It has been no secret that private cybersecurity companies Orca Security (Seattle—founded 2019) and Wiz (New York—founded 2020) have no love for one another. They have been bitter competitors since day one. With a combined market valuation of US$11 billion, these two unicorns are going alicorn-to-alicorn in court over Orca’s allegation of “flagrant, ongoing, and unauthorized use of Orca’s patented technologies.”
But what about the coffee? Humorously, Orca alleges that Wiz copied its imagery, including serving the same coffee at tradeshows. The 42-page complaint would make for a great movie script; it has all the ingredients, including intrigue, deception, and greed. So is this case about guerrilla marketing or fraud?
The highlights of the complaint include:
- Orca is demanding a jury trial.
- Orca believes it is entitled to enhanced damages three times the amount found or assessed for Wiz’s willful patent infringement.
- Wiz has built its business on a simple business plan: Copy Orca.
- Wiz copied Orca’s imagery, messaging, and even the coffee it uses at trade shows.
- Wiz recruited Orca’s outside counsel, who attended confidential board meetings.
- Wiz recruited away Orca’s former patent attorney to copy Orca’s intellectual property.
- Wiz embedded several revolutionary inventions developed and patented by Orca and passed those inventions off falsely as Wiz innovations.
There is no doubt these companies have an impact on the cybersecurity industry, specifically the cloud security domain. Their combined 1,300 plus employees, hundreds of customers, and over US$150 million in annual recurring revenue (ARR) are all at risk depending on the outcome of this case.
The combined companies have nearly US$1 billion in venture funding to finance this lawsuit. Ultimately, I see this case settled out of court, influenced by investors who, in this economic climate, likely do not want to see their prized unicorns taking their eye off the ball over an embattled court case. The likelihood of an out-of-court settlement is that historically, 95% to 97% of patent cases are settled out of court.
What should you do if you’re a customer of Orca Security or Wiz? First, if you are a channel partner reselling Wiz solutions, you must consult legal counsel to verify you’re not unwittingly contributing to patent infringement. You should also review the language in the Wiz contract to see if you are absolved of any patent infringement lawsuit. Although not legal advice, taking these minimum next steps is smart. Remember: It is only alleged patent infringement right now, and this case could drag on for months if not years. Contact me here to share your concerns over this alicorn legal tussle between cybersecurity unicorns.