IIT Kharagpur faces litigation in U.S .over Technology misuse

IIT Kharagpur faces litigation in U.S .over Technology misuse

By SiliconIndia   |   Tuesday, 28 June 2011, 11:27 Hrs   |    5 Comments
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IIT Kharagpur faces litigation in U.S .over Technology misuse
Bangalore: IITs are always in news for their brainchild and innovations, but IIT-Kharagpur is in the lime light for its litigation case filed by a U.S. based entrepreneur Mandana D Farhang along with her affiliate MA Mobile Limited. Mandana and MA Mobile have filed a case against IIT Kharagpur (IITKgp) and its affiliate Technology Incubation and Entrepreneurship Training Society (TIETS) for misuse of her invention and trade secrets. The case is filed with the Northern District Court of California.

In terms of the court, Plaintiff Mandana D. Farhang filed her complaint on May 27, 2008 and IITKgp was served with summons on April 8 2009. In August 2009, IITK filed a complaint against Farhang stating that she was using the institutes? intellectual property without their permission with the High Court of Calcutta, India. IITKgp now moves to stay until the Indian proceedings are concluded and the determination of the High Court of Calcutta becomes final. Their bases for requesting a stay are the principles of international comity and international abstention. International Comity means in U.S. law that that courts should not act in a way that demeans the jurisdiction, laws, or judicial decisions of another jurisdiction.

In its complaint filed with the High Court at Calcutta, IIT makes the following claims: (1) IIT never entered into a valid and enforceable non-disclosure agreement ("NDA") with Farhang; (2) IIT expended time, money, and resources into developing the disputed IP; and (3) Farhang has wrongfully detained and utilized the IP.

It appears that the only action taken by the Indian court thus far has been to issue a preliminary injunction restraining Farhang from utilizing the disputed intellectual property ("IP") without IIT's written consent while the Indian action is pending.

Meanwhile, in the instant action, plaintiffs Farhang and M.A. Mobile Ltd. bring claims against IIT and other defendants for: (1) breach of the NDA, (2) breach of joint venture agreements, (3) breach of fiduciary duty, (4) fraud, and (5) misappropriation of trade secrets. Even if the Calcutta High court will be in the favor of IITKgp and dispose of all of plaintiffs' claims, there will still some issues that the U.S. court has to address.

Also IITKgp states that MA Mobile does not have the rights to file the case under the U.S. court because it has not complied with California Corporations Code Section 2105. Section 2105 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.

In her complaint to the U.S. court Mandana mentions that in the year 2003, she and her affiliate had entered into an agreement with the IITKgp on building a prototype for a specific application for the mobile computing technology that was to be used in the Indian Railways. Keeping this in mind, Mandana had shared her invention with IITKgp. She also went ahead and shared the trade secrets with relation to the invention including the marketing and customer information. Further in the complain states that IITKgp has misused the information by sharing it with other 3rd parties like IBM and Indian Railways thus breaching the contract of agreement between them.

Right now the case is taking different turns everyday. The parallel proceedings in both the courts are taking a long toll and there is a list of people in Mandana's list who need to come out clean in this case. It will take some time for both the courts to give their verdict.

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Reader's comments(5)
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Posted by:chetan - 30 Jun, 2011
2: This is an old news. Also these types of litigation is common with research institutes doing collaborative works. Nothing has been proved to make this a news. Sudden appearance of this old case in 2011 may be due to some other vested interest.
Posted by:Mounita - 28 Jun, 2011
3: The description above needs some clarification. In point of fact, the U.S. Complaint was filed more than one year before the Indian action. The Northern District already rejected IIT-Kgp's motion to dismiss the case on grounds of sovereign immunity as reported by TOI, rejected IIT-Kgp's attempt to have the case in the U.S. stayed as you can see from the public U.S. filings, and certified the U.S. complaint as being properly plead, also evident from the U.S. filings, all in 2010. Meanwhile, the Indian case has hardly progressed at all and IIT-Kgp's initiation of the Indian case appears like a transparent strategy to try to detract from the U.S. proceeding. The Indian filing by IIT-Kgp is also rife with incorrect facts. They incorrectly told the Indian court that the U.S. technology was not patentable, and they are now proven wrong on that point. The technology has been authorized for U.S. patent protection with a priority date of 2000 according to TOI.

Posted by:BJ22 - 28 Jun, 2011
4: IITs are known for their innovations and researches... It is very surprising that they would do something like this.
Posted by:Varsha - 28 Jun, 2011
5: IT should be IITKGP, NOT IITK.

IIT KGP - IIT Kharagpur
IIT K - IIT Kanpur
Posted by:Rajiv Roy - 28 Jun, 2011