Gujarat High Court
Sonani Industries Pvt Ltd vs Prime Diamond Tech on 8 April, 2024
Author: Biren Vaishnav
Bench: Biren Vaishnav
NEUTRAL CITATION
C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/APPEAL FROM ORDER NO. 134 of 2023
With
CIVIL APPLICATION (FOR DIRECTION) NO. 2 of 2023
In R/APPEAL FROM ORDER NO. 134 of 2023
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE BIREN VAISHNAV
and
HONOURABLE MR. JUSTICE DEVAN M. DESAI
================================================================
1 Whether Reporters of Local Papers may be allowed No
to see the judgment ?
2 To be referred to the Reporter or not ? No
3 Whether their Lordships wish to see the fair copy No
of the judgment ?
4 Whether this case involves a substantial question No
of law as to the interpretation of the Constitution
of India or any order made thereunder ?
================================================================
SONANI INDUSTRIES PVT LTD
Versus
PRIME DIAMOND TECH & ORS.
================================================================
Appearance:
MR. S.N.SOPARKAR, SENIOR COUNSEL WITH MR. TARUN KHURANA,
COUNSEL WITH MR. RAJAT SABU, ADVOCATE WITH JWALIT B
SONEJI(7895) for the Appellant(s) No. 1
MR ARJUN M JOSHI(11247) for the Respondent(s) No. 6,7,8
MR. JAY SAVLA, SENIOR COUNSEL WITH MR. ROBIN CHACKO,
ADVOCATE WITH MR.BHASH H MANKAD(6258) for the Respondent(s) No.
1,2,3,4,5
================================================================
CORAM:HONOURABLE MR. JUSTICE BIREN VAISHNAV
and
HONOURABLE MR. JUSTICE DEVAN M. DESAI
Page 1 of 139
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NEUTRAL CITATION
C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024
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Date : 08/04/2024
CAV JUDGMENT
(PER : HONOURABLE MR. JUSTICE DEVAN M. DESAI)
1. Heard learned Senior Counsel Mr. S.N.Soparkar with learned advocate Mr. Tarun Khurana, learned advocate Mr. Rajat Sabu and learned advocate Jwalit B. Soneji for the appellant and Mr. Jay Savla, Senior Counsel with learned advocate Mr. Robin Chacko and the learned advocate Mr. Bhash H. Mankad for respondent Nos.1 to 5.
2. With the consent and request of the learned Senior advocates for the respective parties, the present Appeal from Order is taken up for final hearing.
3. Parties are referred as per their original status of suit.
4. The brief facts of the case are summarized as under;
4.1. M/s Sonani Industries Pvt. Ltd., formerly known as Tenth Diamond Planet Pvt. Ltd., was established in 2006. The appellant initially dealt with CVD-grown diamonds and High Page 2 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined Pressure High Temperature for changing the colour of diamonds. The appellant engaged in extensive research and collaboration with foreign entities and institutions like V.N. Bakul Institute for Superhard Material of National Academy of Sciences of Ukraine (ISM, NANU) Over time, key individuals, Mr Sanjay Jayantibhai Patel, Mr Pareshbhai Kakadiya and Mr Harshadbhai Navadiya, joined the company and gained access to its trade secrets, copyrights, proprietary details, technical know-how and other information.
4.2. However, tensions arose when former employees, including Respondent No. 1, abruptly left and formed a firm named Prime Diamond Tech, allegedly taking with them trade secrets and proprietary knowledge. Therefore, The appellant filed an FIR against Respondent No. 1 and other ex-employees/agents in December 2020 before DCB police Station, Surat City. Respondent No. 1 along with Pareshbhai Prabhubhai Kakadiya, Mr. Harshadbhai Savjibhai Navadiya applied for registration of "A High Pressure High Temperature Page 3 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined Device" vide Diary No. 20669/2020-CO/L before the Copyright Office on 16.12.2020 and the appellant has filed a detailed objection to the same. The respondent No.1, despite knowing that an FIR has been registered against him, applied for Registration of "A Novel Thermobaric Apparatus" vide Diary No. 10662/2021-CO/L & "Novel Thermobaric Cell with Novel Heating Mechanism for Thermobaric Treatment of Diamond"
vide Diary No. 10664/2021-CO/L to which the Petitioner has filed a detailed objection before the learned Copyright Office.
4.3. In response to the alleged infringement, the appellant filed a commercial suit (TMCS No 38 of 2021) seeking injunctions, damages, and other remedies under the Copyrights Act, 1957.
The appellant also filed application for injunctions and Local Commission of the premises of respondents and incriminating evidence was discovered during a local commission at the premises of Respondent No. 1, supporting claims of copyright infringement. Further, the trial Court eventually pronounced an Page 4 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined order on Exh.5 dated 22.02.2023, it was deemed inadequate by the appellant, as it allowed the respondents to continue their business activities, disregarding evidence of infringement and ongoing damages.
4.4. Being Aggrieved by the impugned order, the appellant filed an appeal before this Court challenging the trial Court's order on Ex.5 and citing grounds of ongoing copyright infringement by the respondents.
4.5. The appellant has sough for the following prayers in the Exhibit-5 Application which are reproduced as under;
"a) Pass an interim injunction restraining the Defendants, their agents, servants, their employees, directors, or any other person claiming through or under them from in any manner, directly or indirectly infringing the Applicant's Copyright in its drawings or from making copies thereof or using the same for their HPHT machines and/or in any manner whatsoever whether in three dimensional form and /or two dimension form or from storing the same in any medium, making manufacturing, reproducing the same or issuing the copies of the same in any manner to the public so as to infringe the Applicant's copyright in its drawings and confidential information with respect to its HPHT machines/technology.
b) Pass an interim injunction be passed restraining the Defendants, their agents, servants, their employees, directors, or any other person claiming through or under them from doing the following Page 5 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined acts that is to say in any manner, directly, or indirectly, imparting, disclosing the same, copying, storing on any medium and/or using it for manufacturing the HPHT machines and/ or any other product/process, relating to the (Applicant's confidential information pertaining to their HPHT machine.
c) Pass an injunction be passed in favour of the Applicant against the Defendants, their affiliates, subsidiaries, related parties/officers, directors, representatives, agents, distributors, assigns, nominees, and customers restraining them from directly ог indirectly, jointly or severally, manufacturing, having manufactured, procuring, selling, offering for sale any machine/device/components or rendering service that infringes the Copyright as well as any future machine/device that incorporates Registration Nos.
a. RoC No. SW-13841/2020, b. RoC No. L-97635/2020, c. RoC No. A-137414/202; and d. Pending application no. 11881/2020 - CO / A so as to result in the infringement of the said copyright.
d) Pass an interim injunction be passed in favour of the Applicant against the Defendants, their affiliates, subsidiaries, related parties/officers, directors, representatives, agents, distributors, assigns, nominees, and customers restraining them from directly or indirectly, jointly ог severaly, manufacturing, having manufactured, procuring, selling, offering for sale any machine/device or service that is based on or utilizes the Applicant's technical know-how, confidential information and industrial drawings inter alia.
e) For ex-parte ad-interim and interim reliefs in terms of aforesaid prayers; And
f) For such further and other reliefs as this Hon'ble Court may deem fit and proper in the facts and circumstances of the case."
SUBMISSION ON BEHALF OF THE APPELLANT:-
5. Learned Senior Counsel Mr. S.N. Soparkar for the appellant has submitted that the plaintiff-present appellant Page 6 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined (earlier known as Tenth Diamond Planet Pvt. Ltd.) is a Company established in the year 2006. The plaintiff is a supplier of CVD-grown diamonds. The plaintiff also manufactures and supplies microwave reactors for CVD diamond production. The plaintiff offers diamonds and jewellery, which are all lab-grown and is a global distributor of all types of fancy-coloured diamonds and jewellery. The plaintiff has also developed devices for High Pressure High Temperature treatment ("HPHT treatment") of diamonds and its services to its clients related to improving the colour profile of the diamonds by way of HPHT treatment. Defendant No. 1 is a partnership firm incorporated by Defendant No. 2, Defendant 3 and Defendant No. 4 as Partners in the firm. Defendant No. 1 engaged in HPHT diamond processing technology. Defendant no. 2 is a former "Production Manager" of the Plaintiff who had joined the Plaintiff's company in the year 2011. He joined as a Researcher and was also looking after day-to-day operations and production at the Plaintiff's premises. Plaintiff's long relationship/association with Page 7 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined Defendants No. 2 to 3 also turned into amplitude trust. They resigned from the Plaintiff's Company in the year 2017. During their course of engagement with Plaintiff, Defendants No. 2 to 4 were aware of Plaintiff's know-how, technical details and proprietary rights and information. Defendant No. 5 was a former employee of Plaintiff's sister concern Diamond Elements Pvt. Ltd.(having common promoters) who had joined the said company in the year 2016. He resigned from the said company on 01/08/2018. Defendant No. 5 was also working in the operations of Plaintiff and was fully aware of all the technical know-how, confidential information, Trade Secrets and proprietary details of Plaintiff's company. Defendant No. 6 is a Limited Liability Partnership registered in Surat, Gujarat.
Defendant No. 7 and Defendant No. 8 are partners of Defendant No. 6 firm.
5.1. During the tenure of their job with Plaintiff, Defendant No. 2 and 3 were taught/trained with the entire technological process Page 8 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined and realization of the process and were provided with all the trade secret information regarding the HPHT technology by Plaintiff through the Ukraine scientists with an obligation that the said information shall not be disclosed and to be used solely for the benefit of the Plaintiff. The HPHT technology of the Plaintiff is used to change the colour of the Diamond and comprises of the major 4 components: (i) Belt Press Machine
(ii) Block Matrix Assembly that further comprises of Internal Ring, Intermediate Ring, Outer Ring, Block Matrix, Toroid Ring. (iii). Diamond Container (iv) Software/HMI to run the machine. Out of these components only component 1 i.e. Belt Press Machine is freely available in the market by various vendors; whereas the other components are all developed in-
house and/or in association with the industry experts from Ukraine and Israel; and further modified/improved or independently developed by the Plaintiff. Plaintiff has the exclusive right to prevent third parties who/which do not have its consent, from using, offering for sale, selling and/or Page 9 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined importing for use or sale, product manufactured using, or product and/or process which incorporate Plaintiff's proprietary know-how and Copyright, in India where Plaintiff's copyright in literary/artistic work has been duly registered and recognized.
Plaintiff in 2020 was aware that Defendant no. 2 to 4 started their venture by the name of Prime Diamond Tech (Defendant No. 1 Firm) and started rendering similar services as that of Plaintiff. Defendants No. 2 to 4 also hired Defendant No. 5 in their partnership firm as Assistant Manager. Plaintiff, therefore, got that the Defendants had left their jobs and in connivance of each other have misappropriated the proprietary information, technical know-how, and copyright of the Plaintiff and therefore, has filed a Criminal Complaint against the Defendants (FIR No. 1121001520011) dated 21.12.2020 was accordingly registered before DCB Police Station, Surat City citing gross breach of IPC sections 406, 409, 420, 120B of the Indian Penal Code, 1860, Sections 43B and 66 under the IT Act, 2000, and Section 63 of the Copyright Act, 1957. The authorized signatory Page 10 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined along with Police Authorities visited the premises of Defendant No. 1 at the address to note that identical machines incorporating similar technology as that of Plaintiff's have been deployed at their premises. Defendant nos. 2 to 5 have breached their implied and/or express obligations to maintain the confidentiality of Plaintiff's confidential information about the HPHT apparatus. The Defendants appear to have made copies of the Plaintiff's confidential information including the latter's industrial drawings and software (source code). Later, Plaintiff was aware that Defendant No. 2 to 4 applied vide Diary No. 20669/CO-2020/L grossly misrepresenting that the 'work' filed as part of the instant impugned copyright application had been developed by them, when they were even aware of the criminal complaint that was filed by the Plaintiff was pending, went on to obtain copyright registrations vide RoC No. L-99664/2021, RoC No. L-99493/2021 and RoC No. L- 999700/2021. The Plaintiff then issued a legal notice dated 23.03.2021 against the Defendants granting them an opportunity to withdraw their Page 11 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined registration and to further refrain from continuing with such infringing activities. However, the Defendants replied to the same on date 08.04.2021 citing haphazard reasons not in consonance with law to justify their illegal claims. Moreover, the Plaintiff has been in business with one Eli Dori Diamonds Ltd., an Israel based company, since the year 2016 to whom the Plaintiff supplies TC Matrix regularly. In the year 2021, Plaintiff was found out that Prime Diamond Tech was also involved in activities by way of infringing on the rights of the Plaintiff. On 13th April 2021, the Plaintiff through its Director communicated with Alexander Lavetman of Eli Dori Diamonds Ltd., about the transactions which took place between Prime Diamond Tech and Eli Dori Diamonds Ltd and were able to get hold of invoices for the exported materials from Prime Diamond Tech and photographs of the same which are exactly an imitation of the Plaintiff's work. Besides these, Plaintiff has also become aware that the Defendants are sending/exporting such components using Plaintiff's know-how to various parties and Page 12 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined earning illegitimately. Defendant has not taken any license or permission from Plaintiff and has made or otherwise procured substantial and material reproduction of Plaintiff's machines/devices. Further, Defendant No. 2 had earlier approached Defendant No. 6 (The Firm) making certain representations as to holding of technical information of Plaintiff and agreed to commission and commission the HPHT machines based on the said information of the Plaintiff which is a subject matter of the suit. Mr. Vipul Dhameliya (Ex-Director of defendant no.6 firm) mentioned in the affidavit that Defendant No. 2 has personally approached Mr. Nitinkumar Chandrakant Balar and made a deal to share the technical know-
how, and copyright of the Plaintiff with him. Moreover, Defendant No. 6 and its partners in Comm TMCS No. 1/2023 pending before Surat District Court have admitted that they are in a business relationship with Defendant Nos. 1-4 which shows the collusion between the said parties by stealing and making illegal gains from the Intellectual Property Rights of the Page 13 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined Plaintiff. That Defendant Nos.1 to 5 in connivance with Defendant Nos. 6-8 have been infringing upon the technical know-how and copyright of the Plaintiff and causing severe monetary losses.
5.2. Aggrieved by the Respondent's malicious acts of infringing the copyrights coupled with a breach of obligations of confidentiality and breach of trust, the plaintiff preferred the Commercial Suit TMCS No 38 of 2021 Copyright Suit for Permanent and Mandatory Injunction, Rendition of Accounts, Damages, and Delivery up and further directions under the provisions of the Copyrights Act, 1957 and the plaintiff also filed an Application under Order 39 Rule 1 & 2 of CPC, 1908.
5.3. It is submitted that it is an admitted stand of the Defendants-Respondents that they have replicated the entire Recipe of the HPHT apparatus of the Appellant without any application of mind.
Page 14 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined 5.4 It is further submitted that the learned trial Court has grossly erred in passing the impugned order below Exh. 5 and that it requires the interference of this Hon'ble Court since the said impugned order is arbitrary, capricious, and perverse in nature.
5.6. Respondents have not been able to demonstrate where the control panel is available in the public domain 5.7. Learned Senior advocate Mr. Soparkar further that merely because a few components such as toroid ring and die matrix, exist independently and individually in some research papers or other literature or on website under the keyword'HPHT', does not mean that the complete HPHT apparatus as a whole i.e. 5.8. The learned trial Court failed to appreciate that the Respondents use identical vendors as that of the Appellant, and such vendors were finalized after rigorous trial and errors with multiple vendors spending huge amount of money and efforts Page 15 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined and the Respondent has simply spring boarding upon the humongous efforts of the Appellants which is not allowed.
Respondents used the Appellant's drawings for manufacture of Tungsten Die Matrix form Electronica referring to the exact same Drawing Number 62/43417.
5.9. Defendants-Respondents relied upon YouTube video titled "High Pressure High Temperature (HPHT) Sintering", however, the said video demonstrates the use of HPHT for SINTERING which is the process of compacting and forming a solid mass of material by heat or pressure without melting it to the point of liquefaction , and has nothing to do with Diamond Coloring.
5.10. Learned trial Court failed to consider the Local Commission Report and the incriminating evidence found at the premises of the Respondents. Learned trial Court did not even appreciate the Mapping Chart.
Page 16 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined 5.11. The respondents had completely replicated the ecosystem of Appellant's trade secret technology. Hundreds of files were found in the system of the Respondents when searched with the key word "Sonani" which has been submitted in pen drive by the Local Commissioner before the learned trial Court. Respondents have not produced their drawings to claim differences or an independent effort on their part and thus, it is clear case of Spring boarding that warrants injunction.
5.12. Appellants are claiming ownership of individual elements, but in combination of 5 elements (outer/intermediary/inner rings, TC die matrix, toroid ring, diamond container and control panel) as the appellant's proprietary recipe, in relation to dimension, the components used, methodology of assembling the components together, that it acquires specialty. That mere manufacture or using the technology for diamond coloring does not give any right, but the manner in which the Appellant is using gives the Appellant an Page 17 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined exclusive right over the same.
5.13. It is submitted that there is no delay or latches on part of the Appellant/Plaintiff in bringing the action against the Respondents. Moreover, the act of using the Trade Secret and proprietary information of the Appellant by the Respondent is an ongoing activity and the Respondents are violating the rights of the Appellants on daily basis.
5.14. An ex-employee needs to be injuncted from using the information in his possession and acting in a manner which can be detrimental to the interest of the plaintiff. Respondents were given access to information of the Appellant company with respect to the research and development of HPHT technology pertaining to the colouring of Diamonds. Respondent No.2 was working in the R&D Department and was handling communication with various vendors with respect to the components/raw materials/grading of materials to be procured for eminent results and thus, the Respondents were duty bound Page 18 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined to not to use the Trade Secret of the Appellant company during the course of their employment and even thereafter, as the obligation to keep confidential the Trade Secret and use the same only for the benefit of the Appellant company survives termination of their employment without any need of explicit agreement to that effect.
5.15. The Suit is not filed for enforcing any non-compete clause but filed for claiming injunction against the Plaintiff's trade secret/confidential information and copyright registrations.
5.16. Know-How transfer agreement dated 02.08.2010 that the Appellant had with V.N. Bakul Institute for Superhard Materials of National Academy of Sciences of Ukraine (ISM NANU) - Kiev, wherein technical know-how was transferred exclusively for the Indian Market by the Bakul Institute to the Appellant for a consideration of USD 60,000, owing to which the Appellant became the exclusive owner of the confidential information including technical specifications, designs, Page 19 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined drawings, and other technical information pertaining to the Block Matrix Assembly that further comprises of Internal/Inner Ring, Intermediate Ring, Outer Ring, Block Matrix, and Toroid Ring, along with the Diamond Container, and the software/HMI to run the machine. The said technology know how purchased from Bakul was further crystallized upon by the Appellant to make it commercially viable and that the Appellant is the sole owner of the same. It is important to mention that the subject matter of the instant suit is not mere technology purchased from Bakul, the technology of the Plaintiff alone that was crystallized by numerous trial and errors.
5.17. There is a clear communication from the Parent Institute of Bakul Agreement through Mr. Andrei Novikov dated 26.05.2021 which confirms that the technical know-how was actually sold to the Appellant vide the said agreement and thus, the Respondents has no locus to interpret the said agreement in any other manner whatsoever.
Page 20 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined 5.18. Thus, Clause 11.4 when read with Clause 3, 4 and 6 of the said agreement is very clear that the term of action used in clause 11.4 corresponds to time period to complete the actions by the Bakul Institute within such time period which is for rendering the technical help in manufacture development and not corresponds to the time limit applicable to the transfer of Know-how which is in itself is sell-purchase agreement and thus, the said technology/know-how was purchased by the Appellant without any restriction of time.
5.19. Defendants have misused the Drawing of the Plaintiff by placing order to Electronica Tungsten citing Drawing Number 62/43417.
5.20. Learned advocate for the appellant has placed reliance upon the following decisions;
(1) John Richard Brady and others ... Appellants; versus Chemical Process Equipments P. Ltd. and another ... Respondents reported in 1987 SCC OnLine Del 236, wherein the the Bench has observed in para Nos.3, 4, 5, 7, 12, 13, 21, Page 21 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined 23, 24, 33, 37 and 39, which are as under:-
"3. According to the plaintiffs, John Richard Brady (hereinafter referred as Brady) is an American National. He is a Mechanical Engineer and is the President and Managing Director of Fometa overseas S.A. Castellana, Madrid, Spain. He conceived the idea of growing fresh given grass used as basis found for livestock in a compact unit capable of producing grass throughout the year irrespective of external climatic conditions. He developed the original Fodder Production Unit in the year 1972. It was tested under extreme climatic conditions in various Countries in the World. Steps were taken, from time to time, to improve the unit by optimising its size and achieving greater productivity. After extensive experimentation, an improved Fodder Production Unit (hereinafter referred to as the FPU) was invented by Brady. He applied for grant of patent in India in relation to the FPU. His patent application is pending. Technical details of the FPU are contained in catalogues which illustrate it by technical Drawings and other specifications. The Drawings are the original artistic work. Brady is the owner of Copyright in the Drawings and is entitled to exclusive right to publish and reproduce the Drawings whether two dimensionally or three dimensionally.
4. It is alleged that Brady collaborated and set up plaintiff No. 2, a joint venture Company Fometa (India) Machine Private Ltd. Plaintiff No.3 Sanjeevani Fodder Production Private Ltd. was formed for purpose of establishing and operating the first fodder production feed station as a prototype model commercial facility in India. It was decided by the plaintiffs that a phased programme would be adopted to manufacture the FPU in India for both domestic and export sales. To indigenise manufacture of the FPU, the Plaintiffs sought quotations from Defendant No. 1 for the supply of thermal panels manufactured by it. The panels required were of highly specialised type. To enable the Defendants to send their quotations for supply of the said components and to precisely match those components with the FPU, all the technical material, detailed know how, Drawings and specifications concerning the FPU were passed on to Defendant No. 1 under express condition that it must maintain strict confidentiality regarding the knowhow. Discussions between the parties culminated in an agreement whereby Defendant No. 1 agreed to supply the specialised thermal panels required by the Plaintiffs. Terms and conditions of the agreement were set out in a letter dated 31-8-84 written by Page 22 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined Defendant No. 1 to Plaintiff No. 3. Later, Plaintiffs discovered the inability of the Defendants to supply the required thermal panels, so, they did not place any order on the Defendants. It is alleged that Defendant No. 2, who is Managing Director of Defendant No. 1, along with several other representatives of the Defendants, with a view to acquire the working knowhow and technology of the FPU, made a number of visits to Goa where the Plaintiffs' FPU was in operation. Some of these visits were without the knowledge of the plaintiffs who were later informed about them by their employees. The plaintiffs learnt that in the month of November, 1985 the Defendants were falsely representing that the innovation concerning the FPU originated from them. The plaintiffs also acquired a pamphlet of a Fodder Production Unit (FPU) manufactured by the Defendants, or on their behalf, without the consent, permission and authorisation from the plaintiffs. The Defendants described the Machine produced by them as 'pushti'.
5. It is alleged that the Machine produced by the Defendants is entirely based upon disclosures made by plaintiffs to the Defendants. They committed breach of confidence reposed in them. They wrongfully converted and misappropriated the knowhow, information, drawings, designs, and specifications disclosed to them under strict confidentiality and have also infringed the Copyright of Brady by making the Machine in three dimensional form from the two-dimensional artistic work of the plaintiffs in Drawings of the FPU.
7. It is alleged by the plaintiffs that the Machine produced by the Defendants is an inferior version of the plaintiffs' FPU. It is causing and is further likely to cause immense damage to the plaintiffs' business and reputation. The plaintiffs claim jurisdiction of this court to entertain and try the suit under S. 62(2) of the Copyright Act, 1957 on the plea that they have been carrying on their business for profit and gain at Delhi and that the Defendants have also been circulating pamphlets of the infringing Machine and offering it for sale at Delhi.
12. In Replication, the plaintiffs explained the circumstances in which persons named by the Defendants were dealing in similar machines in the international market. It was pointed out that over a period of 14 years various improvements were made in the basic Unit, a considerable number of patents have been granted in a large number of countries and some patent applications are Page 23 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined pending but not a single application has been rejected in any country in the world. Since Brady had received international recognition and being the Inventor of the "Commercial Grass Machine" concept, a large number of Companies were interested in obtaining licences from Companies of his Group. One such Company "HYDRODAN" (Corby) Ltd., which took a licence in November, 1981 market a Fodder Machine under the brand name "LAND SAVER". As regards DHANYA, it was explained that Mr. Roy John was employed by Brady's Company Fometa Overseas S.A. He obtained the entire technology under conditions of strict confidentiality, but in violation of the confidentiality clause, has introduced the Machine in 1986, and that plaintiffs have already initiated legal steps to ensure the discontinuance of Mr. Roy John's unlawful activities. Likewise, as regards SOMERSET ZERO GRASS MACHINE, U.K., Plaintiffs have explained that the said Company has been started by an ex. Employee of Brady's Company TOMBRA RODAN S.A. Thus, it was controverted by the plaintiffs that there are a large number of firms that had technology prior to Brady. It was asserted that the Defendants were earlier manufacturing only Thermal Panels but have now started copying the FPU in violation of the plaintiffs' rights.
13. The Drawings in which the plaintiffs, claim copyright are contained in their Technical Bulletin. Those Drawings were meant to serve as the blue print for the construction of a three dimensional article of functional or utilitarian value namely, the FPU. Such Drawings are capable of being infringed by copying of a three dimensional article. British Leyland Motor Corporation v. Armstrong Patents Co., 1986 FSR 221. The Machine produced by the Defendants is depicted by their pamphlet.
21. The plaintiffs' arrangement with the Defendants for supply of Thermal panels and angles etc. for FPU failed. We are not concerned with the question why it failed. While the Defendants were manufacturing only Thermal panels on the basis of knowhow, equipment, raw material, training etc. from M/s. Bayers of West Germany since 1983, suddenly, in 1985, the plaintiffs discovered that the Defendants had come out with the Machine in question. According to them, the Defendants abused the technical information, know-how, specifications and Drawings etc. of their FPU which were entrusted to the Defendants under express condition of strict confidentiality and they also had access to their FPU at Goa, which they used as a 'spring-board' to jump into the business field to the detriment of the plaintiffs. Plaintiffs have Page 24 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined strongly relied upon the undisputable access that the defendants had to their Drawings etc. and also to the FPU itself (which is disputed by the Defendants) and the rapidity with which the Defendants emerged in the market as a manufacturer of a Machine which is substantially similar to that of the plaintiffs' FPU. The Defendants tried to escape from the confidentiality clause by pleading that the contract was neither concluded nor was it acted upon between the parties.
23. In Saltman's case a question arose whether or not there was a viable contract and if not whether breach of confidence could in law have occurred. It was found by the Court of Chancery that there was in fact no binding contract and thus no breach of confidence. The Court of Appeal held to the contrary. The observations of Lord Greene M.R. made in that case apply with full force, to the plea raised by the Defendants in the present case. It was observed at page 216 :--
"The suggestion that no contract was made is used for some purpose which, again, I am afraid that I do not understand. It is suggested that the absence of a contract at that time in some way, at some time, modified or discharged the obligation of the Defendants to treat the drawings as confidential matter. It seems to me that it would not matter the least bit whether there was a contract or whether there was not a contract. I find as a fact, without hesitation, that there was a contract, but, contract or no contract, the Defendants got those drawings into their hands knowing, or knowing shortly afterwards, that they belonged to Saltmans, that they were obviously confidential matter, and they knew that they had got them into their hands for a strictly limited purpose. How on that basis they could say that the fact that there was no contract released them from any obligation of confidence I do not know, nor can I see how the fact, if it had been the fact, that there was no contract in June, 1945 could in any way have affected their position after the 22nd November. I have already said what the position was, in my opinion and, indeed, in the opinion of the Defendants' own witnesses at that date. I have already said that nothing happened at or after that date which could justify the Defendants in thinking that they were relieved from their obligation of confidence."
24. Patrick Hearn, in his Book has dealt with this subject under the heading Secrecy.
Page 25 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined He also dealt with the principles laid down in Saltman's case (1948-65 RPC 203): It is pertinent to extract the portion from his book from page 112 to 115. It reads :--
"Secrecy The maintenance of secrecy which plays such an important part in securing to the owner of an invention the uninterrupted proprietorship of marketable know-how, which thus remains at least a form of property, is enforceable at law. That statement may now be examined in the light of established rules making up the law of trade secrets. These rules may, according to the circumstances in any given case, either rest on the principles of equity, that is to say the application by the Court of the need for conscientiousness in the course of conduct, or by the common-law action for breach of confidence which is in effect a breach of contract.
In considering these alternatives there are circumstances out of which proceedings may arise :
(a) where an employee comes into possession of secret and confidential information in the normal course of his work, and either carelessly or deliberately passes that information to an unauthorised person;
(b) where an unauthorised person (such as a new employer) incites such an employee to provide him with such information as has been mentioned above; and
(c) where, under a licence for the use of know-how, a licensee is in breach of a condition, either expressed in an agreement or implied from conduct, to maintain secrecy in respect of such know-how and fails to do so.
All these hypotheses fall within the general rules of equity and breach of confidence propounded in the leading Saltman case, Saltman Engineering Co. v. Cambell Engineering Co. (1948) RPC
203). The facts, as far as they matter here, were that Saltman Engineering owned confidential drawings concerning the design and construction of certain specialist tools. Through an agent they purported to contract with Campbell Engineering for the manufacture of some of these tools, and to that end they handed over the drawings. Cambell Engineering used these drawings for Page 26 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined their own purposes. There was contention as to whether or not there had been a viable contract, and if not whether a breach of confidence could in law have occurred. In the Court of Chancery the Judge held that there was in fact no binding contract and thus no breach of confidence.
The Court of Appeal found that :
(a) there was such a contract as had been claimed, and that the documents provided by Saltman Engineering were confidential and known to be such by Campbell Engineering;
(b) apart from contract, there was an obligation of confidence resting on Campbell Engineering by the delivery of the drawings which they knew to be the property of Saltman Engineering, and which had been provided to them for a limited purpose, that is to say the manufacture of certain specific tools;
(c) a document may be confidential if it is the result of work done by its maker, even if the matter contained therein is public knowledge;
(d) this being so, Campbell Engineering had broken confidence by using documents for purposes other than those for which they had been delivered, and there was no agreement releasing them from the obligation of confidence;
and
(e) Saltman Engineering was entitled to have the documents returned to them and to receive damages for the breach. These bald findings are more specifically explained in the judgement of Lord Greene, then Master of the Rolls, which contains four important statements :
1. If two parties make a contract under which one of them obtains for the purpose of the contract, or in connection with it, some confidential matter then, even though the contract is silent on the matter of confidence, the law will imply an obligation to treat such confidential matter in a confidential way as one of the implied terms of the contract, but the obligation to respect confidence is not limited to cases where the parties are in confidential relationship.Page 27 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024
NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined
2. If a defendant is proved to have used confidential information, obtained directly or indirectly, from a plaintiff, without the consent, express or implied, of the plaintiff, he will be guilty of an infringement of the plaintiffs rights.
3. It seems to me that it would not matter the least bit whether there was a contract; but contract or no contract, the defendants got those drawings into their hands knowing, or knowing shortly afterwards, that they belonged to Saltmans, that they were obviously confidential matter, and they knew that they had got them into their hands for a strictly limited purpose.
4. Information to be confidential must I apprehend, apart from contract, have the necessary quality of confidence about it, namely, it must not be something which is public property and public knowledge.
It is important to note that the word 'information' used in the last statement of the learned Master of the Rolls refers to know-how imparted by word of mouth, by letter or by demonstration. It does not refer to drawings or other such technical documents which are by their nature confidential whether or not a matter of public knowledge. This is on the established principle that the use of such drawings amounts to the unauthorised use of the labour of the person who has prepared them, and thus provides a 'spring-board' by which an infringer may obtain an unfair advantage over competitors."
33. Infringement of copyright has to be tested on visual appearance of the Drawing and the object in question. The purpose, functional utility, efficacy of different parts and components of the object or the material of which they may be made are irrelevant for the purpose of copyright.
37. In these circumstances, no opinion can be finally expressed at this stage on the question of infringement of copyright claimed by the plaintiffs in drawings of Brady by the production of the Machine in question by the Defendants, but the plaintiffs have made out a strong prima facie case of infringement of their copyright, and of strict confidentiality under which specifications, drawings and other technical information about the FPU were supplied to the Defendants, which the Defendants will have to meet at the trial of the suit.
39. Therefore, the Defendants are hereby restrained from manufacturing, selling, offering for sale, advertising, directly or Page 28 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined indirectly dealing in Machines that are substantial imitation and reproduction of the Drawings of the plaintiffs' FPU or from using in any other manner whatsoever the know-how, specifications, Drawings and other technical information about the FPU disclosed to them by the plaintiffs till the final disposal of the suit."
(2) Forbes Marshall Pvt. Ltd. Versus Steam Equipments Private Ltd. reported in 2019 SCC OnLine Bom 3718, wherein the Bench has observed in para Nos.5,7,12,13,21,23,24;
5. The present Suit has been filed by the Plaintiff in respect of its proprietary rights in the confidential information that it claims to own in respect of its SOFT 31 Float Trap and its TOFT float trap. The Plaintiff further seeks to enforce copyright in TOFT and SOFT 31 drawings that it claims are artistic works under the Copyright Act, 1957.
7. The Plaintiff contends that SOFT 31 is a 'Float Trap', an industrial device used in plants to discharge accrued steam condensate. Mr. Kadam states that whilst the buoyancy principle is common and underlies each float trap, manufacturers seek to devise unique internal designs and arrangements of critical components of base, seat, float and float arm assembly, cover, cover gasket and SLR seat etc. to maximize condensate discharge performance.
12. Mr. Kadam argues that the value of the Plaintif's SOFT 31 and TOFT confidential information can be assessed from the ordinary development timeline annexed at Exhibit N to the Plaint. According to this timeline, independent research and development would take approximately 66 weeks and reverse engineering would in turn take 43 weeks. On the other hand and according to the Plaintiff, access to the SOFT 31 and TOFT confidential information would enable a person to copy and manufacture a float trap within a mere 17 weeks.
13. Mr. Kadam submits that Defendant Nos. 3 to 7 were former employees who worked in the Plaintif's manufacturing and customer support divisions. The Plaintiff shared these trade secrets and copyrighted works with Defendant Nos. 3 to 7 in the course of their employment and for exclusively enabling them to discharge their duties Page 29 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined as the former's employees. By dint of their terms of employment and the Plaintif's HR Policy Manual, these Defendants were put to notice that the SOFT 31 and TOFT confidential information and copyrighted drawings were materials in which the Plaintiff enjoyed proprietary rights. They were entrusted with physical access and computer files, strictly for efecting the Plaintif's works. Mr. Kadam contends that Defendant Nos.3 to 7 by dint of their roles, were also under an implied obligation to utilize this information and copyrighted works exclusively and solely for the Plaintif's benefit and purposes. Since they were imparted with these materials in confidence, Defendant Nos. 3 to 7 were under an ethical duty to maintain confidentiality.
21. Mr. Kadam draws my attention to the timing of Defendant Nos. 3 to 6's resignations and Defendant No. 2 's incorporation. He argues that Defendant Nos. 3 to 6 were relieved from service in September 2017. Immediately thereafter, Defendant No. 2 was incorporated in October 2017. By January 2018, he states that the Defendants were confident of bringing their product to market by February 2018. He submits that under the Development timeline annexed to the Plaint, independent research and development activities for devising a float trap ordinarily takes 15 months. In these premises, he argues that it is inconceivable that Defendant Nos. 1 to 7 were able to bring their infringing SLFT 15 product to market within a period of about 3 to 4 months from incorporation and within one third of the time ordinarily spent in independent product development. He argues that such an accomplishment in a short time itself demonstrates that Defendant Nos. 1 to 7 have wrongfully appropriated the Plaintif's SOFT 31 and TOFT confidential information since access to the same would preclude the need to otherwise carry out further independent research. This inference according to him, is further bolstered by the timing of Defendant Nos. 3 to 6's exits from the Plaintif's employment and joining of Defendant No. 2 which in turn further suggests prior collusion to misappropriate the Plaintif's confidential information.
23. I have heard Mr. Kadam for the Plaintiff and I have perused the documents on record. Having considered Mr. Kadam's submissions, the expert's affidavit, the butter paper drawings and the comparative photographs, I prima facie find that the Defendants float trap appears to be based on the Plaintif's confidential information. Prima facie, I find that the industrial drawings of the Plaintiff are 'artistic works' entitled to protection under the Copyright Act. Having perused the butter paper drawings and comparative photographs, I am prima facie of the view that there are striking similarities in the Defendant's parts which appear to be three dimensional depictions based on the Plaintif's Page 30 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined drawings. Prima facie, Defendant Nos. 3 to 7 appear to be former employees of the Plaintiff who agreed to be bound by their confidentiality obligations under their respective relieving letters. At this stage and prima facie, I find it difficult to believe that these employees were in a position to manufacture their own float trap within 4 months of their departure. I further note prima facie, that Defendant nos. 3 to 6 were relieved in September 2017 and thereafter immediately joined Defendant No. 2 (which appears to have been founded in October 2017). Having prima facie found that the SLFT 15 float trap appears to be based on the Plaintif's confidential information, I prima facie find that Defendant No. 2's readiness to launch this float trap in February 2018 was only on account of access to the former's confidential information and drawings. For these reasons, I am satisfied that the Plaintiff has made out a prima facie case for ad-interim reliefs.
24. At this stage, I am also satisfied that the balance of convenience is in the Plaintif's favour. The Plaintiff is seeking to protect confidential information, the utility and value of which only inheres if it is not released in the public domain. Prima facie, I find that Defendant Nos. 1 to 7 are in possession of its confidential information (which includes its drawings). They are thus in a position to make further disclosure to others and possibly denude the information of its confidential value. I am of the prima facie view that the non-grant of ad-interim reliefs at this stage would irreparably prejudice the Plaintiff. For these reasons, I am satisfied that a case for ad-interim reliefs has been made out against the Defendants for breach of confidence and copyright infringement.
(3) Inphase Power Technologies Versus ABB India Limited reported in 2016 SCC OnLine Kar 6931, wherein the Bench has observed in para Nos.8, 9, 10, 11, 21, 24, 27, 28, 29, 30, which are as under;
8. Plaintiff has patented its product, which is numbered as 206766 with the Patent Registry. Plaintiff has made certain developments and improvement in its technology. The said developments are subject matter of pending patent application bearing No.4428/CHE/2011.
9. Plaintiff learnt that 1st Defendant-Company is offering a product called 'STATCOM' described in its brochure as IPC 150-SCOM. It is 'a reactive power compensator' and claims to manage the unbalanced Page 31 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined load compensation for a three phase network. It is based on Voltage Source Converter Technology, which makes use of semi conductor devices to control IGBT (Insulated Gate Bipolar Transistor). The defendants have unauthorisedly incorporated plaintiff's patented invention in their product.
10. Plaintiff's products were developed by a team of employees, which included 2nd and 3rd defendants also. They were paid additional 'Intellectual Property remuneration for their contribution as per Company's policy'. Defendants are now marketing and offering for sale a product by name 'Statcom', which is deceptively similar to plaintiff's trade mark. The name 'Statcom' is visually and phonetically similar to plaintiff's Trade Mark.
11. In sum and substance, plaintiff's specific case is:
• that defendants No.2 to 4 have copied and transferred technical material created by plaintiff such as designs and drawings etc., by electronic mail to their personal emails, which has enabled them to develop a product IPC 150-SCOM; and • that defendants' Trade Mark IPC 150-SCOM is similar to plaintiff's Trade Mark STATCON and PQC STATCON.
21. As per plaint averments, defendants No.2 to 4 were employees under the plaintiff. They tendered their respective resignations and their last dates of working with the plaintiff were 12.8.2014, 8.7.2014 and 5.8.2014, respectively. Defendant No.2 was Assistant Vice President. The nature of duties entrusted to him involved design, manufacturing, sale, marketing strategy including local and global business strategy. The defendant No.3 was working as a Team Manager and defendant No.4 as a Senior Engineer. The relevant particulars with regard to dates of resignation, their designation and the last date of employment are given in the following tabular column extracted from the plaint.Page 32 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024
NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined Defendant Date of Date of Last Designation Nature of No. joining registration working plaintiff day at the intellectual plaintiff property and company plaintiff Confidential Information accessible to the Defendant 1 January 02, May 14, August 12, Assistant Design 1995 2014 2014 Vice and President manufacturing, Sales and Marketing strategy, client details including local and global business strategy 2 January 02, April 9, July 8, Team Design 2007 2014 2014 Manager and manufacturing, Sales and Marketing strategy, client details.
3 December May 7, 2014 August 5, Senior Product
20, 2010 2014 Engineer knowledge,
Sales
and
Marketing
strategy, client
details.
24. The next aspect for consideration would be whether the data/information was transferred. The answer to this question should be in the affirmative because according to the plaintiffs, a product of akin kind is offered by first defendant-Company. Defendants have asserted that their product is different Page 33 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined in many ways. It is settled that unessential features in an infringing article or process are of no account. In the case of Raj Parkash v. Mangat Ram Chowdhry 5 , cited by the Learned Senior Counsel for the respondent, it is held as follows:
"25. The patented article or where there is a process then the process has to be compared with the infringing article or process to find out whether the patent has been infringed. This is the simplest way and indeed the only sure way to find out whether there is piracy. This is what was done in the hair-pin case, above-referred to, and is, indeed, always done. Unessential features in an infringing article or process are of no account. If the infringing goods are made with the same object in view which is attained by the patented article, then a minor variation does not mean that there is no piracy. A person is guilty of infringement if he makes what is in substance the equivalent of the patented article. Some trifling or unessential variation has to be ignored. There is a catena of authority in support of this view. We need not cite all those cases which were brought to out notice at the Bar. Suffice it to quote the words of Lord Denning, M.R. in Beecham Group Limited v. Bristol Laboratories Ltd. 1967 (16) R.P.C. 406 (12) :--
The evidence here shows that in making hetacillin in the United States the defendants use a principal part of the processes which are protected here by the English patents. The importation and sale here is prima facie an infringement.
There is a further point. A person is guilty of infringement if he makes what is in substance the equivalent of the patented article. He cannot get out of it by some trifling or unessential variation............On the evidence as it stands, there is ground for saying that hetacillin is medically equivalent to ampicillin. As soon as it is put into the human body, it does, after an interval, by delayed action, have the same effect as ampicillin. In these circumstances, I think there is a prima facie case for saying there was an infringement. The process is so similar and the product so equivalent that it is in substance the same as ampicillin".
27. In the case of Sirmour Remedies Private Limited v. Kepler Healthcare Private Limited 7 , it is held that an ex-servant would not make an improper use of an information and he could be restrained from doing so. The relevant portion of the said judgment wherein opinions of English Courts have been extracted reads as follows:Page 34 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024
NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined "The plaintiff argues that the second defendant was their Sales Manager in Ahmedabad. He held a very responsible position. He knew their trade secrets and held their confidential information. He was aware of the plaintiff's coinage of the eleven marks. He had misutilised the information for this gain and causing loss to his employers.
The case of Lamb v. Evans, a Court of Appeal decision and reported in 1893 (1) CH 218 cited by Mr. Kapur, learned Senior Counsel was a copyright case.
A trade dictionary of advertisements was arranged under careful composed headings. The Court of Appeal declared that copyright existed in those headings. The next two cases cited by the same learned Counsel Morison v. Moat reported in 9 HARE [241] 492 and Amber Size And Chemical Company, Limited v. Menzel reported in 1913 (2) CH 239 are more important. Morison v. Moat related to a secret process of preparing a medicinal preparation. It appears that the medicinal preparation was the product of a secret compound of a person called Morison. It was held that Morison had a right to the trade secret not being divulged and could restrain anybody from doing so. Similar was the case of Amber Size and Chemical Company, Limited v. Menzel reported in 1913 (2) Ch 239, although this case concerned a secret process of manufacture. The principles laid down in this decision go far enough to say that whenever an information had been communicated to an ex-servant with the understanding expressed or implied that he would not make an improper use of it to the detriment of his master, he could be restrained from doing so. The following passage in the judgment of the said decision is very important:
"In my view, after giving the authorities the best attention I can, the law stand thus:
-- The Court will restrain as ex-servant from publishing or divulging that which has been communicated to him in confidence or under a contract by him, express or implied, not to do so: Morison v. Moat (I), and generally from making an improper use of information obtained in the course of confidential employment: Truck & Sons v. Pries ter (2), and, further, from using to his late master s detriment information and knowledge surreptitiously obtained from him during his, the servant's, employment: Robb V Green. (3)".
In the case of Saltman Engineering Co. Ltd. v. Campbell Engineering Co. Ltd. reported in [1963] 3 All ER 413 (The citation is wrong. It is a much earlier case reported in 65 RPC 203), also cited by Mr. Kapur, Lord Greene sitting in the Court of Appeal said that an information to be confidential must have the necessary "quality of confidence about it". It must have some originality. The Court said "what makes it confidential is the fact that the maker of the document has used his brain and thus produced a result which can only be produced by some body should goes through some process". The Court referred to a formula, a plan, a sketch or something of that kind".
Page 35 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined Lord Greene added:
"If a defendant is proved to have used confidential information, directly or indirectly obtained from a plaintiff, without the consent, express or implied of the plaintiff he will be guilty of an infringement of the plaintiff's rights."
The springboard concept was of Roskill J in Cranleigh Precision Engineering Ltd. v. Bryant reported in [1964] 3 ALL E.R. 289 at pages 301 and 302, relied on by Mr. Kapur. His lordship observed as follows:
"As I understand it. the essence of this branch of the law, whatever the origin of it may be. is that a person who has obtained information in confidence is not allowed to use it as a springboard for activities detrimental to the person who made the confidential communication, and springboard it remains even when all the features have been published or can be ascertained by actual inspection by any member of the public."
(emphasis supplied)
28. In more or less similar set of facts, the Hon'ble High Court of Delhi in the case of John Richard Brady v. Chemical Process Equipments P. Ltd. 8 , has held as follows;
"34. Apart from the striking general similarity between the defendants' Machine and the Drawings of the plaintiffs being obvious to the eye, though the defendants' claim that there are some functional difference between their Machine and the FPU, the defendants had access to the Drawings of the plaintiffs as discussed above, and, the rapidity with which the defendants have produced the Machine lead to the inference that the Defendants have copied the Drawings of the plaintiffs. It is significant to point out that the defendants have not shown how in fact they had arrived at their Machine. In such circumstances, the inference is unescapable that the plaintiffs have established a prima facie case of copying to which the defendants have to answer. This prima facie view formed by me is supported by the principles laid down by the House of Lords in L.B. (Plastics) Limited v. Swish Products Limited 1979 RPC 551".
29. The Learned Senior Counsel for the plaintiff also contended that defendants No.2 to 4 had all vital information in their possession and such information could be used as a springboard to manufacture identical machines though with minor modifications. In support of his contention, he placed reliance on paragraph 45 in the case of Bombay Dyeing and Page 36 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined Manufacturing Co. Ltd. v. Mehar Karan Singh 9 which reads as follows:
"45. Relying upon the decision in the case of Cranleigh Precision Engineering Co. Ltd. v. Bryant (1956) 3 All England Report 301 holding that person, who obtained information in confidence, is not allowed to use it as a "springboard" for activities detrimental to the persons who made the confidential communication, it was held that breach of confidential information depended upon the broad principle of equity that he who receives information in confidence shall not take unfair advantage of it.
Such common law doctrine would, therefore, apply even to the information which has been published or can be ascertained by the public. Such information cannot be used to the prejudice of the person who gave it without the consent of that person"
30. On a careful analysis of the law on the point, what follows is that an ex-employee his possession and acting in a manner which can be detrimental to the interest of the plaintiff. A company which invests its time, money and manpower in research and development deserves protection against infringement and passing of. In the case on hand, the defendants have sought to defend the action on too fragile grounds, which can be hardly countenanced. Firstly, that e-mails are not authentic. Secondly, that there are differences in technical specifications vis-a-vis the product manufactured by the plaintiff and the first defendant. Thirdly, that the name of the product is generic. Fourthly, that a technical report prepared by one Dr. Vishwanathan Talasila relied upon by the plaintiff is vitiated.
(4) Photoquip India Limited Versus Delhi Photo Store reported in 2014 SCC OnLine Bom 1088, wherein the Bench has observed in para Nos.10, 11, 21, 22, 23, 24, 25, 26, 37, 28, 33, 34, which are as under;
10. Between 9 th and 12 th January 2014, the All India Photography and Trade Industry Association hosted a consumer electronics and imaging fair at the NSE Grounds, Goregaon, Mumbai. The Plaintiff participated. It sent out invitations. At the exhibition, the Plaintiff learned that the Page 37 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined Defendants were selling flash lights under the trade marks SIMPEX PRO FX 400 and SIMPEX PRO FX 200. They contend that these are the offending and infringing products. The Defendants have reproduced the Plaintiff's artistic works of the product and the packaging and the copyright in the moulds. Three-dimensional realizations have been created from the two-dimensional drawings. On 12 th January 2014, the Plaintiff purchased the Defendants' SIMPEX PRO FX 400 and SIMPEX PRO FX 200 products (a sales invoice is annexed).
11. The Plaintiff claims that the Defendants' products, shown at Exhibit "I" to the plaint, are an exact replica of the Plaintiff's product, identical in every aspect and detail. Every single one of the features of the Plaintiff's products have been copied and used by the Defendants in their infringing products. The Defendants, the Plaintiff claims, have reverse engineered the Plaintiff's products and, working backward, have then prepared identical drawings and then the mould or cast from which the offending products are manufactured. All the Plaintiff's rights under Section 14 of the Copyright Act, 1957 have been infringed. The Defendants' products are, the Plaintiff says, inferior and sub-standard.
21. Provided that--
(a) in the case of a literary, dramatic or artistic work made by the author in the course of his employment by the proprietor of a newspaper, magazine or similar periodical under a contract of service or apprenticeship, for the purpose of publication in a newspaper, magazine or similar periodical, the said proprietor shall, in the absence of any agreement to the contrary, be the first owner of the copyright in the work in so far as the copyright relates to the publication of the work in any newspaper, magazine or similar periodical, or to the reproduction of the work for the purpose of its being so published, but in all other respects the author shall be the first owner of the copyright in the work;
(b) subject to the provisions of clause (a), in the case of a photograph taken, or a painting or portrait drawn, or an engraving or a cinematograph film made, for valuable consideration at the instance of any person, such person shall, in the absence of any agreement to the contrary, be the first owner of the copyright therein;
(c) in the case of a work made in the course of the author's employment under a contract of service or apprenticeship, to which clause (a) or clause (b) does not apply, the employer shall, in the absence of any agreement to the contrary, be the first owner of the copyright therein;
(cc) in case of any address or speech delivered in public, the person who has delivered such address or speech or if such person has delivered such Page 38 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined address or speech on behalf of any other person, such other person shall be the first owner of the copyright therein notwithstanding that the person who delivers such address or speech, or, as the case may be, the person on whose behalf such address or speech is delivered, is employed by any other person who arranges such address or speech or on whose behalf or premises such address or speech is delivered;
(d) in the case of a Government work, Government shall, in the absence of any agreement to the contrary, be the first owner of the copyright therein;
(dd) in the case of a work made or first published by or under the direction or control of any public undertaking, such public undertaking shall, in the absence of any agreement to the contrary, be the first owner of the copyright therein;
Explanation. --For the purposes of this clause and section 28A, "public undertaking" means--
(i) an undertaking owned or controlled by Government; or
(ii) a Government company as defined in section 617 of the Companies Act, 1956 (1 of 1956); or
(iii) a body corporate established by or under any Central, Provincial or State Act;
(e) in the case of a work to which the provisions of section 41 apply, the international organisation concerned shall be the first owner of the copyright therein.
