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Specialized Lawsuit - At it again?

55K views 261 replies 92 participants last post by  Shawn in da Canyon 
#1 ·
Similar thread.

New target = Volagi.

From today's Merc:

War of the road bikes

By Howard Mintz

hmintz@mercurynews.com
Posted: 01/02/2012 07:04:26 PM PST

When Robert Choi and Barley Forsman quit their jobs in Morgan Hill nearly two years ago at one of the nation's largest high-end bicycle makers, they were pursuing a Silicon Valley-style dream. They wanted to develop their own slick, high-performance bike in a company they dubbed Volagi, Latin for "a will to go."

The two buddies and cycling enthusiasts established their company and designed a bike that sells for as much as $4,500 a pop.

But their former bosses want to take the air out of their tires. They've sued Choi and Forsman in a case set for trial this week in Santa Clara County Superior Court, where a jury will be asked to settle a bitter legal feud that has all the makings of a David vs. Goliath standoff.

Jury selection is set to begin Tuesday, and the trial is expected to unfold over the next two weeks.

Specialized Bicycle Components, one of the nation's most prolific and well-known makers of high-performance bikes, filed the lawsuit last year, alleging that Choi and Forsman stole the design for their bike before leaving the South County-based company in 2010. They say Volagi and its signature bike, the "Liscio," is based on Specialized's trade secrets.

Choi and Forsman deny stealing any designs from Specialized, maintaining that their former employer is simply bitter because the pair have developed a unique product that's drawing raves in the biking world. The partners view the lawsuit as an attempt by a powerful
company and its well-paid lawyers to wipe out a small competitor.

"They were embarrassed," said Forsman, 41. "A lot of this came down to appearance."

Added Choi, 50: "We thought we had a better idea. And in order for us to pursue it, we were going to have to quit Specialized. For them to pursue this is an incredible surprise."

Specialized's lawyers could not be reached for comment Monday. However, in court papers they depict Choi and Forsman as "two former employees who stole (the company's) trade secrets and started their own competing company during their employment with Specialized."

Specialized alleges in court documents that Choi and Forsman schemed to design a bike to rival their line of "Roubaix" bikes, which can sell for as much as $11,000 and is described as one of the company's "most significant sources of revenue."

Mike Sinyard, Specialized's CEO and founder, said in a deposition that when he visited Volagi's website after hearing about it from a Las Vegas trade show, he recalled, "There was our bike."

The jury will have to sort out the competing accounts between Specialized, founded in Morgan Hill in the mid-1970s and now a company that sells hundreds of thousands of bikes each year, and Cotati-based Volagi, which to date has sold about 175 bikes, according to its founders.

Thus far, judges have rejected Specialized's attempts to shut down Volagi's sales of its bikes, but the company plans to ask a jury to order the firm to pay "substantial" damages and relinquish the patents to its bike designs.

But Forsman and Choi say their bike does not resemble anything Specialized produces, and is in fact designed to fill a void in the cycling world for people who aren't professional racers. They are convinced Specialized figured the partners would just pedal away when they got sued.

"We did it above board," Choi said. "We thought it was the American way for us to quit the company and go on our way. They just didn't like that we had a successful bike, perhaps. And they thought we would just cave."


I own some S product, and they make some great gear, but it strikes me that they go out of their way to put the screws to the little guy, much more than can be claimed as customary "turf defense".

I'll also be interested to see what the expiration of the Horst patent brings.

-D
 
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#2 ·
I've grown up with Specialized products and I still ride them weekly as an adult. I love the company and what they produce...but NOT how they treat the little guys. Come on, these guys have only sold 175 bikes so far...I'm sure Specilized dealers sell more than 175 Roubaix bikes in just one day!

Here's the Volagi frame...



And the Roubaix frame that the CEO is quoted as saying is one of their "most significant sources of revenue"

 
#4 ·
I am ashamed of my old Specialized shoes and jacket. I really think it's time to boycott Specialized for their unethical business practices. I know corporate greed is bad, but this stuff is over the top.

I was very disappointed to find that a LBS that I have not been to in years is yet another S dealer. Are there any shops left in Santa Cruz that do not carry Specialized?
 
#6 ·
The floggings will continue...

...until morale improves.

IMHO; Specialized is pursuing this lawsuit more as a warning to current employees thinking of following the route of Choi and Forsman. Spesh may have sensed a mass exodus afoot; perhaps their non-compete clause wasn't as strong as it should have been.

Besides alienating consumers (I've had 6 Specialized bikes) they are going to have a harder time attracting new engineers/designers with "fire in their bellies" for product innovation.
 
#9 ·
Specialized is now a huge supporter of this site and I'm thankful for that. They've also been stepping up a bit in the community outreach.

