Lawsuit says Fusion committed fraud

As promised early last week, TechCrunch today revealed a lawsuit against its one-time collaborator Fusion Garage in a Northern District of California court. The complaint accuses the CrunchPad (now JooJoo) developer of fraud, misappropriation of business ideas and other claims for allegedly "stealing" the project away from the tech website without consent.

In detailing the lawsuit, TechCrunch head Michael Arrington also adamantly denies the claims made by Fusion Garage chief Chandrasekhar Rathakrishnan, arguing that none of the latter's statements are supported by evidence. Arrington asserts that his company still owns significant intellectual property (IP) by virtue of his developing the blueprint and that Pegatron, the originally planned manufacturer, actually owns a significant amount of remaining IP. As Fusion Garage may have brought that IP to its new unnamed manufacturer, Pegatron has shown "concern" it may also have to sue the tablet maker.

The site head has also launched a series of character attacks against Rathakrishnan and his company, accusing the combination of plagiarizing content, trying to hide contradictory statements by erasing its blog, and of relying on "unsavory" creditors to stay funded. Arrington has further tried to dissuade the press from linking to the pre-order page for the JooJoo by claiming that Fusion Garage doesn't have the money to build the devices and is counting on pre-orders to help defend itself.

Why Arrington remained onboard the project after discovering problems, some of which were found months in advance of the split, isn't directly mentioned. It's believed he remained onboard to either see the project through or to have a cleaner legal exit in the event a lawsuit such as the one filed this week. The executive also insists that the Singapore press is also partly to blame as it didn't report the failure of Rathakrishnan's previous company.

In addition to seeking a jury trial, the suit demands a preliminary injunction banning Fusion Garage from selling the JooJoo until the case comes to an end.

By Electronista Staff