June 7, 2005

Arbitrator Makes Preliminary Ruling In The Trade News Vs New Destiny Dispute

Judge's ruling on PDF. Background on the dispute. XBiz reports.

I spoke to Spike at Homegrown. He said the judge's ruling is muddled and he doesn't think it is a victory for either side.

"It was a very confusing ruling," said Spike Tuesday afternoon. "I am going to have to have you talk to Dave [Olsen]. We've got an audit of all his [Ron Levi's] stuff, so to me, that's a victory. I don't see what we got that was a victory either."

Ron Levi responds: "The Arbitrator's ruling is not muddled or confusing, it's very clear. There was no copyright infringement, there was no evidence of a shave, the assignment to Trade News was valid. All other allegations were dropped. There will be an audit, if the audit comes up in our favor, and it will, they will be further ordered to pay a portion of our legal bill and probably the expense of the audit. It's just like I said it would be when this all started, a contract dispute, no wrongdoing. Homegrown made some very damaging public statements about me personally that have been proven to be not true."

I remember when I first read Homegrown's initial filing in this case (March of 2004), I thought that Ron Levi had to be a crook. Then the legal paperwork piled up and I was glad I didn't need to give an opinion, because I was out of my depth.

I got this press release Tuesday afternoon from Ron Levi's team:

Trade News and Voice Media Vindicated, Ron Levi Pleased with Judges Ruling

(LOS ANGELES) -- June 7, 2005 -- Trade News and other Defendants who were sued by New Destiny Internet Group, LLC the parent company for Homegrownvideo.com are extremely satisfied with an arbitration Judge’s Interim Order issued today that categorically rejects HGV’s claims of copyright infringement, invalid assignment, and other alleged related wrongful conduct and that finds no monetary award against the Defendants. (See page 7 of the Interim Order).

Trade News requested early on in the process that an independent audit be performed (See page 8 of the Interim Order).

New Destiny opposed any such audit at the time Trade News requested it (See page 8 of the Interim Order which states that "Trade News' request was opposed by New Destiny") - now the arbitrator has embraced Trade News' request and ordered an independent audit with the costs of such audit to be divided evenly by both sides.

The Arbitrator's Order rejected New Destiny’s other claims against Defendant Ron Levi.

"We are pleased that the Arbitrator has rejected New Destiny's core claims of Copyright Infringement and Invalid Assignment. Voice Media and Trade News look forward to complete and total vindication and finality in this case once the independent audit is completed" says Ira Rothken defendant's counsel.

I call New Destiny's attorney Dave Olsen. "I got a press release from Ron Levi's [team] claiming victory," I say.

Dave: "He should read the opinion a little more carefully then. The judge has ordered an audit on the shave claim. The judge did deny the infringement claim. The judge is going to appoint an auditor to look at the books and then there will be a final opinion.

"He denied their cross-complaint in its entirety.

"It's your standard mixed-bag-decision."

Ira Rothken, attorney for Trade News, calls me back at 3:31pm. I've gone through several headlines by this point as I try to process and upload the story in real time.

Ira: "The headline [then] reads: 'Arbitrator Requires Audit.' We were the one who requested the audit and they opposed it. In his own ruling, the arbitrator points out that we requested it and he finally gave it to us.

"This is a further manifestation of the spin you saw from day one in this case."

Luke: "I'm processing stuff as it comes pouring through in real time."

Ira: "I will applaud you though. The technique you use allows you to scoop everybody else known to mankind by using this real-time blog approach. It kills modern media."

Luke: "It has its weaknesses."

Ira: "It has its weaknesses, but after criticizing you, I'm going to applaud you too, because no one can compete with this."

Luke: "What's the most important thing that comes out of this preliminary ruling?"

Ira: "With the exception of the arbitrator embracing our request for an independent audit, the complainant loses every other claim: copyright infringement, invalid assignment, trademark, bad customer service claims. Every one of these claims were rejected by the arbitrator after he had a robust trial on the merits. We had witnesses who were cross-examined, who gave testimony under the penalty of perjury.

"Ron Levi, Trade News, and Voice Media are very happy with the arbitrator's interim ruling. We look forward to this independent audit so we can have total finality.

