HIGH COURT OF DELHI: NEW DELHI
MANMOHAN SINGH, J.
MVF 3 APS & ORS - Plaintiffs
Versus
MR. M. SIVASAMY AND ORS - Defendants
I.A. No.10268/2009 in CS (OS) No.599/2007
Decided On : 31.08.2012
Copyright Infringement - Trade Secrets and Confidential Information - Code of Civil Procedure, 1908 - Order XI, Rules 12 & 14
Fact of the Case:
Plaintiffs filed a suit alleging infringement of copyright, breach of confidentiality, and illegal use of trade secrets and proprietary data by ex-employees who formed a competing company. The defendants shifted operations to different countries to avoid legal actions and refused to cooperate with the court-appointed Local Commissioners.
Finding of the Court:
The Division Bench directed the discovery of documents related to the production and details of the defendants' product, emphasizing the need to protect confidential information. The Court allowed access to UK Confidential Documents to Indian counsels and directed the establishment of a Confidentiality Club.
Issues: Territorial jurisdiction, existence of an oral contract, and abuse of court process by the plaintiffs.
Ratio Decidendi: The Court rejected objections related to territorial jurisdiction and the existence of an oral contract, stating that these issues should be considered at an appropriate stage. The defendants' consented to the expansion of the UK Confidentiality Club to Indian counsel.
Final Decision: The application was allowed, and the Court directed the submission and handling of confidential documents, emphasizing the need for confidentiality and outlining the terms for access and usage of the documents.
MANMOHAN SINGH, J.
1. The plaintiffs filed a suit to restrain infringement of copyright, breach of confidentiality, damages, delivery up etc.
2. The plaintiffs claim :
(a) that they are the exclusive owners of the trade secrets and confidential information along with copyright in the data base, recepies and the other test data which result in a product
“FENCE”, which is an insecticidal netting (disease control textiles) used in agriculture to surround livestock or crops.
(b) that the mosquito nets are made from polyester and polyethylene and that the production of yarn and manufacture involves a two step process in which master batch recepies are first formed and later mixed with pre-determined number of pure PE pallets and extrusion process of such mixture, through a nozzle of appropriate size, to produce yarn.
(c) that they have developed this product “FENCE” in September, 2001 and first sale of the product was claimed in mid 2003 and have developed two other products ZEROFLY (developed in 1996 and sold for the first time in 2001) and PE BED NET (developed in 2001, presently not in sale).
3. PLAINTIFFS’ CASE AGAINST THE DEFENDANTS
i) that the defendants No.4 and 5 were the employees of plaintiff No.1 being the Sales Manager and Chief of Production of the plaintiff No.1. These employees left the employment of the plaintiff No.1 and incorporated a company M/s Intection A/S (Danish Intection) in Denmark which was declared bankrupt on 30th January, 2006. They illegally took away the confidential information and trade secrets, proprietary data, etc. of the plaintiffs with respect to its products including the product “FENCE” and formed Danish Intection.
ii) that since the suits were filed against this company in Denmark, the defendants No.4 to 6 shifted operations to Great Britain and the companies defendants No.7 to 10 were formed to further the purpose of Danish Intection and the defendants No.4 and 5.
iii) that a company was also incorporated in France which is defendant No.11 and suits were also filed inter alia against this company in France.
iv) the plaintiffs claim that defendants No.1 to 3 in India are now carrying out the operations of manufacture and sale of the disputed products in league with the other defendants. The Local Commissioners were appointed by the learned Single Judge but the defendants refused to cooperate with the Local Commissioners.
v) that in the proceedings in U.K., defendants No.5 and 6 were made to disclose the data of developing and testing of the products through documents, which was however, subject to a confidentiality agreement, so that only the plaintiffs Danish lawyer, one expert and one plaintiffs English lawyer were allowed to see such documents. However, the plaintiffs are not permitted to access such documents which are relevant for the purposes of the suit before the learned Single Judge. The reliance is on the orders of the English Court directing disclosure of various classes of documents.
4. It is claimed by the plaintiffs that defendants No.4, 5 & 6 were/are their ex-employees and consultants who were instrumental at the stage of development of the product in question. After termination of the arrangement with the plaintiffs, the said defendants have in collusion with the other defendants and started to breach the confidentiality to which they were subject in the matter of manufacture and sale of similar products i.e. insecticide incorporated mosquito nets, made of polyethylene.
5. During pendency of the suit, plaintiffs two applications being I.A.Nos.8624-25/2007 were disposed of by the order dated 2nd April, 2009 which were allowed by my esteemed brother Judge. It would be necessary to refer the prayers in these two applications which were allowed by the said order filed by the plaintiffs for discovery and production of the documents filed, under Order XI, Rules 12 & 14 of Code of Civil Procedure, 1908. The relevant prayers in the two applications read as under:-
“I.A. No
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