22. The Plaintiff is, Dr. Tulzapurkar submits, the first owner of copyright in the drawings and the resultant moulds; and the drawings are 'artistic works' within the meaning of Section 13(1)(a). The defence on affidavit is that the Plaintiff is not entitled to protection because of the provisions of Section 15(2) of the Copyright Act:
15. Special provision regarding copyright in designs registered or capable of being registered under the Designs Act, 1911.--
(1) Copyright shall not subsist under this Act in any design which is registered under the Designs Act, 1911 (2 of 1911).
(2) Copyright in any design, which is capable of being registered under the Designs Act, 1911 (2 of 1911), but which has not been so registered, shall cease as soon as any article to which the design has been applied has been reproduced more than fifty times by an Page 39 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined industrial process by the owner of the copyright, or, with his licence, by any other person.
(Emphasis supplied)
23. The Defendants' submission, as I understand it, is that the Plaintiff's copyright artistic works are 'designs' within the meaning of the Designs Act, 2000. They are therefore registrable under that Act. Even if not so registered, if they have been used more than fifty times, which they no doubt have, by an industrial process, and there is no doubt about the process either, there is no subsisting copyright. The words "article" and "design" are defined in the Designs Act thus:
2. Definitions
24. In this Act, unless there is anything repugnant in the subject or context,--
(a) "article" means any article of manufacture and any substance, artificial, or partly artificial and partly natural; and includes any part of an article capable of being made and sold separately;
(d) "design" means only the features of shape, configuration, pattern, ornament or composition of lines or colours applied to any article whether in two dimensional or three dimensional or in both forms, by any industrial process or means, whether manual, mechanical or chemical, separate or combined, which in the finished article appeal to and are judged solely by the eye; but does not include any mode or principle of construction or anything which is in substance a mere mechanical device, and does not include any trade mark as defined in clause (v) of sub-section (1) of section 2 of the Trade and Merchandise Marks Act, 1958 (43 of 1958) or property mark as defined in section 479 of the Penal Code, 1860 or any artistic work as defined in clause (c) of section 2 of the Copyright Act, 1957 (14 of 1957);
(Emphasis supplied)
25. Dr. Tulzapurkar submits that there is no substance in this defence. Section 14 of the Copyright Act puts the matter inperspective:
14. Meaning of Copyright.--
26. For the purposes of this Act, "copyright" means the exclusive right subject to the provisions of this Act, to do or authorize the doing of any of the following acts in respect of a work or any substantial part thereof, namely:--
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(a) in the case of a literary, dramatic or musical work, not being a computer programme,--
(i) to reproduce the work in any material form including the storing of it in any medium by electronic means;
(ii) to issue copies of the work to the public not being copies already in circulation;
(iii) to perform the work in public, or communicate it to the public;
(iv) to make any cinematograph film or sound recording in respect of the work;
(v) to make any translation of the work;
(vi) to make any adaptation of the work;
(vii) to do, in relation to a translation or an adaptation of the work, any of the acts specified in relation to the work in sub-clauses (i) to (vi);
(b) in the case of a computer programme,--
(i) to do any of the acts specified in clause (a);
(ii) to sell or give on commercial rental or offer for sale or for commercial rental any copy of the computer programme:
Provided that such commercial rental does not apply in respect of computer programmes where the programme itself is not the essential object of the rental.
(c) in the case of an artistic work,--
(i) to reproduce the work in any material form including depiction in three dimensions of a two dimensional work or in two dimensions of a three dimensional work;
(ii) to communicate the work to the public;
(iii) to issue copies of the work to the public not being copies already in circulation;
(iv) to include the work in any cinematograph film;
(v) to make any adaptation of the work;
(vi) to do in relation to an adaptation of the work any of the acts specified in relation to the work in sub-clauses (i) to (iv);
(d) in the case of a cinematograph film,--Page 41 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024
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(i) to make a copy of the film including a photograph of any image forming part thereof;
(ii) to sell or give on hire or offer for sale or hire, any copy of the film, regardless of whether such copy has been sold or given on hire on earlier occasions;
(iii) to communicate the film to the public;
(e) in the case of a sound recording,--
(i) to make any other sound recording embodying it;
(ii) to sell or give on hire, or offer for sale or hire, any copy of the sound recording, regardless of whether such copy has been sold or given on hire on earlier occasions;
(iii) to communicate the sound recording to the public.
Explanation. --For the purposes of this section, a copy which has been sold once shall be deemed to be a copy already in circulation.
37. What is registrable as a design is, and is only:
"[...] The shape or configuration of the whole article in respect of which there is to be a commercial monopoly. That necessarily involves taking the design and the article as a whole. Thus, the effective choice must be between excluding the whole shape or configuration from registration because there is a part of it that is purely functional."
(Emphasis supplied)
28. This is also the view of another learned single Judge of this Court in Indiana Gratings Pvt. Ltd. v. Anand Udyog Fabricators Pvt. Ltd. 2 a decision of some consequence on this issue. Mrs. Justice Dalvi in Indiana Gratings followed Nirma, and, in the case before her, rejected an identical argument. The facts in Indiana Gratings are sufficiently similar to those in the present case to make that a binding precedent that cannot be distinguished (on facts) from the case at hand. The controversy there was about an indigenous electrofold machine created on the basis of drawings the plaintiffs prepared. The plaintiffs claimed copyright in these drawings as artistic works. The defendants stood accused of infringing that copyright in those artistic works, i.e., the drawings, by reproducing those drawings in finished products of their own. The defendants' drawings were recovered and found to be identical to those of the plaintiffs. There, as here, the defendants did not produce their own drawings; the difference being that the drawings were prepared by an erstwhile employee of the plaintiffs who then went to work for the 2 nd defendant and prepared Page 42 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined identical drawings for them as well. Before Mrs. Dalvi, J, too, an argument was made that there was no copyright in these drawings as they were 'designs' that lent themselves to registration under the Designs Act, being drawings of industrial design. Describing this as a feeble attempt, again not very different from the case before me, Mrs. Justice Dalvi then went on to consider a very considerable body of precedent, including decisions from England.
33. It is, I think, a mistake to confuse 'artistic work' under the Copyright Act with a more colloquial understanding of what constitutes 'art'. Courts are not arbiters of aesthetics or aesthetic values. Carl Andre's installation of common fireplace bricks at the Tate Modern in 1972 was said to be a sculpture. Whether or not it was 'art' is beside the point. In and of itself, it was capable of copyright protection in the form in which it was presented. This is true, too, of Richard Long's "Red Slate Circle" installation at the Guggenheim Museum from 1980. But a pile of slate slabs and stones, and bricks at a construction site are not the subject of copyright. The physical artefacts are the same, but in one they are arranged and presented in a special format as the expression of an idea, and in the other they are not; they are simply left there to be used in the construction or building or finishing of a structure.
34. It is not necessary either that to receive copyright protection an artistic work should have a plenitude of detail as we see in the paintings of Rembrandt, Gericault, Vermeer, Rousseau or any number of other painters. The most minimal representation or expression may suffice : the sketch in no more than three lines, a single stroke each that is unmistakably Mahatma Gandhi, for instance. Should this sketch be used in the production of a three-dimensional figurine or a bust of Gandhiji, and a hundred, or a thousand, such objects be produced, would that mean that the sketch itself stands without copyright protection? I do not think this can possibly be; yet this is the implication of what Mr. Grover suggests.
"It is no part of copyright law to categorise skill and labour into concept, idea, detail and form. What is worth copying is prima facie worth protecting."
(5) Kanade Anand Udyog Pvt. Ltd. Vs. Indiana Gratings Pvt. Ltd. reported in 2010 SCC OnLine Bom 1769., wherein the Bench has observed in para Nos.2, 3, 5, 9 and 10, which are as under:-
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2. The action by the plaintiff is founded on an alleged infringement of its copyright in artistic work. The artistic work in the present case consists of Industrial Drawings. The plaintiff sought protection in respect of 126 drawings which have been referred to in Exhibit 'G' to the Plaint.
3. The First Defendant is a Limited Company controlled by the Kanade family. The Second Defendant is a partnership firm of which Defendant Nos.8, 10 and 11 are partners, defendant Nos.4 to 7 are former employees of the Plaintiff. Defendant Nos.13 to 23 are fabricators, who had, in the past, made parts for the plaintiff which were used for manufacturing electroforged grating machines. The case of the plaintiff is that Defendant Nos.4 to7 resigned from the service of the plaintiff. Of them, Defendant Nos. 5 to 7 joined service with the first defendant. On a police complaint being lodged, in the course of the investigation, the drawings of the plaintiff were found in the custody of the First defendant and with some amongst the fabricators, Defendant Nos.13 to 23. According to the plaintiff, these drawings were furnished to them by the plaintiffs employees.
5. A fresh motion for interim relief was taken out by the plaintiff. The foundation for the fresh motion is that the first defendant had, despite the order of injunction, not only continued to infringe the plaintiffs copyright in the original artistic drawings by making infringing copies, but also made three dimensional copies, electroforged gratings machines and was marketing and selling electroforged grating made in complete violation of the plaintiffs right in the original artistic work. These acts of infringement were alleged to have been committed in collusion with defendant No.24.
defendant No.24 is a Limited Company. All the shares of the Company are held by Defendant Nos.8 to12, the son of defendant No.8 and by the wife of defendant No.10. The case of the plaintiff in the affidavit in support was that the first defendant, through defendant No.24, has started marketing and selling the electroforged gratings manufactured by the use of electroforged grating machines which was an infringement of the plaintiffs original artistic work in the drawings. The plaintiff averred that defendant No.24 has been awarded six contracts of the value of Rs.4.7 crores by Bharat Heavy Electricals Ltd. Essentially, in the fresh motion three reliefs were sought by the plaintiff - (i) Action under Order 39 Rule 2A for breach of the order of injunction; (ii) The striking out of the defence of the defendants; and (iii) The appointment of a Receiver of electroforged grating machines manufactured from parts based on the drawings of the plaintiff.
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9. The plaintiff filed an affidavit before the learned Single Judge on 6 July, The affidavit buttressed the case of the plaintiff that the two indigenous machines which were in the custody of defendant No.24 had been assembled from the use of parts which were made in infringement of the copyright of the Plaintiff in its artistic work. For instance, in respect of the first machine, the plaintiff pointed out that Defendant No.24 was incorporated only on 12 July 2005 and hence the company could not have procured or acquired the parts of that machine. Most of the purchase orders corresponding to the invoices were prior to the date of incorporation of defendant No.24. None of the invoices were raised on defendant No.24. Of the total payment of Rs.72.52 lakhs,dDefendant No.24 made a payment of Rs.2.84 lakhs. Significantly, defendant No.24 failed to produce even a single drawing to establish that the two indigenous machines had been assembled on the basis of drawings other than the drawings of the plaintiff. The plaintiff also highlighted various invoices which pertain to specific machine parts for which drawings were necessarily required. Exhibit 'A' to the affidavit filed by the plaintiff is titled "Illustrative invoices exposing Infringement". Exhibit 'A' contains a list of orders placed by defendant No.24 on parties from whom drawings pertaining to the particular part were recovered. For instance, in Sr.No.1 of Exhibit 'A' which relates to defendant No.20, the drawings of the plaintiff were recovered from that defendant and from the workshop of the First Defendant. Exhibit 'D' to the affidavit contains a statement of invoices produced by Defendant No.24 which as a matter of fact referred to drawings. Despite being called upon to produce the drawings by the plaintiff, defendant No.24 failed to produce any drawings.
10. The principal contention which has been urged on behalf of the Appellant, original defendant No.24, is that no comparison was made by the learned Single Judge of the machines in the custody of defendant No.24 with the artistic drawings of the plaintiff and it is only on that basis that a case for infringement could have been made out. In our view, the learned Single Judge has carefully evaluated the documents which were produced on the record and the surrounding circumstances of the case before entering a finding that the two indigenous machines in the custody of defendant No.24 were assembled on the basis of parts which in turn had utilized drawings of the plaintiff. Significantly, defendant No.24 did not produce any drawings at all. The case of the plaintiff was that the machines were assembled on the basis of the parts sourced from various fabricators to whom the plaintiff's drawings had been supplied in the past by its employees who had since resigned from service and joined the first defendant. A prima facie case was made out for the grant of interim relief. The balance of convenience clearly lay in favour of the grant of relief as Page 45 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined sought. Despite an order of injunction that was granted by the Learned Single Judge in the earlier motion, a device was created to defeat the order by setting up a case that defendant No.24 was now in custody of the electroforged machine sourced from South Africa which is producing electroforged gratings. In these circumstances, the learned Single Judge was entirely justified in appointing a Receiver in respect of the two indigenous electroforged grating machines and in directing the Receiver to seal the two machines. The defendants have been permitted to use the machine which has been imported from Sough Africa.
(6) Saltman Engineering Company Limited v. Campbell Engineering Company Limited reported in (1948) 65 RPC 203. wherein the Bench has held that as under:-
"The main part of the claim is based on breach of confidence, in respect of which a right may be infringed without the necessity of there being any contractual relationship. I will explain what I mean. If two parties Make a contract, under which one of them obtains 4° for the purpose of the contract or in connection with it some confidential matter, even though the contract is silent on the matter of confidence the law will imply an obligation to treat that confidential matter in a confidential way, as one of the implied terms of the contract; but the obligation to respect confidence is not limited to cases where the parties 45 are in contractual relationship. The learned judge, having declined to find any contract between Monarch, Ld., and the Defendants, went on, if I understand his judgment correctly, to hold that for that reason there could be no relationship of confidence between any of the Plaintiffs and the Defendants. In my opinion, the learned judge erred in law in coming to that conclusion. Redid not deal with the really substantial point in the case, namely, whether or not the Defendants had committed a breach of confidence which infringed the right of the first Plaintiffs, who owned the confidential matter. Into that question he did not go and the consequence is, from our point of view, that we have not the advantage of any findings of his on 5 rnatters of fact which are relevant to the issue. of breach of confidence as between the first Plaintiffs, Soloman Engineering Coy., Ld., apdthe Defendants: and, 1argely for that reason, the investigation of this case in, this Court has taken a very considerable time. There is, however, one matter in connection with his finding on which I must say a word. In declining to find a contract between Monarch, Ld., and the Defendants, he based himself 10 largely, if not entirely, on a view of this description. The contract, if contract there was, was negotiated with the Defendants by a Page 46 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined Mr. Ransom, who was a Director of Monorch, Ld. Quite late in the case, after the evidence had been closed and arguments had been completed, certain documents were produced, and quite properly produced, by Counsel for the Defendants at the request of the learned judge. To those documents the learned judge did hot appear IS at the time to attach very great importance, and a request by Mr. Aldous, on behalf of the Plaintiffs, for leave to recall Mr. Ransom was not dealt with by the judge, and Mr. Aldous naturally went away with the idea that the judge was hot going to place any reliance on those documents. What the documents appeared to show 'was that Mr. Ransom. was interested in another 20 undertaking, carried on by a firm in which he was a partner, although the firm was not in fact formed until after the relevant date apparently, and, further, that a firm, in which Mr. Ransom had been a partner, under the name of Monarch Engineering Coy., was still in existence, in the sense that its name had not been removed from the Register of Business Names. 25 I need not go into' it more than that. The point, in the learned judge's view, was that he was not satisfied that Mr. Ransom in placing an order with the Defendants was acting on behalf of Monarch, Ld., but that he thought that the facts were consistent with his having been acting either on his own behalf as an individual or on behalf of one or other of the two firms which I have mentioned.
30 I think it is unfortunate that it 'must have slipped from the learned judge's rnin-j that Mr. Ransom had not been afforded an opportunity of explaining these matters. I say that it was unfortunate for this reason. Although the judge does not find that Mr. Ransom was defrauding Monarch Ld. in placing the order with the Defendants, in the sense that he was acting as an individual when he ought to have placed the order on behalf of his 35 company, Monarch Ld.-altltough the judge did not find that, what the judge thought was that it was possible that Mr. Ransom was trying to retain the benefit of this order for himself, or for a firm in which he was interested. 'He did not find that he was doing so; he found that it was possible that he was trying to do so. To find that it is possible that a man may have been defrauding his own company is not so serious as to find that he was in 40 fact defrauding his own company, but it is a very serious matter; and, if the. learned judge had recalled the circumstances to his mind, I have no doubt that lie would have put the case back into the List in order to give IMr. Ransom a chance of dealing with the 'matter. There is before us an application for leave to call further evidence, namely, to call Mr. O R anshom t? explain these matters. ~e have not thought it necessary to grant that application. 45 In t e VIew that we take., the evidence and other documents show to our satisfaction that Mr. Ransom in making this contract with the Defendants was acting on behalf of Monarch~ Ld., and was not acting on behalf of either of the firms Page 47 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined which I have mentioned or of himself individually. That appears to me to emerge from the evidence and the other documents in the case and, to 'my mind, the additional documents which were handed to the learned 50 judge at the conclusion of the trial do hot displace that conclusion. I need say no more about that. The other point is this: that, even if Mr. Ransom did not make a contract with the Defendants, it does not alter the fact that the confidential drawings handed to the Defendants for the purpose of executing the order placed with them \vere the property of Saltman Engineering Company, and the Defendants knew that at a comparatively early date in 5 this history. They knew that they were drawings belonging to Saitman Engineering Combaw», Saltman Engineering Company had not in fact paid for them,but that did not alter the fact that they were Saltman Engineering Company's drawings. The Defendants knew that those drawings had been placed in their possession for a limited ,purpose, namely, the purpose only. of making certain tools in accordance with them, the tools being tools required 10 for the purpose of manufacturing leather punches. Without going further into the matter, it seems to me that the existence of a confidential obligation in relation to those drawings, as between Soliman and the Defendants, is abundantly proved; in fact it is not disputed. I need only refer to one or t\VO answers of Mr. Fram-pton, who was the Works Manager of the Defendants, in which he: quite frankly admitted that IS he would not be entitled to make use of those drawings for any purpose of his own. For instance, on p ..17 of the Fourth 'Day, Mr. ..Aldous asked him, talking about the 30th June, which was the date when the order for the making of these tools was placed with the Defendants: "Did you think at that time that you would be entitled to make 'Some: tools It from them for your own purposes? (A): No. (Q): In fact you knew on that date that 20 "it would be wrong for you to do so, if you thought about it? (Vaisey, J.) : Well, he never It thought about it. (The witness): I should not have done it ".It is perfectly clear that Mr. Fram- pton. was an honest man and would have repudiated the suggestion that, the drawings having come into his possession for those purposes, he would have been entitled to use them for any purpose other than that for which he 25 obtained them. I need not go into the: law, which I think is correctly stated in a formula which Mr. Heald himself accepted. I will read it: "If a defendant is proved to have used confidential "information, directly or indirectly obtained from a plaintiff, without the consent, express ,, or implied, of the plaintiff, he win be guilty of an infringement 01 the plaintiff's rights." 30 There are several cases, of course, which deal with that (Morrison v. Moat is one of the better known of them) and I need not examine them further. The principle is established and is not disputed; and it is perfectly clear that that obligation, based on confidence, existed and bound the conscience of the Defendants down to the eznd November, 1945. At that date a meeting took place between representatives of Page 48 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined Saltmans and the Defendants; 35 and I think that Mr. Ransom was there and Mr. Dibbern, the man who had been responsible for the making of the drawings, either by his own hand or by associates. The position from the commercial point of view at that date had developed in rather a curious way and, indeed, a rather unfortunate way. I have gained from the evidence the strong impression that most, if not all, of the parties interested in this matter thought at the time-at any rate when 40 the history began away back in the middle of 1945, and I think probably down to a later date-that this was a very good commercial proposition, namely, the manufacture of these leather punches, of which there appears to have .been a scarcity on the market. Mr. Ransom had painted for the Defendants a very attractive picture of the possibility of getting orders for tens of thousands, actually up to 50 ,0 0 0 , ' leather punches for sale. One thing is perfectly 45 clear: at that date the Defendants had got a contract for one purpose and one purpose only, namely, to make dies and punching tools in accordance with those drawings, into which certain modifications had been introduced by agreement. T'hatwas the only contract that they had got. That was a contract with Monarch, Ld., alone .. Monarch, Ld., were bound to take delivery of those dies when ready and to pay for them; and the Defendants were 50 bound to deliver them. The situation from the business point of view apparently changed in this way. The Defendants contemplated with satisfaction the possibility of entering into the business of manufacturing leather punches to this design. Of course, in order to do that, they would require, first of all, to use the tools that they had made under the contract. They would require raw materials and labour; and they would require also, what was perhaps more important in the history of this case, to make a number of supplementary tools which would be needed in addition to the main tools comprised in the drawings. Unfortunately they did not wait to get a firm order for the manufacture of any leather 5 punches, much less 50,000 leather punches; but, apparently in a wave of optimism and in the expectation that they would be able to get these orders, they proceeded to make the supplementary tools and to start manufacturing a number of leather punches, which afterwards were very largely increased in number. They also set about making other drawings and they incurred expense in making the supplementary tools and in making preparations 10 for the production of a large number of leather punches, for which they had not got any firm order, and, if no firm order eventuated (as was the case), they would have been left with these punches on their hands. That, 1 think, is one of the sources of the whole of this trouble. They were in a weak position for that reason: that they had incurred that expense and they were naturally IS 'anxious to get it back; but, for some reason 'which I am still unable to understand, that situation is relied on in some way as a justification for other things that they did, and in particular for retaining and using the tools which they had made Page 49 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined pursuant to the contract. If, on the zznd November, something had happened by reason of which the Defendants obtained a release from the obligation of confidence, which was binding upon them down to 20 that moment in respect of the drawings and the tools made in accordance with them, the whole picture would have 'been changed. Nothing of the kind happened. It would appear that at that date the Plaintiffs Soliman, at any rate, were not anxious to get the tools and themselves embark on manufacture of leather punches. It would appear, on the other hand, that the Defendants were anxious to retain them and to make 'leather punches in 25 accordance 'with them, remembering always that it was only by making leather punches that they could recoup themselves for the expense which they had incurred in making the supplementary tools. Those were some of the principal considerations that must have been in the minds of the parties on the 22nd November. 30 I can summarise, almost in a sentence, what happened at that meeting. The Plaintiffs, Saltman, were willing to consider an offer by the Defendants to clear up the whole matter, they were 'willing to consider an offer under which, if accepted, the Defendants would be entitled to keep, and make use of the drawings and the tools made in accordance with them. Saltmans were wining to consider an offer which was to include compensation. An offer was 35 made. It was not accepted. How, in those circumstances, it can be suggested that something happened at that interview by reason of which the Defendants became entitled to do something, which on their own admission they would only have been entitled to do if the offer of compensation had been accepted, I do not appreciate. l\ great deal of time has been spent in examining that aspect of the matter; but, as I 40 said at the opening of this judgment, it is a perfectly simple point. No doubt the Defendants had acted a~ many b~sine~s men would act. When t~ey left the meeting of the zand they thought: ThIS matter IS going to be settled and 'we WIll now at once make preparations to make use of the settlement. They took a business risk. It may have been a very good business risk; I dare say that it was; but the risk consisted in this: that, unless a settlement 45 satisfactory to Salimans was arrived at, they would have no right to deal with these tools or to make use of then: in any w~y, in which case their position would have been a very serious one. They took the risk. It did not come off. Salimans were left in their original position with their rights to demand respect for their confidential documents intact. The Defendants in point of fact not merely made use of the tools made in accordance with the original drawings as modified, but they also manufactured a second set of tools. I do not 'want to say anything more about that than this: I am satisfied that in manufacturing the second set of tools or some of them use was made of the confidential information contained 5 in the original drawings, or in the set of tools made from them under the original contract. They made a second set of Page 50 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined drawings and, in order to make those drawings, they had recourse to some material derived from the original drawings. I think that I shall not be stating the principle wrongly if I say this with regard to the use of confidential information. The information, to be confidential, must, I apprehend, apart 10 from contract, have the necessary quality of confidence about it, namely, it must not be something 'which is public property and public knowledge. On the other hand, it is perfectly possible to have a. confidential document, be it a formula, a plan, a sketch, or something of that kind, which is the result of work done by the maker upon materials which may be available for the use of anybody; but what makes it confidential is the fact that the maker 15 of the document has used his brain and thus produced a result which can only be produced by somebody who goes through the same. p,rocess. What the Defendants did in this case was to dispense in certain material respects with the necessity of going through the pr.ocess which had been gone through in compiling these drawings, and thereby to save themselves a great deal of labour and calculation and careful 20 drabghtsmanship. No doubt, if they had taken the 'finished article, namely, the leather punch, which they might have bought in a shop, and given it to an expert draughtsman, that draughtsman could have produced the necessary drawings for the manufacture of machine tools required for making that particular finished article. In at any rate a very material respect they saved themselves that trouble by obtaining the necessary information either from 25 the original drawings or from the tools made in accordance with them. That, in my opinion, was a breach of confidence. In the view that I take the case is a simple one: there has been a breach of confidence, the duty of confidence owed in the circumstances of this case by the Defendants to Saltmans, It is not necessary to go into the question whether there was an implied obligation of confidence 30 as between the two contracting parties:
Monarch, Ld., and the Defendants. I need say nothing about that, because quite obviously in the circumstances, if Monarch, Ld., obtained any relief based upon that, they could only hold it for the benefit of Saltmans, who are the owners of the confidential matter."
