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The Spoon

Daily news and analysis about the food tech revolution

lawsuit

Miyoko’s Creamery Parts Ways With Namesake Founder, Sues for Stolen IP

Last week, it came to light that pioneering vegan cheese entrepreneur Miyoko Schinner had not only parted ways with her namesake company, but that the split between the founder and the company she started had turned acrimonious with Miyoko’s Creamery suing Schinner for stealing company information, including the formulations for some of the brand’s products.

The news of Schinner’s departure broke on Thursday when the company issued a press release. The release said the company and Schinner had “parted ways as the company enters a new stage of growth” and that they had engaged with an executive search firm to find a leader to take the company “into its next stage of growth.”

A day later, news broke that the company had filed suit in California, accusing the founder of stealing critical IP and intentionally disrupting company operations as she hatched a plan to start a competing company.

“Instead of facilitating an orderly transition, following her termination as CEO, Schinner hatched a plot to steal the Company’s property, trade secrets, and confidential information so that she could create a competing company,” Miyoko’s said in the complaint, according to legal reporting site Law360. The company went on to claim that Schinner had downloaded 24 thousand documents from the company’s cloud storage, taken cheese cultures and new product prototypes from Miyoko Creamery’s warehouse, and had recruited other employees of the company to participate in the “scheme.”

After the company broke the news of Schinner’s departure via a press release, Schinner responded on Linkedin and said her removal as CEO occurred in June of 2022 and that “negotiations for my continued involvement stalled before Christmas.”

And on Sunday, Schinner posted again on Linkedin, responding to the news of the lawsuit:

I am shocked that certain board members have decided to file a lawsuit against me. There are wild untruths about me that are designed to destroy me and get me out of the way. I have been cooperative with the Company since my termination.
 
I fail to see how this is adding value to the brand that I — and other values-driven, passionate vegan former employees — worked so hard to build.
 
While I am eager to bring the truth to light, I am going to move with the care necessary to ensure that I am operating in accordance with my fiduciary duties as a Director and with applicable legal rules and guidelines. (while I remain a Director, I am uncertain of how much sway or say I actually have). As always, I thank you for your trust, your patience, and your support.   

It is shocking to see the company sue its namesake founder, a high-profile entrepreneur and well-regarded industry pioneer. No doubt, the company knew it would suffer significant brand damage as news of the accusations spilled into public view, but apparently felt taking such drastic action was necessary.

We’ll keep following this story as it unfolds…

Instacart Files Lawsuit Against Uber’s Cornershop Over Grocery Listings

Today Instacart sued Cornershop, which Uber bought a majority stake in last year, alleging that Cornershop stole product images and other intellectual property.

The Information was first to report on the lawsuit, with reporter Amir Efrati tweeting out the following:

According to Bloomberg:

Instacart claimed Cornershop stole copyrighted images and modified the file names in order to conceal the alleged theft. Instacart also said Cornershop posted job listings for software engineers with “advanced scraping” and other skills indicating that taking and reusing content is part of a company-mandated effort, according to the complaint.

Instacart’s lawsuit comes on the heels of Uber announcing earlier this month that it was expanding grocery delivery into the U.S. through its Cornershop unit.

Grocery e-commerce has seen record sales over the past few months in the U.S., spurred on by the COVID-19 pandemic and subsequent lockdowns. With the coronavirus negatively impacting Uber’s ridesharing business, the company’s ability to diversify its revenues has become more important. Uber also this month announced that it was acquiring rival third-party delivery service, Postmates.

We’ll be following this story as it progresses, but its clear that Instacart, which has raised more than $2 billion in funding, will actively protect its grocery delivery turf. With the lockdowns, Instacart became an essential service for people needing food, and the company bolstered its gig-working delivery worker ranks to 750,000 to meet up with demand.

How big a threat Uber can be with its later and currently limited arrival into grocery delivery reamains to be seen, but the company does have a huge installed base and Instacart looks like it is taking no chances.

With USPTO Denial, Perfect’s Lawsuit Against Drop Moves to Trial

The ongoing, multi-year, multi-patent infringement legal battle Perfect Company brought against Adaptics Ltd, maker of the Drop cooking system, will be heading to federal court this summer. This next phase of the lawsuit comes after the United States Patent and Trademark Office (USPTO) denied institution of Inter Partes Review. Perfect announced the decision in a press release yesterday.

Without getting too far into the legal weeds, an Inter Partes Review (IPR) is:

“… a trial proceeding conducted at the Patent Trial and Appeal Board to review the patentability of one or more claims of an issued patent.” (via Smith & Hopen, U.S. registered patent attorneys)

Basically, it was Drop’s last chance to keep this lawsuit, which started in 2014, from going to trial. This IPR denial was over Perfect’s Patent 9,772,217, and follows a previous legal win for Perfect over its Patent 8,829,365. With both patents upheld by the USPTO board, the lawsuit moves on to trial in federal court in Tacoma, WA from June 3 – 6, 2019.

At its center, the dispute is over patents around the use of smart scales for weighing ingredients that communicate with apps for guided cooking. Perfect Company products include: Perfect Drink app-controlled bartending system, Perfect Bake app-controlled baking system and Perfect Kitchen PRO app-controlled smart kitchen system. The company also licenses out its technology for products include the Vitamix Perfect Blend and the NutriBullet Balance.

Drop started out in the hardware space, making its own connected cooking scale, but later abandonded that that in favor of integrating its software platform into the likes of GE Appliances, LG, Thermomix and Kenwood.

I spoke with Perfect Company CEO, Michael Wallace yesterday about the IPR denial, and asked him what the end goal of the lawsuit is. “What we’re really doing is protecting our space and our IP with our patents,” Wallace said, “The Adaptics guys have refused to pay a royalty or agree to our terms for a license.”

We reached out to Drop, and its Co-Founder and CEO Ben Harris provided us with the following statement:

“While Drop does not comment on pending litigation, we don’t infringe any of Perfect’s patents and are continuing to challenge the validity of Perfect’s patents in Federal Court. We look forward to our court date in June when a jury will finally decide if Perfect’s patents are valid and remain focused on our mission of building the KitchenOS, a unified solution for the smart kitchen that connects the whole cooking journey, of which Drop Scale is just one of hundreds of appliances.”

What was of particular note in the press announcement surrounding the latest USPTO ruling is that Perfect called out Drop investor Alsop Louie by name. Alsop Louie Partners led the $8 million Series A that Drop raised last year, and I asked Wallace why Perfect mentioned them specifically.

“Alsop made a big bet on them. We thought it was important,” said Wallace, “This is a big investment bet. We decided to call that out. The money they are spending on this case are investment dollars.”

Whether this rattles Drop’s investor remains to be seen, but unless this dispute settles relatively soon, we’ll see both parties in court.