New York-based insurtech Lemonade is suing Wefox’s One Insurance for copyright infringement of its Intellectual Property (IP). Julian Teicke, founder of One Insurance, and parent company Wefox Group are included in the lawsuit.
The IP in question is Lemonade’s website and underlying technology which the plaintiff claims Wefox reverse engineered in order to come up with One Insurance. The allegations imply that Wefox are in violations of the Computer Fraud and Abuse Act.
Lemonade CEO Daniel Schreiber accused Wefox’s founder and his team of creating numerous false accounts which they used to initiate claims through the Lemonade app and website. All of this in a bid to reverse engineer Lemonade’s revolutionary mode of operations. Reverse engineering is the process of breaking down a finished product in order to find out how it works. This is often done when someone want to replicate the design and functionality of an existing product or service.
In a post on LinkedIn, Schreiber said, “They methodically reverse engineered Lemonade, and then used the bootlegged IP to create apps, websites and products that are facsimiles of Lemonade,”
This is clearly a breach of their contractual obligations by using the fake accounts. The contractual obligations to customers categorically states that users on the Lemonade platform should not “copy content … to provide any service that is competitive … or to … create derivative works”
When Lemonade found out what Wefox was doing, emails were sent to warn them against their plans. A plea that fell on deaf ears even after a ‘seize and desist’ letter was sent. Despite this, Wefox continued to send the false requests to Lemonade’s servers.
At this point, Lemonade decided to pursue the matter by involving the Southern District Court of New York. “This didn’t have to end in court,” were Schreiber’s remarks on taking the legal action.
In his LinkedIn statement, Schreiber said that any proceeds realized from the lawsuit would be donated to code.org – a non-profit organization that promotes diversity by expanding access to computer science for minorities.
Before pointing out that getting ahead in the insurance business was no easy task. “We believe in the tech revolution insurance is experiencing, and alongside many others, work hard to ensure regulators, investors, and the public believe in the integrity of these innovations,”
He added “That’s why we hold ourselves to strict legal and ethical standards, and it’s why we call out those who do not.”
Lemonade claims to have revolutionized the world of insurance by fully automating their process. According to the FAQ section on their website, Lemonade is available for signup only through mobile apps and their website. The company has taken a completely different approach to the insurance business. In a bid to make their business operations more efficient, they expedite this process whereby making the customer experience much better.
An update from a Wefox representative said:
“At Wefox group, we have 160 talented people whose hard work has created a unique business that is challenging the status-quo every day. These allegations have no merit and ultimately appear as an attempt to disrupt our business rather than a serious dispute…”