Pipal Tech Ventures Private Limited v. MoEngage, Inc. ( 2015 )

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
PIPAL TECH VENTURES PRIVATE )
LIMITED, )
)
Plaintiff, )
)
v. ) C.A. No. 10381-VCG
)
MOENGAGE, INC., )
)
Defendant. )
MEMORANDUM OPINION
Date Submitted: September 1, 2015
Date Decided: December 17, 2015
John G. Harris and David B. Anthony, of BERGER HARRIS LLP, Wilmington, DE,
Attorneys for Plaintiff.
Sean J. Bellew, of DUANE MORRIS LLP, Wilmington, DE, Attorney for Defendant.
GLASSCOCK, Vice Chancellor
This case involves the creation and alleged theft of a valuable computer
application. According to the complaint, the application was developed primarily
by two employees of a tech corporation, incorporated in and headquartered in India.
The application was developed by these employees while they were located in India.
The alleged act of theft—removing the source code that embodies the
application—occurred in India. After the alleged theft, the employees—Messrs.
Dodda and Kumar—placed the stolen application, termed the “MoEngage Product,”
into a Delaware corporation, the Defendant here. That corporation, MoEngage Inc.
(“MoE”), has marketed the application in the United States and abroad, and has
solicited and received investments based on the representation that it owns the
MoEngage Product.
The Plaintiff is the Indian corporation, Pipal Tech Ventures Private Ltd.
(“Pipal Tech”), that is the victim of the alleged theft. In this action, it has sued the
defendant Delaware corporation only; counsel for the Plaintiff has acknowledged
that it likely cannot obtain jurisdiction here over the employees who actually
committed the alleged theft in India. Therefore, the Plaintiff must forgo legal redress
in this action for the alleged theft itself—originally sought in Count III of its
complaint, which has since been voluntarily dismissed—and for alleged breaches of
the employees’ employment and non-disclosure agreements, both of which specify
Indian law as the controlling authority, and one of which specifies Karnataka, India
1
as the exclusive forum. Nonetheless, Delaware is the Plaintiff’s choice of forum. It
seeks a declaratory judgment that it is the owner of the application, damages (under
the Delaware Uniform Trade Secrets Act and otherwise), and related injunctive
relief. The defendant Delaware corporation, MoE, has moved to dismiss on forum
non conveniens grounds. It concedes that it is not subject to process in India, but
agrees to waive that defect. It argues that other than the metaphysical “location” of
the application in the custody of a Delaware entity, no other connection exists to
Delaware.
A motion to dismiss on the ground that Delaware is an inappropriate forum is
addressed to the discretion of the Court. Generally, this Court respects and defers to
the Plaintiff’s choice of a forum, where a prior pending action in another jurisdiction
does not exist. Only where the interests of justice overwhelmingly indicate that
another forum is superior will this Court exercise its discretion and dismiss the
action. Recent case law, including Martinez v. E.I. DuPont de Nemours and Co.1
and Hupan v. Alliance One International, Inc.,2 has clarified our forum non
conveniens jurisprudence, and has indicated that the overwhelming hardship
standard under which forum non conveniens motions are evaluated is not preclusive,
but instead sets a high but clearable bar. At first blush, this case—involving, as it
1
86 A.3d 1102 (Del. 2014).
2
— A.3d —, 2015 WL 7776659 (Del. Super. Nov. 30, 2015).
2
does, underlying tort and contract issues solely related to India—seems, in line with
the decisions above, ripe for dismissal on forum non conveniens grounds. Upon
close examination, however, the alleged acts of the Defendant—holding, marketing
and monetizing the purloined asset—as well as the weighing of other factors
appropriate to consideration of this motion, lead me to find that the choice of forum
here must be respected. For the reasons that follow, the Defendant’s motion is
denied.
I. BACKGROUND3
A. The Parties
Plaintiff Pipal Tech is a closely-held corporation formed in 2011 under the
laws of India with its principal place of business in India.4 Pipal Tech is in the
business of developing, licensing, and supporting mobile and web-based
applications.5
Non-parties Amit Baid, Raviteja Dodda, and Yashwanth Kumar are the
founders of Pipal Tech.6 Dodda and Kumar are also former executives and board
3
The facts, except where otherwise noted, are drawn solely from the allegations of the Complaint
and the documents incorporated by reference therein, and are presumed true for purposes of
evaluating the Defendant’s Motion to Dismiss.
4
Compl. ¶ 1.
5
Id.
6
Id. at ¶ 5. These individuals are referred to as Baid, Dodda, and Kumar, respectively, throughout
the remainder of this Opinion, not to be confused with other non-parties sharing the same
surnames.
