Delhi High Court
Dassault Systemes & Ors. vs Advanced Engineering Solutions & Anr. on 21 February, 2025
Author: Amit Bansal
Bench: Amit Bansal
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment Reserved on: 4th February 2025
Judgment Delivered on: 21st February, 2025
+ CS(COMM) 378/2020 with I.A. 8127/2020
DASSAULT SYSTEMES & ORS. .....Plaintiffs
Through: Mr. Pravin Anand, Mr. Shantanu
Sahay, Ms. Shreya Shukla and Ms.
Vareesha Irfan, Advocates.
versus
ADVANCED ENGINEERING SOLUTIONS & ANR. .....Defendants
Through:
CORAM:
HON'BLE MR. JUSTICE AMIT BANSAL
JUDGMENT
AMIT BANSAL, J.
1. The present suit has been filed seeking relief of permanent injunction
restraining the defendants from infringing the copyright of the plaintiffs, along
with other ancillary reliefs.
CASE SET UP BY THE PLAINTIFFS
2. The plaintiffs in the present suit are, Dassault Systèmes (plaintiff no. 1), a
French corporation; Dassault Systèmes SolidWorks Corporation (plaintiff no. 2),
a U.S.-based company; and plaintiff no. 3, Dassault Systemes India Private
Limited, wholly-owned subsidiary of the plaintiff no. 1 and sister concern of the
plaintiff no. 2. The plaintiff no. 3 was set up to carry out business activities and
anti-piracy campaigns in India. (hereinafter, collectively referred to as 'the
plaintiffs').
3. The software programs created by the plaintiffs are widely known for
developing 3D simulation Computer-Aided Design (CAD), Computer-Aided
Manufacturing (CAM), and Computer-Aided Engineering (CAE). These software
programs bring the entire process of designing, innovating, and manufacturing a
product onto a computer system. They are used across various industries such as
aviation, defence, mining, automotive, and consumer products etc.
4. Plaintiff no. 2 was created to manage all business and legal matters related
to its 'SOLIDWORKS' software, including managing the software's Intellectual
Property Rights. 'SOLIDWORKS' is a computer-aided design software used for
modelling and simulating three-dimensional solid products. The plaintiff no.2 is
the owner of the said software program.
5. In addition to the aforementioned software, the plaintiffs have developed
two other software programs 'CATIA' and 'SIMULIA', which are also the subject
matter of the present suit. 'CATIA' is a 3D modelling and design software that
allows the user to model the products in a manner which would simulate its use in
the real word. 'SIMULIA' is a Multiphysics modelling software that simulates the
reliability, performance and safety of the products. The plaintiff no.1 is the owner
of the aforesaid software programs. The copyright registration certificates of the
plaintiffs in respect of the software programs 'CATIA' and 'SOLIDWORKS' have
been exhibited as Ex - PW 1/6.
6. The plaintiffs operate on a licensing system, where customers acquire the
right to use the software and not ownership. Software is licensed through internet
delivery, with customers agreeing to an End-User License Agreement ("EULA")
or Customer License and Online Services Agreement ("CLOSA") before
installation. After the terms are accepted, the plaintiffs send a license key to the
customer's registered email for installation. Any entity using the software must be
able to provide evidence of legitimate payment and the correct number of licenses
for the software installed or in use. The plaintiffs maintain a regularly updated
database of all valid licensees, and any use of the software beyond the terms of
the EULA/CLOSA constitutes a breach of contractual and intellectual property
rights.
7. The plaintiffs after suffering losses due to piracy, implemented "phone
home" technology in their software to detect misuse and ensure compliance with
the EULA and CLOSA. This system captures usage data from the user's computer
and sends it to the plaintiffs' servers for verification. If the software is used with
an unauthorized license, it logs an "infringement hit" tracking unauthorized use.
The plaintiffs can identify infringing users by cross-referencing this data and take
steps to stop further unauthorized use. All users must accept the EULA or
CLOSA, which includes details about the security mechanisms. Infringement hits
are monitored through the Exalead portal, which consolidates infringement
reports for various plaintiffs' software programs, including 'SOLIDWORKS'.
8. The defendant no.1, Advanced Engineering Solutions, was incorporated in
2007 and is an engineering design and analysis firm consisting of systems,
mechanical, electrical, software, and controls engineering experts. The defendant
no.2 is the director of the defendant no.1.
