Khatabook and Dukaan resolve issues out of court

The legal battle between Khatabook and Growthpond seems to have come to an end with the settlement of disputes outside the court of law. Both companies have jointly announced that they have settled everything concerning Dukaan App. 

The settlement has come as a surprise for many as the two companies were engaged in a legal fight over plagiarism and infringement of copyright for the past three months. Giving an interim relief to Khatabook, the Karnataka High Court restrained Suumit Shah, founder of Growthpond to distribute Dukaan app.

Following the court order, Google had removed the Dukaan app from the Play Store. According to the joint press statement released by the two companies, Khatabook will get nominal equity in Growthpond’s Dukaan app as a part of the overall settlement. 

The settlement would clear roads for the Dukaan app to make a comeback on the Play Store within a week. The app was delisted from Google-owned app store as per the court order on October 2, 2020.

"We think that storefront apps are a very relevant solution for small businesses in India to continue doing business in the world with pandemic reality. With this matter now firmly behind us, Khatabook will focus on driving the adoption of the shopfront app, MyStore, by Khatabook. Growthpond will get Dukaan re-listed and focus on the app's continued progress." said the joint press release.

The terms and specifics of the settlement have not been shared due to a confidentiality agreement. 

The blame game between Khatabook and Growthpond cropped up in August for the first time when the latter served notice to the Sequoia-backed firm over plagiarising logo and user interface of its flagship app -- Dukaan. Following the notice, Khatabook renamed its app from Dukaan by Khatabook to MyStore by Khatabook. 

A month later, Khatabook filed a writ petition at the Karnataka High Court, which barred Dukaan’s co-founder Suumit Shah from infringing Khatabook’s copyright over the source code of “Dukaan'' application. 

The court’s order also barred Shah from operating Dukaan app in any form till the next date of hearing. Nevertheless, the legal fight didn’t dampen the interest of Lightspeed and Matrix. The two venture capitals led a $6 million seed round even after its removal from the Play Store.

According to three Entrackr sources, the settlement between the two companies has been guided by their backers -- Lightspeed and Sequoia. “At end of the day, the legal battle wasn’t a sane option for either. It’s good that they have settled the issue outside the court,” said one of the sources requesting anonymity. “The episode also passes lessons to growth and early-stage startups: things can be resolved mutually without involving courts and slinging mud on each other,” the person added.