Code.org, a US-based non-profit organization that promotes computer science education, has filed a lawsuit against WhiteHat Jr, an Indian edtech startup that teaches coding to kids, over unpaid dues of $1.9 million.
The dispute over the contract
According to the complaint filed in the US District Court for the Western District of Washington, Code.org and WhiteHat Jr entered into a contract in July 2020, under which Code.org agreed to provide WhiteHat Jr with access to its curriculum, platform, and trademarks for a fee of $9.6 million.
The contract also stipulated that WhiteHat Jr would pay Code.org a minimum of $1.6 million per quarter, regardless of the number of students enrolled in its courses. However, Code.org alleged that WhiteHat Jr failed to make the payments for the third and fourth quarters of 2020, and also breached the contract by using Code.org’s materials without authorization, infringing its trademarks, and making false and misleading claims about its partnership with Code.org.
The impact of the lawsuit
Code.org claimed that WhiteHat Jr’s actions have caused it significant harm, including loss of revenue, damage to its reputation, and diversion of its resources. Code.org sought a declaratory judgment that WhiteHat Jr breached the contract and violated the Lanham Act, which governs trademark law in the US. Code.org also demanded damages, injunctive relief, and attorney’s fees from WhiteHat Jr.
WhiteHat Jr, which was acquired by Indian edtech giant Byju’s in August 2020 for $300 million, has not yet responded to the lawsuit. The company has been facing criticism and controversy in India for its aggressive marketing tactics, questionable claims, and censorship of critics. WhiteHat Jr has also been sued by several individuals and entities in India for defamation and violation of free speech.
The implications for the edtech sector
The lawsuit between Code.org and WhiteHat Jr is one of the rare cases of a legal dispute between an international and an Indian edtech company. It highlights the challenges and risks involved in cross-border partnerships and collaborations in the fast-growing and competitive edtech sector.
The edtech sector has witnessed a surge in demand and investment amid the Covid-19 pandemic, as online learning became the norm for millions of students and teachers. According to a report by Entrackr, Indian edtech startups raised $6 billion in funding in the first half of 2023, with Byju’s leading the pack with $850 million.
However, the edtech sector also faces several regulatory and ethical issues, such as data privacy, quality of education, consumer protection, and intellectual property rights. The lawsuit between Code.org and WhiteHat Jr could set a precedent for how such issues are resolved in the future, and could also affect the reputation and credibility of both the parties involved.