I don't much about this lawsuit but it sounds unfortunate. I met and interviewed Robert Choi about his bike in 2010. Really cool guy and I think he started Vistalite too before joining Specialized.

Volagi Cycles road bike with disc brakes and vertical compliant ride - YouTube

fc
 
#89 ·
Francis, I barely post in these forums, and only having only met and ridden with you once a few years back (w/Ricky @ Skeggs), I do beleive that your an asset to this industry and a general cool guy who's opinion I value.

I feel compelled to reply to your post in particular, since you mentioned that the Big S is a big supporter of MTBR. I know that you, as a small business owner yourself, are just trying to get a piece of the pie, and no one can fault you or MTBR for that--corporate money is great.

But you, and a lot of other industry people know, how much of a bully Specialized has been--onerous dealer agreements and merchandising standards just to name one. I've known five LBS owners that have shuttered their store because they (the shops) had to carry 60% of their inventory in Specialized bikes and products, and on a whim, Specialized has decided that their shop is no longer the best in town, and breaks their end of the deal and goes on to a bigger shop who thinks they can sell more of their product.

At the core of this lawsuit, really is this:

Does a company own someone's intellectual property while they are under the employ of said company? Even if the research and development is done outside of company hours?

I hope that Specialized loses this battle becuase if they do, then companies will literally, OWN, you if you work for them. A really, bad precedent as far as case laws are concerned.
 
#16 ·
That's exactly what I would want to hear, too, before jumping to conclusions.

I'm no Specialized fan boy. (Far from it!) But the following statement raised a flag for me:

Added Choi, 50: "We thought we had a better idea. And in order for us to pursue it, we were going to have to quit Specialized. [...]"
This makes it sound either like these people initially presented their ideas within Specialized but the ideas were rejected, or like they had the ideas while at Specialized but kept it to themselves. I'm just a lowly software engineer working for a Silicon Valley company, but even in the paperwork that I signed when I started work for my employer, there were clauses about claims by the company on all the work I produced, even on my own time, during the time I work for them. I'd be surprised to hear if these people weren't subject to similar waivers of rights on any design work they do while they work at Specialized. If so, that would lend a lot of credence to Specialized's position.

You may not be a fan of such contract clauses for total ownership of an employee's creative work by the employer, but once you've signed those documents as you're being hired (hopefully after having read them thoroughly), you've essentially acceded to them and can't make much of a valid case against them afterward. Yes, you can attempt to defy them and try your luck at challenging them in court afterward if you have sufficient resources to do so, but that still doesn't reduce the position of Specialized to "corporate bullying". They'd merely be exercising a right granted to them by these people when they joined the company, in that scenario.

Of course, all of this is only if there was such a grant of employees' intellectual property to Specialized in their contracts. Otherwise, this whole viewpoint goes out the window and any merit in Specialized's case would have to be based on the similarities of the designs in question.
 
#15 ·
Having been close to a few patent disputes I'm curious what they will be arguing is the stolen IP. Carbon bikes all look pretty much the same on the surface, but that can be deceptive. Most of the real IP seems to be in the layup process and design for stress points - for example, redesigning a carbon road frame and fork around disc rather than rim brakes.
I do like the disc mounts on the Volagi - that's pretty cool. IMO if Spesh were going to add disc mounts to any of their higher end road line it would have been the Roubaix.
 
#88 ·
They are not claiming stolen IP, but that any idea that an employee comes up with is Specialized Property, regardless whether it was done at work or not.

If these guys were frame designers at Specialized, they might have a point, but they weren't.

It's exactly the same as if you started a web site on say Bike Reviews in your spare time and your current employer claimed they owned the site because you had the idea while you were employed for them.

- Booker C. Bense
 
#23 ·
This is interesting

history of the roubaix:

Specialized Roubaix - A Short History - Serving Torrance, Palos Verdes, Redondo Beach, San Pedro and Lomita

Specific to 2010 renovations in design:

This construction method created the frame in four parts: the top tube/head tube/downtube section was made in a single unit. The seat tube was a separate unit, as were the seat stays. The bottom bracket area, chain stays and a short lug to connect the seat tube and down tube were fashioned as one piece. This gave the Tarmac best-in-class bottom bracket and chain stay stiffness, the part of the bike where torsional flex would waste the most power. And it allowed the bike's engineers to build in vertical compliance in the seat stays and top tube, to give the bike a smoother ride.
 
#24 ·
I have to admit, 's' have appears to have done their fair share of bullying in the past, but in this particular instance, it sounds like they may actually have a case. If I read correctly, the design was developed while the 2 were employed by Specialized, and Specialized chose to go with a different design. If the work was in fact done as Specialized states, then it is their design.

If I code something at work, and my co-worker creates something similar, and the company decides to go the co-workers route instead of mine, that doesn't mean I can turn around and re-sell my version. It sounds to me like it will be the Jury's job simply to decide who really paid for the initial design of the product in terms of research.
 
