Pinterest Sued by Former Business Partner of Early Investor
Pinterest has arrived at that special milestone for any successful start-up: The day you get sued by someone who says the whole thing was his idea.
Theodore F. Schroeder of Ocean City, N.J., filed a lawsuit yesterday in New York district court, alleging misappropriation, unjust enrichment and breach of fiduciary duty against Pinterest and its early investor Brian Cohen.
“The lawsuit against Pinterest is baseless and we will fight it aggressively,” a spokesman for Pinterest said today.
Update: Schroeder’s attorney, Richard Scheff of Montgomery McCracken, emailed the following comment: “The bottom line is that it’s illegal to steal an idea for your own benefit without regard to the originator of that idea. Here, Mr. Cohen joined an existing enterprise in which Mr Schroeder had a majority interest, and then took without permission or right Mr. Schroeder’s ideas, concepts, web application and technology.”
Cohen did not reply to a request for comment.
Schroeder’s complaint says that he and Cohen worked together in 2007 and 2008 on a start-up venture that was an antecedent to Pinterest. According to Schroeder, the ideas he built for that project — called Rendezvoo, and later, Skoopwire — were incorporated into Pinterest, which Cohen provided early funding for in 2009.
Rendezvoo was a “a Web site where people meet to share opinions, views, items and tastes on a variety of subjects — product, services, events, politics, economics — nearly anything of human interest” with about 5,000 users. It included two “linchpin” concepts that later found their way into Pinterest: “Boards” for posting content and so-called “infinite scrolling,” where users don’t have to load another page to view more content.
Plus, Schroeder said, Rendezvoo had a “pink and purple color scheme to attract female users,” and Pinterest is now well-known for its appeal to women.
Schroeder and Cohen, who is a public relations entrepreneur and chairman of the New York Angels investing group, had worked together on Rendezvoo as well as a later pivot called Skoopwire, which was a free press-release service for new products. Cohen, who served as chairman and CEO, apparently pushed the team away from its more Pinterest-like ideas for Rendezvous, and then later he and Schroeder had a falling out over equity and roles.
The lawsuit accuses Cohen of striking a “Faustian deal” with the founders of Pinterest. “In 2009, a year after Cohen had caused a deadlock … Cohen had given Plaintiff’s ideas and applications to young entrepreneurs.”
One particularly oddball aspect of the case is that, outside of the lawsuit, I wasn’t able to find much of any information about Schroeder. He is apparently a Columbia Law School graduate and Internet entrepreneur who has virtually no online presence — unless perhaps he is the Ted Schroeder of Ocean City, N.J. who owns a gluten-free taco shop.
Update: According to Scheff, Schroeder is not the taco shop owner; he is a young practicing lawyer and “self-taught computer genius” working in the Philadelphia region at a company that he does not want to disclose.
Here’s the full lawsuit: