BikeE and Giant are tangled in a legal dispute over manufacturing contracts, recalls and trade secrets. BikeE was the manufacturer of a semi-recumbent bike and saw some success in the market. According to court documents, BikeEs sales grew from $523,000 in 1996 to $4.6 million in revenues in 2001.
In 2001, BikeE decided to outsource its production to Giant. Between August and February of that year the company announced three recalls-One for a faulty suspension fork, then a faulty steerer tube, and finally a faulty seat-post clamp.
The cost of the recalls caused BikeE to delay payments to Giant. Giant sued for $370,549, plus interest, and won. BikeE was forced to shutter all operations.
In October of this year, BikeE filed its own lawsuit claiming that Giant intentionally put BikeE out of business, and feigned interest in the company in order to access trade secrets. BikeE also alleges that Giant used these secrets to design its own semi-recumbent bike.
Giant denies all of these claims and says that the faulty components were manufactured by a third party. BikeE is asking for $2 million in damages, while Giant wants to hold BikeEs owners personally responsible for the money owed. Both arguments will be heard by a jury.