Iridas Sues Adobe Over Movie Technology

LOS ANGELES (CN) - A U.S. affiliate of a German company that provides digital color-correction products to Hollywood claims Adobe Systems acquired rights to sell and distribute its products without paying it a dime.

Iridas USA LLC (IUSA) sued Adobe systems in Superior Court.

According to the complaint, Iridas CEO Lin Sebastian Kayser entered into "clandestine negotiations" to sell Iridas technologies to Adobe, and handed over Iridas USA's confidential database of film and television customers. Iridas seeks $6 million in damages from Adobe.

Kayser is not a party to the complaint. The only defendants are Adobe Systems and John Does 1-1,000.

Iridas was formed in Munich in 2000. Kayser holds a 40 percent share in Iridas USA, and co-founding member Steve Crouch holds 60 percent share, according to the complaint.

Iridas claims Kayser "bargained away" the right to sell Iridas products in the United States, under an agreement which gives Iridas USA the exclusive right to distribute Iridas products. That includes its signature product, Speedgrade, a tool used for color grading and 3D stereo functions on movies, according to the complaint.

Iridas claims it is entitled to 50 percent of any sales Kayser makes, but never got it.

"In or around, April, 2011 plaintiff alleges on information and belief that Lin Kayser and Adobe began clandestine negotiations undisclosed to plaintiff by which Adobe, a U.S. company, was not only to acquire Iridas products without compensating plaintiff; but also that Adobe was to become the successor in interest for Lin Kayser. The transaction thus included Adobe's acquisition of confidential customer information belonging to IUSA, contact information for potential customers in the United States belonging to IUSA, the rights belonging to IUSA to sell and distribute Iridas products in the United States, including to the existing customers in the United States. Adobe would, and did, hire as its employees, agents and contractors Lin Kayser and the former employees of Lin Kayser, such employees including without limitation Patrick Palmer, Michael Gallo, Dennis Weinmann, and Duy-Anh Pham. Plaintiff alleges on information and belief that Adobe and Lin Kayser intended Adobe to receive all of IUSA's property interests and rights to Adobe without the knowledge or permission of IUSA and without compensation to IUSA for Lin Kayser distributing Iridas products to Adobe and without compensation to IUSA for Adobe redistributing IUDAS products to customers in the United States," the complaint states.

Iridas USA claims that Adobe represented in private that it was buying only software code from Kayser, but publicly stated that it had acquired the company.

An Adobe press statementfrom September 2011, however, says only that the company has acquired "Iridas technology" and "certain assets" of the company.

In its Superior Court complaint, Iridas USA claims that Adobe used a customer database to steal its customers, and that Adobe has denied that Iridas USA has exclusive rights to sell its products in the United States.

The complaint states: "Because of the goodwill IUSA has generated over the years, IUSA customers and potential customers have approached IUSA since August 2011 and have ordered additional Iridas products, whether by way of new licenses, upgrades, additional 'seats,' licenses for new products, and support and maintenance agreements. IUSA has demanded to Adobe in writing that Adobe provide the Iridas products requested and compensate IUSA. Adobe has refused, and continues to refuse, without justification, to comply with the demand and thereby has intentionally interfered with IUSA's contracts and actual economic relations with existing customers and prospective customers. Adobe knew that Adobe did not have the right to refuse IUSA's orders for Iridas products because Adobe knew of the prior economic relation and fiduciary obligations between Lin Kayser and plaintiff and thus Adobe acted wrongfully. Because Adobe interfered with existing economic relations, IUSA could not in good conscience accept or solicit new orders from existing customers and could not in good conscience respond to inquiries from prospective customers or continue marketing Iridas products to potential customers because Adobe was interfering with IUSA's existing contracts and contractual relations."

Iridas USA seeks declaratory relief, an injunction and damages for specific performance, uniform Trade Secrets Act violations, intentional interference with contract, with contractual relations with and prospective economic relations, negligent interference with contract and contractual relations and prospective economic relations, and deceit and deceptive business practices.

Adobe told Courthouse News that it does not comment on pending litigation.

Iridas USA is represented by Keith Robinson with Adams & Nelson, which did not immediately respond to a request for comment.

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