(7) Rapid Bevtech Pvt. Vs. KHS Machinery Pvt. Ltd rendered in R/Appeal From Order No.145 of 2018 and Civil Application No.1 of 2018 decided on 25.07.2018, wherein the Coordinate Bench of this Court has observed in para Nos.3, 5, 7(a), 7(c), 12, 13, 25, 30, which are as under:-
Page 51 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined "3. The appellants are the original defendants in the Commercial Trade Mark Suit filed by the respondents herein contending that the respondent plaintiff is engaged in the business of manufacturing and marketing of filling, packaging and processing machineries for beverage, food and non-
food sectors and providing for maintenance and service for the same. The Civil Suit was filed with the prayers as under :-
"(A) The Hon'ble court be pleased to grant an order and decree of permanent injunction restraining the defendants, their directors, partners, successors, servants, agents, dealers and distributors from using intellectual properties including but not limited to know-how, technical knowledge, customized manufacturing machinery as mentioned in ANNEXURE "A" and copyright protected customized computer software, database, drawings, process information and details, circuit diagrams, patent and other copyright protected materials and confidential information of the plaintiff.
(B) The Hon'ble court be pleased to declare that defendant have no right to use or disclose or divulge confidential information or secret process of manufacturing of machines as mentioned in ANNEXURE "A" and any other information of high degree of confidentiality and trade secrets of plaintiff to any other person.
(C) The defendants, their director, partner, successor, servants, agent, dealers, distributors be restrained by an order of permanent injunction from disclosing confidential information and any other information of high degree of confidentiality and trade secrets of the plaintiff."
5 . In the impugned order, the Commercial Court has restrained the defendants (appellants), i.e. the directors, partners, successors, servants, agents, dealers and distributors from using the confidential information/Know-how/technical knowledge, customized manufacturing machinery of the plaintiff. In the same order, it is also directed that the order of restrain is not to mean to preclude the defendants (appellants), who otherwise are free to carry on their profession by utilizing their own skill and information mentally retained by them, or by soliciting them independently. The impugned order further records directions to the parties to conclude the exercise of admission and denial of documents within a satisfied time.
7. The facts are as under :-
a) It is the case of the plaintiff that the defendant No. 1 is a Company Page 52 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined incorporated by defendant No. 3 and 4 alongwith defendant No. 2 of which defendants No. 3 and 5 are the partners. The defendants No. 3 and 4 were the former employees of the plaintiff Company and defendant No. 5 being the wife of the defendant No. 4. It is the case of the plaintiff with large investment in research and development, the plaintiff in collaboration with its principal foreign company of Germany, were able to develop highly specialized machinery and the plaintiff is using the know-how/confidential information and intellectual property of the principal German company since 1977. It has been selling specialized machinery to leading food and beverage companies. The defendant No. 3 was working with the plaintiff company as Service Engineer and had entered into an Agreement in respect of the technical know-how. Similarly, the defendant No. 4 was also working as Engineer Technical Service and had also signed three agreements in respect of technical Know-how. The plaintiff company had invested money and confidence in these two employees by imparting them with training and technical Know-how of the special machinery of the plaintiff Company and for the purpose, both the defendants were even sent to Germany.
c) It was found by the plaintiff company that the defendants were using confidential information, Know-how and business secrets and intellectual properties of the plaintiff to develop their own business and hence, a notice came to be issued upon the defendants by the plaintiff, pursuant to which a tripartite agreement came to be entered between the plaintiff and the defendant Nos. 2 to 5 on 23.10.2012, wherein the defendants agreed to stop unauthorised use of plaintiff's confidential information, business secrets, intellectual properties.
12. It is submitted that in September 2012, the plaintiff came to know about unfair and dishonest activities undertaken by defendant No. 4 during the course of his employment and therefore, the plaintiff had terminated the services of defendant No. 4. During internal investigation, the plaintiff found that the defendant No. 4, in collusion with defendant No. 3, who was also ex-employee of the plaintiff illegally diverted many of plaintiff's confidential information, Know-how, business secret and intellectual property for illegal gain and to start a business venture by riding upon plaintiff's and its German counterpart's know-how and intellectual properties. According to the plaintiff, the defendant Nos. 3 and 5 had started a partnership firm, i.e. defendant No. 2 when defendant No. 4 was working with the plaintiff for their illegal business activities.
Page 53 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined
13. It is submitted that after becoming aware about the activities of defendant Nos. 2 to 5, the plaintiff issued a legal notice to the defendant Nos. 2 to 5 for their illegal action, breach of trust, misuse of plaintiff's confidential information and know-how. On receipt of the said notice, the defendant Nos. 2 to 5 entered into a Tripartite Agreement with the plaintiff on 23.10.2012. In the said Agreement, defendant Nos. 2 to 5, inter alia, agreed that they will stop and will not unauthorizedly use plaintiff's confidential information, know- how, business secret and intellectual property any further. It is submitted that the plaintiff inquired in the market about illegal activities of the defendant Nos. 2 to 5 and found that defendant Nos. 3 and 4 have incorporated and directors of defendant No. 1 company and that some of the clients of the plaintiff received the services provided by defendant Nos. 1 to 3. The plaintiff therefore lodged a criminal complaint before GIDC Vatva police Station on 08.06.2016 against the defendants and the said complaint is pending for investigation. The plaintiff engaged an expert, i.e. Esquire Ideation Pvt. Ltd. for investigation into the matter. At the request of the plaintiff, the said independent expert prepared the comparison report of plaintiff's product technical specification and defendant No. 1's product technical specification, which clearly shows that the defendants have electronically reproduced and copied the drawings, diagrams, chart, process and technology of the plaintiff. It is submitted that the defendants are still engaged in inducing to sell their machines and equipments, which are based upon the plaintiff's manufacturing process, technology and know-how and also using same specifications in their product brochure as that of the plaintiff. The plaintiff therefore again asked the above named expert to once again prepare a comparison report of the specifications of the plaintiff's product and the one copied therein by defendants. The said expert, after having effected comparative analysis, has given the report dated 17.10.2016, which clearly shows that the defendants are still persisting in the same wrong doing. Hence, the plaintiff had prayed for a temporary injunction against the defendants restraining them from continuing their illegal activities.
25. Contention is raised regarding sharing of confidential information and requirement of the law before ordering restraint on divulging of confidential information or the information which is in public domain. In support it is argued that the information i.e. the drawings, designs etc. of the machinery alleged by plaintiff to be used by the applicant-defendant was already in public domain. Moreover, it is also argued that as the defendants were in business of purchasing old machinery, refurbishing and selling it in the Page 54 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined market because of which also they came in possession of the drawings, designs etc. of the machinery. It is also argued that the drawings, designs, softwares seized during panchnama and sent to FSL were all such drawings etc. and cannot be said to sharing or divulging of confidential information. This contention though strongly raised is not substantiated with equal vigour by any prima facie evidence. As observed by Commercial Court, nothing is produced on record to demonstrate how the information found in possession of the defendant was available with him through any public domain neither anything in the form of Bills/Agreements etc. are produced to show that the drawings, designs, etc. were received as a part of the purchase of old machinery. Whereas plaintiffs have proved that defendant Nos. 3 and 4 were in service with the plaintiff, that too on technical side and had access to the confidential information while on job and during the training.
30. Insofar as the balance of convenience is concerned, considering what is observed in the preceding paragraphs more particularly in connection with the clauses of the agreements and the conclusion of the technical expert and the FSL the Court finds that machinery/equipments designs as projected by the defendant are similar to that of the plaintiff. The defendant has failed to produce before the trial Court any evidence of indigenous development as the design etc. of the machinery by the defendant where as plaintiff is able to establish the fact that the defendants No. 3 and 4 were in service of the plaintiffs were exposed to technical Know-how on account of the job profile and training abroad and the clauses of the tripartite agreement worked the balance of convenience in favour of the plaintiff."
(8) Ramdev Food Products Pvt. Ltd. Vs. Arvindbhai Rambhai Patel & Ors. reported in (2006) 8 SCC 726, wherein the Hon'ble Supreme Court has held in para Nos.125 to 128, which are as under:-
"125. We are not oblivious that normally the appellate court would be slow to interfere with the discretionary jurisdiction of the trial Court.
126. The grant of an interlocutory injunction is in exercise of Page 55 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined discretionary power and hence, the appellate courts will usually not interfere with it. However, the appellate courts will substitute their discretion if they find that discretion has been exercised arbitrarily, capriciously, perversely, or where the court has ignored the settled principles of law regulating the grant or refusal of interlocutory injunctions. This principle has been stated by this Court time and time again. [ See for example Wander Ltd. V. Antox India (P) Ltd., Laxmikant V. Patel V. Chetanbhai Shah and Seema Arshad Zaheer v. Municipal Corpn. Of Greater Mumbai.]
127. The appellate court may not reassess the material and seek to reach a conclusion different from the one reached by the court below if the one reached by that court was reasonably possible on the material. The appellate court would normally not be justified in interfering with the exercise of discretion under appeal solely on the ground that if it had considered the matter at the trial stage it would have come to a contrary conclusion.
128. However, in this case the courts below proceeded on a prima facie misconstruction of documents. They adopted and applied wrong standards. We, therefore, are of the opinion that a case for interference has been made out."
(9) S M Dyechem Ltd. vs. Cadbury (India) Ltd. reported in (2000) 5 SCC 573, wherein the Hon'ble Supreme Court has held in para No.58, which is as under;
"58. Coming to the question whether the appellate court was right in interfering with the discretion of the trial court and in vacating injunction, we are of the view that, on facts, interference was justifiable. If wrong principles were applied by the trial court under Order 39 Rule 1 CPC, the appellate court could certainly interfere in interlocutory proceedings under Order 39 Rule 1 CPC. Here, the trial court gave importance to phonetic similarity and did not refer to the differences in essential features. It did not also have the wary customer in mind. On the other hand, the High Court's approach in this behalf was right as it noticed the dissimilarities in the essential features and concluded that viewed as a whole, there was neither similarity nor scope for deception nor confusion. [No doubt both the courts went into the validity of the plaintiff's registered mark and into Page 56 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined the question of "distinctiveness" of the word PIKNIK under Section 9(1)(e). But in our view that was not necessary.] Thus, when wrong principles were applied by the trial court while refusing temporary injunction, the High Court could certainly interfere. Point 7 is decided accordingly."
(10) Wockhardt Limited vs. Torrent Pharmaceuticals Ltd. & Another reported in (2018) 18 SCC 346, wherein the Hon'ble Supreme Court has held in para Nos.9 and 10, which are as under;
9) The Division Bench essentially interfered with the judgment of the learned Single Judge on this score and also found that the learned Single Judge was incorrect in stating that "reputation as to source is not sufficiently demonstrated". It found that reputation was established from the sales figures, and the fact that the Plaintiff was clearly a prior user would make it clear that the first pre-requisite for the action in passing off was made out. Where the Division Bench and the learned Single Judge really locked horns was on the point of acquiescence. The learned Single Judge found that not only was there a lying by for a long period, but that there was positive action on the part of the Plaintiff in leading the defendant to believe that he could build up his business, at which point the Plaintiff swooped in to interdict and throttle that business as it was rising just as sales were rising. On this count, the Division Bench interfered with the learned Single Judge as follows:-
(SCC OnLine Bom paras 89-91) "89. The learned Judge then attributes acquiescence to the plaintiff. The plaintiff's predecessor in title did not object to the trademark registration application. It allowed others to do so and it is the plaintiff's failure to bring a suit on service of a caveat. Thus, there is no objection from the plaintiff. It only means that the plaintiff kept quiet when the application for registration was made by the defendant. They failed to object to the advertisement of the defendant's application or when the defendant brought its project in market. They did not object to other entities introducing their products in the market either. This is enough to assume acquiescence. We do not think this to be the position on facts and in law. A plea of acquiescence to be raised in defence so as to succeed ought to be supported by weighty materials to that effect. Since the learned single Judge has referred to the judgment of the Hon'ble Supreme Court in Power Control Appliances vs. Sumeet Machines (P) Ltd., we would refer to it in some details. Paras 4, 5, 7, 11, 12, Page 57 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined 13, 14, 15 and 16 of this judgment were heavily relied upon by Mr.Tulzapurkar. In that, the facts and the submissions are summarised. Then, in para 20, the argument of the respondents before the Hon'ble Supreme Court was set out. In paras 27, 28, 29 and 30, the English judgments were noted and up to para 31.
Thereafter, the decisions rendered by our Hon'ble Supreme Court and other courts have been noted.
90. We are in agreement with Mr. Tulzapurkar that even at this prima facie stage, there is no positive act which can be attributed to the plaintiff so as to deny the relief. There is no acquiescence which can be culled out. Beyond referring to some general principles, we do not find any material placed before the learned single Judge from which an inference of acquiescence can be drawn. Mr. Dwarkadas has, on this point, relied upon certain judgments and even in the written submissions, there is reference to general principles. All that the first defendant says is as under:-
"(ii) The defence of the acquiescence is available to Respondent No. 1 since the plaintiff was aware of its right and the defendant was ignorant of its own right and despite the same, the plaintiff assents to or lays by in relation to the acts of the defendant and in view of the same, it would be unjust in all circumstances to grant the relief of injunction to the plaintiff. It is submitted that the requirements stand duly fulfilled and on the above set of facts where from 2009/11, the Appellant/its predecessors are duly aware of Respondent No. 1's trademark; the use of Respondent No. 1's mark openly and on an extensive scale; and at no point for over 7 years did the appellant or its predecessors contest the same. On the contrary, the appellant's 2014 acquisition of the trademark is with full notice of the adoption and use and registration of Respondent No. 1's trademark. As such, the principles of acquiescence and waiver apply with full vigour.
(iii) Acquiescence is a species of estoppel and therefore both a rule of evidence and a rule in equity. It is an estoppel in pais: a party is prevented by his own conduct from enforcing a right to the detriment of another who justifiably acted on such conduct.
(iv) The 'positive act' as referred to in the decision of the Hon'ble Apex Court in Power Control Appliances vs. Sumeet Machines (P) Ltd. (relied upon by the appellant) cannot mean that the plaintiff 'green lighting' the defendant's action only to later complain of it.
The 'positive act' is the 'sitting by' or 'laying by' i.e., not mere Page 58 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined silence or inaction but a refusal or failure to act despite knowledge of invasion and opportunity to stop it. In the present case, from 2009, the appellant and/or its predecessors have been at notice of Respondent No. 1's adoption, use and registration of its trademark and against that there has been a complete failure to register any protest or objection. In 2014, the appellant acquired the trademark with full notice of Respondent No. 1's registration and use of the trademark "CHYMTRAL". This qualifies for both acquiescence and estoppel defences."
91. Thus, the attempt is to equate delay with acquiescence and which is not correct. We do not think that because the appellants stepped in the year 2014 with notice of the first respondent's registration and use of the mark that means the appellant-plaintiff has acquiesced in the same. That is not a positive act and which is required to deny the relief on the ground of acquiescence."
10. We are of the view that this is not a case where Wander Ltd. has not been heeded. On the contrary, the Division Bench has interfered on a matter of principle, pointing out errors of law by the Single Judge. We may also point out one other significant fact that has occurred in the meanwhile. After 17-11-2017, despite the fact that the Division Bench of the High Court stayed its own order, which stay was continued by this Court till date, the appellant has started to sell the same product under a new trade name, namely, "Chymowok'. We have been shown sales figures in the last 10 months of sales made by the appellant under this new trade name which amounts to a figure of Rs 2.71 crores from 17-12- 2017 till 18-8-2018.
(11) Hindustan Pencils Pvt. Ltd. vs. M/s India Stationery Products Co. & Anr. Reported in 1989 SCC OnLine Del 34, wherein the Hon'ble Supreme Court has held in para Nos.11, 12, 18, 19, 23, 27, 35, 37 and 38.
(11) While an action for infringement is taken in respect of trade marks which are registered, an action for passing off is in respect of goods for which the marks have not been registered but in respect of which marks, over a period of time, the user has acquired proprietory right. The Page 59 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined difference between an action for infringement and for passing off has been succinctly explained by the Supreme Court in the case of Kavlraj Pandit Durga Dutt Sharma v. Navaratna Pharmaceutical Laboratories, AIR 1965 Supreme Court 980(1). The Court observed that there is a basic difference between the causes of action and the right to relief in suits for passing off and for infringement of a registered trade mark and it was also incorrect lo equate the essentials of a passing off action with those in respect of an action complaining of an infringement of a registered trade mark. The following passage clearly brings out the essential similarities and the differences in respect of the reliefs which may be claimed in the aforesaid two types of causes of action :
"The finding in favor of the appellant to which the learned Counsel drew our attention was based upon dissimilarity of the packing in which the goods of the two parties were vended, the difference in the physical appearance of the two packets by reason of the variation in their colour and other features and their general get-up together with 'the circumstance that the name and address of the manufactory of the appellant was prominently displayed on his packets and these features were all set out for negativing the respondent's claim that the appellant had passed off his goods as those of the respondent. These matters which are of the essence of the cause of action for relief on the ground of passing off play but a limited role in an action for infringement of a registered trade mark by the registered proprietor who has a statutory right to that mark and who has a statutory remedy in the event of the use by another of the mark or a colour-able imitation thereof. While an action for passing off is a common Law remedy being in substance an action for deceit, that is, a passing off by a person of his own goods as those of another, that is not the gist of an action for infringement. The action for infringement is, statutory remedy conferred on the registered proprietor of a registered trade mark for the vindication of "the exclusive right to the use of the trade mark in relation to those goods"
(Vide S. 21. of the Act). The use by the defendant of the trade mark of the plaintiff is not essential in an action for passing off, but is the sine qua non in the case of an action for infringement. No doubt, where the evidence in respect of passing off consists merely of the colourable use of a registered trade mark, the essential features of both the actions might coincide in the sense that what would be a colourable limitation of a trade mark in a passing off action would also be such in an action for infringement of the same trade mark. But there the correspondence between the two ceases. In an action for infringement, the plaintiff must no doubt, make out that the use of the defendant's mark is so close either visually, phonetically or otherwise and the court reaches the conclusion that there is an imitation, no further evidence is required to Page 60 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined establish that the plaintiff's rights are violated. Expressed in another way. if the essential features of the trade mark of the plaintiff have been adopted by the defendant, the fact that the get-up, packing and other writing or marks on the goods or on the packets in which he offers his goods for sale show marked differences, or indicate clearly a trade origin different from that of the registered proprietor of the mark would be immaterial; whereas in the case of passing off, the defendant may escape liability if he can show that the added matter is sufficient to distinguish his goods from those of the plaintiff.
(12) As already observed earlier, in the instant case, the action is for infringement of the plaintiff's registered trade mark. As stated by the Supreme Court in Durga Dutt Sharma's case (supra), for such an action to succeed the plaintiff has merely to show that the essential features of the trade mark have been adopted by the defendant. This is because in such an action or invokes his statutory right granted under Section 28 of the Trade Marks Act, which gives him the exclusive right to use the said mark.
(18) Shri Anand, learned counsel for the defendants, has fairly conceded that mere delay, without anything more, cannot by itself be regarded as a good defense. This also seems to be the correct position in law. 'Inordinate delay', however, has been a factor which has been taken into consideration while declining the relief of a grant of temporary injunction. In the case of Vine Products Limited & Others v. Mackenzie and Company Limited & Others, (1969) R. P.C.I, the delay in approaching the Court was nearly 100 years. The question in that case was whether the plaintiffs were entitled to a declaration that they could call their product British Sherry. The defendants filed a counter-claim for an injunction to restrain the plaintiffs from passing off their wines as Sherry which was the produce of Jeroz District of Spain. The Court held that the word "Slerry" had been used for British products of the same type of wine for nearly a hundred years and, therefore, there was inordinate delay on the part of the defendants and they were not entitled to the grant of an injunction. A declaration was issued whereby the plaintiffs were entitled to call their products British Sherry. In the case of Cluett, Peabody v. Mcintyre, Hogg, (1958) R.P.C. 335 (4) an injunction was not granted because the plaintiffs had approached the Court after nearly 30 years. Inordinate delay' would, therefore, be delay of such a long duration that the defendant could have come to the conclusion that the plaintiff has, possibly, abandoned his right to seek relief or to object to the defendant using the trade mark. "Equity aids the vigilant, not those who slumber on their rights."
Page 61 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined (12) Mohan Lal vs. Sona Paint & Hardwares reported in 2013 SCC Online Del 1980, wherein the Hon'ble Supreme Court has held in para No.15.
15. Therefore, a design is registerable and is amenable to the protection of the Designs Act as long as it steers clear of the aspects referred to in Section 4 and is a design which fulfils the criteria prescribed under Section 2(b) of the Designs Act.
15.1 It is thus quite possible for two registrants to seek to establish that their respective designs are new or original, are not published anywhere in India or, are "significantly distinguishable" from known designs or combination of known designs provided of course it does not contain any scandalous or obscene matter. There could, however, be a difference of opinion inter se the two registrants with regard to newness, originality or even claimed significant distinction between/amongst designs. Since registration of design creates a monopoly, each design on registration will necessarily be presumed to be unique. However, the registration, would only result in creation of a rebuttable presumption that it fulfils adoption of all procedural safeguards which are required to be taken and that it is shorn of all prohibitions as contained in the Designs Act.
15.2 Having regard to above, it would be useful to appreciate at this stage the nature of an infringement suit under the Designs Act. In this context, a broad overview of the relevant provision may be necessary.
15.3 As indicated above, prohibitions qua registration of a design is contained in Section 4 of the Designs Act. Section 5 provides for an application to be filed by a proprietor of a design which is not prohibited under Section 4 of the Act. The Controller of Designs under Section 5 of the Designs Act is empowered to verify this aspect by having the application for registration being referred to an examiner. The Controller's decision with regard to the registration of design in respect of any or all of the articles prescribed in a class of articles is final under the provisions of Section 6 of the Designs Act.
15.4 Upon the completion of the aforesaid exercise, the Controller of Designs is entitled to issue a certificate of registration to the proprietor of the design under Section 9 of the Designs Act and thereafter in exercise of power under Section 10, enter the name and address of the proprietor of such a design alongwith any notification of assignment or Page 62 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined transmission, in the Register of Designs.
15.5 Under Section 19, any person, who is interested, is conferred with the right to seek cancellation of a registered design on the grounds given in clause (a) to (e) of Sub-Section (1) of Section 19.
15.6 Section 22 protects a registrant against piracy of his design. Clause
(a) of Sub Section (1) of Section 22 make it unlawful for any person to apply for the purposes of sale or cause to be applied any article in a class of articles in which the design is registered, that design or any fraudulent or obvious imitation of that design except with the license or written consent of the registered proprietor. This prohibition extends to anything that may be done to enable the registered design to be infringed in the manner described above. Clause (b) of Sub Section (1) of Section 22 extends the prohibition to even articles imported for sale without the consent of a registered proprietor which otherwise is an article belonging to a class in which the design is registered. Similarly, clause (c) of Sub Section (1) of Section 22 makes it unlawful to publish or expose or cause to be published or exposed for sale that article by a person who has the knowledge that the design or any fraudulent or obvious imitation has been applied to any article in any class of articles in which the design is registered without the consent of the registered proprietor.
15.7 Sub Section (2) of Section 22 provides for penal consequences in the form of damages. The second proviso to Sub Section (2) of Section 22 mandates that a suit for infringement cannot be instituted in a court below the court of a District Judge. Sub Section (3) of Section 22 enables the defendant in an infringement suit, where an allegation of piracy has been made qua the defendant to plead in his defence grounds, which are available under Section 19 of the Designs Act, for cancellation of a registered design.
15.8 Sub Section (4) of Section 22 requires that a suit in which a defence in terms of Section 19 of the Designs Act has been pleaded, the same shall be transferred to the High Court for decision.
15.9 Sub Section (5) of Section 22 provides that, when a decree is passed in a suit under Sub Section (2), a copy of the decree would be sent to the Controller who will cause necessary entries to be made in the Register of Designs.
Page 63 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined (13) Rajesh Kalra vs. Safeops, Surgical Care and Anr. reported in 2018 SCC Online Del 9516, wherein the Bench has held in para Nos.5 and 15. which are as under:-
5. Mr. Ankit Jain, Amicus Curie has argued:
(a) That the definition of 'design' in section 2(d) of the Designs Act, 2000 excludes a mere mechanical device and to qualify as a design it should be appealing to the eye and not appealing to the function which it performs.
(b) That functional change if any made in an article cannot be registered as a design.
(c) That the definition of 'design' under the Designs Act is the same as that which existed in United Kingdom (UK) earlier.
(d) That an Ophthalmologist will not buy an Eye Drape because of how it looks but will buy it for its use.
(e) That the word 'mechanical' as earlier existed in the UK Law has now been substituted with "functional".
