Editor’s note: this week we commemorate the 2-year anniversary of the lawsuit that almost killed Mojo Supreme back in May 2006. This is Part 2.

Two years ago at around this time, 12pm EST, I heard a knock on the door.

Was it the mailman? The milkman? Was it Fartman? Nope. It was the bailiff, aka, badnewsman.

You’ve Been Served!

I was served with papers, lot of papers, from Fasken Martineau, a venerable and expensive law firm. Fasken Martineau was IGN Entertainment’s lawyers in Canada. IGN had bought my old employer Askmen, which was basically an online men’s magazine.

I can’t say I was 100% surprised, not because I was doing something wrong, but because two months earlier, in March, my former employer had sent me a letter warning me that I was - according to them - violating my non-competition agreement, which said I could not start “a men’s online magazine”.

In 2006 I started WatchMojo.com, but before that, I was a VP of Sales for AskMen, which was bought by IGN in June 2005. IGN Entertainment itself was acquired by News Corp. in September 2005.

As far as I knew, News Corp. had very little to do with the lawsuit. It was basically IGN and Askmen tag teaming to make an example out of me.

Technically, the paperwork read:

News Corp., Fox Interactive Media, IGN Entertainment and AskMen

vs.

6059350 Canada Inc., and Ashkan Karbasfrooshan.

Yep, you read that right. It was wild. 6059350 Canada Inc. was a company I set up back in 2003 when I launched my radio career and published my first books. It was a side company with little assets, but one that I used eventually to house Mojo Supreme, which included WatchMojo.com.

For reasons that were unclear to me at the time, IGN attacked both myself personally and my company. This was shrewd, I would soon realize, but ironic ultimately.

Knock, Knock… no one is home

IGN launched its pre-emptive attack on May 8th 2006 by sending a bailiff to serve me the papers.

However, because they were suing my company and the Federal Canadian government’s address for me remained my old address (where I lived until 2004), the lawyers for IGN had to send the paperwork to that address, which meant that I did not get it on the 9th. Once they realized no one was there to accept the papers, they sent them to both my home address and our actual office on the 9th of May, 2006.

Technically, a defendant needs to have at least 24 hours to look at the accusations, they were summoning me to show up to court on May 10th at 9am. But since I had only received the papers on May 9th at noon… time was not on my side. Incidentally, this was one more fateful twist that invariably played a part in the proceedings.

Ah yes, the proceedings. I had about half a day to prepare for the fight of my life.

The Prelude

It’s worth noting that in March 2006, when I got that letter, I emailed my former boss, colleague and partner at AskMen, the IGN brass, as well as the lawyers representing them telling them that this must be a miscommunication and misunderstanding for I had no intention to piss off either AskMen, IGN or News Corp. in particular. I could tell my colleagues disliked me, IGN disrespected me; but News Corp. was a company I actually respected and frankly, envisioned one day partnering or selling to.

The whole episode was odd: upon leaving IGN, no less than Dale Strang, then Executive VP of IGN told me that they might invest in my company.

In January 2006, upon launching Mojo Supreme, I emailed Mark Jung, CEO of IGN, and offered him a seat on our board.

I never heard from them until March 2006 when they sent me a letter and I responded with an email.

I did not contact anyone at News Corp. or Fox Interactive Media in March, 2006. I was always pretty careful to draw a line between IGN and Fox Interactive Media.

All to say, on May 9th 2006, it was clear that giving my former colleagues or IGN a call to smooth things out was out of the question. I knew after that letter in March that that would not be the end of it; this Motion for an Interlocutory Injunction was proof of that. Incidentally, I have kept so many emails and documents from the entire ordeal; sitting in my Gmail draft folder today is this email I typed on May 9th but did not send, addressed to Dale Strang and Mark Jung:

Hello,

I know I should probably have my lawyers speak to your lawyers, and of course I do not expect an answer.

I always believed that legal action was a tactical step towards a broader strategic goal, I am still surprised that you chose to pursue me in court, especially since Dale offered IGN to invest in any company I started after I left AskMen and I contacted you Mark to sit on my board.

