Delhi High Court
Sterlite Technologies Limited vs Anupam Singh & Ors. on 8 September, 2022
Author: Prathiba M. Singh
Bench: Prathiba M. Singh
$~25
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of Decision: 8th September, 2022
+ CS (OS) 349/2022 & I.A. 14613/2022
STERLITE TECHNOLOGIES LIMITED ..... Plaintiff
Through: Ms. Shivangi Narang, Advocate.
(M:9837334866)
versus
ANUPAM SINGH & ORS. ..... Defendants
Through: Mr. Dushyant Manocha and Ms.
Chitra Vats, Advocates for R-1.
(M:9999714826)
Mr. Ayush Sahay, Advocate for D-3.
(M:9871792740)
Mr. Rohan Batra and Mr. Rishabh
Bhargav, Advs. (M:8802895664)
CORAM:
JUSTICE PRATHIBA M. SINGH
Prathiba M. Singh, J. (Oral)
1. This hearing has been done through hybrid mode.
I.A. 14613/20222. This is an application filed on behalf of Defendant No. 2 seeking condonation of delay of 27 days in filing the reply to the injunction application IA No. 9305/2022 filed on behalf of the Plaintiff. For the reasons stated in the application, the delay is condoned. I.A. 14613/2022 is disposed of.
CS (OS) 349/2022
3. The present suit has been filed on behalf of Plaintiff - Sterlite Technologies Ltd. (hereinafter, 'Sterlite') seeking permanent, mandatory injunction and damages against breach of confidence and misappropriation of confidential information and trade secrets against Defendant No.1 -
CS (OS) 349/2022 Page 1 of 6 Signature Not Verified Digitally Signed By:DEVANSHU JOSHI Signing Date:12.09.2022 17:15:11Anupam Singh, Defendant No.2 - Akhil Garg and Defendant No. 3 - HFCL Ltd. (hereinafter, 'HFCL'). Defendant No.1 and Defendant No. 2 are ex- employees of Sterlite who resigned on 3rd August 2020, and 1st May 2020 respectively and subsequently joined HFCL.
4. On 27th February, 2020, HFCL filed Indian Patent Application Nos. 202121014389 and 202121008259 (hereinafter, impugned applications) which were published on 11th March 2022. Defendant Nos. 1 and 2 were listed as the inventors in the impugned applications.
5. The Plaintiff's grievance is that the specification of the said patent applications incorporates its proprietary information, to which Defendant Nos. 1 and 2 had complete access to during their course of employment with Plaintiff company.
6. It is submitted by the Plaintiff that the terms of employment, appointment letter and Confidentiality Letter/ Non-Disclosure Agreements (NDAs) signed by Defendant Nos. 1 and 2 contain standard clauses to safeguard the confidential and proprietary information of the Plaintiff. The NDAs specifically obligated the Defendant Nos. 1 and 2 to not share or disclose any confidential information of the Plaintiff with any person including any competitors. Thus, in addition to their contractual obligations, Defendant Nos. 1 and 2 also owed a duty in common law to the Plaintiff to maintain confidentiality and to not misuse Plaintiff's proprietary information. The relevant paragraphs of the terms of employment signed by Defendant Nos. 1 state as under:
"16. Intellectual Property:
16.1 To the extent permitted by Applicable Law, any and all intellectual property including but not limited to inventions, discoveries, improvements, CS (OS) 349/2022 Page 2 of 6 Signature Not Verified Digitally Signed By:DEVANSHU JOSHI Signing Date:12.09.2022 17:15:11 copyrightable material, trademark ideas, designs and concepts (hereinafter collectively referred to as 'IP'), which you may make or conceive, either solely or jointly with others, during the Term of your employment with the Company, whether in the Company's premises or using the Company's property, or otherwise, shall be deemed to be the exclusive property of the Company and you hereby waive and/or assign any and all right, title, interest and/or ownership in the same in favour of the Company."
