Submissions for WINDERCOM (Raghu Shastri)

Facts

1. Raghu Shastri is a first-generation entrepreneur who is the Founder/Promoter and

Managing Director of the Indian start-up company WINDERCOM (India) Pvt. Ltd.
2. He had joined SYNERCON, a reputed wind turbine manufacturing company as an
Instrumentation Engineer after completing his Masters in Electronics and
Instrumentation. After working for 6 years, Raghu founded WINDERCOM and started
manufacturing control panels for SYNERCON’s wind turbines.
3. During the course of his work, Raghu came across the numerous sufferings underwent by
Indian farmers, primarily because of the lack of a continuous and cheap source of power
for pumping water for irrigation. He also observed that many farmers experienced
extreme poverty and were forced to sell their land to large developers.
4. In order to help the farmers, Raghu decided to provide them with cheap and clean
sources of power to aid their agricultural activities. He realised that the large sizes of the
conventional wind turbines and the required infrastructure would not suit the needs of the
farmers. What was needed were smaller turbines based on simpler technology, which
would not be too capital intensive.
5. With the determination in mind, Raghu set up an R&D department at WINDERCOM
and with the help of engineers was able to successfully develop turbines which operated
on a vertical axis. In this type of turbine, the main rotor shaft is set transverse to the wind
while the main components are located at the base of the turbine. This allows the
generator and gearbox to be located close to the ground, facilitating service and repair.
6. Raghu and WINDERCOM were further able to reduce the size of the turbines, so that
they could be installed on rooftops of houses and run even on mild breeze conditions and
generate cheap and clean power. Although there were still some technical glitches to be
addressed, Raghu was confident that once these glitches were removed, the product
would be successful in India, South East Asia, Africa and South America.
7. Raghu decided to patent this technology but was shocked to receive a legal notice from
UNIWIND for infringement of their intellectual property.
8. UNIWIND is a company based in the Netherlands and has been a leader in the alternate
energy sector with a huge presence in the European market. It has a base of 25000
 employees, and is the largest govt. contractor and known for its large-scale industrial
production. It was difficult for the company to capture the South East Asian market.
9. UNIWIND came to know about the usage of its VAWT technology which it got patented
some time back, by WINDERCOM. The development of the same technology by
WINDERCOM constituted an infringement of the patent. The vertical axis turbine was
already built by it and they had patented it in its name.
10. After the convention of a meeting with legal and technology heads of UNIWIND, the
CEO Mr. Ben Janssen grew sceptical of the claims he wished to make against
UNIWIND. The process they decided to take up to deal with the issues in hand was
mediation, which not only aimed to settle the claim of infringement but also to discuss
other business propositions with WINDERCOM.
11. In pursuance of its above stated objectives, UNIWIND is represented by its CEO Mr.
Janssen and the head of the legal department, Mr. Sergio. Whereas, WINDERCOM is
represented by Mr. Raghu and the head of the legal team, Mr. Shyam.

Issues

1. What will be the percentage of shareholding of UNIWIND in WINDERCOM?

2. How would the technology transfer between UNIWIND and WINDERCOM take place?

Conflicting Interests

Raghu is not interested in complete acquisition of WINDERCOM by UNIWIND and wants

to retain control of his start-up. UNIWIND on the other hand wants a complete takeover of
WINDERCOM with the aim of expanding in the South East Asian region.

Raghu wants UNIWIND and WINDERCOM to enter into a technology sharing agreement
wherein WINDERCOM retains its independent status.

Underlying Interests

UNIWIND does not want an infringement of its intellectual property by WINDERCOM.

Furthermore, it wants to expand in the South East Asian region and would be able to do so
smoothly with the help of WINDERCOM.
WINDERCOM wants to retain itself as a separate corporate enterprise and avoid being
acquired by UNIWIND. Furthermore, it would prefer to settle the matter of patent
infringement outside of court without paying any infringement costs.

BATNA

UNIWIND: Complete acquisition of WINDERCOM and control over its management.

WINDERCOM: Functions as a subsidiary of UNIWIND and Raghu retains control over the
management

WATNA

UNIWIND: Not being able to expand their operations effectively in the South East Asian
region.

WINDERCOM: UNIWIND walks out of the negotiation and sues WINDERCOM for patent
infringement.