Today I got served, it is unfortunate. I read through the documents and am more confident than ever in my case. I am also glad that I saved many emails to from my tenure at AskMen to support my arguments.

Of course, as a young entrepreneur facing so many growth opportunities, I obviously prefer not spending any resources on litigation. But if I am not given a choice, I will spend what it takes.

If there is something you want other than shutting me down, now would be the time to voice your wish. If all you want is to shut me down, I am confident that in the end, we will prevail.

Regards

Ash

I did not send it. I have always, always chosen diplomacy and dialog. But this was past that point. So why email them again?

They had even taken my initial email in March and twisted it against me in the paperwork.

Clearly, peace was not was they sought. They wanted war. I had to go to the war room and plan.

Counsel’s Word: Not Good

From March to May, 2006, I spoke to a few talented, well-regarded and expensive lawyers, one of them being a business acquaintance who I would talk to over the years, a prominent intellectual property lawyer at Blakes, one of Canada’s big law firms. He had introduced me to one of his peers who handled employment law.

The points of view were varied but all echoed the same theme:

- non-competition agreements are hard to enforce.

- my non-competition agreement was vague.

- if they would decide to come after me, it would not be via lawsuit but rather a motion for an injunction.

- injunctions are hard to obtain, but very expensive to defend.

- either way, I had to answer the letter officially.

At the time these tidbits of advice were vague and unclear to me. As much as I have always been comfortable with legalese, frankly it was all the same, and I did not understand what it all meant.

One lawyer suggested that they were trying to corner me in order to buy WatchMojo.com on the cheap.

I did not buy that: I had, what I believed, a promise for consideration to invest in Mojo Supreme by a high-ranking executive at IGN. If they wanted a piece of the company, all they had to do was call me.

More importantly, I had offered a board seat to the Mark Jung, which was an overture for talks either for him to invest or for IGN to do so. Mark is now CEO of Vudu.

At the time, Mark was not only CEO of IGN but I also think had been appointed COO of Fox Interactive Media, reporting to Ross Levinsohn, CEO of Fox Interactive Media.

I considered reaching out to Ross, too, to reason with him on May 9th, but I did not. Even at that time, cornered and alone, I chose not to go around the chain of command. This was one more example of my naive, idealistic and innocent outlook of things.

The Lawyer’s Trap

Anyway, backing up a bit:

By mid-March, I had not responded to the letter formally, only in an email. One of the lawyers I had spoken to at Blakes urged me to respond. For the record, Blakes charged me fairly little for that letter and ultimately was more than professional and cool with me… so nothing in this email is a criticism of their firm or the lawyers I interacted with.

In fact, let me state quite clearly, I’m quite over all of this. This is not even going to be a week-long tirade and rant against my former colleagues and former employer, nor the lawyers at Fasken. I should state that News Corp.’s MySpace is in fact a distribution partner of WatchMojo.com’s… but even before that was announced in January 2008, I have always remained professional and courteous to the entire organization there because that’s my style. I forgive, I just don’t forget. What I am doing now is 100% about advice for entrepreneurs when your back is up against the wall.

Anyway, back to the case: “an official letter” was the right protocol, I was told.

In hindsight, I should have responded myself, or gotten an unknown lawyer to respond. Instead, I made the mistake of effectively mandating this big expensive law firm to respond on my behalf.

By doing that, I had stepped right into IGN’s trap: an expensive dance had officially begun.

The War Room

On May 9th, I was not the only one who got the motion for injunction, Blakes did too, for technically they were our law firm.

That afternoon, we held a conference call and they were asking me very technical questions about what precise time I had gotten the papers (to ensure that I had 24 hours), along with many other attempts to win small tactical, procedural things.

I was getting nauseous. I wanted to blow AskMen and IGN away with a nuclear weapon. I cared very little about procedural matters but knew all too well that while I was going to have a strong case on the substantive matters, I could not get too arrogant or confident. In fact, my counterparts expected that and were, in my opinion, counting on me to lose it and go ballistic.

