The clearcut is murky
Law suits between companies accusing the other of stealing technology are not uncommon. I’ve been involved in a couple of them as an expert consultant, such as Intergraph suing HP over using CPUs containing technology that the courts had earlier found had been stolen by Intel; a refrigeration company suing a startup after an employee left with DWG files; and so on.
In all cases, the offending party apologizes, or is found guilty and/or pays monetary compensation. Here’s a story that goes one step further: it asks whether industry recognition ought to be stripped from the offending party.
Ark Platforms (later renamed Ark Innovation Technology) in Canada developed Arkit Software (later renamed Fieldshare.io) to “Break free from data silos.” The software uses GIS (mapping) technology to manage widespread projects, primarily energy companies. At one time, there was some concern that the name was too close to Apple’s ARKit for developing augmented reality software.
A co-founder, Wing Chuen Lam (a.k.a. Vincent Lam), left Ark in 2017 with a copy of the software and a year later founded Matidor Technologies [https://matidor.com/]. It turns out that Lam leaving Ark was more complex than first seemed. Ark Platforms was having financial problems, and in early 2019 sold its assets to Ark Innovation. Lam sued Ark in British Columbia court that the sale was unfairly prejudicial to him over issues such as an unpaid salary and the purchase price.
Because he thought Ark was in “sun-setting mode,” Lam used the Ark code to create Matidor. The initial version in late 2018 was essentially the Aug-2017 version of Ark, but had the name changed, and Lam began contacting possible customers. The first customer-ship version came out in the fall of 2019, which was “the Arkit code rebranded as Matidor.” Until as late as June 2020, Lam later admitted, Matidor’s code still used “a substantial part” of Ark’s code.
As early as April 2019, Ark became aware of Matidor, and so hired someone to film a demo given by Lam, and by December demanded Matidor discontinue the infringement. Matidor removed the material from its Web site and “accelerated their development.” A month later, Ark filed its law suit against Matidor. Given the difficulty of determining if some code is copied, a federal judge later determined that “Matidor software infringed on the copyright of Ark’s software” through mid-September, 2021.
During this time, Matidor nevertheless won awards and recognition from industry associations:
- TechCrunch Disrupt 2020 -- Runner up [https://techcrunch.com/startup-battlefield/company/matidor/ and https://techcrunch.com/2020/09/14/matidor-is-building-an-all-in-one-geospatial-project-collaboration-platform/]
- Ycombinator Demo Day 2021, at which Matidor said its ARR [annual recurring revenue] was $80,000 [https://techcouver.com/2021/09/01/bc-startups-y-combinator-summer-2021-demo-day]
- CIX Canadian Innovation Exchange’s CIX TOP 20 Early startups for 2021 [https://techcouver.com/2021/09/23/cix-canadian-innovation-exchange-vancouver/]
- BC Tech Company of the Year 2021 – Startup Award Winner: Matidor
Even as Matidor was winning recognition, a federal judge in Ottawa found in December 2021 that Matidor infringed on Ark’s software copyright and had been “passing off” -- where you pass off someone else’s work as your own. Matador/Lam used the Ark name and copied images, product brochures, a promotional video, and even customer studies in some of its marketing material. [https://decisions.fct-cf.gc.ca/fc-cf/decisions/en/516967/1/document.do (PDF)]. (The federal judge did not take the British Columbia case into account, as it had not been settled yet.)
Ark asked for $975,000 in damages, and the judge awarded $277,400, as he felt the harm was not as extensive as Ark indicated in its filings. Lam apologized in a public letter that he had used software that he partially had written but (by no longer being an employee of Ark) no longer owned [https://matidor.com/wp-content/uploads/2021/12/Public-Announcement-2021-12-01.pdf]. Ark subsequently renamed Arkit Software as Fieldshare.io. The case cost Ark about $200,000.
I delved into this story when a press release arrived in my Inbox on behalf of Arc Innovation Technologies pointing out that Matidor had received awards from Ycombinator and Techcrunch. Oughtn’t the awards be rescinded, asked the press release, given that the judge had found the software was copied?
Here is how the press release (no online link available) put it:
The company who stole software IP [intellectual property], Matidor, continued to win tech awards during the legal battle – for software they didn’t write. The ethics of the awarding associations are under fire, as they were aware of the copyright claims against Matidor, but made no move to strip the false startup of their ill-gotten awards, even after an injunction against Matidor landed.
Ark says that YCombinator kept Matidor in their program after learning of the infringement; the organization asked Matidor if they owned the IP and, according to Ark “receiving a lie as a response.” The press release notes that “journalists have reached out to these associations to see if they will take back the wrongly-awarded recognition, and have not received any reply.” I asked Techcouver if they were rescinding their award, but received no response.
This is a topic that I've thought about, such as New York Times never giving up the Pulitzer it won for the pro-Stalin propaganda written up as "news" by its reporter, Walter Duranty. Awards are not about the receivers; they are about the giver, such as universities handing out honorary degrees.
So the primary reason behind not rescinding awards is in the purpose of awards: to help the award-giving association stand out for a time by shining a light on it, increasing its visibility by hopefully getting free publicity -- in short, announcing how important the association is.
To rescind an award is to give the association a black eye, the opposite of the intended outcome!