The times have been tough for Brightcove recently.
After facing calls for its CEO to resign from a long-term shareholder, the Boston video tech company is now getting sued in federal court by Santa Clara-based competitor Ooyala for allegedly stealing trade secrets. The lawsuit, filed in the U.S. District Court in Massachusetts on May 22, names two former Ooyala employees who now work at Brightcove as two other defendants.
In a statement, Brightcove said it believes the lawsuit is without merit, and that the company reached out Ooyala to address its concerns before the lawsuit was filed. However, Brightcove added, "Ooyala disengaged from that conversation."
"We are working to resolve the matter, which is narrowly focused on a particular region and does not concern our products, services or technology," the company added.
In the suit, Ooyala claims that Darío Pérez, a former senior sales executive at Ooyala, sent "a wealth of Ooyala's confidential and trade secret information" to Brightcove in the final three months of his employment while Brightcove was courting to hire him. The information included contacts for key decision makers at current and prospective customers, contract renewal and expiration dates, communications with customers, specific fees and prices for customers and meeting dates with current and prospective customers.
Ooyala also says that Raúl García, a former vice president at Ooyala who now leads Brightcove's Latin America division, coordinated the misappropriation of trade secrets with Perez.
"Not only did Garcia thank Perez for the confidential information forwarded directly to his Brightcove email account, but Garcia also supervised Perez in soliciting Plaintiff Ooyala’s current and prospective clients on behalf of Brightcove," Ooyala's lawyers wrote in the lawsuit. They added that Garcia also "requested that Perez send certain specific client information, and used an 'Attack Plan' to set up meetings with Ooyala’s clients—all while Defendant Perez was still employed at Ooyala."
Ooyala is seeking a permanent injunction against Brightcove that would prohibit it from using Ooyala's trade secrets, employing Garcia and Perez and communicating with any customers whose information was obtained through the allegedly stolen trade secrets. It's also seeking damages that include any profits Brightcove has made as a result of the stolen trade secrets, along with court fees.
Founded in 2007, Ooyala raised a total of $122 million in venture capital before it was acquired by Australian telecom giant Telstra in 2014 for $270 million.
Brightcove was founded in 2004 by Jeremy Allaire, who is now CEO and co-founder of mobile payments startup Circle. The company went public in 2012 after raising more than $100 million from private investors.
The company hasn't been faring well on Wall Street for the last several months due to lackluster earnings, eventually prompting board member and shareholder Chet Kapoor of Tenzing Global Management to resign and call for the resignation of CEO David Mendels. Its stock is down more than 50 percent since last October to $6.05 a share Thursday afternoon.
"I've always been friendly with Chet. He's frustrated with the share price, that's fine, that's his role," Mendels told us earlier this week at Brightcove's PLAY Conference. "The way to make your shareholders successful is deliver a great product and grow your business by making your customers successful and acquiring new customers. And if we do that, the shareholders will come along."
You can find Ooyala's full complaint here:
Ooyala's Federal Complaint Against Brightcove by Dylan Lewis John Martin on Scribd
