkins Coie failed in its duty to use the care exercised by a reasonable patent attorney
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`under the same or similar circumstances, including as described in Paragraph 40.
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`42.
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`Perkins Cole’s incompetent
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`legal
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`representation,
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`including as described in
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`Paragraph 40, constitutes legal malpractice.
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`43.
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`As a direct and proximate result of Perkins Coie’s legal malpractice, Muzik has
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`suffered actual damages, including, but not limited to, the loss of rights to royalties from Muzik
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`IP and the advantage of being first to market on core technologies contained within the rapidly
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`growing field of connected device controls. Muzik has lost valuable rights associated with its IP
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`as these technologies, which Perkins Coie purported to have protected with patent applications,
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`have since been embedded in a number of popular products including the Amazon Echo Dot, Apple
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`Air Pods, and more.
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`44.
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`But for the legal malpractice of Perkins Coie, Plaintist would not have incurred
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`its injuries. As a direct and proximate result of Perkins Coie’s unlawful actions, Plaintiff has been
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`damaged in an amount not currently known, but in a sum of not less than $150,000,000.00.
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`SECOND CAUSE OF ACTION
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`Fraud
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`(Plaintiff against Perkins Coie and Does 1-10)
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`45.
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`Plaintiff incorporates by reference Paragraphs 1 through 44, inclusive, as if fully
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`set forth herein.
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`46.
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`During Perkins Coie’s representation of Muzik between 2014 through 2016,
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`Grygiel made a number of material misrepresentations, including:
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`a.
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`Representing to Muzik on several occasions, and as late as December 21,
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`2015,
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`that
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`the underlying technology to the interconnected speaker portion of the
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`interconnected headphone system was not vulnerable to prior art attacks, when in fact
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`Grygiel received several USPTO opinions referencing prior art vulnerabilities;
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`b.
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`12 of 14
`Representing to Muzik in at least January, 2016 through June, 2016 that
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`manufacturing false patent application numbers to conceal
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`the fact
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`that no such
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`applications were ever filed.
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`47.
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`Defendant made these representations with the intent
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`to deceive Muzik into
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`believing that the Muzik IP was protected by pending and viable patent applications, so that it
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`could continue its lucrative representation of Muzik.
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`48.
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`Plaintiff reasonably relied on Grygiel’s representation because he was their trusted
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`attorney hired specifically to obtain patent protection for the Muzik IP.
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`49.
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`As a result of relying on Grygiel’s misrepresentations, Muzik lost its ability to
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`protect the Muzik IP, and as a result, also lost the rights to royalties and/or advantage of being first
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`to market on core technologies contained within the rapidly growing field of connected device
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`controls
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`50.
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`By reason of Defendant’s fraudulent, intentional, and deliberate wrongdoing, the
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`aggravating and outrageous circumstances, and the conscious acts in willful and wanton disregard
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`of Muzik’s rights (as described in Paragraphs 1
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`through 49 herein),
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`in addition to actual
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`compensatory damages, Plaintiff is entitled to recover exemplary and punitive damages in an
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`amount to be proved at trial, but no less than $150,000,000.00.
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`PRAYER FOR RELIEF
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`WHEREFORE, Plaintiff prays forjudgment against Defendants as follows:
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`a) For compensatory damages against Defendants and Does 1—10, according to proof at trial,
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`but in a sum not less than $150,000,000.00;
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`b) For punitive or exemplary damages against Defendants and Does 1-10 according to proof
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`atukfl.
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`c) For reasonable attorneys’ fees as permitted under any applicable contract or relevant
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`statute, regulation or case law;
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`d) For costs of suit incurred herein;
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`13 of 14
`e) For prejudgment interest accruing at the maximum legal rate; and
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`FILED: NEW YORK COUNTY CLERK 01/17/2020 04:07 PM
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`R«C«IV«D VYSCEF: 01/17/2020
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`Dated: January 17, 2020
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`GREENSP ON MA
`By;
`
`C:{£‘Zél{z_‘d
`
` ‘
`
`Wendy Michael
`Christopher Gisrnon i
`590 Madison Avenue, Suite 1800
`
`New York, New York 10022
`
`(212) 524-5000
`
`&
`
`Jayesh Patel (pending pro hac vice app.)
`Neil Thakor (pending pro hac vice app.)
`Kelly Doyle (pending pro hac vice app.)
`1875 Century Park East, Suite 1900
`Los Angeles, CA 90067
`(323) 880-4520
`
`Attomeys for Plaintiff
`
`ROBINS KAPLAN LLP
`
`Craig Weiner
`399 Park Avenue, Suite 3600
`
`New York, New York 10022
`
`(212) 980-7400
`
`&
`
`Roman Silberfield (pending pro hac vice app.)
`2049 Century Park East, Suite 3400
`Los Angeles, California 90067
`(310) 552-0130
`
`14 of 14
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`