OTX Complaint Against Screen Engine

1 Dawn M. Coulson, Esq.
(SBN 154085)
Casandra P. Secord, Esq. (SBN 237395)
2 EPPS YONG & COULSON LLP
333 S. Hope Street. 35th Floor
3 Los Angeles, California 90071
Telephone: (213) 613-2340
4 Facsimile: (213) 613-2344
5 Attorneys for OTX CORPORATION, a Delaware Corporation
8 SUPERIOR COURT OF THE STATE OF CALIFORNIA

9 FOR THE COUNTY OF LOS ANGELES
10
11 OTX CORPORATION, a Delaware Case No.:BC

EPPS YONG & COULSON, LLP
Corporation,,
333 S. HOPE STREET, 35TH FLOOR, LOS ANGELES, CALIFORNIA 90071
12 COMPLAINT FOR:
Plaintiff,
TEL (213) 613-2340 • FAX (213) 613-2344
13 (1) Misappropriation of Trade Secrets

vs. (Violation of Civil Code Section 3426,
14 et seq.);
RACHEL PARNESS, an individual; (2) Breach of Contract;
15 CHRISTINE V. PERAKIS, an individual;
SCREEN ENGINE, LLC, a California limited (3) Breach of the Implied Covenant of
16 liability company; KEVIN GOETZ, an Good Faith and Fair Dealing;
individual; and DOES 1 through 50, inclusive, (4) Breach of Fiduciary Duty;
17 (5) Breach of Duty of Loyalty;
(6) Violation of Labor Code § 2860;
18 Defendants, (7) Intentional Interference with
Contractual Relations;
19
(8) Intentional Interference with
20 Prospective Economic Advantage;
(9) Negligent Interference with
21 Prospective Economic Advantage;
(10) Conversion;
22 (11) Unfair Business Practices (Business
23 and Professions Code §17200, et seq.);
(12) Violation of Penal Code §§ 496 and
24 499c
(13) Conspiracy
25 (14) Unjust Enrichment
(15) Preliminary and Permanent Injunction
26
27
Plaintiff OTX CORPORATION (“OTX”), a Delaware Corporation, alleges as follows:
28
1
COMPLAINT
1 PARTIES
2 1. OTX is a Delaware Corporation duly licensed and operating under the laws of the
3 State of California with its principal place of business located at 10567 Jefferson Boulevard,
4 Culver City, California 90232.
5 2. OTX alleges, upon information and belief, that defendant RACHEL PARNESS
6 (“PARNESS”) is and, at all times herein mentioned herein, was a resident of the State of
7 California, County of Los Angeles.
8 3. OTX alleges, upon information and belief, that defendant CHRISTINE PERAKIS
9
(“PERAKIS”) is and, at all times herein mentioned herein, was a resident of the State of
10
California, County of Los Angeles. OTX alleges, upon information and belief, that PERAKIS is
11
owner and managing member of SCREEN ENGINE, LLC (“SCREEN ENGINE”)

12
4. OTX alleges, upon information and belief, that defendant SCREEN ENGINE is a
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13
14 California Limited Liability Company with its principal place of business located at 2118 Wilshire
15 Boulevard, Suite 480, Beverly Hills, California.

16 5. OTX alleges, upon information and belief, that defendant KEVIN GOETZ
17
(“GOETZ”) is and, at all times herein mentioned herein, was a resident of the State of California,
18
County of Los Angeles and is owner and member of SCREEN ENGINE.
19
6. OTX is ignorant of the true names and capacities of defendants, sued herein as
20
21 DOES 1 through 50, inclusive, and therefore sues these defendants by these fictitious names.
22 OTX will seek leave of this Court to amend its Complaint to allege their true names, identities and
23 capacities when ascertained. OTX is informed, believes and therefore alleges that each of the
24 fictitiously named defendants are responsible in some manner for the unlawful conduct alleged
25
and its effect and that their acts, conduct and omissions directly caused injuries to OTX.
26
7. At all times herein mentioned, OTX alleges, based upon information and belief,
27
that each of the defendants, in addition to acting for himself, herself, or itself and on his, her, or its
28
2
COMPLAINT
1 own behalf individually, is and was acting as the agent, servant, employee and representative of,
2 and with the knowledge, consent and permission of, and in conspiracy with, each and all of the
3
defendants and within the course, scope and authority of that agency, service, employment,
4
representation, and conspiracy. OTX further alleges on information and belief that the acts of
5
each of the defendants were fully ratified by each and all of the defendants. Specifically, and
6
without limitation, OTX alleges on information and belief that the actions, failures to act,
7
8 breaches, and conspiracies alleged herein and attributed to one or more of the specific defendants
9 were approved, ratified, and done with the cooperation and knowledge of each and all of the
10 defendants.
11
GENERAL ALLEGATIONS
12
OTX
TEL (213) 613-2340 • FAX (213) 613-2344
13
8. OTX is a leading consumer research and consulting firm specializing in research
14
15 products and analysis in the fields of marketing, entertainment and advertising. One integral
16 portion of OTX’s business caters to the motion picture industry. The consumer research and
17 consulting business for the motion picture industry is extremely competitive. Each year various
18 companies attempt to enter into this industry, but are unable to obtain a significant market share
19
because there are several obstacles to overcome. In order to succeed in this industry, a company
20
must have close connections in the motion picture industry, a deep understanding of the movie
21
industry and a history of research in the industry. The research history provides historical
22
23 averages (“norms”), a basis against which to compare the current research about a movie. Without
24 historical research (“norms”), a research screening company like OTX and Screen Engine, would
25 not be able to provide the information requested by the client (i.e. a comparison of the current
26
research results against similar movies). A company must also employ individuals who are
27
knowledgeable, experienced and accepted by members of the movie industry, which are very few
28
and far between.
3
COMPLAINT
1 9. OTX’s Motion Picture Group specifically caters to the film industry. The Motion
2 Picture Group is organized into three (3) divisions: (1) Creative Ad Testing; (2) Screenings and
3
Qualitative; and (3) Worldwide Tracking. The Screenings and Qualitative primarily conducts
4
screenings of movies, exit polls, and research analysis for the motion picture industry. Screening
5
events and exit polls allow OTX to collect valuable information, which is ultimately used by
6
OTX’s clients to, amongst other things, gauge audience reaction, develop marketing strategies and
7
8 generate publicity for a movie.
9 10. GOETZ was the President of the Motion Picture Group prior to his resignation on
10 February 25, 2010. Goetz was primarily responsible for business development, revenue
11
generation and the overall profit of the Motion Picture Group. Goetz initiated and maintained
12
client relationships for screenings and qualitative work, and moderated screenings and focus
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13
groups. Goetz was also in charge of and made final decisions regarding product development.
14
15 Kathleen Pielow Nash (“Nash”) was Goetz’ Executive Assistant.
16 11. Vincent Bruzzese (“Bruzzese”) is the Executive Vice-President of the Motion

17
Picture Group. Bruzzese is in charge of the day to day operations of the Motion Picture Group,
18
including all issues pertaining to structure, operations, employee complaints and training.
19
Bruzzese reported directly to GOETZ and, since GOETZ’ resignation, assumed all of GOETZ’s
20
21 former duties and responsibilities.
22 12. PARNESS headed the Screenings and Qualitative division of the Motion Picture
23
Group as Vice President. PARNESS reported directly to Bruzzese, although in reality, PARNESS
24
and GOETZ worked directly together on most matters related to screenings and qualitative.
25
26 13. As Vice-President of Screenings and Qualitative, PARNESS managed this
27 division’s finances and was primarily responsible for this division’s profit and loss. PARNESS
28 coordinated all internal resources in this division and had full access to all confidential and
4
COMPLAINT
1 proprietary information and trade secrets used by the screenings division. OTX alleges, upon
2 information and belief, that PARNESS maintained an electronic screenings folder that only
3
PARNESS could access that contained confidential and proprietary information and trade secrets,
4
such as clients list, contracts, agreements, and pricing information. The qualitative research team
5
also reported directly to PARNESS, although OTX alleges, upon information and belief, that
6
PARNESS did not have a working knowledge of research or the appropriate research
7
8 methodologies to use for a particular project.
9
14. PARNESS was also the primary point of contact for all incoming
10
screenings/qualitative projects. PARNESS was solely responsible for inputting new screenings
11
projects, and modifications to existing screenings projects, into OTX’s screenings status grid. The
12
screenings status grid is an excel spreadsheet that OTX uses to track all prior and upcoming
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13
14 screenings projects. The screenings status grid is critical. If PARNESS failed to input a screening
15 event into the screenings status grid, OTX’s staff would not know that they needed to work up this
16 screening event. If this were to occur, OTX could lose the screening, lose future business from
17
this client, and suffer damage to its reputations as a whole in an already competitive industry.
18
15. There were several key senior level staff members that reported directly to
19
20 PARNESS, including: (1) Alok Mishra (“Mishra”); (2) Robert Siegel (“Siegel”); (3) Paul
21 Cathcart (“Cathcart”); (4) Phillip Montgomery (“Montgomery”); and (5) Elizabeth Wallan
22 (“Wallan”). Neolani Durfee (“Durfee”) and Natalie Baack (“Baack”) reported directly to Cathcart
23
and, as such, were also under PARNESS’ supervision and control. Each of these employees
24
performs an important function and is integral to the success of OTX’s screenings business.
25
26 16. Mishra was the Senior Manager of Audience Recruitment. As the Senior Manager
27 of Audience Recruitment, Mishra was responsible for filling screening events with audience
28 members that satisfied specific demographic criteria requested by OTX’s clients. Mishra is a
5
COMPLAINT
1 valuable OTX employee due to his experience, skill and knowledge of the industry. Mishra has
2 also developed a close relationship with OTX’s recruiting staff over the years because Mishra is
3
the main point of contact for OTX’s recruiters. Mishra is also well-known in the screenings
4
business, and is one (1) of two (2) individuals trusted in the industry to successfully manage
5
recruiting efforts for screening events.
6
7 17. Siegel was the Senior Manager of Screenings Events. As the Senior Manager of
8 Screenings events, Siegel was responsible for overall event management and supervision at
9
screenings. Over the years, Siegel has also developed a close relationship with most of OTX’s
10
screenings clients. OTX’s clients know that a screening event will run seamlessly if Siegel is
11
present. Siegel is one (1) of two (2) people in the industry that can provide this level assurance.
12
TEL (213) 613-2340 • FAX (213) 613-2344
13 18. Durfee is a Senior Research Manager who is in charge of the night research team.
14 Durfee is responsible for processing data collected from screenings, which is ultimately used by a
15
team of analysts to prepare research analysis reports. The night research team is integral to OTX’s
16
success in the screenings business because it allows OTX to immediately process all of the data
17
collected at screening events and prepare research analysis reports for delivery to their clients by
18
the following morning. By processing data in-house, OTX is able to provide this service to its
19
20 clients. Durfee is extremely valuable to OTX because she is knowledgeable, experienced, and
21 talented at her position. Durfee produces high quality work, meets sensitive deadlines, and
22 effectively manages her team of freelance employees with little turnover.
23
19. Paul Cathcart (“Cathcart”) is a Senior Research Manager at OTX. Cathcart is in
24
charge of the research team and the overall quality of client deliverables, including data collected
25
26 from screenings and the final research report. Cathcart also develops the questionnaire for
27 screenings, answers client questions about research, builds the norms database, oversees special
28 research for screenings division, and updates the research methodology. Cathcart is very valuable
6
COMPLAINT
1 to OTX’s screenings’ division because it is difficult to locate an individual who is sufficiently
2 proficient in market research and client service to perform all of the duties required of this
3
position. Even if OTX were to locate an individual with Cathcart’s skill set, it would take OTX
4
several months to train another employee to perform Cathcart’s duties.
5
6 20. Elizabeth Wallan (“Wallan”) is the Screenings Operations Manager. Wallan is

