Microsoft Corporation & Anr. vs Indus Valley Partners (India) ...
2014 Latest Caselaw 1621 Del

          *IN THE HIGH COURT OF DELHI AT NEW DELHI

%                                       Date of decision: 26th March, 2014

+                          CS(OS) No.1379/2011

       MICROSOFT CORPORATION & ANR.             ..... Petitioners
                   Through: Ms. Jaya Negi, Adv.

                                   Versus

    INDUS VALLEY PARTNERS (INDIA)
    PVT. LTD. & ANR.                   ..... Respondents

Through: None.

CORAM :-

HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW

RAJIV SAHAI ENDLAW, J

1. The two plaintiffs have instituted the present suit for an order of

permanent injunction restraining the defendants from infringing the

copyright of the plaintiffs as subsisting in their software programs by

directly or indirectly copying, reproducing, storing, installing and/or

using pirated/ unlicensed software programs of the plaintiffs, and for

ancillary reliefs of delivery-up, rendition of accounts and damages of Rs

20,05,000/-, pleading:

I. that the plaintiff no. 1 Microsoft Corporation is a

company organized and existing under the laws of the

State of Washington, USA and engaged in

manufacturing and licensing a range of software

products, whereas plaintiff no. 2 Microsoft Corporation

India Pvt. Ltd. is its wholly owned marketing subsidiary

having its office in Nehru Place, New Delhi;

II. that the plaintiff no. 1 (Microsoft Corporation) was set

up in the year 1975 and is the biggest software publisher

for personal and business computing in the world. The

Plaintiff no. 1‟s popular software products include the

most widely used operating system software, Microsoft

Windows Operating Systems and application software

such as Microsoft Office and development tools like

Visual Studio, Visual C++;

III. that the plaintiff no. 1 is the owner of copyright in its

software programs developed and marketed by it and

these software programs are "Computer Programs"

within the meaning of Section 2 (ffc) of the Copyright

Act, 1957 and are included in the definition of "Literary

Works" as per Section 2(o) of the Act;

IV. that the plaintiff no. 1 being the owner of copyright in

the aforesaid literary works within the meaning of

Section 17 of the Copyright Act, is entitled to all the

exclusive rights flowing from such ownership

enumerated under Section 14 of the Copyright Act;

V. that the plaintiffs‟ computer programs are „works‟ that

have been first published and registered in the USA, and

as such also enjoy protection in India by virtue of

Section 40 of the Copyright Act read with the

International Copyright Order, 1999;

VI. that the plaintiffs in the month of December, 2010

received information from credible market sources that

the defendants herein are using large volumes of

software programs belonging to the plaintiff no. 1 on

their computer systems for their business and other

commercial purposes at their various offices without any

proper authorization;

VII. that the plaintiffs thereafter contacted the defendants

regarding conducting a SAM Review program in their

organization but to no avail;

VIII. that the plaintiffs in the months of April 2011, conducted

a search within their large and extensive database called

"Microsoft Sales" which revealed that the defendants

had made volume purchases only for:

                    S. No.           Software Program               No. of
                                                                   Licenses









                     4.      Microsoft Office Professional XP      3





                     6.      Microsoft Visio Professional 2007 10














           IX.     that in order to confirm that the defendants were indeed

involved in the piracy of plaintiffs‟ software programs

and to determine the sphere of activities of the

defendants, two independent investigators were engaged

to carry out an investigation;

X. that during the course of investigation, telephonic

conversations with the employees of defendant no. 2

Indus Valley Partners (India) Private Limited revealed

that there are approximately 240 desktop computer

systems and 150 laptop computer systems which are

used across 3 offices of Indus Valley across New Delhi

and the employees of Indus Valley work on software

programs such as Microsoft Office, Microsoft Windows,

Microsoft Excel, Microsoft PowerPoint, Microsoft Silver

Light, Microsoft SQL Server, etc for their business activities;

XI. that from the investigations as well as the subsequent

license cheque status of the defendants, it was evident

that the defendants were indulging in piracy activities of

the Software Programs of the Plaintiffs;

2. Summons of the suit and notice of the application for interim relief

were issued and vide ex parte ad interim order dated 30 th May, 2011 the

defendants were restrained from using any pirated/ counterfeit/unlicensed

software of the plaintiffs in contravention of the terms of the End-User

License Agreement(s) or infringing in any other manner the copyright of

the plaintiffs. This court also appointed three Local Commissioners to

inspect the respective premises of the defendants. The Local

Commissioners so appointed have in compliance with the order dated 30 th

May, 2011 filed their reports.

