Legal
research
technology
company
Fastcase,
which
is
now
owned
by
Clio,
has
filed
a
federal
lawsuit
against
AI-powered
legal
research
platform
Alexi,
alleging
breach
of
contract,
trademark
infringement
and
trade
secret
misappropriation,
relating
to
its
use
of
data
licensed
from
Fastcase.
The
complaint,
filed
Nov.
26
in
the
U.S.
District
Court
for
the
District
of
Columbia,
accuses
the
Canadian
company
of
transforming
a
limited
data
license
into
a
competing
commercial
product.
Although
Alexi
has
not
yet
formally
responded
to
the
lawsuit,
its
founder
and
CEO
Mark
Doble
told
me
yesterday
afternoon
that
he
denies
any
wrongdoing
and
that
he
believes
the
lawsuit
is
based
on
a
misunderstanding
of
the
original
licensing
agreement
that
came
to
light
during
Clio’s
recent
closing
of
its
purchase
of
vLex,
which
had
merged
with
Fastcase
in
2023.
According
to
the
complaint,
Fastcase
and
Alexi
(formerly
known
as
Alexsei)
entered
into
a
data
license
agreement
in
December
2021.
At
that
time,
the
complaint
says,
Alexi
operated
as
what
it
described
as
a
“research
institution,”
employing
staff
attorneys
who
used
AI-assisted
passage-retrieval
technology
to
prepare
legal
research
memoranda
for
clients
within
24
hours.
The
agreement,
the
complaint
alleges,
granted
Alexi
access
to
Fastcase’s
proprietary
legal
database
solely
for
“internal
research
purposes”
—
specifically,
research
conducted
by
Alexi’s
own
lawyers
in
preparing
client
memoranda.
The
license
explicitly
prohibited
using
the
data
for
commercial
purposes,
competitive
purposes
or
publishing
or
distributing
the
data
in
any
form,
Fastcase
alleges.
(Although
Fastcase
filed
a
copy
of
the
licensing
agreement
with
the
court,
it
did
so
under
seal,
so
it
cannot
be
viewed
by
the
public.)
Fastcase,
founded
in
1999,
merged
with
vLex
in
2023
and
was
subsequently
acquired
by
Clio
for
$1
billion
in
a
transaction
that
closed
Nov.
10
—
described
in
the
complaint
as
“one
of
the
most
significant
transactions
in
legal
technology
history.”
At
Issue
Is
Fastcase
Data
The
lawsuit
centers
on
Fastcase’s
claim
that
Alexi
fundamentally
changed
its
business
model
while
continuing
to
rely
on
Fastcase’s
data
under
the
original
restricted
license.
Beginning
in
2023,
Fastcase
alleges,
Alexi
shifted
away
from
its
lawyer-staffed
memorandum
service
and
began
building
a
direct-to-consumer
AI
legal
research
platform
that
competes
with
Fastcase.
According
to
the
complaint,
Alexi
removed
the
“internal
research”
component
entirely
and
began
publishing
Fastcase-sourced
case
law
directly
to
end
users.
The
complaint
cites
public
statements
by
Alexi’s
CEO
Doble,
including
a
March
2024
LinkedIn
post
in
which
he
described
Alexi
as
“increasingly
a
legitimate
alternative
to
incumbent
legal
research
providers.”
Doble
reportedly
stated
that
relative
weaknesses
including
“access
to
additional
content
(primary
&
secondary)
and
primary
law
meta-data
(e.g.
shepardizing)”
were
“easily
solvable
in
the
next
3-6
months.”
Following
an
$11
million
Series
A
funding
round
in
June
2024,
the
complaint
alleges,
Alexi
expanded
its
platform
to
include
document
analysis,
case
management
tools
and
other
features
typical
of
full-scale
legal
research
providers.
Evidence
Cited
in
the
Complaint
As
evidence
of
Alexi’s
unauthorized
use,
Fastcase’s
complaint
points
to
several
public
demonstrations
of
Alexi’s
platform
—
including
one
I
recorded
with
the
company
last
May
for
my
How
It
Works
video
series.
