Bitter row breaks out as Vayant alleges copyright infringement by Everbread

Get ready for an angry battle between two emerging companies, Vayant and Everbread, in the online airfare shopping and pricing arena.

Vayant, and companies associated with it, sent a letter July 16 to Everbread alleging that Everbread hired about nine of the companies’ ex-employees and launched a competing product with similar functionalities “at breakneck speed” by using their “confidential information and/or by copying their copyright programs.”

An Everbread official says there is no merit in the claims, but declined to comment further.

The Vayant action comes within a month of Everbread securing a funding round from Bessemer Venture Partners and after Google cited both companies – although in curious circumstances – in its now infamous travel ecosystem chart produced to accompany publicity around its acquisition of ITA Software.

Such a spat between the two takes on added importance because they both have roots in Europe, where ITA Software’s penetration has been small, and because some of ITA’s current customers may be looking for an alternative vendor.

The Google-ITA deal faces a likely antitrust inquiry.

And, Google’s decision to name Everbread and Vayant (alongside giants such as Amadeus and Travelport) as emerging competitors to ITA Software won’t hurt Google’s chances of securing regulatory approval.

The row also comes against the backdrop of a financial action from the former-CEO of Lessno (an offshoot of Vayant forerunner EZSearch) and Everbead’s vice president of strategy and business development, Assen Vassilev, against Lessno in the US, although the action is independent of Everbread.

The Clifford Chance law firm of London sent the recent letter, obtained by Tnooz, to Everbread on behalf of clients Vayant Travel Technologies (formerly EZSearch), Vayant Bulgaria (formerly EZSearch Bulgaria), Lessno, Lessno Bulgaria, Travel Technologies Solutions Cooperatif and New Europe Venture Equity.

vayantletter

The law firm’s clients, including Vayant, which has offices in New York, Madrid and Sofia, demand that Everbread, based in London, take several actions within 14 days:

  • Identify the clients’ ex-employees who now work for Everbread and explain their roles;
  • Deliver all of the clients’ software, product documentation and hardware now under Everbread’s control;
  • Identify the program code in which Everbread’s products have been developed and make the source code available for inspection by an independent expert agreed upon by the parties.

Failing an agreement, the letter states that Everbread should make the materials available within seven days of terms set by the president of the British Computer Society.

The law firm’s letter states its clients have been developing, since the beginning of 2007, airfare shopping, pricing and booking software which integrates low cost carriers and traditional airlines. Neveq and associated companies provided $4.5 million in funding for the effort through June 2009, the letter says.

The letter alleges that ex-employees of the companies associated with Vayant, including the former CEO of Lessno, Vassilev, left some of these companies after a series of disagreements in mid-2009 and were hired by Everbread to work on product development.

Vassilev is Everbread’s vice president of strategy and business development, and the letter identifies eight other former employees now apparently working for Everbread.

On June 12, 2009 — around the time Vayant says disagreements with employees were breaking out — Lessno filed a Chapter 7 bankruptcy petition in US Bankruptcy Court for the Eastern District of New York.

[NB: Background to the row]

Vassilev is listed as one of the creditors, and in the ongoing bankruptcy proceedings, he is seeking to recover unsecured claims of $89,333 based on a promissory note that he says is dated June 2, 2009 — or about 10 days before the bankruptcy filing.

Founded in 2006, Lessno, which had offices in Sofia, Bulgaria, New York and Philadelphia,  operated a discount airfare website and was a joint venture of Smart Travel Network and EZSearch, which became Vayant Travel Technologies. Neveq, a private equity fund specializing in eastern European startups, provided approximately $3.9 million in funding to Lessno.

Other creditors, according to the court papers, include Smart Travel Network for $122,304 and Trans Am Travel for $157,207.

Vayant and its associated companies allege that the majority of Everbread’s development team are ex-employees “who had access to and worked on our clients’ code” and that they unlawfully used that confidential and copyrighted information to introduce Everbread’s similar product at an “unprecedented” pace.

“Everbread’s competing product has reached completion phase and deployment capability at breakneck speed,” the Vayant-associated companies allege, highlighting the date of March 23, 2010, as when the first press report revealed Everbread’s debut.

Barring a settlement, the Vayant-Everbread conflict — which also apparently includes a patent dispute — appears headed for a courtroom.

NB: Additional reporting by Kevin May.

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Dennis Schaal

About the Writer :: Dennis Schaal

Dennis Schaal was North American editor for Tnooz.

 

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