What's the other side of the FusionGarage - TechCrunch dustup?

I was checking my feeds, and noticed that Jesse Stay shared a TechCrunch post entitled The End Of The CrunchPad. Rut roh. Michael Arrington:

On November 17, our deadline date for greenlighting the debut three days later, the CEO of our partner on the project, Chandra Rathakrishnan, sent me an email with the subject “no good news.” Yuck, I thought. Another delay, probably with the screen that had been giving us so much trouble – capacitive touch at 12 inches isn’t trivial. And sure enough, the email started off with “no good news to update. updated hardware is still on its way , so that’s a timing issue. friday will be a challenge now.”

But the email went on. Bizarrely, we were being notified that we were no longer involved with the project. Our project. Chandra said that based on pressure from his shareholders he had decided to move forward and sell the device directly through Fusion Garage, without our involvement.

Err, what? This is the equivalent of Foxconn, who build the iPhone, notifiying Apple a couple of days before launch that they’d be moving ahead and selling the iPhone directly without any involvement from Apple.

Arrington is not the shy retiring type, and he made a couple of other points:

We chose to work with Fusion Garage on Prototype C and the launch prototype after we finished Prototype B internally.

We jointly own the CrunchPad product intellectual property, and we solely own the CrunchPad trademark.

So it’s legally impossible for them to simply build and sell the device without our agreement.

And:

Ultimately there are two sides to every story, and they’ll certainly have their side. We will almost certainly be filing multiple lawsuits against Fusion Garage, and possibly Chandra and his shareholders as individuals, shortly. The legal system will work it all out over time.

So I guess everyone is wondering what FusionGarage's side of the story is. I visited their website, and found a blog that hadn't been updated since February. I did find a January post that read, in part:

There is an air of excitement permeating through Fusion Garage at the moment. Michael Arrington of Techcrunch just wrote an update on the Techcrunch Tablet Prototype B.

It’s our software that is running on the tablet as demonstrated in the videos embedded in the article. We continue to work with Louis Monier on the feature set and the user experience. We are thrilled with this progress and would like to take the opportunity to thank Michael and Louis for giving us the opportunity to work with them on the Techcrunch Tablet.

Note the differing interpretations of Prototype B. As far as Arrington is concerned, it's a TechCrunch product. As far as FusionGarage is concerned, it includes FusionGarage software. So if there is jointly-owned CrunchPad intellectual property, it looks like both parties brought some prior art into the equation. And when something is jointly owned, it's difficult to separate it into two parts if the joint partnership effectively dissolves. If you don't believe me, check the blog Dodger Divorce, dedicated to the dissolution of the personal - and business - relationship of Frank and Jamie McCourt. Either they co-own the Dodgers, or Frank owns the Dodgers, depending on which set of lawyers is talking.

While we're waiting for a statement from FusionGarage, it is likely that any such statement will emphasize the content which FusionGarage solely owns; will probably state that they have no intention of releasing a "CrunchPad"; and will presumably detail some reason as to why it was not beneficial to continue the relationship with TechCrunch.

But, as I observed on FriendFeed:

Step 1 in how to lose friends and disinfluence people - anger a popular blogger. No matter what the other side may say, and even if they have a legitimate reason for their decision, Arrington has the bigger megaphone.

If you're on FriendFeed, join the discussion in Jesse Stay's feed.