Mudslinging in Indian IP Theft Case

Could lax enforcement harm the country's booming outsourcing industry?

4 min read

5 October 2004--In an ugly case that highlights the difficulties of preventing intellectual property theft in India, a small U.S. software firm has filed a lawsuit against police in Mumbai (formerly Bombay) for failing to investigate a complaint against an employee at its Indian subsidiary. Police fired back calling the firm, Jolly Technologies, in San Carlos, Calif., "bogus" and founder Sandeep Jolly a "cheat." Jolly Technologies is a provider of software for bulk printing of labels, bar codes, and ID cards. (Jolly claims the U.S. military as a big ID card customer.) The firm accuses one of its engineers of stealing the source code and other confidential information for a key product.

"We haven't even gotten the local police to register a complaint," said Sandeep Jolly, the firm's founder and chief executive. "For us, as a small company, doing business in India is pretty risky." His allegations come as more and more overseas firms--among them dozens of Silicon Valley start-ups--are moving research and development and other high-end operations to India. While weak enforcement of protection laws is not yet scaring away investors, the high-tech industry is scrambling to maintain the country's image as a safe place to do business. Reports in non-Indian media about the risks of outsourcing software code and other protected information to India have prompted Indian firms to assert that they use the best safety standards found anywhere.

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