In
that
video,
according
to
the
complaint,
Alexi’s
Chief
Revenue
Officer
Daniel
Diamond
“showcased
direct
access
to
Fastcase
Data
and
continued
to
use
Fastcase’s
registered
marks
within
its
platform.”
The
complaint
includes
this
screencap
of
my
‘How
It
Works’
interview
with
Alexi,
allegedly
to
show
unauthorized
use
of
Fastcase
data
and
trademarks.
The
complaint
also
cites
an
October
2024
demonstration
for
HeyCounsel
in
which
Diamond
presented
Alexi’s
AI
chat
interface,
stating
that
Alexi’s
model
was
“trained
on
over
30
million
pairs
of
questions
and
answers
that
are
derived
from
caselaw.”
The
complaint
includes
screenshots
from
those
two
demos
that
show
Alexi’s
interface
displaying
full-text
case
law
with
a
button
stating
“View
this
document
on
Fastcase,”
which
Fastcase
characterizes
as
unauthorized
use
of
its
trademark
and
an
implied
affiliation
that
was
never
authorized.
Diamond
also
reportedly
acknowledged
that
Alexi
had
moved
beyond
its
original
passage-retrieval
tool
and
now
acted
“as
a
wrapper
on
top
of
third-party
AI
models
using
Fastcase
Data,”
the
complaint
alleges.
Alexi
CEO
Denies
Wrongdoing
In
an
interview
yesterday,
Alexi
CEO
Doble
denied
that
the
company
had
violated
its
agreement
with
Fastcase
and
expressed
his
hope
that
the
lawsuit
can
be
resolved
quickly.
Although
he
told
me
that
he
is
limited
in
what
he
can
say
because
of
the
pendency
of
the
lawsuit,
he
attributed
it
to
a
“massive
miscommunication”
and
said
that
Alexi
is
“doing
everything
we
can
to
try
and
resolve
it
as
fast
as
we
can.”
The
full
text
of
the
license
agreement
is
under
seal
in
the
lawsuit
at
Clio’s
request.
But
Doble
said
he
has
always
been
careful
never
to
operate
beyond
the
license’s
scope.
The
reason
it
came
to
a
head
now,
Doble
suggested,
is
that
Clio
only
became
aware
of
the
agreement
during
the
final
weeks
before
the
Nov.
10
date
on
which
it
completed
its
acquisition
of
vLex.
Until
then,
he
said,
no
one
at
Fastcase
or
vLex
had
ever
before
questioned
the
licensing
agreement
or
Alexi’s
actions
under
it.
His
relationship
with
both
companies
had
always
been
cordial
and
cooperative,
he
said,
even
to
the
point
of
their
engineers
having
worked
together
to
develop
some
of
the
functionality
now
at
issue.
He
disputes
the
complaint’s
allegation
that
Alexi
shifted
its
business
model
after
entering
into
the
licensing
agreement.
From
the
company’s
founding,
he
said,
its
mission
was
always
to
fully
automate
the
production
of
research
memos.
While
it
initially
employed
lawyers
to
control
the
accuracy
of
its
memos,
its
goal
was
always
to
become
fully
automated,
and
that
was
clearly
communicated
to
Fastcase,
he
said.
Doble
describes
the
misunderstanding
around
the
terms
of
the
agreement
as
being
the
result
of
a
“bit
of
broken
telephone”
in
the
transitions
over
the
years
from
Fastcase
to
vLex
and
then
vLex
to
Clio.
“It’s
clear
there’s
a
lot
of
information
that
Clio
doesn’t
have
that
we
have
that
now
we’re
just
trying
to
go
through
and
work
with
them
on
explaining,”
he
said.
October
Notice
of
Breach
Doble
said
the
first
he
heard
of
any
problem
was
in
late
October,
when
he
received
a
phone
call
from
a
vLex
executive,
which
was
then
followed
on
Oct.
