A Start-up’s IP Litigation Story

start-up01While conventionally the Indian companies are accused of intellectual property infringement, this case comes as a surprise as it involves an Indian start-up against a million dollar turnover foreign entity.

The Indian auxiliary of the global education giant Pearson LLC recently got into a legal dispute with a Bengaluru based educational start-up New Rubric Solutions for encroaching upon the latter’s pending patent on student assessment and analytics platform “Kaleido”, that is used by schools to diagnose student needs and to provide them personalized assistance in areas which need attention.

It is alleged that New Rubric had entered into discussions with Pearson early last year for Kaleido as an appraisal apparatus in Pearson’s overlooked schools. Moreover, Pearson’s offered to license Kaleido for a term of 2 years and later explore a larger advertising alliance where Kaleido would be a part of another product Pearson’s has been planning to launch. As per the discussions, New Rubric conducted a pilot test in one of the schools in August-September, 2014 and arranged the data for Pearson. The negotiations continued without any constructive outcome and finally fell apart in March this year.

New Rubric contents that Pearson plagiarized the data generated from Kaleido in a YouTube presentation and marketed them to educational institutions and potential customers misrepresenting them as data resulting from their learning tool, ‘MyPedia’. It is stated that the said presentation was copied from the data generated by New Rubric’s Kaleido while conducting the pilot test. There has been a blatant misuse of the technical and proprietary information disclosed by them while applying for Pearson Affordable Learning Fund (PALF) for funding for Kaleido and Pearson has been exploiting the same for their commercial gains[1].

On the other hand, Pearson denied the allegations and countered by saying that there is no copyright over the data collected at the school. The presentation was developed with the help of a separate vendor and not New Rubric.

In the interim order, the city court upheld the plea of New Rubric and granted an injunction against Pearson restraining them from infringing New Rubric’s intellectual property. The court stated that “it is well founded from the record that the defendant [Pearson] encroached upon the copyright of the plaintiff [New Rubric] which amounts to infringement within the meaning of Section 51 of the Act. If the defendant is allowed to continue its acts, the plaintiff will be put to inconvenience and hardship”[2].At this point of time, the matter is sub-judice, and may go into appeal to the High Court.

This case can be seen as a welcome change since the start up culture is coming up in a big way in India. Effective and proper IP management is a sine qua non for any emerging company. The suit serves as a benchmark for other emerging companies to take a stand for the protection of its IP.

[1]“Court asks Pearson’s Indian arm to stop infringing on Bangalore startup’s IP rights” Available at<http://www.vccircle.com/news/technology/2015/08/12/court-asks-pearsons-indian-arm-stop-infringing-bangalore-startup%E2%80%99s-ip> (Last visited on August 25, 2015).

[2]“In A First Incidence, A Global MNC Found Guilty Of Using Indian Startup’s Intellectual PropertyAvailable at<http://www.indianweb2.com/2015/08/14/in-a-first-incidence-a-global-mnc-found-guilty-of-using-indian-startups-intellectual-property-857/> (Last visited on August 26, 2009).