From velonews
Specialized sues Volagi over Liscio road bike
By Caley FretzPublished Jan. 3, 2012Updated 3 hours ago
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A lawsuit filed by Specialized Bicycle Components last year alleging that Volagi Bicycles founders, and former Specialized employees, Robert Choi and Barley Forsman used Specialized trade secrets to create the Liscio road bike has gone to court, according to Silicon Valley news site Mercury News.
Jury selection began Tuesday, and the trial is expected to take two weeks.
The Liscio is a unique disc-brake equipped road bike designed for endurance riding, and is currently Volagi’s only model. It uses a “Longbow Flex Stay,” which attaches the seat stays directly to the top tube rather than the seat tube, adding 5-6mm of vertical flex without compromising torsional stiffness. Choi claims that the design is not an idea that came from Specialized.
The Liscio was debuted at Interbike in 2010. The lawsuit was filed the following month.
Choi and Forsman were in the equipment department at Specialized until April 2010. “I managed their equipment, the bottle business and such. Cages, pumps, computers, tires; completely separated from the bikes. Barney was the primary designer for equipment,” Choi explained during a short break in proceedings on Tuesday.
According to Choi, the genesis of the Liscio concept came while both were working for Specialized but the two didn’t use any of the company’s trade secrets in its development.
“We never thought that it would come to this,” Choi said.
“We really thought we had a better idea, we had a unique idea about a marketplace that they weren’t really serving,” Choi said. “We designed a bike ideally suited for people that want to go out and do centuries and stuff. We thought it wouldn’t be a conflict. We didn’t have any information about their bike business. Nothing.
“They used to poo-poo us for doing these long distance rides and double centuries. We were the weirdos in the office because we didn’t want to go do the 24mph lunch ride.”
According to Choi, Specialized did not name any specific technical aspects of the Liscio design that had been stolen.
Choi and Forsman believe they were completely honest upon their departure, and perhaps that is now acting to their detriment. “We went in open-kimono, gave them all the info they wanted when we left. But they used that and turned it around on us.”
Specialized is now demanding a royalty payment on every Liscio sold, according to Choi.
“At first, they claimed we stole everything. But the preliminary injunction was rejected,” Choi explained. Now, Specialized is claiming that the two men breached their contract, and their confidentiality agreement. “They’re saying we didn’t have rights to design something that would be seen as competitive to Specialized because we had a non-compete clause,” said Choi.
“I worked for Mike Sinyard,” he added. “I had a certain amount of respect for him. They were almost bankrupt 7-8 years ago, and now they’re knocking on Trek’s total sales. I wrote (Sinyard) a heartfelt letter, thanking him. We hoped he would wish us well … he didn’t wish us well.
“He’s saying ‘this is my fucking bike,’ just because the bike is red. They think they own the red color. I’m pretty sure SRAM has a component group called Red.”
“We’ve spent hundreds of thousands of dollars on this. We spent more money on the lawsuit than the entire gross revenue of the bikes we’ve sold. Our houses are mortgaged. (Specialized) spent a million and a half dollars. For a million and a half dollars they should have bought our company,” Choi said.
When reached for comment, Specialized brand communications manager Ben Delaney said: “Regarding Volagi, I’m afraid we can’t comment about any ongoing arbitration.”
They are suing two former Specialized employees who left the company and then relatively quickly started their own bike company allegedly using proprietary information gleaned from their work at Specialized.
I’m mostly surprised that they weren’t forced to sign some sort of non-compete, but at the same time, the bike industry is relatively incestuous, and it seems nobody ever leaves the industry; they just move from company to company.
I think the headline is a bit misleading. It’d probably be more accurate to say, “Specialized sues former employees over alleged IP theft.” That headline might make Specialized seem like less of a “bully,” but it’s also probably not as good for getting clicks…
DISCLAIMER - I have not spoken to anyone at Specialized about this case; this is merely my own opinion from reading the article(s) on the case online.
I agree with Jordan; protecting IP doesn’t make you a bully. Let the case play out and see if there really was trade secrets involved. If they did take some IP, then wouldn’t we want Specialized to step in?
Also of note, the Specialized Director of Communication says they can’t comment on on-going arbitration not on-going litigation so this suit (like many others) will likely be settled out of court.
If my employee left and I believe he stole my intellectual property, I’d sue as well. I see nothing wrong with it.
I agree, and if they had any inkling of this as a possibility, and if they were smart, they shouldn’t have made the bike look frigging exactly like a Specialized product, right down to the swooshy V that looks like the S-works insignia on the downtube.
I know one of the Volagi employees/reps (there aren’t many in this small company).
This is likely more technically correct since the 2 former employees had nothing at all to do with bicycle design. Specialized is a very large company (saddles, shoes, etc.). Pending a few details, my view of Specialized has gone down a few notches …
i don’t see Spez suing anyone else with the (IMO) ugly sloping top-tube-seat-stay design. there are many, many other manufacturers with very similar frame shapes.
i was looking at the trivent experts when my Nike t-speed shoes die, but now i think i’ll be shopping for other brands(bontrager rxl hilo, giro factor, PI trifly3, etc.)
