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By Tony Dime – AV Web News

The kids at Sony seem to have been very naughty children. They let their IT system go to pot, and got hacked, and outed, as “racist”, “misogynist”, “campaign rigging”, “high school tantrum throwing” kinds of people, per their own emails. Hollywood Reporter, The Verge, Wikileaks, and a variety of tabloids and pundits, have delighted in dissecting the fraternity house, inside antics, of Sony Pictures. Their boss got fired. They got ridiculed for turning Zero Dark Thirty into a, slightly fabricated, political vote-churn tool. Other execs got kicked to the curb. All of their financial, contracting, political cash layout, and tax dynamics were placed under investigation, and even more sketchy bits are shaking loose…

The latest issue has to do with Sony’s hope for its future. The movie box office numbers, from walk-in theaters, are not so swell. The world has discovered, and embraced, digital media. Netflix users are going up, up, up and print media is dead. Sony’s future depends on digital media.

Sony is rushing to play catch-up with Sony Vue Video-on-Demand and VR headsets to watch digital movies in. Other content owners are worried about Sony being in charge of their digital content if Sony can’t even keep its own digital house in order. Documents from the hacks, and whistle-blowing from past employees and investment banks, confirm that Sony has spent many billions on it’s digital video program and intends to make vast billions of dollars off of digital video-on-demand.

Sony was not always in a jam to try to get digital done right. In 1998 Sony approached a small technology group (Let’s call them “ABC Group”) in San Francisco, that had developed the first full-screen web video. The technology was the first to deliver full screen, high definition, full frame-rate, full color, small data demand, movies and music, over the internet, using any standard browser.

No other company had done this exact thing before, nor had anybody patented it, and demonstrated it, nor did anyone have this much of a leg up on it, like “ABC Group” had. “ABC Group”, accurately, predicted that movies on the web, and their technology approach, would be a “big thing”.

This was before YouTube, Napster, Bittorent, iTunes, Vudu, or the rest, had even been formed. One of this group’s biggest pitches was that their movies were un-hackable, because their technology allowed them to put thousands of digital padlocks throughout each movie, so that no hacker would even bother with the hassle of trying to open all of those locks. Today, Sony appreciates that factor more than ever.

Sony had kept it’s eye on this group, since this group first developed, built and patented, the first  wearable VR headset movie system.  Sony’s Director of Worldwide Pay-Per-View: Lawrence Hess; Sony’s Vice President of Marketing: Ira Rubenstein; Sony’s Manager of Corporate Development: Steven C. Tsai; Sony’s Vice President of Sales & Advertising for Pay Television & Airlines: Cheryl Koll; and Sony’s Director of Marketing: Andrew Schneider; contacted the heads of “ABC Group” and said that they wanted the technology and invited “ABC” to come to Sony Headquarters in Los Angles to make a full board presentation.

At one of the (recorded) meetings, there were so many Sony Executives, many of whom had flown in from Japan, that many were shaking hands, for first-ever meetings, and commenting: “Oh, you are the head of so-and-so department, I read about you in Variety all the time.”

In addition to the above, other Sony luminaries at the discussions included: Sony’s Vice President of Post Production Services: Patricia Furnare; Sony’s Director of Marketing for Sony Semiconductor: Thuy T. Nguyen; Sony’s Product Marketing Manager for Consumer a/v/d for Sony Semiconductor: Grace Wei; Area Sales Manager for Sony Semiconductor: Jerry K. Smith; Sony Vice President of Corporate Development: Patrick Kennedy; Sony Vice President of Business & Legal Affairs: Eric I. Baum and other top Sony leaders.

During one of the largest meetings, a fight broke out between Sony executives in which one group said, about “ABC’s” technology: “We must stop this, it could destroy our business plan”; while another group yelled out: “We must do this, it is the business plan of our future.”

“ABC” demonstrated their Playstation-like video cartridges and gamebox/video player web connected hardware box and software. Many, many non-disclosure agreements were signed by Sony pictures, but were later found to have been broken by Sony executives.

After dangling “investment” and “acquisition offers” and requiring extensive “investment review” of the technology, Sony later says: It is “too early to talk about this”…. It is a bit too “futuristic”…” Essentially a “Thanks, but no Thanks”.