7 responsible for maintaining the screenings database, which contains all of the contact information
8
for audience members who have attended OTX’s screenings events. Wallan also built and
9
designed OTX’s call blast system, which allows OTX to send out a screenings invitation to all
10
individuals in OTX’s screenings database. Wallan is also in charge of all production materials for
11
12 screening events.
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13 21. Josh Kash (“Kash”) and Terry Cavanaugh (“Cavanaugh”) are Focus Group
14
Moderators. Focus Group Moderators lead focus group discussions and are traditionally the main
15
point of client contact at screening events. Kash and Cavanaugh are two (2) of six (6) Focus
16
Group Moderators that are accepted by the major film studios. As such, Kash and Cavanaugh are
17
18 extremely valuable to OTX’s screenings team.
19 22. Blaine Vedros (“Vedros”) is one (1) of two (2) screenings supervisors at OTX, the
20
other being Siegel. Vedros is very charismatic and competent. As such, Vedros has developed
21
close relationships with OTX’s clients and OTX’s screenings and recruiting staff. Vedros is also
22
in training to become a focus group moderator.
23
24 23. Each of the employees mentioned herein are integral to the screenings division
25 because they have the skills, knowledge, experience and the relationships necessary to handle a
26
specific aspect of the screenings and qualitative research business. If OTX were to lose any of
27
these key employees, it would take several months, or in some cases years, to train another
28
individual to assume these key positions with the same degree of effectiveness. If all of these keys
7
COMPLAINT
1 employees left at once, OTX’s screenings business would not survive. Even if OTX were able to
2 hire and train replacements, the mass exodus of OTX’s key personal would signal trouble to
3
OTX’s clients and staff, and damage OTX’s reputation. The disruption alone would also have
4
caused OTX to permanently lose many of its clients.
5
6 24. To compete with other consumer research and consulting firms, OTX devotes
7 substantial time and financial resources to the development of confidential and proprietary
8 information and trade secrets, including but not limited to online research and marketing data,
9
other analytic data based upon or derived from such online research and marketing data and
10
information concerning the financial condition, proprietary technology and research products,
11
customer lists and pricing, prospective business clients, business development plans and strategy,
12
financial records, vendor/supplier lists, employment manuals, training materials, screenings
TEL (213) 613-2340 • FAX (213) 613-2344
13
14 attendee database, call blast system, employee and freelance contact lists, norms data, and various
15 screenings production materials.

16 25. In order to maintain its competitive edge in the consumer market research industry,
17
it is imperative for OTX to protect the secrecy of its confidential and proprietary information and
18
trade secrets, and to prevent the use and disclosure thereof by or to the public and its competitors.
19
Therefore, OTX expends substantial time and financial resources to maintain the secrecy of its
20
21 confidential and proprietary information and trade secrets. OTX does not disclose its confidential
22 and proprietary information and trade secrets to the public or its competitors, and did not do so at
23 any time relevant to this action.

24 26. OTX also implemented and enforces strict policies and procedures to prevent the
25
use and disclosure of its confidential and proprietary information and trade secrets by instituting,
26
among other measures, the signing of employment and/or Proprietary and Inventions Agreements
27
(“PII Agreement”) and the implementation of policies and procedures in OTX’s employment
28
8
COMPLAINT
1 handbook. The employment agreements, PII Agreements and employee handbooks not only
2 notify OTX’s employees of OTX’s rights related to its confidential and proprietary information
3
and trade secrets, but also obtain written assurances from its employees that they will not
4
disseminate OTX’s confidential and proprietary information and trade secrets to the public, or use
5
or disclose OTX’s confidential and proprietary information and trade secrets to indirectly or
6
directly benefit themselves or any of OTX’s competitors.
7
8 GEOTZ’ 2004 Employment Agreement
9 27. On or about January 8, 2004, GOETZ and OTX executed an employment

10 agreement wherein GOETZ agreed to serve as OTX’s Executive Vice President of Entertainment
11
Research – Screenings and Qualitative from January 8, 2004 through December 31, 2006, subject
12
to the terms and conditions contained therein (the “2004 Employment Agreement”). The 2004
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13
Employment Agreement is attached hereto as Exhibit “A.”
14
15 28. GOETZ’ duties and responsibilities as OTX’s Executive Vice President of
16 Entertainment Research – Screenings and Qualitative included, but were not limited to, (i)
17 implementation and supervision of OTX’s business plan for screenings, (ii) assistance with the
18 preparation and execution of OTX’s quarterly and annual budgets, (iii) management of screenings’
19
personnel, (iv) leadership of screenings business development, (v) management of relationships
20
with screenings clients, (vi) responsibility for driving screenings revenues, (vii) management of
21
screenings vendors and (viii) use of best efforts to seek innovations for screenings. See 2004
22
23 Employment Agreement Section 1.1(c) attached hereto as Exhibit “A.”
24 29. In order to prevent loss of its confidential and proprietary information and avoid an
25 employee later unfairly competing with OTX, Section 1.7 of the 2004 Employment Agreement
26
contains several restrictive covenants through which GOETZ recognized and acknowledged that
27
he had access to OTX’s confidential and proprietary information and trade secrets in order to carry
28
out duties owed to OTX. GOETZ agreed that he would protect the secrecy of OTX’s confidential
9
COMPLAINT
1 and proprietary information and trade secrets, and that he would refrain from the use, disclosure
2 and misappropriation OTX’s confidential and proprietary information and trade secrets for his
3
own benefit or for the benefit of another person, business or legal entity.
4
30. GOETZ and OTX further agreed that the restrictive covenants contained in the
5
2004 Employment Agreement shall survive the termination of GOETZ’s employment with OTX.
6
See Section 1.7(j) of the 2004 Employment Agreement. In executing the 2004 Employment
7
8 Agreement, GOETZ and OTX recognized and agreed that the terms and conditions set forth in the
9 2004 Employment Agreement, “including the restrictive covenants set forth in Section 1.7,” were
10 “critical to the operations of the [OTX’s] business.” See Recitals in the 2004 Employment
11
Agreement attached hereto as Exhibit “A.”

12
31. Sections 1.6(j) and 1.7(f) of the 2004 Employment Agreement provide also for the
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13
return of OTX’s property, including, but not limited to, all books, records, accounts, documents,
14
15 effects, money, securities, credit cards, and other property belonging to OTX upon termination of
16 GOETZ’s employment with OTX.
17 32. Section 2.2 of the 2004 Employment Agreement provides for the award of
18 reasonable attorneys’ fees and costs to the prevailing party in the event that an action or
19
proceeding is brought relating to, or to enforce any provisions contained in, the 2004 Employment
20
Agreement.
21
GOETZ 2007 Employment Agreement
22
23 33. On or about January 1, 2007, GOETZ and OTX executed another employment
24 agreement whereby GOETZ agreed to serve as President of OTX’s Motion Picture Group (“MPG”
25 or “Screenings Division”) from January 1, 2007 to June 30, 2009, subject to the terms and
26
conditions set forth therein (the “2007 Employment Agreement”). The 2007 Employment
27
Agreement is attached hereto as Exhibit “B.”
28
34. As President of OTX’s Screenings Division, GOETZ was uniquely responsible for
10
COMPLAINT
1 the success, operations, customer relationships, and business strategy of OTX’s Screenings
2 Division. GOETZ’s duties and responsibilities included, but were not limited to, (i) development,
3
implementation and supervision of OTX’s business plan for the Screenings Division, (ii)
4
assistance with the preparation and execution of OTX’s quarterly and annual budgets, (iii)
5
management of Screenings Division personnel, (iv) leadership of the business development of the
6
Screenings Division, (v) management of relationships with Screenings Division clients, (vi)
7
8 responsibility for driving Screening Divisions revenues, (vii) management of Screenings Division
9 vendors, and (viii) use of best efforts to seek innovations for the Screenings Division.
10 35. By virtue of GOETZ’s position as President of OTX’s Motion Picture Group,
11
GOETZ had access to highly confidential and proprietary information and trade secrets belonging
12
to OTX, including, but not limited to, online research and marketing data, other analytic data
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13
based upon or derived from such online research and marketing data and information concerning
14
15 the financial condition, proprietary technology and research products, customer lists and pricing,
16 prospective business, business development plans and strategy, financial records, vendor/supplier
17 lists, employment manuals, training materials, screenings attendee database, employee contact
18 lists, employee payroll information, research reports, norms data, and screenings production
19
materials.
20
36. In executing the 2007 Employment Agreement, GOETZ and OTX recognized and
21
agreed that the terms and conditions set forth in the 2007 Employment Agreement, “including the
22
23 restrictive covenants set forth in Section 1.7,” were “critical to the operations of [OTX’s]
24 business.” See Recitals in the 2007 Employment Agreement attached hereto as Exhibit “B.”
25 37. Furthermore, GOETZ agreed to the following restrictive covenants contained in

