WASHINGTON (CN) – A Georgetown art studio claims in court that daily deal company Living Social ripped off its “learn to paint while sipping wine classes” business model during its successful promotional deal in 2011.
Seed Works LLC aka Uncork’d art sued Hungry Machine Inc. dba Living Social, and three individuals, in D.C. Superior Court.
Seed Works claims Living Social copied Uncork’d Art’s business model after it hired the daily deals company to promote its art classes.
Seed Works claims Living Social agreed to “promote Uncork’d Art’s business and not compete with it in any way, either during the promotion or after,” in exchange for 50 percent commission.
Uncork’d claims it was obligated to turn over its confidential business information to Living Social as part of the deal. This included class scheduling, expected profits, pricing, ambience and menu.
The April 2011 promotion was successful and profitable, Uncork’d says.
So successful, the compliant states: “When Living Social noticed how successful Uncork’d Art was with the learn to paint while sipping wine classes, Living Social stood up its own classes to compete with Uncork’d Art.
“Living Social’s competing classes are causing commercial damage to Uncork’d Art, including a decline in revenues.
“Uncork’d Art alleges on information and belief that it is business practice of Living Social to learn of confidential business ideas and practices through Living Social’s promoting work and then to profit from the confidential information by competing against Living Social’s successful merchant clients.”
Uncork’d seeks an injunction and $8 million in compensatory and punitive damages for negligent misrepresentation, fraud, breach of contract, breach of good faith and fair dealing, unjust enrichment, interference with property rights, and unfair trade. It is represented by Michael Trevelline.