Getty Images (US), Inc. v. Stability AI, Inc.

Filing 18

DECLARATION re 16 MOTION to Dismiss for Lack of Jurisdiction Over the Person MOTION to Dismiss for Failure to Join a Party MOTION to Dismiss for Failure to State a Claim MOTION to Transfer Case to Northern District of California -- Declaration of Peter O'Donoghue -- by Stability AI, Inc., Stability AI, Ltd.. (Attachments: # 1 Exhibit A)(Flynn, Michael)

Case 1:23-cv-00135-GBW Document 18 Filed 05/02/23 Page 1 of 6 PageID #: 1927

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
GETTY IMAGES (US), INC.,
Plaintiff,
v.
STABILITY AI, LTD. and
STABILITY AI, INC.,

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C.A. No. 23-135 (GBW)

Defendants.
DECLARATION OF PETER O’DONOGHUE

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Case 1:23-cv-00135-GBW Document 18 Filed 05/02/23 Page 2 of 6 PageID #: 1928

PETER O’DONOGHUE, being duly sworn, deposes and says, in accordance with
28 U.S.C. § 1746:
1.

I am the Chief Financial Officer and a member of the Board of Directors of Stability

AI, Inc. (“Stability US”). I reside in London, England.
2.

I make this Declaration based on my personal knowledge and if called to testify

about the facts set forth below, I could do so competently.
3.

I understand that Getty Images (US), Inc. (“Getty”) alleges in this case that Stability

US and Stability AI Ltd. (“Stability UK”) are alter egos of each other. I understand that that means
Getty asserts that Stability US and Stability UK do not operate as separate and distinct companies.
That is not correct.
4.

Stability US is a holding company organized under the laws of Delaware.

5.

Stability UK is organized under the laws of the United Kingdom and is a

wholly-owned subsidiary of Stability US.
6.

Stability UK is an operating company focused on creating products using artificial

intelligence.
7.

Stability US and Stability UK are operated as separate companies. Each company

maintains separate books and records, maintains separate bank accounts, and observes corporate
formalities.
8.

Stability UK is a party to employment contracts, supercomputer contracts,

commercial agreements, sales contracts, and other agreements that are required for the day-to-day
operations of the company. Stability US does not have any of the aforementioned agreements.
Stability US and Stability UK are each adequately funded for their corporate purposes and are
solvent as they are each able to pay their current obligations as they become due.

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Case 1:23-cv-00135-GBW Document 18 Filed 05/02/23 Page 3 of 6 PageID #: 1929

9.

Stability US, after inadvertently failing to pay its franchise tax, quickly remedied

its corporate charter within three working days after being alerted to the problem.
10.

Stability US has a Board of Directors that meets regularly and records minutes of

these meetings appropriately.

Stability US’s Board of Directors includes independent,

non-management directors, including its Board Chairman and certain investor designees.
11.

Stability US does not maintain any offices in Delaware or anywhere else in the

United States. Stability US has no employees in Delaware or anywhere else.
12.

Stability US’s and Stability UK’s principal places of business are located in

London, England.
13.

Stability US is the corporate entity through which the Stability AI corporate group

raises capital from outside investors. Stability US has recently acquired a company, Init ML Inc.
and its wholly owned subsidiary, Init ML SaS, which now operates as a separate, wholly-owned
subsidiary of Stability US.
14.

Stability UK does not maintain any offices or employees in Delaware.

15.

The people who work for Stability UK in the United States have employment

contracts with a third-party remote working company, which has a separate agreement with
Stability UK for their services. At the time of filing the Amended Complaint, Stability UK
employed approximately 56 people in the United States through this agreement, with more than
20% of the US workforce residing in California, and no employees residing in Delaware. Some
of these employees reside in the Northern District of California. Senior executives of Stability
UK, including two direct reports of the CEO, reside in California. Stability UK has spent over
$500,000 with California suppliers.

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Case 1:23-cv-00135-GBW Document 18 Filed 05/02/23 Page 4 of 6 PageID #: 1930

16.

None of the development of Stable Diffusion or DreamStudio took place in

Delaware or involved computing resources located in Delaware. Stable Diffusion and
DreamStudio were developed in part by individuals working for Stability UK while residing in
California, Oregon, and Washington. For example, one former employee who resides in the
Northern District of California participated in the development of DreamStudio.
17.

Stability US and Stability UK have both been named in a class action pending in

the United States District Court for the Northern District of California styled Anderson v. Stability
AI, Ltd., et al., No. 3:23-cv-00201 (N.D. Cal. filed Jan 13, 2023) (the “Class Action”), that arises
from substantially the same facts and circumstances as alleged in Getty’s Amended Complaint. A
true and correct copy of the Complaint in the Class Action is attached hereto as Exhibit A. Stability
US and Stability UK have consented to the jurisdiction of the Northern District of California in
the Class Action.

[Signature page to follow]

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Case 1:23-cv-00135-GBW Document 18 Filed 05/02/23 Page 5 of 6 PageID #: 1931

Case 1:23-cv-00135-GBW Document 18 Filed 05/02/23 Page 6 of 6 PageID #: 1932

CERTIFICATE OF SERVICE
I hereby certify that on May 2, 2023, I caused the foregoing to be electronically filed with
the Clerk of the Court using CM/ECF, which will send notification of such filing to all registered
participants.
I further certify that I caused copies of the foregoing document to be served on May 2,
2023, upon the following in the manner indicated:
Tammy L. Mercer, Esquire
Robert M. Vrana, Esquire
YOUNG CONAWAY STARGATT & TAYLOR, LLP
1000 North King Street
Wilmington, DE 19801
Attorneys for Plaintiff

VIA ELECTRONIC MAIL

Benjamin E. Marks, Esquire
Jared R. Friedmann, Esquire
WEIL, GOTSHAL & MANGES LLP
767 Fifth Avenue
New York, NY 10153
Attorneys for Plaintiff

VIA ELECTRONIC MAIL

/s/ Michael J. Flynn
Michael J. Flynn (#5333)