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Los Angeles, California, Friday, January 30, 2009-Future-Link Online hired Los Angeles business litigation attorney Robert G. Klein to pursue its multi-million dollar lawsuit against the software giant Microsoft Corporation. The decision to hire Los Angeles business lawyer Robert G. Klein followed a December 18, 2008 California Court of Appeal decision that reversed an earlier judgment in favor of Microsoft.
The Court of Appeal ruling assures that Future-Link Online will have its day in court when at such time it will ask a jury to impose damages against Microsoft which could reach as high as $45,000,000. Future Link’s lawsuit claims that Microsoft, and its predecessor WebTV, intentionally interfered with Future Link’s contract with a company called Futurenet, a multi level marketing company that sold a type of “set-top box,” by which owners could access the internet using their television sets as monitors.
In December 1997, Future-Link, an Internet Service Provided (ISP), entered into a written contract with Futurenet. The intent of the contract was to allow Future-Link to be the exclusive internet service provider to each customer that purchased the set-top box from Futurenet. These set top boxes offered an inexpensive alternative for people who may not have owned an expensive computer but who wanted to access the internet and receive e-mail.
The material terms of the Future-Link contract with Futurenet were that Future-Link would provide dial in access to all Futurenet customers who purchased the set top box and bill subscribers an access fee of $19.95 per month of which 32% would be paid to Futurenet. Future-Link also agreed not to provide the same or similar network services to any other Multi-level marketing company for as long as contract remained in effect with Futurenet.
The contract set out Futurenet’s obligations as follows: “Futurenet Online, Inc. shall cause all subscribers current and future [to] utilize Future-Link online services, and Futurenet Online, Inc. shall not obtain any such services from any other during the term of this agreement.” After one year Futurenet had an estimated 39,000 customers who would need an ISP to access the internet.
Two and one-half months after signing the contract, Futurenet entered into another agreement, with WebTV which similarly afforded internet access through its own type of set-top box, manufactured by Philips Magnavox. This agreement between WebTV and Futurenet principally provided for Futurenet’s purchase of WebTV’s set-top boxes from Philips. The WebTV agreement implicitly contemplated Futurenet’s marketing the WebTV box. WebTV already had several ISPs it was using. The agreement thus contained as a final provision: “ISP Status. WebTV will allow Future-Link, [Futurenet’s] current ISP, to become a WebTV ISP on terms consistent with the terms offered to WebTV’s other ISPs that offer comparable service to the service offered by Future Link.”
Future-Link responded to what it perceived as Futurenet’s material breach of the contract by ceasing to provide internet services to Futurenet’s customer-subscribers. Futurenet proceeded to sue Future-Link, for breach of contract and related claims, and Future-Link filed a cross-complaint, which included a cause of action against WebTV (now Microsoft Corporation), for interference with the contract.
On the day of trial Superior Court Judge Barbara M. Scheper ruled that Futurenet did not breach its contract with Future-Link and without a breach of contract, Microsoft could not have induced a breach or interfered with Future-Link’s contract with Futurenet. Based upon that ruling, Judge Scheper entered judgment in favor of Microsoft.
The Court of Appeals reversed that judgment and in no uncertain terms stated: “We therefore conclude that the trial court’s resolution of the interpretative issue presented to it was incorrect, and that, as properly construed, the contract was breached by Futurenet’s entry into its separate agreement with WebTV. The judgment is reversed, and the case remanded for a new trial in accordance with our decision.”
This was the third time the Court of Appeal reviewed an adverse judgment against Future-Link which explains why this case has been pending since 1997. The same Court of Appeal previously reversed a summary judgment in favor of Microsoft and thereafter reversed a judgment based on refusal to join the real party in interest which involves an issue known as “standing to sue”.
“The Court of Appeal decision finding that Futurenet did in fact breach its contract with Future-Link is the ‘law of the case’ and binding on the trial court when this case goes to trial”, said Future-Link’s attorney Robert G. Klein. The law of the case doctrine states that when, in deciding an appeal, an appellate court states in its opinion a principle or rule of law necessary to the decision, that principle or rule becomes the law of the case and must be adhered to throughout its subsequent progress, both in the lower court and upon subsequent appeal.
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