Claim No: IP-2022-000086 - [2024] EWHC 1430 (IPEC)

The Claimant describes itself as a highly successful software developer with a number of major global brands and innovative entrepreneurs amongst its client base, which has been recognised as such through its receipt of numerous industry awards, e.g. ‘Winner of the Hottest AI Start-Up’ at the 2020, ‘Best COVID-19 Innovation for Recovery’ at CogX 2020 and third place in the 2023 ‘Fast Company’ global list of ‘Most Innovative Companies in Artificial Intelligence’ (after OpenAI, the producers of ChatGPT, and DeepMind). The Claimant also ranked in a list of 5,000 of the fastest growing companies in America. Ms Gupta also notes that the Claimant won the category of ‘Scale Up of the Year’ at the 2022 Europas Hottest Tech Start Up Awards for UK and Europe, and the Claimant’s CEO Sachin Dev Duggal won the 2023 Ernst & Young UK Entrepreneur of the Year award, the Claimant being referred to as ‘Builder.ai’ in all of the announcements relating to the award. None of this evidence was challenged by the Defendants. The services for which the Claimant is known are provided and developed through the Claimant’s website, https://www.builder.ai/.

Mr Girdhar says that he developed an idea in 2010 for an app builder which allowed customers to build their own apps at low cost without coding knowledge, by dragging and dropping pre-built elements into templates to create personalised apps, while he was working in a previous business that he had founded, ONS Interactive Solutions PVT Ltd, which provided search engine optimisation, web development, web app services and Google AdWords management. He developed that idea with his father, and by around early 2013 had come up with a minimum viable product version of Appy Pie’s app builder. He said that from 2013 to early 2015, he and his father set up a company in India called Appy Pie Inc, and operated in partnership. He was involved with programming but otherwise continued to run ONS, and his father was responsible for day-to-day operations of Appy Pie Inc, including marketing and finances. However, Mr Girdhar’s father sadly died in June 2015, so Mr Girdhar took over the running of the business and set up D2 in January 2016 with his mother, who remains a joint partner in it, although playing no active role. It is D2, he says, who is now the operating entity of the Appy Pie brand; has around 200 employees, mostly in India; controls product development, advertising, the Appy Pie Website and all other activities except for payment processing in certain territories, including the UK.

Mr Girdhar’s evidence is that D2’s business is a very successful one, and ranked as an industry leader by a number of publications, including in December 2023 by G2 who rated it as the leading drag-and-drop app builder. His evidence is that the Appy Pie platform has over 10 million registered users and over 15 million apps have been created using it, by users based all over the world, who he referred to in cross-examination as “Citizen developers”. These may be corporate entities or other organisations, or individuals. In cross-examination he says he knows of users aged 6 and aged over 80 who use the Appy Pie platform to create apps. In the UK, he says, users include: the NHS which has used the D2’s app builder to create an app used by 1.2 million NHS staff; the Metropolitan Police, to create a counter terrorism app; and the University of Westminster (his alma mater) which uses it to teach app development to students.

Mr Girdhar says that D1 was set up by him and his wife in April 2016 to act as a pure payment gateway to D2, so that UK and European customers could pay for D2s products and services in pounds sterling and Euros. Although he was a director of D1 when it was incorporated, he resigned after less than a month on tax advice, and his wife is the sole owner and now the sole director of D1. He says D1 was set up because international bank and credit cards cannot be accepted by Indian banks.

In his witness statement Mr Girdhar says that D1 has no involvement in the development or marketing of D2’s products whatsoever, and this has at all relevant times been explained to users in the terms and conditions on the Appy Pie website. In answer to questions from Mr Howe, Mr Girdhar said that when a customer in the UK purchases from the Appy Pie Website, D1 issues a VAT invoice to that customer, which will show D1 as providing the goods or services. However, he said, that customer will have agreed with the terms of service on the Appy Pie Website, which provides that the customer is contracting with D2, and once they have paid, D2 will manage the relationship. He confirmed that after collecting payment and issuing the VAT invoice, D1 also accounts for VAT arising from D2’s trades to HMRC. However, subject to that, the rest of the revenues remain in D1’s bank account unless and until they are repatriated with approval from the Reserve Bank of India.