3
members of Pipal Tech, and the founders of Defendant MoE.7 MoE is a Delaware
corporation, incorporated on or about July 22, 2014.8 According to the Defendant,
it is operated by non-party MoEngage India Private Limited (“MoE India”).9
B. Facts
Pipal Tech was formed in 2011 with seed capital provided by CP Baid and
Premlata Baid, who also serve on the Plaintiff’s board of directors.10 Dodda and
Kumar were appointed as Directors to Pipal Tech’s board of directors with a
minority stake in September 2011.11 Shortly thereafter, both were hired as
employees, with Dodda tasked to head Pipal Tech’s product and business
development and day-to-day operational management, and Kumar to manage the
Plaintiff’s technology and engineering functions.12 Subsequently, in mid-2013,
Dodda was appointed the Chief Executive Officer (CEO) and Kumar the Chief
Technical Officer (CTO) of Pipal Tech.13 The terms of their employment were set
forth in respective employment agreements (the “Employment Agreements”),
7
Id. at ¶¶ 7, 38.
8
Id. at ¶ 38.
9
According to the Defendant, MoE has no employees and is operated through its subsidiary MoE
India, a corporation organized and existing under the laws of India, with its principal place of
business in Bangalore in the State of Karnataka, India. Def’s Opening Br, Ex. A (Affidavit of
Raviteja Dodda) ¶ 4. The Complaint is silent as to the relationship between MoE and MoE India.
10
Compl. ¶ 6.
11
Id. at ¶ 7.
12
Id.
13
Id.
4
executed in November 2011,14 each providing that Pipal Tech “shall retain
ownership of all right, title and interest in the Company Materials including all
copyright, trademark, patent, or other intellectual property rights” and that
“[n]othing in this Agreement shall be construed to assign or license any rights in any
company to [Dodda or Kumar] except as set forth in this Agreement.”15 The
Employment Agreements further provide that Dodda and Kumar “assign[] to the
Company all right, title and interest in the Product, designs and specifications
(related and unrelated to the product) including all copyright, trademark, patent and
other intellectual property rights.”16
In addition to the Employment Agreements, Dodda and Kumar executed non-
disclosure agreements (the “NDAs”) providing that all “Confidential Information”
is the property of Pipal Tech, with “Confidential Information” defined to include,
among other things, “all information or material that is related to the business of
[Pipal Tech] which [] may derive economic value, actual or potential, from not being
generally known to or readily ascertainable by the other person who can obtain
economic value from its disclosure or use.”17 Under the terms of the NDAs, Dodda
and Kumar are not permitted to “disclose, give away, divulge, exchange or make
14
Id. at ¶ 8.
15
Id.
16
Id. at ¶ 9.
17
Id. at ¶ 10.
5
known or available in any way” Pipal Tech’s Confidential Information without the
prior written consent of Pipal Tech.18 Both the NDAs and the Employment
Agreements expressly provide that they are governed by Indian law, and the NDAs
include a forum selection clause designating Karnataka, India as the proper venue
for any disputes arising with respect to the NDAs.19
Shortly after Dodda and Kumar were hired, Pipal Tech began developing an
application called DelightCircle—subsequently re-launched with enhancements as
“SaveZippy”—a location-based mobile and web application that allows retailers to
“engage with their customers and distribute and market retail coupons.”20 Dodda
and Kumar were involved in the technical development of SaveZippy, interacted
with Pipal Tech’s customers and investors regarding the product, and handled media
relations.21 By March 2013, Pipal Tech had expanded to the United States and
Canada with SafeZippy and other Pipal Tech products by incorporating
18
Id. at ¶ 11.
19
See Pl’s Opening Br., Ex. B (Dodda Employment Agreement) ¶ 8 (“This Agreement shall be
construed with, and governed in all respects by, the laws of India, without regard to conflicts of
laws principles.”); Pl’s Opening Br., Ex. C (Dodda Non-Disclosure Agreement) ¶ 16 (“This
Agreement shall be construed to and governed by the Honorable Courts of Banglore/Benglaru in
the State of Karnataka, India, without regard to the conflicts of laws or provisions thereof. All
legal proceedings, including the rendering of any award, shall take place in Karnataka, India, which
shall be the exclusive forum for resolving any dispute, controversy or claim arising out of or related
in any manner to this Agreement.”). These agreements are incorporated by reference and integral
to the Complaint; therefore, the Court may consider their contents. See Trenwick America Litig.
Trust v. Ernst & Young, L.L.P., 906 A.2d 168, 188 (Del. Ch. 2006) (“In evaluating the complaint,
the court may also consider the unambiguous terms of those documents incorporated by reference
in the complaint . . . .”).
20
Compl. ¶ 15.
21
Id. at ¶ 16.
6
DelightCircle, Inc., a Delaware corporation, and beginning to seek U.S.-based
investors.22
In order to address a key challenge in the mobile-application business—
keeping users engaged—Pipal Tech developed a set of technologies (collectively
referred to as the “MoEngage Product”) to be used in SaveZippy and another Pipal
Tech application under development (the “Mantri Application”).23 The MoEngage
Product tracks users’ usage of the application, categorizes users based on certain
criteria, and delivers information to users based on their interests through push-based
notifications, changing the application’s content, or via other channels such as
email.24
Recognizing the potential independent value of the MoEngage Product,
Dodda proposed in a phone call to Baid, also a member of Pipal Tech’s Board, that
Pipal Tech market the MoEngage Product as a separate application.25 With Baid’s
verbal agreement and Pipal Tech’s authorization, Dodda and Kumar copied and
removed the MoEngage Product-related source code from Pipal Tech’s server that
housed SaveZippy’s and the Mantri Application’s source codes, and moved it to a
different server controlled by Dodda and Kumar.26 They then reformatted the source
22
Id. at ¶ 17.
23
Id. at ¶ 18.
24
Id.
25
Id. at ¶ 19.
26
Id. at ¶¶ 19–21. As high-ranking employees, Dodda and Kumar had exclusive control over
access to the servers on which Pipal Tech kept its source codes. Id. at ¶ 14.
7
code to make it independently transferable to third parties and marketable as a new
product for the Plaintiff.27 Between April 15 and April 30, 2014, Dodda, through a
series of emails between himself and Baid, confirmed that the MoEngage Product
was developed using software created by Pipal Tech.28
On or about April 20, 2014, Dodda developed a web-based demo of the
MoEngage Product and started reaching out to prospective clients. From April to
June 2014, Dodda and Kumar provided demonstrations, presentations, and other
information regarding the MoEngage Product to numerous third parties.29
Specifically, Dodda marketed the MoEngage Product to “the largest movie ticket
purchasing mobile application in India—Book My Show,” “one of India’s largest e-
commerce portals, Jabong,” an 800-participant conference of start-up companies in
India, and at least 14 other companies based out of India, all on behalf of the
Plaintiff.30 In mid-May 2014, Dodda and Kumar also applied to a U.S.-based
investment firm called 500 Start-Up Accelerator, acknowledging in the application
that the MoEngage Product was initially built by the Plaintiff to increase the user
engagement of SaveZippy, and that Rohit Bhat and Naveen Kumar, both current
employees of Pipal Tech, were part of the team working on the MoEngage Product.31
27
Id. at ¶ 20.
28
Id. at ¶ 22.
29
Id. at ¶¶ 23–30.
30
Id.
31
Id. at ¶ 27.
8
By early June 2014, it was clear that there was significant demand for the MoEngage
Product and that it was potentially a very valuable asset; and by mid-June, Dodda
confirmed to Baid, through his Pipal Tech email account, that three new clients had
agreed to license the MoEngage Product and that the Plaintiff’s employees had
begun technical integration.32
“Shortly thereafter,” Dodda and Kumar allegedly asserted to Pipal Tech—for
the first time—that the MoEngage Product was their own because they had
developed it, and that the MoEngage Product would be the property of a new,
separate entity owned and controlled by them. 33 The Plaintiff also alleges that, at
some time in June 2014, the Defendant “wrongfully interfered with Plaintiff’s
employment relationship with Rohit Bhat and Naveen Kumar” by soliciting them to
terminate their employment with the Plaintiff for a position with the Defendant
(which, according to the Complaint, was not yet incorporated in Delaware).34 Dodda
and Kumar then resigned as CEO and CTO, respectively, on June 16, 2014,
remaining on Pipal Tech’s Board.35
The Plaintiff further alleges that “[s]omtime in late June 2014,” without the
Plaintiff’s permission, Dodda and Kumar removed the MoEngage Product source
32
Id. at ¶¶ 31–32.
33
Id. at ¶ 33.
34
Id. at ¶¶ 27, 38.
35
Id. at ¶ 34.
9
code and all other data and information pertaining to the MoEngage Product from
the Plaintiff’s servers—including pricing models, business strategy, proposed
contracts, and customer lists—and “then transferred this information to Defendant,
a company they formed and incorporated in the State of Delaware on or about July
22, 2014.”36 Following the alleged misappropriation, Pipal Tech sent Dodda and
Kumar a cease and desist letter, and in response, Dodda and Kumar resigned from
Pipal Tech’s Board on July 28, 2014.37
Despite multiple requests by the Plaintiff, MoE has refused to produce the
contracts of the clients whose interest Dodda and Kumar confirmed with the
Company in mid-June.38 The Plaintiff believes that the Defendant has taken these
contractual relations for itself.39 Since its incorporation, MoE has also received an
investment of $50,000 from Alchemist Accelerator (“Alchemist”), a U.S.-based
investment firm that invests in early-stage technology companies.40 Kumar and
Dodda are attempting to raise an additional $750,000 in capital from other U.S.-
based venture capital firms, all while representing that the MoEngage Product
belongs to the Defendant and that many large companies in India are using the
MoEngage Product.41
36
Id. at ¶ 38.
37
Id. at ¶¶ 36–37.
38
Id. at ¶ 39.
39
Id.
40
Id. at ¶ 41.
41
Id. at ¶ 42.
10
The parties have engaged in months-long negotiations in an effort to resolve
this dispute amicably.42 The Plaintiff contends that, during the course of these
negotiations, however, it learned that the Defendant destroyed key information
related to its theft of the MoEngage Product, and that the Defendant acknowledged
the deletion in an email dated October 24, 2014.43
C. Procedural History
On November 20, 2014, Pipal Tech filed its Verified Complaint against MoE,
alleging the misappropriation and conversion of mobile application engagement and
marketing software. In Count I, the Plaintiff seeks a declaratory judgment
recognizing that the intellectual property at dispute, the MoEngage Product,
rightfully and exclusively belongs to Pipal Tech. The Plaintiff asserts in Count II a
trade secrets violation pursuant to 6 Del. C. § 2001, claiming that the “Plaintiff’s
source code related to [MoE] has independent economic value and qualifies as a
trade secret,” and that the “Defendant acquired Plaintiff’s source code through the
unlawful actions of Dodda and Kumar.”44 In relief, the Plaintiff seeks damages,
attorneys’ fees, pre- and post-judgment interest on any amount due to the Plaintiff,
and “a permanent injunction prohibiting [the] Defendant from exercising control
42
Id. at ¶ 45.
43
Id.
44
Id. at ¶¶ 55–56.
11
over [the] Plaintiff’s source code or transferring it to any third party.” 45 Finally,
Count III—which has since been voluntarily dismissed by the Plaintiff—sought
damages for the Defendant’s alleged conversion of the Plaintiff’s source code.46
On December 16, 2014, the Defendant filed a Motion to Dismiss on the
grounds of forum non conveniens. The Plaintiff served the Defendant with its first
set of discovery requests on December 31, 2014, and on January 31, 2015, the
Defendant filed a Motion to Stay Discovery pending the resolution of the Motion to
Dismiss. Full briefing of the motions followed.
I heard oral argument on the motions on April 23, 2015 (the “Oral
Argument”), at which time I directed the parties to proceed with document
discovery47 and reserved judgment on the Motion to Dismiss. Following the Oral
Argument, I requested supplemental briefing on the following issues: (1) “. . . to
what extent is process available for taking discovery under the Hague Convention
of Indian nationals who may have pertinent evidence”; and (2) “whether there are
unsettled issues of Indian law generally regarding” (a) employment contracts and
restrictive covenants, and (b) “intellectual property rights in general.”48 After
reviewing the supplemental briefing, for the following reasons, I deny the
45
Id. at ¶¶ 58–59, 19.
46
Id. at ¶¶ 61, 65; Oral Argument Tr. 40:15–20.
47
Oral Argument Tr. 66:23–24.
48
Id. at 65:8–10, 15–16, 19.
12
Defendant’s Motion to Dismiss on forum non conveniens grounds.
II. ANALYSIS
Delaware’s jurisprudence in forum non conveniens cases is well established,49
and has recently been clarified by our Supreme Court.50 A court—in the absence of
a prior-filed action elsewhere—should respect a plaintiff’s choice of forum except
in the “rare case” 51 where the defendant demonstrates “with particularity that it will
be subjected to overwhelming hardship and inconvenience if required to litigate in
Delaware,”52 thereby warranting “drastic relief.”53 While a “bare claim of
inconvenience” is insufficient to make the required showing,54 the “overwhelming
hardship” standard is not preclusive.55 The moving defendant need not show that it
is factually or financially impossible to mount a defense in this jurisdiction. Rather,
to overcome a plaintiff’s jurisdictional choice, a moving defendant must demonstrate
that such a choice is overwhelmingly inappropriate and inconsistent with the
administration of justice.56 In addressing this issue, the Court’s analysis of hardship
49
Taylor v. LSI Logic Corp., 689 A.2d 1196, 1198–99 (Del. 1997).
50
E.g., Martinez v. E.I. DuPont de Nemours and Co., 86 A.3d 1102 (Del. 2014); Hupan v. Alliance
One Int’l, Inc., 2015 WL 7776659 (Del. Super. Nov. 30, 2015).
51
Chrysler First Bus. Credit Corp. v. 1500 Locust Ltd. P’ship, 669 A.2d 104, 105 (Del. 1995).
52
LSI Logic Corp., 689 A.2d at 1199.
53
Jacobson v. Ronsdorf, 2005 WL 29881, at *4 (Del. Ch. 2005) (citing Candlewood Timber Grp.,
LLC v. Pan Am. Energy, LLC, 859 A.2d 989, 994 (Del.2004)).
54
RJ Associates, Inc. v. Health Payors’ Org. Ltd. P’ship, HPA, Inc., 1999 WL 550350, at *6 n.21
(Del. Ch. 1999) (citing LSI Logic Corp., 689 A.2d at 1199).
55
Martinez, 86 A.3d at 1105.
56
Id. at 1112.
13
and inconvenience is guided by the factors set out by our Supreme Court in General
Foods Corp. v. Cryo-Maid, Inc.,57 including:
(1) the relative ease of access to proof;
(2) the availability of compulsory process for witnesses;
(3) the possibility of the view of the premises;
(4) whether the controversy is dependent upon the application of
Delaware law which the courts of this State more properly should
decide than those of another jurisdiction;
(5) the pendency or nonpendency of a similar action or actions in
another jurisdiction; and
(6) all other practical problems that would make the trial of the case
easy, expeditious and inexpensive.58
Application of these factors is not mechanical or mathematical; that all the factors
may favor the defendant is not enough. The Court must consider each of the factors
in light of the particular case and determine whether any or all “truly cause both
inconvenience and hardship.”59 While courts have traditionally applied the doctrine
sparingly, with due regard for the plaintiff's right to choose its forum,60 the Delaware
Supreme Court recently clarified in Martinez that, despite its “preclusive-sounding
appellation, the ‘overwhelming hardship’ standard is not insurmountable,” and is
“more properly perceived as requiring a finding that, on balance, litigation in
Delaware would represent a manifest hardship to the defendants, ‘a stringent
57
198 A.2d 681 (Del. 1964).
58
LSI Logic Corp., 689 A.2d at 1198–99.
59
Chrysler First Bus. Credit Corp., 669 A.2d at 105; see also Health Payors’ Org. Ltd. P’ship,
1999 WL 550350, at *6 n.21 (“A bare claim of inconvenience is an insufficient basis for dismissal
absent a particularized showing of hardship.”) (citing LSI Logic Corp., 689 A.2d at 1199).
60
Wilmington Sav. Fund Soc'y, FSB v. Caesars Entm't Corp., 2015 WL 1306754, at *7 (Del. Ch.
Mar. 18, 2015).
14
standard that holds defendants who seek to deprive a plaintiff of her chosen forum
to an appropriately high burden.’”61 With that framework in mind, I consider the
factors set out in Cryo-Maid, as follows.
A. Relative Ease of Access to Proof
The first factor that I must consider is the relative ease of access to proof. This
“proof” includes the relevant documents and witnesses.62 The Defendant must make
a “particularized showing that witnesses, documents, or other evidence necessary to
defend the allegations contained in [the Plaintiff’s] complaint cannot be brought to
or otherwise produced in Delaware.”63 In considering this factor, I must bear in
mind that “[m]odern methods of information transfer render concerns about
transmission of documents virtually irrelevant.”64
The Defendant contends that nearly all of the potential witnesses and sources
of information pertinent here are located in India.65 The Defendant points out that,
to determine ownership of the MoEngage Product, the Court must consider the facts
surrounding the contractual relationship between the Plaintiff and Dodda and Kumar
61
Id. at *8 (quoting Martinez, 86 A.3d at 1105).
62
Dimeling, Schreiber and Park v. Packaging Indus. Grp., Inc., 1991 WL 260762, at *4 (Del. Ch.
Nov. 15, 1991).
63
Candlewood Timber Grp., 859 A.2d at 1001 (quoting Mar-Land Indus. Contractors, Inc. v.
Caribbean Petroleum Refining, L.P., 777 A.2d 774, 781 (Del. 2001)).
64
Asten v. Wanger, 1997 WL 634330, at *3 (Del. Ch. Oct. 3, 1997). The parties apparently
concede as much, as the vast majority of the briefing on this factor focuses on the availability of
witnesses.
65
Def’s Opening Br. 7.
15
as well as the removal of the MoEngage Product from the Plaintiff, all of which facts
arose in India. The Defendant argues that it may need to call upon for testimony
Pipal Tech and its employees, MoE India and its employees, Dodda, Kumar, Rohit
Baht, Naveen Kumar, “hundreds of third parties to whom Dodda and Kumar
pitched” the MoEngage Product, and the “many large companies” purportedly using
the MoEngage Product, nearly all of whom are located in India.66 However, in
discovery relating to this Motion, the Defendant has identified only twelve witnesses
necessary to its defense.67
Conversely, the Plaintiff contends that there is little material evidence located
in India, and that whatever material evidence is located in India is accessible as
pretrial discovery.68 Moreover, the Plaintiff argues that the third parties identified
by the Defendant “are, at best, [peripheral] to the core allegations underlying
Defendant’s misappropriation of Plaintiff’s intellectual property.”69 The Plaintiff
suggests that any information related to the customers identified in the Complaint is
accessible electronically, and that the Defendant has failed to show with particularity
that any of its nonparty employees possess relevant information unique from that
known to and controlled by Dodda and Kumar.70
66
Id.
67
See infra notes 82–83 and accompanying text.
68
Pl’s Answering Br. 14.
69
Id.
70
Id.
16
I find this factor supports the Defendants. It is true that modern technology
has lessened the degree of efficiency gained by proximity, but to the extent
documentary and deposition evidence must be gathered, that process will largely
take place in India, and certainly not in Delaware.
B. Availability of Compulsory Process for Witnesses
The second factor I must consider is the availability of compulsory process
for witnesses. For this factor to favor the Defendant, it must have identified the
witnesses and “the specific substance of their testimony,”71 and have explained why
the witnesses’ testimony could not be presented in Delaware by deposition.72
“Further, for this factor to be relevant, the other forum should ‘provide a substantial
improvement as to the number of witnesses who would be subject to compulsory
process.’”73
At the Oral Argument, I expressed concern as to “whether the defendant can
mount a full defense, given the strictures of the Hague Convention”74 and asked the
parties to provide supplemental briefing addressing “to what extent is process
available for taking discovery under the Hague Convention of Indian nationals who
71
Rapoport v. Litig. Trust of MDIP, Inc., 2005 WL 3277911, at *6 (Del. Ch. Nov. 23, 2005) (citing
Donald J. Wolfe, Jr. & Michael A. Pittenger, Corporate and Commercial Practice in the Delaware
Court of Chancery § 5-2[c] (2005)).
