A district court in southern California has issued a preliminary injunction against Axiom Zen after San Diego-based Starcoin accused the developer of the CryptoKitties sports collectibles of stealing trade secrets relating to the digital collectibles space.
According to court records emailed to Cryptovest by the plaintiff, the order issued by Judge Janis Sammartino also directed Axiom to abstain from further misappropriation or use of Starcoin’s trade secrets contained in the confidential business information provided to Axiom under a mutual non-disclosure agreement (MNDA) signed early in February.
Sammartino also scheduled an oral argument hearing for June 14.
In filing his complaint, Starcoin CEO Jevon Feinblatt told the court he was contacted by Axiom Zen early this year to discuss potential collaboration on ideas and development of digital collectibles.
Axiom chief of staff Jody Rebak reportedly e-mailed Feinblatt that the company is “always interested in connecting with like-minded individuals to build and launch companies,” and asked him to share more details about Starcoin.
Feinblatt told the court:
“In response, I offered to send a non-disclosure agreement to discuss the proprietary aspects of Starcoin with Axiom. Ms. Rebak instead asked me to review Axiom’s mutual non-disclosure agreement (MNDA) to avoid the delay and expense to Axiom of engaging its legal team. After that, Mr. Sam Gharegozlou, Axiom's head of operations, and I signed and entered into the MNDA February 9, 2018. The parties to the communications included Ms. Rebak and me. That same day, I provided Axiom with many pages of confidential materials describing Starcoin’s core concept and trade secrets,”
According to Feinblatt, he expected to hear from Axiom after sending all the vital documents, but the company "never engaged in further communications." Instead, he received an email from Axiom dated February 26, informing him that Axiom is not ready to look at new products and would get back to him sometime in June.
To his surprise, Axiom published a press release on May 7, claiming it had signed a deal with Stephen Curry to release a digital collectible of his through its CryptoKitties application, which is available for download via MetaMask - a digital wallet application designed for use on desktop browsers such as Google Chrome.
He went on to tell the court:
“Only through much time, expense, and effort has Starcoin been able to develop its unique business model, concepts, and marketing materials. Until Starcoin actually launches a product or an update into the public domain and for public use, Starcoin maintains the confidentiality of all details about its digital collectibles.”
Feinblatt said Starcoin had already suffered tremendous losses, and they would become total and irreparable if Axiom continued using Starcoin’s confidential information. This would completely eviscerate Starcoin’s ideas, methods, and products as a trade secret, depriving the company of the opportunity to be “first to market” with the foregoing licensed collectibles. Furthermore, Starcoin may have lost its chance to be perceived as an innovator in the digital collectibles space, Feinblatt added.
A check on the CyproKitties website showed that trading of the Stephen Curry kitties is suspended.