26 Section 1.7 of the 2007 Employment Agreement, which prohibits GOETZ from unlawfully
27 competing with OTX, using or disclosing OTX’s confidential and proprietary information and
28 trade secrets, and unlawfully soliciting OTX’s employees and customers:
11
COMPLAINT
1
2 “(a) Non-competition. The Employee recognizes and acknowledges
3 that his services to the Company are of a special, unique and extraordinary
4 nature that cannot easily be duplicated. Further, the Company has and will
5 expend substantial resources to promotes such services and develop MPG.
6 Accordingly, in order to protect the Company unfair competition and to
7 protect the Company’s proprietary information, the Employee agrees that, at
8 all times during the Restricted Period, the Employee shall not, directly or
9 indirectly (i) perform or provide managerial or employee services on behalf
10 of any Person which is engaged in, or plans to engage in, any business that
11 directly or indirectly competes with the Company’s Business within the

12 United States and Canada; or (ii) have any interest in any business that
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13 competes with the Company’s Business….
14
15 “(b) Confidential Information 1. The Employee recognizes and
16 acknowledges that he has access to Proprietary Information 2, which is a
17 valuable, special and unique asset of the of the Company’s business. In

18 order to obtain and/or maintain access to the Proprietary Information, which
19 Employee acknowledges is essential to the performance of his duties under
20
21
1
“Confidential Information” shall mean any information belonging to or licensed to the Company, regardless of form,
22
other than Trade Secrets, which is valuable to the Company and not generally known to competitors of the Company,
including, without limitation, all online research and marketing data, other analytic data based upon or derived from
23
such online research and marketing data and information concerning the financial condition, proprietary technology
and research products, customer lists and pricing, business prospects and strategic plans of the Company, MPG and
24
the Company’s Entertainment Divisions.” Section 1.8 of the 2007 Employment Agreement.
25 2
Proprietary Information” shall mean the Trade Secrets, the Confidential Information and all physical embodiments
thereof, as they may exist from time to time. “Trade Secrets” means information belonging to or licensed to the
26 Company, regardless of form, including, but not limited to, any technical or non-technical data, formula, pattern,
compilation, program, device, method, technique, drawing, financial, marketing or other business plan, lists of actual
27 or potential customers or suppliers, or any other information similar to any of the foregoing, which derives economic
value, actual or potential, from not being generally known to, and not being readily ascertainable or discoverable by
28 proper means by, other persons who can derive economic value from its disclosure or use. Section 1.8 of the 2007
Employment Agreement.
12
COMPLAINT
1 this Agreement, the Employee agrees that, except with respect to those
2 duties assigned to him by Company, the Employee: (i) shall hold in
3 confidence all Proprietary Information; (ii) shall not reproduce, use,
4 distribute, disclose, or otherwise misappropriate any Proprietary
5 Information, in whole or in part; (iii) shall take no action causing, or fail to
6 take any action necessary to prevent causing, any Proprietary Information to
7 lose its character as Proprietary Information; and (iv) shall not make use of
8 any such Proprietary Information for the Employee’s own purposes or for
9 the benefit of any person, business or legal entity (except the Company)
10 under any circumstances… 3
11
12 (c) Nonsolicitation of Employees and Customers. At all times during the

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13 Restricted Period, the Employee shall not, directly or indirectly, for himself
14 or for any other person: (i) employ, solicit, recruit or attempt to employ,
15 solicit, or recruit any employee of the Company to leave the Company’s
16 employment; or (ii) solicit or attempt to solicit any of the actual or targeted
17 prospective customers or clients of the Company with whom the Employee

18 had personal contact or about whom the Employee learned Confidential
19 Information on behalf of any person in connection with any business that
20 competes with the Company’s Business.”
21
22 “(d) Ownership of Developments. All Work Product 4 shall belong
23 exclusively to the Company and shall, to the extent possible, be considered
24 a work made by the Employee for hire for the Company within the meaning
25
26 3
Section 1.7(b) of the 2007 Employment Agreement.
27 4
“Work Product” means all copy rights, patents, trade secrets, or other intellectual property rights associated with any
ideas, concepts, techniques, inventions, processes, or works of authorship developed, modified or created by the
28 Employee during the course of performing work for the Company or its clients.” Section 1.8 of the 2007 Employment
Agreement.
13
COMPLAINT
1 of Title 17 of the United States Code. To the extent the Work Product may
2 not be considered work made by the Employee for hire for the Company,
3 the Employee agrees to assign, and automatically assign at the time of
4 creation of the Work Product, without any requirement of further
5 consideration, any right, title, or interest the Employee may have in such
6 work product. Upon request of the Company, the Employee shall take such
7 further actions, including execution and delivery of instruments of
8 conveyance, as may be appropriate to give full and proper effect to such
9 assignment.” 5
10 38. According to Section 1.7(j), the restrictive covenants contained in the 2007
11 Employment Agreement shall survive the termination of this Agreement.

12 39. Section 2.2 of the 2007 Employment Agreement further provides for the recovery
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13 of reasonable attorneys’ fees and costs if any action or proceeding relating to this Agreement or
14 the enforcement of any provision of this Agreement is brought against any party.
15 40. Section 2.8 of the 2007 Employment Agreement further provides:
16 “Remedies Cumulative; Specific Performance. The rights and remedies of
17 the parties hereto shall be cumulative (and not alternative). The parties to
18 this Agreement agree that, in the event of any breach by any party to this
19 Agreement of any covenant, obligation or other provision set forth in this
20 Agreement for the benefit of any other party to this Agreement, such other
21 party shall be entitled (in addition to any other remedy that may be available
22 to it) to seek (a) a decree or order of specific performance or mandamus to
23 enforce the observance and performance of such covenant, obligation or
24 other provision, and (b) an injunction restraining such breach or threatened
25 breach.”
26 GOETZ’ 2009 Amendment

27 41. On or about July 1, 2009, GOETZ and OTX executed an amendment to the 2007
28
5
Section 1.7(d) of the 2007 Employment Agreement.
14
COMPLAINT
1 Employment Agreement (the “2009 Amendment”). A true and correct copy of the 2009
2 Amendment is attached hereto as Exhibit “C.”
3 42. The 2009 Amendment extended the termination date of the 2007 Employment
4 Agreement from June 30, 2009 to December 31, 2009. According to the 2009 Amendment, all
5 terms used therein shall have the same meaning as the 2007 Employment Agreement.
6 Additionally, all terms provided in the 2007 Employment Agreement shall continue in full force
7 and effect, subject to the following terms:
8 “…Employee shall have the right to engage, nonexclusively, in any
9 business activities, provided that such activities are outside of the
10 entertainment market research areas which Employee currently engages in
11 on behalf of OTX, and provided further that such non-exclusive business

12 activities (i) do not interfere with the performance of Employee’s

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13 responsibilities under the Agreement or (ii) conflict or compete with the
14 Company’s business as currently conducted. It is hereby expressly
15 understood and acknowledged between the parties that provided that there
16 is no use of the Company’s proprietary property or technology, the
17 ownership, results and proceeds of any such outside business activities shall
18 be the exclusive property of Employee, and Company shall have no right,
19 title or interest therein…”
20
21 43. From December 31, 2009 until GOETZ’ resignation on February 25, 2010,
22 GOETZ and OTX were operating under the 2007 Agreement pending the sale of OTX to Ipsos
23 (the “OTX-Ipsos deal”) and pending GOETZ’ negotiations regarding the terms of his future
24 employment with OTX and/or Ipsos.
25 PARNES’ Employment With OTX

26 44. PARNESS was employed as the Vice President of OTX’s Screenings and
27 Qualitative division from June 1, 2008 to February 28, 2010, at which time PARNESS resigned
28 from OTX. Prior to this time, PARNESS served as OTX’s Executive Director of Screenings
15
COMPLAINT
1 from January 1, 2007 until June 1, 2008. PARNESS served as OTX’s Director of Operations in
2 the Screenings and Qualitative division from January 1, 2006 through January 1, 2007.
3 45. OTX alleges, upon information and belief, that by virtue of her employment with
4 OTX, PARNESS had access to and assisted in the development of OTX’s confidential and
5
proprietary information and trade secrets, including, but not limited, online research and
6
marketing data, other analytic data based upon or derived from such online research and
7
marketing data and information concerning the financial condition, proprietary technology and
8
research products, customer lists and pricing, prospective business, business development plans
9
10 and strategy, financial records, vendor/supplier lists, employment manuals, training materials,
11 screenings attendee database, employee contact lists, employee payroll information, research
12 reports, norms data, and screenings production materials.

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13
46. On or about January 12, 2002, PARNESS executed a PII Agreement, a true and
14
correct copy of which is attached hereto as Exhibit “D.”
15
47. Under Section 1 of the PII Agreement, PARNESS agreed to hold OTX’s
16
17 confidential and proprietary information in the strictest confidence and to refrain from
18 disclosing, using, lecturing upon, or publishing any of OTX’s confidential and proprietary
19 information.
20 48. Under Section 2.5 of the PII Agreement, PARNESS agreed to assign to OTX all
21
rights, title and interest in and to any and all inventions and all proprietary rights with respect
22
thereto.
23
49. Under Section 5 of the PII Agreement, PARNESS agreed to return all documents
24
25 and other property belonging to OTX, including all originals and copies, upon termination of her
26 employment with OTX.
27 50. Under Section 6 of the PII Agreement, OTX shall have the right to enforce the PII
28
Agreement and any of its provisions by injunction, specific performance or other equitable relief.
16
COMPLAINT
1 51. On or about July 19, 2004, PARNESS received OTX’s employment handbook
2 and acknowledge receipt of and acceptance of the terms contained in OTX’s employment
3
handbook. OTX’s employment handbook contains specific provision prohibiting unlawful
4
solicitation and the use and disclosure of OTX’s confidential and proprietary information and
5
trade secrets. A true and correct copy of the OTX’s employment handbook and PARNESS’
6
acknowledgement of receipt of the OTX’s employment handbook is attached hereto as Exhibit
7
8 “E.”
9 GOETZ’ Resignation from OTX and Screen Engine