"It is our view that the independent audit is going to further confirm the arbitrator's initial view -- that the plaintiff was paid what was owed them. The arbitrator points out that they [New Destiny] have not proven there were any underpayments made.

"Furthermore, it is likely in our view that an independent auditor is going to find that Trade News overpaid New Destiny. We're certainly going to ask the arbitrator to give back any overpayment."

Luke: "Did they dismiss any of your claims? Your cross-complaint?"

Ira: "Our cross-complaint was at its core a declaratory relief case asking the court to declare that we are not in copyright infringement, the court did that, that we're not in trademark infringement, the court did that implicitly... That we did not breach the contract by providing poor customer service. The court granted our declaratory relief on that because whatever claims were discussed were rejected.

"For the plaintiff to say that our cross-complaint wasn't successful is misleading... We did ask the arbitrator to award to the respondents any over-payment. We expect to get those. We also requested costs and attorney fees. We're optimistic about getting those."

Luke: "Did anything surprise you in the judge's ruling?"

Ira: "No."

04/05/16

Sex.com Rolls Out Info On The Homegrown vs Voice Media (Ron Levi) Lawsuit

Why is Sex.com owner Gary Kremen publishing this? Because Ron Levi (Voice Media) won't return his phone calls.

I think there's bad blood between Gary and Ron. When Gary won back sex.com in late 2000, I think I told him that Ron Levi would be the best person to run the site for him at maximum profit with least litigious risk. But Gary didn't want someone else to run his site. He wanted to be hands on. Gary met with Ron and drove Ron crazy.

Gary eventually handed sex.com over to Yishai Habari for three months before yanking it back and going through various gyrations to the place it is today. Ron Levi felt like Gary had jerked him around. Ron can be the most charming guy in the world. He can also display a fearsome temper. Ron gave Gary's people a taste of his temper and resolved to not give Gary the time of day.

Now Gary's getting back at him.

When I spoke to Ron about this Homegrown suit a few weeks ago, he said it was inconsequential and that the matter was heading for arbitration.

I emailed Ron a few days ago to follow up on all this but I did not receive a reply.

According to sources unfriendly to Ron Levi, the reason he and CECash and Trade News and company settled with Acacia is that CE has loose books. He doesn't want an audit of Voice Media, CECash, Trade News, etc. According to my sources, Ron Levi said this in a meeting with Spike Goldberg, Jim Coles, Greg Klamen, Norm from Matrix. "We all keep our books loosy goosy." Greg, Jim and Spike say no. We have no problems with audits. That shut down the argument. Ron was trying to get Homegrown to settle with Acacia.

Here are excerpts from the TRO (Temporary Restraining Order) request by Homegrown AKA New Destiny:

Plaintiff New Destiny...entered into an agreement with the principal defendant, Voice Media... The Defendant was to provide marketing and credit card processing for the site [www.homegrownvideo.com]. The Agreement, which provides for a 50/50 split of membership revenues derived from the site...

As plaintiffs recently learned...in May 2001, the Federal Trade Commission lodged a formal complaint against the Defendant and its principals regarding Defendant's egregious "deceptive acts and practices" it utilized in marketing and administrating adult internet sites. Defendant agreed in a consent decree still in effect to notify its agents, among others, of the consent decree. Defendant, however, did not notify plaintiffs of consent decree and thus continued to market and administer the Site. As will be demonstrated below, defendants are now engaging in the very acts prohibited by the consent decree in purporting to administer the site.

4. Defendants wrongful conduct in this matter and the resulting outrage from the public and damage to plaintiff's reputation

In late 2002, Defendant stopped providing monthly accountings to New Destiny for an extended period of time and New Destiny thereafter learned in August, 2003, that there were several thousand more registered members of the Site than reported to New Destiny by Defendant or for which New Destiny was receiving its revenue split.

[On November 7, 2003, the plaintiffs, through counsel, requested an audit. The Plaintiff alleges the Defendant threw up all sorts of roadblocks to getting an honest audit.] Even the limited and incomplete audit that New Destiny was permitted to conduct, however, revealed or confirmed serious wrongdoing by defendants, including that New Destiny was not being paid its share for thousands of users of the site.

