Code.org Sues WhiteHat Jr. For $3 Million 8
theodp writes: Back in May 2021, tech-backed nonprofit Code.org touted the signing of a licensing agreement with WhiteHat Jr., allowing the edtech company with a controversial past (Whitehat Jr. was bought for $300M in 2020 by Byju's, an edtech firm that received a $50M investment from Mark Zuckerberg's venture firm) to integrate Code.org's free-to-educators-and-organizations content and tools into their online tutoring service. Code.org did not reveal what it was charging Byju's to use its "free curriculum and open source technology" for commercial purposes, but Code.org's 2021 IRS 990 filing reported $1M in royalties from an unspecified source after earlier years reported $0. Coincidentally, Whitehat Jr. is represented by Aaron Kornblum, who once worked at Microsoft for now-President Brad Smith, who left Code.org's Board just before the lawsuit was filed.
Fast forward to 2023 and the bloom is off the rose, as Court records show that Code.org earlier this month sued Whitehat Education Technology, LLC (Exhibits A and B) in what is called "a civil action for breach of contract arising from Whitehat's failure to pay Code.org the agreed-upon charges for its use of Code.org's platform and licensed content and its ongoing, unauthorized use of that platform and content." According to the filing, "Whitehat agreed [in April 2022] to pay to Code.org licensing fees totaling $4,000,000 pursuant to a four-year schedule" and "made its first four scheduled payments, totaling $1,000,000," but "about a year after the Agreement was signed, Whitehat informed Code.org that it would be unable to make the remaining scheduled license payments." While the original agreement was amended to backload Whitehat's license fee payment obligations, "Whitehat has not paid anything at all beyond the $1,000,000 that it paid pursuant to the 2022 invoices before the Agreement was amended" and "has continued to access Code.org's platform and content."
That Byju's Whitehat Jr. stiffed Code.org is hardly shocking. In June 2023, Reuters reported that Byju's auditor Deloitte cut ties with the troubled Indian Edtech startup that was once an investor darling and valued at $22 billion, adding that a Byju's Board member representing the Chan-Zuckerberg Initiative had resigned with two other Board members. The BBC reported in July that Byju's was guilty of overexpanding during the pandemic (not unlike Zuck's Facebook). Ironically, the lawsuit Exhibits include screenshots showing Mark Zuckerberg teaching Code.org lessons. Zuckerberg and Facebook were once among the biggest backers of Code.org, although it's unclear whether that relationship soured after court documents were released that revealed Code.org's co-founders talking smack about Zuck and Facebook's business practices to lawyers for Six4Three, which was suing Facebook.
Code.org's curriculum is also used by the Amazon Future Engineer (AFE) initiative, but it is unclear what royalties -- if any -- Amazon pays to Code.org for the use of Code.org curriculum. While the AFE site boldly says, "we provide free computer science curriculum," the AFE fine print further explains that "our partners at Code.org and ProjectSTEM offer a wide array of introductory and advance curriculum options and teacher training." It's unclear what kind of organization Amazon's AFE ("Computer Science Learning Childhood to Career") exactly is -- an IRS Tax Exempt Organization Search failed to find any hits for "Amazon Future Engineer" -- making it hard to guess whether Code.org might consider AFE's use of Code.org software 'commercial use.' Would providing a California school district with free K-12 CS curriculum that Amazon boasts of cultivating into its "vocal champion" count as "commercial use"? How about providing free K-12 CS curriculum to children who live where Amazon is seeking incentives? Or if Amazon CEO Jeff Bezos testifies Amazon "funds computer science coursework" for schools as he attempts to counter a Congressional antitrust inquiry? These seem to be some of the kinds of distinctions Richard Stallman anticipated more than a decade ago as he argued against a restriction against commercial use of otherwise free software.
Fast forward to 2023 and the bloom is off the rose, as Court records show that Code.org earlier this month sued Whitehat Education Technology, LLC (Exhibits A and B) in what is called "a civil action for breach of contract arising from Whitehat's failure to pay Code.org the agreed-upon charges for its use of Code.org's platform and licensed content and its ongoing, unauthorized use of that platform and content." According to the filing, "Whitehat agreed [in April 2022] to pay to Code.org licensing fees totaling $4,000,000 pursuant to a four-year schedule" and "made its first four scheduled payments, totaling $1,000,000," but "about a year after the Agreement was signed, Whitehat informed Code.org that it would be unable to make the remaining scheduled license payments." While the original agreement was amended to backload Whitehat's license fee payment obligations, "Whitehat has not paid anything at all beyond the $1,000,000 that it paid pursuant to the 2022 invoices before the Agreement was amended" and "has continued to access Code.org's platform and content."
