Ethereum-Based Ad Firm Bidooh Sues Founders in Tech Ownership Dispute
The co-founders are countersuing, claiming the company – which developed "Minority Report-inspired ad boards – has been hijacked.
Digital advertising company Bidooh has taken two of its former co-founders to court on accusations they stole company software.
Bidooh COO Vicki Simms said in the group's official Telegram chat on Jan. 20 the platform had been "seriously tampered with" and that the company had taken legal proceedings against former CEO Abdul Alim and former CTO Shaz Mughal.
"We continue to press on with the remaining legal steps necessary to obtain final judgment against the defendants, Abdul Alim and Shaz Mughal, and reimbursement of our costs," Simms said.
Bidooh is a digital advertising platform, based in Manchester U.K., that allows companies to broadcast tailor-made ads to anyone who walks past one of its interactive billboards. Advertisers pay by the second using fiat currency or the protocol's native DOOH tokens, which are built on the ethereum blockchain.
Launched in January 2017, Bidooh raised more than $5 million in an initial coin offering (ICO) in 2018. By October 2018, the company operated 27 screens across the U.K. and had just struck a deal for 3,000 more screens across central and eastern Europe, according to a Financial Times report.
Alim was reported as saying at the time that he had taken inspiration from "Minority Report," a 2002 sci-fi movie where a talking screen changes to address Tom Cruise's character as he walks past.
Alim confirmed to CoinDesk that Bidooh was "accusing us of copying the software." He added the remaining company board members, which include Michael Edelson, a non-executive director of Manchester United football club, also accused him and Mughal of trying to steal existing Bidooh clients for their new venture, called Flydooh.
Alim and Mughal are contesting the allegations, claiming Bidooh's remaining board members, executive chairman Edelson, Gary Partington, Howard Simms and Paul Althasen, had been "completely screwing us over" by awarding unsustainable salaries to staff.
While Alim and Mughal each received £30,000 ($39,000), Alim claims the CFO had a £120,000 ($156,000) salary, a sales member was paid £115,000 ($149,000), the chief treasurer took home £200,000 ($260,000) and the COO was on £80,000 ($104,000). "Michael [Edelson] even hired all his staff on our payroll, he had a guy cleaning his car, a guy doing his garden, his PA, his bookkeeper on our pay," he said.
Despite raising $5 million in the ICO, Alim claims the board moved to reduce Shaz's and Alim's salary from £30,000 to £17,000 ($22,000) – having already had their shares diluted to 13 percent. Bidooh ran out of money, Ali said, and could no longer afford screens. The platform and protocol were then subsequently removed from the website.
When Alim and Mughal refused the salary cut, the other board members reportedly threatened to liquidate Bidooh and pull their loans from the company. "No sane founders would want to leave a company they've built up for any reason," Alim said. "[But] basically they've just taken our company from us ... [they] totally hijacked it."
In February 2019, Alim said Partington had created a platform, called Promokio, with "the exact same colors and, in essence, the exact same platform but better." Bidooh had originally paid Partington's software development company £1.6 million ($2 million) to help build the platform.
Alim and Mughal are now countersuing Bidooh, accusing the company of not paying a total of £320,000 ($415,000) in salaries. "We're saying either give us the software or our company back," he said. "In essence, we still own that software, that's our argument."
In a 'vulnerable state'
In a statement to CoinDesk, Bidooh's interim CEO Hannah Eames denied Alim's allegations, saying it was "frustrating to hear the unsubstantiated accusations," adding both defendants had admitted in court to having copied the software.
Describing Alim's comments as "not consistent in any way" with their admissions, Eames said the company "cannot afford to become distracted by them, nor to be drawn into a war of words via the media." On the advice of counsel, she added, Bidooh would not make any further comment until the case had been resolved.
In a High Court order seen by CoinDesk, dated and signed by Mr Justice Richard Arnold on Sept. 11, 2019, Alim and Mughal were ordered to hand over all software, source code and documents relating to Bidooh and their new venture Flydooh, access to their email accounts, with the right to examine any technical equipment and electronic devices capable of storing documents.
In her Telegram announcement, Simms said the order gave Bidooh an injunction that "prevents Abdul Alim and Shaz Mughal from infringing copyright in Bidooh’s computer code."
She added that both had been removed as directors of Admoments Holdings, the registered company name of Bidooh. Companies House, the national registrar for businesses in the U.K., confirmed the appointments of both Alim and Mughal were terminated Oct. 14.
"The business is in a particularly vulnerable state," Simms said, "However, the remaining management team [is] working with the current shareholders to determine a viable strategy for the future of the business."
Gary Partington said he could not comment on the court case for legal reasons. Michael Edelson could not be reached for comment.
The next court date is April 15.
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