Delhi High Court On The Issue Of Theft Of Company Data By Former Employees;
Conclusion- The present case reflects a very sensitive issue i.e. theft of data or source codes by the employees. As a company's data is accessible by employees, it becomes vulnerable to IP infringement. Hence, it is essential that adequate protection of data is ensured and confidentiality clauses are incorporated in employment agreements in such a manner that they firmly prohibit misuse of data by employees.
Brief Facts of the Case – In this case, an individual namely, Tarun Tyagi (hereinafter referred to as the Petitioner) filed the present petition for quashing an order passed by the Chief Metropolitan Magistrate on November 6, 2013 in the matter.
Background of the case- Initially, the complaint was filed against the Petitioner by the company Unistal Systems Pvt. Ltd. (hereinafter referred as the Complainant Company) of which the Petitioner was an employee from 2003 to 2005. The Complainant Company is engaged in the business of providing data recovery services.
Allegedly, after leaving the services of the Complainant in September, 2005 the Petitioner set up a company namely M/s Prodata Doctor Private Limited (hereinafter referred as the Petitioner's Company). The Petitioner's Company was also engaged in a similar business of data recovery and developing software applications for computers.
The Complainant Company in suspicion of theft of its source code by the Petitioner registered a FIR with the CBI (Central Bureau of Investigation) wherein it alleged that somewhere around March, 2005 the Petitioner had stolen the source codes of a software known as "Quick Recovery" and the same was offered for sale by the Petitioner's company under the name "Prodatadoctor".
In view of the above complaint, the CBI conducted seizure of documents and disks from the Petitioner's company. Meanwhile in 2008, the Complainant Company preferred a suit for perpetual injunction and damages against the Petitioner alleging infringement of its copyright of software named, Quick Recovery. The suit of the Complainant Company was based on the footing that the Petitioner had stolen the source code of a software developed by it and the same was put up for sale by the company owned by the Petitioner by making some cosmetic changes in the software.
Thbus, the police also can register a criminal complaint under section 406 IPC against the employee.
You may also file a recovery suit for the losses due to infringement of the copyrights and a suit for perpetual injunction and damages against the Petitioner alleging infringement of its copyright of data that has been allegedly stolen and being used by him.
IP rights are infringed when a work protected by IP laws with regard to patents, copyright, and trademarks, and "misappropriation" with respect to trade secrets, copied or otherwise exploited without having the proper permission from a person who owns those rights.