Deadbeats Staton Techiya LLC and King & Spalding LLP Owe Prolifogy Over $134,000
On April 11, 2024, software experts from Prolifogy Inc., including Dr. Cory Plock, were retained by King & Spalding LLP and Staton Techiya LLC to perform consulting services in the matter of Case 2:23-cv-00319, being tried before Judge Rodney Gilstrap in the Eastern District of Texas. Unpaid invoices totaling $134,687 for work performed by Prolifogy employees in the months of May and June, 2024 were generated as a result of said consulting services. These fees included tens of thousands of dollars of New York City travel expenses footed by Prolifogy employees at various points in time, including airfare from California, months of hotel fees, meal expenses, parking fees, and rideshare services. In addition to the $134,687 owed by Staton Techiya LLC and King & Spalding LLP, additional tens of thousands in commissions are also due to Expert Research Group, an expert witness services broker.
Consulting Services Performed by Prolifogy
The general nature of the work performed during Prolifogy’s performance of the consulting services was a source code review of several Samsung earbud products at issue in the case. The work product generated during performance of the consulting services included the creation of spreadsheets and narrative descriptions concerning how certain aspects of certain Samsung earbud products were implemented in source code software or firmware, and how they were believed to read onto the claims of several asserted patents, including United States patents 11,610,587, 11,659,315, 11,665,493, 11,683,643, 11,750,965, and 11,710,473. The spreadsheets and narrative descriptions generated by Prolifogy Inc. during the course of its software consulting services, included source code citations to Samsung source code, which was later made available in the form of Bates-stamped source code printouts.
Use of Work Product in Infringement Contentions
Prolifogy’s best understanding of the motivation for King & Spalding’s request for Prolifogy to perform said consulting services was so that aforementioned source code citations (which is to say, work product generated by Prolifogy) could be inserted into Staton Techiya’s amended infringement contentions for filing with the court shortly after the conclusion of Prolifogy’s work engagement on June 7, 2024. Indeed, court filings show that on June 10, 2024, the following notice was issued to the Eastern District of Texas court: NOTICE of Discovery Disclosure by Staton Techiya, LLC Plaintiff’s Notice of Service of Amended P.R. 3-1 and 3-2 Disclosures (Friel, Thomas).
Since the performance of the consulting services, two invoices totaling $134,687 were generated and sent to Expert Research Group for final presentation to the Staton Techiya LLC client on June 1 and July 1, each having 30-day net terms. Ample and sufficient time has elapsed since the due dates of these invoices that the account is now, indisputably, in a grossly delinquent state, and that Staton Techiya LLC is therefore not entitled, and never was entitled, to the use of Prolifogy’s work product generated in May and June 2024, in furtherance of Case 2:23-cv-00319 by virtue of King & Spalding’s June 10, 2024 court filing. Prolifogy reiterated to Roy Falik of King & Spalding LLP on August 20, 2024, that the work product belongs to Prolifogy until such time as the invoices are paid in full. Nevertheless, attempts to access Prolifogy’s work product by King & Spalding LLP were made on at least September 18, 2024.
The seemingly arbitrary withholding of funds by Staton Techiya LLC has not only created a potential unjust enrichment claim for Prolifogy Inc (should Staton Techiya LLC prevail at the conclusion of Case 2:23-cv-00319), but has already created irreparable financial harm to Prolifogy in numerous ways. Among the losses suffered by Prolifogy include funding employee payroll expenses including reimbursing travel expenses (without Prolifogy itself being paid), negotiating for and obtaining additional lines of business credit, suffering the additional interest and administrative expenses of said lines of credit, renegotiating terms of existing contracts to backfill at least some cash flow shortages, loss of future business opportunities due to adverse credit reporting, and time and expense of efforts undertaken to remediate said adverse reporting, seeking faster payments from other more fiscally responsible clients thereby causing embarrassment and reputational damage, the health impacts of physical stress and associated medical costs of Prolifogy stakeholders, and loss of business due to the remediation of the adverse effects of Staton Techiya LLC’s non-payment, rather than focusing on revenue-generating engagements that pay on time. Additionally, inflation further eats away at the value of the amounts owed as every week passes. In the future, it may come to pass that Staton Techiya LLC celebrates a patent lawsuit victory at the expense of Prolifogy Inc. and its employees.
Conclusion
It is Prolifogy’s understanding that King & Spalding may have hired additional unsuspecting experts to perform similar source code review services generally relating to a new round of products introduced into Case 2:23-cv-00319 since Prolifogy’s source code review in May and June. The unauthorized attempted access to Prolifogy’s work product on September 18, 2024 could have been related to feeding Prolifogy’s work product findings to its new experts.