Microsoft Corporation vs Mr. G.V. Rao & Another
2009 Latest Caselaw 101 Del

     *IN THE HIGH COURT OF DELHI AT NEW DELHI

+                  CS(OS) 1168/2005

%15.01.2009                            Date of decision:15.01.2009

MICROSOFT CORPORATION                                  ....     Plaintiff
                         Through:    Mr Pravin Anand, Mr Shantanu Sahay
                                    and Mr Nishant Bora, Advocates.

                                    Versus

MR. G.V. RAO & ANOTHER                                 .... Defendants
                          Through: Ex parte.


CORAM :-
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW

1.    Whether reporters of Local papers may
      be allowed to see the judgment?       No

2.    To be referred to the reporter or not?      No

3.    Whether the judgment should be reported
      in the Digest?                                   No


RAJIV SAHAI ENDLAW, J.

1. The plaintiff a company incorporated in accordance with the

laws of the State of Washington (USA) and carrying on business

within the jurisdiction of this court also, has instituted this suit for

restraining the defendants from copying, selling, offering for sale etc

the counterfeit /unlicensed version of the plaintiff's software,

amounting to infringement of the plaintiff's copyright in the said

computer programmes and for further restraining the defendants

from loading and offering for sale and distributing the plaintiff's

software and/or any other product to which the plaintiff's trademark

or any deceptive variants thereof have been applied without the

license of the plaintiff and also amounting to infringement of

plaintiff's trademark. The plaintiff has also claimed the ancillary

reliefs of delivery, damages, rendition of accounts and costs.

2. Vide ex parte order dated 25th August, 2005, the defendants

were restrained from copying, reproducing, hard-disk loading,

offering for sale, distributing, issuing to public, counterfeit/

unlicensed versions of the plaintiff's software and infringing the

copyright of the plaintiff.

3. The defendant No.1 in the name and style of the defendant

No.2 and as a sole proprietor of the defendant No.2 is averred to be

carrying on business in Hyderabad of marketing and selling

computer hardware including branded and/or assembled desk-top

computers and peripherals. The defendants, on being served with

summons of the suit, appeared before this court and filed a written

statement, inter alia, disputing the territorial jurisdiction of this

court and also denying that they were marketing or dealing in

software. It was pleaded that they were engaged in marketing and

selling computer hardware including branded desktop computers

and computer peripherals. The plaintiff filed replication reiterating

its stand in the plaint and on the pleadings of the parties, on 12th

January, 2006 the following issues were framed:

"1. Whether this court has no territorial jurisdiction to entertain and decide the suit? OPD

2. Whether the plaint is signed and verified by a duly authorized person? OPP

3. Whether the plaintiff owns the copyrights and trademarks which are subject matter of the suit?

4. Whether the defendants have infringed the copyright of the plaintiff as subsisting in its software programs?

5. Whether the defendants have infringed the registered trademarks of the plaintiff?

6. Whether the defendants have passed off counterfeit/pirated and unlicensed versions of the plaintiff's software as genuine goods of the plaintiff as alleged in the plaint?

7. Relief."

4. The defendants on 27th April, 2006 also gave their no objection

to the ex parte ad interim order being confirmed during the

pendency of the suit and it was so confirmed.

5. The suit was adjourned for few dates thereafter on the plea of

the counsel for the parties that the parties were attempting an

amicable settlement. However, thereafter, the counsel earlier

appearing for the defendants stated that the defendants had stopped

instructing the counsel. The counsels for the defendants were

discharged on 9th January, 2007 and the defendants ordered to be

served again. However, the defendants could not be served,

apparently because they had ceased to be at the address given in the

plaint. The defendants were ordered to be served by affixation at

their last known address and were so served and upon their failure

to appear, were vide order dated 11th December, 2007 ordered to be

proceeded against ex parte and remain ex parte.

6. The plaintiff has led ex parte evidence of its constituted

attorney Mr Anand Banerjee and of a Chartered Accountant Mr

Sanjiv Sharma. The said evidence remains unrebutted. Since the

defendants are ex parte, need is not felt to render findings issue-

wise. However, Mr Anand Banerjee witness of the plaintiff has

deposed that he has instituted the suit and signed and verified the

plaint on behalf of the plaintiff; that he has been duly authorized in

this regard and the authorization in his favour has been proved as

Exhibit P1. The said authorization is by one Mr Rakesh Bakshi who

has claimed a power of attorney from the plaintiff in his favour and

with authority to delegate further. The document proved as Exhibit

P1 also contains a photocopy of a notarized certificate of an Assistant

Secretary (original of which was produced before the court) to the

effect that a power of attorney in favour of the said Mr Anand

Banerjee had been executed but the original of which was

untraceable and ratifying the institution of all suits by the said Mr

Anand Banerjee on behalf of the plaintiff pre or post 1st November,

2004; the present suit would be so covered. It is now the settled

legal position that the institution of a suit even if unauthorized on the

date of institution can be subsequently ratified. I, thus, find the suit

to have been instituted and the plaint signed and verified by a duly

authorized person on behalf of the plaintiff.