Rather than addressing the legitimate concerns raised by New Destiny, the defendants, knowing they had been caught with their hands in the cookie jar, apparently decided to try to cover their tracks while at the same [time] implementing a plan to gouge unlawfully members of the site for as long as they could. Defendants, for example, first advised New Destiny that they were "purging" the site of some 10,000 members. Not surprisingly, plaintiffs thus began to get complaints from customers who had their memberships canceled with no notice...

In addition to complaints relating to defendants unlawful "purging," plaintiffs began to receive an avalanche of angry complaints from other members who: (1) were being double-billed for their memberships or for unordered services (2) were improperly enrolled in other internet sites when they signed up for the Site (3) were being billed for memberships to the Site after expiration of "free trials" without conspicuous notice of this practice...and/or (4) could not reach the bogus customer service numbers or emails disseminated by defendants... The following emails, for example:

"Going through my bank statement, I suddenly saw a charge show up of 49.95... It took a while to find out that Jettis [Premiere] had billed my card for a full membership to homegrownvideo.com. To say the least, I was not only stunned but furious that my card number had remained inside your/their system, even after cancellation and no attempts to access the site for over three months..."

"I signed up for the 3 free days and cancelled before the 3 days was up... I was then billed $49:95 on January 20, 2004 and again on January 30, 2004. I have tried repeatedly to speak to someone about this...never a call back, not able to leave a message."

"I tried to cancel my membership. I was redirected to transsecure.net, where I was given the choice to cancel subscription to 'Party Sluts,' a site I have never visited, let alone belonged to."

"I have been double billed by your credit card company. They agree they have double billed me but have refused to credit my account. They told me that the only solution is to refuse to pay my credit card bill and accuse them of fraud..."

"Just a question. I cancelled my subscription and noticed that my credit card was immediately charged for two months. Why is that?"

Defendants shifted to off-shore accounts due to the high charge-backs caused by their aggressive billing practices. Plaintiffs fear that at some point the credit card companies will catch up with the defendants and bar them from obtaining another merchant account. If that happens, the sanction could likely apply to all web sites represented by the defendants, including the Site.

In this arbitration claimant New Destiny Internet Group [Homegrown] presents claims for copyright infringement and related relief against respondents Voice Media Incorporated, its trustee Ron Levi, Trade News NV, and Internet Business Services, LLC. New Destiny originally asserted its claims in an action in federal district court, but that court held that New Destiny was bound to arbitrate its claims.

Claimants move for a preliminary injunction, and for leave to amend their demand in arbitration to add alter ego claims against respondent Ron Levi. They originally sought relief in their federal action, but the federal court ruled that they should pursue injunctive relief in the arbitration, and struck the motion to add alter ego claims against Mr. Levi.

The arbitrator has carefully considered the briefs and materials filed, and the oral arguments. The following is the abitrator's statement of reasons and ruling.

INJUNCTION. New Destiny owns an adult entertainment internet website and a copyright web page called the "Homegrown Video Web Site Tour," used to market the web site. In January 2000 New Destiny entered a written agreement engaging VMI to market and provide credit card servicing for the website, and granting VMI a non-exclusive license to use the tour. The Agreement specified that "neither party may, without consent of the other party, assign any of its rights or delegate any of its duties or obligations under this Agreement." New Destiny offers evidence that: VMI violated the non-assignment clause by purporting to assign the website tour to Trade News; Trade News has been displaying the website by copying it on its own computers and making it available over the Internet without New Destiny's authorization; the web tour still resides on the Trade News server; Internet Business is handling all of the financial administration of Trade News's use of the website tour.

Under the federal standard, an injunction is available if serious questions are raised as to liability, and the balance of hardships tips in favor of the party seeking the injunction. Trade News argues forcefully that its discontinuance of use eliminates the need for any injunctive relief, but New Destiny's recent evidence of continued use undermines confidence that Trade News has completely ceased the alleged infringement. Further, little hardship to Trade News can flow from an injunction against conduct it claims already has ceased. And, the arbitrator finds, while acknowleding that final decision must await a full hearing on the merits, that serious questions have been raised concerning liability.

