He Said He Said

Hipster Spectacle! Possible Warby Parker Knockoff Accuses Warby Parker of (Possibly) Scaring off Investors

Did the startup world's hipster darling do wrong or is a copycat flashing its claws?

screen shot 2012 03 09 at 11 26 26 am Hipster Spectacle! Possible Warby Parker Knockoff Accuses Warby Parker of (Possibly) Scaring off InvestorsYesterday a Williamsburg-based startup called Classic Specs posted what looked like a rather damning open letter accusing one of its competitors of attempting to tamper with investors. “We’ve been having a number of great meetings with advisors and potential investors lately,” Classic Specs cofounder Andrew Lipovsky wrote. “That’s why we were surprised to hear that someone was telling them, ‘hey..make sure you know the full story behind Classic Specs (wink).'”

Who would want to spread rumors about Classic Specs, which sells its stylish glasses at Brooklyn Flea and donates a portion of its proceeds to charity? “Our sales keep growing because we have a great product that people love (and that we hand deliver if you’re nearby) and because we have a very attractive dog as a mascot,” Mr. Lipovsky wrote in the stirring letter, which embedded a picture of said pooch.

Mr. Lipovsky suspects that the rumormonger is Warby Parker: the eyeglasses e-vendor, investor darling and customer sensation, that also happens to be based in New York. Why? Because the much-larger Warby had tried to shut Classic down before, he alleged.

The story seemed to have it all: copycats, unfair competition, and underdogs, and it shot up to the top of Hacker News yesterday afternoon, garnering at last count 169 points and 71 comments. “Hipster fight,” wrote one commenter. “This whole thing makes me so glad I got LASIK a few years ago,” said another.

But what, exactly, is the beef?

Backstory

Classic Specs launched in October, 2010, eight months after Warby Parker, with a strikingly similar website and essentially the same proposition, although Classic Specs has since changed its design. In a $20 billion industry dominated by one player (Luxxotica Group, which owns Lenscrafters, Sunglass Hut, Pearle Vision, etc. as well as brands like Chanel, Prada, Ralph Lauren), these startups make cool, classic frames and sell them online. They both let you try before you buy, and they donate money to charity.

Warby Parker, however, has $13.5 million in funding from firms like SV Angel, Lerer Ventures, and Thrive Capital*  as well as a buzzy national brand.

Classic Specs, which we had never heard of until yesterday, is in the process of trying to raise funding.

Tensions were high from the start.

In the post, Classic Specs cofounder Andrew Lipovsky accused Warby Parker of (1) trying to intimidate his company out of existence by issuing a cease-and-desist letter claiming “unjustified” copyright infringement just two days after Classic Specs launched in beta; and (2) when that failed, badmouthing Classic Specs to potential investors and advisors.

“You’re not the first company on earth to sell eyeglasses (offline or online),” wrote Mr. Lipovsky, who gets more acerbic from there. (He ends, for example, by revealing that he sent an empty box and a cheeky note to the wife of one of the Warby Parker cofounders when she tried to place an order.)

A source close to Warby Parker, naturally, has a very different story to tell.

Picking at Old Wounds

In Mr. Lipovsky’s version of events, Warby Parker’s 2010 cease-and-desist letter—which alleges that Classic Specs “willfully and deliberately copied a significant portion of the Warby Parker website” and that by selling identical goods (i.e. eyeglasses and frames) constitutes an “unlawful business practice”—is an overreach, to put it mildly.

Warby sent the letter on a Friday. On the following Monday, Mr. Lipovsky told Betabeat, he spoke on the phone with Warby Parker cofounders Neil Blumenthal and David Gilboa. “They said in so many words ‘Take down the site, hand over all your inventory, hand over all your profits and shut down the business,'” Mr. Lipovsky said.

Although he didn’t mention this in the post, he later told Betabeat by email, “Because we had no idea what they would do next, on Monday the 18th, we temporarily took down the site and made changes out of an abundance of caution (we didn’t have any outside funding and couldn’t afford any type of BS legal fight..again, it was our first week in business). As soon as we hired our lawyer, the first thing he told us to do was put the site back up because we were definitely in the right. After a day or maybe two the site went back up.”

Since then, Mr. Lipovsky said, he hasn’t heard from Warby Parker or its legal counsel. But he suspects the startup is behind rumors being spread in New York’s tiny investment circles about Classic Specs. “After we gave them the documentation, [potential] investors actually became really, really furious [toward Warby Parker] about the whole situation,” said Mr. Lipovsky, who declined to name investors. “The word some of them used was ‘pathetic.'”

Competitor or Copycat?

Warby Parker declined to comment. However a source close to the company who spoke to Betabeat yesterday under the condition of anonymity offered a different version of events. Mr. Lipovsky was one of Warby Parker’s first customers, even going so far as to email the founders to compliment the service.

But when Classic Specs launched, the source insisted, Mr. Lipovsky copied specific portions as well as the look and feel of the website, which was the impetus for the cease-and-desist letter. The claims in the cease-and-desist letter had nothing to do with copying Warby Parker’s business model, the source said.

