database products later in that same contract big knowledge that what was going to develop were quote joint in the database products and later for those products another paragraph as j v products despite of multiple of the factors but not relying solely on that why do you rely on it form what are for what point are you relying on in terms of establishing a partnership so first it goes to the factor of expression inten partners i've also using it to show contribution of property to the business because that contract sets forth what each party is going to provide and contribute to the partnership i further rely on it to show the right to control or to participate in control of the business i further rely on and the you describe what the business is notably the statute repeatedly refers to control of the business showing the profits of the business so that one of the threshold questions of course is what is the business one directly on the partnership line under the m r u languages etc for ownership of half the data bank and then mine is joint creator of the when on the partnership are you when otherwise under the agreement i think that's right if the court determines there was an error in the partnership analysis as we set forth in the brief the dish of course analysis of the ownership issue is really mixed in with its partnership analysis so if the court determines that the partnership issue needs to be remanded that issue sort of infects everything else in the case now the court but you don't need a partnership to man that's correct i don't need a partnership the way if the court determine that the addition court erred on the partnership issue it would put the ownership issue in place certainly but i don't need x your best shot and so that's what you can start with i think i have a good shot on both not hang on but i think that the most significant clear error is on the control factor keep in mind that there's five factors that the statute and the texas supreme court in anger say go into the partnership in court the district court found two of the five factors and said that i find two the five factors but i'm not saying that's not enough the control factor which the legislative comments to the statue you know it is one of the most important factors it is you know there's five factors out there it's one of the top factors she just got the wall ro court certainly quoted the statute and cited angry and they noted in interim that the right to control is the right to make executive decisions and she found as a factual matter that p l s did have the right to make executive decisions regarding the sales and marketing of the database and it set the pricing it decided to sell to them and it also did that feel as not only had control over those issues it had input into the product development issues  but that's not the whole ball of wax either one of those i mean there are other issues involved in running a business besides how we're going to sell and market it is true your client under the arrangements  had to do a sales and marketing that was the sphere that it was operating in but that doesn't make a partnership this is this is a deal venture a joint venture but the question whether you really established is a matter of on this record that there was actually a partnership under texas law is very different from a joint venture love for this court to just say as a matter of law there's a partnership here but i think on this record if the court determines that there are errors of law in the dish of courts conclusions of law that the appropriate remedy would be a remain for further proceedings to let that court go forward and based on the correct law and the issue here is ingram says that there are good four different examples of executive decision making one of those is a right right the whole business operations the dish a court found the right to control business operations found the right controls sales and marketing but then for whatever reason said there's no control here at all because the dish a quarter rony sleeve wrote a new element into the statute that to be a partnership each partner had to be able to control the whole business and in england doesn't say that the statute doesn't say that and nothing else and texas law says that in fact the decision by two partners at the outset to divide responsibility say you're going to handle this and i'm going to handle factor and then it's up for the fact finder to say ok now on these facts that i found and how do i weigh the risks and that's where the harm is and that's where the areas on the control issues that the other issue is control is at certain points you can control some parts of the business and put in the others it is further evidence of control and here in the district were found as a factual matter that there was input in the parts of the business that people estimate control itself but then said inputs not control but the overall problem on control really gets to the fact that she just imposed a much higher standard requiring each partner to be able control everything and that is not texas law and that legal air infected the fact finding credence to it and i would note that the court and the court thought a factor was there but we the court set it for example on the contribution factor it's that i find that the parties to contribute property but i find the factor to a limited extent now i disagree with that but the next issue i think of legal and the partnership analysis has to do with profit sharing and the dish of course air here was she basically imposed a requirement that doesn't exist in law that to have made found to be profit  have to basically do like that would order of operations like you learned in the class of case where you have to do this then this then this to calculate profit in england doesn't say that ingram does say that profits is the excess of revenues over expenditures no doubt about that and what the parties did here was they said we're going to split the revenues this way and we're going to split the cost of this way so each side got some profit now depending on the cost of a given month and the revenues in a given month it may broad inflexible and the whole idea is brought inflexible on it's just best to eliminate accidental partners and this is very stringent and tight is not really the problem with unfocused and in some ways misunderstood what engram was saying that for example an interim the court said we don't find profit sharing here because there was no allocation of cost it just said i may get a third of the revenue in the second partners and get a third of the revenue and the other third of the revenue will do the costs and with the courts concern there was was that