Bernstein v. New York

591 F. Supp. 2d 448, 2008 U.S. Dist. LEXIS 61269, 2008 WL 3514104
CourtDistrict Court, S.D. New York
DecidedAugust 8, 2008
Docket07 Civ. 11196(SAS)
StatusPublished
Cited by59 cases

This text of 591 F. Supp. 2d 448 (Bernstein v. New York) is published on Counsel Stack Legal Research, covering District Court, S.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bernstein v. New York, 591 F. Supp. 2d 448, 2008 U.S. Dist. LEXIS 61269, 2008 WL 3514104 (S.D.N.Y. 2008).

Opinion

OPINION AND ORDER

SHIRA A. SCHEINDLIN, District Judge:

I. INTRODUCTION

This action presents a dramatic story of intrigue, car bombing, conspiracy, video technology, and murder. In short, plaintiffs allege that hundreds of defendants engaged in a massive conspiracy to violate their civil rights and, in the process, contributed to the Enron bankruptcy and the presidency of George W. Bush. In plaintiffs’ words:

Plaintiffs depict a conspiratorial pattern of fraud, deceit, and misrepresentation, that runs so wide and so deep, that it tears at the very fabric, and becomes the litmus test, of what has come to be known as free commerce through inventors’ rights and due process in this country, and in that the circumstances involve inventors’ rights tears at the very fabric of the Democracy protected under the Constitution of the United States. 1

Defendants characterize the events quite differently:

For many years, pro se Plaintiffs Eliot I. Bernstein and Plaintiff Stephen Lamont have engaged in a defamatory and harassing campaign ... alleging an immense global conspiracy .... Although largely unintelligible, the [Amended Complaint] purports to describe a fantastic conspiracy among members of the legal profession, judges and government officials and private individuals and businesses to deprive plaintiffs of what they describe as their “holy grail” technologies. 2

While I cannot determine which of these descriptions is more accurate, I can and do conclude that plaintiffs have failed to state a claim against any of the hundreds of defendants named in this action. For the reasons stated below, plaintiffs’ claims are dismissed.

II. BACKGROUND

A. Facts

The following factual allegations, taken from the Amended Complaint, are accepted as true for purposes of this motion. Because the Complaint comprises more than one thousand paragraphs, the facts presented here are by necessity a summary and a selection of the most pertinent allegations.

*453 1. Development and Theft of the Video Technology

The story begins in 1997, when plaintiff Eliot Bernstein and others 3 invented video technologies (the “Inventions”). 4 The Inventions permit transmission of video signals using significantly less bandwidth than other technologies. 5 They also provide a way to “zoom almost infinitely on a low resolution file with clarity,” 6 something that is generally believed to be impossible. The Inventions were quickly incorporated into “almost every digital camera and present screen display device” and they “played a pivotal part in changing the Internet from a text based medium to a medium filled with magnificent images and video, thought prior to be impossible on the limited bandwidth of the Internet.” 7 They are also used by DVDs, televisions, cable television broadcasting, certain websites, and “chips,” presumably integrated circuits. 8

In 1998, Bernstein’s accountant, Gerald R. Lewin, suggested that Bernstein contact Albert T. Gortz, an attorney at Pros-kauer Rose LLP, regarding the Inventions. 9 Gortz, an estate planner, put Bernstein in contact with Proskauer partner Christopher C. Wheeler, a real estate attorney, who told Bernstein that he would determine whether Proskauer’s New York office had partners with appropriate experience in patent law. 10 Several weeks later, they represented that partners Kenneth Rubenstein and Raymond A. Joao would secure patents for the Inventions and would perform other trademark, trade secret, and copyright work. 11 Apparently impressed by the Inventions, Proskauer agreed to accept 2.5% of the equity of Iviewit, Inc., the company that owned the Inventions, in return for its services. 12 Unbeknownst to Bernstein, Rubenstein and Joao did not at the time work for Proskauer. 13 Rubenstein subsequently joined Proskauer, but Joao remained at the firm Meltzer Lippe Goldstein Wolf & Schlissel, P.C. (“MLG”) 14

Rubenstein was also counsel to MPEG-LA LLC, one of the largest users of the Inventions. When he was hired by Pros-kauer, MPEGLA became Proskauer’s client. MPEGLA bundled the Inventions in with other technologies that they license, but did not pay Iviewit any royalties. 15 In fact, plaintiffs allege that Ruben-stein was part of a scheme to steal the Inventions. 16 Apparently as part of this scheme, Joao filed for more than ninety related patents in his own name. 17 Then, to mask the theft, Proskauer created nu *454 merous illegitimate companies with names similar to that of Iviewit in various jurisdictions (the “Similar Companies”). 18 Proskauer filed defective patent applications for Iviewit and valid applications for the Similar Companies. 19

Proskauer then brought in representatives from Real (a consortium that at the time comprised Intel; Silicon Graphics, Inc.; and Lockheed Martin, and that was later acquired by Intel). 20 Real made use of the Inventions without first arranging for a license from Iviewit. 21 Proskauer required Real and other interested parties to sign non-disclosure agreements, but did not enforce these agreements. 22

Proskauer also distributed the Inventions to Enron Broadband. Enron “booked enormous revenue through [Enron Broadband] without a single movie to distribute,” but because they lost use of the Inventions, the deal “collapsed over night causing massive losses to Enron investors” — indeed, plaintiffs allege that this may be “one of the major reasons for Enron’s bankruptcy.” 23

Meanwhile, Proskauer pursued investors for the Similar Companies. Using fraudulent documents, they secured millions of dollars from the Small Business Administration, Goldman Sachs, Gruntal & Co., Wachovia Securities, and various others, 24 including defendant Huizenga Holdings, Inc. 25

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591 F. Supp. 2d 448, 2008 U.S. Dist. LEXIS 61269, 2008 WL 3514104, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bernstein-v-new-york-nysd-2008.