Spotify Sued by Ad Maker for Allegedly Stealing Trade Secrets

Spotify
Mateusz Slodkowski/SOPA Images/LightRocket via Getty Images

Spotify

Spotify is being sued by an ad maker claiming the streaming service stole trade secrets. Mujae Group, which does business under the name VoxTonePRO, filed a lawsuit April 30 in federal court in Delaware.

Mujae Group alleges that after it shared its proprietary advertisement creation tool with Spotify, the streaming giant subsequently stole the idea, copied it and used it to create a similar program in-house, according to the 23-page complaint. Mujae Group is suing Spotify for theft of trade secrets, misappropriation and unfair competition.

“This is a case about a big business stealing from a small business,” states the complaint. “Before it had meetings with VoxTonePRO, Spotify had no system for self-service voiceover ad creation.”

Mujae says it created VoxTonePro the “first of it’s kind: scalable, cost efficient, a self-service online application” to generate audio ads with voiceover narrations, music and sound effects to streamline the creation of audio ads and to cut costs. The service's pricing starts at $13.99 per ad.

The lawsuit alleges that VoxTonePRO had several meetings with Spotify to discuss a potential partnership and Nadeem Mughal, chairman of the Mujae Group and CEO and founder of VoxTonePR, was induced to share trade secrets with Spotify executive Derek Kuhl in 2016. Mughal says he was promised that information shared would be kept confidential, but Kuhl took extensive notes. Mughal says he also later gave Kuhl and his team a personal tour of how the platform worked from the inside. Subsequently, they learned that Spotify was launching its own ad-creation platform and “brushed VoxTonePRO aside,” according to the complaint. Mughal believes the information he shared with Spotify was used by them to create its own self service audio ad-creation tool.

Mujae’s legal team is demanding actual and punitive damages as well as reasonable royalty award for Spotify’s alleged misappropriation of VoxTonePRO’s trade secrets.

Spotify did not respond to a request for comment at time of publishing.

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