10 52. OTX alleges, upon information and belief, that on or about February 25, 2010 at
11 approximately 11:23 a.m., GOETZ abruptly and without any forewarning submitted his
12 resignation from OTX. A few minutes thereafter, GOETZ walked into the Human Resources
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13 Department and handed in his corporate credit card and building access card. GOETZ
14 immediately walked out of OTX’s office and refused to stay to discuss his resignation, despite
15 OTX’s requests. As a result of GOETZ’ abrupt departure from OTX, OTX did not have an
16 opportunity to conduct an exit interview or collect company property from GOETZ.
17 53. OTX alleges, upon information and belief, that GOETZ’ resignation was designed
18 to maximize the disruption and chaos to OTX’s business and internal operations. GOETZ
19 submitted his resignation on a day when a majority of OTX’s executives were outside the state of
20 California on pre-planned vacations, meetings and conferences, including OTX’s Chief
21 Executive Officer, Shelly Zalis (“Zalis”), Chief Financial Officer, Jeffrey Dean (“Dean”), and
22 GOETZ’ boss, Bruce Friend (“Friend”). GOETZ did not provide OTX an opportunity to make
23 any transitions, as is typically done when an employee resigns, because GOETZ abruptly left
24 OTX within minutes of submitting his resignation and refused to discuss his resignation with
25 anyone.
26 54. Shortly after GOETZ’ departure from OTX, Bruzzese received a press release
27 that announced GOETZ’ resignation from OTX to start a new company called SCREEN
28 ENGINE. According to the press release, SCREEN ENGINE would provide custom research
17
COMPLAINT
1 and marketing products, and conduct screening research, exit polling and qualitative analysis for
2 the motion picture industry in direct competition of OTX’s Screenings and Qualitative Division.
3 55. OTX alleges, upon information and belief, that within minutes of leaving OTX,
4 GOETZ began to contact and solicit key employees within OTX’s screenings division for
5 SCREEN ENGINE, including, but not limited to, including Mishra, Siegel, Kash and Wallan. At
6 the time, PARNESS, Mishra, Siegel and Kash were in, or in route to, New York City and
7 Chicago to supervise screening events for OTX. OTX alleges, upon information and belief, that
8 GOETZ purposely announced his resignation on a day when these key employees were outside
9 of the state of California, and even directed Mishra to attend a press junket screening in New
10 York, so that GOETZ could freely solicit key employees.
11 56. OTX alleges, upon information and belief, that in each case, GOETZ initiated
12 discussions regarding employment opportunities at SCREEN ENGINE. GOETZ told these key
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13 employees that he was starting a new screenings and research business named SCREEN
14 ENGINE. In order to create anxiety about their job security at OTX, GOETZ told these key
15 employees that SCREEN ENGINE would inevitably take all of OTX’s screenings and research
16 business due to GOETZ’ connections in the industry. GOETZ referred these key employees to a
17 website called Entertainmentcareers.net to locate positions available at SCREEN ENGINE and

18 encouraged them to submit an application. In many cases, the jobs that SCREEN ENGINE
19 posted did not match the positions that these key employees held at OTX; other postings were
20 designed to specifically describe an OTX key employee’s job. In other cases, it was unusual to
21 advertise the position to the general public (i.e. Focus Group Moderator) because the position is
22 traditionally filled by someone who is already well known and accepted by the industry. In an
23 attempt to claim he was not soliciting employees. GOETZ also asked these key employees to
24 submit resumes, even though GOETZ supervised and worked closely with these key employees
25 for several years and was fully aware of their relevant experience and skills.
26 57. OTX alleges, upon information and belief, that defendants publically advertised
27 the positions at SCREEN ENGINE and asked OTX’s employees to submit employment
28 applications and resumes in order to create the illusion that it was these key employees who
18
COMPLAINT
1 solicited GOETZ for employment, as opposed to GOETZ soliciting these key employees to work
2 for SCREEN ENGINE.
3 58. OTX alleges, upon information and belief, GOETZ quickly set up “interviews”
4 with Kash, Siegel and Mishra the weekend after he resigned from OTX. Both GOETZ and
5 PERAKIS, GOETZ’s business partner, attorney and friend, met with Mishra, Kash and Siegel at
6 GOETZ’ home in Studio City. During these meetings, GOETZ and PERAKIS offered Mishra,
7 Kash, and Siegel the same positions that they held at OTX, at a base salaries, plus ‘equity’
8 interest that was projected to approximate what these employees made at OTX. OTX alleges,
9 upon information and belief, that GOETZ used OTX’s confidential and proprietary information
10 to learn Mishra, Kash and Siegel’s base salaries at OTX, and offered Mishra, Kash and Siegel
11 compensation packages, and other incentives, to induce them to work for SCREEN ENGINE.
12 59. OTX alleges, upon information and belief, that GOETZ and PERAKIS pressured
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13 Mishra, Siegel and Kash to make a decision and submit their resignations to OTX as soon as
14 possible, preferably by Monday, March 1, 2010.
15 60. OTX alleges, upon information and belief, that GOETZ and PERAKIS pressured
16 Mishra, Siegel and Kash to submit their resignations because GOETZ and PERAKIS knew that
17 the success of SCREEN ENGINE (and downfall of OTX) depended upon their ability to secure
18 these key employees. GOETZ and PERAKIS did not want to provide OTX an opportunity to
19 talk with these key employees to stay at OTX. GOETZ and PERAKIS were also aware that, if
20 SCREEN ENGINE were able to secure Mishra and Siegel, the rest of OTX’s screenings staff and
21 clients would follow as Mishra and Siegel’s departure would have signaled trouble in OTX’s
22 screenings business.
23 PARNESS’ Resignation from OTX

24 61. On Sunday, February 28, 2010 at approximately 10:00 p.m., PARNESS abruptly
25 and without notice resigned from OTX. OTX alleges, upon information and belief, that
26 PARNESS resigned from OTX to join GOETZ and PERAKIS at SCREEN ENGINE under a
27 predetermined plan.
28 62. OTX alleges, upon information and belief, that PARNESS entered OTX’s
19
COMPLAINT
1 building the night that she resigned to take confidential and proprietary information from OTX
2 and to destroy information and files.
3 63. Due to PARNESS’ weekend late night departure from OTX, OTX did not have an
4 opportunity to conduct an exit interview or retrieve any company property from PARNESS, as is
5 typically done with employees when they decide to leave OTX. OTX alleges, upon information
6 and belief, that PARNESS’ abrupt, weekend night departure was intentionally designed to cause,
7 and in fact did cause, disruption to OTX’s business. PARNESS was the head of OTX’s
8 Screenings and Qualitative division, and PARNESS’ abrupt departure and immediate resignation
9 denied OTX an opportunity to transition her duties in an organized manner.
10 64. OTX alleges, upon information and belief, that shortly after PARNESS’
11 resignation, PARNESS and GOETZ used OTX’s confidential employee contact list to call
12 Cathcart’s private home telephone number late Sunday evening and offer him employment at
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13 SCREEN ENGINE. Cathcart would have been particularly useful to SCREEN ENGINE as
14 PARNESS does not have working knowledge of research and heavily relied upon Cathcart while
15 she was employed at OTX to prepare accurate research reports and field questions from the
16 client.
17 65. OTX alleges, upon information and belief, that in order to make it appear that
18 they were not soliciting OTX’s employees, PARNESS and GOETZ referred Cathcart to the
19 EntertainmentCareers.Net website and encouraged Cathcart to apply for the Research Manager
20 position. PARNESS and GOETZ also used fear and intimidation to convince Cathcart to apply
21 for the position at SCREEN ENGINE. PARNES and GOETZ told Cathcart that several key
22 screenings employees were leaving OTX to work for SCREEN ENGINE and that OTX’s
23 business would soon follow. PARNESS and GOETZ also used OTX’s confidential information
24 to offer Cathcart a salary that was slightly higher than OTX to further entice him to accept the
25 position at SCREEN ENGINE.
26 66. OTX alleges, upon information and belief, that Cathcart ultimately submitted a
27 resume to SCREEN ENGINE out of fear that he would lose his job at OTX.
28 67. OTX alleges, upon information and belief, that PARNESS and GOETZ also used
20
COMPLAINT
1 OTX’s confidential and proprietary information to contact Durfee and Vedros, other key
2 employees of OTX, to discuss employment opportunities at SCREEN ENGINE. GOETZ and/or
3 PARNESS informed Durfee and Vedros that there were positions available at SCREEN
4 ENGINE and encouraged them to visit the EntertainmentCareers.Net website. GOETZ and/or
5 PARNESS also asked Durfee and Vedros to submit an application and resume, despite the fact
6 that both GOETZ and PARNESS were Durfee and Vedros’ supervisors at OTX, and GOETZ
7 and PARNESS were fully aware of Durfee and Vedros’ employment history and experience.
8 68. OTX alleges, upon information and belief, that GOETZ has repeatedly contacted,
9 and continues to aggressively pursue, Durfee since he initially contacted Durfee.
10 Defendants’ Conspiracy/Scheme and Use Of OTX Confidential Information to Raid

11 OTX’s Workforce and Take OTX’s Business
12 69. OTX alleges, upon information and belief, that defendants made efforts to start
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13 SCREEN ENGINE several months before GOETZ and PARNESS resigned from OTX. In the
14 meantime, defendants plotted and schemed to unlawfully steal OTX’s confidential and
15 proprietary information and trade secrets, unlawfully compete with OTX, unlawfully raid OTX’s
16 employees, and unlawfully divert OTX’s business opportunities to SCREEN ENGINE. OTX
17 further alleges, upon information and belief, that defendants plotted and schemed to maximize
18 the disruption to OTX’s business operations and destroy OTX’s reputation in the industry in
19 order to benefit SCREEN ENGINE and ultimately themselves.
20 70. OTX alleges, upon information and belief, that in the months leading up to
21 GOETZ and PARNESS’ resignation from OTX, PARNESS made several unusual requests for
22 OTX’s confidential and proprietary information and trade secrets, including but not limited to
23 following:
24 • In approximately the middle of January 2010, PARNESS asked Montgomery to

25 update OTX’s Active Freelance Database for her. PARNESS also asked
26 Montgomery to include OTX’s senior staff, focus group moderators, and analysts.
27 The Active Freelance Database contains confidential information regarding
28 OTX’s screenings staff, recruiting staff, office staff, night staff, and New York
21
COMPLAINT
1 staff, including their names, telephone numbers, email addresses, date of birth,
2 position/title, salary, and year to date earnings. The Active Freelance Database
3 had not been updated since December 2008. Montgomery made PARNESS’
4 revisions and renamed the document “Screenings Employee Database” as it now
5 included information regarding every employee in OTX’s screenings staff as
6 opposed to just the freelance employees. Although Montgomery emailed the
7 Screenings Employee Database document and location where to find it on the
8 OTX network server, PARNESS asked Montgomery to hand her a printed copy.
9 Pursuant to PARNESS’ request, Montgomery printed a hard copy of the
10 “Screenings Employee Database” and delivered it to her.
11 • In middle of January 2010, PARNESS asked the senior level employees of

12 screenings staff to create a master vendor list that included all pertinent
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13 information regarding vendors that are used by the screenings division, including
14 their names, addresses, telephones numbers and pricing information.
15 • In middle of January 2010, at her request, OTX’s Human Resources Department

16 provided PARNESS 2009 salary information for OTX’s freelance staff.
17 • In middle of January 2010, PARNESS asked Mishra to provide her a hardcopy of