3. On 5th August, 2011 the plaintiffs moved an application stating that

the then defendant no. 1 Mr. Pankaj Jain was merely an employee of the

defendant no. 2 Indus Valley Partners (India) Pvt. Ltd. and that all

disputes have been resolved between the plaintiff and the defendant no. 1

and accordingly the suit was dismissed as withdrawn qua the defendant

no. 1 and now remains against Indus Valley Partners (India) Pvt. Ltd. &

Indus Valley Partners (Mumbai) Pvt. Ltd.

4. Thereafter on 31st October, 2011 counsels for both the parties

stated that the matter had been amicably settled between the parties and

that an appropriate compromise application shall be moved in due course.

However, thereafter on 8th November, 2011, 19th January, 2012, 23rd

May, 2012, 27th July, 2012, 3rd October, 2012 the parties kept on taking

adjournments stating that an application will be filed under Order 23 Rule

3 but no such application was filed. Then, on 14th January, 2013, the

counsel for the plaintiffs stated that no settlement could be arrived at and

the matter be heard. However, on 10th February, 2014, the counsel for the

plaintiffs again stated that the parties have settled their dispute and an

appropriate application will be moved but no such application has been filed.

5. Today, again the counsel for the plaintiffs seeks adjournment.

6. I am not inclined to adjourn the matter and to keep the suit so

pending. None appears for the defendants. In fact, none has appeared for

the defendants since after 3rd October, 2012 whereafter the suit is being

adjourned at the instance of the counsel for plaintiffs only. I have thus

considered the matter. The defendants having not filed the written

statement, I have examined whether a decree under Order VIII Rule 10 of

the CPC can be passed. I am of the view that insofar as the relief of

permanent injunction as claimed in para 52(a) of the plaint is concerned,

there is no impediment to the passing of a decree in terms thereof. I have

in judgment dated 30th January, 2013 in CS (OS) No. 559/2010 titled

Indian Performing Rights Society Vs. Gauhati Town Club held that in

such cases, there is no need for requiring any ex parte evidence to be led

when the plaint is supported by an affidavit and the material on record is

otherwise sufficient. It is so in the present case.

7. As far as the other reliefs claimed by the plaintiffs are concerned,

considering the history of the suit, need is not felt to give an opportunity

to the plaintiff to prove the same. The Commissioners appointed by this

Court in the reports submitted have reported large scale piracy by the

defendants. This Court in such cases (see Time Incorporated Vs. Lokesh

Srivastava 2005 (30) PTC 3(Del.) and Adobe Systems, Inc. Vs. P.

Bhoominathan 2009 (39) PTC 658 (Del.)) has besides the compensatory

damages also been awarding punitive damages. This suit was being listed

with CS(OS) 1766/2010, also filed by the plaintiffs against some other

persons who were also represented by the same advocate who was

representing the defendants in this suit and joint requests for

adjournments on the ground of arriving at a compromise were being made in both

the suits.

8. CS(OS) 1766/2010 was ultimately disposed of on 24.05.2013 in

terms of the compromise therein under which the defendants therein paid

a sum of Rs.2,00,000/- to the plaintiffs herein. I am of the view that the

award of punitive damages in the sum of Rs.2,00,000/- is thus appropriate

in this suit also.

9. Accordingly, a decree is passed in favour of the plaintiffs and

against the two defendants jointly and severally,

(i) in terms of prayer para 52(a) of the plaint.

(ii) of recovery of Rs.2,00,000/- by way of punitive

damages.

The plaintiffs shall also be entitled to costs of the suit jointly and

severally from the two defendants, with counsel‟s fee assessed at

Rs.15,000/-.

Decree sheet be drawn up.

RAJIV SAHAI ENDLAW, J MARCH 26, 2014 SK