INTRODUCTION

The legal conflict between Inox India Pvt. Ltd., a pioneer in cryogenic engineering solutions, and Cryogas Equipment Pvt. Ltd., a competitor in the same industry, highlights complex issues of intellectual property protection, corporate confidentiality, and employee mobility within the specialized sector of cryogenic equipment manufacturing.

Inox India, with decades of experience in designing and producing cryogenic liquid storage and transport systems, has significantly invested in research and development to build its portfolio of engineering drawings, proprietary processes, and technical know-how. These resources are central to the company’s competitive edge and have been carefully developed and guarded over time. The plaintiff alleged that Cryogas, with the involvement of its affiliate companies and two former senior employees of Inox, unlawfully accessed and used these proprietary assets to design and manufacture similar cryogenic semi-trailers and LNG storage systems. The controversy deepened when Inox discovered that the engineering drawings submitted by Cryogas for regulatory approvals appeared substantially identical to their own proprietary designs including identical spelling mistakes and technical annotations. This suggested not just inspiration or common standards, but direct copying. The participation of ex-employees in the competing venture added a layer of complexity, raising questions around breach of confidentiality clauses, contractual obligations, and the misuse of sensitive business information acquired during previous employment.

LEGAL ISSUES

1.     Do the proprietary engineering drawings qualify as 'artistic' and 'literary' works?

2.     Was there a breach of contractual confidentiality by the defendants?

3.     What are the enforceability of confidentiality and employment agreements?

SUMMARY OF THE CASE

The legal proceedings initiated by Inox India Pvt. Ltd. arose from serious allegations of unauthorized use and reproduction of its intellectual property, specifically, engineering drawings, proprietary designs, and confidential technical knowledge that the company had developed over many years. Inox, a well-established manufacturer in the cryogenic storage and transport equipment industry, contended that Cryogas Equipment Pvt. Ltd. and its affiliated entities had unlawfully utilized these proprietary resources to create cryogenic and LNG (Liquefied Natural Gas) semi-trailers that bore striking resemblance to those manufactured by Inox.

Central to Inox's claim was the assertion that two of its former employees, who had played key roles in its engineering division, had later joined Cryogas and its group companies. Inox alleged that these individuals, upon leaving the company, had taken with them critical engineering designs and know-how, which were subsequently used to create near-identical trailers by Cryogas. The plaintiff pointed to the timing of the employees’ resignations and their immediate engagement with Cryogas as indicative of a deliberate and strategic attempt to exploit confidential information in direct competition. To support its claim, Inox highlighted that engineering drawings submitted by Cryogas to the Petroleum and Explosives Safety Organisation (PESO) for regulatory approval were not only structurally similar to Inox's own drawings but even contained identical typographical errors, technical annotations, and sentence structures.

In defence, Cryogas and its related entities denied any wrongdoing, claiming that the engineering drawings in question were not original creations of Inox but were developed in accordance with commonly used international engineering standards and codes. They argued that such standards were in the public domain and widely accessible to anyone working in the cryogenic engineering field. Moreover, the defendants claimed to have independently sourced their designs through a third-party designer based in the United States.

Hon’ble Supreme Court of India had earlier been approached by the parties, it introduced a two-pronged legal test to determine whether a given work should be protected under the Copyright Act, 1957 or if it fell within the purview of the Designs Act, 2000. It scrutinized whether Inox’s engineering drawings could be classified as original artistic or literary works deserving copyright protection and whether the manufacturing of the semi-trailers based on those drawings triggered the limitations under Section 15(2) of the Copyright Act.

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ARGUMENTS

Plaintiff’s Arguments

·       The engineering drawings are original 'artistic' and 'literary' works under the Copyright Act.

·       Drawings were developed through extensive R&D and are not publicly available.

·       The defendants copied not only structural aspects but also spelling errors in notes.

·       Functional nature of the products does not diminish copyright protection.

Defendant’s Arguments

·       The drawings are functional, created per international codes, and lack originality.

·       The subject matter is governed by the Designs Act, not eligible for copyright.

·       Former employees were not bound by enforceable post-employment restrictions.

·       No cause of action against certain parties as they did not manufacture the alleged products.

COURT ANALYSIS

The court applied the Supreme Court’s two-pronged test to evaluate:

1. Whether the work is purely artistic or a design subjected to industrial application.
2. Whether the work’s dominant purpose was functional utility.

JUDGEMENT

The court observed that the engineering drawings created by Inox were primarily technical and functional in nature, with no intention of visual appeal. These drawings related to the inner structure of cryogenic tanks, which are not visible in the final product and have no decorative features. Therefore, they could not be considered ‘designs’ under the Designs Act, which requires an element of visual ornamentation for industrial applicability. Rather, these drawings were classified as original artistic works, created through considerable intellectual effort and expertise. As such, they were deemed to fall within the scope of Section 2(c) of the Copyright Act, which includes diagrams and drawings as artistic works.

Further reinforcing the plaintiff’s claim of infringement, the court took particular note of direct evidence pointing to copying. It was revealed that several spelling errors and technical phrases found in Inox’s original drawings also appeared verbatim in the drawings submitted by the defendants to regulatory authorities. This, according to the court, could not be a mere coincidence and strongly indicated that the defendants had replicated the plaintiff’s proprietary material rather than independently creating their own. The absence of any satisfactory explanation from the defendants on this aspect further weakened their defense.

The court held that Inox had established a strong prima facie case for copyright infringement and breach of confidentiality. It further noted that the balance of convenience was clearly in favor of the plaintiff. Inox had made substantial investments in developing its proprietary engineering designs, and allowing the defendants to continue using these without authorization would cause lasting damage to its business interests and competitive position.

Finally, the court concluded that if interim relief were not granted, Inox would suffer irreparable harm, both financially and in terms of its intellectual property rights. As such, the court passed an interim injunction, restraining the defendants from further using, disclosing, or manufacturing any products based on the impugned drawings or proprietary information of the plaintiff. This injunction would remain in force until the final adjudication of the suit.

CONCLUSION

The case reinforces the principle that functional, non-aesthetic engineering drawings can still qualify for copyright protection when they are original and demonstrate creative input. It also upholds the enforceability of confidentiality clauses in employment contexts, especially when breach results in economic and proprietary loss. The ruling bridges complex overlaps between copyright and design law while providing clarity on legal thresholds for interim relief in commercial IP disputes.

AUTHOR – BHAVPREET SINGH SONI

CO AUTHOR - SMRITI RAI