Tuesday, June 28, 2011

Stale News: IIT Kharagpur in the Dock before a US Court

I am sure most Indian readers must have already read in today’s news reports that IIT Kharagpur, the first and the oldest of Indian Institutes of Technology (the famed ‘IITs’) is staring down the barrel in a suit in which it has been arrayed as one of the primary defendants by MA Mobile Limited and Mandana D Farhang, a US-based entrepreneur. 

The case, which was filed before the Northern District of California in May 2008, concerns alleged misuse of Farhang’s invention and trade secrets by the Technology Incubation and Entrepreneurship Training Society (TIETS) of IIT Kharagpur. The US suit alleges (1) breach of the NDA, (2) breach of joint venture agreements, (3) breach of fiduciary duty, (4) fraud, and (5) misappropriation of trade secrets, by IIT Kgp.

In her suit, Farhang states that in the year 2003, MA Mobile and she had entered into an agreement with the IIT Kgp for creation of a prototype of a mobile computing application which could be used by the Indian Railways. The application, along with trade secrets and customer information, was shared with IIT Kgp for the creation of the prototype by the latter. Allegedly, IITKgp subsequently shared the trade secret and the application with IBM and Indian Railways in breach of its agreement with Farhang.  

IIT Kgp, on its part, has claimed that Farhang did not have the right to file the suit in a US Court since provisions of the California Corporations Code had not been satisfied. Reportedly, Section 2105 of the Code requires foreign corporations to obtain a certificate of qualification from the Secretary of State prior to transacting intrastate business in California. M.A. Mobile is a foreign corporation chartered under the laws of the Commonwealth of Dominica.

Further, IIT Kgp too filed a suit before the High Court of Calcutta in April 2009 claiming that Farhang was using the institute’s technology without authorization. IIT Kgp had also prayed for an anti-suit injunction whereby the foreign suit instituted by Farhang was sought to be stayed until the Indian proceedings were concluded.

The High Court of Calcutta issued an interim injunction against Farhang which prevented her from using the disputed IP during the pendency of the suit.  I haven’t found th HC’s order on Manupatra or Indian Kanoon. If any of our readers have, I request them to share it with us.

From what I have gathered, three orders have been passed by the US Court dated June 1, 2010, September 3, 2010 and September 7, 2010. We’ll discuss them in the next few posts.

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