18 OTX’s recruiting manual.
19 • In late January 2010, PARNESS asked Mishra to update and provide her a copy
20 of the Movie Release Schedule for 2010 and 2011. PARNESS asked Mishra to
21 indicate which screenings were already taken by OTX/NRG and which screenings
22 were still available.
23 • On or about January 26, 2010, PARNESS asked Siegel to provide her a list of
24 issues to discuss with a screenings team before a screenings event.
25 • During the first week of February 2010, Parness asked Wallan to provide her
26 specific research reports for various screenings that occurred within the last four
27 (4) months, including, but not limited to, family screenings, focus group
28 screenings, normal screenings and critics screenings. Approximately two (2)
22
COMPLAINT
1 weeks later, and shortly before PARNESS’ resignation, PARNES requested
2 additional research reports, including a copy of an unusual research report
3 prepared in PowerPoint.
4 • On or about February 11, 2010, PARNESS requested Wallan to provide her an

5 electronic copy of a screenings invitation template.
6 • Approximately two (2) weeks before PARNESS resigned from OTX, PARNESS
7 asked Mishra to print out a hardcopy of the active recruiter list, which includes
8 the names, telephone numbers, email addresses, and addresses of active recruiters.
9 • On or about February 18, 2010, PARNESS asked Wallan to provide her a copy of
10 an exit poll manual and banned list. The exit poll manual was created by OTX
11 and provides detailed procedures regarding exit polls for training and reference
12 purposes. The banned list contains a list of individuals who have been banned
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13 from OTX screenings events over the years. The banned list would be very
14 helpful for a new screenings business to avoid admitting trouble makers and
15 unqualified audience members at screening events.
16 • At their request, Cathcart provided PARNESS and GOETZ OTX’s proprietary

17 normative data, including new kids normative data and updated normative data.
18 Cathcart also provide GOETZ materials for his presentation at FOX shortly
19 before GOETZ’ departure from OTX.
20 71. OTX alleges, upon information and belief, that since their resignation from OTX,
21 defendants have used OTX’s confidential and proprietary information and trade secrets and
22 insider information to unlawfully solicit and raid not only OTX’s key screening staff members as
23 fully described above, but also its freelance staff. As a result of defendants’ actions, OTX was
24 forced to substantially increase salaries and offer retention bonuses in order to persuade these
25 key employees to remain at OTX. OTX anticipates that it will have to continue offering raises
26 and bonuses to keep other employees if defendants continue to unlawfully solicit OTX’s
27 employees.
28 72. OTX alleges, upon information and belief, that defendants have also used
23
COMPLAINT
1 employee contact lists to systematically solicit most, if not all, of OTX’s screening and recruiting
2 staff. OTX alleges, upon information and belief, that defendants contacted OTX’s screening and
3 recruiting staff at their private home and cellular telephone numbers, which only could have been
4 obtained through unauthorized access to OTX private and confidential employee contact list.
5 73. In order to convince OTX’s screenings and recruiting staff to work for SCREEN
6 ENGINE instead of OTX, OTX is informed and believes and on that basis alleges that
7 defendants have made disparaging and threatening remarks regarding the future viability OTX’s
8 screenings business and their overall job security at OTX. Defendants have also used OTX’s
9 confidential payroll information to further entice OTX’s screenings and recruiting staff to work
10 for SCREEN ENGINE by offering slightly higher compensation packages than OTX or promises
11 of a certain number of screenings. Defendants have successfully convinced many of OTX’s

12 screenings and recruiting staff to work for SCREEN ENGINE. If defendants are not enjoined
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13 from continuing to solicit OTX’s screenings and recruiting staff, OTX anticipates that it will be
14 unable to work the screenings that is has and it will have to continue increasing pay to keep these
15 employees, whom GOETZ, PARNESS and PERAKIS would not know or be able to contact
16 but/for defendants having used OTX’s confidential information to contact the employees.
17 74. OTX alleges, upon information and belief, that defendants have also used OTX’s
18 confidential and proprietary information and trade secrets to attempt to hire OTX’s prospective
19 employees for SCREEN ENGINE, including George Zavier (“Zavier”). Although Zavier
20 interviewed and filled out hiring paperwork at OTX (which is not done unless a hiring decision is
21 made), PARNESS and GOETZ intentionally delayed the hiring of Zavier until they resigned
22 from OTX, at which point they used OTX’s confidential and proprietary information and trade
23 secrets to contact Zavier and offer him employment at SCREEN ENGINE instead.
24 75. OTX alleges, upon information and belief, that defendants used OTX’s
25 confidential and proprietary information and trade secrets to unlawfully and unfairly solicit
26 OTX’s clients, during and after their employment with OTX, including, but not limited to, FOX
27 and Universal.
28 76. OTX alleges, upon information and belief, that defendants took OTX’s confidential
24
COMPLAINT
1 and proprietary information and trade secrets for the use and benefit of SCREEN ENGINE and in
2 order to negotiate comparable deals with OTX’s vendors, thus, allowing OTX to lose its
3
competitive edge. Moreover, shortly before GOETZ and PARNESS resigned from OTX, OTX
4
learned of vendors that could provide alternative ways to quickly and more cost effectively recruit
5
audience members to fill screening events. OTX negotiated pricing and other terms with these
6
vendors prior to GOETZ and PARNESS’ departure, which pricing GOETZ and PARNESS knew.
7
8 Immediately after GOETZ and PARNESS resigned from OTX, defendants used this confidential
9 and proprietary information to negotiate similar contracts for SCREEN ENGINE, as a brand new
10 company, with these vendors at rates that OTX, as an established business. OTX is informed and
11
believes that SCREEN ENGINE is now using these vendors to recruit audience members for
12
SCREEN ENGINE’s screening events.
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13
77. OTX alleges, upon information and belief, that defendants plotted and schemed to
14
15 use OTX’s confidential and proprietary information and trade secrets to quickly and inexpensively
16 set up SCREEN ENGINE’s infrastructure, including, but not limited to, OTX’s employee contacts
17 lists, OTX’s vendor lists, OTX’s pricing models, OTX’s screenings production materials, OTX’s
18 screening database, OTX’s research reports, OTX’s product offerings, and OTX’s normative data.
19
78. OTX alleges, upon information and belief, that defendants plotted and schemed to
20
unlawfully seize screening events that were originally booked with OTX and divert OTX’s
21
business opportunities to SCREEN ENGINE, including screenings for the movies “Morning
22
Glory,” “The Bounty Hunter,” “Life As We Know It,” “Despicable Me,” “Repo Man,” “Waiting
23
for Forever,” “The Runaways,” “The Ex-Terminators,” “13” and others. PARNESS
24
uncharacteristically failed to input these screenings into OTX’s screenings status grid or
25
otherwise did not follow up on these screenings and, therefore, OTX was not aware of these
26
screenings until after defendants resigned from OTX. Prior to PARNESS’ resignation, however,
27
PARNESS used OTX’s resources to begin the work to produce these screening events, including
28
25
COMPLAINT
1 using OTX’s staff to prepare movie concepts and “movie seen” lists for audience recruitment,
2 select appropriate theatre locations, and prepare specification letters. OTX is informed and
3 believes that SCREEN ENGINE stole screening events from OTX and held screening events
4 shortly after GOETZ and PARNESS resigned from OTX.
5 79. OTX alleges, upon information and belief, that while still employed by OTX,
6 defendants plotted and schemed to conceal business opportunities available to OTX in attempt to
7 divert business from OTX, interfere with OTX’s business relationships, and injure OTX’s
8 reputation in the industry. OTX is further informed and believes that shortly before her
9 resignation from OTX, PARNESS intentionally neglected several screenings requests by failing
10 to enter these screening requests into OTX’s screenings status grid, including screening requests
11 for “Morning Glory,” “The Bounty Hunter,” and “Life as We Know It.” In many instances
12 where this occurred, OTX’s clients decided to cancel these screening events as they had lost
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13 confidence in OTX’s ability to run these screening events. OTX is informed and believes that
14 defendants’ actions were intentional and part of their overall scheme to divert business
15 opportunities from OTX and to cause further damage to OTX’s reputation in the film
16 community.
17 80. OTX alleges, upon information and belief, that defendants intentionally interfered
18 with OTX’s prospective business by concealing business opportunities available to other
19 divisions in OTX.
20 81. OTX alleges, upon information and belief, that PARNESS, GOETZ and Nash
21 failed to return OTX property, including OTX’s confidential and proprietary information and
22 trade secrets, including, but not limited to, the Active Freelance Database, Screenings Employee
23 Database, employee contact lists, vendor list, research reports, templates, training manuals (exit
24 poll, recruiting and screenings manuals), banned list, screenings database, screenings database on
25 250 gig external hard drive/discs, salary/payroll information, active recruiter list, updated movie
26 release schedule, normative data, presentation materials, client lists and pricing information,
27 specification letters, agreements, online research and marketing data, other analytic data based
28 upon or derived from such online research and marketing data and information concerning the
26
COMPLAINT
1 financial condition, proprietary technology and research products, business development plans,
2 screenings production materials, and other documents related to OTX’s screenings and
3 qualitative business.
4 82. OTX alleges, upon information and belief, that PARNESS deleted and destroyed
5 documents critical to OTX’s screenings business (some of which only PARNESS could access)
6 before she resigned from OTX to cause further disruption to OTX’s business and injury to
7 OTX’s reputation in the industry. OTX is further informed and believes that PARNESS and
8 GOETZ wiped their company computers in order to attempt to conceal their activities and
9 disrupt and hurt OTX’s business.
10
11 FIRST CAUSE OF ACTION

12 [Misappropriation of Trade Secrets (Violation of Civil Code Section

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13
3426, et seq.) Against All Defendants]
14
83. OTX incorporates by reference as if fully set forth herein paragraphs 1 through 82,
15
inclusive.
16
84. OTX’s confidential information, described more fully above, includes and
17
18 constitutes trade secrets under Civil Code §3426, et seq. because it consists of compilations which
19 derive independent economic value from their disclosure or use, and are subject to efforts that are
20 reasonable under the circumstances to maintain their secrecy.
21
85. OTX alleges, upon information and belief, that defendants had access to OTX’s
22
confidential and proprietary information and trade secrets by virtue of their employment with
23
OTX.
24
25 86. OTX alleges, upon information and belief, that defendants misappropriated OTX’s
26 trade secrets by disclosing and using defendant OTX’s confidential and proprietary information
27 and trade secrets to solicit and divert business from OTX for the benefit of defendants, to solicit
28 OTX screenings and recruiting staff, and to obtain the benefits of OTX’s longstanding and
27
COMPLAINT
1 profitable relationships with its clients and vendors as more fully described above.
2 87. As a direct and proximate result of defendants’ misappropriation of OTX’s

