It looks like we have the best selling brand Serta, going after the largest e-commerce player Casper. I like to watch a fight where you have two heavyweights in the same ring. Ding, ding.
Serta is alleging that Casper is infringing on its patented design when it developed its new Wave mattress. In the lawsuit, Serta says, “Casper’s unauthorized use is unsurprising given that Casper openly states on its website that it has ‘disrespect for the existing mattress industry.'” In other words, we don’t care what you think we are coming after you guys guns blazing.
The primary complaint by Serta revolves around the rails that are cut into the foam that Casper is using to provide “precision contouring for added pressure relief”. Serta says that this resembles its own “Channel Cut Technology” and is in violation of their patent. (There are other alleged patent violations that we won’t get into here.) Serta is after monetary reimbursement as well as a court order asking Casper to stop producing the product.
All of this is going on after a new round of funding by Casper raised $170 million and has made it clear that they are planning an I.P.O in the near future. That $170 million is based on a valuation of $750 million for a company that by most accounts, isn’t making any money. Phillip Krim, one of the founders was recently asked about the valuation but declined to comment.
So what’s the point here? Whenever you have industry titans like Mattress Firm and in this case, Serta, threatened by newcomers like Tuft and Needle and Casper, there is going to be some friction. If you have intellectual property you have to defend it or the courts will take it from you so Serta is doing what they have to do. Casper knows that they have to continue to grow and leverage their position as the leader in the e-commerce space so being aggressive is important, but in this case, you have to wonder if they went a little too far.
So who will end up the victor in this particular battle? Only time will tell. Will Casper be hurt by the lawsuit as they move towards their I.P.O.? Will Serta get much from this outside of a massive legal bill? One thing we know for sure, the attorneys are going to do alright.
In 2014 I wrote a blog titled “5 Signs An Outsider Won’t Make It In The Mattress Industry.” It talks about industry outsiders coming in and failing because they make too many assumptions that end up in bad decisions. About this time Michael Traub, CEO of SSB, was starting his new job. In the post I give him a warm welcome to the industry and warn that if he makes the same mistakes that I outline, he may not be around long. I recently saw Michael at the Magowitz event and we laughed about this. Today, I feel like I should make a point of saying congratulations to Michael for NOT making those stupid mistakes and for becoming “one of us” over the last three years. I always enjoy talking to Michael and appreciate that his ego allows him to laugh about such things. Continued success to you and SSB!