Of Travelocity’s Lawsuit On Cleartrip And Trade Secret Vs. Knowledge Debate

Travelocity India filed FIR against Cleartrip for data theft in December of 2009 and Cleartrip CEO, Stuart and Amit Taneja (Former CEO of Desiya) were arrested in August of 2010. Travelocity has now filed a chargesheet against Cleartrip for data theft and criminal conspiracy (via).

The Story So Far

  • Travelguru acquired Desiya in 2007 and was later acquired by Travelocity in September of 2009 (Amit Taneja, who was the CEO of Deisya landed up in Travelocity, a Cleartrip competitor).
  • The earlier FIR charged Desiya employees for sharing the data related to hotel business model, projections and proprietary information to Cleartrip CEO, Stuart Crighton.
  • Cleartrip CEO, Stuart and Amit Taneja (Former CEO of Desiya) were arrested in August of 2010.
  • The chargesheet said Taneja had been offered a 1.5% equity stake by Cleartrip in exchange for the information. According to the chargesheet, Travelocity has suffered a loss of Rs.20 crore.
  • Important to note that, Amit Taneja works as Director at Cleartrip now.
  • As per Mint, the case is scheduled for hearing on July 20th.

Question to Ponder

Very recently, Paypal filed a lawsuit against Google (and two Google executives who were Paypal employees earlier) for stealing its trade secrets. Google’s response

Silicon Valley was built on the ability of individuals to use their knowledge and expertise to seek better employment opportunities, an idea recognized by both California law and public policy. We respect trade secrets, and will defend ourselves against these claims.

That is, employees can take knowledge wherever they want (but not the trade secrets), which is similar stance in Travelocity/Cleartrip case. Though in this case, data theft is the key reason where Travelocity has field a case against Cleartrip, but read this statement from joint commissioner of police, Gurgaon:

“This is an important case. This will lay the base for unauthorized transfer of intellectual property of similar IT companies by employees while thy are switching to a new job.”

What’s your opinion on this? Isn’t there a thin line between knowledge and trade secrets? Should companies (+ startups) prohibit key employees to join the same sector, given that they know a lot about operations/business model (IP)?

Or is this just a PR move?

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