(f) That the House of Lords in AMP Incorporated v. Utilux Proprietary Limited (1972) R.P.C. 103 has inter alia held that the phrase "which in the finished article appeal to and are judged solely by the eye" in the definition of 'design' in Section 19 of the Patents and Designs Act, 1919 (UK) is to be read as importing some limitation to the expression "features of shape, configuration, pattern or ornament" and that not all of such features constitute a design; the emphasis is on external appearance, but not every external appearance of an article constitutes a design; there must be in some way a special, peculiar, distinctive, significant or striking appearance-something which catches the eye and in this sense appeals to the eye.
(g) That the Full Bench of this Court, in Mohan Lal v. Sona Paint and Hardwares AIR 2013 Delhi 143, has held that designs relate to non-functional features of the article; therefore, by necessary corollary, a design which has functional attributes cannot be registered under the Designs Act-this is an essence of section 2(d) of the Designs Act; the protection under the Designs Act is granted Page 64 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined only to those designs which have an aesthetic value or otherwise appeal to the eye.
(h) That the High Court of Calcutta in Castrol India Ltd. v. Tide Water Oil Co. (I) Ltd. 1996 (16) PTC 202 (Cal) held that all novel designs are not protected; novel designs which are purely functional cannot found an action for infringement; the object of the Designs Act is to protect shape but not a functional shape and if shape and configuration are dictated solely by function, it is not registrable as a design.
(i) That this Court in Carlsberg Breweries A/s v. Som Distilleries and Breweries Limited 2017 (70) PTC 413 (Del), though appeal there against is pending, has held that the words "judged solely by the eye" must be intended to exclude cases where a customer might choose an article of that shape not because he thought that the shape made it more useful to him but because on viewing the product/article it stands out or strikes as novel; indentations and grooving on a bottle, in that case, though were found to be novel, inasmuch as bottles of other manufacturers were not having identical indentations and grooving but it was held that the indentations and grooving appeared to serve the purpose of providing a space where the label could be affixed and providing a frame to the label and were thus functional.
(j) That though the Full Bench of this Court in Mohan Lal supra has held that a suit for passing off of a design is also maintainable but the plaintiff has not sued therefor.
(k) That a perusal of the Certificates of Registration filed by the plaintiff show registration to be only with respect to shape and configuration.
(l) That though Rule 11(4) of the Design Rules, 2001 permits an applicant for registration to also state the purpose for which the article is used but the Certificate of Registration filed by the plaintiff does not state any purpose;
(m) That Rule 12 of the aforesaid Rules titled "Statement of Novelty" permits the applicant for registration to, if required by the Controller, endorse on the application and each of the representations, a brief statement of the novelty he claims in his design but there is no such statement also and nothing can be gathered from the Certificates of Registration, as to what is novel.Page 65 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024
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(n) That the House of Lords, in Phillips v. Harbro Rupper Company 1920 (37) R.P.C. 233, in the context of the Patents, Designs and Trade Marks Act, 1883, noted that though the statute requires that the application should contain a statement of the nature of the design, and the rules made under that statute permit the applicant to lodge a statement of the novelty claimed for the design, but the applicant therein had not availed himself of the permission and held that the Court themselves had to decide the question of originality or novelty of the design and infringement only on the basis of its own appreciation of the article by the test of eye; hope was expressed that the Controller of Designs would freely avail himself of this power as under Rule 12 (supra) of the Designs Rules and/or in any case where doubt is likely to arise, as otherwise, the only safe course for a Court to take will be to insist on absolute identity between the infringing and the registered design.
(o) That this Court also, in Dabur India Limited v. Rajesh Kumar 2008 (37) PTC 227 (Del), held that the plaintiff had not got any peculiar feature of the bottle registered as a design and it got the whole bottle registered as a design and that a plastic bottle is not a new thing.
(p) That the plaintiff in the present case did not claim any novelty in the aperture in the Eye Drape.
15. In my opinion, therefore, there is nothing non-obvious, novel or unique in terms of shape, size, configuration, pattern and composition of lines in the Eye Drape of the plaintiff, save for the functional utility of not requiring the Ophthalmologist or the paramedic to, before using the same, make a cut or an aperture therein for accessing the eye-socket to be operated upon. A functional shape and configuration which is dictated solely by functionality is not registrable under the Designs Act as a design. Once, the overall appearance is dictated by function, it cannot be registered as a design and the registration, if any, is invalid. This is not a case where some features of a design may have a functional purpose. Here, as aforesaid, the design of 'pre-cut' is only functional and has no ornamental value.
(14) Sanjay Soya Private Limited vs Narayani Trading (IA(L) 5011/2020 in COMIP (L) 2/2020, wherein the Bench has held under the following paragraphs which are as under;
Page 66 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined [27] He draws my attention to a decision of a learned Single Judge of this Court in Dhiraj Dharamdas Dewani v Sonal Info Systems Pvt Ltd And Others., 2012 3 MhLJ 888. This was a decision rendered on 6th March 2012. The decision holds that registration under the Copyright Act is mandatory before a plaintiff can claim relief, civil or criminal, under the Copyright Act. The matter came up in appeal from the District Court. The appellant was the plaintiff. He brought suit under Section 60 of the Copyright Act 1957 for a declaration and a permanent injunction in relation to taxation software. The factual details are not relevant. After considering some of the provisions of the Copyright Act and in particular Sections 14, 17, 21, 44, 45, 47, 48, 50-A, 51, 62(1), 63, 63-B and 64, the learned Single Judge concluded in paragraphs 26 and 27:
"26. Reading of the above penal provisions of sections 63, 63-B and 64 the Copyright Act clearly show that a person knowingly making use of a computer by infringing copy of a computer programme shall be criminally liable. It is well settle that provisions relating to penal provisions are required to be interpreted strictly. Now if there is no registration of copyright by its owner and such owner of a copyright is not known to the infringer due to nonregistration of the copyright he still would be held criminally liable under these provisions. To make a person liable criminally, it will have to be shown that such a person was fully knowing about the owner of the copyright and that he indulged in infringing the said copyright despite knowing the ownership thereof. If registration is not made and published in the official gazette such infringer cannot be expected to be aware nor can he be attributed knowledge about the ownership of the copyright of a particular copyright owner and in that event the criminal Court would not be able to convict such a person. That my lead to chaotic situations. Similarly, reading of Section 64 regarding power of police to seize shows that police officer will have to get himself satisfied that a particular person (complainant) is the owner of copyright and he will be so satisfied if such a copyright is registered. When both the complainant and the alleged infringer claim that their product was launched first and that their copyright work was made first, in the absence of registration under section 44 of the Act, how the police officer will be satisfied to proceed to take cognisance. The police officer in that case would not be able to move an inch to effect seizure of the alleged infringing copies. After all the provision regarding seizure is another serious act, which infringes upon the privacy of a person. Hence, the word 'may' used in section 45 of the Act will have to be read as 'shall' having regard to the scheme of the Act of which all Page 67 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined materials provisions have been quoted and analysed by me. I am therefore inclined to agree with and to follow the interpretation made by the Division Bench in Andhra Pradesh High Court in AIR 1960 A.P. 415 and Orissa High Court in AIR 1986 Orissa 210.
27. Thus careful survey of the above provisions of the Copyright Act, 1957 to my mind clearly denotes that in the absence of registration under section 44 of the Copyright Act by the owner of the copyright it would be impossible to enforce the remedies under the provisions of the Copyright Act against the infringer for any infringement under section 51 of the Copyright Act. Thus, I answer point No.1 in the affirmative."
(Emphasis added) [28] This decision is entirely per incuriam. It incorrectly notes that there was no decision of the Bombay High Court directly on this point (paragraph 11, last sentence). There were, in fact, four previous decisions, all to the contrary, each binding on the Dhiraj Dewani court.
[29] The first of these is the decision of SH Kapadia J (as he then was) sitting singly in Burroughs Wellcome (India) Ltd v Uni-Sole Pvt Ltd And Another, 1997 3 MhLJ 914. In paragraph 8, after discussing the essence of copyright, the learned Single Judge noted that there is no provision under the Act that deprives an author of his rights on account of nonregistration of the copyright.
[30] Oddly enough, Burroughs Wellcome was, in fact, cited before the Dhiraj Dewani court, as we can see from the listing in paragraph 6 of the latter. But, beyond stating it was placed, there is absolutely no consideration of Burroughs Wellcome in Dhiraj Dewani. The decision by Kapadia J was clearly binding on the Dhiraj Dewani court, which could not have taken a contrary view without considering Burroughs Wellcome and distinguishing it.
[31] Second, there is the 12th September 2002 decision of SJ Vazifdar J (as he then was) sitting singly in Asian Paints (I) Ltd v M/s Jaikishan Paints & Allied Products, 2002 4 MhLJ 536. In paragraph 24, the learned Single Judge held:
24. Registration under the Copyright Act is optional and not compulsory.
Registration is not necessary to claim a copyright. Registration under the Copyright Act merely raises a prima facie presumption in respect of the particulars entered in the Register of Copyright. The presumption is Page 68 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined however not conclusive. Copyright subsists as soon as the work is created and given a material form even if it is not registered. See Buroughs (I) Ltd vs Uni Soni Ltd, 1997 3 MhLJ 914. Thus even if the plaintiff's work was not registered, the plaintiff having established that it had created the same prior to the defendant, mere registration by the defendant of its work cannot defeat the plaintiff's claim."
(Emphasis added) [32] Asian Paints is not even noticed in Dhiraj Dewani.
[33] Incidentally, the Asian Paints decision is absolutely on point on the question of priority between the plaintiff claiming copyright and the defendant.
[34] The third reported decision is that of SU Kamdar J (as he then was) of 25th January 2006 in International Association of Lions Club v National Association of Indian Lions And Others, 2006 4 MhLJ 527. In paragraph 14, page 32, the Court was of the opinion that registration of copyright was not mandatory; and that registration, if availed, was only prima facie evidence of ownership of a copyright.
[35] There is another unreported decision of this Court in Anand Patwardhan v Director-General of Doordarshan And Others, to the same effect.
[36] Any one of these decisions - and each of them - were binding on the learned Single Judge deciding Dhiraj Dewani and, at a minimum, if that Court disagreed, have required that a reference be made to the Hon'ble the Chief Justice to constitute a larger bench to decide the question of law. But, necessarily, that would have required each of the four decisions to be considered and would have needed a reasoned order setting out why, in the view of the Dhiraj Dewani court, these were wrongly decided. There is no such discussion in Dhiraj Dewani.
[42] There is a large body of decisions of other Courts that hold that registration of copyright is not mandatory.
[43] The Dhiraj Dewani court was persuaded to follow the contrary view of other High Courts to the effect that registration is mandatory. Mr Burad attempts to do precisely that even today. In view of the binding decisions of this Court, it is not open to me to accept this submission: it would amount to (a) ignoring previous, and binding, decisions of this Court; and possibly (b) overruling the decisions of four benches of coordinate jurisdiction and strength. This is simply Page 69 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined impossible, and is not a course available to me. It was also not open to the Dhiraj Dewani court. The four decisions of this Court to which I have referred are all binding on me, as they were on the Dhiraj Dewani court. They cannot be distinguished. A contrary view is plainly impossible, and it was just as impossible on 6th March 2012 when Dhiraj Dewani was decided.
[44] Indeed, on principle, it seems to me that the Dhiraj Dewani could not possibly have decided as it did. Consider this: (i) the Burroughs Wellcome decision was cited, but neither distinguished nor followed, though entirely binding; (b) the other decisions of this court (Asian Paints, Lions Club and Anand Patwardhan), all of benches of coordinate strength, and all binding on precisely the same point, were not even noticed; and (c) the Dhiraj Dewani court preferred the Division Bench view of the Madhya Pradesh High Court in Mishra Bandhu Karyalaya & Ors v Shivratanlal Koshal, 1970 AIR(MP) 261:
1969 SCCOnLineMP 35 . even though this was specifically held not to be good law by a Full Bench to which the question of law was referred in KC Bokadia & Anr v Dinesh Chandra Dubey, 1999 1 MPLJ 33. Curiously, the Dhiraj Dewani court itself noted that the Mishra Bandhu Karyalaya Division Bench decision had not been followed by a Division Bench of the Kerala High Court.There is thus no question of Mr Burad being able to commend today that I should prefer the view of the over-ruled Division Bench of the Madhya Pradesh High Court in Mishra Bandhu.
[49] Interestingly, as Mr Khandekar points out, there was indeed a proposal to make copyright registration mandatory. The Copyright Bill, 1955 contained such a proposal in Clause 65(2). The proposal was that no suit or other proceeding regarding infringement of copyright in any work could be entertained unless the copyright was registered with the Registrar of Copyrights. What we find in the Report of the Joint Committee to which the Bill was referred is that sub-clause (2) was, after deliberation, not found appropriate. It was omitted and was replaced by a new sub-clause. The Joint Committee felt that, as originally contemplated, sub-Clause(2) would:
"virtually make registration of copyright compulsory and would be an undue restriction on the owner of the copyright to exercise his rights. In the opinion of the Committee, many authors are deterred from instituting infringement proceedings because the court in which such proceedings are to be instituted is situated at a considerable distance from the place of their ordinary residence. The Committee feels that this impediment should be removed and Page 70 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined the new sub-clause (2) accordingly provides that infringement proceedings may be instituted in the district court within the local limits of whose jurisdiction the person instituting the proceedings ordinary resides, carries on business, etc".
[50] When the Act was finally brought into force, the original subclause(2), requiring mandatory registration of copyright, was replaced by the following:
"(2) Where any civil suit or other proceeding regarding infringement of copyright instituted by an exclusive licensee is successful no fresh suit or other proceeding in respect of the same cause of action shall lie at the instance of the owner of the copyright."
[51] The second reason to disagree with the view in Dhiraj Dewani is about the nature of the right itself. Copyright and trade mark operate in different spheres, though in some cases - as in the present one - these may overlap or intersect. An artistic work may receive both trade mark registration as a label and copyright protection as an artistic work. One requires registration to sustain a suit for infringement. The other does not. At its essence, copyright is a recognition of originality, granting rights of commercialisation and exclusivity in that commercialisation to the author of a work, a person who, by sweat of his brow, has brought into being the original expression or realisation of an idea. The emphasise is on originality, labour and skill in expression and realisation. This is where there is a real point of disagreement with the Dhiraj Dewani approach. That Court believed that the author of a work - literary or artistic -might be cast into a state of wonderment on completing his or her work as to whether or not his or her work was indeed original or was an infringement of someone else's copyright; and hence that Court said that copyright registration was necessary. But this is conceptually and logically plainly wrong. No forger or plagiarist is ever in any such state of wonderment. Every forger, plagiarist or, to use a more colloquial expression, 'rip-off artist' knows what he or she is about, i.e., forging, plagiarising or 'ripping off' another's original work, even as he or she goes about doing it.
[52] Section 51 of the Copyright Act says:
51. When copyright infringed.- Copyright in a work shall be deemed to be infringed-Page 71 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024
NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined
(a) when any person, without a licence granted by the owner of the copyright or the Registrar of Copyrights under this Act or in contravention of the conditions of a licence so granted or of any condition imposed by a competent authority under this Act-
(i) does anything, the exclusive right to do which is by this Act conferred upon the owner of the copyright, or
(ii) permits for profit any place to be used for the communication of the work to the public where such communication constitutes an infringement of the copyright in the work, unless he was not aware and had no reasonable ground for believing that such communication to the public would be an infringement of copyright; or
(b) when any person-
(i) makes for sale or hire, or sells or lets for hire, or by way of trade displays or offers for sale or hire, or
(ii) distributes either for the purpose of trade or to such an extent as to affect prejudicially the owner of the copyright, or
(iii) by way of trade exhibits in public, or
(iv) imports into India, any infringing copies of the work:
Provided that nothing in sub-clause (iv) shall apply to the import of one copy of any work for the private and domestic use of the importer.
Explanation.- For the purposes of this section, the reproduction of a literary, dramatic, musical or artistic work in the form of a cinematograph film shall be deemed to be an "infringing copy".
(Emphasis added) [53] This section does not, per se, demand prior registration. It does not say so anywhere; and this has to be read with Section 45(1), which says that the owner of copyright may apply for registration. Importantly, copyright infringement lies in the unlicensed use of original works, in which the author has a spectrum of exclusive rights. Copyright theft or infringement lies in taking another's original work and claiming it as a work of one's own originality, and thus availing illicitly of those exclusive rights. One of the tests is how much of the claimed original work has been taken up in the later work. There is always the slight escape of the fair use doctrine, but the underlying principle is that no author may claim as his or her own the original authorship work of another. That is the essence of copyright protection. It is unlike the incidents of trade mark law where there is, in fact, a possibility of concurrent users, joint proprietors or two or more registered proprietors of very similar marks. Not every case by a registered Page 72 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined proprietor of a trade mark yields a decree in infringement. Very distinct and different considerations obtain in trade mark law, and these cannot be put on the same pedestal or subjected to the same considerations as copyright law.
[54] Indeed this the reason why, a little earlier in this judgement, I noted that Mr Burad's task would be to show that either his client or some other person had used the very label over which Sanjay Soya claims copyright protection before Sanjay Soya, that is to say, there would be no originality at all in Sanjay Soya's label. Clearly, Narayani Trading's use is later, so it cannot itself claim to have been the first author of the artistic work. It cannot also point to anyone else prior to Sanjay Soya or its predecessor-in-title, SK Oil. This necessarily constricts the range of defences that are now available to Narayani Trading.
[55] International treaties and obligations to which India is a party also militate against the acceptance of the Dhiraj Dewani view that copyright registration is mandatory. The Berne Convention of 1886 (as modified in Paris in 1971), and of which India is a member since 28th April 1928, has three fundamental principles:
(a) Works originating in one of the Contracting States (that is, works the author of which is a national of such a State or works first published in such a State) must be given the same protection in each of the other Contracting States as the latter grants to the works of its own nationals (principle of "national treatment").
(b) Protection must not be conditional upon compliance with any formality (principle of "automatic" protection).
(c) Protection is independent of the existence of protection in the country of origin of the work (principle of "independence" of protection). If, however, a Contracting State provides for a longer term of protection than the minimum prescribed by the Convention and the work ceases to be protected in the country of origin, protection may be denied once protection in the country of origin ceases.
(Emphasis added) [56] Formal 'registration' of copyright as a mandatory requirement would be in the teeth of this Convention requirement. Protection must be 'automatic', on the coming into existence of the work in which copyright is claimed.
[57] Further, as regards the Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement):
Under the Agreement on Trade-Related Aspects of Intellectual Property Page 73 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined Rights (TRIPS Agreement), the principles of national treatment, automatic protection and independence of protection also bind those World Trade Organization (WTO) Members not party to the Berne Convention. In addition, the TRIPS Agreement imposes an obligation of "most-favoured-nation treatment", under which advantages accorded by a WTO Member to the nationals of any other country must also be accorded to the nationals of all WTO Members. It is to be noted that the possibility of delayed application of the TRIPS Agreement does not apply to national treatment and most-favoured obligations.
(Emphasis added) [58] An illuminating discussion is to be found in the very recent 2nd March 2021 decision of a three-judge Bench of the Supreme Court in Engineering Analysis Centre of Excellence Pvt Ltd v Commissioner of Income Tax & Anr,This is particularly appropriate because Engineering Analysis also dealt with copyright in a literary work, viz., software, and an associated issue of taxation - Dhiraj Dewani was also about copyright in taxation software. The Supreme Court decision, authored by Rohinton Fali Nariman J, inter alia explains the nature of copyright:
35. Though the expression "copyright" has not been defined separately in the "definitions" section of the Copyright Act, yet, section 14 makes it clear that "copyright" means the "exclusive right", subject to the provisions of the Act, to do or authorise the doing of certain acts "in respect of a work". When an "author" in relation to a "literary work" which includes a "computer programme", creates such work, such author has the exclusive right, subject to the provisions of the Copyright Act, to do or authorise the doing of several acts in respect of such work or any substantial part thereof. In the case of a computer programme, section 14(b) specifically speaks of two sets of acts - the seven acts enumerated in subclause (a) and the eighth act of selling or giving on commercial rental or offering for sale or for commercial rental any copy of the computer programme. Insofar as the seven acts that are set out in sub-clause (a) are concerned, they all delineate how the exclusive right that is with the owner of the copyright may be parted with, i.e., if there is any parting with the right to reproduce the work in any material form; the right to issue copies of the work to the public, not being copies already in circulation; the right to perform the work in public or communicate it to the public; the right to make any cinematograph film or sound recording in respect of the work; the right to make any translation of the work; the right to make any adaptation of the work; or the right to do any of the Page 74 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined specified acts in relation to a translation or an adaptation.
36. In essence, such right is referred to as copyright, and includes the right to reproduce the work in any material form, issue copies of the work to the public, perform the work in public, or make translations or adaptations of the work. This is made even clearer by the definition of an "infringing copy" contained in section 2(m) of the Copyright Act, which in relation to a computer programme, i.e., a literary work, means reproduction of the said work. Thus, the right to reproduce a computer programme and exploit the reproduction by way of sale, transfer, license etc. is at the heart of the said exclusive right.
38. Importantly, no copyright exists in India outside the provisions of the Copyright Act or any other special law for the time being in force, vide section 16 of the Copyright Act. When the owner of copyright in a literary work assigns wholly or in part, all or any of the rights contained in section 14(a) and (b) of the Copyright Act, in the said work for a consideration, the assignee of such right becomes entitled to all such rights comprised in the copyright that is assigned, and shall be treated as the owner of the copyright of what is assigned to him (see section 18(2) read with section 19(3) of the Copyright Act). Also, under section 30 of the Copyright Act, the owner of the copyright in any literary work may grant any interest in any right mentioned in section 14(a) of the Copyright Act by licence in writing by him to the licensee, under which, for parting with such interest, royalty may become payable (see section 30A of the Copyright Act). When such licence is granted, copyright is infringed when any use, relatable to the said interest/right that is licensed, is contrary to the conditions of the licence so granted. Infringement of copyright takes place when a person "makes for sale or hire or sells or lets for hire" or "offers for sale or hire" or "distributes so as to affect prejudicially the owner of the copyright", vide section 51(b) of the Copyright Act.
Importantly, the making of copies or adaptation of a computer programme in order to utilise the said computer programme for the purpose for which it was supplied, or to make up back-up copies as a temporary protection against loss, destruction or damage so as to be able to utilise the computer programme for the purpose for which it was supplied, does not constitute an act of infringement of copyright under section 52(1)(aa) of the Copyright Act. In short, what is referred to in section 52(1) (aa) of the Copyright Act would not amount to reproduction so as to amount to an infringement of copyright.
Page 75 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined (Emphasis added) [59] In this delineation by the Supreme Court of the rights of an author of a work, of the owner of copyright, of the concept of copyright, and when and how it can be used, claimed and protected against infringement, there is no finding at all that prior registration is mandatory before such rights and entitlements are claimed. Simply put, Dhiraj Dewani simply cannot stand against this enunciation of law. It is entirely contrary to the Supreme Court decision in Engineering Analysis. Therefore, even if it was not otherwise not good law, it would now stand impliedly over-ruled, as would Gulfam Exporters.
[60] The third and final point of sharp disagreement with Dhiraj Dewani is its understanding that the jurisdictional provision in Section 62 of the Copyright Act, and which corresponds almost exactly to Section 134 of the Trade Marks Act, establishes what Dhiraj Dewani calls 'a special Court'. In trade mark law, the interpretation of Section 134 has been the subject matter of some controversy. I had occasion to address this in a different context in Manugraph India Ltd v Simarq Technologies Pvt Ltd., 2016 67 PTC 254: AIR 2016 Bom 217 : 2016 SCC OnLine Bom 5334. That decision contained an analysis of Supreme Court decision in Indian Performing Rights Society v Sanjay Dalia And Anr, 2015 10 SCC 161. Sections 134 and 62 operate to supplement the ordinary provisions of jurisdiction of civil courts under Section 20 of the Code of Civil Procedure 1908 ("CPC"). A registered proprietor of a mark or the owner (not registrant) of copyright may have recourse to the jurisdictional venues in Section 134 or Section 62, in addition to those under CPC Section 20. These special jurisdictional provisions give the trade mark registrant or the copyright owner the additional right to, as it were, drag the defendant to the plaintiff's court. A registered proprietor can sue a defendant where the plaintiff proprietor is situated. A copyright owner can similarly sue a defendant where the copyright owner is situated. Sections 62 and 134 read thus:
62. Jurisdiction of Court over matters arising under this Chapter.- (1) Every suit or other civil proceedings arising under this Chapter in respect of the infringement of copyright in any work or the infringement of any other right conferred by this Act shall be instituted in the district Court having jurisdiction.
(2) For the purpose of sub-section (1), a "district Court having jurisdiction" shall, notwithstanding anything contained in the Code of Civil Procedure, 1908 (5 of 1908), or any other law for the time being in force, include a district Court within the local limits of whose jurisdiction, Page 76 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined at the time of the institution of the suit or other proceeding, the person instituting the suit or other proceeding or, where there are more than one such persons, any of them actually and voluntarily resides or carries on business or personally works for gain.
134. Suit for infringement, etc., to be instituted before District Court.- (1) No suit-
(a) for the infringement of a registered trade mark; or
(b) relating to any right in a registered trade mark; or
(c) for passing off arising out of the use by the defendant or any trade mark which is identical with or deceptively similar to the plaintiff's trade mark, whether registered or unregistered, shall be instituted in any court inferior to a District Court having jurisdiction to try the suit.
(2) For the purpose of clauses (a) and (b) of sub-section (1), a "District Court having jurisdiction" shall, notwithstanding anything contained in the Code of Civil Procedure, 1908 (5 of 1908) or any other law for the time being in force include a District Court within the local limits of whose jurisdiction, at the time of the institution of the suit or other proceeding, the person instituting the suit or proceeding, or, where there are more than one such persons any of them, actually and voluntarily resides or carries on business or personally works for gain.
