Four members of a startup formerly incubated at Google-backed The Nest I/O have been arrested for infringing on intellectual property rights, according to local media reports in Pakistan.
The entrepreneurs run Investors Lounge, a portal for budding investors to see updated financial data on things like stocks, mutual funds, and commodities. It recently secured its first round of funding.
The four individuals – Baqar Abbas Jafri, Sennen D’Souza, Hammad Ali Hashmi, and Waqar Ehsan – were previously associated with The Nest I/O, a startup incubator based in Karachi which has received funding from Google for Entrepreneurs, Samsung, and the US State Department.
The complainant in the case says the founders of Investors Lounge were its former employees. While at AMZ MAK Capital, they had been given the task of building a social media platform for investors. Instead they allegedly stole the source code and used it to build an alternative product with a few minor modifications.
“After the product was developed, all the above named four employees, along with the head of software programing and project head, quit at the same time taking the source code along with them,” says a statement from the complainant provided today to Tech in Asia. “The mastermind behind this fraud, Baqar Abbas Jafri, re-launched the same website few months later, which was the idea and property of AMZ MAK Capital, by changing a few interfaces while keeping the exact same idea and the source code.”
Mir Mohammad Ali Khan, the CEO of AMZ MAK Capital, said he took to the courts to prevent the entrepreneurs from running away with the idea. After hearing the merits of the case, the judge decided to issue arrest warrants. The source code is valued at US$140,000.
A formal trial will now be held to determine the outcome of the case.
However, the team behind Investors Lounge categorically denies the accusations. In a press statement they said they “created new and original software code for Investors Lounge portal with the assistance of shared content recently purchased from recognised vendors with the specific intention of using such shared content for Investors Lounge only.”
Jehan Ara, the head of Nest I/O, says the case is totally without any merit. “This is a false accusation,” she outlines. “I know these youngsters personally and the product was created from scratch […] It is heartbreaking and totally unjust that these young entrepreneurs who have struggled so much and worked so hard to get to this stage should be put through this. I stand by them.”
This article originally appeared on Tech in Asia