Broker Genius, a New York-based company which provides pricing technology aimed at those selling in the secondary market, has sued a pair of competitors, alleging that they used proprietary knowledge gained while using Broker Genius as a client to build their own similar products. The lawsuits were both filed in United States District Court, Southern District of New York. The first, filed Friday, November 3, named Matthew Berry, GenTech Enterprises LLC, and Select Seats LLC – collectively doing business as PriceMeister. The second, filed on Tuesday, November 7, named Seat Scouts LLC and Drew Gainor as defendants.

The core of both lawsuits is Broker Genius’ contention that Price-Meister and SeatScouts unlawfully misappropriated trade secret technology and skills, duplicated copyrighted software, and breached contractual obligations entered into by their earlier acceptance Terms of Use when they became Broker Genius clients.

Broker Genius is asking for a permanent injunction against both businesses using what they allege to be the stolen intellectual property,  as well as punitive damages and legal fees.

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Reached via phone on Thursday afternoon, Matthew Berry declined to comment on the pending litigation. Representatives of Broker Genius also declined to comment at this time.

Gainor issued a statement, which was sent to “customers, colleagues, and friends” on Wednesday afternoon, characterizing the lawsuit as containing “patently frivolous and baseless allegations.” He went on to say that “we can say, without equivocation, that these allegations are fundamentally without merit and we have operated our business within the confines of the law. We intend to vigorously defend ourselves against these vexatious allegations and are confident that we will prevail in doing so.”

The full statement is available at the end of this post.

Specifically, Broker Genius alleges that both defendants co-opted key portions of their proprietary “Auto Pricer” product in the building of competing systems.

In the case of Seat Scouts, the complaint alleges that Defendant Gainor signed up for an account with Broker Genius in late May, 2016. He agreed to the Terms of Use at that time, and again in July. He received “extensive and personalized training and technical support” from Broker Genius on that product. In late August, he registered the domain name. In March of 2017, he incorporated Seat Scouts in Nebraska. Then in late October, he began promoting his company on Shows On Sale – a popular message board in the ticket broker community.

After coming across that posting, Broker Genius staff viewed a live webinar of Seat Scouts’ “Command Center” product, which they described as having a “user interface, user experience and workflow, architecture, and component interoperability” that were “substantially the same and in some cases virtually identical to and derived from Auto Pricer.”

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Read the full Broker Genius vs. Seat Scouts complaint here

The complaint against Berry/Price-Meister is broadly similar, alleging that Defendent Berry created an account in April 2014 with Broker Genius and learned their systems. In March of this year, Berry informed Broker Genius he would no longer like to use their product. Shortly after, he allegedly posted on Shows On Sale that he was “looking for skybox users interested in a pricing application.” Two days later, he registered a domain under the name, subsequently posting frequently on Shows On Sale touting his product using the alias “Lurker.”

On September 17, Broker Genius claims to have viewed a demonstration of the Price-Meister product, finding it to be “substantially the same and in some cases virtually identical to and derived from Auto Pricer.”

Read the full Broker Genius vs. Price-Meister complaint here

Currently, the website for Seat Scouts remains live. The website for Price-Meister redirects to the home page for the United States Department of Justice.

Twitter user Don Shano posted the documents to social media, bringing attention to the pending lawsuits brought by Broker Genius:

Statement from Seat Scouts Drew Gainor

Dear Customers, Colleagues, and Friends,

We started Seat Scouts less than 1 year ago with the goal of creating the fastest, smartest and most cost-effective auto-pricer and ticket management tool for our customers. With over 40 years of combined experience in the secondary ticket market, we have been able to identify inefficiencies in the marketplace and hone in on our customers’ needs and primary objectives to create a product that not only is cutting edge, but also is competitively priced. Indeed, it is our ability to compete on price without compromising the quality of our product that has separated us from other industry players.

As some of you may have heard, last week one of our competitors, Broker Genius Inc., filed a lawsuit against Seat Scouts containing patently frivolous and baseless allegations that we disclosed or improperly used Broker Genius’ trade secrets. We can say, without equivocation, that these allegations are fundamentally without merit and we have always operated our business within the confines of the law. We intend to vigorously defend ourselves against these vexatious allegations and are confident that we will prevail in doing so.

Make no mistake, we take these allegations very seriously and pride ourselves on the innovations and software that we and we alone created to offer our customers what many have said to be the best automated pricing tool on the market. It is customer comments like these that drive us to constantly refine our products and cater to our market base so we stay ahead of the pack, no matter what roadblocks may come our way.

While we are unable to comment further on the specifics of the lawsuit, it is public record that this is at least the third lawsuit this year that Broker Genius has commenced against one of its competitors alleging theft of trade secrets. In fact, after the first such lawsuit was filed, Broker Genius sent out an eerily similar email blast to its clientele notifying them of that suit, as it did yesterday regarding the legal action against Seat Scouts. You are free to interpret these facts as you wish, but in our opinion these lawsuits are less about intellectual property infringement and more about stomping out the competition to achieve higher profit margins for one company at the expense of the customer.

Finally, many of you have inquired about whether we will continue to license our Command Center product during the pendency of the lawsuit. In connection with the lawsuit, Broker Genius asked the Court to prevent Seat Scouts from “using or providing or making available, whether by sale or otherwise, to any third party the Command Center Video, product and services including providing further services to any now existing client or potential client using or training to use the Command Center product and services.” The Court specifically declined to grant this request. Therefore, Seat Scouts may continue to license its Command Center product to new and existing brokers without violating the Order, and we intend to do so.

Thank you so much for your constant support and continued interest in our company and the products and services it offers.
Kind regards,
Drew Gainor