I’m sorry but you’d be hard pressed to find any big business that isn’t a bully to some degree. I hope you’re not using Microsoft products or listen to an iPod. Just sayin…
Specialized make excellent bikes, but their road stuff - apart from the Shiv iterations - is pretty conservative. The long distance Roubaix has seen mild updates at best over the last few years. To be clear, this isn’t necessarily a bad thing, because it means their products are refined, but unless Specialized were planning to reinvent themselves overnight as a radical manufacturer their lawsuit seems unconvincing to me. I’d like to see a 2014 roadmap, let alone a 2013 one, where the Roubaix had disc brakes, internal routing via the fork blades, that particular leaf spring rear triangle setup, and so on. Just because you might have discussed a different rear triangle design in a meeting at some point doesn’t mean you should suddenly get rights to that “Intellectual Property.”
Obviously we know nothing about the various merits of the case as it might stand up in court, but money tends to talk in these situations. Spesh isn’t remortgaging any houses to pay for this case. If they have a good basis for the claim that this is “their bike” then they’re right to sue for redress, but forgive my cynicism that it’s going to come down to anything that comprehensible to anyone who isn’t a lawyer.
I’m sorry but you’d be hard pressed to find any big business that isn’t a bully to some degree. I hope you’re not using Microsoft products or listen to an iPod. Just sayin…
X2 on this. Gotta protect your IP.
Usually these things come down to strength of non-compete clause and ‘obviousness’ versus original patent. Up to a judge to decide that.
Hey Jordan, the non-compete would be a viable element if they received severance, and within the legality and legal copy of the contract within separation it would have stated such; however, if they refused to sign it and not receive any severance or benefits from them leaving, they would not be held to anything because they sign nothing about non-compete. Usually signing into a company they don’t sign anything like this either because it’s very odd, they usually just sign a non-disclosure, not a non-compete, therefore, they can remain within the bike industry forever and I assume this is what they did. Curious to know if this is the case.
Hey Jordan, the non-compete would be a viable element if they received severance, and within the legality and legal copy of the contract within separation it would have stated such; however, if they refused to sign it and not receive any severance or benefits from them leaving, they would not be held to anything because they sign nothing about non-compete. Usually signing into a company they don’t sign anything like this either because it’s very odd, they usually just sign a non-disclosure, not a non-compete, therefore, they can remain within the bike industry forever and I assume this is what they did. Curious to know if this is the case.
I’ve run into a non-compete clause while signing my hiring paperwork. It wasn’t made obvious in their speech that it was there so I brought it up the HR person. She confirmed that it was a non-compete clause (which included ANY retailer by her statement), everybody left the room. The lesson here is to ALWAYS read your contracts, and be willing to say you won’t give up your rights.
Honestly, I’d like to see someone limit the length of contracts. I’d accept longer contracts IF someone outside of the contract conducted a test to insure the party knew what they were signing to. I’d venture to guess very few people read the user contracts for ALL of their electronics, programming, and website access. I’ll even bet that >95% of the U.S. Population has opened and “used” a product even before knowing that a contract was associated to that device.
Back to the OP… is it IP? What part, the decal (streching it, maybe), the seat (that’s been in the industry well before Specialized), the color red (not unless that is CMYK#xxxxx that specialized has patented - which I disagree with patenting colors in the first place)? I do see that it is possible that a person in the company saw a specialized bike, and unintentionally followed some of it’s design features while crafting the bike, but since it wasn’t the former Specialized employees who developed the bike it couldn’t have been “trade secret”. This reminds me of when Adidas sued a company for having 2 or 4 stripes on the side of their shoe and saying it was too close to the Adidas shoe designs. It’s just alternating colors in a pattern (stripes). Adidas didn’t invent them. I would have thought the motion b.s. if the other defendant had put 3 stripes as well.
Remind me to patent a letter so that I get a royalty for any time someone goes to us it. I know I’ll patent “e”. That would be fifteen just in this paragraph.
You make a very sound statement because I think it’s a collaboration of the fact that people don’t know and don’t care what’s in the legal copy, which in turn can bite them in the butt in the long run. I also find it very funny when someone buys an items at a retail store and it breaks, within warranty, and they call the store for the issue, this is obviously stating they didn’t get a plan through the store and it’s only covered by the manufacturer, not the store itself. Then, the store informs them they must call the manufacturer in order to have the issue handled and it pisses the consumer off, but it almost always states this on the product, and even ON the warranty information that comes with the product.
With any legal abiding contract, one must always read it because it is your life, especially with a job, and it could affect your professional career. Glad you pay attention, Mike. Thanks for sharing!
I’m sorry but you’d be hard pressed to find any big business that isn’t a bully to some degree. I hope you’re not using Microsoft products or listen to an iPod. Just sayin…
I am no fan of Microsoft. They copied or stole an awful lot of their major products, then got off with a handslap judgement when the profits on those items far exceeded the judgement. I do not buy their stuff.
Volgi Liscio. Photo: Brad Kaminski
Volgi Liscio. Photo: Brad Kaminski
Volgi Liscio. Photo: Brad Kaminski
Volgi Liscio. Photo: Brad Kaminski
Volgi Liscio. Photo: Brad Kaminski
Volgi Liscio. Photo: Brad Kaminski
Volgi Liscio. Photo: Brad Kaminski
Volgi Liscio. Photo: Brad Kaminski
Volgi Liscio. Photo: Brad Kaminski
Volgi Liscio. Photo: Brad Kaminski
