Tractors And Farm Equipment Ltd. v/s Greenfield Farm Equipment (P) Ltd. 2006 (32) Ptc 343

Facts:
The plaintiff (plaintiff) is a company manufacturing tractors and agricultural machinery since 1961. In 2000, the plaintiff created a project called the "Hunter Program" to develop a new tractor model called the

"Hunter Tractor". To achieve this goal, the plaintiff hired Omni Design International Ltd. in Great Britain to design the Hunter Tractor under service contracts. and Hawtal Whiting Ltd. The plaintiff incurred costs of approximately Rs. 3 crores to develop the design of Hunter Tractor.

The second defendant was an employee of the plaintiff company who joined in 1999 as a Technical Specialist (RandD). He was later promoted and confirmed as a senior member of the RandD department from June 1, 2000. The second respondent was directly involved in the Hunter project and was sent to the UK in November 2000 to work with Omni Design International Ltd during the development of the Hunter Tractor design. The second defendant was branded with copies of communications between Omni Design and Hawtal Whiting Ltd, which showed his close involvement with the Hunter project.

20. in October 2003, the second defendant retired from the plaintiff's company. The plaintiff's company accepted his resignation. Prior to his resignation, the second defendant executed an employment contract dated 7 October 199 9 which contained a confidentiality clause (s 8). This clause prohibited the second defendant from disclosing or making available any confidential or restricted information obtained during his employment with the plaintiff for a period of three years after termination of service. The first defendant company Green Field

Farm Equipments Private Limited was incorporated. on 13th December, 2002 by Vijayalakshmi, the wife of the second respondent, as promoter and founder manager. After leaving the defendant's com pany in October 2003, the second defendant joined the first defendant's company as a manager in November 2003.

The plaintiff discovered that the first defendant intended to manufacture a tractor called

"Maharaja 3300", which was allegedly identical in design to the Hunter Tractor of the plaintiff. Further investigation revealed that the fifth defendant, an employee of the plaintiff's department, whose wife was the head of the first defendant's company, was also involved in the Maharaja 3300 tractor manufacturing project.

The plaintiff alleged that the first defendant published brochures and pamphlets suggesting that the Maharaja tractor 3300 was the patent registration number 194570, which was found to be incorrect during inspection. The plaintiff found that the first defendant registered model no. 194570 for the maharaja 3300 tractor and on comparison it was found that the model was Omni Design International Ltd. an imitation of the developed Hunter Tractor model. to Plaintiff.

Issues:

• Whether the Plaintiff owns the copyright in Hunter Tractor's design.
• Whether Second Defendant had access to confidential Hunter Tractor design information.
• Whether Second Defendant breached the non-disclosure clause in the manufacture of the Maharaja 3300 Tractor.
• Whether the Plaintiff is entitled to an injunction against Defendants.

Contentions:
The plaintiff asserted that it acquired the exclusive rights and copyrights to Hunter Tractor's hunter design intellectual property pursuant to agreements with Omni Design International Ltd of the United

Kingdom. and Hawtal Whiting Ltd. and allocation of rights. The plaintiff alleged that the second defendant, who had access to confidential information about Hunter Tractor's design because he was involved in the project and based in the United Kingdom, misused that information to register the model with the first defendant under the name "Maharaja 3300. Company.

The defendants however contended that the Maharaja 3300 tractor could be manufactured by any qualified engineer with land and capital and the second defendant did not rely on the plaintiff's drawings. They argued that the plaintiff's drawings were not significant to start the production process of the basic tractor.The defendants alleged that the plaintiff abandoned the

Hunter project as early as April 2002 due to its viability in the Indian market and the second defendant had to resign under pressure. After the termination of the employment of the plaintiff, the second defendant independently designed the Maharaja 3300 tractor with the help of other engineers and designers.

The defendants further alleged that the first defendant registered the Maharaja 3300 tractor model under the Designs Act, 2000 and was the legal owner of the design under section 1 1 of the Act. They submitted that the first respondent did not manufacture the tractors covered by the registered design no. 194570 but produced another tractor called Maharaja 3300 which was not registered under the Designs Act. The defendants argued that the first defendant did not intend to commercially exploit the design contained in Design Registration No. 194570 and therefore there could be no injunctive relief against them.

Legal analysis:
The court analyzed the evidence and found that the Hunter Tractor Design was developed by and at the expense of the plaintiff and the British firms Omni Design International Ltd. and Hawtal Whiting Ltd. transferred the rights to the plaintiff. The court relied on a statement by Omni Design International Ltd, which read:

"In this regard, we wish to emphasize and confirm that all confidential information such as designs, copyrights, intellectual property rights, drawings, specifications, technical information, knowledge, knowhow and electronic transmission , which we transferred to you in connection with the aforementioned project, were fully transferred and assigned to you." This notice prima facie confirmed the transfer of rights to the plaintiff.

