Quicken sued by data startup claiming trade secrets theft
(Bloomberg) -- Quicken Loans Inc. was sued by real-estate data analytics startup HouseCanary Inc., which accused the mortgage-lending firm of trying to steal its data and technology through a sham licensing agreement so it could develop competing appraisal software.
The lawsuit was filed days after San Francisco-based HouseCanary won a jury trial against the affiliate, Amrock Inc., which calls itself the biggest independent title-insurance and valuation firm in the U.S. Jurors in Texas last week said Amrock stole HouseCanary’s trade secrets "with malice" and awarded the startup $706 million in damages.
In its March 16 complaint, HouseCanary claims Quicken officials directed Amrock to secure the licensing agreement in 2015 under false pretenses. Once Quicken and Amrock had what they wanted, Amrock backed out of the deal, refused to pay a $5 million fee and falsely accused HouseCanary of providing useless software that never worked properly, according to the complaint.
Amrock’s data science team, which worked closely with HouseCanary, went to work for Detroit-based Quicken in 2016, according to the lawsuit. The next year, Quicken allegedly launched its own automated-valuation tool.
HouseCanary is trying to extract cash from Quicken by using bogus litigation, Quicken Loans Chief Executive Officer Jay Farner said Monday in an emailed statement.
"We will be driven by one thing and one thing only: Defending against the assault on our reputation by unscrupulous actors who exploit the time and cost of litigation and the fear of perceived bad publicity to pressure their targets to write large multimillion-dollar checks for them to go away," Farner said.
Seth Lubove, an outside spokesman for HouseCanary, declined to comment on Farner’s claim.