1. Quia timet action for breach of confidentiality by ex-employees and copyright infringement of technical drawings. (Para 1 , 2 )
2023 Supreme(Online)(Bom) 28659
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
Manish Pitale, J
Rochem Separation Systems (India) Pvt. Ltd. – Appellant
Versus
Nirtech Private Limited – Respondent
INTERIM APPLICATION (L) NO. 29924 OF 2022 | COURT RECEIVER’S REPORT NO. 380 OF 2022 | COMMERCIAL IP SUIT (L) NO. 29923 OF 2022
For the Appellants/Petitioners: Rashmin Khandekar, M. Roy Chowdhary, K. Khanna, Akshay Khanna, Akshay Kapadia, V. Desai
For the Respondents: Hiren Kamod, Nishad Nadkarni, Khushboo Jhunjhunwala, Charu Shukla, Prem Khullar
To obtain interim relief for breach of confidentiality, a plaintiff must precisely identify the proprietary information in the pleadings; general statements are insufficient, and information existing in the public domain cannot be protected under the doctrine of confidentiality.
Headnote:(A) Code of Civil Procedure, 1908 - Order XXXIX Rule 4 - Copyrights Act, 1957 - Section 52(1)(w) - Breach of confidentiality by former employees - Grant of interim injunction - The requirement for pleadings in cases of breach of confidentiality is stringent; the plaintiff must precisely and specifically identify the confidential information that is not in the public domain (Paras 16, 17). A generalized or omnibus statement claiming confidentiality over a wide range of technical documents, research, and trade secrets without providing specific particulars is insufficient to sustain an interim order (Paras 19, 20). The practice of providing specific confidential information in a sealed cover to the Court is mandatory to allow the Court to examine the veracity of the claims (Paras 12, 18, 24). If the information, such as technical drawings, is already in the public domain (e.g., through an expired patent), it cannot be protected as confidential information (Paras 21, 22).
Facts of the case:
The plaintiff sought interim reliefs and confirmation of an ex-parte ad-interim order against the defendants, including former employees, alleging breach of confidentiality and copyright infringement regarding technical drawings of connection flanges. The defendants moved to vacate the order, contending that the plaintiff suppressed the fact that the drawings were based on a US patent from 1983 and were in the public domain. They further argued that the plaintiff's pleadings were too general and lacked the requisite precision to define the confidential information.
Findings of Court:
The court found that the plaintiff relied on general statements in paragraph 27 of the plaint and failed to provide specific details of the confidential information or submit them in a sealed cover as per established practice. Furthermore, the plaintiff suppressed material information regarding the public availability of the technical drawings via an expired patent.
Issues: Whether the plaintiff sufficiently particularized the confidential information to justify an interim injunction and whether the information in question was in the public domain.
Ratio Decidendi: For a cause of action in breach of confidence to succeed, there must be precision, originality, and completeness of disclosure. General statements are not enough. Information already in the public domain cannot be claimed as confidential, and any suppression of such facts by the plaintiff disentitles them to equitable relief.
Result: Ad-interim order vacated; interim application dismissed.
Legal Category Hierarchy
- intellectual property
- practice and procedure
- employment law
Table of Contents
2. Plaintiff argued breach of confidentiality; defendants argued suppression of material facts and public domain drawings with no prima facie case. (Para 2 , 3 , 4 , 5 , 6 , 7 , 8 , 9 , 10 , 11 , 12 , 13 )
3. Plaintiff failed to identify confidential information with precision; drawing in public domain; procedure of sealed cover not followed. (Para 14 , 15 , 16 , 17 , 18 , 19 , 20 , 21 , 22 , 23 , 24 , 25 , 26 )
4. Plaintiff in breach of confidence action must clearly identify confidential information; generalised pleading insufficient for interim relief. (Para 15 , 16 , 17 , 24 )
5. Ad-interim order vacated; interim application dismissed; sealed envelope returned; receiver discharged; seized goods released. (Para 26 , 27 )
6. What must a plaintiff in a breach of confidence action plead at the interlocutory stage?
The plaintiff must clearly identify the confidential information, show it was handed over in confidence, that it can be treated as confidential, and that it was used or threatened to be used without licence. (Para 15 )
7. Is a generalised statement in the plaint sufficient to claim confidentiality and obtain interim relief?
No, a generalised statement is never enough; the information must be accurately and specifically identified. Precision, originality, and completeness of disclosure are essential. (Para 16 , 17 )
8. Is a plaintiff required to disclose confidential information to the court in a sealed envelope while seeking ex-parte interim relief?