TO respondents Voice Media Incorporated, Trade News N.V., Internet Business Services, LLC, and Ron Levi:

You and each of you, and your officers, directors, trustees, agents, servants, employees, and attorneys, and those persons in active participation with you or them, are restrained and enjoined pending arbitration or resolution of this proceeding from: the "Homegrown Video Web Site Tour..."

I did a conference call Tuesday afternoon with (the carefully spoken) Spike Goldberg, Homegrown CEO, Farrell Timlake (loose cannon), and their attorney Dave Olson (who speaks like an attorney).

Dave: "We had a hearing this morning before Judge Neal. It was a motion filed by the defendants the night before the injunction hearing. It was a motion to allow the JAMS people [abitration people] to retain the proceeds to which New Destiny [Homegrown Video] from the ongoing operation of the Homegrownvideo.com Web site. They were taking our share and saying, you should hold on to it because it is in dispute, as opposed to paying it over to us.

"I cited a case that said that it would be 'contrary to law and sound morals to permit a party to repudiate his obligation while retaining consideration he has received.' They're performing the agreement. They're making money off the site. They're obtaining the benefits of the agreement. It would be immoral for them to do that without paying us that to which we were entitled under the agreement."

"That we will keep getting our money going forward until we have a final resolution of this matter."

Farrell: "It also means that their strategy of trying to bleed us by not giving us the cash... They think we're totally beholden for whatever income we're making. It's just a way to force us to stop. Now they'll see that they will have to give us these checks and these checks will go right into sustaining our legal proceedings against them."

Spike: "For an organization that went out and told everybody that they had stopped doing stuff for the Homegrown site, I find it funny that they need to go to the effort to try to keep monies that, according to their press releases, they don't really care about."

Dave: "In fairness, they claim to have stopped signing up new members. They spun it as if they were terminating the relationship. They are continuing to operate and service existing members on their end to make money from them. We thought this was a transparent attempt to bleed us dry during the litigation by not paying us the money to which we were entitled.

"We have that mediation coming up next week. If we can't get it done there, we will gear up on the discovery aspects of the case and prove up the damages."

Farrell: "We had sympathetic people lining up [at Internext] to share sob stories with us."

It's fun listening in while the three guys go back and forth. Farrell pops off, Spike declares what he said off the record, and Dave cuts in with lawyer talk.

Spike: "Our lawsuit paves the way for people to be more honest in this industry. I hope we see the days of shaving and fraud in the rear view mirror and people deal with each other on ethical grounds."

Spike: "For an industry I plan to spend the rest of my days in, I would like to see it be more than it is."

Farrell: "We'll offer a road map for people to audit their programs and find out whether they are really getting what they should be getting."

Dave: "They're great rulings for us. It was the injunction we were seeking that's been bitterly contested since day one. And we have the ability to hold [Ron] Levi personally responsible. These were our first two goals in the litigation. Now we're going to focus on proving up the damages.

"We're going to have a mediation August 24. If we can't resolve it, we'll gear up on our discovery, on the damage elements and on the alter ego claim to tie Levi in as the alter ego of Voice Media."

"Not at all so far. We conducted an audit in January. They didn't produce records. We have discovery responses due this week. They've indicated they need an extra 30 days. I have not agreed to that. For the time being, we haven't gotten anything from them. I anticipate it will be a battle but we will get what we need.

"They made a big announcement that they had stopped using the [Homegrown Video] tour and that they had stopped signing up members. We showed Judge Neal that as of July 20th, the day my reply brief was due, that not only were they using it, but they had tour up on one of their sites, I think it was f-ckforcash.com. You clicked to join Homegrown off the tour and you got signed up for Amateur Bitch and one of their other sites. Not only were they using it, they were using it in a way that was egregious not only to the end user, and their supposed partner [Homegrown]."

"Has the Federal Trade Commission gotten in touch with you guys to take advantage of some of the information you've gleaned?"

"We've done discovery on that. We'll find out when they give us the information they're supposed to."

I am an equal opportunity idiot in reporting this case. I have misspelled the names of both CE's and New Destiny's attorneys. It is Ira Rothken (CE) and Dave Olson (ND).

