By Afzal Mohhamad
For far too long, there has been a continuous scuffle between employers and employees on the usage of the customer lists by the employees post-termination by the employer. Though sometimes bound by the legal obligations under the contract signed between the two parties, this matter has been a bone of contention with no clear demarcation to clarify the stance of judiciary.
The Delhi High Court in the recent case of Navigators Logistics Ltd v. Kashif Qureshi ruled that customer lists cannot be termed and treated as confidential information and thus are not protected under the Indian Copyright Act, 1957. This judgment clarifies the stance of the court after the Tech Plus Media Ltd.
The case at hand involved a logistics company, specialising in freight and couriers, claiming copyright over the customer list. The suit was filed against the former employees, who has started working for a rival company in the same business, on the ground that they had violated the copyright of the plaintiff company from the use of its customer list for their own business resolves.
The main argument of the plaintiffs was based on the premise that after the termination of the employment, the use of the customer list by the employees resulted in direct breach of the non-disclosure and non-compete clauses of the employment contract. They further contended that the customer lists were copyrighted documents and qualified as trade secret. On the other hand, the defendants argued that the plaintiff had failed to disclose the author of the list, further that the said plaint did not include the particulars of the list, and finally had failed to prove how this breach of confidentiality had resulted in loss to the employer.
The Judge delivered in favour of the respondents on the basis of three arguments; first, regarding the originality of the list; second, regarding the author of the list; third, regarding the publication of the list.
The learned Judge employing the ‘originality’ test laid down in the EBC case concluded that proof of originality of the customer list required one to state the technique/criteria employed behind the making of the list; mere mentioning of the customer list did not make it a protected document of the company.
On the second prong of the threefold test, the Court found that the plaintiff failed to disclose the author of the work (customer list). The fact that the plaintiff did not disclose the author of the work and did not claim confidentiality of the author were reasons, in the eyes of the Judge, to establish that the plaintiff had no copyright over the list. However, this might raise a number of issues with copyright in cases where a company is involved. The learned Judge cleared the air around this too, citing Rupendra Kashyap v. Jiwan Publishing House Pvt Ltd, where the claim of copyright was not given to CBSE but to the natural persons who compiled the questions. CBSE would be eligible for copyright only when it proves that it had engaged and employed persons specifically for the purposes of preparation and compilation of the papers with a contract that copyright shall lie with the CBSE. In addition, in Tech Plus Media Private Ltd v. Jyoti Janda, it was held that a juristic person is incapable of being the author of any literary work, in which a copyright may exist, though he may be the owner of the copyright. It is pertinent to mention here that the CBSE case was the first instance where a court ruled that a copyright would not exist in a compilation or customer list since it did not involve substantial skill or judgment on the part of the plaintiff.
Considering arguments on the third point, the Judge stated that for the list to qualify as original work, copyright would not vest in it unless the list had been published or if unpublished, it had been authored by a citizen of India or domiciled in India. As has been shown above, the author of the work had not been disclosed by the plaintiff and without any author, copyright would not vest with the employer.
On the question of whether the customer list would qualify as a trade secret, Justice Endlaw stated that the aforementioned lists cannot be termed as trade secret as it is implied and obvious for a company to know the players and customers in a particular business they function in. The judgment places reliance on the Bombay High Court’s ruling in Star India Pvt Ltd v. Laxmiraj Seetharam Nayak, where it was held that “every opinion or general knowledge of facts cannot be labelled as trade secrets or confidential information”. In the present case, no answer has been put forward to the question of as to how these lists constitute trade secret. Thus, the decision went in favour of the defendants.
The judgment is a welcome step in the copyright jurisprudence of India bringing in the required clarity with respect to violation claims over customer lists. The case clearly laid down that it is now mandatory for fresh plaints to make a case by providing concrete reasoning behind the originality of the work. Besides originality, the identification of author is required and subsequently in cases of a contracted author for purposes specific to the compilation of the database, the vesting of copyright in the employer would be presumed. The Court clarified that the requirement of publication of the database might be waived off where the author of the list is an Indian citizen or a person domiciled in India.
At the outset, the case might seem to be a clear-cut demarcation of the requisites for a copyright claim over customer lists, however some questions still remain unanswered. The author identifies three major takeaways from this judgment. Firstly, the judgment identified the relevant jurisprudence in this area and accordingly, clarified the stance of judiciary as regards the copyright determination test. Secondly, the Court failed to address the issue regarding ‘confidentiality versus publication requirement’ of lists. Finally, the Court sets a solid precedent for the lawyers to draft their plaints meticulously when seeking reliefs in copyright claims with a thorough evaluation of their situation through the satisfaction of the required tests.
 CS(COMM) No.735/2016.
 (2014) 60 PTC 121.
 Eastern Book Company vs D.B. Modak (2008) 1 SCC 1.
 1994 (28) DRJ 286.
 (2014) 60 PTC 121.
 2003 SCC OnLine Bom 27.
Image source: Photo available at https://www.pexels.com/photo/account-black-and-white-business-commerce-209137/.