In the matter of :-
SILVERMAPLE HEALTHCARE SERVICES PRIVATE LIMITED AND OTHERS ….. Plaintiffs
Versus
DR AJAY DUBEY & ORS. ….. Defendants
Date of Order:- 24.08.2023
Plaintiffs case is of violation of Non-Competitional Confidentiality Agreement (NCCA) and Infringement of its trademarks, Plaintiffs registered trademarks were:- DHI no touch, DHI Medical group, DHI direct hair transplant, DHI Hair Restoration.
“DHI” refers to a technique for facilitating hair growth, known as Direct Hair Implantation. The technique is stated to have been invented and developed by Mr. Konstantinos P. Giotis, founder of the DHI Global Medical Group.
Defendant 1 was a dermatologist, employed by Plaintiff 1 vide appointment letter dated 19 September 2011. His employment was last renewed by Plaintiff 1 vide contract dated 13 April 2022, till 30 September 2026.
Non-Competitional Confidentiality Agreement (NCCA)
At the time of his employment, a Non-Competitional Confidentiality Agreement (NCCA), dated 19 September 2011, was executed between Plaintiff 1 and Defendant 1.
NCCA obligations for defendant no.1:- a) Not to use copyrightable works,photographs and reports, customers or clients’ lists, b) Not to divulge or disclose any confidential information of Plaintiff 1 to anyone. c) Not to engage with any business or enterprise which directly or indirectly competed with the Plaintiff 1’s business. d) Not to induce, solicit or assist any of the personnel or staff of the plaintiff to leave the Plaintiff 1. e) Not to contact or solicit any person/client who was known, by Defendant 1, to have been a client of the Plaintiff 1.
Vide email dated 28 September 2022, Defendant 1 resigned from the services of Plaintiff 1. The resignation was accepted by the Plaintiff 1 on 4 October 2022. Consequent thereupon, on 8 October 2022, a Severance Agreement was executed between Plaintiff 1 and Defendant 1.
After leaving the services of Plaintiff 1,
A) Defendant 1 set up his own clinic in Gurgaon, B) Where he carried out transplantation by a technique titled “Direct Follice Insertion”, abbreviated to “DFI”. C) Defendant 1 opened a new website www.evolvedhairindia.com and, D) Started a limited liability partnership enterprise under the name “Evolved Hair Restoration India” (Def no.2) at Gurgaon, registered as an LLP .
Defendant 1 is the Medical Director in Defendant 2. On the website www.evolvedhairindia.com, DFI is described as a complete care system founded after amalgamating the best practices of Follicle Unit Extraction method (FUE) and DHI. It is further stated that, though the said website does not use the expression DHI anymore, it does refer to “Direct Hair Implant”.
BREACH OF Non-Competitional Confidentiality Agreement (NCCA) BY DEFENDANT NO.1
I) An Employee joinded Defendant no.1, II) Defendant no.1 called and messaged several clients of Plaintiff no.4, III) Defendant 1, put up, various disparaging comments on social media against plaintiff no.4, IV) Defendant 1 not only misrepresented the actual factual position, but also denigrated the plaintiffs, by making it appear that, after the DHI technique which the plaintiffs employed were defective and needs corrections, V) Defendant no.1 made false comments on youtube channel of Plaintiffs. VI) Defendant 1 also uploaded, on the “Results” section of the website of Defendant 2, morphed photographs before and after DHI treatment of Plaintiffs, VII) Defendant n.1 Posted an old Interview from television and edit and removed the caption, so that the relationship between Plaintiffs and Defendant no.1 cannot be disclosed. VIII) The acronym “DFI”, used by Defendants 1 and 2 infringed the plaintiffs’ registered “DHI” trademarks, as they were deceptively similar, both in appearance as well as phonetically.
i) Defendant ackowledged the about posting certain messages, on his Instagram web page and other virtual sites, which criticised the plaintiffs, these allegations have been removed by Defendants. ii) No trademark infringment by defendants as DFI is not being used as trademark but as a descriptor, Defendant trademark is “Evolved Hair India Ltd”, iii) Defendant submitted that defendant will remove all the morphed images from the website of defendant. iv) Defendants denied having solicited in anyway the clients and employees of Plaintiffs, v) Defenfant further submitted that the clauses of the NCCA, and the Severance Agreement, that Plaintiff wants to enforce, cannot be enforced, in view of Section 14 of the Specific Relief Act, 1947; nor can any injunction be granted on the basis thereof, in view of Section 41 of the said Act.
