Discovery of Documents for Enforcement of Trade Secrets and Copyright
08 October 2012
The civil remedies for the enforcement of intellectual property rights are usually in the form of injunctions, account of profits, delivery up or discovery of infringing material or documents on the prevalence of appropriate grounds. The procedure for obtaining the above reliefs is provided under the Civil Procedure Code 1908. Section 30 and Order XI, Rules 12 to 14 of the Civil Procedure Code allow for document discovery, inspection, production, impounding and return of documents, or other material that can be produced as evidence by a party to the suit. Such power of court is exercised in cases of alleged infringement of intellectual property rights when the infringing material and documents are alleged to be in possession of the defendant.
Recent Cases
It has been held in ML Sethi v. RP Kopur that when the court makes an order for discovery under the above provisions, the defendant is bound to make an affidavit of documents, and upon failure to do so, penalties shall be subjected under Order 11, Rule 21. An affidavit of the documents shall set forth all the documents related to the matter which are in possession of the defendant. Further, it has been held that in Sosanagoudo v. SB Amarkhed that the power to order production of documents is coupled with discretion to examine the expediency, justness and relevance of the documents.
This remedy of production of documents was availed of in a recent case involving enforcement of copyright, trade secrets and confidential information. Trade secrets consists of any formula, pattern, device or compilation of information which is used in one’s business, and which gives it an opportunity to obtain an advantage over competitors who do not know it or use it. With the increase in competition in every field, businesses must ensure that they adequately protect their processes, technical know-how and confidential information from competitors. Trade secrets can be extremely valuable to a company’s growth and sometimes even critical for its survival. There being no specific law relating to trade secret protection in India, trade secrets are instead protected under the common law system. Also, if the confidential information is in the form of databases and other charts, the owner can claim copyright over them.
Misappropriating Trade Secrets
In Vestergaard Frandsen A/s and Ors v. M Sivaswamy and Ors, the plaintiffs alleged that the defendants misappropriated their trade secrets relating to production of mosquito nets made from polyester and polyethylene and impregnated with insecticides.
The production of nets involved a two-step process in which master batch recipes were formed. This master batch recipe and product recipe constituted their trade secrets, and were kept confidential at all times.
The nets manufactured by the defendants violated the trade secrets of the plaintiff, as some of the defendants were shown to be former employees of the plaintiff.
During the course of their employment with the plaintiff, it was alleged, they copied confidential information and constituted their own company to produce the same product. One of the defendants leaked the formula to a French company, which was also joined in the suit as a defendant.
The plaintiffs also alleged copyright infringement in the databases, recipes, and other test data which belonged to them under Section 17(c) of the Copyright Act, 1957.
Breach of confidentiality and unlawful use of information was also alleged on the part of the former employees. Plaintiffs appointed local commissioners for document discovery and search and seizure of the defendants’ premises to reveal infringing material, which was obstructed by the defendants. The order of the UK court that granted an injunction against the conduct of the defendants was also cited before the High Court.
A number of reliefs were sought by the plaintiffs against the defendants including permanent injunction from infringing the copyright, manufacturing, selling, authorising the sale, delivery up and forfeiture of documents and infringing materials in power and possession of the defendants and a decree for accounts and damages.
The court, on hearing the plaintiff, held that the relevance, justness and expediency to produce documents were germane considerations which weighed upon courts while making orders. It also said that admissibility of the documents is not a relevant consideration while deciding whether to direct discovery. The function of discovery is to provide the parties with relevant documentary material before the trial to assist them in appraising the strength or weakness of their cases. Hence, the court, pending the determination of the actual utilisation of the trade secrets and confidential information by the defendants, or violation of their copyright, at the trial, directed discovery of documents form the defendants.
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