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Albert Podell
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Graduate of Cornell University, 1958. Graduate Fellow, Univ of Chicago 1958-60. Received Doctor of Laws degree from New York University School of Law, 1976. Have practiced litigation from 1976 until retirement in 2010. Have been an active stock investor since 1964,and active theatrical investor... More
  • UNXL "Smoking Gun" Did Not Iinjure Anyone 12 comments
    May 9, 2013 4:07 AM | about stocks: UNXL

    In his Instablog Post here on May 8, titled "CIT v UniPixel: The Smoking Gun!" Ivan Jiminez, a persistent basher of Uni-Pixel, reveals a woeful ignorance of the law as it is applied in the United States and England.

    Mr. Jiminez begins by stating that "This case is about a non-disclosure agreement, not about UniBoss or UniPixel's current process. CIT presented evidence of Uni-Pixel's breach of its agreement." Once he has embarked on that route, he is dead in the water, as I will show.

    The thrust of his argument is that, "In its patent request Uni-Pixel disclosed multiple of CIT's core technologies," which he goes on to enumerate.

    He concludes his screed with: "The fact that Uni-Pixel is or is not currently using the technologies is irrelevant. The fact is that UniPixel disclosed those core technologies in a patent request and that's the smoking gun."

    The fatal flaw in his argument is that the discharge of that smoking gun never injured anyone.

    Even if we give Mr. Jiminez the benefit of the doubt and assume that every fact he states is true, his argument is not worth a bucket of warm spit. Because this self-described "aircraft mechanic by trade" clearly does not know squat about how the law operates.

    It is a classic axiom of the law, drilled into the skulls of every first-year law student for the past several hundred years, that "A tort or a breach, in the air, does not lie." What this basic legal tenet means is that unless the alleged tort or breach results in damage to the plaintiff, it is not actionable; it fails to state a claim upon which a court can grant relief; it is legally defective and readily dismissible.

    In torts, the classic example is the miscreant who throws a brick off the roof onto a crowded street (akin to the actions of many of the vociferously nasty shorts on the UNXL message boards). He is certainly a bad boy, and not the kind of chap you'd want to marry your sister, but unless his brick actually hits and injures someone, or causes harm to someone in its impact zone, it is not an actionable event. A tort in the air simply does not lie.

    Similarly, in contract law, the over-riding principle is that the breach of the contract is only the first step in the prima facie complaint; unless the plaintiff can credibly plead (and later prove) some monetary damage resulting from the breach, his complaint fails to state a claim upon which relief can be granted and the action can be dismissed.

    In the CIT case, even if UniPixel did disclose some information it learned during the term of, and as a result of, the non-disclosure agreement by which it had consented to be bound, there is no damage resulting from said breach, and consequently no legally cognizable claim by CIT.

    There is no damage, in the first instance, because most of the information UNXL is alleged to have disclosed was fully available to the entire world in the patent applications filed by CIT itself. CIT can not sue UNXL for disclosing what CIT had already disclosed. Moreover, and of crucial and dispositive consequence, there is no damage resulting to CIT from the alleged disclosure because CIT was not shot, or even grazed, by the smoking gun. No one in the world who heard or read what Uni-Pixel disclosed in its own patent request acted upon that information to the detriment of CIT. Neither Microsoft, nor Intel, nor Walt Disney, nor HerbaLife, or any other entity in the world, is alleged to have taken that information and used it to make a product or process that harmed CIT or competed with it.