3
confidential and proprietary information and trade secrets, OTX has been damaged and defendants
4
have been unjustly enriched. Such damages include without limitation, loss of past, present and
5
future income, the diminution in the value of OTX business, and the increased value of
6
defendants’ business due to their misappropriation of OTX’s confidential and proprietary
7
8 information and trade secrets in an amount according to proof.
9 88. Defendants’ conduct as described herein was and continues to be intentional,

10 willful and malicious, with a conscious disregard for OTX’s rights. In misappropriating OTX’s
11
confidential and proprietary information and trade secrets, defendants acted and continue to act
12
oppressively with an intent to destroy OTX’s business, and to injure OTX’s reputation and good
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13
will with its clients in the film industry. Therefore, defendants conduct, as described fully herein,
14
15 warrants an award of punitive damages and attorneys’ fees and costs.
16 89. Unless restrained and enjoined, defendants will continue to misappropriate all or
17 part of OTX’s trade secrets and other confidential and proprietary information and cause
18 irreparable harm to OTX.
19
SECOND CAUSE OF ACTION
20
[Breach of Contract Against Defendants GOETZ and PARNESS
21
and DOES 1 through 50 inclusive]
22
23 90. OTX incorporates by reference as if fully set forth herein paragraphs 1 through 89,
24 inclusive.
25 91. On January 8, 2004 and January 1, 2007, GOETZ executed written employment
26
agreements with OTX. A true and correct copy of the 2004 and 2007 Employment Agreements,
27
and amendments thereto, is attached as Exhibits “A,” “B” and “C.”
28
92. On or about January 12, 2002, PARNESS executed OTX’s PII Agreement. On or
28
COMPLAINT
1 about July 19, 2004, PARNESS received OTX’s employment handbook and acknowledged receipt
2 of and agreed to the terms contained in OTX’s employment handbook. A true and correct copy of
3
the PII Agreement and OTX’s employment handbook is attached hereto as Exhibits “D” and “E.”
4
93. OTX performed all conditions, covenants, and promises required on its part to be
5
performed in accordance to the terms and conditions of the 2004 and 2007 Employment
6
Agreements and amendments thereto, the PII Agreement, and OTX’s employment handbook.
7
8 94. The 2004 and 2007 Employment Agreements, and amendments thereto, the PII
9 Agreement and OTX’s employment handbook specifically prohibited GOETZ and PARNESS
10 from disclosing and using OTX’s confidential and proprietary information and trade secrets,
11
unlawfully and unfairly competing with OTX’s business, unlawfully and unfairly soliciting OTX’s
12
clients, and unlawfully and unfairly soliciting OTX’s employees.
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13
95. The 2004 and 2007 Employment Agreements, and amendments thereto, the PII
14
15 Agreement and OTX’s employment handbook further provide that GOETZ and PARNESS shall
16 immediately return all property belonging to OTX, including OTX’s confidential and proprietary
17 information and trade secrets, upon termination of their employment.

18 96. OTX alleges, upon information and belief, that GOETZ and PARNESS breached
19
their obligations under these agreements by using and disclosing OTX’s confidential and
20
proprietary information and trade secrets for the benefit of defendants, unlawfully and unfairly
21
competing with OTX’s business, unlawfully and unfairly soliciting OTX’s clients, unlawfully and
22
23 unfairly soliciting OTX’s employees, and failing to return OTX’s property as fully described
24 above.
25 97. As a result of GOETZ and PARNESS’ failure and refusal to abide by the
26
obligations set forth in the 2004 and 2007 Employment Agreement, and amendments thereto, the
27
PII Agreement, and OTX’s employment handbook, OTX has been directly damaged resulting in a
28
loss of clients, goodwill and profits in an amount according to proof at the time of trial. OTX is
29
COMPLAINT
1 also entitled to an award of attorneys’ fees and costs under these agreements as the prevailing
2 party.
3
98. An award of monetary damages will not adequately compensate OTX for the
4
damages it has incurred, and will continue to incur, by reason of GOETZ and PARNESS’
5
breaches. Unless the terms of these agreements are specifically enforced, GOETZ and PARNESS
6
will continue to breach these agreements, causing irreparable harm to OTX.
7
9 THIRD CAUSE OF ACTION

10 [Breach of the Implied Covenant of Good Faith and Fair Dealing Against
11
Defendants PARNESS and GOETZ and Does 1 through 50, inclusive]

12
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13
inclusive.
14
15 100. California law implies a covenant of good faith and fair dealing in all contracts
16 between parties entered into in the State of California.
17 101. On January 8, 2004 and January 1, 2007, GOETZ executed written employment
18 agreements with OTX. A true and correct copy of the 2004 and 2007 Employment Agreements,
19
and amendments thereto, are attached as Exhibits “A,” “B” and “C.”
20
102. On or about January 12, 2002, PARNESS executed OTX’s PII Agreement. On or
21
about July 19, 2004, PARNESS received OTX’s employment handbook and acknowledged receipt
22
23 of and agreed to the terms contained in OTX’s employment handbook. A true and correct copy of
24 the PII Agreement and OTX’s employment handbook is attached hereto as Exhibits “D” and “E.”
25 103. OTX performed all conditions, covenants, and promises required on its part to be
26
performed in accordance to the terms and conditions of the 2004 and 2007 Employment
27
Agreements and amendments thereto, the PII Agreement, and OTX’s employment handbook.
28
104. The 2004 and 2007 Employment Agreements, and amendments thereto, the PII
30
COMPLAINT
1 Agreement and OTX’s employment handbook specifically prohibit GOETZ and PARNESS from
2 disclosing and using OTX’s confidential and proprietary information and trade secrets, unlawfully
3
and unfairly competing with OTX’s business, unlawfully and unfairly soliciting OTX’s clients,
4
and unlawfully and unfairly soliciting OTX’s employees.
5
105. OTX alleges, upon information and belief, that GOETZ and PARNESS failed to
6
honor the terms of these agreements, for the reasons set forth hereinabove, and thereby violated
7
8 the implied covenant of good faith and fair dealing as against OTX and unfairly prevented OTX
9 from receiving the benefits of these agreements.

10 106. The actions of GOETZ and PARNESS as hereinbefore described in violation of
11
said implied covenant of good faith and fair dealing has caused OTX to suffer damages in an
12
amount according to proof at the time of trial.
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13
107. An award of monetary damages will not adequately compensate OTX for the
14
15 damages it has incurred, and will continue to incur, by reason of GOETZ and PARNESS’
16 breaches. Unless the terms of these agreements are specifically enforced, GOETZ and PARNESS
17 will continue to breach these agreements, causing irreparable harm to OTX.

18 FOURTH CAUSE OF ACTION
19
[Breach of Fiduciary Duty Against PARNESS and GOETZ
20
and Does 1 through 50, inclusive]
21
22
23 inclusive.
24 109. From January 2004 through February 25, 2010, GOETZ acted as OTX’s Executive
25 Vice President of Entertainment Research and President of OTX’s Motion Picture Group.
26
110. PARNESS was employed as the Vice President of OTX’s Screenings and
27
Qualitative division from June 1, 2008 to February 28, 2010, at which time PARNESS resigned
28
from OTX. Prior to this time, PARNESS served as OTX’s Executive Director of Screenings from
31
COMPLAINT
1 January 1, 2007 until June 1, 2008. PARNESS served as OTX’s Director of Operations in the
2 Screenings and Qualitative division from January 1, 2006 through January 1, 2007.
3
111. As officers and managers of OTX, GOETZ and PARNESS owed a fiduciary duty
4
to OTX and OTX’s shareholders, meaning that GOETZ and PARNESS owed a duty to protect the
5
interests of OTX and to refrain from any activities that would injure OTX or deprive OTX of any
6
business opportunities.
7
8 112. OTX alleges, upon information and belief, that defendants breached their fiduciary
9 duties by committing the acts complained of herein, including, but not limited to, planning to and
10 then misappropriating OTX’s confidential and proprietary information and trade secrets to benefit
11
themselves and SCREEN ENGINE, by unlawfully competing against OTX, by unlawfully raiding
12
OTX’s key screenings employees, by unlawfully soliciting OTX’s screenings and recruiting staff,
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13
by interfering with OTX’s business relationships with its clients, by concealing and diverting
14
15 business opportunities from OTX, by seizing business opportunities/screenings belonging to OTX
16 for SCREEN ENGINE, and by failing to return OTX’s property.
17 113. As a proximate result of GOETZ and PARNESS’ actions, OTX suffered and will
18 continue to suffer damages in an amount according to proof at the time of trial.
19
114. In doing the acts alleged herein, GOETZ and PARNESS acted with intent to vex,
20
injure, and annoy OTX and acted in conscious disregard of OTX’s rights. GOETZ and PARNESS
21
are, therefore, guilty of malice, fraud and oppression so as to entitle OTX to an award of
22
23 exemplary damages.
24 FIFTH CAUSE OF ACTION
25 [Breach of Duty of Loyalty and Duty of Care Against PARNESS

26
and GOETZ and Does 1 through 50, inclusive]
27
28
inclusive.
32
COMPLAINT
1 116. As an agents, employees, officers, and managers of OTX, and by virtue of OTX
2 having placed confidence in the fidelity and integrity of GOETZ and PARNESS, GOETZ and
3
PARNES owed OTX a duty of loyalty and utmost due care.
4
117. OTX alleges, upon information and belief, that OTX breached his duty of loyalty
5
and due care by committing the acts complained of herein, including, but not limited to, planning
6
to and then stealing and using OTX’s confidential and proprietary information and trade secrets to
7
8 benefit themselves and SCREEN ENGINE, by unlawfully competing against OTX, by unlawfully
9 raiding OTX’s key screenings employees, by unlawfully soliciting OTX’s screenings and
10 recruiting staff, by interfering with OTX’s business relationships with its clients, by concealing
11
and diverting business opportunities from OTX, by seizing business opportunities/screenings