That Byju's Whitehat Jr. stiffed Code.org is hardly shocking. In June 2023, Reuters reported that Byju's auditor Deloitte cut ties with the troubled Indian Edtech startup that was once an investor darling and valued at $22 billion, adding that a Byju's Board member representing the Chan-Zuckerberg Initiative had resigned with two other Board members. The BBC reported in July that Byju's was guilty of overexpanding during the pandemic (not unlike Zuck's Facebook). Ironically, the lawsuit Exhibits include screenshots showing Mark Zuckerberg teaching Code.org lessons. Zuckerberg and Facebook were once among the biggest backers of Code.org, although it's unclear whether that relationship soured after court documents were released that revealed Code.org's co-founders talking smack about Zuck and Facebook's business practices to lawyers for Six4Three, which was suing Facebook.
Code.org's curriculum is also used by the Amazon Future Engineer (AFE) initiative, but it is unclear what royalties -- if any -- Amazon pays to Code.org for the use of Code.org curriculum. While the AFE site boldly says, "we provide free computer science curriculum," the AFE fine print further explains that "our partners at Code.org and ProjectSTEM offer a wide array of introductory and advance curriculum options and teacher training." It's unclear what kind of organization Amazon's AFE ("Computer Science Learning Childhood to Career") exactly is -- an IRS Tax Exempt Organization Search failed to find any hits for "Amazon Future Engineer" -- making it hard to guess whether Code.org might consider AFE's use of Code.org software 'commercial use.' Would providing a California school district with free K-12 CS curriculum that Amazon boasts of cultivating into its "vocal champion" count as "commercial use"? How about providing free K-12 CS curriculum to children who live where Amazon is seeking incentives? Or if Amazon CEO Jeff Bezos testifies Amazon "funds computer science coursework" for schools as he attempts to counter a Congressional antitrust inquiry? These seem to be some of the kinds of distinctions Richard Stallman anticipated more than a decade ago as he argued against a restriction against commercial use of otherwise free software.
Tech Villains bingo card (Score:3)
You can check off "Brad Smith", "Mark Zuckerberg" and maybe even "Jeff Bezos" with this one.
Just wondering... (Score:2)
What percentage of tech news stories are lawsuit news stories?
This reads like one of those old gossip rags (Score:4, Insightful)
Except instead of talking about actors and actresses, it's talking about people in tech. There's a story under there, but the author seems intent on dragging a whole lot of superfluous fluff into the mix.
O. M. G! (Score:3)
This is way too painful to read so I asked ChatGPT to summarize it. It said:
In May 2021, Code.org entered a licensing agreement with WhiteHat Jr., allowing the edtech firm to integrate Code.org's content into its services. However, a recent lawsuit reveals that WhiteHat Jr. is being sued by Code.org for breach of contract and failure to pay agreed-upon charges, amid broader challenges faced by Byju's, which acquired WhiteHat Jr., and the lawsuit includes screenshots of Mark Zuckerberg teaching Code.org lessons, raising questions about the complex relationships in the edtech industry.
I still don't know what WhatHat Jr. is, but I realized I don't care at all.
FSF: Free software, free society, free education! (Score:3)
The lawsuit launched by Code.org - the CS education-promoting Big Tech-backed [code.org] nonprofit whose Board of Directors [code.org] includes execs from Microsoft (Kevin Scott, CTO), Amazon (David Treadwell, VP eCommerce Services), and Google (Maggie Johnson, VP of Education) - against Bjyu's - the Edtech company that was backed and directed by Mark Zuckerberg's education-democratizing Chan-Zuckerberg initiative [chanzuckerberg.com] - certainly drives home the point of the Free Software Foundation's Free software, free society, free education! [fsf.org] fundraising campaign, which stresses that "We can only learn in freedom if the software we use is free."
FREE curriculum (Score:1, Interesting)
How do you go from "free and open source" to a million dollar "sponsor" you then sue?
Unfortunately this will settle out of court and the rest of the world will never know.
Is there a "bad guy" here? Is it code.org being a useless "nonprofit" clearly trying to grift from a third party for open-source stuff they didn't create?
Buehler?
Re: (Score:2)
It's in the poorly-worded summary. Code.org's tools are free only for non-commercial use. WhiteHat Jr. wanted access to those tools for commercial use. Code.org offered them up for $4 million over four years. WhiteHat Jr. agreed, then stopped making payments 1/4 of the way through but didn't stop using Code.org's tools.