EDITOR’S NOTE: This lawsuit was dismissed on Oct. 26, 2018.
Textio alleges in a new lawsuit that a former customer abused free trial offers of the Seattle startup’s services for improving job posts to sell optimized job descriptions directly to its customers.
Here’s the crux of Textio’s claim, filed in U.S. District court in Seattle last week against Oakland, Calif.-based Ongig:
Ongig was once a paying Textio customer. But beginning in 2016, Ongig decided it wanted to use the Textio product for free. It terminated the relationship and then repeatedly registered for trial accounts using both Ongig and fictitious email addresses. Through this pattern of pretexting, Ongig gained ongoing access to Textio’s platform without paying license fees. Worse, rather than use the platform for internal purposes as Textio’s trial license agreement requires, Ongig ran job descriptions through the Textio platform that it repurposed and sold to its own customers.
Ongig frequently uses the tagline “everything job descriptions,” and its mission of helping organizations create better job posts is similar to that of Textio, the 86th ranked startup on our GeekWire 200 list of the top privately held companies in the Pacific Northwest.
In the lawsuit, Textio claims Ongig violated its terms of service, as well as federal and Washington state laws covering computer fraud, unfair business practices and unfair competition. Along with seeking monetary damages, Textio is asking Ongig to be barred from any action that violates the U.S. Computer Fraud and Abuse Act or Textio’s Terms of Service.
In total, Textio believes Ongig ran more than 170 job posts through its platform without paying for a single one, according to the lawsuit. Ongig bought a single Textio license in 2015, but canceled when the company switched to a pay-per-use model.
Contacted by GeekWire, Textio had the following response: “While we don’t comment on pending litigation, we strongly believe that as Textio’s business expands, it is important for us to ensure that provisions around reselling and other aspects of our terms of service are respected.”
Ongig declined to comment.
Textio fits into the growing category of software-as-a-service companies, or SaaS for short, that provide services licensed by others. Some of the biggest companies in the world — Salesforce, Microsoft, Adobe and more — fit under this umbrella. And almost all of them offer some sort of free trial of their software. But this case is a reminder that with new ways to deliver services come new vulnerabilities for the companies that build the software.
Textio in the lawsuit documents numerous allegations of Ongig employees signing up for these free trials and editing job posts from 2016 to 2018. In February, Textio sent a letter to Ongig demanding they stop this practice. In court documents, Textio indicates Ongig agreed to stop. A month later, another free trial signup came through with Ongig listed as the employer.
“Textio has attempted to resolve this dispute informally, but Ongig has refused to comply with its legal obligations,” according to the lawsuit. “Textio therefore seeks an injunction prohibiting Ongig from further accessing Textio’s platform.”
Ongig claims on its website that it can “transform your job descriptions,” through services like mobile design and adding widgets to popular job boards like LinkedIn and Indeed to customer websites. In a What We Do section, Ongig guarantees all its “Rewritten Job Descriptions” score at least 96 out of 100 on Textio’s platform.
That’s because, according to the lawsuit, Ongig would “use Textio to generate customer-facing job descriptions that it passed off as its own products. Ongig’s use was not solely for its internal business use and was aimed at developing its own competitive product or service.”
Read the full lawsuit below: