Code.org, the US educational non-profit, has taken legal action against Byju’s subsidiary WhiteHat Jr for allegedly breaching a licensing contract. The lawsuit was filed in a California district court, claiming that WhiteHat Jr failed to pay fees as agreed while continuing to utilize Code.org’s platform.
Key Takeaway
Code.org has filed a lawsuit against Byju’s-owned WhiteHat Jr, alleging non-payment of agreed licensing fees and breach of contract.
Alleged Breach of Licensing Contract
WhiteHat Jr, which was acquired by Byju’s for $300 million in 2020, entered into a partnership with Code.org in 2021. As part of the agreement, WhiteHat Jr was supposed to pay $4 million over four years to license Code.org’s coding education platform. However, Code.org alleged in the lawsuit that WhiteHat Jr did not adhere to the payment schedule while still making use of its coding courseware.
Non-Payment of Fees
According to Code.org’s legal complaint, WhiteHat Jr did pay its 2022 licensing fee but subsequently notified the non-profit earlier this year that it would be unable to fulfill the remaining scheduled payments under the four-year deal. Code.org’s lawyers argue that the original contract stipulates that even in the event of termination, WhiteHat Jr would still be obligated to settle all future licensing payments owed, which amounts to $3 million in this particular case.
Unresolved Payment Disputes
The legal complaint also highlighted that WhiteHat Jr has failed to make the Q1 2023 and Q2 2023 payments despite repeated requests from Code.org. The lawsuit alleges that WhiteHat Jr has not made any payments beyond the $1,000,000 paid pursuant to the 2022 invoices before the Agreement was amended.
Byju’s Response and Additional Challenges
Byju’s, the parent company of WhiteHat Jr, did not provide a comment in response to the lawsuit. The legal action adds to the challenges faced by Byju’s following its acquisition of WhiteHat Jr, including considerations about winding down the subsidiary. Moreover, Byju’s is also grappling with delays in financial filings and governance issues, with influential backer Prosus recently lowering the startup’s valuation to below $3 billion.
