The Virtual Currency Fight: Offerpal Sues Kickflip

21 Comments

offerpal-logoOfferpal Media, a Fremont, Calif.-based startup that links virtual currency from social games to real-world marketing deals, is suing startup Kickflip, alleging breach of contract, misappropriation of trade secrets and unlawful business practices, among other claims, according to court documents. Kickflip, headquartered in San Jose, Calif., is the creator of social games payment engine Gambit.

Offerpal alleges in the suit, which was filed in the Northern California District Court in late April, that Kickflip used Offerpal’s web service for two of its online gambling applications — Sports Bets and Bet Arcade — and applied the information it procured about Offerpal’s business model towards developing Gambit. If the court documents are any indication, the case will be an intriguing one to follow. From the filing:

[The] Defendant, as set forth below, misrepresented its intentions in forming a relationship with Offerpal, and then used the information and trade secrets learned in the course of the relationship to develop and improve Defendant’s own competing service.

Aside from the lawsuit, it’s been a pretty good year for Offerpal. As we previously noted, the company received $15 million in funding in February, when many VC firms were limiting their investments amid the struggling global economy. Offerpal said at the time that it was continuing to generate annual revenue of $30-$40 million.

21 Comments

Rick Lea

I mean not awesome that they in fights. I have nothing against any of the companies. But I am glad to see qinteractive get their stuff rocking! Thanks,

JFitzy

You should also check out a company called Q Interactive.com, They offer a much cleaner solution and have been doing similar stuff for over 12 years and are now streamlining into virtual currency.

Hugh

Um, yea, so I was gonna use Offerpal.

Now i’m looking into Gambit!

TY ROSS

I would not use Gambit, but go with Offerpal. Gambit has not been honoring it’s offers on the Mafia Wars or Sorority Life applications on FaceBook. This is only going to cause problems for not only the sponsors, but FB as well in the end as people get frustrated and abandon these applications all together which generate Im sure, millions of dollars in affiliation and sponsor revenue through filling out the offers. Despite being given proof via emails and such Gambit refuses to give out the points players use to further advance in the games. Only giving the reason that the sponsor won’t honor it. Sponsors have been called directly and stated there have been no problems and conflict and even sent emails to no avail. I would say on the surface, the payouts from GAMBIT/KICKFLIP seem intriguing and better, however in the end the integrity of the company is shaky at best and I would go with a model that has a more proven track record :-)

surya

Yikes. This seems kind of insane.It looks to me like KickFlip started as a FB apps company. They used Offerpal. They didn’t see the future that promising developing FB apps, so they looked for a new business to pivot into. I’m guessing they recieved crappy service from Offerpal and thought of 1000 ways to meet this market need better and got to work on it. So far this sounds like 10,000 other startup stories. See a need or a sleepy player and work to out-innovate and solve the need. Now Offerpal is seeing their hyper-cushy margins impacted by this scrappy player and what better solution than sue? From the part of the complaint cited, Offerpal will have to prove that KickFlip knowingly entered into their agreement with the intent to obtain trade secrets. Yeah, good luck proving that. Morons.

Full disclosure: I, like the other 99% of the startup scene out here know Noah Kagan. I’ll add that I have no personal knowledge of any of these details since my conversations with noah have revolved mostly around indian burritos.

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