IMAX Claims Former Partner, Cinemark, Stole The Trade Secrets of the IMAX Theater Experience

Courthouse News Service is reporting that IMAX claims its former partner Cinemark defrauded it and stole trade secrets by trying to "reproduce" IMAX's "multiplex movie theaters across the Americas." It claims Cinemark used the secrets to create "Extreme Digital" or XD theaters to provide a "bootleg version of the IMAX Experience."

In its complaint filed in state court in New York, IMAX says it teamed up Cinemark in the 1990s after "two principals of Cinemark ... professed an intent to become one of IMAX's biggest customers."

At the time, IMAX says, Cinemark multiplexes "housed standard, conventional-sized auditoriums," while IMAX theaters were "wrap around." IMAX says it went for the deal because Cinemark promised "to install IMAX systems in ... Cinemark's domestic multiplexes ... and to ultimately provide IMAX an expansion opportunity into Latin American markets, where Cinemark touted a strategic presence." IMAX says it disclosed to Cinemark "confidential and sensitive information regarding the IMAX immersion theatres ... all the details that set IMAX apart from all other industry participants."

But now, IMAX says, instead of promoting the IMAX brand, Cinemark is "blatantly" trying "to reproduce the entire, trademarked IMAX Experience in the form of a product that Cinemark unveiled earlier this year," which Cinemark calls "'Extreme Digital Cinema' ... or XD.'" Cinemark has the brass to claim that XD is "just like" or even "better than" IMAX, according to the complaint.

IMAX claims XD is a "bootleg version of the IMAX Experience." It claims Cinemark "fraudulently misrepresented its intentions to IMAX for the purpose of extracting confidential information." It adds that "over a number of years, [Cinemark] has deliberately misappropriated that information, co-opting ... hundreds of millions of dollars worth of strategic research ... and is now ... seeking to profit from its actions at IMAX's expense." IMAX seeks compensatory and punitive damages for tortious interference, unjust enrichment, theft of trade secrets and breach of contract.

We'll keep our 3-D glasses on and watch for developments in this one.