Software Piracy – Indian Court Orders for Damages
The recent decision of the Delhi High Court in the case – Microsoft Corporation v. Yogesh Papat & Anr., related to “software piracy”, has once again established the determination of the Indian judiciary to address intellectual property issues up front. Intellectual property theft, which until recently was perceived as a white-collar petty crime due to its economic environment, finally seems to have emerged from the dark shadows of archetypal criminal offenses, which had hurt the mindset of law enforcement agencies and of Indian law enforcement (the prevailing notion is that criminal offenses are far more criminal and aberrational compared to their IP counterparts, an argument some people might still subscribe to).
This case concerns copyright infringement in software and, in particular, the interpretation of Sec. 51 and 55 of the Indian Copyright Act, 1957. The Plaintiff, the software giant – Microsoft Corporation, the registered owner of the MICROSOFT trademark, filed a lawsuit seeking a permanent injunction preventing Defendants, their directors and agents from copying, selling, offering for sale, distributing, issuing to the public unlicensed/falsified versions of the software programs, in any way, that infringes its copyrights in said computer programs and related manuals and its trademarks, and also restricting defendants from selling and distributing any products to which the trademark has been applied of the plaintiffs, or any deceptive variant thereof and also request the delivery and rendering of accounts of utilities.
Defendants opted not to appear after notice and proceeded ex parte. The lawsuit was ultimately entered against the defendants who without a license and in the absence of any permission from the software manufacturers were downloading the plaintiffs’ software onto the hard drives of the computers they sold.
Generally, when software is sold, the buyer has a license agreement that sets out the terms for the permitted user of the software, which is located on a diskette. The CD/floppy disks are delivered to the purchaser and the license agreement permits the use of the CD/floppy disks, subject to the terms. In the present case, as stated above, the defendants, without a license, were loading the software and thus causing financial loss to the plaintiff.
Legal proceedings – An idea:
The plaintiff provided evidence through affidavits proving its strong presence in the field of software and the ownership of computer programs that included various operating systems. Evidence was also provided through the ‘registration certificate’ corresponding to the registration of the ‘Microsoft’ trademark in the plaintiff’s name. In addition, direct evidence establishing Defendants’ guilt was made by an affidavit from an employee of Plaintiff who purchased a Defendants’ computer loaded with Plaintiff’s pirated software, which was in turn authenticated by the Plaintiff’s report. examination by a technical expert.
The plaintiff also submitted an affidavit by way of evidence from a CPA, which recorded and proved the period during which the defendants were in business and the sale price of the computer sold by them, based on which a The presumptive number of the total number of computers sold by the defendant was calculated to determine the estimated loss of business for the plaintiff.
This evidence in the record established beyond any doubt that the plaintiff was the registered owner of the ‘MICROSOFT’ trademark and that the copyright in the computer programs rests with the plaintiff. The evidence also established the hard drive hacking practiced by the defendants.
Decision of the Court:
The court dealt with each of the tests in turn and, based on the assumption of 100 computers sold each year and the popularity of the software, upheld the estimated loss of profit for the claimant in the amount of INR 19.75 lacs and interest @ 9% from the date of the decree to the date of payment together with the other relief requested. With respect to accountability, the tribunal observed: “…it may be true that financial loss is based on certain assumptions, but it cannot be avoided for the reason that the defendant has chosen to remain ex parte. It would be futile to hold the defendants to account for the reason that the defendants have been conducting business surreptitiously.”
The Honorable Court, expressing the observation made by Mr. Judge Laddy of the Superior Court of Justice, Chancery Division in the Microsoft Corporation vs. Electrowide Ltd. and Anr., (1997) FSR 580 held that “this constitutes a general threat of copyright infringement in the software class.” In the words of Judge Predeep Nandrajog, who presided over the case:
“…defendants are found to have infringed plaintiffs’ copyrights by making unlawful copies of the operating systems software by openly copying any operating system that may currently be sold.”
Final statement:
One can only wait to see how this ruling would shape Copyright jurisprudence in the country. From the above, it is clear that this ruling has paved the way to establish an effective copyright enforcement regime in the country, which in turn would serve as a deterrent to all those who indulge in this ‘omnipresent’ phenomenon: ‘software piracy’. ‘.