HON’BLE DELHI HIGH COURT FINDINGS
Hon’ble Court observed, that, in a recent order, passed by the Division Bench of this Court on 21 August 2023, the prayer for interim injunction, restraining the defendants from using “DFI” as a trademark cannot be granted without allowing the defendant an opportunity to file a reply to the present application.
Though without referring to this decision, the Division Bench of this Court has, in its order dated 21 August 2023 in FAO (OS) (COMM) 171/20236 , held as under:
“Having conferred our thoughtful consideration on the rival submissions noticed above, we find that, undisputedly, the suit upon being presented on or about 02 August 2023 came up for consideration for the first time on 07 August 2023. The ad interim injunction came to be granted merely two days thereafter on 09 August 2023. Admittedly, and as per the plaintiffs/respondents own case, the product of the appellant/defendant had been introduced somewhere around May 2023. In our considered opinion, this fact alone warranted the appellants/defendants being accorded at least a rudimentary opportunity to oppose the application which sought grant of ad interim injunction.”
therefore, the correct legal position would be – where the impugned mark has been used by the defendant for any length of time, that sole factor would entitle the defendant to an opportunity to respond, inviting, to the prayer for interlocutory injunctive relief, before orders are passed by the Court thereon.
Court said , In the past, Court has been granting ad interim injunctive reliefs, often ex parte and on the very first date of hearing, even where the defendant has been using the impugned mark, or where the longevity of user, by the defendant, of the impugned mark, is unknown, that position cannot continue, in view of the afore extracted enunciation of the legal position by the Division Bench in Dabur India Ltd v. Emami Ltd.
If the defendant has been using the impugned mark, before the plaintiff instituted the suit, then, in all but, possibly, the most exceptional cases, the decision in Dabur India Ltd v. Emami Ltd, would obligate the Court to extend, to the defendant, an opportunity to submit a written response to the prayer for interlocutory relief, before proceeding to pass orders thereon.
The defendants are entitled to file a response, to the prayer for injunction against use of the “DFI” mark, before any orders are passed on the said prayer.
Following directions were given to Defendants by Hon’ble Court in the present case:-
A) The defendants may continue running their establishments in Gurgaon. But, Defendant 1 shall strictly abide by his obligations under the NCCA and the Severance Agreement.
B) The defendants shall stand restrained from making any comment on any physical or virtual site or on DHI technique.
C) Defendant no.1 can communicate with clients but without mentioning plaintiff or its DHI technique.
D) No photographs or other material which was, or is, on the plaintiffs’ website, shall be replicated or used by the defendants without the plaintiffs’ permission, either as it is or in any altered or morphed fashion.
E) These directions shall not restrain the defendants from extending, to clients or customers, hair transplant services using the DFI technique, in consonance with the above directions.
Court said, Keeping in view the nature of the allegations involved in the present case, and the fact that several ex-employees of Plaintiff 1 and 2, who were privy to the confidential data of the plaintiffs, are now working with Defendant 1, some interim protective directions are required to be passed.
F) Defendant 1 is directed to place on record, by way of affidavit within three days, details of the data or material, obtained by Defendant 1 during the course of his employment with the Plaintiff 1, which conforms to the definition of “confidential information” as contained in the NCCA dated 19 September 2011.
G) Defendant 1 is also directed to submit to the Registry of this Court, within ten days, electronic copies of all such data, in a sealed cover.
Application for Ad-interim relief was disposed off.
Read, Reviewed & Edited by
Neeraj Gogia,Advocate