Reader's Choice Books, the display marketing startup that was sued by Books Are Fun in November, has denied BAF's charges of unfair competition and filed its own counterclaims against the company, which is owned by Reader's Digest. But RCB founder Steve Rosebrough acknowledged that the company will likely shut down its operation by the end of February.
Rosebrough said the decision to close was driven in large measure by the BAF lawsuit, which, he said, "scared away investors" and is also draining RCB's finances. Rosebrough said RCB, after some early "bumps and grinds," had a strong December, but that would not be enough to keep the company solvent. He said his immediate goal is to "find a home for my reps" (a number of whom have returned to BAF) and to "take care of my vendors."
In RCB's legal response to the BAF lawsuit as well as in a statement, Rosebrough denied BAF's claims that its testing methods to determine which books will sell are trade secrets. In its court filing, RCB said that BAF's testing results were not highly confidential or closely guarded by the company. "Such information was available to merchandise controllers, buyers' assistants, publishers, sales representatives and others," the filing stated. "This case has nothing to do with trade secrets and everything to do with using lawsuits to hurt the business of a competitor," Rosebrough said. He also vigorously denied allegations that during his last year with BAF he sabotaged the company by intentionally placing wrong orders for books. "During the decade I worked for them, I always gave 110%," Rosebrough said.
In RCB's counterclaim, the company is seeking unspecified compensatory damages due to what RCB alleges is BAF's interfence with RCB's attempt to launch a company by making false statements against it.
An RD spokesperson said that despite the prospect that RCB will fold, BAF will continue to pursue the lawsuit because of its belief in the "harm caused by the individuals and company involved."
