A pharmacy benefits startup is accusing its former general counsel and chief financial officer of launching a competitor with stolen trade secrets.

Blink Health Ltd. sued Hippo Technologies LLC in New York federal court on Wednesday, calling Hippo “a rogue and fraudulent enterprise that is trying to cheat its way into the market by outright thievery.”

Backed by Gibson, Dunn & Crutcher, Blink seeks $250 million in damages and an injunction that would stop Hippo from “competing unfairly” against Blink.

Blink's unusually caustic complaint accuses Hippo co-founders Charles Jacoby and Gene Kakaulin, who previously served as GC and CFO at Blink, respectively, of scheming to misappropriate source code, marketing plans and even unused company slogans.

“Lacking any ingenuity of its own, defendant's second-rate copycat competitor business appears to be premised entirely on a blatant and cynical misappropriation of all aspects of Blink's unique and proprietary business model, methods, processes, research, strategies, and technology,” states the complaint, which is signed by Gibson partner Orin Snyder.

The complaint alleges that Jacoby began stealing trade secrets while still employed as Blink's deputy general counsel in 2017.

The parties have litigated similar claims in New York state court, but Blink dropped the suit when the defendants invoked arbitration clauses. Proskauer Rose and Levi Lubarsky Feigenbaum & Weiss represented Hippo and its executives in that litigation.

Kakaulin said in an email Wednesday evening that Blink's claims reflect its “toxic corporate culture” and are a blatant attempt to interfere with fair competition.

“This new case follows on the heels of their lawsuit that was laughed out of New York State court last month,” Kakaulin said. “With the recent spate of lawsuits by and against Blink, their toxic corporate culture is now widely known, and this lawsuit is just another example of their questionable business practices.”

Blink describes itself as a prescription medication e-commerce system for uninsured and underinsured patients. The company negotiates discounts with pharmaceutical companies and benefit managers, which it says results in lower and more transparent pricing for users. The company claims as trade secrets its contracting structure; its back-end process for funding and approving the filling of pre-purchased medications with its “Blink card;” its billing process; and its ”marketing playbook” to which it restricted employee access.

According to the complaint, Jacoby was Blink's general counsel from July 2014 through August 2016, then worked as deputy GC until his departure in 2017. As GC he managed the IP portfolio and had access to sensitive data about company financings. “It is difficult to conceive of sensitive information within the Company to which Jacoby was not exposed, given the trust and confidence the company (regrettably) placed in him,” the complaint states.

According to his LinkedIn profile, Jacoby received his law degree from the University of Pennsylvania in 2010 and spent two years as a legal and policy adviser in the office of New York Mayor Michael Bloomberg.

Jacoby and Kakaulin launched Hippo in 2016 despite their obligations to Blink and their having signed nondisclosure and noncompete agreements, the complaint alleges. It goes on to accuse Jacoby of transferring confidential Blink information to his personal email account that later emerged in a disgruntled Blink investor's lawsuit against the company.

The complaint also alleges that Hippo hired a computer consultant who worked previously for Blink and was familiar with its source code and enlisted a Blink marketing consultant to try to trick a current employee into giving her a copy of the marketing playbook.

Finally, Blink alleges that Hippo's primary slogan, “Save Money. Fill Better,” was developed by Blink and appears on internal presentations that Jacoby would have seen. “Defendant has stolen the slogan for use in a sham trademark application it filed and on its cheap imitation website,” the complaint states.

Kakaulin said the lawsuit is an example of Blink's questionable business practices. He said Hippo offered during the state court litigation to retain an independent expert to verify that it isn't using any Blink trade secrets. “Blink declined. This says it all,” he said. “Hippo is offering patients a better product with stronger industry partnerships, and Blink is now trying to accomplish through the courts what it knows it will not be able to achieve in the market.