“The language was copied in many cases verbatim, it wasn’t even a close call, it was exactly the same thing,” said the source, who sent us the comparison slides in this post.

screen shot 2012 03 09 at 1 08 16 pm Hipster Spectacle! Possible Warby Parker Knockoff Accuses Warby Parker of (Possibly) Scaring off InvestorsAnd here is where the two versions of the story drastically diverge.

According to the source, Mr. Lipovsky admitted fault and agreed to a settlement after the phone call with Warby Parker’s cofounders. “The proof is in the pudding, he took the website down a day later, he admitted that he copied the site, agreed to take site down and not put it back up, and agreed to donate his inventory to charity,” the source said.

Betabeat received a purported copy of an email from Warby Parker to Mr. Lipovsky’s Gmail account at the time, which says, essentially, thanks for agreeing to settle and we want to put this behind us.

So why didn’t Warby Parker go forward with the copyright infringement claim if Classic Specs didn’t takedown its site? The source says because once the website went back up the next week, “They had changed one word in each sentence of their copy, which if you’re wondering would make it harder to make an infringement case. They also refunded the money to every one of their customers.” If Classic Specs didn’t make any money off the products, the source noted, the lawsuit loses merit.

“Warby launched as a cool, young brand,” said the source. “You could pay $95 and it also happened to have a social good connected to it. When they launched, there wasn’t really anyone else who looked like them in the space. If you launch a company and you put your blood, sweat and tears, in it and a company copies all of the language and the entire thing,” you’re forced to react.

David vs. Goliath

Mr. Lipovsky responded to those counter-claims by email. “Warby has told several people that we agreed to their terms and settled…I don’t remember my exact words, but it was some variation of “no way” (doesn’t exactly seem like a settlement to me),” he wrote, adding, “At the same time we took the site down, we refunded customers that had placed orders with us. It was only 9 people, and because customer service is very important to us, we emailed them and let them know we were refunding their money because we didn’t want them coming back to a site that was temporarily unavailable. Of course, we still sent them the product they ordered.”

“We rewrote sentences either changing the whole sentence or just a word depending on the situation,” Mr. Lipovsky added. “Some things we didn’t change at all – those are just the standard industry terms for how you talk about certain things in optics. It definitely was not us changing one word in every sentence . . . We were just scared because this was our first week in business and we got this threatening lawyer letter trying to bully us around. Just because they wrote that in an email to us does not mean we agreed to anything period. They were trying to rush that over to us as fast as they could because they knew we didn’t have a lawyer yet and hoped that we would foolishly sign it by their artificial deadline.”

Not the Only Ones

The final bone of contention between these two? While Warby Parker was out trashing Classic Specs, Mr. Lipovsky alleges—claiming that the younger startup doesn’t actually donate to charity, among other things—no one has mentioned that Warby Parker itself was accused of being a copycat.

In the open letter to Warby Parker posted yesterday, Mr. Lipovsky embedded a lawsuit filed against Warby Parker for copyright infringement and unfair competition by a company called Salt Optics.  He added this biting observation:

“It looks like Warby Parker admitted to wrongdoing and settled to at least one of the aforementioned charges…am I right? I for one have never seen these details in any of the many articles about Warby Parker, and it certainly seems to be left out of the “wink wink nudge nudge” that inspired this letter in the first place.”

The source close to Warby Parker, however, told Betabeat that the judge dismissed the copyright infringement charges with prejudice, insinuating that Classic Specs was grasping at straws to try to disparage Warby Parker’s brand. Update: While the judge’s dismissal of the copyright infringement charges are public, Salt Optics filed a joint stipulation to dismiss the case, thus any potential agreement related to other charges in the case, including trade dress infringement, unfair competition, and common law misappropriation is not publicly available. However, we were told Salt Optics agreed to dismiss all the trade dress claims with prejudice as well.

As we’ve chronicled before, duplication happens constantly on the Internet (and attempts to squash it can have a nasty Streisand effect). We’re inclined to see the same takeaway as Hacker News commenter vm, who wrote, “So many companies are copying Warby Parker. Warby was first and at least FOUR other companies copy them, down to the marketing message, branding and products . . . Lesson? Haul-ass once you find product-market fit.”

screen shot 2012 03 09 at 11 34 40 am Hipster Spectacle! Possible Warby Parker Knockoff Accuses Warby Parker of (Possibly) Scaring off Investors

screen shot 2012 03 09 at 11 32 09 am Hipster Spectacle! Possible Warby Parker Knockoff Accuses Warby Parker of (Possibly) Scaring off Investorsscreen shot 2012 03 09 at 11 33 33 am Hipster Spectacle! Possible Warby Parker Knockoff Accuses Warby Parker of (Possibly) Scaring off Investors*Disclosure

 

Follow Nitasha Tiku on Twitter or via RSS. ntiku@observer.com

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