"That ruling was a motion that the CE Cash defendants brought for the court to give it guidance on what it should do with the revenue share arising out of the contract between CE Cash and New Destiny [Homegrown Video]. The court said that it didn't think it was necessary for the defendants [Voice Media, Ron Levi, et al] to deposit the money with JAMS [the abitrator]. That it could make its own election on what it wants to do with the monies."

"It was a benign ruling that maintained the status quo. We were trying to be creative because we wanted to show good faith. Normally in a case like this one, where the plaintiff (New Destiny) is claiming there is no contract, it's rather unusual for them to walk into court and argue that they want to be paid under a contract. We were asking the arbitrator for some guidance and he gave us the guidance. He didn't think setting up a fund was necessary. There was no time when we wanted to keep monies from New Destiny. We were dealing with a moving target and we were seeking guidance from the arbitrator."

"New Destiny filed suit. They were claiming to the federal court that there was no contract. Fortunately, the federal court ordered the case to arbitration, persuant to a contract.

"Then New Destiny came in with this theory that CE Cash was infringing on their copyrights with the Homegrown Video tour join pages. Yet New Destiny does not explain how it is it could be a copyright infringement when the tour and join pages were located on a domain name tour.homegrownvideo.com that was under the exclusive control of New Destiny. We're still trying to figure out if there's any there there.

"New Destiny keeps running to the industry press and trying to spin it in a way that's embarrassing to the defendants, even though there has been no ruling on the merits of this case whatsoever."

"Wasn't there an injunction granted against Trade News (CE Cash) using New Destiny's copyrighted tour?"

"That was not a ruling on the merits. New Destiny wanted to terminate its relationship with CE Cash. In an effort to wind down the thing New Destiny wanted, CE Cash started winding down relations and removing links without any orders. CE was acting consistent with what New Destiny wanted.

"When it came time for a hearing on a motion for interim relief (not a preliminary injunction even though it is couched in those words), the argument made by CE Cash was a simple one. We said the issue is moot. We have honored their request and removed everything. The arbitrator in essence said that if you've removed everything, it wouldn't be any kind of burden on you to agree to this interim order because there was a single manifestation multiple levels deep that occurred.

"The arbitrator was careful when he made his order. There's no ruling on the merits."

"Until it was mentioned to you by the plaintiff, it was supposed to be a confidential session. Apparently they are trying to use you and possibly other media as a conduit to us. We're going to keep saying bad things about you in the press unless you pay us money. I don't think that is a healthy way to resolve this disagreement.

"CECash always discouraged, when it has a conflict with any of its business partners, they are particularly upset about this conflict because CECash believes it has done nothing wrong and that the statements being made in the press are absolutely disproportional to the level of any possible disagreements they have."

"When I read the New Destiny application for a TRO (temporary restraining order), I thought, holy cow, this is horrific. I don't have a dog in this fight, but I read that application for a TRO, and I thought, CE and Voice Media have been doing horrible things."

"Right. Every single thing that was mentioned in their TRO application was refuted. There are two sides to every coin. If you only read the Plaintiff's side, then the Plaintiff is going to win every case.

"If you want to raise any issue right now, I could tell you in two seconds the defendant's position on it because in every single instance it is refuted. They're going to complain there were customer service problems... When the complaints were analyzed, one realizes that there were many complaints from few people. The vast majority of them were not legitimate. They were from people who had been terminated for failing to pay. They were people who were terminated because their credit cards no longer worked. There were a few complaints that were legitimate but within the bounds of commercial reasonability. And those concerns were addressed.

"In any kind of commercial field, one cannot have perfection in the way one handles customer service. But one shouldn't elevate the lack of perfection into being something evil and bad. In our view, that's what is happening here.

"The most eye-catching part of the TRO request, which was denied, was the allegation that the CECash was violating its agreement with the FTC."

"False. Those were refuted. If you look at our declarations made under the penalty of perjury, it was stated under oath why those allegations were wrong and how CECash was in absolute compliance. The mechanism criticized by the plaintiffs was the one endorsed by the FTC. That's in the declaration in opposition."

