“We’re thrilled to celebrate the nationwide launch of Mobile Services by Stream with our enthusiastic and committed Associates at Unleashed in Las Vegas.” – Mark Schiro, Stream President and CEO.
And so begins another MLM war. This time the rivals are Solavei, which operates a mobile service provider expanding into social commerce, and Stream, a Texas company that is expanding beyond its current retail electric service, and the judge is the public as both companies battle each other using numerous press releases. Most of the time, the public is quick to form their personal opinion which seems not so easy in this case.
January 24th, 2015, was the launch of Stream’s new mobile phone service in Las Vegas. However, Solavei wanted to block the launch for an obvious and simple reason: they accuse Stream of stealing their trade secrets and other intellectual property which had been disclosed to them during extensive merger talks between the companies.
Stream developed a Mobile Service branch that offers cellular services in the United States, without the usage of any commitments or contracts. The similarities are more than obvious, but the same argument could probably also be made about other services such as Cricket and Boost.
On January 24th, the day of Stream’s mobile product launch, a Dallas District Court judge blocked Stream Energy from using proprietary technology and information to launch a new mobile phone service. But that didn’t stop them from launching their new product which they managed to put together in about ¼ of the time it has taken Solavei.
“It was understood by all that Solavei’s confidential information was extremely valuable and it was not to be used or disclosed for any purpose other than consummating a deal between Solavei and Stream,” the lawsuit states.
Stream representatives put Solavei’s doubts off as a tactic to massively affect the presentation of their new product. Since Solavei released their doubts just one day before the launching, one can assume that the whole act was thoroughly planned.
Mark “Bouncer” Schiro, Stream President and CEO, then continues to highlight that the contract regarding confidentiality has not been broken by them and that they will continue to be trusting partners. The court basically just affirmed the contract but didn’t accuse any of the businesses. Therefore, Stream has not been stopped from launching their new service.
“Of course Stream is not permitted to use any proprietary information learned from Solavei during the course of sensitive merger discussions – and we indeed have not,” Schiro continued.
On the one hand, “Why would we copy the plans and tactics of a firm that drove itself into federal bankruptcy proceedings” is probably the best argument for Stream. On the other hand it makes you wonder why they considered a merger in the first place with a company that can’t work successfully and profitably. Stream has done over $7 billion in the past 10 years and is one of the most successful direct selling companies — #14 on the DSN Global 100.
The odyssey started in 2013 as both companies signed an agreement about merger intentions, including confidentiality of information shared dating back to May 2013. From February 2014 to April 2014 both companies shared their technology, social marketing strategies, go-to-market plan and customer lists with each other. Everything seemed to proceed perfectly, until Stream brought the contract to a termination just before the deal was finalized.
Just three months later, though, they published their intention to bring out a mobile phone direct marketing business within six months, which is unusually quick. They even used Solavei’s trademarked slogan “Powered by Relationships” and allegedly tried to poach Solavei’s top members by spreading false information and making negative comments about Solavei.
So it’s understandable that they want to do everything to stop Stream. Suing them on the grounds of misappropriation of trade secrets, breach of contract, tortious interference and conspiracy was just a matter of time.
The lawsuit states, “That Stream is improperly using Solavei’s proprietary and trade secret information to jump start its new business line is self-evident.”
But is it really? Both companies released both some very strong and some pretty weak statements, leaving many questions unanswered.
Why didn’t Solavei complain earlier but decided to cause a turmoil just before Stream’s launch?
Why did Stream terminate the contract just as it was about to get nailed down?
Why did Stream decide to copy their slogan “Powered by Relationships”, knowing that this is a registered US trademark owned by Solavei?
Why haven’t the companies attempted to solve the problems behind the curtains after months of successful negotiations? (or maybe they have, but it’s not evident)
And probably the biggest question of all, what confidential information did Solavei share – and Stream use – that couldn’t readily be learned or reverse-engineered from a thorough analysis of their publicly available information and research of the competition?
It will also be interesting to see if this court case affects the companies’ reputations in a negative way.
These questions should definitely get answered soon. It’s not up to us who wins this war. Personally, I look forward to hearing what they say in court, which should be more valuable than the press releases written for the court of public opinion: