U.S. Startup Smartcar Accuses Israeli Firm of Stealing Its Code, Down to the Typos

Smartcar is taking legal action against its Israeli competitor Otonomo, alleging theft of its API code

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Otponomo co-founders Ben Volkow and Avner Cohen in 2016.
Otonomo co-founders Ben Volkow and Avner Cohen in 2016. Credit: Ori Habushi
Amitai Ziv
Amitai Ziv

A California-based startup, Smartcar, is claiming that the Israeli startup Otonomo stole its source code.

Smartcar said it is taking legal action in the case and on Sunday posted a report on its company website entitled “How Otonomo, with nearly $55 million in funding, is illegally cloning our product.”

In the post, Smartcar’s CEO and founder, Sahas Katta, wrote: “We started Smartcar a few years ago with a powerful mission: making it possible for developers to easily build apps for cars. We created a standard API [Application Programming Interface] for cars. Developers can read our docs and use our API to locate or even unlock a car’s doors with just a few lines of code. We’re proud of the product our small 20-person team has built and we’re glad to work with the customers we serve .… It took us months of ideation, engineering, chatting with customers, and iteration to launch our platform.”

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“A few days ago, we came across Otonomo’s publicly available API documentation,” the blog continues. “As we read through it, we quickly realized that something was off. It looked familiar. Oddly familiar. That’s because we wrote it. We didn’t just find a few vague similarities to Smartcar’s documentation. Otonomo’s docs are a systematically written rip-off of ours – from the overall structure, right down to code samples and even typos.”

Otonomo said in response: “Otonomo is proud of the unique solution that is protected by intellectual property laws and patents. We are treating Smartcar’s request seriously and investigating the issue, but we are convinced that our standard of integrity has not been violated. If there are findings in the course of our investigation, we will take the necessary steps to deal with them.”

Smartcar claims that the code isn’t just similar. It’s identical at several points. The post includes alleged examples of that, down to the level of typos. The blog also states that Otonomo raised $55 million, based on a company valuation of nearly $400 million, from major players such as Bessemer Venture Partners and Aptiv (Delphi Automotive).

“I’m baffled,” writes the Smartcar CEO. “Did none of the over 100 Otonomo employees think that what they were doing was wrong?”

Katta continued: “Today we are taking legal action. We have sent Otonomo a cease and desist, demanding that they immediately stop ripping off our hard work. Stay tuned.”

Otonomo was founded in 2015. The company developed a cloud platform that helps car manufacturers to easily and safely share the wealth of information collected from vehicles for the purpose of developing services and apps for motorists and passengers. The post comes at a bad time for Otonomo, because according to reports from South Korea, it is about to embark on another important round of fundraising led by the SK Group, the South Korean giant energy and telecom corporation. The company has yet to respond.

The present dispute is somewhat reminiscent of a 2016 controversy in which the founder of WordPress accused the Israeli firm Wix of using WordPress’ source code without giving proper credit, contrary to the code-sharing license. Wix founder Avishai Abrahami didn’t let the claim go unanswered, but at the time, the dispute remained in the setting of the open code community and ended with no more than an exchange of allegations on the internet. This time, the dispute is commercial and has legal implications.

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