A case against IIT Kharagpur and its affiliate Technology Incubation and Entrepreneurship Training Society (TIETS) is pending in the Northern District Court of California for misappropriation of technology of a US firm. IIT Kharagpur has been charged for breaching a contract, it signed in 2003 with entrepreneur Mandana D. Farhang and her affiliate M.A. Mobile Limited by allegedly passing to others the technology relating to a new platform for mobile computing. 

The case has now taken a serious turn as recently the US Patent & Trademark Office (USPTO) described the technology as ‘valuable and novel’ even before IIT-Kharagpur had access to it.

The Plaintiffs, Farhang and M.A. Mobile Ltd filed a complaint on May 27, 2008 in US court alleging breach of contract, breach of fiduciary duty, fraud and misappropriation of trade secrets arising out of a Non-Disclosure Agreement (NDA) between IIT-Kharagpur and M.A. Mobile. The Dean of Sponsored Research and Industrial Consultancy, IIT-Kharagpur and four IIT professors have also been made party to the case for wrongful conduct.

IIT-Kharagpur was served with summons on April 8, 2009. In August 2009, IIT-Kharagpur filed a complaint against Farhang with the High Court of Calcutta. In its complaint, IIT-Kharagpur alleges that it never entered into a valid and enforceable NDA with Farhang and that it expended time, money, and resources into developing the disputed technology. The complaint further alleges that Farhang has wrongfully detained and utilized the technology.

IIT-Kharagpur also moved the US court to stay all claims in this action until the Indian proceedings are concluded. IIT-Kharagpur argued that the court should dismiss or stay the action in California for reasons of international comity. The court rejected IIT-Kharagpur’s arguments and found that
the case was properly filed in the Northern District of California and that IIT-Kharagpur must defend itself in California.

According to the complaint filed by Farhang, IIT Kharagpur had signed a mutual NDA with Farhang and M.A. Mobile in August 2003. The NDA included a choice-of-law clause providing that the agreement would be governed by California law. The NDA further provided that information exchanged under the agreement would be kept in confidence and will be disclosed only to persons who have agreed to be bound by the terms of the NDA.

Farhang and her affiliate shared not only critical technology and confidential information with IIT-Kharagpur but also disclosed critical trade secrets relating to marketing, business strategies and various applications for which the technology could be used. 

The complaint alleges that IIT Kharagpur breached this agreement by disclosing confidential information to persons or entities who had not agreed to be bound by its terms.

According to the complaint, in or around February of 2004, M.A. Mobile and Farhang had also entered into a joint venture agreement (JVA) with IIT-Kharagpur to develop and market technology disclosed in a patent application. The JVA provided that the parties would jointly develop the technology, then own and market it through a specially formed entity.

The complaint alleges that while IIT-Kharagpur had promised that it could deliver the technology because of its influential status in India, instead it "misappropriated" the technology and "joint venture’s customers for their own benefit, giving the technology to IBM and ultimately to the Indian Railways and possibly others". 

Farhang had also moved the US court to disqualify counsel of IIT Kharagpur, Orrick, Herrington & Sutclifee LLP (Orrick) on the ground that Orrick had previously represented her and obtained confidential information material to the instant case. However, the court denied this move stating that no current Orrick attorney has confidential information material relating to the current litigation.

The proceedings both in India and US have been pending for a long time.

The plaintiff’s lead counsel is Micah R. Jacob Partner at MBV Law LLP and co-counsel is Sanjiv N. Singh of SNS PLC, a former Skadden, Arps attorney.

IP Partner I. Neel Chatterjee along with Associate Nitin Gambhir and IP Litigation Attorney Theresa Ann Sutton of Orrick are representing IIT-Kharagpur in the US court.