#25 ·
I have to admit, 's' have appears to have done their fair share of bullying in the past, but in this particular instance, it sounds like they may actually have a case. If I read correctly, the design was developed while the 2 were employed by Specialized, and Specialized chose to go with a different design. If the work was in fact done as Specialized states, then it is their design.

If I code something at work, and my co-worker creates something similar, and the company decides to go the co-workers route instead of mine, that doesn't mean I can turn around and re-sell my version. It sounds to me like it will be the Jury's job simply to decide who really paid for the initial design of the product in terms of research.
you cant patent geometry - and that's really all that sets this bike apart. Disc brakes not withstanding.
 
#30 ·
I think one of Volagi's main design features is at the top tube/seat tube/seat stay junction. It's different than any of Specialized's endurance frames and I think how their frame rides so comfortably.
 
#34 ·
Guess I'll get the Giro MTB shoes instead of the Specialized.

As far as how the bike looks, it reminds me more of a RDO than a Roubiax, Tarmac or the S-Works frame.

Seems even more fitting considering Specialized got started by copying the Richie design.
 
#36 ·
I work with lots of big money corporate types and many of them can be very mobile in the industry.I have also been witness to similar behavior in Silicon Valley where ideas and process move at the speed of light. What you do and when, where your ideas are developed and what one carries with them when they move on are very difficult and sensitive issues.

My thought is that this has less to do with Specialized, per se, than how such issues are managed. Good will, good guys/bad guys, go right out the door.
 
#43 ·
After watching the program "Klunkerz" on PBS last month, I lost a lot of respect for Specialized, I may have interperated it wrong, but it seemed to me that Mike Sinyard took a "Mountainbike" Gary Fisher gave him and took it to Japan to be mass-produced. I do realize that it kicked off our hobby and all, but if that wasn't stealing someone's idea, I don't know what is!! -Robbrt
 
#44 ·
Nope, they stole it, outsourced it, shipped it off to Taiwan and commoditized it.

Now they're suing a small company for having a bike that *looks* like theirs.

Mike Sinyard is an *******.
 
#48 ·
Will just add this to the mix. Do not know if this if definitely true or not but I heard from a Titus employee that Specialized threatened to sue them when Titus first came out with the FTM since it looked like the new S-Works bike (they released at about the same time).

Titus was able to prove they had the design first so the suit was eventually dropped. It did cost Titus a bit of money at a time when they could not afford it.

I think Specialized does some good stuff but I also think they are becoming over protective since they do not dominate the industry the way they once did. When it comes to MTB their suspension design is some what dated. The Horst link (FSR) is a very good design but it is no longer the design to copy.
 
#50 ·
EVERY time Specialized sues some small company into oblivion, their clueless fans defend them.

They sued Mountain Cycle for a bike cyclocross bike called "stumptown" - named after Portland, OR's nickname.

They sued WTB for a tire called "Epicwolf"

They sued Stratos suspension for their inertial valve

Before Charlie Kelley and Gary Fisher had the smarts to copyright their creation, Specialized sent one to Asia to be copied. Now the company known as "mountainbikes" is dead.

And on and on.

How many small, creative companies are we going to watch fall victim to Mike Sinyard's predatory tactics?
 
#53 ·
Not really inclined to give Specialized the benefit of the doubt here. This isn't the first time or the second time. And, to add insult to injury, for like 6 months they have been taking out ads in bike magazines showing some guy in denim overalls drooling over their 1981 copy of some other guys' bike.
 
#54 ·
I think it's good for the industry when an employee leaves a large company to produce a product that the company has rejected. It may in fact violate the employee's contract with the company, but the courts should IMO interpret the contract liberally in favor of the employee, because public policy should favor the fostering of innovation over corporate protectionism (particularly when the corporation is not really interested in marketing the new product itself and just wants to stifle competition). Unfortunately there are a lot of lawyers who make lots of money protecting the IP interests of large corporations, even if it means bullying ex-employees and small companies just getting started.

I hope the Davids at Volagi prevail over the Goliath that is Specialized.
 
#55 ·
the courts should IMO interpret the contract liberally in favor of the employee, because public policy should favor the fostering of innovation over corporate protectionism
This is about ownership. Sometmes ideas and products are purchased just to keep them off of the market. Whoever "owns" them can do whatever they want with them.

I know, I know...:rolleyes:
 
#57 ·
I think Sinyard is pissed that someone parked in his spot at the Tennis and Raquet club. Those poor guys at Volagi were probably just there to carry a few golf bags or bus some tables to make ends meet, and now they are being sued..?
That's what you get when you park an '87 Accord anywhere at the "club" I guess...

We are in fact talking about Road Bikes a this point.. Just saying..
 
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