Explanation.- For the purposes of sub-section (2), "person" includes the registered proprietor and the registered user.
[61] This is therefore not "a special Court" as reasoned by the Dhiraj Dewani. This is only an additional jurisdictional facility available to a registered proprietor of a trade mark or the owner of copyright. The finding in Dhiraj Dewani, therefore, that for a copyright infringement, recourse to the so-called "special court," i.e., the court where the registered owner of copyright resides, is unavailable without registration has no foundation in the statute itself. The Dhiraj Dewani decision then goes on to say that, without registration, an owner of a copyright may bring suit "in the regular Court" - meaning any of the courts covered by Section 20 of the CPC. This analysis is plainly incorrect. Suing in the court with jurisdiction where the plaintiff copyright holder resides or works is not dependent on registration at all. The owner of a copyright has a panoply of jurisdictional choices, including one that is available only to him (and not to an ordinary plaintiff in a regular civil suit). The question, therefore, is not of which court, but more properly for what relief. This is the contradiction at the heart of Dhiraj Dewani: for, if it holds that registration of copyright is compulsory to sue for infringement, then it surely makes no difference at all where a suit for infringement is Page 77 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined filed, i.e., in the District Court where the plaintiff is or in a Section 20 CPC Court. The rationale behind allowing a trade mark registrant or a copyright owner this additional jurisdictional choice is that the right claimed is in rem, against the world at large. The infringement thus takes place where the proprietor of the trade mark or the owner of copyright resides or works. This is, therefore, no ground to hold that copyright registration is mandatory.
SUBMISSIONS ON BEHALF OF THE RESPONDENTS:-
6. The HPHT technology that the Plaintiff is in the entire Copyright Suit actually traces its origins to the Bakul Institute sagacious Government of Ukraine entity that has not even protected its own technology and permitted the same to be open to public, for the greater welfare of the world. The HPHT technology is just one of the technologies available in public domain which also include 'irradiation', 'Low-Pressure High Temperature' methods which also has sufficient or equivalent results. The entire HPHT technology in its present form is existing since 1960s onwards and most of its patents have already expired by efflux of time to the extent that there is no patent filed with respect to the subject matter of the Suit Patent i.e. the 'Diamond Container' for the HPHT treatment of Page 78 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined diamonds, with the Patents Office in India or Worldwide in last 10 (ten) years or so except the Suit Patent and the Suit-
Copyrights.
6.1. For processing diamonds using HPHT technology, there is requirement of any specialized training from the scientists of Ukraine and Israel or know-how and the same can be achieved by the use of information that is already available in the public domain in the form of numerous expired patents, designs etc. The titles of the Suit-Copyrights pertain to well-known and used apparatus does not exhibit any form of innovation or novelty and the entire Suit-Copyrights is nothing but a replication of existing designs of HPHT apparatus and devices that already freely exist or that were acquired in the form of Know- How acquired from Bakul Institute and Eli Dori Diamonds Limited.
All legal purposes the copyrights claimed by the Plaintiff was nothing but a derivative work or adaptation, wherein the original authorship and ownership of the copyrights was vested with the Bakul Institute, as per the Plaintiff's own admissions. The Page 79 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined Know-How Agreement is not an instrument of transfer/ absolute conveyance of ANY INTELLECTUAL PROPERTY in favour of the Plaintiff. there is no evidence or averment by plaintiff as regards execution of transfer/ conveyance deed or its registration with any government authority in India. Even though the document has been titied as a 'Know-How Agreement' it was basically, a supply, operations and maintenance agreement with a minor component being the alleged agreement to transfer of license to know-how for the restricted purposes of production (HPHT treatment of diamonds) and NOT for transfer and subsequent appropriation of ownership of the intellectual property as has been done by the Plaintiff. Know-How Agreement has only conferred restricted 'rights to use' for the production based on the technology and not ownership rights permitting the Plaintiff to apply for a copyright on technology.
The Plaintiff has misled the Copyright Office and deliberately omitted to mention the existence of the Know-How Agreement.
Page 80 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined 6.2. There is also no evidence on record to suggest that either Bakul Institute or Plaintiff made any due-diligence or inquiries on existing prior art search to confirm if any intellectual property akin/ similar to that being transferred in terms of the Know-How Agreement existed in the jurisdiction of India, which might conflict with the intellectual property rights being transferred in terms of the Know-How Agreement. Plaintiff in obtaining the Suit-Copyrights is directly in contravention to the provisions of the Know-How Agreement and to the detriment of the legal rights of the Bakul Institute and may also be in violation of the extant laws of Ukraine as the said Know-How Agreement was executed thereat. This proves that the term of the Know-How Agreement was only for a period of 3 (three) years from the date of execution in 2010 and was for all reasons and purposes deemed expired on completion of the said term.
6.3. The Plaintiff is relying on the Know-How Agreement which is an instrument executed in Ukraine and the Page 81 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined subject-matter of the said Know- How Agreement i.e. the 'Know-How' is also in Ukraine. It is a well settled principle that for courts in India, foreign law is a question of fact and the onus of proof of foreign law lies on the party relying on it, which in this case is the Plaintiff. The HPHT apparatus used by the Defendants including the various components that form parts thereof are based on the designs that are commonly available in public-domain with workshop modifications as per the requirements of individual batches of diamonds under process and there is no fundamental differences between them and that used by the Plaintiff till 2017 as the Plaintiff itself was relying on publicly available designs, software and components that are commonly available in the public- domain. It is evident that Bakul Institute has also been freely selling the design of the Suit Patent - Diamond Container cell to other international entities including Eli Dori. The Plaintiff company has not been engaged in any research and development till November 2017 and as such, there was no 'confidential information' pertaining to the Page 82 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined suit patent. Toroid-type HPHT technology is an outdated and redundant technology with most of the components available in the public domain and is being replaced worldwide by Cubic type presses as a superior and cost-effective alternative.
6.4. As regards substantial amounts of money/royalty etc. paid by the Plaintiff over the years, the Copyright Suit discloses no payments whatsoever. It is only in the connected matter being the Copyright Suit that there is an averment of payment made to Bakul Institute for procurement of overhauling service, training, spares and components purchases etc. with some of portion for procurement of 'Know-How' and that too was limited to $ 60000 /- and paid way back in the year 2010. HPHT technology for the sole purpose of changing the color of diamond is neither economically viable пог a commercially sustainable practice as far superior Cubic-Type Press are already replacing the same which are much cheaper too. In today's date will use Toroid Ring based HPHT treatment of diamonds to change the color is Page 83 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined because it already has the Die Matrix and other apparatus in place and cannot economically justify the cost of replacement thereof. The Copyright Act, 1957 has no provisions whatsoever to deal with violations of any 'Confidential Information','Know-
How', 'Trade Secrets', 'Proprietary Information'. All the various apparatus/components/ technical drawings etc. that the Defendants are using are freely available in the public domain on a free to use basis or have been provided to it from the OEM themselves.
6.5. The Plaintiff has not followed any protocols for safeguarding of Confidential Information/ trade secrets etc. at least till the time Defendants were working in their respective capacities with the Plaintiff company till 2017. There was never an occasion when the Plaintiff asked any of the Defendants to sign any confidentiality agreement. The Plaintiff has never developed any Tungsten Carbide Die Matrix in house till 2017.
The Defendants can neither confirm nor deny any agreement Page 84 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined between Electronica Tough Carbide Limited and the Plaintiff for the supply of Tungsten Carbide Die Matrix.
6.6. None of Defendants during their entire engagement with Plaintiff has ever seen Mr. Mahesh Bhagavanbhai Sonani and Mr. Jayam Maheshbhi Sonani to authoring or even studying the subject matters of the Suit-Copyrights and all the technologies were from publicly available sources that were used by the Plaintiff till 2017. Defendant No. 2 did not join as a 'Permanent Employee' and was not disclosed any Confidential Information under any confidentiality obligations either explicit or implicit.
The Defendants has not possess the requisite educational qualifications to under complicated technical assignments as alleged and the Promoter-Directors of the Plaintiff company.
The Plaintiff is admitting to having received the entire technology from Bakul Institute. The mere placement of a Toroidal ring in an HPHT machine is neither 'novel' nor an 'inventive step' as otherwise the Plaintiff would have obtained a Page 85 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined patent for the same. The same is nothing more than a workshop improvement. In Para 35 the Plaintiff is admitting the infringing machines are not available for market sale and on the other part at Para 63 the Plaintiff is claiming the Defendants have made Crores of Rupees by the sale of the Infringing Machines. So, this is not a mere contradiction but exposes in entirety the mala fide intention and actions of the Plaintiff.
6.7. In the Criminal Proceedings that have been referenced have falsely implicated the Defendants and the same can be seen from the C-Summary Report filed by the Surat Police dated 24 April 2021. The Plaintiff became fully aware in the said C-
Summary Report that the Surat Police had determined that no evidence existed for proceeding with the criminal action against the Defendants.
6.8. Mr. Jay Savla, learned Senior advocate for respondent Nos.1 to 5 has submitted that respondent No. 3 to 5 are close family relatives of the Promoter-Directors of the Appellant and Page 86 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined they were engaged in multiple businesses with each other as Partners including but not limited to the High Pressure-High Temperature (HPHT) Treatment of diamonds for change of color, removal of lattice imperfections etc., which is a very well-
known technique for processing diamonds and practised in Surat- Gujarat. Respondents never had any employment contract with the Appellant. There was never any employment agreement / confidentiality or Non-disclosure Agreement executed with the Appellant. The techniques and technology for HPHT treatment of diamonds is a well-known process and available in the public domain there was also never any need for any Confidentiality Agreement or any Trade Secrets inter alias amongst the parties.
6.9. It is further submitted that respondent No. 5 does not even have any relation with the Appellant and was only an employee at another group company which is engaged in CVD Diamonds and does not even deal with HPHT processing of diamonds.
Page 87 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined 6.10. It is further submitted that respondents in the year 2018, acquired second-hand belt press machines being toroid-type belt press machines which are very well known and publicly available designs being technology that was originally developed in Soviet Russia/ Ukraine and operationalized the said second-hand belt press machines for HPHT processing of diamonds. Respondents have submitted thousands of pages of documents including from ISM Bakul, as duly noted by the learned Commercial Court in the Impugned Order which clearly establishes that the technology is clearly available in public domain.
6.11. It is further submitted that appellant has never mentioned that the Impugned Copyrights originated from the ISM Bakul 'Know-How Agreement and the original work was done by researchers at ISM Bakul in Ukraine.
6.12. It is further submitted that the appellant has prima facie failed to establish that the Impugned Copyrights are Original Page 88 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined Works, and also failed to establish that the Promoter-Directors of the Appellant are the 'Authors' of the Impugned Copyrights and thus no relief ought to be granted. Learned trial Court itself has made the finding that the original work i.e. technology was procured by appellant from ISM Bakul and therefore the Appellant has prima facie failed to establish itself as either the 'Owner' or as the 'Author' of the Impugned Copyrights.
6.13. It is also admitted and not denied by the appellant that HMI program and control panel were made by and installed all by Mr. Valodoya (Original Author) himself at the premises of both the appellant and the respondents. The HPHT machine comes with the manual that can be used by any technician or engineer having knowledge of HPHT apparatus.
6.14. Plaintiff's own case is that it procured the HPHT technology from ISM Bakul which it purportedly improved and this purported documents in relation to its improvement been kept in sealed covers and has not been shown to the respondents Page 89 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined during the proceedings in the trial Court. Therefore, appellant itself cannot ask for any injunction on use of Block Matrix.
6.15. There was never any information or documentation shared with any of the respondents that was stated as either confidential or trade secret nor has the appellant identified any such information or documents.
6.16. It is further submitted that the Court Commission was not able to find a single shred of evidence of any infringing material during the Court Commission. Appellant had also filed a FIR based on which a Police Raid was conducted on the premises of the respondents, and yet no incriminating/ infringing material was found.
6.17. The intent of the appellant is to throw the respondents out of competing business.
6.18. It is further submitted that it is well settled that jurisdiction of the Appeal Court in an Appeal arising out of interim order is extremely limited.
Page 90 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined 6.19. Learned senior advocate for respondents has placed reliance upon the decision in the case of Wander Ltd & Ors. V. Antox India P. Ltd reported in 19990 Supp (1) SCC 727;
MANU/SC/0595/1990.
6.20. It is further submitted that as per the case of plaintiff original apparatus and components were itself procured from ISM Bakul and other international sources and thereafter developed by it. Thus, the idea itself is neither unique nor are the Impugned Copyrights 'Original Work' but at best an expression of an idea that is available in the public domain.
6.21. The comparison is of regular components / apparatus freely available in the market and commonly used in factories undertaking HPHT processing and thus, no infringement can be established by the Photographs referenced. Appellant to establish infringement ought to compare the infringing components with the Unpublished Copyrights. Instead of comparing, Appellant has itself chosen not to disclose and Page 91 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined compare the same.
6.22. It is further asserted that till date neither the respondents nor the learned trial Court has compared the Unpublished Copyrights kept in Sealed Cover and no infringement can be established without the comparison of the infringing components with the contents of Sealed Cover.
6.23. It is further submitted that components mapped in the Comparison Chart are commonly used components that are used in all factory setups wherein Toroid Type Belt Press based HPHT apparatus is used and no reasonable inference of infringement can be drawn from the same.
6.24. It is further submitted that the applications for the Impugned Copyrights were filed by the appellant in the year 2020-21 i.e. almost after a lapse of 2-3 years after the departure of the respondents. The cause of action is based on an anonymous letter from a 'Whistleblower' whose locus, bona Page 92 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined fides and veracity of contents of the letter are itself strongly disputed which makes it a triable issue.
6.25. Learned Senior advocate for the respondents has placed reliance upon the decision in the case of M/s Polymer Papers Ltd v. Gurmit Singh &Ors. reported in 2002 SCC OnLine Del 674, wherein, the Hon'ble Supreme Court has held in para Nos.
2, 3, 20, 23, 24 and 27, which are as under:-
"2. Before discussing the rival contentions of the parties, it would be important to give a brief summary of facts. Plaintiff No. 1 is a company engaged in the manufacture of wide range of filter papers, chemicals and filters used for various purposes such as locomotives, defence equipment, automotive and industrial applications. The plaintiff company has various divisions including an engineering division. Defendant No. 1, Sh. Gurmit Singh has been working in the capacity of Managing Director of the plaintiff company since its inception. Defendants No. 2 and 3, Sh. Digvijay Singh and Sh. Anoop Singh are the sons of Defendant No. 1. Defendant No. 2 has been working in the capacity of Vice-President (Operations) and also in charge of engineering and component division, whereas defendant No. 3 has been working as Manager (Sales). Defendants No. 4 to 10 are the employees of the company and have been working in various capacities in the engineering division of the plaintiff company. The engineering division has been manufacturing its own designed filter manufacturing and testing machines. The plaintiff company has invested substantial amounts in the development and know-how of skill, knowledge, technique and mechanism. On the basis of its know -how, its engineering Page 93 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined division has launched its own concepts and drawings of the various filter manufacturing and testing machines. It is claimed that the industrial drawings and manufacturing process, names of suppliers and certain parts used in the machinery constitute the trade secrets of the plaintiff company. The Plaintiff company also claims to be the exclusive owner of the artistic works consisting of the industrial drawings, shapes and get up of the machines and thereby claim the exclusive right to reproduce or depict in two and three dimensions, the machinery and the key components.
3. The plaintiffs' allegations are that defendants No. 1 to 3 have conspired with defendants No. 4 to 10, to hijack the business of the engineering division and in order to take away the know-how of the plaintiff company photocopies the drawings and designs and the customers and suppliers lists etc. Defendants No. 2, 4, 5, 6, 8 and 10 submitted their letters of resignation before Defendant No. 1, who unilaterally and without consultation with the other Directors accepted their resignation letters and paid them dues in full and final settlement. The plaintiff's further case is that by accepting the resignation of the aforesaid defendants and taking away the copies of the industrial drawings and lists of plaintiffs' customers and suppliers, etc. they have practically closed the engineering division of the company. The paralysing of the engineering division has caused tremendous set back to the functioning of the other divisions of the company as they all are dependent on the engineering division. The company is alleged to have suffered heavy losses on account of the Paralysing of the engineering division as the company is unable to meet its commitments. The further allegations are that apart from the industrial drawings, etc. the Defendants have also removed other technical material and have established independent business, on parallel lines in Delhi and Gurgaon. It is alleged that the aforesaid industrial/engineering drawings or designs, etc. are exclusive property of the plaintiff company and the defendants with a view to unauthorizedly, illegally and commercially exploit the Page 94 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined works and property of the plaintiff company have made photocopies and in certain cases taken the original designs and drawings from the premises of the plaintiff company.
20. The third plea raised by learned counsel for the defendants is that there cannot be any restraint against a person from carrying on a lawful trade, business or profession. It is contended that the plaintiffs have failed to place anything on record to show that they have any right of exclusivity of protection under any of the statutes for intellectual property rights and in the absence of that they have no right to restrain the defendants from doing business similar to that of the plaintiffs. Such a restraint against the defendants from manufacturing, selling or otherwise dealing in machines similar to those manufactured by the plaintiffs is clearly barred under S. 27 of the Indian Contract Act. No person can be restrained from carrying any lawful trade, business of profession. It is submitted that even otherwise there is no contract between the plaintiffs and the defendants imposing any terms or conditions for doing any business similar to that of the plaintiffs. It is submitted that even a service contract in restrain of trade of business would not have been enforceable in law being barred under S. 27 of the Contract Act. Reference in this respect is made to a celebrated decision in Superintendence Company of India Pvt. Ltd. v. Krishan Murgai, AIR 1980 SC 1717, where the Apex Court relying on the celebrated Judgment in Madhub Chunder v. Rajcoomer Doss, (1874) 14 Beng LR 76 held as under (paras 28 and 29 of AIR):
"The question whether an agreement is void under S. 27 must be decided upon the wording of that section. There is nothing in the wording of S. 27 to suggest that the principle stated therein does not apply when the restraint is for a limited period only or is confined to a particular area. Such matters of partial restriction have effect only when the facts fall within the exception to the section.Page 95 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024
NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined A contract, which has for its object a restraint of trade, is prima facie, void, S. 27 of the Contract Act is general in terms and unless a particular contract can be distinctly brought within Exception 1 there is no escape from the prohibition. We have nothing to do with the policy of such a law. All we have to do is to take the words of the Contract Act and put upon them the meaning which they appear plainly to bear. This view of the section was expressed by Sir Richard Couch C.J. in the celebrated judgment in Madhub Chunder v. Rajcoomar Doss (1874) 14 Beng LR 76 at pp. 85-86, laying down that whether the restraint was general or partial, unqualified or qualified, if it was in the nature of a restraint of trade, it was void."
23. In the instant case, admittedly there was no agreement or service contract between the plaintiff company and defendants No. 2 to 10. Defendant No. 1 is in any case not an employee. He is one of the Managing Directors of plaintiff No. 1 company holding substantial shares therein. The absence of such an agreement or service contract renders the plaintiffs' case even worst. In the absence of showing any exclusive right protected under any of the Intellectual Property Laws the plaintiffs cannot even claim a restraint against the defendants from carrying on any trade or business similar to that of the plaintiffs. It is submitted that the plaintiffs having failed to show any exclusive proprietary rights in the industrial drawings, designs, etc. are not entitled to any restraint orders against the defendants injuncting them from carrying out any trade or business similar to that of the plaintiffs.
24. I find substance in the submissions of the learned counsel. The plaintiffs have prima facie failed to show that they have any exclusive proprietary right in the Industrial drawings, designs etc. protected under any of the Intellectual Property Laws. In the absence of the same and in view of the Apex Court's observations in Krishan Murgai's case (AIR 1980 SC 1717) (supra), followed by the Gujarat High Court in Sandhya Organic Chemical Ltd. case AIR 1997 Gujarat 177) (supra), Page 96 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined prima facie the plaintiffs are not entitled to have any restraint order against the defendants on carrying on any trade or business similar to that of the plaintiff. Balance of convenience is also in favour of the defendants and against the plaintiffs."
27. According to S. 11 of this Act a registered proprietor of a design shall subject to the provisions of the Act have copyright in the design during 10 years from the date of its registration and shall also have an exclusive right to apply a design to an article in any class in which the design is registered. Section 22 of the Act (S. 53 of the Design Act 1911) makes it unlawful for any person to apply the design or its fraudulent or obvious imitation or cause it to be applied to an article in any class of goods in which the design is registered except with the licence or written consent of a registered proprietor. This provision shows that once a design is registered, registered proprietor having a copyright therein can insist that anyone committing piracy should be restrained from doing so for the purpose of Designs Act is to protect a novelty or originality in the design to be applied to a particular article marketed commercially.
6.26. It is further submitted that till date the appellant has kept the 'cause of action' in a sealed cover and the subject-matter of the present Copyright Suit itself are purported 'Unpublished Copyrights'. Thus, it is clearly discerned that the intent of the appellant is to enforce a monopoly in the guise of an interim injunction to restrict the respondents from undertaking their constitutional rights to trade and business as guaranteed under Article 19 (1)(g) of the Constitution of India read with Section Page 97 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined 27 of the Indian Contract Act, 1872.
6.27. In support of his submissions, learned Senior advocate for the respondents has placed reliance upon the following decisions;
a) Trivitron Healthcare Pvt Ltd v. Shivram Iyer & Ors. [2018 (1) CTC 430)] (Paras 3.1, 4.1, 6, and 7);
3.1. The learned counsel appearing for the applicant/plaintiff submits that the information as available in the folder by name "pen drive" constitute a trade dress. It also comes within the purview of a copy right. The plaintiff complied with the mandate of Section 65-B of the Indian Evidence Act, 1872. On fact, there is no dispute that defendants 1 to 4 were the employees of the plaintiff. It is also not in dispute that all of them resigned and joined the fifth defendant. The manufacturing process would involve certain technical intricacies, price mechanism and the customer data. Defendants 1 to 4 were in the know how of these particulars, which are to be classified as confidential and trade secret. The manufacturing activities have started by the fifth defendant only after defendants 1 to 4 have joined. When a skill merges with trade secret, a knowledge acquired through it, cannot be permitted to be used by the erstwhile employee in favour of a third party or on his own. Thus, it requires protection. Even on equity, the plaintiff is entitled for injunction. Section 27 of the Indian Contract Act, 1872, would not apply to such cases. For granting injunction, what is required is that the acquisition and possession of a trade secret in favour of an employee. In support of his aforesaid contentions, the learned counsel has made reliance upon the following decisions.
1.Beyond Dreams Entertainment Pvt. Ltd., & Others V. Zee Page 98 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined Entertainment Enterprises Ltd and another,2015 SCCOnline(Bom) 4223;
2.Burlington Home Shopping Pvt. Ltd., V. Rajnish Chibber and another, 1996 61 DLT 6;
3.Hi-Tech Systems & Services Ltd., V. Suprabhat Ray & Ors.,2015 SCCOnline(Cal) 1192;
4.John Richard Brady and others V, Chemical Process Equipments P. Ltd., and another, 1987 AIR(Del) 372;
5.Bombay Dyeing and Manufacturing Co. Ltd., V. Mehar Karan Singh, 2010 5 AIRBomR 573;
6.Amber Sixe and Chemical Company Limited V. Astbuby J. Menzel,1912 A 1297;
7.Escorts Const. Equipment Ltd. and another V. Action Const. Equipment P. Ltd., and another, 1999 AIR(Del) 73; and
8.Desiccant Rotors International Pvt. Ltd., V. Bappaditya Sarkar & another, 2009 112 DRJ 14.
4.1. A trade secret has got an element of uniqueness or exclusivity. It may be a single factor or an idea or a combination of many. It includes manufacturing process, engineering, drawing etc. Such a trade secret can exist notwithstanding a protection available under the Copyright Act, Trade Mark Act, Designs Act and Patent Act. A trade secret cannot be defined or restricted to a set of activities or ideas. A copyright is different from a trade secret. However, they can complement each other. That the trade secret gives protection and such protection needs the maintenance of confidential information. A trade secret shall involve sufficiently developed tehnical intricacies not in the realm of public knowledge. Even an information being partly public and private cannot always be termed as a trade secret and thus, not entitled for confidentiality. A copyright is an act against the World in general while a confidence operates against those individuals which relates to receiving information or ideas in confidence. A copyright has a fixed statutory time limit as against a trade secret involving confidential information.
[6] With the abovesaid principles of law, let us consider the contentions raised. The basic facts are not in dispute qua the employment of defendants 1 to 4, including their resignation and Page 99 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined joining. Thus, prima facie it appears that no reliance can be made on the Internal Audit Report of the plaintiff. The defendants were working at Mumbai, resigned earlier and never visited the Chennai office except the first defendant on two occasions. Secondly, the admissibility, relevancy and proof of folder "pen drive" is a matter to be decided at the time of hearing the suit finally. Suffice it to state that the plaintiff has not produced sufficient evidence on the so called conspiracy qua the defendants. This Court is of the prima facie view that there is no copyright involved. The plaintiff has neither obtained any protection under the Copyright Act nor entitled to it in law. The basic specifications are available in the public domain. The question as to whether the information as provided under the folder would constitute a trade secret and ideas coupled with confidentiality and thus, a right is created or not leading to a protection is a matter for evidence. There are no sufficient materials for this Court to come to the conclusion at this stage. This is also for the reason that there is an apparent difference between the products and the one belonging to the fifth defendant is priced higher. The contentions regarding the skill and knowledge qua defendants 1 to 4 also cannot be accepted. [7] Firstly, the plaintiff has to establish through evidence that there indeed a trade secret. However, an useful reference can be made to the judgment of this Court in M/s Bajaj Auto Limited V. M/s TVS Motor Company Limited, 2016 4 LW 865, wherein after considering Section 65-A and 65-B of the Indian Evidence Act, it has been held that such an evidence has been looked into only at the time of deciding the suit.
b) Satish Kumar V. Khushboo Singh and Ors. (2019 SCC Online Del 10671) Paras 11 and 18.