During that call, it was pretty clear that just explaining the details of the case would take a lot of time.

Moreover, a respected law firm like Blakes would take a lot of time combing through the thousands of pages.

This was playing right into Fasken’s strategy.

During that call, I had to ask the inevitable and unavoidable question: what would such a defense cost?

Silence.

Injunctions 101

After a few seconds of dead air: I was told that an injunction was a multi-stage process:

- the Provisional Injunction
- the Interlocutory Injunction
- the actual trial, or Merits.

Mind you, unlike a regular trial, an injunction connotes a sense of urgency. It’s all about an element of surprise. The idea is one party is at threat of suffering unmeasurable damages so the offending party must be stopped, if not temporarily, until we get to the trial. In this case, supposedly WatchMojo.com was causing irreparable harm to AskMen, which was a version of Maxim magazine on the Web, a men’s online magazine producing articles. At WatchMojo.com, I was producing videos for people of all ages. It seemed clear that we were not competing, let alone causing them any harm. But, as I was learning, it was all moot.

We were in the first phase… the whole thing could take years. While this meant that technically WatchMojo.com could operate and prolong this process, just preparing for the first phase would cost me over $50,000.

Actually going through Phase 1 would be well over $100,000.

Preparing for Phase 2 would be far more expensive and simply getting to let alone winning Phase 3 would start to cost me somewhere north of $250,000, if not way more.

These things were unpredictable, I was told. Oh how that was an understatement.

Incidentally, having been a minority shareholder at AskMen, I had walked away with a couple hundred thousands of dollars. My three partners took in over $7M, our VCs $6M and another small partner and I took in less than $500K combined.

I’ve never made it official, but that’s right, everything you see here, here, here and in fact, here was built for less than $500K. We do have revenues to finance operations, too, so by now the investment-to-date is obviously far more than that, but you get the idea: while some clueless frigtards are raising $10M-100M and fleecing investors, we’ve actually built something tangible of considerable value with about $1M.

The point is: at the risk of sounding cocky, I think they knew that I could go on to build something of value with little funds, so they sought to avoid that and make an example out of me for daring to move on with my life after IGN pushed me out of the picture.

The proceeds of the sale, along with my sales commissions over the years (which my classy colleagues broke down every penny in one of the exhibits) was all I had to finance Mojo Supreme. To thank me for my hard work, they were about to bleed me dry to avoid that from happening.

Bear in mind, today WatchMojo.com is a valuable business with one of the biggest content libraries around, syndication deals, revenue, partnerships, etc. At the time, I estimate we had less than 500 clips, had generated $219.39 (not a typo) in revenues Year-to-Date and I had no clue if WatchMojo.com would become something of value. I did not even know the full extent of what they were suing, because they seemed to want to shut down everything: our video site, our blogs, our search operations… At the time this was a slight detail but this, too, would prove to become a factor, I guess.

It was clear, then, that they wanted to make me into an example. This was personal, frivolous and meritless, but they were never counting on getting to the merits.

They were coming at me with a ton of bricks and I had to make a choice:

Give up or Fight Back.

The Decision to Drop Representation

During that conference call, I thanked Blakes for their counsel thus far and took over the case myself. This was probably around 2pm. From 2pm onwards, I had to get cracking on a strategy.

Forget coming at me like a ton of bricks, for all intents and purposes, I was shitting them!

An Early Mistake: Not Listening to My Gut

A mistake I did in March, and continued to make in May, was actually not going public with this. I did not blog about it because I still wanted to maintain diplomatic options. Again, I was naive and an idiot. These guys were about to crucify me and here I was looking out for how they looked.

The Night Before War

From 2pm until about 2am, I hit the Web and prepared a “defense”.

I had a date with destiny the next morning at 9am. What happened? Well, the first thing I did was go through the affidavits and motion for injunction.

Come back tomorrow for what happened on that infamous May 10th 2006.

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