In the absence still of Harry Blazer's promised "rebuttal" rendition of current events as per his side, one might consider the just-filed injunction against Ralph Karsten by plaintiffs Atma-Sphere Acquisition LLC of Kalispell/Montana and Atma-Sphere Music Systems Inc. of St. Paul/Minnesota. It opens with "Karsten's employment history with Atma-Sphere Music" and recounts it as follows:
  • Incorporation: on or about October 23, 1996
  • Business: design and manufacture of high-end electronic preamplifiers and amplifiers primarily for home use.
  • Assignment of Intangibles: on November 1, 1996 whereby Ralph Karsten assigned copyrights, non-registered trademarks, mechanical drawings and "all designs, production procedures, prints, schematic and pc board layouts" to Atma-Sphere Music including three US patents
  • Signed employee agreement: on November 1, 1996 which forbids Karsten from, "among other things, directly or indirectly engaging in a business similar to Atma-Sphere for five years following the termination of his employment relationship... to contact any customers for the purpose of selling competing products. As additional consideration to Karsten for entering into the employment agreement, Atma-Sphere Music made its trade secrets and confidential information known to him.. all... at substantial expense to Atma-Sphere Music."

Considering that in 1996, Atma-Sphere was jointly and equally owned by Ralph Karsten and Mike Benyo and that Karsten, as the filing confirms, "was responsible for Atma-Sphere Music's day-to-day operations and for designing and developing new technology for music amplifiers", it is a curious slight of legalese phrasing that Atma-Sphere made its trade secrets and confidential information known to Karsten and at substantial expense when in fact Karsten was the holder and originator of such information in the first place. The filing next describes "The Creation of Atma-Sphere Acquisition".

  • Formation in September 2003: formed as a Georgia LLC between Ralph Karsten, Harry Blazer and Mark Gilmore "each of whom owned approximately one-third of the business respectively". As part of their capital contributions to Atma-Sphere Acquisition, Karsten and Gilmore contributed 100% of Atma-Sphere Music's stock whereas Blazer infused "substantial capital" (no actual amount mentioned).
  • Operating Agreement: includes 2-year non-compete that binds each member and prohibits each, among other things, from interfering with the operations and divulging company information. Violation of this non-compete agreement entitles Atma-Sphere Acquisition to a temporary and permanent injunction. Also includes provisions for "reasonable limitations in duration, scope and activities restrained".

The document continues by stating that in September 2004, "Karsten voluntarily resigned from his employment with Atma-Sphere Music and began negotiating the sale of his ownership interests" but, as of the filing date, "has not sold his ownership interest to the remaining members of Atma-Sphere Acquisition nor have the terms of a proposed buyout agreement been reached". This statement is in clear opposition to Harry Blazer's press release posted on both the Atma-Sphere and Glacier Audio websites, which we copied here and which now appears to have been nothing more than a smoke screen. The court filing continues with statements about Ralph Karsten's "new business venture entitled 'Rendition Audio' of which he is the sole owner and for which he "intends to use and/or has used the defendant's intellectual property in producing products for Rendition Audio." It then proceeds to accuse Rendition Audio of plagiarizing Atma-Sphere Music's Internet site and that "Rendition Audio is, or will soon be, a direct competitor of Atma-Sphere Music."

One look at the Rendition Audio news page reveals the following statement:

"Rendition Audio is the latest company of Ralph Karsten, who has built a career of 27 years producing state of the art amplification using his patented OTL designs. In the past, Ralph Karsten's career was focused on the area of High End audio. Now through Rendition Audio he will be a introducing a new line of products that promise to be equally exciting in their respective fields.

The first of these new products is the world's first OTL guitar amplifier! Based on many of the concepts Ralph Karsten has developed in the last three decades, the Rendition Audio Evolution One is an entirely new concept in the world of guitar amplifiers- in fact, 'new' hardly describes the radical concepts that are being introduced.