7. The relevant part of the Confidentiality Letter signed by Defendant Nos. 2 state as under:
"2. You understand that the Company continues to be the sole and exclusive owner and has a universal worldwide right in perpetuity of all the results and proceeds of your services, work and labour during the course of your employment with the Company, in connection with your employment with the Company. You agree that all the intellectual property rights in any product, work, software (including the source and object code and documentation}, technical manuals, business research, development or any other work that has been or may be created / developed / made by you, either jointly or independently, during your employment with the Company ("Inventions") shall be and remain vested with the Company in accordance with the terms of this letter and such other documentation that you may have executed with the Company. You further acknowledge that the Inventions which have been developed by you during your employment with the Company and which may be protectable, either as patents, designs, copyrights or otherwise intellectual property, are "works made for hire" and that you shall not claim any right over the same. You hereby agree to assign to the Company or its designee, your entire right, title, and interest in and to the Inventions which you have developed during CS (OS) 349/2022 Page 3 of 6 Signature Not Verified Digitally Signed By:DEVANSHU JOSHI Signing Date:12.09.2022 17:15:11 your employment with the Company. You also waive. and agree never to assert any moral rights, or the equivalent thereof, against the Company with respect to the Inventions. You agree to waive any right to and refrain from raising any objection or claims pursuant to Section 19(4) of the Copyright Act, 1957. All copyrightable works, including software, and all Inventions which you have made during the course of your employment and all patent and copyright applications filed by you within a year after Employment Cessation Date will be disclosed by you."
8. In this background it is noticed that the suit is not numbered as a commercial suit. Ld. counsel for both parties submit that the suit relates to confidential information and thus may not have been numbered as a Commercial suit as it may strictly not constitute a 'commercial dispute' as it relates to trade secrets and confidential information.
9. In terms of the order dated 14th December, 2015 passed in CS(OS) 2265/2014 titled Sanofi Winthrop Industrie & Anr. v. Kirti B. Maheshwari & Anr., disputes of this nature relating to trade secrets and confidential information ought to be treated as `commercial disputes'. The relevant part of the order is as follows:
"12. It is the stand of the plaintiffs that the Agreement dated 12.10.2011 envisaged that any information shared by them with Astron was for the purpose of rendering services that were entrusted to them, and that the performance of the services would remain their exclusive property and that Astron was under any obligation to assign to the plaintiffs, any intellectual property right or interest as a result of the performance of services, on receiving payment.
13. In fact, the descriptive heading of the Agreement dated 12.10.2011 itself is self-explanatory CS (OS) 349/2022 Page 4 of 6 Signature Not Verified Digitally Signed By:DEVANSHU JOSHI Signing Date:12.09.2022 17:15:11 as it has been titled as a "Development Services Agreement", which would mean that the disputes arising from the said document would fall within the definition of a "commercial dispute", as specified under Section 2(1)(c)(xvi) & (xviii) of the Ordinance, namely, technology development agreements and agreement for provision of services.
14. Having examined the various articles incorporated in the Development Services Agreement, particularly Article 2, which lays down the scope of the agreement and refers to performance of services by the predecessor-in-title of the defendants, Article 4 that elaborates the performance of the services, Article 5 which specifies the remuneration for the services that may be rendered by Astron, and Article 6 that deals with intellectual property and refers to patent applications and trademarks relating to the said product and the limited licences granted by the plaintiffs to Astron for its Background IP, the results of the development agreement and the proprietary rights therein, there is no manner of doubt that the dispute between the parties squarely falls within the definition of a "Commercial Dispute" as elaborated in Section 2(1)(c)(ix) and (xvi) to (xviii) of the Ordinance."
10. Considering the nature of the litigation, i.e., one involving trade secrets and confidential information as also subject-matter disclosed in patent applications, the present suit involves a `commercial dispute' under the Commercial Courts Act. The definition of `commercial dispute' under Section 2 (c) of the CCA, 2015 reads:
"(xvii) intellectual property rights relating to registered and unregistered trademarks, copyright, patent, design, domain names, geographical indications and semiconductor integrated circuits;"
11. The above would include disputes relating to intellectual property as CS (OS) 349/2022 Page 5 of 6 Signature Not Verified Digitally Signed By:DEVANSHU JOSHI Signing Date:12.09.2022 17:15:11 also disputes relating to breach of confidential information, trade secrecy research and development, subject-matter of patents or pending patent applications etc., The definition of `intellectual property' under Section 2(c)(xvii) ought to be read broadly to include the broader subject matter related to intellectual property and not restricted to the specific species of intellectual property rights specified therein. The definition is not restrictive in nature. The suit thus ought to be numbered as a commercial suit.
12. Accordingly, let the Registry renumber this suit as a commercial suit. List before the Joint Registrar on 15th September, 2022 i.e., the date fixed.
13. The above observations shall not be construed as an opinion of the merits of the disputes between the parties.
14. List before the Court on 10th October, 2022 i.e., the date fixed.
PRATHIBA M. SINGH JUDGE SEPTEMBER 8, 2022/dj/kt CS (OS) 349/2022 Page 6 of 6 Signature Not Verified Digitally Signed By:DEVANSHU JOSHI Signing Date:12.09.2022 17:15:11