27
by
vLex
sending
Alexi
a
“Notice
of
Material
Breach”
demanding
the
company
cure
its
breaches
within
30
days
as
required
by
the
agreement.
According
to
the
complaint,
Alexi’s
counsel
responded
on
Nov.
3,
denying
any
breach
and
expressly
admitting
that
Alexi
had
used
Fastcase
data
to
train
its
generative
AI
models.
The
response
stated:
“The
intention
of
the
Agreement
was
never
to
preclude
Alexi
from
using
Fastcase
Data
as
source
material
for
Alexi’s
generative
AI
product;
that
is
exactly
what
Alexi
was
paying
Fastcase
nearly
a
quarter
million
dollars
for
annually.”
Fastcase
characterizes
this
as
an
acknowledgment
of
conduct
prohibited
by
the
agreement’s
plain
terms
and
notes
that
Alexi
stated
its
intention
to
continue
using
the
data
“as
it
had
been.”
After
the
30-day
cure
period
expired
without
resolution,
Fastcase
terminated
the
agreement
and
filed
this
lawsuit.
A
Clio
spokesperson
declined
to
say
anything
more
about
the
allegations
of
the
lawsuit
beyond
what
is
alleged
in
the
complaint.
“Clio
takes
its
contractual
obligations
and
our
responsibility
as
stewards
of
our
intellectual
property
very
seriously,”
the
spokesperson
said.
“We
follow
established
processes
to
ensure
our
licensed
data
is
used
appropriately
in
order
to
protect
the
integrity
of
our
content
library.”
Legal
Allegations
The
complaint
alleges
that
Alexi
materially
breached
the
Data
License
Agreement
by
using
Fastcase
data
to
train
and
develop
Alexi’s
commercial
AI
legal
research
product
and
in
other
ways.
It
also
asserts
that
Alexi
violated
Fastcase’s
trademarks
and
used
the
Fastcase
name
and
trademarks
in
its
interface
and
marketing
materials.
Perhaps
most
significantly
the
complaint
alleges
that
Alexi
misappropriated
trade
secrets
through
its
unauthorized
use
of
Fastcase’s
database.
Fastcase
is
seeking
extensive
remedies,
including
a
declaratory
judgement
that
Alexi
materially
breached
the
contract,
a
permanent
injunction,
compensatory
damages,
and
disgorgement
of
all
revenues
and
profits
from
unauthorized
use.
‘A
Huge
Misunderstanding’
Some
of
you
reading
this
may
be
wondering
if
this
is
déjà
vu all
over
again,
as
this
blog
continues
to
follow
the
long-running
litigation
of
Thomson
Reuters
v.
ROSS
Intelligence.
Yes,
that
lawsuit
involves
an
established,
Canada-based
legal
research
company
suing
a
Canada-based
legal
research
startup,
much
as
this
one
involves
the
Canada-based
legal
tech
giant
Clio
suing
the
Canada-based
Alexi.
But
in
this
case,
Doble
expressed
hope
that
Canada
connection
would
work
in
favor
of
a
quick
resolution.
“We’re
a
Canadian
legal
tech
company
and
Clio
is
the
Canadian
darling
legal
tech
company,”
he
said.
“I
still
have
a
ton
of
respect
for
what
they’ve
done
—
we
all
at
Alexi
look
up
to
them.
They’re
an
amazing
company.
…
“I
just
think
there’s
a
huge
misunderstanding,
miscommunication,
and
I’m
confident
it’ll
be
resolved
pretty
quickly.”
The
case
is
assigned
to
Judge
Richard
J.
Leon
in
the
U.S.
District
Court
for
the
District
of
Columbia,
case
number
1:25-cv-04159.
Fastcase
is
represented
by
attorneys
from
Wilson
Sonsini
Goodrich
&
Rosati,
including
Paul
N.
Harold
in
the
firm’s
Washington,
D.C.,
office.