The court also noted that the similarity. between the model Hunter Tractor and the model Maharaja 3300 Tractor registered by the first defendant under model No. 194570 showed another breach of confidentiality by the defendant and misuse of confidential information by the plaintiff. The court said that even with the naked eye it was easily seen that the first defendant copied and imitated the 3300 design of Maharaja for the plaintiff Omni Design

The defendants violated copyright and mishandled confidential material, according to the ruling in Zed Telefilms Ltd. v. Sundial Communications Pvt. Ltd. (2003 PTC 457 Bom DB), which the court cited. The plaintiff could not have a grievance, the court reasoned, if the design registered by the first defendant was the original work of the second defendant, unrelated to Omni Design International Ltd. Nevertheless, the resemblance between the two tractor designs suggested that the second defendant had not only violated the confidentially but also broken the law. As a result, an order of injunction should be issued to protect the plaintiff from suffering irreversible harm.

The court further cited the ruling in IPLR INTEC Polymers Ltd. v. Mr. Rajendra Eknathrao Tambe (IPLR 2005 January 48), which held that a breach of confidentiality could result in an injunction against the violator. The court also pointed out that the defendants had not produced any documentation indicating that they had hired engineers or carried out research and development for the design, which might have indicated an unaffiliated third party.

The court also took into account the confidentiality clause (Clause 8) in the employment letter of the second defendant, which was dated October 7, 1999, and which forbade him from revealing or making accessible any restricted or confidential knowledge he had learned while working for the plaintiff company for a period of three years following his termination. The second defendant should have been the one to register the design and produce the Tractor under the name Maharaja 3300, the court noted, as he had access to the Hunter Project and knowledge of the design.

In response to the defendants' claim that the first defendant was the registered owner of the design, the court cited the ruling in Niky Tasha India Pvt. Ltd. v. F.G. Gadgets Pvt. Ltd. (AIR 1985 Delhi 136), which held that no injunction should be granted when a design registration is contested and a cancellation application has been filed, particularly if the design registration is recent. The plaintiff filed an application in November 2005 to have the design registration cancelled, and the court saw that the plaintiff supplied a letter supporting that application.

The plaintiff may pursue the right to have the registration cancelled under Section 19 of the Designs Act, 2000, hence the court rejected the defendants' argument that the first defendant was the design's owner based only on the registration. A decision in Metro Plastic Industries (Regd) v. Galaxy Footwear New Delhi (2000 PTC (20) 1 FB) was also cited by the court. In that case, it was decided that such a right could be enforced in the absence of an application for cancellation of the design; however, once an application for cancellation has been made, the court must take into account all relevant facts, including the grounds raised in the application for cancellation, when determining whether to grant an injunction.

The court further noted that even if the defendants had adopted the Hunter Tractor design, the plaintiff could still challenge it, since the plaintiff had provided evidence that the design's copyright had been granted to them through transfer or assignment from Omni Design International Ltd. The court cited the ruling in Puneet Industrial Controls Pvt. Ltd. v. Classic Electronics ((1997) PTC (17) 161), which held that the defendants could be placed under injunction if the plaintiffs established their ownership of the copyright and the defendants were unable to produce any drawings or other materials to support their claim.

The defendants' claim that the plaintiff could not contest the claimed infringement because she did not possess the copyright was similarly dismissed by the court. The plaintiff had exclusive intellectual property rights over the confidential information, data, digital media, electronic work, and other materials provided by the UK companies, the court noted, and the plaint and affidavit clearly stated that Omni Design International Ltd. designed the Hunter

Tractor under a contract of service for the plaintiff. The counter-affidavit asserted that the plaintiff was not the copyright owner, but it did not meaningfully contest these averments.

Regarding the defendants' argument that the assignment had expired because the plaintiff had not used the rights granted to them within a year, as allowed by Section 19(4) of the Copyright Act, 1957, the court decided that, in ruling on the interlocutory application, even though the assignment had been prima facie established, it might not have been possible to ascertain whether or not such a right had expired because the terms and conditions of the assignment had not been disclosed. The court said that a decision on this matter could be made during the trial.

Court's Decision:
Based on the analysis, the court determined that the plaintiff had shown both the second defendant's act of confidentially violation and the copyright infringement, thereby establishing the balance of convenience in its favour.

In both of the plaintiff's applications, the court granted temporary injunctions that prohibit the defendants from producing, marketing, distributing, advertising, or engaging in business related to tractors bearing the name "Maharaja 3300" or any other name that significantly mimics the drawings, digital photos, or photographs of the plaintiff's Hunter Tractor design, thereby violating the plaintiff's copyright.

The court did make clear, however, that the plaintiff could not use the injunction prohibiting the defendants from substantially copying the drawings, digital images, or photographs of the Hunter Tractor design to stop the defendants from producing tractors of their own design and configuration that are unrelated to the digital images or photographs of the Hunter Tractor, under the name Maharaja 3300 or under any other name. This is because no one can be protected by a blanket injunction from manufacturing tractors that are their own design and configuration and do not infringe upon the rights of others.

In summary, the court granted temporary injunctions to prevent the defendants from replicating or copying the Hunter Tractor design while permitting them to produce tractors of their own independent design after concluding that the plaintiff had established a prima facie case of copyright infringement and breach of confidentiality by the defendants.

Written By:

• Devanshi Rana
• Ishika Pundir