Yes, the method of providing information in a sealed cover with material particulars is mandatory under the law laid down by the Bombay High Court, and must be complied with. (Para 18 , 24 )
9. Can a plaintiff avoid disclosing confidential information on the ground that disclosure would dilute its confidentiality?
No, the court disagreed with such a view; disclosure in a sealed cover is mandatory to allow the court to examine the veracity of allegations. (Para 24 )
10. What is the effect of suppression of material facts while obtaining an ex-parte ad-interim order?
Such suppression leads to the ad-interim order being vacated as it was obtained without bringing the correct position of law and relevant material to the court's notice. (Para 20 , 22 )
P.C.
. The present application for interim reliefs came up for consideration, as also for confirmation of ex-parte ad-interim order dated 12/10/2022, granted by this Court. The defendants filed their reply affidavits and the plaintiff filed its rejoinder affidavit and therefore, the pleadings were complete. The defendants invoked the first proviso to Order XXXIX Rule 4 of the Code of Civil Procedure (CPC) for vacating the ex-parte ad- interim order, on the ground that the plaintiff had indulged in suppression of material facts from this Court. It was also alleged on behalf of the defendants that the relevant material, as well as the correct position of law, was not brought to the notice of this Court while obtaining the ex-parte ad-interim order on12/10/2022.
2. Mr. Khandekar, learned counsel appearing for the plaintiff, apart from reiterating submissions made before this Court when the said order was passed, submitted that the contentions raised on behalf of the defendants in their reply affidavits and the oral statements made on their behalf, did not demonstrate any ground for vacating the ad-interim order under first the proviso to Order XXXIX Rule 4 of the CPC. It was further submitted that the plaintiff has specifically pleaded breach of confidentiality on the part of defendant Nos.2 and 3, as they are ex-employees of the plaintiff. As such, pleadings are for a quia timet action wherein the plaintiff apprehends misuse of its confidential information by the defendants. It is submitted that in the context of such action initiated by the plaintiff, it is not expected that each and every detail of the confidential information is placed before the Court, because the confidentiality of the same would then be diluted.
3. The learned counsel for the plaintiff relied upon the pleadings in the plaint, application for interim reliefs and rejoinder affidavit to contend that the ex-parte ad-interim order deserved to be confirmed. It was submitted that the execution of the ex-parte ad-interim order has resulted in material now being available to the Court to verify as to the extent of breach of confidentiality on the part of the defendants, particularly defendant Nos.2 and 3.
4. The learned counsel for the plaintiff refuted the contentions raised in the reply affidavit filed on behalf of the defendants. On the specific stand taken by the defendants that the details of connection flanges were already in public domain in the form of a patent granted in the United States of America with regard to water filtration technology, which had already expired, the learned counsel for the plaintiff submitted that the details stated in the rejoinder affidavit would clearly indicate the striking differences in the drawing pertaining to the aforesaid patent and the original drawing in which the plaintiff is claiming copyright, which is at page 72 alongwith the plaint. On the aspect of applicability of Section 52(1)(w) of the Copyrights Act, 1957 , the learned counsel for the plaintiff submitted that the aforesaid ground raised on behalf of the defendants was completely misplaced because in the present case, the plaintiff is specifically claiming copyright in the original drawing and therefore, the said provision pertaining to the making of three dimensional object is wholly inapplicable. It was further submitted that the defendants are not justified in alleging that to stifle competition or to harass the defendants, the allegations pertaining to forgery and of fabricating documents have been made. It is also denied on behalf of the plaintiff that defendant Nos.2 and 3 can claim right to use acquired knowledge, expertise and also skill gained over a period of time when their actions are in clear breach of confidentiality, as both the said defendants were ex-employees of the plaintiff and now they are indulging in using such knowledge gained in confidence, in order to cause loss to the plaintiff.
5. The learned counsel for the plaintiff submitted that consid