Many business lawsuits are settled out of court. But there is one case in the email business that does not seem headed for amicable resolution any time soon: the suit formerly known as Email on Acid vs. 250ok.
Technically, the case may still be called that, but one might just as well describe it as Sinch vs. Validity, because those are the parent companies. Validity acquired 250ok in 2020 and Pathwire purchased Email on Acid in 2021, and was itself bought by Sinch a few months later.
U.S. Magistrate Judge Michael E. Hegarty, who is overseeing this case in U.S. District Court for the District of Colorado, must be getting dizzy from the continuing ownership disclosures.
The dispute concerns Email On Acid’s software-as-a-service that allows users to preview how emails will render in Gmail, Yahoo and other email platforms, and via mobile, desktop and the web.
Email On Acid alleges that after “licensing its technology and agreeing not to create a competing product, 250ok abused this access to create its own rip-off version of the product, marketed itself as a competitor to Email on Acid, and has attempted to poach Email on Acid’s customers.”
250ok denies the charges, saying the contract between the two speaks for itself. The company says it “offered a suite of products that incorporated an email-rendering feature, of which Plaintiff was aware, both before and during the term of the License Agreement.”
A trial would have to determine if 250ok did, in effect, reverse engineer and sell the technology, against contract. and also the degree if any of Validity's “successor liability.” Email on Acid is demanding any revenue that accrued.
The most recent hearing in September consisted of bickering about the allegedly slow pace of discovery production by the 250ok side. It was not without its humorous moments.
Matthew McLaughlin, attorney for the defense, said his client had produced over 900,000 Slack messages and 50,000 pages of non-Slack documents.
Zachary Garthe, attorney for the plaintiff, countered: “Over 800,000 of those documents were automated system messages with no communication information.”
Judge Hegarty, highlighting the need to monitor discovery, said: “Well, let’s just have a hearing every day…Could you guys just pencil me in at 9:55 every day?”
There was also some joshing about getting into the virtual hearing.
The case filed in 2019 has even spilled over into other courts. In November 2021, U.S. District Judge Xavier Rodriguez of the U.S. District Court for the Western District of Texas, San Antonio, squashed a subpoena issued to William Conway, CEO of Pathwire, seeking that he be deposed. Conway resides in Texas, the documents state.
Both sides have declined to comment on the lawsuit in the past.
But here’s the question: Why are these corporations running up legal bills to fight this out? Is the technology really that valuable? Litmus also offers a service for rendering emails.
Judging it from the outside, with the limited information available, the technology seems ever more critical given that mobile use is growing, like that of other channels. Email marketers need to see what they are sending out.
It may come down to this. As one observer says, “There’s only two real players out there and Litmus has done a good job in penetrating a lot of the ESP’s and EOA has the other chunk. But the revenue is tight. So add another player and you dilute the pool.”