Arguments For Arbitration

This arbitration involves a dispute between Company A and the Respondent regarding a breach of a Patent-Sharing Agreement and unauthorized use of proprietary software, resulting in significant financial and reputational harm to Company A. The Claimant seeks monetary compensation, a permanent injunction, and other reliefs due to the Respondent's infringement, which is supported by forensic evidence and legal frameworks under Indian and international law. Despite attempts at amicable resolution, the Respondent's continued infringement has led to the initiation of arbitration proceedings.

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Arguments For Arbitration

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Nithya Prakash

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ARGUMENTS FOR ARBITRATION

CLAIMANT'S SIDE
1. This arbitration arises from a dispute involving a valid Patent-Sharing Agreement dated
09.04.2020 between Company A and the Respondent. The agreement aimed to foster
innovation and maximize the commercial potential of patented technologies. Additionally, an
Arbitration Agreement dated 15.02.2025 establishes the jurisdiction and seat of arbitration in
Chennai, Tamil Nadu. Company A, a leading technology firm, entered into this agreement in
good faith, intending to leverage its proprietary software for mutual technological
advancement and commercial benefit. The strategic importance of this software to Company
A's business underscores the significance of this dispute. At the heart of this case is the
alleged breach of contract and intellectual property infringement by the Respondent,
undermining the contractual relationship and causing substantial financial and reputational
harm to Company A.

2.The Respondent's actions constitute a clear breach of Clause 12 of the Patent-Sharing

Agreement, which explicitly prohibits unauthorized use, modification, or distribution of the
proprietary software. The agreement clearly stipulates conditions for usage, including proper
attribution, confidentiality obligations, and financial remuneration. Despite these clear
conditions, the Respondent unauthorizedly replicated proprietary algorithms, as evidenced by
forensic analysis revealing identical coding patterns, data structures, and logical frameworks.
Company A discovered this breach on 15.12.2023 and promptly issued a cease-and-desist
notice on 20.12.2023. The Respondent's actions violate the agreed terms, fundamentally
damaging the trust and integrity of the contractual relationship.

3.Under Section 48 of the Indian Patents Act, 1970, Company A holds exclusive rights to
use, manufacture, and license the patented software. This right is further reinforced by Article
28 of the TRIPS Agreement, which internationally recognizes patent holders' rights to
prevent unauthorized usage and distribution. In this case, forensic evidence from independent
cybersecurity experts confirms the unauthorized replication of unique proprietary algorithms
developed by Company A. These algorithms, protected under the Patent-Sharing Agreement,
were exclusively accessible to the Respondent under strict confidentiality and usage
limitations. The evidence refutes any claims of independent development, establishing that
the Respondent's actions amount to clear patent infringement, violating both national and
international intellectual property laws.
4. The unauthorized usage of proprietary software has caused significant financial and
reputational losses to Company A. Estimated financial losses amount to approximately
$5,000,000, attributed to the Respondent's unfair competitive advantage and consequent
market share erosion. Additionally, the dilution of brand value and damage to Company A's
reputation has further compounded these losses. The causal link between the Respondent’s
unauthorized actions and the resultant financial and reputational damage is well-established
through market analysis and financial records. These damages directly stem from the
Respondent’s continued infringement despite receiving a cease-and-desist notice,
underscoring the gravity of the breach.

5. The Respondent is expected to argue independent development as a defense. However, this

claim is invalidated by forensic evidence demonstrating identical coding patterns and data
structures that are highly unlikely to occur without unauthorized access to Company A’s
proprietary source code. Moreover, the algorithms in question were exclusively available
under the Patent-Sharing Agreement, and the probability of replicating them independently is
extremely low. This evidence disproves the Respondent’s argument of independent
development, confirming that the replication could only have occurred through unauthorized
access. Therefore, the Respondent’s defense is both factually and legally untenable.

6.Company A has acted in good faith throughout the dispute, making genuine efforts to
resolve the matter amicably. Upon discovering the unauthorized usage on 15.12.2023,
Company A issued a cease-and-desist notice on 20.12.2023. Additionally, it proposed a
revised licensing agreement and initiated third-party mediation to settle the dispute.
Negotiations held on 15.01.2024 failed due to the Respondent's unwavering stance of non-
infringement. Despite Company A’s proactive and reasonable attempts at resolution, the
Respondent continued its unauthorized usage, necessitating the initiation of arbitration
proceedings. This approach demonstrates Company A’s integrity and strengthens its moral
and legal standing in seeking justice through arbitration.

7.Company A’s claims are supported by a robust legal framework. Under Section 48 of the
Indian Patents Act, 1970, Company A possesses exclusive rights over its patented software.
Article 28 of the TRIPS Agreement further reinforces international protection against
unauthorized usage. Additionally, the Indian Contract Act, 1872, establishes the binding
nature of contractual obligations, and the Information Technology Act, 2000, addresses
unauthorized access and usage of proprietary software. These legal provisions collectively
support the claims of breach of contract, patent infringement, and unauthorized usage,
providing a comprehensive legal foundation for Company A's case.

8.Company A seeks the following reliefs from this arbitration:

1. Monetary Compensation of $5,000,000 to cover revenue loss, reputational damage,

and unauthorized usage.
2. Permanent Injunction to prevent any further unauthorized usage, modification, or
distribution of the proprietary software.
3. Declaratory Relief affirming the Respondent's violation of the Patent-Sharing
Agreement.
4. Interest on Compensation at a rate of 12% per annum from the date of the breach.
5. Arbitration Costs including legal fees and expenses for expert witnesses.
6. Audit and Accountability through a third-party audit to assess the full extent of
unauthorized usage.
7. Rectification and Compliance Measures requiring the destruction or return of all
copies of the proprietary software.
8. Public Apology and Reputation Restoration to address brand value damage.

These reliefs are justified by the substantial financial and reputational losses incurred by
Company A due to the Respondent’s actions.

9. In conclusion, Company A has demonstrated a clear and compelling case of breach of

contract and intellectual property infringement by the Respondent. The evidence presented,
including forensic analysis and financial records, unequivocally establishes the unauthorized
usage and replication of proprietary algorithms. Company A has suffered significant financial
losses, reputational damage, and dilution of brand value as a direct consequence of the
Respondent’s actions. Despite genuine attempts at an amicable resolution, the Respondent’s
continued infringement necessitated arbitration. Therefore, Company A respectfully prays for
the Hon’ble Arbitrator to grant the requested reliefs, thereby restoring its rights and ensuring
justice.

10. To reinforce its claims, Company A strategically utilizes expert testimony from
cybersecurity specialists to corroborate the forensic evidence of unauthorized replication.
Additionally, a comparative market analysis is presented to quantify the financial impact and
loss of market share. Anticipating the Respondent's potential defenses, particularly claims of
independent development or fair usage, Company A preemptively counters these arguments
with conclusive forensic evidence and legal reasoning. This strategic approach ensures a
comprehensive and compelling presentation of Company A’s case, maximizing the likelihood
of a favorable arbitral award.