9. In the month of April 2018, the plaintiffs received credible information
from market sources that the defendants are using large volumes of
pirated/unauthorized versions of plaintiffs' 'SOLIDWORKS' software program
on their computer systems at their business premises. To verify market
information, the plaintiffs checked their infringement database and confirmed that
the defendants were using unauthorized versions of 'SOLIDWORKS' software
program on at least six (6) computer systems.
10. Thereafter, the plaintiffs sent a legal notice dated 10th April, 2018 to the
defendants, informing them about the plaintiffs' rights in the 'SOLIDWORKS'
software and the defendants' copyright infringement. The notice asked the
defendants to stop using pirated copies, pay the license fee, and cease and desist
from further unauthorized use of the software. Printout of the plaintiffs' legal
notice dated 10th April, 2018 has been exhibited as Ex - PW 1/14.
11. On 11th April, 2018, representatives from eCluewise Services, the plaintiffs'
license compliance consultants, emailed the defendants, referencing the aforesaid
legal notice and requesting a meeting to resolve the issue. On 13th April, 2018,
eCluewise Services sent another email, asking the defendant no. 2 for a
discussion on license compliance. In response, on 14 th April, 2018, the defendant
no. 2 claimed that he had a licensed copy of the software program
'SOLIDWORKS' and shared an invoice as proof.
12. On 16th April, 2018, eCluewise Services informed the defendant no. 2 that
the defendants lacked a global license to use software purchased in another
jurisdiction and clarified that their unauthorized use was tracked in India. They
also pointed out that the shared invoice did not match the pirated software
version.
13. After repeated follow-ups by eCluewise Services, the defendant no. 1
requested a discussion with the plaintiffs' representative. Despite receiving the
contact details of the said representative of the plaintiffs on 8th May, 2018, the
defendants never contacted the plaintiffs. Printouts of the complete
correspondence including the plaintiffs, defendants and eCluewise Services have
been exhibited as Ex- PW 1/18.
14. Since direct contact could not be established with the defendant no. 2, the
plaintiffs sent additional legal notices on 23rd May, 2018, 17th September, 2018,
and 10th May, 2019, reiterating their demands to stop the piracy and pay the
license fee. The plaintiffs did not receive any response to the aforesaid notices.
Despite this, the plaintiffs continued to engage with the defendants via phone
calls to resolve the issue amicably, but the defendants showed no interest in
settling the matter. Printouts of plaintiffs' legal notices dated 23rd May, 2018, 17th
September, 2018, and 10th May, 2019 have been exhibited as Ex - PW 1/15, Ex -
PW 1/16 and Ex - PW 1/17 respectively.
15. It is averred that the defendants have not paid the license fee till date for
their unauthorized use of the plaintiffs' software programs and continue to deny
the evidence of infringement despite repeated notifications.
16. In the month of July 2020, the plaintiffs conducted a check on its internal
infringement database to gauge the extent of the defendants' infringing activities
in relation to the software program 'SOLIDWORKS'. A tabular representation of
the infringement hits as provided in paragraph 36 of the plaint is reproduced
below:
S.No. MAC Total First Last Location Pg.
Address Infringement Infringeme Infringement No.
nt
1. 544249e3b7 1 31.10.2014 31.10.2014 Chennai 107-
2. aeS8112c90 66 24.11.2016 18.04.2018 Chennai 110-
3. 40b0342a0b 33 25.09.2017 07.12.2017 Chennai 103-
4. 009c022244 5 22.03.2018 05.09.2019 Chennai 97-99
5. 1c1b0d57cc 14 14.03.2019 27.01.2020 Chennai 95-96
a2
6. 28d244a2b4 9 05.02.2018 19.05.2020 Chennai 100-
7. 00ff01d1ba 2 04.09.2019 13.09.2019 Chennai 117-
8. 00ff432ee87 38 06.01.2020 20.03.2020 Chennai 120-
9. 00ff937f6c4 61 05.09.2019 12.03.2020 Chennai 124-
10. 1c39472b12 37 15.04.2020 14.08.2020 Chennai 129-
11. e0d55e9f69 97 02.07.2019 20.03.2020 Chennai 133-
12. e0d55eef7ef 11 02.07.2019 18.08.2020 Chennai 140-
13. e0d55eef7ef 45 14.05.2019 22.01.2019 Chennai 143-
Extracts of the infringement report showing the defendants' infringing use of
'SOLIDWORKS' software program as tabulated above have been exhibited as Ex
- PW1/20 (Colly).