12
belonging to OTX for SCREEN ENGINE, and by failing to return OTX’s property.
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13
118. As a direct and proximate result of GOETZ and PARNESS’ breach of their duty of
14
15 loyalty and duty of care, OTX suffered and will continue to suffer damages in an amount
16 according to proof at the time of trial.
17 119. In doing the acts alleged herein, GOETZ and PARNESS acted with intent to vex,
18 injure, and annoy OTX, and acted in conscious disregard of OTX’s rights. GOETZ and
19
PARNESS are, therefore, guilty of malice, fraud and oppression so as to entitle OTX to an award
20
of exemplary damages.
21
SIXTH CAUSE OF ACTION
22
23 [Violation of Labor Code §2860 Against PARNESS and GOETZ
24 and Does 1 through 50, inclusive]
26
inclusive.
27
121. Labor Code §2860 provides that everything that an employee acquired by virtue of
28
his/her employment, except the compensation due him/her, belongs to the employer, whether
33
COMPLAINT
1 acquired lawfully or unlawfully or during or after his/her employment.
2 122. OTX alleges, upon information and belief, that GOETZ and PARNESS planned
3
and then took, misappropriated, and failed to return property belonging to OTX in violation of the
4
requirements and obligations imposed on GOETZ and PARNESS under Labor Code §2860,
5
including online research and marketing data, other analytic data based upon or derived from such
6
online research and marketing data and information concerning the financial condition, proprietary
7
8 technology and research products, customer lists and pricing, prospective business clients,
9 business development plans and strategy, financial records, vendor/supplier lists, employment
10 manuals, training materials, screenings attendee database, employee and freelance contact lists,
11
norms data, computer files, external hard drives, documents, agreements, and other screenings
12
materials.
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13
123. As a result of GOETZ and PARNESS’ violation of the duties and obligations
14
15 imposed on them by Labor Code §2860, OTX has and will in the future suffer damages in an
16 amount according to proof at the time of trial.
17 124. In doing the acts alleged herein, GOETZ and PARNESS acted with intent to vex,
18 injure, and annoy OTX, and acted in conscious disregard of OTX’s rights. GOETZ and
19
PARNESS are, therefore, guilty of malice, fraud and oppression so as to entitle OTX to an award
20
of exemplary damages.
21
SEVENTH CAUSE OF ACTION
22
23 [Intentional Interference with Contractual Relations Against All Defendants
26
inclusive.
27
126. By virtue of GOETZ and PARNESS’ executive and management positions with
28
OTX, defendants knew of OTX contracts with various clients and vendors in the screenings and
34
COMPLAINT
1 qualitative business.
2 127. OTX alleges, upon information and belief, that defendants misappropriated OTX’s
3
confidential and proprietary information and trade secrets, made disparaging remarks about the
4
future viability of OTX’s screenings and qualitative business, made false statements regarding the
5
circumstances of GOETZ’ departure from OTX and a purported “strategic alliance” between
6
SCREEN ENGINE and OTX to interfere with OTX’s contracts with its vendors and clients, steal
7
8 screening events that originated at OTX, and divert business opportunities to SCREEN ENGINE
9 as fully described above.

10 128. As a result of defendants’ actions, OTX alleges, upon information and belief, that
11
defendants thereby induced OTX’s clients to breach their contracts with OTX thereby used
12
confidential and proprietary information stolen from OTX to intentionally interfere with OTX's
TEL (213) 613-2340 • FAX (213) 613-2344
13
contracts with its clients.
14
15 129. As a direct result of defendants' actions, as more fully described above, OTX has
16 been damaged in an amount according to proof at the time of trial.
17 130. In doing the acts alleged herein, defendants acted with intent to vex, injure, and
18 annoy OTX, and acted in conscious disregard of OTX’s rights. Defendants are, therefore, guilty
19
of malice, fraud and oppression so as to entitle OTX to an award of exemplary damages.
20
EIGHTH CAUSE OF ACTION
21
[Intentional Interference with Prospective Economic Advantage Against All Defendants
22
25 inclusive.
26
27
OTX, defendants knew of OTX's ongoing and prospective business relationships.
28
133. OTX alleges, upon information and belief, that defendants intentionally interfered
35
COMPLAINT
1 with OTX's prospective economic advantage by using their positions and access to OTX’s
2 confidential and proprietary information to induce OTX’s vendors to provide services and clients
3
to use the services of SCREEN ENGINE and otherwise divert business opportunities from OTX,
4
by stealing screening events that originated at OTX, and by devising a plan (e.g. abrupt
5
resignations, immediate solicitation of OTX’s employees, vendors and clients, failure to input
6
screenings into OTX’s screenings status grid) to maximize the disruption to OTX’s screenings
7
8 business and to discredit and destroy confidence in OTX’s screenings business as more fully
9 described above.
10 134. As a result of defendants’ actions, OTX is informed and believes that several
11
clients have terminated their business relationship with OTX and/or cancelled screening events
12
with OTX, including, but not limited to, screening events for “The Bounty Hunter,” “Life as We
TEL (213) 613-2340 • FAX (213) 613-2344
13
Know it,” “The Runaways,” “Waiting for Forever,” “The Ex-Terminators,” and “13.”
14
15 135. As a direct result of defendants' actions and omissions, OTX has been damaged in
16 an amount according to proof at the time of trial.
17 136. Defendants’ actions were undertaken with fraud, malice or oppression, or with a
18 conscious disregard of the rights of OTX, and, therefore, OTX is entitled to an award of
19
exemplary and punitive damages against Defendants, and each of them, in an amount according to
20
proof at the time of trial.
21
NINTH CAUSE OF ACTION
22
23 [Negligent Interference with Prospective Economic Advantage Against All Defendants
26
inclusive.
27
28
OTX, defendants knew of OTX's ongoing and prospective business relationships.
36
COMPLAINT
1 139. OTX is informed and believes that defendants negligently interfered with OTX's
2 prospective economic advantage by using their positions and access to OTX’s confidential and
3
proprietary information to induce OTX’s clients to use the services of SCREEN ENGINE and
4
otherwise divert business opportunities from OTX, by stealing screening events that originated at
5
OTX, and by devising a plan (e.g. abrupt resignations, immediate solicitation of OTX’s employees
6
and clients, failure to input screenings into OTX’s screenings status grid, destruction and deletions
7
8 of information) to maximize the disruption to OTX’s screenings business and to discredit and
9 destroy confidence in OTX’s screenings business as more fully described above.

10 140. As a result of defendants’ actions, OTX is informed and believes that several
11
clients have terminated their business relationship with OTX and/or cancelled screening events
12
with OTX, including, but not limited to, screening events for “The Bounty Hunter,” “Life as We
TEL (213) 613-2340 • FAX (213) 613-2344
13
Know it,” “The Runaways,” “Waiting for Forever,” “The Ex-Terminators,” and “13.”
14
15 141. As a direct result of defendants' actions and omissions, OTX has been damaged in
16 an amount according to proof at the time of trial.
17 142. Defendants’ actions were undertaken with fraud, malice or oppression, or with a
18 conscious disregard of the rights of OTX, and, therefore, OTX is entitled to an award of
19
exemplary and punitive damages against Defendants, and each of them, in an amount according to
20
proof at the time of trial.
21
TENTH CAUSE OF ACTION
22
23 [Conversion Against All Defendants and Does 1 through 50, inclusive]
25 inclusive.
26
144. OTX alleges, upon information and belief, that defendants took property from OTX
27
as identified herein, including, but not limited to, OTX’s confidential and proprietary information
28
and trade secrets. OTX is further informed and believes that defendant stole screening events that
37
COMPLAINT
1 originated at and belonged to OTX, including, but not limited to, “The Runaways,” “Waiting for
2 Forever,” “The Ex-Terminators,” and “13.”

3
145. OTX is informed and believes that defendants converted OTX’s property for their
4
own use and benefit and with the intention of depriving OTX of the use and benefit of said
5
property as fully described above.
6
146. OTX did not consent to defendants’ use of OTX’s property.
7
8 147. As a proximate result of the conversion by defendants, OTX has suffered injuries
9 which are the natural, reasonable and proximate result of conversion, in an amount to be proven at
10 the time of trial.
11
148. In doing the acts herein alleged, defendants acted with oppression, fraud, malice,
12
and in conscious disregard of the rights of OTX, and OTX is therefore entitled to punitive
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13
damages according to proof at the time of trial.
14
15 ELEVENTH CAUSE OF ACTION
16 [Unfair Business Practices (Business and Professions Code §17200, et seq.) Against All
17 Defendants and Does 1 through 50, inclusive]

19
inclusive.
20
150. OTX alleges, upon information and belief, that defendants’ actions constitute unfair
21
business practices under Business & Professions Code §17200, et seq. In particular and without
22
23 limitation the following actions constitute unfair business practices: (a) defendants’
24 misappropriation of confidential and proprietary information and trade secrets to divert business to
25 defendants and/or defendants’ employers and businesses and unfairly compete with OTX; (b)
26
defendants misappropriation of OTX’s employee lists and payroll information to unlawfully solicit
27
OTX’s screenings, employees and recruiting staff; (c) defendants’ unlawful attempts to raid
28
personnel that are integral to OTX’s screenings business and/or have established relationships
38
COMPLAINT
1 with OTX’s clients and screenings staff to divert business and resources to SCREEN ENGINE;
2 (d) defendants’ unlawful solicitation of OTX’s clients; (e) defendants’ unlawful concealment of
3
OTX’s business opportunities and screening events; (f) defendants’ unlawful seizure of screenings
4
business that originated at OTX; (g) defendants’ misappropriation of confidential and proprietary
5
information and trade secrets to quickly build an infrastructure at no or minimal time and expense
6
to SCREEN ENGINE; (h) defendants’ disparaging remarks regarding the future viability of
7
8 OTX’s screenings business and false statements regarding a strategic alliance between OTX and
9 SCREEN ENGINE to divert business and employees from OTX; (i) defendants’ scheme to
10 maximize disruption to OTX’s business in order to discredit OTX, harm OTX’s reputation, and
11
cause OTX’s clients to lose confidence in OTX’s screenings and qualitative business; (j)
12
defendants destruction of important screenings documents and materials prior to their resignation
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13
from OTX; and (i) defendants’ failure to return property belonging to OTX and continuing to use
14
15 and disclose OTX’s confidential and proprietary information and trade secrets to further SCREEN
16 ENGINE’s business.
17 151. As a direct result of defendants’ unfair business practices, OTX has been damaged
18 and defendants have been unjustly enriched in an amount according to proof at the time of trial.
19
152. In unfairly competing with OTX, defendants acted and continue to act oppressively
20
with an intent to destroy OTX’s business, and to injure OTX’s relationship and good will with its
21
customers and employees.
22
23 153. In doing the acts herein alleged, defendants acted with oppression, fraud, malice,
24 and in conscious disregard of the rights of OTX, and OTX is therefore entitled to punitive
25 damages according to proof at the time of trial.

