Blink Health, which makes an app and online tool for helping consumers find low prices on medications, is suing competitor Hippo Technologies for up to $250 million, alleging a “copycat” scheme. The lawsuit claims that Hippo, which was founded by former Blink employees, obtained trade secrets, participated in unfair competition, took part in tortious interference with contract and business retaliation.
“Defendant Hippo is a rogue and fraudulent enterprise that is trying to cheat its way into the market by outright thievery,” the lawsuit stated. “Defendant is attempting to side-step the process of honest business development and competition on the merits, in favor of stealing and misusing Blink’s valuable trade secrets, and proactively seeking out and encouraging former Blink employees who had access to Blink’s trade secrets and related confidential and/or proprietary information to violate their obligations to Blink and steal and continue to steal for the benefit of Defendant.”
The suit goes on to claim that confidential information was obtained from Blink by five former employees, including the cofounders of Hippo technologies, Charles Jacoby and Eugene Kakaulin. Jacoby also allegedly signed a noncompete with Blink, according to the suit.
In a statement released to Business Insider Hippo Technologies fired back at these claims.
"Blink Health's claims are a blatant attempt to interfere with fair competition by Hippo,” the statement reads.
The lawsuit calls Hippo a “second-rate copycat competitor business” and alleged that it is based entirely on a misappropriation of all aspects of Blink’s business model, methods, process, research, strategies, and technology.
The lawsuit comes after Blink filed a different suit against Hippo in the state of New York. In the new suit, Blink claims that Jacoby and Kakaulin delayed and obstructed Blink's ability to have “its day in court by seeking to arbitrate the individual claims against them.” Eventually the original case was dismissed.
“This new case follows on the heels of their lawsuit that was laughed out of New York State court last month,” Hippo said in the statement to Buisness Insider. “With the recent spate of lawsuits by and against Blink, their toxic corporate culture is now widely known, and this lawsuit is just another example of their questionable business practices. Hippo offered to retain an independent expert to verify that none of Blink's non-existent trade secrets are being used in Hippo's business. Blink declined. This says it all. Hippo is offering patients a better product with stronger industry partnerships, and Blink is now trying to accomplish through the courts what it knows it will not be able to achieve in the market.”
According to the lawsuit, Blink wrote a letter to Hippo Technologies in December 2017, demanding that they immediate cease and desist alleging the company was engaging in “continuing unlawful conduct.”
“We demand that you (an anyone acting on your behalf and/or at your direct) immediately cease and desist these and any related activities, including without limitation any effort to misappropriate Blink trade secretes including disclosing Blink confidential information to potential investors and any effort to tortuously interfere with Mr. Jacoby’s contractual obligations to Blink and/or aid and abet any wrongful conduct by Mr. Jacoby that could harm Blink,” the December letter read.
Blink has been involved with other lawsuits in recent years, one including one of the cofounders of Hippo, Eugene Kakaulin. In November of 2016 Kakaulin filed a suit alleging that Blink Health fired him as a form of retaliation because of his whistle blowing behavior when he alerted them to security violations. The case was eventually settled.
Blink was in the news again in 2017 when one of their early investors, Michael Karsch, filed a $30 million lawsuit against the company, claiming the company and its founders are guilty of a number of illegal actions including fraud, concealment, breach of contract, unjust enrichment, fraudulent misrepresentation and violation of securities law.
Blink Health, which was founded in 2014, is a particularly well funded startup having raised $165 million. In the lawsuit against Hippo Technologies, Blink demands a trial by jury “on all issues so triable.”
“Copycat companies have long ripped off industry leaders to short-cut hard work,” the lawsuit states. “But it is not every case where the wrongdoers leave behind as many digital fingerprints and other evidence of their misconduct.”Nike Paul George PG1