Alexi denies that he misused Fastcase data to create a competing platform.
Two Canadian law firms are locked in a legal battle over access to a research database that is part of a US$1 billion deal.
Fastcase's lawsuit alleges that Alexi violated the terms of a data licensing agreement entered into in 2021 by using the database to create a competing legal platform.
Fastcase, a company owned by Burnaby, British Columbia-based legal technology firm Clio, is suing Toronto-based Alexi for allegedly using Fastcase data to build a competing legal platform, which they say is a violation of a data licensing agreement. Clio, one of Canada's largest legal technologies, bought parent company Fastcase vLex— and access to its own research database — in November for US$1 billion (C$1.4 billion) in cash and stock.
The lawsuit, filed by Fastcase in Washington, D.C., on November 26, accuses Alexi of violating the terms of a 2021 data licensing agreement by using the data to create a competing legal platform. It also alleges that Alexie misused Fastcase's intellectual property and misappropriated trade secrets.
None of these accusations have yet been proven in court. Alexi CEO Mark Doble called the claims “baseless” in an interview with BetaKit on Wednesday and said the lawsuit is a Hail Mary attempt to terminate the licensing agreement. In a statement emailed to BetaKit, a Clio spokesperson said the company “takes its contractual obligations and intellectual property very seriously” and follows processes to ensure its licensed data is used appropriately. When BetaKit asked BetaKit to comment on Doble's remarks, Clio declined and pointed to his statement.
The lawsuit says Alexi and Fastcase entered into a data licensing agreement in 2021, when Alexi gained access to Fastcase's litigation database. The license agreement is sealed, and neither Alexi nor Clio agreed to share the document with BetaKit (Dauble cited confidentiality provisions).
According to the lawsuit, the agreement allowed Alexie to use the data for “internal research purposes” but not for commercial purposes competing with Fastcase or for publishing or distributing the data.
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Alexi sells artificial intelligence (AI)-powered legal software designed to help lawyers and legal teams create research briefs, identify relevant legal issues and arguments, and automate routine tasks. The company recently began building a library of legal workflows that clients can use as needed, with AI agents guiding each step of the process. Double told BetaKit in October that Alexi has seen user growth of 3,000 percent year over year and serves more than 600 mid-market and enterprise law firms.
The suit alleges that Doble contacted Fastcase to explore the possibility of a partnership in 2022, and that Doble “raised the possibility” of Fastcase acquiring Alexi. A broader agreement did not materialize, and in 2023 Fastcase merged with Spanish-American firm vLex to create the vLex Group. Fastcase says that starting in 2024, Alexi has changed its offering to compete directly with it as a legal research platform, using Fastcase data to do so. Doble denies that Alexi ever used Fastcase data in violation of the established agreement.
Leading Canadian legal technology company Clio entered the scene this year. purchased in Lex November 10. Clio, valued at $5 billion and one of Canada's most capitalized companies, sells law firm management software and is increasingly using artificial intelligence on its platform to help clients with tasks such as document preparation and legal research. The firm says its annual recurring revenue has reached $400 million and serves more than 400,000 lawyers.
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Doble said that based on his belief and interpretation of Clio's public statements, the US$1 billion acquisition of vLex was primarily based on obtaining exclusive rights to that database held by Fastcase and vLex. “We don’t know when they found out it wasn’t true,” he told BetaKit on Wednesday. According to Doble, existing access to the Fastcase database through a licensing agreement threatens the exclusivity of what Clio paid US$1 billion for.
Clio CFO Kurt Sigfstedt told BetaKit in November that the vLex acquisition was “a really big deal” because it gave Clio access to “arguably the best legal databases and data assets in the world.” He said the vLex database was rivaled only by databases owned by legal industry giants LexisNexis and Thomson Reuters.
“Clio is an incredible company and a great team. What they have done for LegalTech in Canada is incredible,” said Doble. “I'm optimistic that over time they'll realize they're on the wrong side. Even though there's a billion dollars at stake, we'll quickly find a great solution.”
“Clio takes its contractual obligations and intellectual property very seriously,” a Clio spokesperson told BetaKit via email. “We follow established procedures to ensure that our licensed data is used correctly and the integrity of our content library is protected.”
Artistic images courtesy of Clio and Alexi.
