• by Ray Schultz , June 1, 2020

A nasty lawsuit between two email tech firms over alleged theft of intellectual property apparently is entering the discovery stage.

Email On Acid LLC alleges that 250ok licensed its Email Previews Service, then used it to create a competing product and poach clients, breaching the agreement between the two firms.

250ok denies the charges.

The case was filed last December. Since then, 250ok has been acquired by Validity and 250ok’s legal team has been changed. 

Neither side had responded to a request for comment at deadline.

It is not clear how the scheduling will be affected by the COVID-19 pandemic outbreak.

In the last apparent development, on April 24, the sides agreed to a protective order setting up confidentiality rules for discovery. All that would be rendered moot if the contestants agreed to settle out of court prior to discovery.

According to the complaint on file with the U.S. District Court for the District of Colorado, Email On Acid licensed its Email Previews Service API for use by 250ok clients in 2015. 

That software-as-a-service allows users to view how emails will render in Gmail, Yahoo, and other email platforms, and via mobile desktop and the web. 

Initially, the Email Previews Service was available only to Email on Acid clients, but the firm later offered a white-label version for other email technology providers to offer to their customers. 

In 2018, 250ok CEO Greg Kraios threatened Email On Acid CEO John Thies that 250ok “would either acquire Email on Acid or rip-off the Email Previews Service (despite the prohibition against doing so in the License Agreement),” the complaint alleges.

This threat was repeated during encounters at two industry conferences, the complaint says.

In June 2019, 250ok ran ads on Google, billing itself as: “Email On Acid Alternative/250ok."

Email on Acid says it terminated the license agreement with 250ok that July.

250ok’s answer to the charges is that it already used Litmus for a viewing service when approached by Email on Acid in 2015, and that it continued using Litmus during the term of the agreement, using Email on Acid only as a backup, according to a synopsis of the defense position by U.S. Magistrate Judge Michael E. Hegarty.

250ok had been seeking a “more reliable software solution,” Hegarty continues.   

Email on Acid’s service did not more prove more reliable that the one offered by Litmus, and it hired two independent contractors to build the technology, neither of whom was familiar with the product offered by Email on Acid, Hegarty adds.

The firm denies that it competes with Email on Acid.

In its complaint, Email on Acid said: "The immense challenge involved in developing this service is one of the main reasons why there were only two companies in the world providing this service: Email on Acid and its competitor (Litmus).”

Validity, parent of Return Path and 250ok, has the pockets to acquire Email on Acid if such an option were on the table.