By Tom Lohwiss-BakerWhen a new tech startup goes into court, it’s hard to know whether the lawyers will try to set aside a decision that has already been made.
That’s because the new business model in the business of technology is the “cavemans”.
It involves the use of a company’s own servers to host software, making it difficult for the judge to enforce its ruling on behalf of the customer.
In the case of the company Isobionics, a British startup that builds 3D printers and has raised a record $40m from angel investors, the legal battle was about its ability to charge consumers higher prices.
In a lawsuit filed in the US in 2014, the judge found that the company was not making a “fair and equitable” offer to its customers.
The judge said that, if Isoborionics went to trial, its prices would not be “reasonable” under current law.
In other words, Isobbors competitors would be allowed to offer cheaper prices, even if Iobobys customers paid the difference.
The US case had the potential to be a landmark in the field of digital technology, but it didn’t happen.
In its 2014 ruling, the US Court of Appeals for the Second Circuit said that the case should be dismissed because the price disparity was not a “reasonable pricing incentive” to use the service.
“There is no justification for the company’s ‘cavesman’ pricing model,” the judges wrote.
“The caveman pricing model is the most extreme example of an approach that would make it difficult to enforce a fair and equitable pricing agreement in this case.”
The decision of the Second Amendment Foundation, which is part of the Liberty Counsel, a Christian legal organisation, that brought the case, to dismiss the case means that Isobis’ price-to-cost ratio will remain in place.
Isobodies CEO Peter Hochberg said that he was disappointed with the outcome, but said the outcome was not necessarily a bad thing.
“I think it is important for people to be aware that if a company can go to court and say, ‘This is how I can charge more for my services than the competitor can’, and that’s what happened here, that’s a real setback to the business model that they are trying to run,” he said.
This article was amended on 8 December to reflect that the court found that Iobborys pricing was not reasonable.