Sap Aktiengesellschaft & Anr. vs M/S Microbase Technologies
2014 Latest Caselaw 3950 Del

*        IN THE HIGH COURT OF DELHI AT NEW DELHI

%                                 Order delivered on: August 27, 2014

+                        CS(OS) No.679/2009

         SAP AKTIENGESELLSCHAFT & ANR.              ..... Plaintiffs
                          Through Mr. Rahul Beruar, Advocate.

                         versus

         M/S MICROBASE TECHNOLOGIES                 ....Defendant
                           Through Defendant is ex-parte
         CORAM:
         HON'BLE MR. JUSTICE MANMOHAN SINGH

MANMOHAN SINGH, J. (Oral)

1. The plaintiffs have filed a suit for permanent injunction restraining infringement of copyright, damages, delivery up, rendition of accounts of profits etc. against the defendant.

Case of the Plaintiffs

2. The plaintiff No.1 is a company organized and established in under the laws of Germany. The plaintiff No.2 is an Indian subsidiary of plaintiff No.1, who owns more than 51% shares and is responsible for the sales of SAP solutions, implementation, post-implementation support, training and certification of its customers and partners in India.

3. In the early 1970's, the plaintiff No.1 developed RF- System, later referred to as R/1, an automatic accounting and transaction- processing program that features standard software and real-time computing. This software title is stated to be the first of several in a

series of packaged ERP (Enterprise Resource Planning) solutions that enables organizations in the documentation, planning and deployment of resources available to them in the most efficient manner, for achieving maximum productivity. In 1979, plaintiff No.1 introduced SAP R/2 software, which showed the world that the vision of integrated, real time enterprise software has clear benefits for its customers. In 1992, the plaintiff No.1 introduced SAP R/3, a new architectural paradigm by combining three-tier client-server architecture with the business concept of enhanced process integration. SAP R/3 software with the client-server concept, uniform appearance of graphical interfaces, consistent use of relational databases and the inherent ability to run on computers from different vendors, met with overwhelming approval of the user industries and ushered in a new generation of enterprise software. The plaintiffs have developed following modules of the ERP software:

a. SAP-FICO (Finance and Control)

b. SAP- PP (Production Planning)

c. SAP- HR (Human Resource)

d. SAP - MM (Material Management)

e. SAP - SD (Sales and Distribution)

f. SAP - (Net Weaver)

g. SAP- ABAP

The plaintiffs have expended considerable resources in promoting its products in the name and style of SAP ERP over the last 35 years.

4. The plaintiff No.1 is stated to be the sole owner of copyright in the software programs developed and marketed by it, as mentioned hereinabove including SAP R/3 Release 4.6B. These software programs are "computer programmes" within the meaning of Section 2(ffc) of the Indian Copyright Act, 1957 (hereinafter referred to as the "Act") and are included in the definition of a 'literary work' as per Section 2(o) of the Act. The plaintiff No.1's computer programs are "works" that have been first published in Germany and have also been registered in Germany, apart from Copyright Registrations having been obtained from the United States Copyright Office. Under the Indian Copyright Law, the copyright in a work created by an employee belongs to the employer under the 'work made for hire' doctrine. Both the computer program and the supplementary user instructions and manuals are 'original literary works' as contemplated under Section 2(o) and Section 13(1) (a) of the Act.

Case against the defendant as alleged by the plaintiffs.

5. The defendant is an entity allegedly engaged in the business of providing ERP/eCRM services to its client and also provides training programs in SAP ERP software and carries on its business activity.

6. It is stated that in the month of October, 2008, the plaintiffs came to know that the defendant have made offers for providing training services in the plaintiffs' software programs however, the plaintiffs have education partners with only 57 entities in India and that the plaintiffs or any of their agents or representatives have not entered into any such agreement with the defendant with any such

SAP Training Program Agreement till date. It is stated that the defendant was conducting unauthorized training programs in batches of one hour with each batch consisting of around 15-20 students and charged a fees of Rs.30,000 - Rs.35,000/- per student per module as against the fees of around Rs.1.5 lacs charged by the plaintiffs.

7. It is stated that the licenses provided by the plaintiffs for the use of its software programs are purpose specific and cannot be used in any other manner or for any other purpose other than for which the software is licensed. It is further stated that only a formal Education Partner Agreement with the plaintiff No.1 or with its Indian subsidiary, plaintiff No.2, would enable the rendering of training upon SAP software products and that the 'purpose of (to) use' the plaintiffs' software is regulated by the End User License Agreement and any breach of its provisions constitutes an unlicensed use and therefore, the defendant are committing an infringement of the plaintiffs' copyright.

8. Plaintiff No.2 through its agents, EIPR India Limited, immediately lodged a criminal complaint on 15th October, 2008. During the search operations, it was noticed that infringing softwares were being used by the defendant for providing training of SAP software. It is stated that not even a single license of the plaintiffs' SAP software was produced in the name of the defendant and therefore, the defendant was using pirated/infringing versions.

9. The plaintiffs have been protecting their software in question through various courts of law, the details of which are given in the para 23 of the plaint wherein ad interim injunction has been granted in favour of plaintiffs.

10. When this matter came up before this Court, summons were issued upon the defendant. Defendant was duly served however no one appeared on behalf of the defendant and hence, the defendant was proceeded ex-parte vide order dated 28th July, 2009.

11. In ex-parte evidence, the plaintiffs filed affidavit dated 18th November, 2010 of Mr. Yogesh Goel as PW1 reiterating the contents of the plaint and also exhibited certain documents exhibited as Ex.P1 to Ex. P8 in support of its case. The documents exhibited are as follows:

 Copy of Power of Attorney dated 24th July, 2008 and 13th October, 2009 issued by Plaintiff No.1 and copy of Power of Attorney on 29th August, 2008 issued by Plaintiff No.2, Ex. P-1.

 Copy of End User License Agreements, Ex.P-2.

 Copy of Education/Training License Agreement ("SAP Academy Program"), Ex.P-3.

 Copy of the list of authorized partners, Ex.P-4.

 Certified copies of the copyright registration certificates of plaintiff No.1's software programs, Ex.P-5.

 Copy of cash receipt dated 14th October, 2008, Ex P-6.

 Copy of FIR dated 15th October, 2008, Ex.P-7.

 Copy of seizure memo, Ex.P-8.

PW 2, Sh. R.Nateshan, working as Inspector was also examined and proved the copy of FIR which was exhibited as Ex.PW2/1.

12. The ex-parte evidence was closed vide order dated 14th July, 2014. The evidence filed by the plaintiff has gone unrebutted as no cross-examination of the plaintiff's witness was carried out, therefore, the statements made by the plaintiff are accepted as correct deposition.

13. Learned counsel for the plaintiff upon instructions states that he is not pressing for costs, damages and the relief of rendition of accounts.

14. In view of abovementioned facts and circumstances, the plaintiffs are seeking injunction orders against the defendant from directly or indirectly reproducing/installing and/or using pirated/unlicensed software programs of the plaintiff No.1.

15. Accordingly, the suit is decreed in terms of prayer clause (a) and (c) of the plaint. Decree be drawn accordingly. The rest of the prayers are not pressed hence rejected.

(MANMOHAN SINGH) JUDGE AUGUST 27, 2014