Document Management News

DocMagic, which provides technology for mortgage loan document preparation, has filed a US lawsuit against its former ePASS and reseller partner Ellie Mae for antitrust violations.

It is claiming on the grounds of "intentional interference with contractual relationships, interference with prospective economic advantage and unfair competition".

DocMagic has also filed a lawsuit against Ellie Mae for the alleged misuse of DocMagic's intellectual property in the Ellie Mae Docs system.

The antitrust suit alleges that DocMagic was provided access to the Ellie Mae-owned ePASS mortgage document platform until Ellie Mae notified DocMagic of its intent to terminate its ePASS agreement. It "subsequently took drastic steps to prevent its users from accessing DocMagic products through unfair and anti-competitive behaviour, including sabotaging clients from accessing DocMagic altogether through alternative web service calls".

The lawsuit also claims Ellie Mae began notifying ePASS Network users that DocMagic would no longer be available on its ePASS or Encompass Closer platforms, and that DocMagic users would be moved to Ellie Mae’s loan document service instead. DocMagic claims Ellie Mae then began changing the terms of the Encompass user agreements to prohibit the transfer of data from Encompass to any third-party service provider outside of the ePASS network.

The separate intellectual property action has seen DocMagic claim Ellie Mae made unauthorised use of DocMagic’s product user interface, workflow, terminology and overall look and feel in its own document system.

Dominic Iannitti, CEO of DocMagic, said, "We feel strongly that everyone in our industry must work together in good faith to support proprietary innovation and cooperation in order to meet the challenges of the current lending environment, not create problems for our industry merely to gain an unfair competitive advantage at the expense of the lending community and the borrowers we serve."

Jonathan Corr, chief strategy officer at Ellie Mae, said in response to the DocMagic actions, "This lawsuit is not about anti-competitive behaviour, as our ePASS technology currently supports ten of the industry’s leading document services providers, and thousands of other service providers from which our customers can choose.

"This is about one vendor that is displeased to be losing the overly favourable terms it negotiated a long time ago, even after those terms had expired."

He added, “We have invested years of research and development into our patented ePASS technology, which has provided immeasurable efficiencies to the mortgage industry. It is not DocMagic’s or anyone’s right to reverse-engineer technology or to access it illegitimately.”

Ellie Mae said it will defend the DocMagic lawsuits.