that may not be enough to cover the costs it doesn't deal with here all the costs were covered by one partner or the other and in some cases even though there was a division among them each partner wound up covering each other's costs there are times where p l s was covering derrick's costs related product development product management there are times that mr david our testified that he incurred sales and marketing costs on his side of the ledger so w district court there was a tax return filed later in two thousand and thirteen i don't believe it's part of the trial record however said but other than that i believe that is correct double check on that but what we see is is your point judge court far too narrowly read the profit sharing when you see the examples where profit sharing doesn't occur it's avoid what you call the accidental partnership where somebody is entitled to a cut of the revenues or court of the profits but is basically free writing this just they don't but they'll have the skin in the game other than dish court recognized that they had a business together that there's not a correct meaning in a joint ventures where they hand the auction is didn't add up to a partnership under texas law i agree and we believe it did but the the big issue here on appeal is that in the five factors is how did the circumstances test the district court got the ball wrong on two of the five factors that it did not find existed and that alone requires a real man for further proceedings if i could almost i would like to turn briefly to the second issue lot of evidence and fighting back and forth about how much kill us contribution is worth how much derek contributions are worth but the court doesn't need to get into all those issues it only needs to look at the contract and i would point the court to page thirty nine fifteen of the record which is the similarly in the exit mechanism which is a next main paragraph down where the court is saying i'm sorry where the parties are saying what happens it just walks out on this before that term is up what happens it says derek you've got the you is with respect to ownership i would agree that the partnership inquiry doesn't matter the part there isn't there are some issues were in the partnership you know we're here on fifty four b sort of attention there are some other fishery duty claims and some other claims that partnership might be relevant to but at the end of the day you're right the ownership and she is the big issue for my client and if the court wants to say that my client's happy most points for the questions i will sit down for now ok thank you very much for asking and mr good morning may it please the court my name is brandon cook and i represent derek petroleum services in the limited time i have this morning i'll try to deal with the partnership issue and the ownership issue but i feel compelled to make a few  had an experienced trial judge what a four day bench trial heard seven live witnesses over two hundred exhibits took a month and a half then the craft a thirty five page opinion is this court knows there must be clear error to reverse this court's trial court's decision  must be a definite and firm conviction that a mistake was made i submit to this court that judge rosenthal did not make a mistake in this case council started consistent with their  the judge rose and told got the wall that she erred and it is a matter of the law a couple of observations in that regard there's really no dispute in this case is what that as to what that law is there's no dispute that ingram v de controls and i want to underscore for this court that trial counsel at the time told judge rosenthal that ingram is the best case for both sides the last review by the texas supreme court of partnership law which goes through all of the factors that record on appeal it twenty two thirty so there should be no doubt in this court's mind what law applies there's been a bit of a shell game in the briefing in terms of the interplay between the statute the texas business organizations code ingram and what the court did in that regard the second observation i'd like to make of course is that as a as is typically the case in the bench trial that look the court is the sole arbiter of the credibility of the witnesses and it bears noting that at least three times in the court's opinion on critical issues relating the sharing of profits expenses and contributions to that a base it was determined that the p l s testimony on those issues was not credible tha it was inconsistent with documents or just didn't follow consistent with other testimony in the case and i'd invite the court to look at the record on appeal at eight thirty for a thirty five and eight thirty eight if you will  having said that i want to make sure that i touch on a couple of key basic points there were questions that were lodged in mr ball to ball on skis argument were regarding intent to be part of the only intent we were some discussion about the testimony from p l s witnesses conceded that there was no transfer of any interest in into the ownership of the the database at that time but on the subject of intent there's precious little evidence of intent expressed by either side to be partners that which is in the m r u was determined to be ambiguous and the court stated that she gave those statements in the m l you and other statements that were admittedly made either the ownership interest pictures the pros all that it doesn't say anything about the ownership interest that's the bottom line is judge rosenthal concluded that it says nothing with respect to ownership interests and the testimony of  ownership in this three page document but he didn't that's plaintiff's exhibit sixty nine and record on appeal at forty eight sixty two mr lecky who drafted this document who is in this courtroom today mr lets these that ownership is not clear in the i ownership argument that this court is confronted with here today does not derive from the m r u but was contrived by counsel for purposes of argument a product that's record on appeal at twenty four sixty one and sixty two and last but not least  court also concluded that the testimony of b l s witnesses on that subject was not credible basically so long and short of the there's simply nothing to be said with nothing to follow up on the imo you as right along i mean people put more information into it but there's no there is no provision in it that says here's what we started with in terms of ownership and here's what we're going to end with in terms of ownership ownership of the database is simply not addressed is that what you're saying but yes your honor i am correct there are a few points that you made in your question