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March 21, 2019
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lawsuit

Court dismisses Paris lawsuit against Airbnb for illegal listings

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A court in Paris has dismissed a case against Airbnb, as Le Monde reported. Last month, the City of Paris sued Airbnb for 1,010 illegal listings. According to the mayor’s office, Airbnb failed to comply with regulation in Paris.

Paris has been trying to limit the effect of Airbnb on the housing market in Paris. Paris is one of the top cities for Airbnb in the world. A few years ago, many people stopped renting their apartments the traditional way in favor of Airbnb. The average rental price in some areas of Paris has increased as a result.

Mayor of Paris Anne Hidalgo didn’t want to ban Airbnb altogether. Instead, the city asked hosts to get an ID number so the city can track how many nights someone is listing their apartment on Airbnb. You can’t rent an apartment more than 120 days a year.

But many listings still don’t have that ID number. The mayor’s office flagged around 1,000 apartments, saying that Airbnb was also responsible by dragging their feet.

Paris sues Airbnb for illegal listings and seeks $14.2 million

But the court has said that screenshots are not enough to prove that these apartments without an ID number are permanently available on Airbnb. Maybe some of these apartments are available for less than 120 days a year, after all.

The case is not over, as this is just a summary judgement. But it sounds like the case is not strong enough to condemn Airbnb.

News Source = techcrunch.com

Facebook sues four Chinese companies over trademark infringement

in Asia/Delhi/India/lawsuit/Politics/TC by

Facebook is taking legal action against a cluster of Chinese websites that sell fake accounts, likes and followers both on Facebook itself and on Instagram. The company announced the legal action in a short blog post late Friday afternoon (a move unusual enough to pique our curiosity a little). Of course, the fact that Facebook isn’t allowed in China might be a complexifier, in Bezos-speak.

The lawsuit, filed with the Northern District of California, alleges that starting in 2017 four Chinese companies and three individuals based in China “operated a series of websites promoting the sale of fake accounts (e.g. using fake names or other false identifiers) and inauthentic accounts (e.g. used for inauthentic activity),” infringing on Facebook and Instagram’s trademarks and terms of service in the process.

The lawsuit names Xiu Network Science and Technology Company, Xiu Feishu Science and Technology Company, Xiufei Book Technology Co., Home Network (Fujian) Technology Co., Ltd. and three people affiliated with those operations. TechCrunch reached out to Facebook for clarification about the scope of the fraudulent activity and the reason behind its decision to escalate these concerns, though didn’t receive much clarification.

Trademark infringement is certainly nothing new for the biggest social network on the planet, so our guess is that the activity must have been on a fairly large scale to attract Facebook’s legal ire. The company is asking for $100,000 in damages each for six websites it lists in the complaint for trademark infringement, terms of service violations and cybersquatting domains using its name. At the time of writing, the domains in question mostly still appeared online and operational — another factor that may have contributed to Facebook’s choice to pursue legal action. Some of the websites also sell accounts for services from Google, Twitter other American tech companies.

As Facebook notes in the filing, “According to their websites, these Defendants… engage in the registration and sale of accounts, in bulk, for various social networking sites.” When we looked into one of the websites, 9xiufacebook.com, we found that most people discovered it through a Chinese web search for “Facebook account purchase.”

The court filing is embedded below.

News Source = techcrunch.com

Justin Caldbeck sues Binary Capital co-founder Jonathan Teo for breach of contract and fiduciary duty, fraud and more

in Binary Capital/california/Delhi/Dia&Co/India/Jonathan Teo/Justin Caldbeck/lawsuit/lerer hippeau/New York/Politics/search engine/sherpa capital/TC/Venture Capital by

Embattled venture capitalist Justin Caldbeck (pictured) is suing his former co-Binary Capital founder Jonathan Teo, alleging breach of contract, fraud and more.

Caldbeck, accused of sexual harassment and unwanted sexual advances in 2017, took an indefinite leave of absence from Binary Capital, leaving to Teo all the responsibilities of the $175 million fund. Shortly after, Teo offered to step down in a last-ditch effort to keep the firm afloat. Ultimately, Binary Capital shut down and New York venture capital firm Lerer Hippeau assumed responsibility for its $125 million debut investment vehicle, 70 percent of which has been deployed, per details shared in the lawsuit.

In the legal filing submitted to the Superior Court of The State of California, Caldbeck accuses Teo of mismanagement following his June 2017 departure. We’ve reached out to lawyers for both parties for comment.

“Mr. Teo completely abandoned the leadership responsibilities that were entrusted to him, neglecting to take the most basic steps required to run a venture capital firm,” the lawsuit states. “Mr. Teo was laughably bad at this job. As another Silicon Valley entrepreneur remarked publicly, ‘this guy has done everything possible wrong.’”