7. As far as the plea taken of the defendant challenging the

territorial jurisdiction of this court is concerned, it is again the

unchallenged evidence of the plaintiff that the plaintiff is carrying on

business within the jurisdiction of this court. Even though the

defendants are situated outside the jurisdiction of the court and the

cause of action constituting their activities has also accrued outside

the jurisdiction of this court but the legislature has intentionally, in

relation to the suits for infringement of copyright, as the present suit

is, under Section 62(2) given the court, where the plaintiff is

carrying on business, also jurisdiction to entertain the suit. The said

change in legislative policy has to be given full effect to and

notwithstanding the said special change in relation to the actions

under the Copyright Act and the Trademark Act, reliance cannot be

placed on the general provisions of CPC relating to territorial

jurisdiction. Thus this plea of the defendants is also found to be

misconceived.

8. As far as the copyright of the plaintiff is concerned, Mr Anand

Banerjee witness of the plaintiff has deposed and proved as Exhibit

P2 to Exhibit P8 the copyright registration of the plaintiff and as

Exhibit P9 and P10 the trademarks certificates of the plaintiff

relating to the mark Microsoft. The defendants chose not to rebut

the said evidence. That leaves only the question as to whether the

defendants were infringing the copyright and trademark of the

plaintiff. Though the defendants in their written statement claimed

to be dealing in computer hardware and peripherals only and denied

dealing in software, not only is it the unrebutted evidence but it is

also common knowledge that such vendors of computer hardware

are known to be attracting buyers/customers by loading un-licensed

and pirated versions of the software to the hardware and without

which software the hardware is useless. The witness of the plaintiff

has also deposed that upon receiving information in June 2005 that

the defendants were indulging in such activities, the plaintiff

deputed an independent investigator Mr R Satheesh Kumar who, on

behalf of the plaintiff, executed the purchase of an assembled

computer system from the defendants on 24th June, 2005, on to

which pirated version of the plaintiff's software programme had been

illegally loaded. The plaintiff has not examined the said Mr R

Satheesh before this court but even without his testimony, the

version of the witness of the plaintiff in the circumstances aforesaid

is believable. It is further in evidence that on technical examination,

the aforesaid software was found to be unlicenced and pirated

version of the plaintiff's software.

9. The witness of the plaintiff has deposed that even prior to the

institution of the suit talks took place with the defendant No.1 but

upon the refusal of the defendant No.1 to relent, the suit was filed.

After the institution of the suit also when the counsel for the

defendants was appearing, adjournments were taken from this court

again on the ground of settlement. However, it appears that the

defendants were not interested in the settlement and that is why

stopped instructing their advocates and also decided against

contesting this suit. In fact, it appears that the defendants during

the pendency of the suit closed their business from the address at

which the same was being carried on and shifted to some other

place. That is why the defendants, after their advocate had stopped

appearing could not be served at their address available with the

plaintiff.

10. The plaintiff has thus made out a case for grant of the relief of

injunction claimed. No purpose would be served in ordering delivery

since the defendants, the record discloses, have ceased to be at the

address available with the plaintiff. For the same reason there is no

point in granting the relief of accounts also to the plaintiff. This

court in Microsoft Corporation v Yogesh Papat 2005(30) PTC 245

has held that the plaintiff would be entitled to damages for the

reason that it would be futile to direct the defendants to render

accounts for the reason of the defendants carrying on business

surreptitiously. Similarly in Times Incorporated v Lokesh

Srivastava 2005 (30) PTC 3 (Del) also it was held that where

infringement is found, punitive damages should follow to discourage

such law breakers. The chartered accountant examined by the

plaintiff has deposed that from the tax invoice issued by the

defendants for sale to the independent investigator aforesaid, it

appears that the defendants have been carrying on business at least

since 2003-2004. It has further been deposed that the average

market price of licenced Microsoft products of plaintiff, which the

defendants were illegally distributing pirated copies, were of the

value of Rs 7500/- or Rs 15000/- per licence. This court has in the

judgments (supra) taken judicial notice of the sales usually made by

such vendors of the software, in the Nehru Place market at New

Delhi. The witness of the plaintiff has deposed that the sales in the

present case were of ten computers a month and has deposed that

the plaintiff would be entitled to minimum damages of Rs 6 lacs. I do

not find any reason not to agree with the said ex parte evidence of

the plaintiff. The plaintiff is thus found entitled to a decree for

damages in the sum of Rs 6 lacs against the defendants. The suit of

the plaintiff is thus decreed against the defendants jointly and

severally for the reliefs of permanent injunction in terms of prayer

paragraph 39 (a) (b) and (c) and for recovery of damages in the sum

of Rs 6 lacs. The plaintiff shall also be entitled to costs of the suit

from the defendants. If the amounts are not recovered within 90

days of the decree, the plaintiff shall be entitled to future interest on

the damages at 15% per annum till the date of payment.

The decree sheet be drawn up.

RAJIV SAHAI ENDLAW (JUDGE) January 15, 2009 M