11. I have enquired from the counsel for the plaintiff, whether not the question for adjudication is, the right, if any, of the plaintiff as an ex- employee of the defendant no. 1, to restrain the defendant no. 1 from competing with the plaintiff by dealing with the same set of persons with whom the plaintiff was dealing in during the course of employment of the defendant no. 1 with the plaintiff.
18. I will first take up the claim of the plaintiff on the basis of copyright.
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c) Navigators Logistics Ltd. V. Kashif Qureshi (2018 SCC OnLine Del 11321) Para 53-56.
53. A two Judge Bench of the Supreme Court, as far back as in Niranjan Shankar Golikari v. Century Spinning & Manufacturing Co. Ltd., AIR 1967 SC 1098 was concerned with a suit for injunction to restrain the employee, who had agreed to serve the employer for a fixed period, from during the said period, even after ceasing to be the employee of the plaintiff, joining employment of a competitor of the plaintiff. It was unanimously held that considerations against restrictive covenants are different in cases where the restriction is to apply during the period after the termination of the contract, than those in cases where it is to operate during the period of contract of employment. In the facts of that case, it was found that the employee was privy to the special process invented/adopted by the plaintiff and of which the employee was trained and had acquired knowledge. The employee who had left employment prior to the contracted period was thus restrained from joining employment of a competitor for the remaining period for which he had contracted with the plaintiff in that case.
54. A three Judge Bench of the Supreme Court in Superintendence Company of India (P) Ltd. v. Krishan Murgai, (1981) 2 SCC 246 was concerned with a claim for injunction post cessation of employment. It was held by two of the Judges on an interpretation of the restrictive clause in the Employment Contract, that the same was to apply only when the employee on his/her volition left the employment and not when the employer terminated the employment. The third Hon'ble Judge held that even if the restrictive covenant was to include cessation of employment at the volition of the employee, there could be no post-employment restriction under Section 27 of the Act.
55. A subsequent two Judge Bench of the Supreme Court in Percept D'Mark (India) (P) Ltd. v. Zaheer Khan, (2006) 4 SCC 227 refused enforcement of a post-employment restriction on the ground of same being barred by Section 27 of the Act.
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56. Applying the aforesaid law to the facts of the present case, it is found that as per the plaintiff also, there was no fixed term for which either of the defendants no. 1 to 8 had agreed to serve the plaintiff. The clause in the Employment Contract claimed by the plaintiff also is to the effect that defendants no. 1 to 8, for a period of one year after ceasing to be the employee of the plaintiff, to not compete with the plaintiff. Such a clause in the Employment Contract, as per the judgments aforesaid of the Supreme Court, is void under Section 27 of the Contract Act. Once the clause is void, there can be no injunction or damages in lieu of injunction on the basis thereof."
6.28. It is further submitted by the learned Senior advocate that the submissions of the appellant is that respondents have exported components on 19.03.2020, whereas the applications for the Impugned Copyrights were made only sometime in the period of August 2020 to January 2021 with the Copyrights Office.
6.29. Thus, prima facie clear that the applications for Impugned Copyrights were made by the appellant with an ulterior motive only to thwart the business of the respondents and launch a series of litigation to stifle the business of the respondents.
Page 102 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined 6.30. The knowhow agreement with ISM Bakul was never renewed and therefore, the very foundation of the Plaint of the Appellant is on shaky ground as no rights can be asserted by the Plaintiff at such a belated stage on the basis of a knowhow agreement which was only in the nature of "permissive use" and the Plaintiff never became the owner of the "knowhow" even during or after the conclusion of the knowhow agreemnet.
6.31. Respondents had legally procured the software for operating their HPHT Machines from Mr. Vynnyk Volodymyr in a similar manner as that of the Plaintiff company and moreover, the software version provided to the Defendants was totally different from the version provided to the Plaintiff as per Mr. Vynnyk Volodymyr himself.
6.32. Plaintiff company has till date not shown the difference between Source Code/ Software obtained by it from Bakul Institute and the one it copyrighted and/or the similarity, if any, between the software used by the Defendants and its proprietary Page 103 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined software.
6.33. Respondents further submit that they have placed on record numerous publications and prior arts on the subject including several from ISM Bakul and its researcher and the same is duly noted in the Impugned Order. Section 15 (2) of the Copyright Act, 1957
(i) A COPY OF WORK IS ANNEXED WORK.
(ii) THE ARTISTIC WORK SHALL NOT BE USED IN RELATION TO ANY GOODS OR SERVICES.
(iii) THE COPYRIGHT IN THE ARTISTIC WORK SHALL NOT SUBSIST IF THE WORK HAS BEEN APPLIED TO AN ARTICLE THROUGH INDUSTRIAL PROCESS & REPRODUCED MORE THAN 50 TIMES."
6.34. Impugned Copyrights being unpublished copyrights -
could not have been used for any commercial purposes or for the manufacturing of devices on a commercial scale- which is clearly admitted by the Appellant and thus no interim relief can be granted.
6.35. Learned senior Counsel for the respondents has placed reliance upon the following decision;
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1. Ritika Private Limited v. Biba Apparels Private Limited [2016 SCC OnLine Del 1979] (Paras 2,6,7,11,14,27,28,29); are hereby reproduced;
2. Plaintiff has filed the present suit claiming copyright in various drawings and sketches which are created by the plaintiff for dresses being sold under the trade name/brand RITU KUMAR. It is pleaded that the drawings and sketches are distinctive, exclusive and identifiable with the brand RITU KUMAR of the plaintiff and the brand enjoys goodwill and reputation. It is pleaded that there is originality in the garment prints and sketches created by the plaintiff for the dresses/garments. It is pleaded that ensembles of the plaintiff are so designed that each component, such as sleeves, front and back panels etc. are delineated and are co-ordinated with unique features. The plaintiff is stated to be maintaining digital records of the creation of each drawing and print by giving it identification code and name which is also shown in the invoices issued by the plaintiff. The claim of the plaintiff with respect to its copyright work is set out in the form of process adopted by the plaintiff as detailed in paras 10, 11 and 12 of the plaint and which paras read as under : -
"10. The initial stage of the Plaintiff's creative process in general may be summarized as follows:
(a) A drawing or sketch is created by Mrs. Ritu Kumar and/or other designers employed by the Plaintiff. The same is an original derivative artistic work.
(b) The drawing is put in digital form and completed on a computer assigninig colours. The same is independently a derivative artistic work.
These first stages result in the creation of independent artistic works which can be enjoyed for their own sake or used for various purposes including different garments.
11. The artistic works so created are then suitably adapted for different garments and different partes of garment ensembles, as described below. Each such variation is a further, derivative work, which does not affect the Plaintiff's separate rights in the original.
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(a) Screems are prepared for each colour facilitationg an initial printing ("swatching") to test the design on different fabrics.
(b) The artisti work so created is then available for use in connection with different products.
(c) Acording to requirement and market assessment, but artistic work is then customized for use on different garments with appropriate variations.
12. Further, in some cases embriodiery of an artistic characher is done on each garment individually, by hand or using a machine, by a skilled craftsman. Such garments are works of artistic craftsmanship".
6. The issue urged on behalf of the defendant for seeking dismissal of the suit is as per the provision of Section 15(2) of the Indian Copyright Act, 1957 and which provides that once a copyright in a design is applied to an article by an industrial process for more than 50 times, ownership of the copyright ceases because the copyright resulting in creation of the article is capable of being registered under the Designs Act, 2000 but has not been registered by the plaintiff. Section 15 of the Indian Copyright Act, 1957 reads as under:
"Section 15 of the Indian Copyright Act, 1957
15. Special provision regarding copyright in designs registered or capable of being registered under the Designs Act, 2000 (16 of 2000). --
(1) Copyright shall not subsist under this Act in any design which is registered under the Designs Act, 2000 (16 of 2000).
(2) Copyright in any design, which is capable of being registered under the Designs Act, 2000 (16 of 2000), but which has not been so registered, shall cease as soon as any article to which the design has been applied has been reproduced more than fifty times by an industrial process by the owner of the copyright, or, with his licence, by any other person."
7. It is also argued on behalf of the defendant that the paragraphs of the Page 106 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined plaint with respect to violation of trade secrets as alleged by the plaintiff are no averments as required of a cause of action in law because not only what are the specific trade secrets are not mentioned resulting in the fact that a general order of alleged violation of unspecified trade secrets should not be passed, but also that really the so called trade secrets are nothing but the copyrights claimed by the plaintiff as applied to garments and dresses and that once copyright does not subsist in the plaintiff because of Section 15(2) of the Indian Copyright Act, there does not arise the issue of any violation of trade secrets as is falsely alleged by the plaintiff.
11. Besides referring to Section 15(2) of the Indian Copyright Act for the purposes of the present decision, the definition of design under the Designs Act, 2000 would also have to be seen alongwith Section 4 of the Designs Act. Section 4 of the Designs Act is being referred to inasmuch as some arguments were urged on behalf of the plaintiff by referring to Section 4. Sections 2(d) and 4 of the Designs Act read as under:
"Section 2(d) of the Designs Act, 2000 2 (d). "design" means only the features of shape, configuration, pattern, ornament or composition of lines or colours applied to any article whether in two dimensional or three dimensional or in both forms, by any industrial process or means, whether manual, mechanical or chemical, separate or combined, which in the finished article appeal to and are judged solely by the eye; but does not include any mode or principle of construction or anything which is in substance a mere mechanical device, and does not include any trade mark as defined in clause (v) of sub-section (1) of section 2 of the Trade and Merchandise Marks Act, 1958 (43 of 1958) or property mark as defined in section 479 of the Penal Code, 1860 or any artistic work as defined in clause (c) of section 2 of the Copyright Act, 1957 (14 of 1957);
"Section 4 of the Designs Act, 2000
4. Prohibition of registration of certain designs. --A design which
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(a) is not new or original; or
(b) has been disclosed to the public anywhere in India or in any other country by publication in tangible form or by use or in any other way prior to the filing date, or where applicable, the priority date of the application for registration; or
(c) is not significantly distinguishable from known designs or combination of known designs; or
(d) comprises or contains scandalous or obscene matter, shall not be registered"
14. Ordinarily, the issues which are raised on behalf of the plaintiff would have called for detailed discussion and analysis of various sections of the Indian Copyright Act and the Designs Act alongwith the arguments of the plaintiff, however, this Court need not venture on the same as the issue to be decided in this case is clearly and completely covered against the plaintiff by a judgement of a Division Bench of this Court in the case of Microfibres Inc. v. Girdhar & Co. 2009 (40) PTC 519 (Del) : 2009 SCC Online Del 1647. The very arguments which are urged on behalf of the plaintiff of contending that copyright in a drawing or a sketch will continue even if the same is not registered as a design and an article is produced on the basis of the drawing, sketch or design for more than 50 times by an industrial process or means, has been squarely dealt with against the plaintiff in terms of the following paragraphs of the judgment in Microfibre's case (supra). Though the paragraphs are many, I have no option but to reproduce them as all of them pertain to the ratio laid down in Microfibre's case (supra). These para nos. 20 to 33 and 35 to 46 are reproduced below : -
"20. After taking into account the above pleas, we are of the view that Section 2(c) of the Copyright Act defines 'artistic work' to mean a painting, sculpture, a drawing (including a diagram, map, chart or plan), and engraving or photograph, whether or not any such work possesses artistic quality. It also includes a work of architecture and any other artistic craftsmanship. This definition has a very wide connotation as it is not circumscribed by any limitation of the work possessing any artistic quality. Even an abstract work, such as a few Page 108 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined lines or curves arbitrarily drawn would qualify as an artistic work. It may be two dimensional or three dimensional. The artistic work may or may not have visual appeal.
21. The rights to which a holder of an original artistic work is entitled are enumerated in Section 14(c) of the Copyright act. These are, the right:
(i) To reproduce the work in any material form including depiction in three dimensions of a two dimensional work or in two dimensions of a three dimensional work;
(ii) To communicate the work to the public;
(iii) To issue copies of the work to the public not being copies already in circulation.
(iv) To include the work in any cinematograph film;
(v) To make any adaptation of the work;
(vi) To do in relation to an adaptation of the work any of the acts specified in relation to the work in sub-clauses (i) to (iv)
22. Therefore, it is the exclusive right of the holder of a Copyright in an original artistic work to reproduce the work in any material form.
For example, a drawing of an imaginary futuristic automobile, which is an original artistic work, may be reproduced in the three dimensional material form using an element, such as a metal sheet. When the copyright holder of an original artistic work reproduces the same in another material form, he may, or may not do so by employing an industrial process or means which may be manual, mechanical or chemical, separate or combined, on an article. If the reproduction of the original artistic work is done by employing an industrial process, as aforesaid, on an article, and the same results in a finished article which appeals to the eye as adjudged solely by the eye, then the features of shape, configuration, pattern, ornament or composition of lines or colours applied to the article by the industrial process constitutes a 'design', within the meaning of this expression as defined under the Designs Act.
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23. There is, therefore, a clear distinction between an original artistic work, and the design derived from it for industrial application on an article. This position is clarified by the use of the expression 'only' before the words 'the features of shape, configuration, pattern, ornament or composition of lines or colours' in the definition of 'design' in the Designs Act. Therefore, the original artistic work, which may have inspired the creation of a design, is not merely the feature of shape, configuration, pattern, ornament or composition of lines or colours which are created to apply to an article by an industrial process. The original artistic work is something different from the design. Secondly, the definition of 'design' expressly excludes, inter alia, any artistic work defined in Section 2(c) of the Copyright act, 1957.
24. It needs to be emphasized that it is not necessary that in every case a design has to be preceded by an artistic work upon which it is founded. A craftsman may create a design without first creating a basic artistic work. This may best be illustrated by a weaver who may straightaway create a design while weaving a shawl, which product could be created even without the basic artistic work.
25. Whether or not a design is preceded by an original artistic work, a design would, in its own right qualify to be termed as an artistic work within the meaning of Section 2(c) of the Copyright Act. This is so because the expression 'artistic work' as defined in Section 2(c) of the Copyright Act bears a wide definition to mean a painting, a sculpture, a drawing (including a diagram, map, chart or plan), an engraving or a photograph, whether or not any such work possesses artistic quality. However, the design may or may not enjoy a copyright protection under the Copyright Act, depending on whether it is an 'original artistic work' or not.
26. The expression 'copyright in any design' used in Section 15(2) means the copyright as understood under the Copyright Act, and not under the Designs Act. This is evident from the expression 'copyright shall not subsist under this Act... ...' used in Sub-section (1) of Section 15. However, copyright in an artistic work subsists provided Page 110 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined it is an original artistic work. Therefore, there can be no claim for Copyright under the Copyright Act in an artistic work which does not have the quality of possessing originality. The holder of a copy of an original artistic work cannot claim copyright protection. Therefore, to be entitled to protection under the Copyright Act, the design should have originality. That is not to say that if the design is not entitled to copyright protection under the Copyright Act, on account of it not possessing originality vis-à-vis the original artistic work, the design does not require, or cannot be granted registration under the Designs Act for it to be entitled to protection under the Designs Act.
27. Under the Designs Act, a copyright has a different connotation from a copyright under the Copyright Act. Under the Designs Act, copyright means the exclusive right to apply the design to any article in any class in which the design is registered.
28. The issue with regard to the extent of, and the conditions for the copyright protection to such an artistic work, as an artistic work under the Copyright Act, which is a design registered or capable of registration under the Designs Act, is what is dealt with, by Section 15 of the Copyright Act. Once the distinction between the original artistic work and the design derived from it, and the distinction between Copyright in an original artistic work under the Copyright Act, and a copyright in a design under the Designs Act is appreciated, the meaning and purport of Section 15 of the Copyright Act becomes clear.
29. Section 15 of the Copyright Act is in two parts. The first part i.e. Sub-section (1) states that copyright shall not subsist under the Copyright Act in any design which is registered under the Designs Act. Consequently once the design is created and got registered under the Designs Act, whether or not the design is eventually applied to an article by an industrial process, the design loses its protection as an artistic work under the Copyright Act. Therefore, subject to whatever rights that are available under the Designs Act, the registered design holder cannot claim protection or complain of copyright infringement in respect of the registered Design under the Copyright Act.
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30. Sub-section (2) of Section 15 deals with the situation where the design, which is capable of being registered under the Designs Act, is not so registered. It provides that copyright in such a design shall cease as soon as any article to which the design has been applied has been reproduced more than 50 times by an industrial process by the owner of the copyright or with his licence, by any other person. It is clear to us that the Parliament in Section 15 of the Copyright Act was dealing with the aspect of copyright in a registered/registrable design, as understood in the Copyright Act and not the Designs Act. Else, there was no need to deal with this aspect in the Copyright Act. The same would have been dealt with under the Designs Act. Therefore, the law tolerates only a limited industrial, or shall we say commercial, exploitation of the original artistic work by the application/reproduction of the said work in any other form or reproduction of copies thereof in exercise of the rights under Section 14(c)(1) and 14(c)(iii) of the Copyright Act. Beyond the specified limit, if the design derived from the original artistic work is exploited (i.e. if the design is applied more than 50 times by an industrial process on an article) the copyright in the design ceases unless it is registered under the Designs Act.
31. We are also of the view that it is not correct on behalf of the appellant to urge that the intention of the creation of the work determines the Intellectual Property Rights contained therein, and not whether such work fell within the classification of 'Designs' under the Designs Act or the Copyright Act. The Designs Act nowhere stipulates the intention of the creator of the work as a determinative criteria and the exhaustive definition given not only in the Designs Act but indeed the Copyright Act clearly rules out such interpretation as suggested by Shri. Raju Ramachandran. In fact, the appropriate occasion to evaluate the registrability of a design would arise when the artistic work is translated into an object having features of shapes, configuration, pattern, ornament or composition of lines or colors whether two dimensional or three dimensional by employing an industrial process. Significantly, the appellant themselves have registered their product under the Designs Act in U.K. Furthermore, as submitted by the appellant, even if there is very Page 112 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined little variation between the original artistic work and the design which is industrially applied to an article to produce a product, nevertheless, such a design can claim registration under the Designs Act, provided such registration was sought. The interpretation suggested by the appellant would clearly afford not only the design protection in case of registered works but also in addition, the copyright protection to the works which were industrially produced, which interpretation does not reflect the legislative intent.
32. A perusal of the Copyright Act and the Designs Act and indeed the Preamble and the Statement of Objects and Reasons of the Designs Act makes it clear that the legislative intent was to grant a higher protection to pure original artistic works such as paintings, sculptures etc. and lesser period of protection to design activity commercial in nature. The period of copyright would be the author's life span plus 60 years. However, the legislature has allocated a lesser time span for the protection available to a registered design as only being 15 years. Thus, commerce and art have been treated differently by the Legislature and any activity which is commercial in nature has been granted lesser period of protection. On the other hand, pure artistic works per se have been granted a longer protection.
33. The Statement of Objects and Reasons of the Designs Act, 2000 reads as follows:
"Since the enactment of the Designs Act, 1911 considerable progress has been made in the field of science and technology. The legal system of the protection of industrial designs requires to be made more efficient in order to ensure effective protection to registered designs. It is also required to promote design activity in order to promote the design element in an article of production. The proposed Designs Bill is essentially aimed to balance these interests. It is also intended to ensure that the law does not unnecessarily extent protection beyond what is necessary to create the required incentive for design activity while removing impediments to the free use of available designs."Page 113 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024
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35. However, there can be no quarrel with the plea of Shri. Ramachandran that the operation of Section 15(2) of the Copyright Act does not exclude from the ambit of Copyright protection either the original 'artistic work' upon which the design is based or the design which by itself is an artistic work. It cannot be disputed that the original paintings/artistic works which may be used to industrially produce the designed article would continue to fall within the meaning of the artistic work defined under Section 2(c) of the Copyright Act, 1957 and would be entitled to the full period of copyright protection. This is also evident from the definition of the design under Section 2(d) of the Designs Act. This, in our view, in fact is a factor which would go against the appellants in construing the nature of protection to be given to the original artistic work such as a painting, as contrasted with the applied artistic work that is the design, which in the present case does not mean the intermediary medium such as a mould, engraving devised/produced only to enable industrial application of the painting to produce the furnishing products of the appellant. Thus, while the original painting would indeed be entitled to the copyright protection, the commercial/industrial manifestation of such paintings such as the design derived from and founded upon the original painting for the purpose of industrial production of furnishings would only be covered by the limitations placed in Section 15 of the Copyright Act and would get protection if registered as a design under the Designs Act but would enjoy lesser period of protection in case of a registered design.
36. This clearly shows that the legislature intended that even if the artistic work such as a painting has been used as the basis for designing an industrially produced object for commerce, such as the furnishing in the present case, nevertheless the original painting would indeed enjoy full copyright protection, while the result of the Page 114 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined industrial application of such painting, namely, the design used in the industrial production of the ultimate product shall enjoy lesser period of protection as stipulated under the Designs Act provided it is registered as a design under the Designs Act. Thus, we are of the view that an original artistic work initially acquires protection under the Copyright Act as an 'artistic work' or else the protection under the Designs Act qua the product created from the artistic work when industrially applied.
37. Dr. Abhishek Manu Singhvi, the learned Senior Counsel appearing for the respondent in FAO (OS) No. 447/2008 had submitted, and in our view rightly so that the object of the two legislations was to prevent long term usage by the person who was commercially exploiting something and yet wanting to claim an exclusive monopoly through longer period of copyright protection afforded to an artistic work. Section 15 of the Copyright Act demonstrates the legislative intention of integrating the Copyright and Designs Acts and any other interpretation would, as rightly submitted by Dr. Singhvi, render the registration under the Designs Act as meaningless as a design proponent will always get a longer period of copyright protection under the Copyright Act. In our view, the above plea would make a registration under the Designs Act meaningless, which the legislature could have never intended. In fact, the plea of Dr. Singhvi that a design which has been granted the protection under the Designs Act cannot be granted protection under the Copyright Act is correct and this is evident from Section 15(1) of the Act.
38. Thus, while it is not open to the respondent to reproduce such paintings per se, which formed the basis of the design that was applied to the fabric, nevertheless, such protection qua the design imprinted on the product through industrial application is available only under the Designs Act, provided there is a registration. This is precisely why the legislature not only limited the protection by mandating that the copyright shall cease under the Copyright Act in a registered design, but in addition, also deprived copyright protection to designs capable of being registered under the Designs Act, but not so registered, as soon as the concerned design had been Page 115 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined applied more than 50 times by industrial process by the owner of the copyright or his licensee. This clearly indicates that the legislature intended to provide industrial and commercial application of an artistic work for commerce lesser protection.
39. Shri. Arun Jaitley, the learned Senior Counsel appearing for the appellant in FAO (OS) No. 326/2007 titled as Dart Industries Inc. v. Techno Plast had only made submissions in the present appeal in respect of Section 15 of the Copyright Act to the extent it could affect the appeal filed by his clients. He had advanced a very attractive argument as to the three stages of processes leading to the eventual designed product. He submitted that the first stage is of the preparation of drawing or artistic work which leads to the production of mould/engraving which is the second stage and such mould/engraving leads to the final commercially marketable product, which is the third stage. He has also submitted that the products of the respondent were made by the process of reverse engineering starting from the final product leading to the second stage of creating a moulding, and from it a final drawing. His plea was based upon the premises that the mould and the drawing of the appellant are copyright protectable under the Copyright Act and cannot be or are incapable of forming part of the design registration regime. It is submitted that the product of the respondent involves the copying of the mould/drawing of the appellant.
40. While the argument is very attractive but nevertheless it is not legally sustainable because such a plea would enlarge the monopoly in industrial design from the current maximum time of 15 years to the longer period available under the Copyright Act. While the original drawings of the appellant could be entitled to copyright protection under the Copyright Act as artistic works, the designs derived therefrom as moulds which are used for industrial application of the design on the articles would not qualify for protection as artistic works under the Copyright Act except in accordance with Section 15(2) of the Copyright Act. It is not the case of the appellant Microfibres or even that of Mr. Jaitley's clients that the design applied on the fabric (in the case of Microfibres) or the plastic (in the case of Mattel Inc.) has not been applied for more than 50 times.
Page 116 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined There designs have been used more than 50 times. The learned Single Judge in paragraph 51 of the impugned judgment held as follows:
"The plea of the plaintiff is also sought to be negated on the issue of definition of a 'design' under Section 2(d) of the Designs Act, 2000 whereby an 'artistic work' as defined in Clause (c) of Section 2 of the Copyright Act has been specifically excluded. The submission was, thus, advanced that this would have the effect of rendering the law of designs redundant for the simple reason that each design registered thereunder would be able to trace its origin to a diagram, chart, drawing, etc. and, thus, cease to be governed by the Designs Act. The legislative intent could not have been this because the law of designs is based on the same principle as applicable to other monopolies and to fuel industrial innovativeness by granting limited time-limit to the monopolies and allow others to make use of them after they have passed into the public domain. Thus, the plea of the plaintiff, if accepted, would be anti-competitive and would throttle and stagnate the industry.
