Instacart Sues Uber’s Cornershop Over Intellectual Property Theft

Instacart, the US’ dominant grocery delivery app, has sued smaller rival Cornershop, alleging the Uber-owned company engaged in “brazen” theft of its intellectual property.

Cornershop is one of the biggest delivery apps in Latin America, but only entered the US market in May when it launched on a small scale in Dallas and Austin, later launching a limited service in Miami.

Instacart alleged in its lawsuit that Cornershop cut its US start-up costs by stealing images used for product images, allegedly changing the filenames to conceal the theft.

The thousands of copyrighted and licensed images, along with product descriptions and pricing data, represent “substantial investments” made by Instacart, the company said.

‘Systematic effort’

“The lawsuit makes clear that Cornershop is engaging in a systematic effort to illegally steal Instacart’s proprietary catalogue while attempting to conceal that theft for its own commercial benefit,” Instacart said in a statement.

In the Texas lawsuit, Instacart said Cornershop had “carried out its illegal enterprise with striking audacity”.

Cornershop had advertised for job positions in Texas for applicants who could “generate good scrapers”, Instacart added.

Uber said Cornershop would be responding to the allegations, framing them as a move by Instacart to block new competition.

“Instacart is facing a new challenge in the US from a Chilean upstart, and it’s unfortunate that their first move is litigation instead of competition,” Uber said.

Uber announced it would be acquiring Cornershop in October for $459 million (£366m), and the deal completed last week, although regulatory approval is still pending in Mexico.

Delivery boom

Uber began integrating Cornershop into Uber Eats last week in Latin America and Canada, and said it would begin doing so in the US in the coming weeks.

“In light of the egregious behaviour exhibited by Cornershop, we believe this legal action is necessary to protect our business and retail partners from Cornershop’s ongoing theft,” Instacart said in a statement.

The filing seeks a trial by jury.

Both Uber and Instacart are looking to capitalise on surging demand for online food deliveries amidst coronavirus lockdowns and other factors.

Investors recently added $325m to Instacart’s coffers, bringing its valuation to nearly $14bn.

Instacart said it has spent at least $17m since 2015 on creating and maintaining its catalogue.

“While we welcome competition and innovation, what Cornershop is doing is illegal,” the company said in a blog post.