Hexaware seeks dismissal of $500 mn US patent suit
BENGALURU, Dec. 26 -- Hexaware Technologies Ltd has moved a US court to dismiss a patent infringement lawsuit that seeks more than $500 million in damages-an amount that could materially affect the Indian IT firm's financials-arguing that the inventions it is accused of infringing are not patentable under US law.
Carlyle-backed Hexaware, which re-entered Indian bourses in February, has argued that the inventions at the centre of the dispute amount to abstract ideas rather than genuine technological innovations.
"For more than 150 years, the Supreme Court has held that patents cannot protect laws of nature, natural phenomena, and abstract ideas because these are the basic tools of scientific and technological work," read a 12 December Hexaware court filing in support of its plea to dismiss Natsoft's case.
"Using 'computers to compute' is not a patent-eligible 'invention'," read the filing.
Hexaware filed a motion to dismiss Natsoft's case on 12 December, followed by a separate filing on 19 December seeking to halt discovery pending the court's decision. Mint has seen copies of both filings.
Privately held Natsoft filed its lawsuit against Hexaware in an Illinois district court on 23 September, alleging that Hexaware used application modernization software covered by nine Updraft patents. The company claimed Hexaware marketed these products for both application modernization and GenAI use cases. Application modernization refers to the practice of updating older software systems.
Natsoft is represented by Maxson Mago & Macaulay, LLP, and Shelhoff Canfield & Chin LLC. Hexaware is represented by Wilson Elser Moskowitz Edelman & Dicker LLP.
In its submissions, New Jersey-based Hexaware said Natsoft's complaint merely describes the software development life cycle (SDLC), a standard process for creating software that includes planning, designing, developing, and maintaining software tools.
"The Complaint's descriptions regarding the Accused Products comprise statements allegedly made publicly by Hexaware that do no more than describe the various stages of the SDLC (software development life cycle) as implemented for modernizing legacy code. These statements mimic the generic and vague elements of the asserted claims," said Hexaware.
For Hexaware, which follows a January-December fiscal year, damages of $500 million would amount to nearly four times its net profit of Rs.1,174 crore ($132 million) in the last fiscal year. The company ended the year with revenue of $1.43 billion, up 14% year-on-year.
Natsoft a New Jersey-based IT services company with about 2,000 associates, provides back-end IT and customer support for around 500 clients worldwide.
In its filings, Hexaware said all nine patents asserted by Natsoft are invalid, arguing that they cover the "abstract idea" of automatically generating computer code. Hexaware said this activity has traditionally been a manual process and does not constitute a patentable invention....
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