The complaint, filed in the U.S. District Court Southern District of NY, alleges that wefox reverse engineered Lemonade to create ONE, infringing Lemonade’s intellectual property, violating the Computer Fraud and Abuse Act, and breaching its contractual obligations to Lemonade not to “copy content… to provide any service that is competitive…or to…create derivative works.”
In the filing, Lemonade alleges that Teicke repeatedly registered for insurance on Lemonade under various names and for various addresses, some of which do not exist. Teicke also allegedly filed claims in what appeared to be an attempt to assess and copy the arrangement of those flows.
Lemonade’s counsel says Teicke started seven claims over the course of 20 days, prompting Lemonade to cancel his policy.
Alongside Teicke, a number of other executives and members of leadership at wefox also filed fake claims, despite having opted in to Lemonade’s user agreement and taking an honesty pledge, which is required of all Lemonade users.
This, according to Lemonade, violates the Computer Fraud and Abuse act. Lemonade also alleges that the ONE app infringes Lemonade’s IP, and that in assessing the Lemonade app and building a competitor, Teicke also violated Lemonade’s TOS.
Lemonade has revolutionized the insurance business in two key ways: First, it made the process of actually buying insurance as easy as a few clicks on your smartphone. Digitizing the process makes the issue of getting home or renters insurance far less daunting and more approachable to consumers. Secondly, Lemonade rethought the business model of insurance.
Normally, insurance providers charge you a certain monthly rate based on the value of the property/items looking to be insured. But at the end of the year, the money remaining in that policy becomes profit, putting the insurance company in direct opposition to the consumer any time a claim is filed.
Lemonade takes its profit directly out of each payment, and if a file isn’t claimed, it sends the rest of the leftover money to the charity of your choice, ensuring that Lemonade and the consumer are on the same page when a claim is filed.
In keeping with that thesis, any proceeds generated from this lawsuit will go directly to Code.org.
“We’re not trying to enrich ourselves by poking another startup,” said Lemonade CEO Daniel Schreiber . “We’re not anti-competition. We’re just saying ‘Play by the rules, play fair and square.’”
Folks interested in the lawsuit can check out the complaint here.