Fair dealing. (Destiny)

by narcogen , Andover, Massachusetts, Monday, September 07, 2015, 22:54 (3462 days ago) @ General Vagueness

I'm probably going to write something longer on it, but it is interesting to note that both O'Donnell and Bungie only prevailed on one claim each out of many, and the one that Bungie prevailed on was largely irrelevant.

I'm not sure what constitutes a claim, but the arbitrator found that Bungie was correct in two accusations. Firstly they claimed Marty had their property-- copies of Music of the Spheres-- and the arbitrator agreed and it's now been returned. Secondly they claimed that he violated their copyright by distributing and performing the music without permission, and the arbitrator agreed there too, but because he gave out a copy before the copyright was filed, pursuant to a corner of copyright law I'd never heard of before, they can't get the damages they were seeking-- but they can get other relief, which I wasn't able to find the details of.

Bungie made several counter-claims; one based on the confidential information (Section 11c) of O'Donnell's contract. The arbitrator found that O'Donnell had NOT violated it by distributing Spheres, and the order to O'Donnell to return any work product not as relief because Bungie had suffered damage, or punishment because O'Donnell had violated, but merely because copies of Spheres were Bungie's property. O"Donnell claims he had already done so before litigation began and that the only remaining copy has held by counsel.

Bungie also claimed that O'Donnell's unauthorized distribution of Spheres constituted copyright infringement and sought statutory damages. However, the arbitrator found that while O'Donnell's distribution of the entire work exceeded any reasonable fair use exemption, that Bungie was unable to recover any damages for the following reasons: 1) You cannot seek both real and statutory damages; 2) as Spheres was unpublished (and still is) there is no method for assessing real damage, and 3) because O'Donnell's infringement began before the copyright on Spheres was registered and continued after registration, Bungie is not eligible to recover statutory damages (17 U.S.C. Sec 504).

So you can technically call claim E a "win" because it found O'Donnell did infringe, but since Bungie was seeking statutory damages in an amount that would likely have wiped out any potential payments by Bungie under other claims, I call it a loss. Bungie essentially got nothing out of both claims D and E.

What's more interesting, though, and not portrayed in the news summaries I've seen, is that O'Donnell prevailed not because what Bungie did actually broke any of the contracts between O'Donnell and Bungie. In fact, two of O'Donnell's claims that alleged that were denied. However, it was within Bungie's power to terminate O'Donnell without depriving him of all his shares, and since the arbitrator is empowered by the agreement and JAMS rules to decide what is fair and equitable, he decided it was fair and equitable to award O'Donnell 60% of his previously unvested shares, and that Bungie had violated the concept of "fair dealing" that underpins all contract law.

Yeah, it sounded to me like they were trying to argue that because they gave him a performance review and found his performance "unacceptable" they were justified in withholding those things. It sounded like the arbitrator was saying maybe they would have been legally justified if there was anything in writing that said it worked that way, but there wasn't so they had to give him his shares.

Hmm... not quite. Bungie actually was legally justified in most of what they did, at least, to the letter. However, the employment contract has a binding arbitration clause that brings a dispute like this to the company JAMS, and empowers that arbitrator to do what they think is fair and equitable, and when arbitrating a dispute that hinges on the actions of Bungie's board sub-committee that determines things like profit sharing participation (which is what the bad review was to prevent) the arbitrator is empowered to do what they were. So since the committee COULD have fired O'Donnell AFTER his shares vested rather than before, and the arbitrator considers it fair and equitable that O'Donnell get a portion of his stock vested, that was what he was awarded, in recognition of the fact that Bungie did not deal fairly with O'Donnell.

I think it's also worth noting Marty had the chance to claim vested shares and have a say in the company, and chose not to. If that was because he doesn't want to try to push people around that don't want him involved, or because he doesn't want to deal with them at all, or because because of the larger cash value, no one can say but him.

I'm guessing it's more useful to him to roll into Highwire; I also believe he is still eligible for the profit participation plan in the future.