Estonia, Internet, Legislation, Technology

International Internet Magazine. Baltic States news & analytics Monday, 06.07.2020, 13:20

Estonian tech startup Xolo involved in a intellectual property dispute

BC, Tallinn, 05.02.2020.Print version
Estonian police searched the offices of tech startup Xolo, which Rimuut OU, a company with a Turkish background, is accusing of intellectual property theft, the daily Postimees writes. However, Xolo CEO Allan Martinson says Rimuut's accusations are unfounded and not based on facts.

"Yesterday, we had a very nice and friendly visit from police officers, whom we showed how our company works and what we do. We presented relevant information and also gave them files and digital materials to take with them that illustrate all this," Martinson said.

"From their [the police's] perspective, this was to register some kind of a situation, to get an initial snapshot," he said, adding that no one is suspected of anything. "In this sense, this was more about conversations," Martinson added.

According to the CEO, the proceedings will not affect Xolo's business and the company is cooperating with the authorities to disprove the speculations.

"We believe that the Estonian legal system and police are professional and we are happy to cooperate with them fully and openly," Martinson added.

Xolo is a tech startup founded to service Estonian e-residents. With the help of the online platform of the company, people can establish a private limited company in Estonia, open a bank account and use an automatized accounting service

Rimuut is a former client of Xolo claiming that Xolo copied Rimuut's business model when it launched its new product in the summer of 2019. Xolo affirms that the models are significantly different.

Rimuut is a company that helps freelancers establish a virtual company, which is somewhat similar to the activity of Xolo. Rimuut's owners are two Turkish nationals, Esen Bulut and Mert Safak Bulut.

According to Rimuut, this is the most successful start-up company created through the e-residency program and the company's revenue and customer base are growing rapidly.

"Xolo's business has been the same for nearly five years. Individual entrepreneurs all over the world receive legal entity, a bank account, a software platform to run their business and full accounting service through Xolo, including guarantee of timely payment of their taxes and drawing up of annual reports," Martinson said.

Martinson said that, last summer, Xolo started offering the option of establishing business in the form of partnership in addition to setting up private limited companies in Estonia. The Xolo Go service enables launching a business without applying for Estonian e-residency and registering a company.

According to Xolo, it is easy to prove that Rimuut's business information was not used to develop Xolo's service.

"It has some similarities to Rimuut's service, they cannot be offended that we do business because they themselves became our customer. There are some similarities, but when you look more closely, those similarities disappear: the legal form is different, we have invested a six-figure sum for developing a contract system, we offer a bank account, which Rimuut does not," Martinson said.

"Intellectual property disputes are commonplace in the technology sector. Sometimes there are bona fide disputants, but often, the opponents are malicious opportunists. I would not like to start drawing conclusions as to which one we are dealing with here. However, it is worth noting that despite our repeated requests we have not received any claims from Rimuut for more than half a year," Martinson added.

Xolo was founded in 2015 and the company has customers in over 100 countries across the globe. In total, the startup has helped found over 3,500 companies in Estonia and there are over 80 employees on the startup's team.

Search site