The Daily Startup: Bounce Exchange and Yieldify Tangle in Copyright Suit


This post is by Russ Garland from Venture Capital Dispatch


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Bounce Exchange Inc., a venture-backed behavioral marketing startup, has sued competitor Yieldify, accusing it of copyright infringement and theft of its software code, Patience Haggin reports for Dow Jones VentureWire. New York-based Bounce Exchange, founded in 2010, is backed by investors including LaunchTime, Contour Venture Partners and Primary Venture Partners. London-based Yieldify Ltd., held by Zeus Enterprise Ltd., raised $11.5 million from investors including Alphabet’s venture arm GV, formerly Google Ventures, and Japanese telecommunications group SoftBank in 2015. Bounce Exchange alleged in court filings that each of Yieldify’s co-founders contacted the company separately and posed as potential customers to get a demonstration of the software and other information. As a result of the information obtained through these meetings, Bounce Exchange alleges that Yieldify created “substantially similar” software and all but copied some portions of Bounce’s code. Yieldify, when notified of Bounce’s allegations, in court filings that it disagreed with the infringement claims and that it replaced the implicated code with open-source code in March 2015.

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ELSEWHERE AROUND THE WEB:

Honest Company Caught in Spin Cycle. In less than four years, the Honest Company Inc. surged to a $1.7 billion private valuation thanks to its marketing of cleaning supplies, diapers and other consumer products that it says are safer and more ecologically friendly than other brands. The company, co-founded by actress Jessica Alba, is challenging giants such as Procter & Gamble Co. and Clorox Co. with a guarantee that its offerings don’t contain what it says are harsh chemicals found in many mainstream products. One of the primary ingredients Honest tells consumers to avoid is a cleaning agent called sodium lauryl sulfate, or SLS, which can be found in everyday household items from Colgate toothpaste to Tide detergent and Honest says can irritate skin. But two independent lab tests commissioned by The Wall Street Journal determined Honest’s liquid laundry detergent contains SLS. Honest disputed the findings.

Ted Schlein Sees More Cybersecurity Firms Embrace Machine Learning. Machine learning tools will underpin many new cybersecurity startups as companies look for scalable ways to sift through massive piles of data, quickly detect strange activity and act accordingly, says Ted Schlein, a managing partner at venture capital firm Kleiner Perkins Caufield & Byers.

Write to Russ Garland at russell.garland@wsj.com