"We could get you the PDF files, but we don't want them published. We don't want to try this case in the press. The main reason I spoke to you was after reading what was on your site, there was such a lack of symetry, that the only way to fight words was with words. The last thing we want to do is to have postings of all the pleadings and to have links to them all over the Internet. We're trying to resolve the dispute, not to create a legacy of the dispute propagated virally all over the Internet.

"If they had a serious dispute, they should try to settle it in arbitration, rather than go over the most minute motions and run to people in the industry, sites like yours and others, to try to get public relations. They would handle the case on the merits. It seems to me that they are more interested in getting ill will towards CE Cash and to Ron Levi than to actually work on the case before the arbitrator or to try to resolve the case amicably. It makes one wonder about the wisdom of CE Cash getting into business with New Destiny in the first instance.

"Even if one has a good faith controversy, one should exercise restraint before going to the media over what appears to be nothing more than a contract dispute."

"Are we likely to find out from this dispute who owns Trade News? I'm sure you know but I don't know. [I think it is David van der Pool of Python.]"

"That's probably public information. The shareholders of Trade News own Trade News just like the shareholders of any other dotcom own the dotcom. Whether those shareholders indicate how many shares they have and who they are can wait another day."

"I'm curious who owns Trade News and what percentage, if any, Ron Levi owns."

"What I hold at Charles Schwab, why would that be interesting? I see that as being more of a privacy intrusion than anything else when a company is not publicly traded. What is more interesting is who the officers might be and is Trade News doing a good job for their customers."

"Trade News is definitely number one or close to it at what they do. [Meaning that they are about the biggest and pay out more money than almost any other webmaster program.]"

"That's what is so disheartening about this whole thing. We're having this information from the plaintiffs spewed out on these various journalist sites on the Industry and people are making the assumption that just because someone moves for a TRO, they're right. Just because someone obtains a preliminary injunction, the game is over. Therefore, they win.

"There hasn't been one sworn witness yet. There hasn't been any finding on the merits. The preliminary injunction is nothing more than a label."

"If it is by settlement, who knows when that will occur, especially after reading in the press that the plaintiff suggested they were ripped off by $10 million. That is false, but they said it anyway, hoping people will believe it.

"We apparently have a date for the second quarter of 2005 for a hearing on the merits with sworn testimony. That will be the equivalent of a trial date. Until then, unless there's a settlement, it's likely that nothing matters that anyone says. My hopes are that everybody will avoid passing judgments.

"It does not pass the giggle test to say there was no contract when, even after alleging there was no contract, New Destiny continued to maintain the integrity of the traffic to tour.homegrownvideo.com. If they thought there was copyright infringement going on on pages that manifested on that domain name, they could've sent [that traffic] anywhere else in the entire world including their own tour and join pages. They didn't do that."

Federal Court Grants Homegrown Video Injunctive Relief Against Voice Media/Trade News

I called Ira Rothken, who represents Trade News and Voice Media. "Is this anything new?"

Ira: "It's absolutely nothing new. It's just a desire by the Homegrown people to keep kicking new things into the news that are not really news. Months ago, we stipulated, at the request of Homegrown, to not advertise Homegrown as part of an affiliate program. Many months ago, those links were removed. We still believe that when we have a trial on the merits that the defendants, Trade News, Voice Media et al, are going to prevail. There's no news here."

Ira: "I wouldn't think so. We are supposed to have our hearing, our arbitration AKA so-called trial, in April of 2005. So far there have been no witnesses, no depositions, no cross-examinations, no discovery. All that is going on right now is agreements between the parties to maintain the status quo. Then the courts come in and embrace those agreements, sometimes calling them nasty names like 'preliminary injunctions' or 'interim relief.'

"It's surprising that they would write such a thing when we are all trying to cooperate while litigating the case."

New Destiny/Homegrown Video attorney David Olsen writes: "It is pure and myopic spin to argue that today's ruling is "nothing new" or represented some agreement of the parties. Defendants vigorously opposed this injunction just as they unsuccessfully vigorously opposed the New Destiny injunction issued by Judge Neal. They filed hundreds of pages of documents in opposition. In fact, Judge Marshall literally had to cut off opposing counsel after he argued on and on against the injunction. This was a ruling on the merits based on extensive evidence, declarations, and briefing submitted to the Court. The Court rejected every argument asserted by defendants as to why Trade News should be permitted to continue using the Homegrown Video trade mark."

