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Boston Consulting, De Beers sued over blockchain patent


In May 2018, De Beers unveiled its TRACR blockchain diamond tracking solution developed in conjunction with BCG Digital Ventures, part of Boston Consulting Group (BCG). A former BCG employee Max Rady has filed a legal complaint in the New York courts against both firms alleging patent infringement, misappropriation of trade secrets and other claims. The litigation relates to the technology used in TRACR.

In August 2010, Rady started a joint Masters/PhD research degree at Kings College London. The topic included optical properties for assets that could create an identification signature, including for gemstones. The data would be recorded on a blockchain. A key challenge with blockchain traceability is how to link a physical object to its digital twin, so any tools that enable this connection are important. Rady subsequently filed a patent for his invention.

While still working on his PhD, he joined BCG in June 2016 but never worked directly on the TRACR project. He says BCG were aware of his research and the fact that he was contemplating filing a patent. 

In 2017 BCG started working on the De Beers TRACR project. Rady claims that after filing his patent application in December 2017, he was consulted by the group working on the TRACR project, asking about his research work. He alleges he shared the information and unpublished patent in confidence on the understanding it would not be used without his consent. It’s unclear whether the confidentiality discussions were in writing or not.

In March 2018, Rady claims he was approached to license his patent to Rio Tinto. He consulted his boss and a Legal Counsel with BCG said it could be viewed as a conflict of interest with De Beers, so Rady declined the licensing.

Rady alleges that his invention was used in the TRACR project. And that the potential licensing of his intellectual property was discussed with BCG in February and May 2018. He claims to have emails from May 2018 that reference a possible license.

In September 2018, Rady alleges he was pressured to release his patent claims against BCG. But despite receiving a good review in early October, he was fired at the end of the month. There was no arbitration for unfair dismissal.

A key issue is likely to be whether or not the patent subject matter was developed as part of his employment. 

The filing claims that “Mr. Rady also discussed with Mr. Ravindran the projects on which he was assigned during his employment with BCG so as to confirm that the information being provided by Mr. Rady had not been developed by him within the scope of his employment at BCG.”

We contacted BCG for comment twice, but did not receive a response in time for publication.

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