The renowned Indian Institute of Technology, Kharagpur (IIT KGP) and its affiliate Technology Incubation and Entrepreneurship Training Society (TIETS), often in the limelight for their innovative creations, seem to have attracted quite a serious bit of controversy this time around. A U.S.-based entrepreneur Mandana D. Farhang and her affiliate MA Mobile Limited have brought charges of misappropriation of technology against the illustrious institution in the Northern District Court of California and the matter seems to be assuming grave proportions fast.
According to media reports, as far back as 2003, IIT KGP had entered into an agreement with Farhang and MA mobile, by which the latter had apparently shared new critical mobile computing technology and related confidential information with IIT KGP, as well as critical trade secrets relating to marketing, business strategies and various applications for usage of said technology. In return, IIT KGP had promised to develop the advanced prototype that Farhang had provided for specific application with Indian Railways.
On May 27, 2008, Farhang had filed her complaint that IIT KGP had breached the said agreement by way of unauthorized sharing of the said technology with third parties such as IBM and the Indian Railways. Accordingly, IIT KGP was served with summons on April 8, 2009. In response to the allegation, the IIT filed its own complaint at the Calcutta High Court against Farhang in August, 2009, alleging unauthorized usage of intellectual property. The claims made by IIT KGP included denial of having ever entered into a valid and enforceable non-disclosure agreement with Farhang, expending considerable time and monetary and intellectual resources for development of the disputed IP in question and wrongful detention and exploitation of said IP by Farhang.
IIT KGP has now filed a motion for a stay order vis-à-vis the Californian court proceedings until the conclusion of the Indian proceedings. The grounds for such motion are the principles of international comity [i.e. the courts should not act in a way that demeans the jurisdiction, laws, or judicial decisions of another jurisdiction] and international abstention. However, the only action taken by the Indian court thus far has been to issue a preliminary injunction restraining Farhang from utilizing the disputed IP without the IIT's written consent during the pendency of the Indian action.
However, Farhang’s action involves wider claims such as breaches of the non-disclosure agreement, the joint venture agreements and fiduciary duty, fraud and misappropriation of trade secrets. Therefore, even if the Calcutta High Court rules in favor of IIT KGP, there will still remain certain matters that the Californian court has to sort out.
Another procedural contention on the IIT’s part was that MA Mobile did not have the rights to file the case before the U.S. court in the first place, owing to non-compliance with California Corporations Code Section 2105 that 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.
The technology in question has already been duly identified by the US Patent & Trademark Office (USPTO) as "valuable and novel" even before IIT-KGP had any access to it. The IIT, however, had every right to be disappointed at the rejection by the Californian judiciary for grant of sovereign immunity that is usually given to independent nations.
Sanjiv N. Singh, co-lead counsel for Farhang and MA Mobile, seemed to be pretty confident about his clients getting a ruling in their favor and also hinted at IIT KGP’s unsuccessful attempts to have itself dismissed from the lawsuit. In the action, Partha P Chakrabarti, Dean of Sponsored Research and Industrial Consultancy, IIT KGP, as well as IIT professors Pallab Dasgupta, Rakesh Gupta, Pravanjan Choudhry, Subrat Panda and Animesh Naskar have been made parties by being accused of wrongful conduct and involvement in the misappropriation.
So far, T.K. Ghosal, the Registrar of IIT KGP has refrained from making any comment before the media, prudently terming the matter as sub-judice. While it is likely to take the judiciary of both the jurisdictions considerable time to reach a verdict in the matters involved, one really hopes the institute that has become almost synonymous with progressive innovation and excellence in the nation through long toils does not get embroiled in a murky and prolonged litigation, thereby causing harm to its considerable reputation in the process. The Spicy IP team has been trying to get in touch with the IIT KGP personnel involved in the matter, in a genuine attempt to listen to their version of what so far has seemed a pretty one-sided story, but to no avail so far. Once the attempt succeeds, the readers can perhaps look forward to more fireworks on this space.