The Evolution One is not only the first OTL guitar amplifier, it is also the first fully differential and balanced all tube guitar amplifier. Balanced circuitry allows for considerably quieter circuits; so much quieter that the Evolution One has as much gain as two Marshall amplifiers in series, yet remains quiet! There is plenty of gain so that the serious heavy metal guitarist need look no further for the gain he needs, while at the same time for those who need 'clean', the Evolution One is a revelation beside conventional guitar amps.

It does not stop there. The Evolution One also features a unique speaker array (available with many options) that allows for the most consistent sustain of any guitar amplifier in existence. More on the Evolution One will soon be available on the 'Musical Instruments' section of this website.

Rendition Audio will also be participating in the Recording Arts. Two products and a service are planned - a two channel microphone preamplifier with full balanced line capabilities (the quietest and most neutral in its class), an LP mastering amplifier (OTL of course) and finally an LP mastering service using these technologies!"

According to the court document, Atma-Sphere Music and now Atma-Sphere Acquisition was/is engaged in the consumer audio market whereas Rendition Audio describes itself as planning to enter the musical instruments and professional recording market. Will the judge consider this unfair competition? The proposed OTL guitar amplifier seems based on prior Atma-Sphere circuitry, the rights and patents of which belong to Atma-Sphere Acquisition. Again, the reader is referred to the previous press release signed by Harry Blazer in which Ralph is claimed to enjoy the rights to continue building statement-level hand-crafted home audio components under his own label - never mind guitar amplifiers or microphone preamps.

The court filing next petitions for injunctive relief against Ralph Karsten and Rendition Audio by claiming that the latter's formation and proposed or already active operation are in direct violation of the employee and operating agreements which Karsten signed with Atma-Sphere Acquisition. Ralph Karsten and Rendition Audio are further accused of deceptive trade practices in which "the defendants are passing off plaintiff's history, work and/or services as their own which causes a likelihood of confusion or misunderstanding to the public as to the source of the goods and/or services"; breach of contract; breach of fiduciary duty; unfair competition; tortious interference with contract and intentional interference with prospective business advantage; and patent infringement. The plaintiffs then pray for relief and ask for a temporary, preliminary or permanent injunction against Karsten and Rendition Audio and recovery of all attorney's fees.

The quoted statements of this last paragraph point at the very crux of the matter. Atma-Sphere Music, from 1996 to 2003 and thus prior to the formation of the LLC, was Ralph Karsten. The entire history, designs, awards and customer relations until 2003 were Ralph Karsten and Ralph Karsten alone (though technically speaking, half-owned by Mike Benyo]. The Absolute Sound's Golden Ear awards were received by Ralph Karsten. He personally wrote all the manufacturer's replies to reviews or letters of thanks for the bestowal of recognitions. He picked up the phone and spoke to customers. He negotiated and transacted sales. And so on and so forth.

After all, companies are mere legal paper entities. To date, no company has invented a single thing, picked up a phone or made a happy customer. People have and do. One wonders what investors Harry Blazer and Mark Gilmore thought they were buying into if not the human ingenuity and personal track record of Atma-Sphere's founder, Ralph Karsten. Technically speaking, the awards were for products whose designs and patents belonged to the company which the plaintiffs have since bought into. Alas, said awards were bestowed well prior to their buying in. If perhaps not by the letter of the acquisition's contract, these awards and the person of Ralph Karsten are indelibly linked in the minds of audiophiles and prospective customer who, after all, are the only ones to whom such things matter. Still, a judge might well rule that Ralph Karsten the man and as such separate from Atma-Sphere past and present cannot use or refer to these awards in the future.

In the end, this story seems predestined to a bad ending. It might thus serve as a warning to other small manufacturers who contemplate the solicitation or acceptance of investment capital in exchange for signing over certain rights and privileges. One is further left with the question of who stands to gain anything of substance in the present court case except for the lawyers? It's curious how what can be found right under law can seem very wrong indeed to plain common sense and ethics. And sometimes, even to be right can still be different from being happy and able to enjoy the sleep of the innocent - when being right comes at too high a cost to basic human values.

PS: Using these court filing excerpts in lieu of the 'other side' of the story, this is the extent to which 6moons will cover this matter.