point one simply but the imo you does not express address ownership but i touched on that point to you referenced alleged contributions made by p l s to the database i should underscore for this word as we were preparing this case and we looked at how we were going to evaluate this information we went out and retained a very well respected forensic expert in this field an individual named nancy miracle miss miracle testified and her testimony was essentially uncontroverted you can scour the record high and low and you won't find anything to contest the testimony of mr miracle including cross examination of key witnesses p l s and i think the important point there is that mr miracle made a few observations or conclusions one and i don't think this point is in dispute that the database says it was originated and created by derek in two thousand and six was essentially the same database in two thousand and two thousand and yes i am here on that one i think i think the record is overwhelming in that regard and to prove that there are some facts and figures if you will that i might suggest of the court this miracle that a detailed review and sound specifically that point zero two percent of sixteen thousand and one emanate records came from the b l s two thousand and nine database but less than one half of one percent miracle this miracle reviewed almost three thousand e mails from people asked the director and she conceded that of that contribution only one point seven percent of the data that was embraced and contained in the emanated database actually came from last indeed there were many suggestions on many occasions that were made by p l s but i should underscore no they were also made by customers they were made by totality they were made by shall they were made  on the record reflects this and if you would if you were involved for the moment the notion that merely because payless made the suggestion to direct and that suggestion was incorporated then by implication the shelves the top tiles and all those other companies the stone simply have an ownership interest as well but aren't there done that some documents that reflect that they were going to have to try to buy peerless is interesting and nobody was ever talking about buying shelves interests or tiles injuries dollars there's one very limited document and frankly your honour's that document what followed from a mediation that took place in new york city when it became apparent that there was going to be a business divorce in this case it was a settlement discussion and derek's offer was not to buy out the interest in its database that it created but there were subscription agreements that had been entered into with numerous customers that were generating a cash flow the cash flow that i think the record shows at one point in time remember the  year exceeded two million dollars that sold eric was doing p l s his interest in the database that's the title of the document well then that's a misnomer on a because the simple fact you know dar sent the title the thing buying p l s is interest right well at that point in time he at last was asserting an interest in the database and if you look at the record there are myriad number of documents in which not only does p l s question whether it has any interest in the database and when a lot of lament the fact that the record is unclear in that regard and then make admissions that they don't and direct challenges that as well at this point in time there was a crossfire between the parties they were just trying to saddle an issue which at that point i was in the s first of all that is a p l s document unilaterally created by p l s and it was not approved by deborah it's a self serving unilateral or issue let's point one second point the characterizations that the parties themselves bring to bear regarding had nothing to do with those were documents and this gets back into the separateness of the business and what the court observed to be the separate steers that were controlled by each side the m o you basically had last doing the marketing what was characterized as the front end of the business and the back end of the business was the technical aspect of creation maintenance and operation of the database if you will on the front end were were the subscription agreements there is a small company three or four employees located ten thousand miles away in india they had nothing to do with these subscription agreements but if they signed it excuse me the very person there's some evidence there is evidence that the court considered and determined in her weight to be accorded those five factors to be unwise under england in the court they don't need those fi individually if you don't we're not going for a partnership you're going for whether there is doing ownership of the database apart from the partners it's the totality of circumstances tast the ownership interest at the end of the day you look at there's stages of creation control and contribution there's no dispute that the creation of the database was was undertaken by direct as far as control is concerned and that is a very important factor and i would allude to the there are least four or five instances in which the court observed that i quote directly taking to maintain control over the content structure and presentation of the database that's a record eight thirty to the evidence shows that derek exercised its contractual profit of controlling the data says content and format but it goes on in that same thing and because derek was the sole party in possession and control of the database i sign up they would have to be signed by someone from derek because derek's got the database at least at the outset so he'd have to know i don't know how much not sure i'm not i don't know how much you make of the fact that he signed it because this is a it is a joint operation and he's one of the joint people who's working on the database and i know the other side also put information into the database but certainly if you're a customer you're going to want to be sure that you've got derrick on the line here  right i think partially your honor i think we're looking for consistency and an absolute mess where there's probably where there probably isn't any we're looking at a five year continuum over two hundred subscription agreements and i can sit here stand here today before the court and say everyone was treated on a consistent matter i suspect if we were to go through all two hundred of them derek probably saw in some they didn't sign of others the way the independent aspects of the business operated evolved over that period of time as the business the revenue generated from the business increased if you will i can only