(Emphasis supplied)"
In our view the learned Single Judge has felicitously summed up the legislative intent that limited monopoly should be granted to fuel industrial inventiveness in the field of commerce. We fully approve and reiterate the aforesaid view
41. As rightly submitted by Shri. Rajender Kumar, the learned Counsel for the respondent No. 2 in the present appeal, the interpretations canvassed by the appellant would, render the design legislation otiose, because every registered design would then be able to trace its origin to a chart, drawing, diagram etc. and consequently also claim copyright protection under the Copyright Act in addition to the protection as a registered design under the Designs Act.
42. Shri. Prashanto Chandra Sen, the learned Counsel appearing on behalf of the respondent No. 1, contended that the difference between a design and an artistic work lies in the applicability of the former to Page 117 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined an article as evident from the decision in Con Planck Ltd. case 1923 KB 804, wherein it was held that the fundamental distinction between a design and a simple artistic work lies in the applicability of the former to some other article. In our view, the interpretation suggested by Shri. Jaitley would result in every industrial tracing, drawing or mould which may not be an original artistic work within the meaning of Section 2(c) read with Section 13 of the Copyright Act, and which lead to the designed product, being afforded protection under the Copyright Act as an original artistic work and also being at the same time industrially and commercially exploitable by being applied to marketable articles by claiming protection under the Designs Act, 2000.
In the case of Interlego (1988) RPC 343, the following position of law was laid down:
"The definition of 'design' in Section 1(3) of the Act of 1949 is hardly a model of Parliamentary draughtsmanship and this is by no means the first case in which its meaning and application have been called in question. In approaching the question of construction there has to be borne in mind that the purpose of the Act, as appears both from its terms and its legislative history, is to protect novel designs devised to be 'applied to' (or, in other words, to govern the shape and construction of) particular articles to be manufactured and marketed commercially. It is not to protect principles of operation or inventions which, if protected at all, ought to be made the subject-matter of a patent. Nor is it to prevent the copying of the direct product of original artistic effort in producing a drawing. Indeed the whole purpose of a design is that it shall not stand on its own as an artistic work but shall be copied by embodiment in a commercially produced artifact. Thus, the primary concern is what the finished article is to look like and not with what it does and the monopoly provided for the proprietor is effected by according not, as in the case of ordinary copyright, a right to prevent direct reproduction of the image registered as the design but the right, over a much more limited period, to prevent the manufacture and sale of articles of a design not substantially different from the registered design. The emphasis therefore is upon Page 118 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined the visual image conveyed by the manufactured article."
Thus, in the case of Pugh v. Riley 1912 RPC 196 the general principle was laid down that any application for registration must be accompanied by a representation of the design which ought to be in the nature of a drawing or a tracing, by means of which the suggestion constituting the design may be imparted to others. A person looking at the drawing must be able to form a mental picture of the shape, configuration, pattern or ornament of the article to which the design has been applied. Further, in the case of Interlego (supra) it was laid down that the purpose of design is not to protect the principles of operations or inventions which, if protected at all, must be made the subject matter of the patent. This process of operation or invention such as a moulding/engraving could at best be granted patent protection and thus, Mr. Jaitley's plea that such intermediary process be granted copyright protection cannot be accepted. Thus, what is granted is a right, over a lesser period, to prevent the manufacture and sale of articles of a design not substantially different from those industrially produced by the application of the registered design. The emphasis therefore, is upon the visual image conveyed by the manufactured article and thus the above judgment of Interlego (supra) also supports the case of the respondent, that the intermediary process of creation of a design from an original artistic work cannot be afforded protection under the Copyright Act if it crosses the lakshman rekha of having been applied more than 50 times industrially to produce an article.
43. Undoubtedly, it is true as contended by Shri. Jaitley that the artistic work defined under Section 2(c) of the Copyright Act need not possess artistic quality. His plea about the copyright protection available to moulding/engraving/drawing is postulated on the above premise. Nevertheless, we cannot lose sight of the fact that the design, based upon a moulding or an engraving derived from the original artistic work, which is used for industrial application on an article and which evolves during any process intermediate to the reproduction of the finally designed article, would not qualify as an artistic work. The case of Dover LD (supra) clearly requires the Page 119 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined exercise of intellectual activity so as to originate some novel application and thus, this principle cannot be applied to a mould, or an engraving i.e. the intermediates which are mere derivatives of the original artistic work. In the case of Pugh v. Riley (supra) also it was held that a design is preceded by a drawing or tracing which incorporates the design to be imparted to produce the designed article and upon being applied to an article become incapable of being registered as a design.
Thus, the interpretation as suggested by the appellant would have the effect of rendering the design legislation in India redundant as every design could have its origin to an intermediate product such as a engraving, mould, diagram etc. It is also anticompetitive and stagnates innovativeness beside in effect negating the legislative intent of giving lesser protection of 15 years to a 'design' under the Designs Act as compared to the larger protection of 60 years to an 'artistic work' under the Copyright Act.
44. We cannot accede to the plea of Shri. Sanjay Jain that the intention of creating an artistic work would determine as to which enactment applies. The artist's intent at the time of creation of the artistic work is indecipherable at the best of times. Artists are governed more often than not by their emotions and moods and whatever be the intention at the time of the creation of the artistic work cannot, in our view, determine the nature of protection available to the artistic work. Indeed such a plea of Shri. Ramachandran has already been rejected by us, as the stupendous and commercial success of a particular artistic work may spur on the artist to permit commercial utilization and exploitation of such a work of Article To this extent, we agree with Mr. Praveen Anand that an intention of creation is difficult to ascertain and cannot form the basis of determining the rights. Thus, even if the original painting was intended to be created only as a work of art, a latter intention may transform it by its industrial application into a commercially viable object. To this extent, we agree with the plea of Shri. Sanjay Jain that once the artistic work, by industrial application transforms Page 120 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined into a commercially marketable artifact its design falls within the domain of the Designs Act and the protection to the design founded upon the artistic work is limited by Section 15 of the Copyright Act and the provisions of the Designs Act.
45. Learned Counsel Shri. Praveen Anand , appearing on behalf of the appellant in FAO (OS) No. 447/2008 has contended that there is a vital difference between the subject matter of copyright and design protection. In our view, while this plea is sustainable, nevertheless, it cannot be ignored that different kinds of protection for an artistic work, and the design founded upon the artistic work which is industrially and commercially exploited, has been intended by the Legislature. He has further submitted that what stands extinguished under Section 15 of the Copyright Act is the copyright in the design itself as applied to an article and not the copyright in the artistic work itself. There is no quarrel with this proposition. However, that does not advance the case of the appellant. We do hold that in the original work of art, copyright would exist and the author/holder would continue enjoying the longer protection granted under the Copyright Act in respect of the original artistic work. Thus, for instance a famous painting will continue to enjoy the protection available to an artistic work under the Copyright Act. A design created from such a painting for the purpose of industrial application on an article so as to produce an article which has features of shape, or configuration or pattern or ornament or composition of lines or colours and which appeals to the eye would also be entitled design protection in terms of the provisions of the Designs Act. Therefore, if the design is registered under the Designs Act, the Design would lose its copyright protection under the Copyright Act but not the original painting. If it is a design registrable under the Designs Act but has not so been registered, the Design would continue to enjoy copyright protection under the Act so long as the threshold limit of its application on an article by an industrial process for more than 50 times is reached. But once that limit is crossed, it would lose its copyright protection under the Copyright Act. This interpretation, in our view, would harmonize the Copyright and the Designs Act in accordance with the legislative intent.
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46. We thus summarize our findings as follows:
a. The definition of 'artistic work' has a very wide connotation as it is not circumscribed by any limitation of the work possessing any artistic quality. Even an abstract work, such as a few lines or curves arbitrarily drawn would qualify as an artistic work. It may be two dimensional or three dimensional. The artistic work may or may not have visual appeal.
b. The rights to which a holder of an original artistic work is entitled are enumerated in Section 14(c) of the Copyright act.
c. It is the exclusive right of the holder of a Copyright in an original artistic work to reproduce the work in any material form. For example, a drawing of an imaginary futuristic automobile, which is an original artistic work, may be reproduced in the three-dimensional material form using an element, such as a metal sheet.
d. The design protection in case of registered works under the Designs Act cannot be extended to include the copyright protection to the works which were industrially produced.
e. A perusal of the Copyright Act and the Designs Act and indeed the Preamble and the Statement of Objects and Reasons of the Designs Act makes it clear that the legislative intent was to grant a higher protection to pure original artistic works such as paintings, sculptures etc. and lesser protection to design activity which is commercial in nature. The legislative intent is, thus, clear that the protection accorded to a work which is commercial in nature is lesser than and not to be equated with the protection granted to a work of pure art.
f. The original paintings/artistic works which may be used to industrially produce the designed article would continue to fall within the meaning of the artistic work defined under Section 2
(c) of the Copyright Act, 1957 and would be entitled to the full period of copyright protection as evident from the definition of Page 122 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined the design under Section 2(d) of the Designs Act. However, the intention of producing the artistic work is not relevant.
g. This is precisely why the legislature not only limited the protection by mandating that the copyright shall cease under the Copyright Act in a registered design but in addition, also deprived copyright protection to designs capable of being registered under the Designs Act, but not so registered, as soon as the concerned design had been applied more than 50 times by industrial process by the owner of the copyright or his licensee.
h. In the original work of art, copyright would exist and the author/holder would continue enjoying the longer protection granted under the Copyright Act in respect of the original artistic work per se.
i. If the design is registered under the Designs Act, the Design would lose its copyright protection under the Copyright Act. If it is a design registrable under the Designs Act but has not so been registered, the Design would continue to enjoy copyright protection under the Act so long as the threshold limit of its application on an article by an industrial process for more than 50 times is reached. But once that limit is crossed, it would lose its copyright protection under the Copyright Act. This interpretation would harmonize the Copyright and the Designs Act in accordance with the legislative intent."
(emphasis added by me).
27. So far as the issue of violation of trade secrets is concerned, it is noted that firstly paras 16 and 17 of the plaint are far too general to make out such a case and for passing an order as to so called trade secrets which are being not specifically talked of and pleaded by the plaintiff. If an injunction order is sought with respect to trade secrets then such specific trade secrets have to be mentioned and as to how those trade secrets are in the ownership of the plaintiff, and only thereafter the court can consider the grant of any injunction order on the basis of specified trade secrets and it cannot be that a general order can be passed that there is presumed to be a trade secret of the plaintiff and the defendant to be injuncted with respect to that unspecified trade secret Page 123 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined which is not described in the plaint, and with respect to which thus no specific injunction order qua specific trade secret can be passed.
28. As a matter of abundant caution during the course of arguments I put it to the counsel for the plaintiff as to what are the trade secrets which the plaintiff has and to which counsel for the plaintiff argued that they are the same sketches, drawings and designs in which copyright is claimed by the plaintiff and which are taken away by the erstwhile employees of the plaintiff and used by the defendant. Therefore really the issue once again is nothing but of application of Section 15(2) of the Indian Copyright Act and not with respect to any trade secret dehors the provisions of the Indian Copyright Act and the Designs Act.
29. In view of the above, it is found that the present suit is barred by Section 15(2) of the Indian Copyright Act read with the ratio of the Division Bench of this Court in the case of Microfibres (supra), and therefore, the suit is dismissed, leaving the parties to bear their own costs.
3. Holland Company LP &Anrv. S.P. Industries [CS(COMM) 1419/2016 Delhi High Court- 27 July 2017] (Paras 2,5,8,12,
29);
2. The plaintiffs have claimed themselves to be the owner of industrial drawings of Automatic Twist Lock (hereinafter referred to as "ATL") system for securing cargo containers to support such as deck of a vehicle or a second cargo with which the first container is to be stacked. Plaintiffs claimed to have invented the product and possess intellectual property rights, patent and copyright. It is submitted that, in fact, the invention was done by the plaintiff No. 1, but the technology was transferred under an agreement dated 11.07.2006 to the plaintiff No. 2. That the plaintiffs had supplied its product to the Indian Railways and it used it on container flat wagon. Plaintiffs claim that the drawings of ATL device along with its component, are the original Artistic Work and plaintiffs is the owner of copyright of these industrial drawings.
5. Claim of the plaintiffs is that the drawings of ATL device and of its Page 124 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined parts belong exclusively to the plaintiffs and that it is an artistic work in which plaintiffs have copyright. 8. The suit as well as the application is contested by the defendant.
8. At the outset, the defendant has submitted that the plaintiffs have no copyright in the industrial drawings. It is submitted that by virtue of Section 15 of Copyright Act, 1957, no copyright exist in any drawing or design once the production has been done more than 50 times by an industrial process using such drawing or design. It is submitted that the plaintiffs have themselves admitted that they have supplied ATL devices to the Railways and thus by using drawing they have reproduced more than 50 articles. It is further submitted that under the contract awarded to it by the Indian Railways, it was bound to fulfil its obligation on the basis of specification and drawings mandated in terms of the contract. It is also contended by the defendant that it had never claimed to be manufacturers and supplier of the plaintiff's spare parts. The defendants have to do only those things which it is required to do under the contract awarded by the Indian Railways which is for the repair or replacement of parts of ATL devices. Having lost the tender, the plaintiffs cannot claim to have exclusive rights to repair and replace the ATL devices which belong to Indian Railways. It is denied by the defendant that it has misappropriated the know-how or information, drawings or designs of the plaintiffs. The plaintiffs also cannot be said to have exclusive intellectual property right over the said drawings since these drawings have been published and are readily available in the market. The defendant is to confine its work under the contract. It is submitted that the components required to be replaced as per the tender awarded are not the components of the plaintiffs. It is submitted that the defendant is neither infringing the copyright nor stealing the drawings of the plaintiffs by using reverse engineering. It is submitted that the quality check of the work carried out by the defendant is done by the Indian Railways and their representatives. It is submitted that even before this contract which was awarded to the defendant, the Indian Railways have placed orders on M/s Escorts Ltd, Faridabad, M/s Ad Electrosteel Co. Pvt. Ltd, Kolkata, M/s Buttweld Industries, Kolkata for the repair and maintenance of the same product, i.e., ATL devices and/or its spare parts. It is submitted that the plaintiffs cannot claim proprietary right over the drawings with an intent to keep the other competitors out with a view to maintain monopoly more so when the plaintiffs participated in Page 125 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined the bid process and lost the contract. It is further submitted that this case is the outcome of the frustration on the part of the plaintiffs in losing the contract. The fact that it had participated in the bid process, clearly shows that it never had any objection against Railways for carrying out the repairs of ATL devices by inviting different players in the field by process of tender. It is submitted that the plaintiffs have no copyright in the industrial drawings and peculiar facts of the case clearly shows that the suit itself is not maintainable and liable to be dismissed.
12. On the other hand, learned counsel for the defendant argues that industrial drawings are not an artistic work and, therefore, no copyright exist and that the plaintiffs have no copyright in the industrial drawing since the plaintiffs are not the author of the work and so not entitled protection under law. It is further argued that even if it is presumed that the plaintiff is the author of the work, he is not entitled for the protection because his work has been duly published in India. It is also argued that industrial drawings since capable of being registered under the Designs Act, 2000, are exempted from the purview of the Copyright Act, 1957. It is further argued that the defendant is not infringing any copyrights of the plaintiff rather it is acting as per the contract awarded to it by the Railways for service and maintenance of ATL. It is further argued that since it is the Railways who had awarded the contract for service and repair of ATL devices, the Railways are a necessary party, but yet the plaintiffs have not made them a party to the suit and the suit is liable to be dismissed on this count. It is further argued that once Railways have published the drawings and have also duly published the drawings of the articles which needed to be repaired, it cannot be said that the plaintiff continues to have any copyright in those drawings.
7. We have considered the oral as well as written submissions advanced by the both the learned Senior advocates of the respective parties and also perused the papers placed on record.
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8. After hearing the the learned advocates appearing for the respective parties, the learned trial Court partly allowed the Exhibit-5 Application and has directed the defendants to maintain and produce the complete/accurate accounts with respect to the business done by them using the subject technology in seal cover. The operative portion of the said impugned order is hereby reproduced hereinbelow;
"(A) By way of interim injunction, the defendants (including their employees, directors, agents etc.) are hereby restrained from disclose or providing the subject technology along with the working dimensions to any third party till the final disposal of the suit.
(B) The Defendants are also directed to maintain and produce the complete/accurate accounts before this court with respect to the business done by them using the subject technology in seal cover.
(C) It is clarified that by way of this interim injunction, the Defendants are not restrained from using the subject technology for their own business purpose.
(D) With the aforesaid directions the present interim injunction application, stands dispose off.
(E) No Order as to Cost."
9. The case of the appellant is that the respondent have copied the recipe of HPHT apparatus and there is no material on record which suggests prima facie that the control panel is easily Page 127 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined available in the market. Reliance placed by the respondent on the existence of Toroid Ring and Diamatrix found in some research papers or on website does not mean complete HPHT apparatus. The further case of the appellant is that they have expended huge amount of money and efforts in doing research and for developing technology. To substantiate such contention except bare words in the application, there is no eye catching evidence that appellant has expended huge amount of money and efforts, no prima facie evidence, is found on record.
10. During the course of hearing, learned Senior advocates of the both the parties have shown the demo of HPHT apparatus and demonstrated how the diamond is placed and how internal Ring, Intermediate Ring, outer Ring, Diamatrix, toroid ring, diamond container and control panel are placed and functions.
By showing the demo, an attempt is made to establish that the methodology of assembling components has been acquired by the appellant after rigorous research and development.
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11. What is under consideration at this stage is whether the plaintiff has any prima facie case; (i) in establishing exclusive right over the manner in which diamonds are being colored, (ii) whether defendant is misusing the technology owned by plaintiff, (iii) whether the respondent is guilty of using trade secret and proprietary information of the appellant, (iv) whether under know how agreement dated 02.08.2010, the appellant has an exclusive right over the technology, (v) whether respondents were given access to information of the appellant company with respect to research and development of HPHT technology pertaining to coloring of diamond (vi) whether appellant became an exclusive owner of the confidential information including technical specification, design, drawings and other technical information pertaining to the Block Matrix assembly that further comprises of internal / inner ring/ intermediary rings, outer ring, Block Matrix and Toroid Ring along with the diamond container and software / HMI. The plaintiff has to prima facie establish above aspects. Notice was issued to defendants prior to the Page 129 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined intimation of the suit by plaintiff.
12. The suit is filed on 12.05.2021 and the correspondence / email relied upon by plaintiff is dated 26.05.2021 confirming technical know how sold to appellant by Bakul. The said communication is undoubtedly after the initiation of suit and same cannot be considered by Court. Further, there is no material from Bakul. There is no material from Bakul confirming any right to have been continued after the period of expiration of know how agreement. Undoubtedly, the duration of technical know how agreement was for three years from 02.08.2010.
13. The counter submission of learned Senior advocate for the appellant that the technology purchased through know how agreement was without any restriction of time. Such contention has no force as the know how agreement clearly speaks about a time duration leaving no room for interpretation.
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14. It is noteworthy to mention here that in absence of confirmation from Bakul regarding existence of any agreement after the period of expiry of 3 years, at a very delicate stage of deciding injunction application, without trial, such contention cannot be weighed in favour of plaintiff. The contention of continuity of the know how agreement without restriction of time cannot be decided on the basis of affidavits and counter affidavits. Such contention can be tested only after the trial.
15. It can be culled out from the pleadings of the parties that there was no confidentiality agreement executed between the plaintiff and the defendant. Under the general law, there cannot be any restriction about non-disclosure of the confidential information, drawings etc. Whether the respondent is using trade secret and proprietary information of the appellant, is required to be tested after trial. Section 27 of Contract Act is hereby reproduced as under;
"27. Agreement in restraint of trade, void.--Every agreement by which any one is restrained from exercising a lawful profession, trade or business of any kind, is to that extent void."Page 131 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024
NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined The provision is unambiguous. There cannot be any restraint against a person from carrying out any lawful trade, business or profession.
16. We are of the view that all the contentions and the counter contentions cannot be gone into at the state of deciding interim application. At the stage of deciding interim application, the Court has not to undergo a mini trial and cannot decide the complexed questions of fact which are involved in the present case.
17. Another aspect which has weighed to this Court in not granting any reliefs to appellant at this stage is that the technical know how agreement is executed between V.N. Bakul Institute for Superhard Materials of National Academy of Sciences of Ukraine (ISM NANU) - Kiev and Tenth Diamond Planet Private Limited on 2/8/2010. The said know how agreement is an agreement of transfer of know how for process of carrying out HTHP treatment of various types of natural and synthetic Page 132 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined diamonds. In the plaint, it is the case of the plaintiff company that plaintiff Company established in the year 2006 and formally plaintiff company was known as Tenth Diamond Planet Private Limited. The know how agreement is executed in favour of Tenth diamond planet Private Limited. Thus, the agreement is not executed with the plaintiff company. The plaintiff cannot claim any exclusive right under agreement dated 2/8/2010. No injunction can be granted in favour of the plaintiff in view of absence of prima facie case. There is no material on record establishing any link between plaintiff and Tenth Diamons Planet Pvt. Ltd. The plaintiff cannot claim any ownership right over the technology which it has not invented.
Only by way of an agreement of transfer of know how for process of carrying out HTHP treatment of various types of natural and synthetic diamons, right to use technology was permitted to Tenth Diamond Planet Pvt. Ltd.
18. More particularly, on perusal of the prayers made in the Page 133 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined plaint as well as in the injunction application it is found that if the injunction application is allowed at this stage it would tantamount to passing a decree without trial. Considering the documents placed on record, more particularly, the research papers of Bakul, prima facie establishes that the technology is not new in the market. As observed above the confidential information and industrial drawings which are claimed to be the proprietorship of plaintiff cannot be decided on the basis of affidavits. The claim of the plaintiff in the plaint as well as injunction application that the plaintiff has developed devices for HPHT treatment of Diamonds is completely against the contents of the technical know how agreement.
19. From the terms and conditions of the technical know how agreement, it transpires that the plaintiff does not get an exclusive right to initiate legal proceedings. Clause number 12 of the said agreement speaks about protection of transferred know how, the sub-clauses of the same are reproduced Page 134 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined hereinbelow;
"12.1 If after the contract conclusion any third party submits the patent demand or the patent will be granted to him which can deprive of the SELLER or the BUYER of the right in full or in part to use "know-how" the parties immediately after they learn about it, will undertake joint actions on protection of "know-how" and in case of need on contest of the validity of demands or patents of the third parties, and also carry out other actions connected with performance of the Contract.
12.2. In case if the claims on the third parties rights violations due to "know-how" using will be shown the BUYER under the present contract, the BUYER informs on it the SELLER. The BUYER in coordination with the SELLER undertakes to settle claims or to provide judicial protection. Expenses and losses suffered by BUYER as a result of settlement of the specified claims or the termination of litigations will be distributed between the parties according to the arrangement."
20. In the totality of the facts and considering the material which is placed on record, we are of the view that the learned trial Court has prima facie held that the controversy requires trial and we do not find any reason to interfere in the findings of fact, which have been arrived at by the learned trial Court. The decisions which have been relied upon by the appellant are not helpful to the appellant at this stage.
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21. Submissions that vendors are same and respondents are using the same vendors as that of the appellant, is not a ground to injunct defendants from carrying out any business, profession or trade. Such allegations require strict proof of fact. We are of the view that whether the use of HPHT device and its technology surrounding HPHT treatment of diamonds has any connection or any relevance with HPHT for sintering to do with clouring of diamond is purely a technical issue. The technical issue which is involved in the present case cannot be decided by referring affidavits and by considering allegations and counter-
allegations. Such questions on technical issues require expert evidence who is having an expertise knowledge and experience on such device and the technology to change the colour of diamond. The commissioner report is not a conclusive piece of evidence and the controversy cannot be adjudicated upon the report of the Court Commissioner. The claim of the plaintiff is that HPHT pertaining to the colouring of diamond is a proprietary right is purely a question of fact and merely on the Page 136 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined basis of affidavits and counter-affidavits. Such factual aspect cannot be decided. The proprietary right claimed by the plaintiff cannot be decided at this stage of hearing of injunction application. The learned trial Court has considered all the documents and material placed before him and after scrutinizing the material placed before him has passed the order directing the defendants to maintain and produce the complete/accurate accounts with respect to the business done by them using the subject technology in sealed cover. It is also a vital aspect that the learned trial Court had no opportunity to assess the infringing materials with the contents of the sealed cover, which was placed before the trial Court by the plaintiff with re-joinder.
Such material was not placed on record at the time of filing the suit.
22. From the record of the case, the sealed cover, as per the plaintiff's case, contains copy of mapping chart with pictures of the plaintiff's system / apparatus with corresponding para / line Page 137 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024 NEUTRAL CITATION C/AO/134/2023 CAV JUDGMENT DATED: 08/04/2024 undefined of Local Commissioner Report and corresponding image, number of defendants' machine as procured by the local commissioner. And mapping chart of product / component as procured from suppliers. The details procured from suppliers are required to be tested during trial. Thus, there is no prima facie case in favour of plaintiff which warrants an order of injunction in favour of plaintiff. What is relevant is the contents and the veracity of such documents / pictures / products which cannot be evaluated without the evidence of expert on the subject.
23. After considering the material placed on record and after considering the decisions which have been relied upon by both the sides, we are of the view that learned trial Court has not committed any error in passing the impugned order, we do not find any illegality and perversity committed by the learned trial Court in arriving at a conclusion which is based on facts and material placed before him.
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24. In the result, the present Appeal From Order fails and the same is dismissed. No order as to cost. Accordingly, connected Civil Application stands disposed of.
(BIREN VAISHNAV, J) (D. M. DESAI,J) RINKU Page 139 of 139 Downloaded on : Fri Apr 26 20:52:35 IST 2024