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
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.