A U.S. District Court judge in Delaware has dismissed two key counts in a lawsuit filed against industry behemoth Envestnet and its subsidiary Yodlee by software development firm FinApps last year. The judge is allowing the case to continue based on seven other counts of the original complaint.
Specifically, the judge dismissed two counts related to copyright infringement raised in an objection filed by Envestnet, while allowing the case to proceed based on allegations of misappropriation of trade secrets, interference with prospective business opportunities, unfair competition, and unfair and deceptive trade practices, among others, according to court documents filed Aug. 25 in a federal court in Delaware.
The lawsuit, filed in August 2019, alleged that Yodlee had reverse-engineered FinApps’ code and claimed it as its own. With the suit, FinApps is seeking $100 million in damages from Envestnet | Yodlee.
FinApps began working with Yodlee in 2016, allowing the latter firm access, under a license, to the developer’s credit-decisioning software.
Marc E. Kasowitz, the lead lawyer representing FinancialApps and a partner at Kasowitz Benson Torres, provided the following response regarding the opinion: “FinApps is pleased with the court’s well-reasoned opinion. FinApps’ claims for fraud, misappropriation of trade secrets, and breach of contract, among others, will proceed through discovery, and FinApps looks forward to vindicating its position at trial.”
An Envestnet spokesperson provided the following response: “Notwithstanding the plaintiff-friendly standard on a motion to dismiss whereby the Court must accept all of FinancialApps’s allegations as true, the Court ruled in favor of Envestnet and Yodlee and actually dismissed two counts, including claims alleging copyright infringement and violations of the Illinois Deceptive Trade Practices Act."
"The claims filed by FinancialApps are baseless and we are vigorously defending ourselves. We hold ourselves to the highest ethical standards with regard to business dealings with customers, partners, and employees, particularly with respect to intellectual property rights,” the statement concluded.