say that mr wong as the president of people last was adamant in his testimony that these subscription agreements were ours stay out of our business we control the front end you control the backend and his testimony which the court relied upon that was expressed and on point when he said we're liable for the subscription agreements these are our business they're not yours we're on the hook so i hesitate to say that any signature by mr david our might be considered pro forma in nature but you know these things would be sent over to him and in the end he would sign that i would submit to the court that does not merely because of the language that mr lidsky or mr weiss may have drafted that elevate the ls to the position of the owner of the database given the fact that had nothing to do with the creation given the fact it had nothing to do with the control and there was certainly at the end of the day as the court said no transfer of ownership and that is key and i don't copyright jointly i'm sorry your honor why do they hold the copyright jointly why did they hold the copyright i'm not sure i can you repeat it one more time my question is if they don't have any interest in it in the database itself why are the parties holding the copyright in their database jointly but that's i'm not sure they are and i would say this year on earth it is it's not because of anything mr di adored there has been in the court addressed this in her memorandum opinion that the copyright issue was only raised and you have to have two elements there you have to have a transfer of ownership and an attempt to transfer ownership and the  that one there was no transfer and to no intent to effect transfer and i'll quote the court on this at record on appeal that page eight fifty that the court said the m o u language is consistent with the adorers credible testimony that the parties did knew this they criticized your daughter said he should have put it in but he didn't mr list he says ownerships not clear it doesn't have the ownership interest in it basically and the bottom line is and there is a case that sort of bears on this as the thompson  larsen case that we cited in our brief that taste says their most independent contributions the intellectual property to the issue there are no such independent contributions here and i didn't make this point but i should add when information would be given a suggestion might be made that they should include certain data points for information on the database it wasn't rubber stamped in the polluted it was derek who had to assimilate this information analyze the information we form recommended direct except for and when we look at the larsen case it's an interesting case because it involves a dispute over the musical the hit play rent if you will and one of the alleged contributors it was found that even a contribution of minor ten percent of the musical score was deemed insufficient to establish a viable claim of ownership and the court looked at this and basically said any contributions that p l s may have made were a century de minimus in nature they w n the back up because i think i missed something there were four hundred thirty nine deals put forward by him by p l s ok pos put them forward and when you say do you know what you're talking about is raw material for the database right ok corporate transactions right transactions and only four of them went into the database that's right and the record on appeal i can reference as a twenty five seventy eight to twenty five eighty in that regard i know it might times out i think t court for just patience and i would merely end by asking this court list fully affirmed the decision of judge judge rosenthal because well we can all stand here today and second guess that's not the role of the li i'll start with the ownership issue first the air there was there is a contract that unimpeded mostly provides that this database product they jointly developed and marketed was to be jointly of the difficult as a matter of law and looking beyond the terms of that on him big it was contract to various other things and i would like to point out contrary to what mr cook at just told the court at page eight fifty one of the record where the court in a single paragraph dealt with the conveyance issue separately from the partnership issue it didn't say that the m o you doesn't address it address whether or not is to be jointly and it said two things about the emily it said the m o you did not comply with copyright didn't address copyright ownership in a way that complied with seventeen issue because if there is any of those factors our company would be changed that's a harmful area would go from two factors to three factors that could well change the district court's determination at a minimum we man is necessary the second legal air is the misinterpret as to what constitutes the sharing of profits under texas law she impose an overly stringent requirement on how profits must be calculated to meet that statute the third legal air on the partnership issue was the district court in its fact findings talked about  which is what the statute says and what it says it's different than the common law test of actual intent but then in the conclusions of the law for whatever reason the district court did not answer that the answer the question about expressions of intent instead at page eight fifty the documents and e mails that mr cook referred to these are the same kind of abridged versions of the documents and testimony that are in apple is great if you look at pages nineteen through twenty two of our reply brief you'll see the rest of the story for example from the beginning to today said that they have an ownership interest in this database judge all right you mentioned record forty sixty six which is the e mail from mr david r to a third party consultant about buying out p l s s interest that e mails in august two thousand and twelve nearly two years before this lawsuit was filed so i mean yes was there were there disputes between the parties in two thousand twelve thousand thirteen yes there were but to extent there's a suggestion that is some part of the settlement communication in this case that's not the that then you don't need to show independent copyrightable contributions from both that again even in copyright the contract controls in our point here is that emily shows that intent that the database to be jointly developed is in fact a jointly prop and product finally there's a decided we gave them all the stuff that we had they had a prior database that over three years had mentioned the three customers and then we had our database we gave them access to it they chose only put a certain number of rows and ok ok