72
In re Chambers Dev. Co., Inc. S’holders Litig., 1993 WL 179335, at *6 (Del. Ch. May 20, 1993)
(citing States Marine Lines v. Domingo, 269 A.2d 223 (Del. 1970)).
73
Rapoport, 2005 WL 3277911, at *6 (citation omitted).
74
Oral Argument Tr. 27:10–13.
17
may have pertinent evidence.”75 Upon further research, the parties agree that
compulsory process is available in India under both the Hague Convention and
Section 78 of the Indian Code of Civil Procedure.76
While the Defendant now concedes that compulsory process is available in
India, it maintains that proceeding in Delaware will “impose an undue burden on
[the] Defendant and cause it overwhelming hardship.”77 The Defendant repeats its
contention that the vast majority of evidence necessary to defend its claims is located
in India, and that the complained-of conduct took place in India. Additionally, the
Defendant argues that, even assuming the witnesses—the vast majority of whom live
in India—could be subpoenaed to testify, the costs associated therewith would be
unduly burdensome for a start-up company like itself.78 The Defendant concedes
that trial depositions could be substituted for live testimony in a trial in Delaware,
but suggests that such a substitution deprives the Court, as fact finder, the
opportunity “to effectively and contemporaneously evaluate the credibility of
witnesses”79—thereby depriving the Defendant the full opportunity to attack that
75
Id. at 65:8–10.
76
Pl’s Supp. Opening Br. 14, Ex. C (the “Sethna Report”), at ¶¶ 3.1–3.2. While the Defendant has
conceded that compulsory process is available in India, it notes that “it does not agree with all the
statements in Ms. Sethna’s report.” Def’s Supp. Answering Br. 4 n.2. No further clarification of
the Defendant’s objection is offered, however, and the Defendant relies upon the Sethna Report in
its argument. See Def’s Supp. Answering Br. 6 n.4.
77
Id. at 4.
78
Id. at 5–6.
79
Id. at 6.
18
credibility.80
The Plaintiff argues that the Defendant’s discovery responses confirm there
are no third-party witness in India who have material information and are outside of
the Defendant’s control.81 That is, the Defendant identified only twelve individuals
in response to an interrogatory asking it to identify any “person it may call as a
witness at a hearing or trial in this case, by deposition, affidavit or any other
means.”82 Of those twelve, according to the Plaintiff, four are employees of “the
Defendant.”83 The record appears to indicate that the Defendant has no employees,
and the Plaintiff presumably means that these four are employees of the Defendant’s
subsidiary, MoE India, an Indian corporation.84 The Plaintiff concedes that the
remaining eight witnesses that the Defendant has identified are customers of the
parties, but it argues that, because none of the Defendant’s customers “were or are
authorized to know the contractual rights and obligations between Dodda, Kumar
and Plaintiff,” that these witnesses cannot reasonably be expected to have any non-
80
See Aveta, Inc. v. Colon, 942 A.2d 603, 612–13 (Del. Ch. Jan. 15, 2008) (“[D]epositions serve
as poor proxies for live testimony because the fact finder loses the opportunity effectively and
contemporaneously evaluate the credibility of the witness. . . . A court of equity may not willfully
ignore substantial issues of fairness, and considering the relative size and resources of the
defendant in this case, I conclude that [the Defendant] would face an overwhelming hardship if
forced to absorb the considerable expense of flying his numerous witnesses from Puerto Rico to
Delaware and boarding them here.”).
81
Pl’s Supp. Opening Br. 11.
82
Id.
83
Id.
84
See supra note 9.
19
cumulative information material to determining which party is the rightful owner of
the MoEngage Product.85 In other words, the Plaintiff argues that only a handful of
witnesses have relevant evidence subject to testimony here.
I find that process is available to compel testimony of the necessary witnesses
here, although practical reasons indicate that live testimony would be curtailed and
that obtaining and presenting testimony would be cumbersome and inefficient. I do
not find this factor supportive of the Defendant’s motion, although the lack of
practical access to live testimony is a factor I consider in my analysis of the final
Cryo-Maid factor, below.
C. Possibility of the View of the Premises
The Plaintiff and Defendant agree that this factor is inapplicable here.86
D. Whether the Controversy is Dependent upon the Application of Delaware
Law Which the Courts of this State More Properly Should Decide Than
Those of Another Jurisdiction
Generally, the application of foreign law is “not sufficient reason to warrant
dismissal under the doctrine of forum non conveniens.”87 However, the Supreme
85
Pl’s Supp. Opening Br. 11–12.