The filing cites 500 Startups and Sherpa Capital as examples of funds that were able to survive following similar scandals wherein a partner was accused of sexual harassment and misconduct. Caldbeck, in essence, is upset Teo wasn’t able to successfully run Binary Capital following his own alleged wrongdoings.

Binary Capital co-founders Jonathan Teo and Justin Caldbeck

Caldbeck, who’s taken to angel investing in the months following the high-profile scandal, was previously a managing director at Lightspeed Venture Partners before launching Binary Capital alongside Teo in 2014. Teo, for his part, was formerly a managing director at General Catalyst. Binary Capital, an early-stage fund, has backed companies including plus-sized clothing business Dia&Co and airfare search engine Skiplagged.

According to several reports, Teo had hoped to keep Binary Capital alive after The Information published a report highlighting six women’s allegations of being groped and propositioned during their professional relationship with Caldbeck.

Caldbeck, however, is less than satisfied with Teo’s handling of those allegations and the wave of “negative press articles” that followed. Caldbeck also claims he resigned from the firm only in exchange for a promise for future financial stability from Teo.

In the months following his departure, Caldbeck asserts Teo took personal vacations to Mongolia, Ibiza and the Burning Man festival. He “went AWOL,” “was completely unresponsive,” “seemed not to care,” and “made no effort to save the firm,” per the filing.

Teo, additionally, allegedly took on an operating role at Binary Capital portfolio company Trillex, where he increased corporate spending limits to purchase gifts for himself, including taking out a more than $2 million unauthorized loan to pay his personal taxes and to assist a family member with a real estate project.

According to a Forbes report on the lawsuit, Teo’s legal team says “The justice system will soon remind Mr. Caldbeck that he alone is responsible for his many misdeeds.” We will update this report when he hear back from Caldbeck and Teo’s legal teams.

Here’s the full lawsuit:

News Source = techcrunch.com

Apple is selling the iPhone 7 and iPhone 8 in Germany again

in antitrust/Apple/apple inc/China/Delhi/Europe/Federal Trade Commission/Germany/India/Intel/iPhone/lawsuit/licensing/mobile/mobile phones/patent litigation/patents/Politics/Qorvo/Qualcomm/smartphone/standards-essential patents by

Two older iPhone models are back on sale in Apple stores in Germany — but only with Qualcomm chips inside.

The iPhone maker was forced to pull the iPhone 7 and iPhone 8 models from shelves in its online shop and physical stores in the country last month, after chipmaker Qualcomm posted security bonds to enforce a December court injunction it secured via patent litigation.

Apple told Reuters it had “no choice” but to stop using some Intel chips for handsets to be sold in Germany. “Qualcomm is attempting to use injunctions against our products to try to get Apple to succumb to their extortionist demands,” it said in a statement provided to the news agency.

Apple and Qualcomm have been embroiled in an increasingly bitter global legal battle around patents and licensing terms for several years.

The litigation follows Cupertino’s move away from using only Qualcomm’s chips in iPhones after, in 2016, Apple began sourcing modem chips from rival Intel — dropping Qualcomm chips entirely for last year’s iPhone models. Though still using some Qualcomm chips for older iPhone models, as it will now for iPhone 7 and iPhone 8 units headed to Germany.

For these handsets Apple is swapping out Intel modems that contain chips from Qorvo which are subject to the local patent litigation injunction. (The litigation relates to a patented smartphone power management technology.) 

Hence Apple’s Germany webstore is once again listing the two older iPhone models for sale…

Newer iPhones containing Intel chips remain on sale in Germany because they do not containing the same components subject to the patent injunction.

“Intel’s modem products are not involved in this lawsuit and are not subject to this or any other injunction,” Intel’s general counsel, Steven Rodgers, said in a statement to Reuters.

While Apple’s decision to restock its shelves with Qualcomm-only iPhone 7s and 8s represents a momentary victory for Qualcomm, a separate German court tossed another of its patent suits against Apple last month — dismissing it as groundless. (Qualcomm said it would appeal.)

The chipmaker has also been pursing patent litigation against Apple in China, and in December Apple appealed a preliminary injunction banning the import and sales of old iPhone models in the country.

At the same time, Qualcomm and Apple are both waiting the result of an antitrust trial brought against Qualcomm’s licensing terms in the U.S.

Two years ago the FTC filed charges against Qualcomm, accusing the chipmaker of operating a monopoly and forcing exclusivity from Apple while charging “excessive” licensing fees for standards-essential patents.

The case was heard last month and is pending a verdict or settlement.

News Source = techcrunch.com

The plot to revive Mt. Gox and repay victims’ Bitcoin

in Apps/Banking/Bitcoin/blockchain/Brock Pierce/coinlab/cryptocurrency/cryptocurrency exchange/Delhi/Developer/Gox Rising/India/lawsuit/mt.gox/Payments/peter vessenes/Politics/Security/Startups/Sunlot/TC by

It was the Lehman Brothers of blockchain. 850,000 Bitcoin disappeared when cryptocurrency exchange Mt. Gox imploded in 2014 after a series of hacks. The incident cemented the industry’s reputation as frighteningly insecure. Now a controversial crypto celebrity named Brock Pierce is trying to get the Mt. Gox flameout’s 24,000 victims their money back and build a new company from the ashes.

Pierce spoke to TechCrunch for the first interview about Gox Rising — his plan to reboot the Mt. Gox brand and challenge Coinbase and Binance for the title of top cryptocurrency exchange. He claims there’s around $630 million and 150,000 Bitcoin waiting in the Mt. Gox bankruptcy trust, and Pierce wants to solve the legal and technical barriers to getting those assets distributed back to their rightful owners.

The consensus from several blockchain startup CEOs I spoke with was that the plot is “crazy”, but that it also has the potential to right one of the biggest wrongs marring the history of Bitcoin.

The Fall Of Mt. Gox

But the story starts with Magic: The Gathering. Mt. Gox launched in 2006 as a place for players of the fantasy card game to trade monsters and spells before cryptocurrency came of age. The Magic: The Gathering Online eXchange wasn’t designed to safeguard huge quantities of Bitcoin from legions of hackers, but founder Jed McCaleb pivoted the site in 2010. Seeking to focus on other projects, he gave 88 percent of the company to French software engineer Mark Karpeles, and kept 12 percent. By 2013, the Tokyo-based Mt. Gox had become the world’s leading cryptocurrency exchange, handling 70 percent of all Bitcoin trades. But security breaches, technology problems, and regulations were already plaguing the service.

Then everything fell apart. In February 2014, Mt. Gox halted withdrawls due to what it called a bug in Bitcoin, trapping assets in user accounts. Mt. Gox discovered that it had lost over 700,000 Bitcoins due to theft over the past few years. By the end of the month, it had suspended all trading and filed for bankruptcy protection, which would contribute to a 36 percent decline in Bitcoin’s price. It admitted that 100,000 of its own Bitcoin atop 750,000 owned by customers had been stolen.

Mt. Gox is now undergoing bankruptcy rehabilitation in Japan overseen by court-appointed trustee and veteran bankruptcy lawyer Nobuaki Kobayashi to establish a process for compensating the 24,000 victims who filed claims. There’s now 137,892 Bitcoin, 162,106 Bitcoin Cash, and some other forked coins in Mt. Gox’s holdings, along with $630 million from the sale of 25 percent of the Bitcoin Kobayashi handled at a precient price point above where it is today. But five years later, creditors still haven’t been paid back. 

A Rescue Attempt

Brock Pierce, the eccentric crypto celebrity

Pierce had actually tried to acquire Mt. Gox in 2013. The child actor known from The Mighty Ducks had gone on to work with a talent management company called Digital Entertainment Network. But accusations of sex crime led Pierce and some team members to flee the US to Spain until they were extradited back. Pierce wasn’t charged and paid roughly $21,000 to settle civil suits, but his cohorts were convicted of child molestation and child pornography.

The situation still haunts Pierce’s reputation and makes some in the industry apprehensive to be associated with him. But he managed to break into the virtual currency business, setting up World Of Warcraft gold mining farms in China. He claims to have eventually run the world’s largest exchanges for WOW Gold and Second Life Linden Dollars.

Soon Pierce was becoming a central figure in the blockchain scene. He co-founded Blockchain Capital, and eventually the EOS Alliance as well as a “crypto utopia” in Puerto Rico called Sol. His eccentric, Burning Man-influenced fashion made him easy to spot at the industry’s many conferences.

As Bitcoin and Mt. Gox rose in late 2012, Pierce tried to buy it, but “my biggest investor was Goldman Sachs. Goldman was not a fan of me buying the biggest Bitcoin exchange” due to the regulatory issues, Pierce tells me. But he also suspected the exchange was built on a shaky technical foundation that led him to stop pursuing the deal. “I thought there was a big risk factor in the Mt. Gox back-end. That was may intuition and I’m glad I was because my intuition was dead right.”

After Mt. Gox imploded, Pierce claims his investment group Sunlot Holdings successfully bought founder McCaleb’s 12 percent stake for 1 Bitcoin, though McCaleb says he didn’t receive the Bitcoin and it’s not clear if the deal went through. Pierce also claims he had a binding deal with Karpeles to buy the other 88 percent of Mt. Gox, but that Karpeles tried to pull out of the deal that remains in legal limbo.

