Tribunal upholds State’s judgement in data theft case

Orders former employee of medical research startup to pay compensation of ₹15 lakh

June 04, 2019 01:22 am | Updated 01:22 am IST - Mumbai

Five years after the State’s Principal Secretary, Information Technology (IT) indicted the founder of a medical research startup for stealing crucial data from his former employer, the Telecom Disputes Settlement and Appellate Tribunal, New Delhi recently upheld the order.

In June 2013, Abhimanyu Kumar, head of PreventiNe Life Care Pvt Ltd, had approached the then Principal Secretary (IT) Rajesh Aggarwal, whose office is the adjudicating authority for cases of data theft via electronic means, to complain against his former employee, Rishi Dixit. Mr. Kumar alleged that Mr. Dixit, after breaking off from PreventiNe in 2012, started his own company called Navigene in Mira Road and used research data stolen from PreventiNe to pitch its services to clients.

In March 2014, Mr. Aggarwal directed Mr. Dixit to pay ₹30 lakh as damages. Vrushali Joshi, a former PreventiNe employee who later went to work for Mr. Dixit, was also named as a respondent in the case. Both appealed against the order before the tribunal.

In its judgement dated May 31 this year, the tribunal said while the allegation of Navigene having stolen PreventiNe’s software to generate its own reports was not substantiated, it has been established that Mr. Dixit took sensitive data from PreventiNe and used it for his own business interests, despite signing confidentiality clauses in his employment contract. The clauses are valid even after his breaking off from the company, it said, while exonerating Ms. Joshi of the charges as there was “no evidence of unauthorised transfer of data”.

“In the facts of the case, we therefore hold that a compensation of ₹15 lakh will hold just and fair,” the tribunal’s order said. The adjudicating officer also granted 12% compound interest in case the amount is not paid within one month of the order. “We have generally been allowing a simple interest of 8% in most cases before us. Though such cases may not be similar, we intend to follow the practice in this case as well,” the order said.

Seven-year battle

Mr. Kumar told The Hindu the order marked the end of a seven-year battle, in which the first year was spent trying to convince the Navi Mumbai police to register an FIR. Since 2007, his startup has been working on predicting possible disorders in newborns based on their DNA, working with thousands of samples from various countries.

“There is need for a systemic overhaul when it comes to dealing with cases of data theft. For startups such as ours, data is the biggest asset. While the government is talking about encouraging startups and providing facilities like funding and non-lateral credit, little is being done to protect our data,” Mr. Kumar said.

The 2014 judgement in the case was a landmark one, as it proved data theft after observing that let alone the colours, fonts and abbreviations, even the spelling and grammatical errors in both the research reports of both the companies were similar.

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