17. In the same month, the plaintiffs checked their internal database again in
order to ascertain whether the defendants were still actively using the plaintiffs'
software programs and discovered that the defendants were using plaintiffs' other
software program 'SIMULIA'. A tabular representation of the same as provided
in paragraph 38 of the plaint is reproduced below:
S.No. MAC Address Total First Last Location Pg.
Infringeme Infringeme Infringeme No.
nt nt nt
1. 40a8f0ca0a37 32 21.11.2019 02.01.2020 Chennai 152-
2. f46d04ecf2ef 3 21.11.2019 22.11.2019 Chennai 155-
Extracts of the infringement report showing the defendants' infringing use of
'SIMULIA' software program as tabulated above have been exhibited as Ex -
PW1/21 (Colly).
18. It is asserted that the plaintiffs' investigator apprised the plaintiffs about the
unauthorized use of 'CATIA' software by the defendants. In a telephonic
conversation, one Mr. Marimuthu S., who was working as a CFD Engineer at the
defendant no.1's Chennai Office in July 2020, informed the investigator that 5
CFD Engineers were using 'CATIA V5' for 3D modelling in the company.
Detailed affidavit of the independent investigator has been exhibited as Ex - PW
1/22.
19. The counsel for the plaintiffs submits that the defendants were knowingly
using the pirated/unauthorised version of the plaintiffs' 'SOLIDWORKS',
'CATIA' and 'SIMULIA' software programs rather than procuring genuine
licenses of the concerned software programs. He further submits that considering
the frequency, quantum and pattern of the defendants' infringing use of the
software programs, it is not out of place to speculate that the defendants continue
to engage in use of pirated/unauthorised use of the plaintiffs' various software
programs.
20. Accordingly, the present suit has been filed seeking relief of permanent
injunction and also compensatory damages from the defendants.
PROCEEDINGS IN THE SUIT
21. This Court issued summons in the suit and notice in I.A. No. 8127/2020
(application under Order XXXIX Rules 1 and 2 of the Code of Civil Procedure,
1908) vide order dated 15th September 2020.
22. On 18th September 2020, the defendant no. 2 appeared in person and stated
that neither he, in his personal capacity, nor as a director of the defendant no.1,
would use the software programs without obtaining proper licenses from the
plaintiffs. Defendant no.2 also claimed that neither he nor the defendant no.1
required the software programs 'CATIA' and 'SIMULIA'. He further submitted
that 'SOLIDWORKS' was the only software program in which the defendants
were interested and undertook to approach the plaintiffs for a license of the same.
Based on this statement, this Court granted an injunction in favour of the
plaintiffs, restraining the defendants from using the software programs 'CATIA',
'SIMULIA', and 'SOLIDWORKS' till the time the defendants obtain license(s)
from the plaintiffs.
23. Despite service of summons, none appeared on behalf of the defendants on
multiple dates after 18th September, 2020. Consequently, the defendants were
proceeded against ex-parte vide order dated 17th March, 2021. In the same order,
the Court also directed the plaintiffs to file evidence by way of an affidavit.
24. The plaintiffs filed the evidence of Mr. Col. J.K. Sharma (PW-1) affirming
the facts of the plaint. Vide order dated 14th December, 2023, the examination in
chief of PW-1 was concluded and the plaintiffs' evidence was closed. On 30th
January, 2024, the plaintiffs sought permission to lead additional evidence on the
aspect of damages, which was allowed on the basis that the defendants were
already ex-parte.
25. The plaintiffs requested time to file a fresh affidavit regarding the
computation of damages on 25th November, 2024 and sought extension of time on
9th December, 2024.
26. Vide order dated 20th December, 2024, last opportunity was granted to the
plaintiffs to file the said affidavit before the next date of hearing. Subsequently,
the plaintiffs filed an affidavit for computation of damages on 30th January, 2025.
27. In these circumstances, the plaintiffs seek an ex-parte decree against the
defendants.
ANALYSIS AND FINDINGS
28. I have heard the counsel for the plaintiffs and perused the material on
record.