The Supposed Villain

The Sunlot has since been trying to handle the bankruptcy proceedings, but that arrangement was derailed by a lawsuit from CoinLab. That company had partnered with Mt. Gox to run its North American operations but claimed it never received the necessary assets, and sued Mt. Gox for $75 million, though Mt. Gox countersued saying CoinLab wasn’t legally certified to run the exchange in the US and that it hadn’t returned $5.3 million in customer deposits. For a detailed account the tangle of lawsuits, check out Reuters’ deep-dive into the Mt. Gox fiasco.

CoinLab co-founder Peter Vessenes

This week, CoinLab co-founder Peter Vessenes increased the claim and is now seeking $16 billion. Pierce alleges “this is a frivolous lawsuit. He’s claiming if [the partnership with Mt. Gox] hadn’t been cancelled, CoinLab would have been Coinbase and is suing for all the value. He believes Coinbase is worth $16 billion so he should be paid $16 billion. He embezzled money from Mt. Gox, he committed a crime, and he’s trying to extort the creditors. He’s holding up the entire process hoping he’ll get a payday.” Later, Pierce reiterated that “Coinlab is the villain trying to take all the money and see creditors get nothing.” Industry sources I spoke to agreed with that characterization

Mt. Gox customers worried that they might only receive the cash equivalent of their Bitcoin according to the currency’s $486 value when Gox closed in 2014. That’s despite the rise in Bitcoin’s value rising to around 7X that today, and as high as 40X at the currency’s peak. Luckily, in June 2018 a Japanese District Court halted bankruptcy proceedings and sent Mt. Gox into civil rehabilitation which means the company’s assets would be distributed to its creditors (the users) instead of liquidated. It also declared that users would be paid back their lost Bitcoin rather than the old cash value.

The Plan For Gox Rising

Now Pierce and Sunlot are attempting another rescue of Mt. Gox’s  $1.2 billion assets. He wants to track down the remaining cryptocurrency that’s missing, have it all fairly valued, and then distribute the maximum amount to the robbed users with Mt. Gox equity shareholders including himself receiving nothing.

That’s a much better deal for creditors than if Mt. Gox paid out the undervalued sum, and then shareholders like Pierce got to keep the remaining Bitcoins or proceeds of their sale at today’s true value. “I‘ve been very blessed in my life. I did commit to giving my first billion away” Pierce notes, joking that this plan could account for the first $700 million he plans to ‘donate’.

“Like Game Of Thrones, the last season of Mt. Gox hasn’t been written” Pierce tells me, speaking in terms HBO’s Silicon Valley would be quick to parody. “What kind of ending do we want to make for it? I’m a Joseph Campbell fan so I’m obviously going to go with a hero’s journey, with a rise and a fall, and then a rise from the ashes like a phoenix.”

But to make this happen, Sunlot needs at least half of those Mt. Gox users seeking compensation, or roughly 12,000 that represent the majority of assets, to sign up to join a creditors committee. That’s where GoxRising.com comes in. The plan is to have users join the committee there so they can present a united voice to Kobayashi about how they want Mt. Gox’s assets distributed. “I think that would allow the process to move faster than it would otherise. Things are on track to be resolved in the next three to five years. If [a majority of creditors sign on] this could be resolved in maybe 1 year.

Beyond providing whatever the Mt. Gox estate pays out, Pierce wants to create a Gox Coin that gives original Mt Gox creditors a stake in the new company. He plans to have all of Mt. Gox’s equity wiped out, including his own. Then he’ll arrange to finance and tokenize an independent foundation governed by the creditors that will seek to recover additional lost Mt. Gox assets and then distribute them pro rata to the Gox Coin holders. There are plenty of unanswered questions about the regulatory status of a Gox Coin and what holders would be entitled to, Pierce admits.

Meanwhile, Pierce is bidding to buy the intangibles of Mt. Gox, aka the brand and domain. He wants to then relaunch it as a Gox or Mt. Gox exchange that doesn’t provide custody itself for higher security.

“We want to offer [creditors] more than the bankruptcy trustee can do on its own” Pierce tells me. He concedes that the venture isn’t purely altruistic. “If the exchange is very successful I stand to benefit sometime down the road.” Still, he stands by his plan, even if the revived Mt. Gox never rises to legitimately challenge Binance, Coinbase, and other leading exchanges. Pierce concludes, “Whether we’re successful or not, I want to see the creditors made whole.” Those creditors will have to decide for themselves who to trust.

News Source = techcrunch.com

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