86
See Def’s Opening Br. 7 (conceding that this factor “is not applicable here because the case
involves mobile and web-based application technologies that can be viewed an made available
electronically.”); Pl’s Answering Br. 3 (“The third Cyro-Maid factor—the possibility of the view
of the premises—is not implicated in the instant case and thus warrants no further attention here.”).
87
LSI Logic Corp., 689 A.2d at 1200 (emphasis added); see also Candlewood Timber Group, 859
A.2d at 1002 (finding no overwhelming hardship where the application of Argentine law required
“translating pertinent legal precedent, [] retaining foreign lawyers, and [] producing foreign law
experts to testify at trial”).
20
Court recently clarified in Martinez that, where important and novel issues of
another sovereign are presented, those issues “are best determined by their courts
where practicable.”88
Here, both parties agree that the application of Indian law, at least as to one
of the claims, is appropriate.89 To assess the Plaintiff’s claims, I will need to
determine whether the MoEngage Product ever belonged to the Plaintiff under
applicable Indian law and, if so, whether the MoEngage Product is improperly held
by the Defendant. In part, that analysis will turn on evaluation of the Employment
Agreements and NDAs signed by non-parties Dodda and Kumar. Those agreements
are governed by Indian law. In their supplemental briefing, the parties agree that
Indian law, as relevant to the issues here, is settled. 90 The Complaint also seeks
88
Martinez, 86 A.3d at 1110. The Supreme Court explained further:
To state it differently, just as our cases have recognized the plaintiff's substantial
interest in having important open questions of Delaware law decided by our courts,
a principled application of that reasoning must give reciprocal weight to a
defendant's interest in having important issues of foreign law decided by the courts
whose law governs the case. Id.
89
The Plaintiff contends that Count II of the Complaint—the trade secrets claim under Delaware’s
version of the Uniform Trade Secrets Act (“DUTSA”)—should be informed by DUTSA and the
Delaware law interpreting and applying DUTSA. Pl’s Supp. Opening Br. 20. The Plaintiff also
argues that it remains an open question as to whether the wrongful acquisition claim in Count II
should be decided under Delaware law. Id. The Plaintiff urges the Court, should it find a conflict
of law, to apply the “most significant relationship test” of the Restatement (Second) of Conflicts
to determine which jurisdiction’s law governs the trade secret claim. Id. at 20–21.
90
See Pl’s Supp. Opening Br. 18–19 (“The Indian laws governing an employer’s ability to enforce
restrictive covenants and contractual intellectual property rights, like the kind at issue here, are
well-settled, uncomplicated, written in English and trace their roots to English common law.”);
Def’s Supp. Answering Br. 7 (“There do not appear to be any unsettled issues of Indian law that
would be applicable to this proceeding . . . .”).
21
redress for breach of the Delaware Uniform Trade Secrets Act, which will require
application of Delaware law. Nothing in the record suggests that the issues posed
will invoke novel interpretation of Delaware law.
This factor slightly favors the Defendant’s motion. The tort that underlies this
action—the conversion of the MoEngage Product—took place, if at all, in India. If
the Defendant’s principals—non-parties here—breached contractual obligations
relating to that conversion, those breaches took place in India. Indian law applies,
and Indian issues are implicated, in those issues. I note, however, that this factor
would be more persuasive if unsettled issues of Indian law were presented; this Court
is capable of applying settled Indian law, as the Courts of India are the law of
Delaware. I also take judicial notice that English is an official language of India,
and that therefore nettlesome issues of translation are not present.
E. Pendency of a Similar Action in Another Jurisdiction
Next, I must consider whether there is a similar action pending in another
jurisdiction. There is none here. The Plaintiff asserts that this lack of concurrent
litigation weighs heavily in its favor, as this Court has noted that “[t]he absence of
another pending litigation weighs significantly against granting a forum non
conveniens motion.”91 I note, however, that the Defendant has agreed to submit
91
Vichi v. Koninklijke Philips Elecs. N.V., 2009 WL 4345724, at *13 (Del. Ch. Dec. 1, 2009)
(quoting Berger v. Intelident Solutions, Inc., 906 A.2d 134, 137 (Del. 2006)); see also Taylor, 689
A.2d 1197, 1198 (Del. 1997) (providing that “judicial discretion is to be exercised sparingly where,
22
itself to Indian jurisdiction if its motion is granted. 92 In addition, given the very
early stage of the proceeding, any inefficiency involved in a transfer of this action
to an Indian court would be minimal.93 Accordingly, this factor weighs only slightly
in favor of the Plaintiff.
F. All Other Practical Problems That Would Make the Trial of the Case Easy,
Expeditious and Inexpensive
“Under this prong, Delaware courts have examined a wide array of
considerations[,] including judicial economy, the motives of the parties filing suit in
the respective jurisdictions, and public interest.”94
This case fits rather poorly the enumerated Cryo-Maid factors above, largely
because the action as brought does not name as party defendants the principals of
the corporate defendant, Dodda and Kumar, the individuals whose alleged theft of
assets or breaches of contract underlie this action. The actionable behavior alleged
against the Defendant—wrongfully holding and marketing the MoEngage
Product—is, in the Defendant’s view, secondary to the alleged Indian contract
as here, there is no prior action pending elsewhere” (citing McWane Cast Iron Pipe Corp. v.