    In the Western world, our entire concept of contractual jurisprudence is based, not on punishing or imposing a penalty on an alleged offender, but on providing compensatory relief, in the form of monetary damages, to the aggrieved party. Therefore, even if Uni-Pixel did disclose some information it learned during the NDA term, there is no legal punishment for doing so in the absence of damage caused by that disclosure. Accordingly, Mr. Jiminez's argument falls of its own weight

    Since I have picked on Mr. Jiminez for lacking legal credentials, let me briefly state mine. I hold a Doctor of Laws degree from the NYU School of Law, one of the top five law school in the country, and I was, until I retired three years ago, a member in good standing of the bar of the State of New York; the federal district courts for the Eastern and Southern Districts of New York; the United States Courts of Appeals for the First and the Second Circuits, and the Federal Circuit,the special court handling cases involving intellectual property; and the Supreme Court of the Unite States. Among the leading cases on which I worked is Universal Pictures v. Sony, in which I was part of the Sony legal team, winning a landmark case that allowed the Betamax (and its later incarnations in the VCR and the DVD player) to be sold in the U.S. against the misguided attempt by the motion picture companies to prohibit their sale. In 32 years of practicing litigation, I never lost a jury trial and, by God, I would not lose this case, because CIT is not able to prove, by a preponderance of the evidence, a clear connection between any actions of Uni-Pixel and CIT sustaining damages.

    I respectfully submit that Mr. Jiminez cease trying to offer legal opinions, for which he is totally untrained and recklessly incompetent, and stick to repairing landing struts.

    Disclosure: I am long UNXL.

    Themes: long ideas Stocks: UNXL
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Comments (12)
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  • Well done, Al. And thank you for your help. I was going to respond to Ivan today, but you've put him in his place much more convincingly than I would have been able. Nice work, as usual.
    9 May 2013, 09:05 AM Reply Like
  • Author’s reply » For me it was as easy as squashing a roach.
    10 May 2013, 12:59 AM Reply Like
  • WOW! i guess you told him. glad to see someone knows the words comin out of his mouth. well done and thank you.
    9 May 2013, 09:42 AM Reply Like
  • Author’s reply » my pleasrre. truly
    10 May 2013, 12:59 AM Reply Like
  • Al,

     

    I bow to your legal qualifications and experience. Perhaps you'd be kind enough to answer the following.

     

    Should the case prove inconclusive over IP infringement, yet accepting that disclosure took place in breach of the NDA with no damage as you describe, what in your opinion would be the determination of the Texas court in terms of award of legal costs?
    9 May 2013, 08:44 PM Reply Like
  • Author’s reply » dear dliifk. That is an excellent question, and one worth about a million dollars at the rate they are spending for legal fees. Right now I cold argue it all three ways. Give me a week or two to delve into it and try to figure it out. It is far more complex than you may even realize, involving choice of law, the statute of limitations, which agreements survive, which superseded which,etc..
    10 May 2013, 01:05 AM Reply Like
  • Thanks for breaking it down to the common, good sense level. Very well written and easy to follow the logic of the law. Based on my own personal experiences with the legal system your comments are spot on.

     

    BETTERQOL
    9 May 2013, 10:17 PM Reply Like
  • Author’s reply » Thank you. I felt it was important to make the controlling principle clear because most laypeople are not aware of the need for damages.
    10 May 2013, 01:08 AM Reply Like
  • Thanks for the legal enlightenment Al.
    10 May 2013, 12:08 AM Reply Like
  • Author’s reply » Happy to be of service. Jimenez was so far off base i just had to correct him. Now he seems to have withdrawn his Instablog.
    10 May 2013, 01:09 AM Reply Like
  • Mr Podell is clearly a distinguished lawyer, but his tort example of throwing a brick off a roof is flawed. In English law such a person could be convicted of affray i.e. making bystanders afraid for their safety because of the thrower's reckless behaviour. Nowadays I think that the courts might agree that psycholgical damage was caused to a bystander and award accordingly.
    10 May 2013, 01:51 AM Reply Like
  • Author’s reply » Go back and read carefully what I wrote. I covered the harm to those in the impact zone, what American courts call the zone of danger. They do not have to be hit by the brick if it causes them such legitimate fright as to constitute psychological damage, or post-traumatic stress disorder. The point is that, if it can be proven, that constitutes a legitimate damage. In contrast, the mere disclosure of a trade secret does not cause damage if nobody pays any attention to it or acts upon it.
    10 May 2013, 09:59 AM Reply Like
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