“ABC” had many “how to” meetings with all of the key Sony engineers and executives. Extensive numbers of highly encouraging emails, letters and contracts were exchanged. All of those documents and communications have now been recovered and this reporter has viewed many of them.

Years later, “ABC” discovers a patent that Sony had rushed out to file, right after one of the largest meetings with “ABC”. The man who had first solicited “ABC” on behalf of Sony: Sony’s Vice President of Marketing: Ira Rubenstein; had listed himself as the “inventor”. The patent described a clone of the “ABC” technology. Many of the other Sony executives, from those meetings with “ABC”, had also put their names on the patent as “co-inventors”. “ABC” always found this sudden inventive spirit by Mr. Rubenstein to be amazing, since, at the same time, he was sending emails to the founders of “ABC” describing himself as a “computer idiot” and lamenting his inability to get technology to work.

This was the same Ira Rubenstein who stood on stage at the Variety Entertainment Magazine industry-wide event, and proclaimed to the heads of the entertainment industry, that: “The future of the web will be brought to you by Sony Pictures and “ABC Group”…” As he pointed to “ABC Group” staff standing in the room. He said this on-camera, on behalf of Sony Pictures.

Sony’s patent filing, and their later digital music and video roll-outs, turned out to be complete copies of the system ABC had engineered, built, launched, demonstrated and patented. IT turned out that Sony went right out and copied the technology as soon as they got done sifting through “ABC’s” intellectual property.

In an even more profound slap in the face: when forensic intellectual property experts scoured Sony’s federal patent files, they found an ironic smoking gun! In Sony’s own patent files, submitted to the U.S. Government, the hired patent writers, who had drafted the patent, had accidently left in the written notations about “ABC Group”! In all of Sony’s patent materials, then, the only outside source of inspiration mentioned was “ABC Group”. This proves where Sony got their engineering and intellectual property from, in Sony’s own materials.

Sony’s own materials come back to bite Sony, in the backside, again, after the Korean hack. What they had said that digital media exploitation was making, in public, was not what the true numbers were. It was making more than Sony had said, and Sony planned big profits, in the next years, off of that single technology shift. Everyone enjoyed seeing all of the South Pacific Island trips, private schools and multiple homes that Sony executives were always bragging about. That digital media exploitation sure pays well. “ABC” was curious about when their money from Sony might show up so they could, also, get a private beach house in Tahiti.

After seeing some of the newer confirming documents, “ABC” asked George Clooney’s agent, a party who Sony, at one time, respected, to assist with negotiating a settlement. Sony’s CEO, though, was facing extraction, and that potential settlement deal did not evolve.

To date, according to Sony documents, and Staff, Sony has made over $18 Billion+ dollars exploiting “ABC’s” technology. Sony has paid “ABC” and its lead staff exactly ZERO!

Big companies tried to stop, hit-job, blockade and blacklist ABC from getting “those damn movies on that internet”; but it is now the main way that people see media. It is no longer possible for Sony to say the technology couldn’t have worked. It is working in Sony’s own products.

Current Sony lawyers say that they were not around “back then” and that Sony has “No obligation”. The records, recordings and documents tell a different story. “ABC” wrote the head of Sony Corporate in Japan. They advised him that Sony executives were being dishonorable. He has yet to reply.

“ABC” is looking for a law firm to sue Sony. Suing Sony is a pricey proposition and Sony knows this. That is why Sony used to be quite cavalier about their actions. In the post hack days, with hard evidence on the table, maybe they will change their tune.

The value of a big corporation is it’s brand. If the brand of Sony is tied to remarks and actions about racism, women, ego’s and idea theft, then Sony has a long row to hoe. Sony might want to do the right thing here and finally return “ABC”’s phone call. Sony Vice President of Litigation: Kathleen M. Hallinan; said that “ABC” was too small to take Sony on and refuses to even have a single discussion about the matter.

Will this ever go away? “ABC” says: “Never!.. not until we get a fair discussion.”

Sony just launched their Sony Vue copy of ABC’s technology so the clock has a long time to run.

Sony, why won’t you do the right thing and try to work this out?

If you are an experienced law firm, and you want to sue Sony Pictures on behalf of “ABC”, and split the winnings, let me know and I will forward your info.






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