McDowell-Wellmen Eng’g Co., 263 A.2d 281, 283 n.2 (Del. 1970))).
92
Def’s Reply Br. 12.
93
See IM2 Merch. and Mfg., Inc. v. Tirex Corp., 2000 WL 1664168, at *11 n.54 (Del. Ch. Nov. 2,
2000) (citing Ison v. E.I. DuPont de Nemours and Co., 729 A.2d 832, 845 (Del. 1999) (directing
court to consider the stage of litigation in assessing this factor)); Nash v. McDonald's Corp., 1997
WL 528036, at *3 (Del. Super. Feb. 27, 1997) (finding the fact that no action was pending
elsewhere was no bar to a forum non conveniens dismissal where there was no obstacle that
prevented the plaintiffs from pressing the action in the appropriate forum).
94
Azurix Corp. v. Synagro Tech., Inc., 2000 WL 193117, at *6 (Del. Ch. Feb 3, 2000).
23
breaches and theft. While the Plaintiff asserts correctly that Delaware has a
“powerful interest” in preventing Delaware entities from being used as a vehicles
for wrongdoing,95 it is India that has an interest in preventing theft of assets in India,
and in redressing breaches of contract occurring there.
The Plaintiff also argues that this Court is better positioned than any Indian
court to address the alleged destruction of evidence by Dodda and to prevent further
evidence tampering, and generally to administer swift and complete justice, without
demonstrating convincingly why that is the case.96 Moreover, while the Plaintiff
concedes that it cannot sue the individual wrongdoers here, if this litigation goes
forward Dodda and Kumar will surely have to appear and defend their actions, and
this Court will have to consider their contractual obligations under Indian law. With
respect to the NDAs, the Plaintiff agreed contractually that Karnataka, India
provided the sole venue for such a dispute; instead, the litigation will take place in a
venue 8,000 miles from that location. Also supportive of the Defendant’s Motion is
the concern that cost will dictate that some live testimony will be replaced by trial
depositions.
However, according to the Complaint, after converting the MoEngage
95
See Williams v. Calypso Wireless, Inc., 2012 WL 424880, at *7 (Del. Ch. Feb. 8, 2012)
(“Delaware has a powerful interest of its own in preventing the entities that it charters from being
used as vehicles for fraud. Delaware’s legitimacy as a chartering jurisdiction depends on it.”)
(quoting NACCO Indus., Inc. v. Applica Inc., 997 A.2d 1, 26 (Del. Ch. 2009)).
96
See Pl’s Answering Br. 24.
24
Product, Kumar and Dodda created a Delaware entity to hold, market, and monetize
the purloined asset. The Defendant, a Delaware corporation, is allegedly holding
the asset not only in contravention of Indian law, but also in violation of the
Delaware Uniform Trade Secrets Act. I recognize that the deference to a plaintiff’s
choice of forum is properly of less importance where an alternative forum is the
plaintiff’s home jurisdiction,97 but the same can be said for a defendant’s opposition
to litigation in its home-state courts. While the Defendant now represents it would
not oppose jurisdiction in the State of Karnataka, India, it is clear that the Plaintiff
followed its asset to this forum, where the Defendant now holds it. My job in
evaluating this motion is not to choose the “best,” or even a “proper” forum; instead,
it is to respect the Plaintiff’s choice of forum unless the Defendant can show
resulting hardship or inconvenience so profound that it overwhelms that choice.
While Delaware is not a convenient place for the Defendant to litigate, it has not
shown that this venue is overwhelmingly inconvenient.
III. CONCLUSION
In consideration of all the factors set out above, I conclude that the Defendant
has failed to demonstrate that fundamental concerns of the administration of justice
97
IM2 Merch. And Mfg., Inc., 2000 WL 1664168, at *9 (“Although the Supreme Court has
emphasized that the plaintiffs' domicile is not a factor that in isolation comes close to helping a
defendant bear its burden to show overwhelming hardship to itself, common sense indicates that a
court should be somewhat less hesitant to dismiss for forum non conveniens when the defendants
contend that the proper forum is in the backyard of the plaintiffs.”).
25
overwhelmingly support dismissal of this action, in deference to a theoretical action
in an Indian court. For the foregoing reasons, I deny the Defendant’s Motion to
Dismiss on the grounds of forum non conveniens. An appropriate order accompanies
this Memorandum Opinion.
26
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
PIPAL TECH VENTURES PRIVATE )
LIMITED, )
)
Plaintiff, )
)
v. ) C.A. No. 10381-VCG
)
MOENGAGE, INC., )
)
Defendant. )
ORDER
AND NOW, this 17th day of December, 2015,
The Court having considered the Defendant’s Motion to Dismiss, and for the
reasons set forth in the Memorandum Opinion dated December 17, 2015, IT IS
HEREBY ORDERED that the Motion to Dismiss is DENIED.
SO ORDERED:
/s/ Sam Glasscock III
Vice Chancellor