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LOS ANGELES (Hollywood Reporter) - Video-sharing sensation Hulu and founding investor NBC Universal were sued Tuesday by a Canadian company called Hulavision, which claims NBCU executives stole its trademark and trade secrets after meeting with its founder.
Hulavision and principal Errol Hula claim that the company developed technology to deliver television programs directly to viewers online. Hula then met with NBC Universal business development executive Raymond Vergel de Dios at a Las Vegas trade show and was invited to have further discussions about working together. In the spring of 2006, Hula and NBCU allegedly signed a nondisclosure agreement, after which Hula revealed his company's business model, marketing strategy, product road map and a "shared revenue model chart" that included valuable trade secrets.
"At no time did Mr. Vergel de Dios inform Hula of any potential plans NBC had of its own for the development of any project similar to Hula's or that it had any interest other than possibly to form a business relationship with Hula if the Confidential Information to be disclosed was of interest to NBC," according to the complaint.
In March 2007, NBCU and News Corp. announced the creation of the service that would later be named Hulu, which Hula says is a "nearly identical" adaptation of Hulavision. The company claims that Hulu rips off nearly everything about Hulavision, right down to its name.
"Hula's Confidential Information demonstrated why using the name Hula or Hulavision was beneficial and valuable and how the concept and plans could be carried out in the market with the challenges posed," the complaint says. "Hula's Confidential Information demonstrated to NBC how and why the project would work."
An NBCU spokesperson said, "The case has no merit and NBC Universal will vigorously defend against it."
This isn't the first time Hulu has come under legal fire. Internet publisher Lulu sued Hulu for trademark infringement, but that case was settled.
The new complaint asks for unspecified damages on causes of action for misappropriation of trade secrets, breach of contract (the nondisclosure agreement), breach of implied contract, breach of a confidential relationship, unfair competition and unjust enrichment.
It also says there is already an arbitration pending from last July between Hula and Hulu on the same issues, and Hula's goal in filing suit is to preserve its rights should the contract at issue (and the arbitration clause therein) be deemed void.