26
154. Unless restrained and enjoined, defendants will continue to unfairly compete and
27
OTX will be irreparably harmed.
28
155. OTX is entitled to recover its attorneys’ fees it has and will continue to incur to
39
COMPLAINT
1 prosecute defendants to stop their unfair, unlawful and fraudulent business practices.
3
TWELFTH CAUSE OF ACTION
4
[Violation of Penal Code §§ 496 and 499c Against All Defendants
5
6
7
8 inclusive.
9 156. Section 496 of the California Penal Code provides, in pertinent part, that every
10 person who buys or receives any property that has been obtained in any manner constituting theft,
11
knowing the property to be so obtained, or who sells, or aids in the selling of such property, is
12
subject to imprisonment in a state prison, or in a county jail for not more than one year. “Theft” is
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13
defined in §499c(b) of the California Penal Code to include taking or using a trade secret without
14
15 authorization, with the intent to deprive or withhold the control of a trade secret from its owner, or
16 with an intent to appropriate a trade secret to his own use or to the use of another.
17 157. OTX alleges, upon information and belief, that defendants have bought, received,
18 sold or aided in obtaining OTX’s trade secrets and other confidential and proprietary information
19
within the meaning of such terms as set forth in Penal Code §§496 and 499c(d) and with
20
knowledge that such property had been obtained in a manner constituting theft, all in an attempt to
21
unfairly compete with OTX
22
23 158. Pursuant to Penal Code §496, OTX is entitled to an award equal to three times the
24 amount of its actual damages and to recovery of reasonable attorney’s fees incurred in prosecuting
25 its claim against defendants.

26
THIRTEEN CAUSE OF ACTION
27
[Conspiracy Against All Defendants and Does 1 through 50, inclusive]
28
159. OTX incorporates the foregoing paragraphs by reference as though set forth fully
40
COMPLAINT
1 herein paragraphs 1 through 158, inclusive.
2 160. OTX alleges, upon information and belief, that defendants were aware of and
3 agreed to participate in a scheme to steal OTX’s confidential and proprietary information and trade
4 secrets, misappropriate OTX’s confidential and proprietary information and trade secrets to divert
5 business to SCREEN ENGINE and away from OTX, misappropriate OTX’s confidential and
6 proprietary information and trade secrets to raid OTX’s employees and screenings’ staff,
7 misappropriate OTX’s confidential and proprietary information and trade secrets to unlawfully
8 solicit OTX’s clients and steal OTX’s business, misappropriate OTX’s confidential and
9 proprietary information and trade secrets to build SCREEN ENGINE’s infrastructure at little to no
10 cost to defendants, unlawfully conceal OTX’s business opportunities and screening events, and
11
disrupt OTX’s business and cause damage OTX’s reputation.

12 161. OTX alleges, upon information and belief, that defendants in fact profited and
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13
received other benefits from the conspiracy scheme.
14
162. As a proximate result of the wrongful acts herein alleged, OTX has been damaged
15
and defendants have been unjustly enriched in an amount according to proof at the time of trial.
16
163. In doing the acts herein alleged, defendants acted with oppression, fraud, malice,
17
18 and in conscious disregard of the rights of OTX, and OTX is therefore entitled to punitive
19 damages according to proof at the time of trial.

20 FOURTEENTH CAUSE OF ACTION
21
[Unjust Enrichment Against All Defendants and Does 1 through 50, inclusive]
22
23
herein paragraphs 1 through 163, inclusive.
24
25 165. In doing to acts and things referred to herein, defendants, and each them, were
26 unjustly enriched at the expense of OTX, and OTX is entitled to disgorgement of all amounts by
27 which defendants, and each of them, have been unjustly enriched (i.e. all income, profits, or other
28 gain earned or received) by virtue of the wrongful conduct perpetrated upon OTX by defendants,
41
COMPLAINT
1 and each of them, as alleged above.
2 FIFTEENTH CAUSE OF ACTION

3
[For Preliminary and Permanent Injunction Against All Defendants
4
5
6
herein paragraphs 1 through 165, inclusive.
7
8 167. Defendants, and each of them, threaten to, and unless restrained will, continue to
9 unfairly and unlawfully, misappropriate and use OTX’s confidential and trade secret information,
10 interfere with OTX’s business relationships, solicit and raid OTX’s employees, divert business
11
away from OTX and unfairly compete with OTX for the benefit of defendants.
12
168. OTX has sustained and will continue to sustain substantial and irreparable injury
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13
and harm, is without as an adequate remedy at law to stop or be compensated for such wrongful
14
15 conduct, and OTX would be required to maintain a multiplicity of actions. Unless and until
16 defendants are enjoined and restrained by order of this Court, such wrongful and illegal conduct of
17 defendants, and each of them, will cause and continue to cause great and irreparable injury.
18
19
WHEREFORE, OTX prays for judgment as follows:
20
1. For a preliminary and permanent injunction, restraining and enjoining
21
Defendants from misappropriating Cross-Complainant OTX’s trade secrets and other confidential
22
23 and proprietary information, and requiring Defendants to return the trade secrets and other
24 confidential and proprietary information to OTX;
25 2. For a preliminary and permanent injunction, restraining and enjoining

26
defendants GOETZ AND PARNESS from breaching the terms of the Employment Agreements
27
and Proprietary and Inventions Agreement signed by them;
28
42
COMPLAINT
1 defendants from interfering with OTX’s contractual relations and prospective economic relations;

3
Defendants PARNESS and GOETZ from breaching of their fiduciary duties to OTX;
4
5
Defendants, and each of them, from continuing the acts that constitute unfair business practices;
6
7
8 Defendants PARNESS and GOETZ from continuing the acts that constitute violations of Labor
9 Code §2860;
11
Defendants from any further misappropriation of OTX’s trade secrets and other confidential and
12
proprietary information and requiring Defendants to return the trade secrets and other confidential
TEL (213) 613-2340 • FAX (213) 613-2344
13
and proprietary information to OTX;
14
15 8. For an award of general damages to be proven at trial;
16 9. For an award of attorney’s fees and costs and all other relief provided for by
17 Civil Code §§ 1717 and 3426, et seq.

18 10. For restitution in an amount to be proven at trial;
19
11. For disgorgement of profits;
20
12. For all relief provided for under Business and Professions Code §17200, et
21
seq.;
22
23 13. For all relief provided for by Penal Code §496, including treble damages and
24 an award for attorney’s fees and costs;
25 14. For punitive and exemplary damages;

26
15. For costs of suit; and
27
///
28
///
43
COMPLAINT
1 16. For such further or other relief as the Court sees fit.
2 DATED: 3/22/2010 EPPS YONG & COULSON, LLP

3
5
By:
6 Dawn M. Coulson
Casandra P. Secord
7 Attorneys for OTX CORPORATION
8
10
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44
COMPLAINT

OTX Complaint Against Screen Engine

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OTX Complaint Against Screen Engine

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1 Dawn M. Coulson, Esq.

5 Attorneys for OTX CORPORATION, a Delaware Corporation

8 SUPERIOR COURT OF THE STATE OF CALIFORNIA

11 OTX CORPORATION, a Delaware Case No.:BC

13 (1) Misappropriation of Trade Secrets

owner and managing member of SCREEN ENGINE, LLC (“SCREEN ENGINE”)

15 Boulevard, Suite 480, Beverly Hills, California.

8 generate publicity for a movie.

15 Kathleen Pielow Nash (“Nash”) was Goetz’ Executive Assistant.

16 11. Vincent Bruzzese (“Bruzzese”) is the Executive Vice-President of the Motion

21 former duties and responsibilities.

26 13. As Vice-President of Screenings and Qualitative, PARNESS managed this

8 methodologies to use for a particular project.

6 20. Elizabeth Wallan (“Wallan”) is the Screenings Operations Manager. Wallan is

15 screenings production materials.

23 any time relevant to this action.

8 GEOTZ’ 2004 Employment Agreement

9 27. On or about January 8, 2004, GOETZ and OTX executed an employment

15 28. GOETZ’ duties and responsibilities as OTX’s Executive Vice President of

23 Employment Agreement Section 1.1(c) attached hereto as Exhibit “A.”

Agreement attached hereto as Exhibit “A.”

16 GOETZ’s employment with OTX.

25 37. Furthermore, GOETZ agreed to the following restrictive covenants contained in

2 “(a) Non-competition. The Employee recognizes and acknowledges

5 expend substantial resources to promotes such services and develop MPG.

6 Accordingly, in order to protect the Company unfair competition and to

7 protect the Company’s proprietary information, the Employee agrees that, at

9 indirectly (i) perform or provide managerial or employee services on behalf

11 directly or indirectly competes with the Company’s Business within the

13 competes with the Company’s Business….

15 “(b) Confidential Information 1. The Employee recognizes and

16 acknowledges that he has access to Proprietary Information 2, which is a

17 valuable, special and unique asset of the of the Company’s business. In

2 duties assigned to him by Company, the Employee: (i) shall hold in

3 confidence all Proprietary Information; (ii) shall not reproduce, use,

4 distribute, disclose, or otherwise misappropriate any Proprietary

5 Information, in whole or in part; (iii) shall take no action causing, or fail to

6 take any action necessary to prevent causing, any Proprietary Information to

10 under any circumstances… 3

12 (c) Nonsolicitation of Employees and Customers. At all times during the

15 solicit, or recruit any employee of the Company to leave the Company’s

16 employment; or (ii) solicit or attempt to solicit any of the actual or targeted

17 prospective customers or clients of the Company with whom the Employee

22 “(d) Ownership of Developments. All Work Product 4 shall belong

23 exclusively to the Company and shall, to the extent possible, be considered

3 the Employee agrees to assign, and automatically assign at the time of

4 creation of the Work Product, without any requirement of further

7 further actions, including execution and delivery of instruments of

8 conveyance, as may be appropriate to give full and proper effect to such

11 Employment Agreement shall survive the termination of this Agreement.

15 40. Section 2.8 of the 2007 Employment Agreement further provides:

16 “Remedies Cumulative; Specific Performance. The rights and remedies of

22 to it) to seek (a) a decree or order of specific performance or mandamus to

23 enforce the observance and performance of such covenant, obligation or

24 other provision, and (b) an injunction restraining such breach or threatened

26 GOETZ’ 2009 Amendment

2 Amendment is attached hereto as Exhibit “C.”

7 and effect, subject to the following terms:

8 “…Employee shall have the right to engage, nonexclusively, in any

9 business activities, provided that such activities are outside of the

10 entertainment market research areas which Employee currently engages in

11 on behalf of OTX, and provided further that such non-exclusive business

12 activities (i) do not interfere with the performance of Employee’s

13 responsibilities under the Agreement or (ii) conflict or compete with the