WHO: New Destiny Internet Group/Homegrown Video
WHAT: Arbitrator Denies Motion to Continue Arbitration Hearing Filed by Ron Levi, Voice Media, Inc., Trade News NV, and Internet Business Services
WHEN: March 1, 2005 On March 1, 2005, the Honorable Richard C. Neal (Ret.), JAMS, denied a motion previously filed by respondents Ron Levi, Voice Media Inc., Trade News, and Internet Business Services to continue the New Destiny Internet Group arbitration hearing for six months. With this ruling, the hearing remains on calendar as scheduled for the week of April 18, 2005.

Respondents sought a continuance based, in part, on the notion that the pending litigation filed by Acacia Media Technologies against New Destiny and others in the internet industry could impact New Destiny's legal action against respondents, as to both liability and damages, and should be decided first.

New Destiny vigorously opposed the attempt to delay the hearing and contended that the Acacia litigation was irrelevant to any issues to be decided in the pending arbitration and to damages.

New Destiny's attorney, David S. Olson of Kulik, Gottesman, Mouton & Siegel in Sherman Oaks, stated that "the hearing date was agreed to by all parties last June, as Justice Neal noted. We have been litigating this case in federal court and the arbitration forum for over a year now and we are ready and very anxious to put on our case for Justice Neal. One would think the respondents would also be clamoring for the earliest chance to put on their defense if, as they claim, they have done nothing wrong and have fully paid New Destiny its share of revenues generated by the homegrownvideo site."

Spike Goldberg of New Destiny attended the hearing and stated "Justice Neal articulated that he thought the motion was a 'concoction.' We were not surprised that respondents tried to delay the hearing. Fortunately, this effort failed. We look forward to having the hearing in April, as planned."

Ira Rothken, who represents Ron Levi, Voice Media and Trade News Corp in their defense against New Destiny Internet Group/Homegrown Video, calls me back Thursday morning.

Ira: "There's always two sides to every story. New Destiny, about 60 days before the hearing date, had served the respondents [Ron Levi, Voice Media, Trade News] with over 1300 written requests for discovery. Each one would take 10-30 minutes to do.

"The respondents [Ira's clients] moved the court for both a protective order and a continuance. A protective order to prevent from having to respond to 1300 requests within 30 days and a continuance, in the event that we had to...

"The judge decided to grant the respondents [Ron Levi, Voice et al] a protective order. We don't have to respond to a single one of those 1300 discovery requests. He found them to be unduly burdensome and abusive and beyond the amount allowed by the rules of civil procedure in CA. That reduced the need for a hearing continuance.

"I'll get you the written order once the judge comes out with it, if I am allowed to.

"There is no written order yet. They're doing this from what they claim is an oral order. Once the written order [from the judge] comes out, it will be clear what happened.

"Before the judge ruled, they [Homegrown] said, judge, in our second amended complaint, there's an allegation that we're suing the respondents over an Acacia issue, namely, the respondents doing a deal with Acacia to get a license to cover the Homegrown site. They said, judge, so you will not continue this case, we are going to remove that allegation.

"They, in essence, gave us a victory by dismissing with prejudice their Acacia claims against Trade news for unfair competition. But they don't mention that in their press release.

"The last thing the judge said, which is quite telling, was that if other parts of the Acacia issue arise during the arbitration hearing, he will deal with on an issue-by-issue basis at that time, and nothing about him not granting a continuance precludes us from raising it as a defense.

"If New Destiny's obligation under its agreement with Trade News was to stream videos to consumers, and they weren't allowed to do that because they were infringing on someone's patents, it wouldn't pass the giggle test for them to run to court to try getting damages for something they couldn't do.

"What's most telling about this press release is what it's missing. My clients look forward to defending themselves at the arbitration.

"Normally people don't issue press releases until a judge has given a written order. The judge is allowed to change his mind up until the time of the written order. He takes the matter under submission. He does give his tentative rulings."