Lone Wolf Technologies filed a lawsuit on Jan. 7 against Glide Labs, a digital real estate forms company based in San Francisco.
Prior to the suit, Glide was a member Lone Wolf’s partner marketplace, a collection of industry vendors selected by Lone Wolf to augment customer solutions.
The suit revolves around zipForms, an electronic transaction and forms solution that Lone Wolf integrated when it acquired zipLogix in 2019.
Lone Wolf Technologies wrote the following in an email to customers announcing the lawsuit and the termination of Glide as a forms partner:
We regret to inform you, however, that we are no longer partners with one of these providers, Glide Labs, Inc. As such, the integration to Glide Labs’ services will cease to be available in Transactions (zipForm Edition) in the coming weeks.
Regrettably, we have encountered a highly problematic situation that we have never confronted before in our three decades of operations and technology partnerships. Earlier today, we filed a lawsuit against Glide Labs, Inc., for theft of trade secrets and breach of contract. We took this step reluctantly and only after providing Glide with ample time and multiple opportunities to reach a mutually acceptable settlement.
In a phone call with Inman, Lone Wolf CEO Jimmy Kelly said the issue came to light after activity in a Quality Assurance account — a software testing environment — revealed Glide was developing additional forms products.
“In the fall of 2020, what we discovered was very suspicious usage in their QA account, where it appears as if they were directing functionality in the account for every type of real estate form, when our agreement really states they only have access to the disclosure forms” Kelly said.
“And this happened directly after there was an announcement that they’re going to be a member benefit in California for 2021 and have a full transaction management platform,” he added.
According to the complaint, filed in California Superior Court in Los Angeles County, zipLogix, “identified hundreds of instances, starting September 1, 2020, of unauthorized access and use of the Software by Glide.”
ZipLogix has had formal relationship with the National Association of Realtors since 2015, making it accessible to member multiple listing services around the country. Glide’s forms are currently compliant only in California and Pennsylvania.
Glide is currently listed as a member benefit product on C.A.R’s Member Benefits webpage, indicating availability on Jan. 14, 2021. It is next to Lone Wolf’s zipForm’s access portal.
“We have attempted, frankly, prior to filing the lawsuit to reach out them to understand what they were doing,” Kelly said. “We have the logs, we have all the information.”
Kelly said Glide has been minimally responsive, and that he has had only one conversation with Glide CEO Sebastian Tonkin, “and it was unfruitful.”
In a company statement published on its blog Jan. 7, Glide’s leadership team denies all wrongdoing.
After learning many months ago that Glide is expanding from a disclosure solution into a modern alternative for preparing any real estate form, Lone Wolf has pursued increasingly aggressive actions to try to prevent us launching a competing product. This began with proposed acquisition discussions (which we refused), escalated into threats of litigation and today resulted in the filing of a baseless lawsuit claiming theft of trade secrets.
While we were disappointed to see a former partner turn hostile in this way, we were not exactly surprised.
Tonkin initially agreed to discuss the lawsuit with Inman, but later declined, writing in an email:
“I circled back with my legal counsel and as this litigation is pending, I’m not able to comment on these questions beyond what was shared in the blog post. That said, we are officially launching our expanded offering next Thursday [Jan. 14].”
Asked directly if he thinks Glide is using zipForms technology in its pending transaction management solution, Kelly said he isn’t certain.
“That’s what we believe, but we do not know because they haven’t spoken to us,” he said.
However, it appears the lawsuit might have accomplished Kelly’s goal of getting Glide to engage, as the he said the two companies have agreed to a meeting on Monday, Jan. 11.
This is the first time in 30 years of business that Lone Wolf has filed a lawsuit against another technology company, according to Kelly, and that the case is not about having direct competition in California.
“From a competitive standpoint, I have no issue frankly competing with Glide, just like SkySlope, DocuSign, dotloop, whomever. Competition breeds innovation, it’s good for the industry,” he said. “I don’t know if it really raises a threat flare so much, but in my mind, it disturbs the core fundamental of our market, which is built on relationships and trust.”
“If somebody we had a relationship with, a partnership with, went outside of that agreement and stole out intellectual property, then by all means we’re going to protect the rights of our customers, employees and our business,” he said.
Read the complaint (with some redacted portions) below:
This is a developing story …