Specialized win $1 in million dollar battle with smaller rival

Volagi founders celebrate only having to pay former employer symbolic dollar at court case conclusion

by nick_rearden   January 14, 2012  

Volagi-Liscio-Rival

A court case between Specialized, one of the biggest bike brands in the world, and Volagi, a small Californian startup formed by two former employees of the larger company, was resolved yesterday with what the Mercury News described as "a mixed verdict." The Silicon Valley newspaper described the conclusion as, "like a gruelling bike race with both riders claiming they won the yellow jersey."

Specialized had originally sued Robert Choi and Barley Forsman, accusing them of founding their new company based on bicycle designs they'd stolen while still working for the Morgan Hill based bike giant.

Yesterday after an almost two week trial the Santa Clara County Superior Court jury found that Robert Choi had breached the contract with his ex-bosses because he began planning his own competing company while still working there.

During the trail the judge had disallowed most of of Specialized's claims against the Volagi owners, including the most serious claim of Intellectual Property theft over Volagi's LongBow Flex frame design and which already has its own Volagi-owned patent. The jury was therefore left at the conclusion with just the breach of contract allegations to resolve. 

They found against Robert Choi but granted Specialized just a single US dollar in damages, based on Choi's claim that he only stayed on at work in Specialized's accessories department after his resignation at the employer's request, despite them knowing he planned to start a bike company. Meanwhile his new business partner Barley Forsman was cleared of any wrongdoing because he had resigned and left before any planning or discussion about the nascent business.

Choi called the ruling "disappointing," according to the Mercury News but expressed satisfaction in the jury's conclusion that his actions hadn't harmed Specialized more than a dollar's worth and that there was no finding that Volagi had stolen any designs.

During the trial, Choi and Forsman's lawyers portrayed the case as an attempt to crush a cheeky new competitor. "The fact they only awarded a dollar showed there wasn't any harm by my actions," Choi said.

Volagi tweeted the verdict yesterday just after noon, California time, "Specialized gets ONE dollar!" and then that they were allowed to keep the distinctive LongBow Flex design. Also, in a droll touch, "the color red."

Susan Forsman, wife of Barley Forsman and tweeting for Volagi said, "We stood up to the largest cycling company in the world," before adding, "Yes, very smart on their part. Hire the most expensive lawyer to get $1. We are very happy that the jurors humiliated Specialized."

In a statement, Specialized said, "This lawsuit was a matter of principle and about protecting our culture of trust and innovation. We respect the ruling of the court in our favour. We are very satisfied with the outcome and the damages set at $1. We really want to put all our passion and time into growing the sport of cycling.”

Which brings up the bad news for Volagi; the legal defence against Specialized who themselves are thought to have have spent $1.5m in mounting their claim, cost over $400,000 leading to speculation among industry pundits whether Volagi might now reclaim their legal expenses based on the the Intellectual Property element of the case as well as the breach of contract claim against Forsman being unsuccessful. 

 

Carry On Volagi

 

The outcome allows Volagi to keep selling their bikes based on the Liscio carbon frame and its LongBow Flex design in which the rear seatstays smoothly blend into the top tube while bypassing the seat tube. The idea of the LongBow design combined with a tad-longer-than-usual-for-a-road-bike wheelbase is extreme comfort and stability while covering big miles, what Volagi are calling an Endurance frame.

The Liscio is a first for a road frame as far as we can think of in that it only comes with disc brake tabs although there are drillings for conventional rim callipers as well but the complete bikes are only fitted - for now - with Avid BB7 cable-actuated disc brakes. The High Modulus Carbon frame and fork sells for US$2,195 or £1,646 inc VAT but not duty or shipping.

According to UK trade mag BikeBiz Robert Choi - then with VistaLite - in the 1980s developed and patented  the first LED bicycle light. He sold VistaLite to Bell Sports in 1994 and has also designed products for Blackburn and CamelBak.

Yesterday, the Volagi twitter account said, "Starting at Cotati (where Volagi is based) warehouse riding down to Morgan hill to settle our debt. Next Saturday. Start at 7am." They're asking 100 cyclists to bring a penny each to symbolically pay their $1, although it remains to be seen whether anyone from Specialized is there to make coffee.

 

9 user comments

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Yes, me please!!! I want this one bad!!!

(just me wishing this were a Schwag Grab Crying )

posted by rmeloa [30 posts]
14th January 2012 - 16:01

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looks better than any specialized by miles, actually like the look of discs (but wont be converting to them)

posted by russyparkin [575 posts]
14th January 2012 - 17:04

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Now I have anothern reason why I want one of their bikes.

posted by Ciclismo [19 posts]
14th January 2012 - 22:30

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specialized riders are like rats/man utd fans. your never more than 5ft away from one.

as a long long term cyclist i recall when specialized were good honest and fair priced bikes.

now they are overpriced and over hyped, they are ok bikes but they need to back off a bit.

posted by russyparkin [575 posts]
14th January 2012 - 22:55

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There's something about the first pic that reminds me of a penny farthing... Thinking Maybe that sloping top tube going right to the rear wheel?

If I could have, say, 6 bikes, would it stop me drooling over others that I don't have?

posted by notfastenough [2879 posts]
15th January 2012 - 0:28

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russyparkin wrote:
looks better than any specialized by miles, actually like the look of discs (but wont be converting to them)

Not many will be converting - the aggro of stripping, attaching disc calliper tabs (assuming it's possible in the case of carbon or advisable with forks not designed for discs) refinishing and then rebuilding will be prohibitive for all but the most committed. It will be at the new bike or new frame purchase stage that most will succumb. Having said that that my 15-year-old Trek tandem has cried out for discs since the first day I rode it downhill so it will be into Argos in Bristol THE SECOND hydraulic STI-type levers are announced. The children would be perfectly happy eating ASDA bargain pack pasta everyday, anyway.

posted by nick_rearden [859 posts]
15th January 2012 - 0:59

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Nice to see the little guy getting one over the corporate monster, but I have to say this is one the ugliest loking bikes I have seen in a long time!

Downhill bikes don't make you cool.

www.beestoncc.co.uk

charliemac74's picture

posted by charliemac74 [166 posts]
15th January 2012 - 17:48

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By specialized doing this they have actually given this company advertising. i have never heard of volagi until this story. awesome looking bike!!for once, a start up company that doesnt use bog standard off the peg chinese moulds.

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posted by Chummy93 [2 posts]
16th January 2012 - 10:45

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Longer wheelbase and a bit of softness? Sounds like the 631 frame I built on Dave Yates's course. Makes a pleasant change from "beefy" bottom bracket aero oversize headtube etc. Still not sure I'd want or need carbon, but it's a nice change to see a high-tech bike based on being practical.

posted by steff [81 posts]
16th January 2012 - 19:42

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