29. The plaint has been duly verified and is also supported by the affidavit of
the plaintiffs. In view of the fact that no written statement has been filed on
behalf of the defendants, all the averments made in the plaint have to be taken to
be admitted. Further, since no affidavit of admission/denial has been filed on
behalf of the defendants in respect of the documents filed with the plaint, in terms
of Rule 3 of the Delhi High Court (Original Side) Rules 2018, the same are
deemed to have been admitted.
30. From the averments made in the plaint and the evidence on record, the
plaintiffs have been able to prove that they are the copyright owners of the
software programs 'CATIA', 'SIMULIA', and 'SOLIDWORKS'.
31. The plaintiffs have filed extensive documentation demonstrating copyright
infringement of the software programs of the plaintiffs by the defendants, which
includes details of the licenses owned by the defendant no. 1 as per the records
maintained by the plaintiffs and proof that the defendants used the plaintiffs'
software programs without a valid license. The plaintiffs have also provided
extracts from their infringement database, which show the unauthorized or pirated
use of their 'SOLIDWORKS' and 'SIMULIA' software programs on the
defendants' computer systems. In addition to this, it emerges from the affidavit
filed by the independent investigator hired by the plaintiffs that the defendants
were using 'CATIA' software program in an unauthorized manner. The plaintiffs
have also placed on record various legal notices that were sent to the defendants.
32. Based on the discussion above, a clear case of infringement of copyright is
made out. The defendants have taken unfair advantage of the reputation and
goodwill of the copyrighted software programs of the plaintiffs by using a pirated
version of the plaintiffs' software.
33. At this stage, it is pertinent to note that the defendant no. 2 appeared before
the Court only once, on 18th September 2020, and has not entered appearance
thereafter. Since the defendants have failed to take any requisite steps to contest
the present suit, despite having suffered an interim injunction order, it is evident
that they have no defence to put forth on merits.
34. The plaintiffs further claim compensatory damages from the defendants. In
this regard, reference may be made to Rule 20 of the Delhi High Court
Intellectual Property Rights Division Rules, 2022 as set out below:
"20. Damages/Account of profits
A party seeking damages/account of profits, shall give a reasonable estimate
of the amounts claimed and the foundational facts/account statements in
respect thereof along with any evidence, documentary and/or oral led by the
parties to support such a claim. In addition, the Court shall consider the
following factors while determining the quantum of damages:
(i) Lost profits suffered by the injured party;
(ii) Profits earned by the infringing party;
(iii) Quantum of income which the injured party may have earned
through royalties/license fees, had the use of the subject IPR been
duly authorized;
(iv) The duration of the infringement;
(v) Degree of intention/neglect underlying the infringement;
(vi) Conduct of the infringing party to mitigate the damages being
incurred by the injured party;
In the computation of damages, the Court may take the assistance of an
expert as provided for under Rule 31 of these Rules. "
(Emphasis supplied)
35. In the present case, the infringement hits recorded on the 'phone home'
technology of the plaintiffs clearly show unauthorised use of the plaintiffs'
software programs on multiple computer systems of the defendants.
36. Further, the defendant no.2 appeared before this Court on 18 th September,
2020 and stated that the defendant no.1 company does not require 'CATIA' and
'SIMULIA' software programs. However, it is evident from the affidavit filed by
the independent investigator of the plaintiffs on 11 th September, 2020 that the
defendant no.1's employees have admitted the unauthorised use of 'CATIA V5'
for 3D modelling in the company, during a telephonic conversation. In addition to
this, another employee of the defendant no.1 company has admitted that multiple
teams in the company are using 'SOLIDWORKS 2019'. It is also clear from the
infringement hits recorded by the plaintiffs that 'SIMULIA' and
'SOLIDWORKS' software programs are being used by the defendants in an
unauthorised manner.
37. It may be relevant to note that the defendant no.2 has failed to file an
affidavit in compliance of the order dated 18th September, 2020, wherein he had
undertaken to receive a license from the plaintiffs before using the
'SOLIDWORKS' software program. Instead, the defendant no.2 has not appeared
before this Court since that date. Therefore, it appears that the defendants have
deliberately infringed the copyright of the plaintiffs.
38. In the initial affidavit dated 22nd February, 2024, the plaintiffs have claimed
a total sum of Rs. 4,49,32,244/- as damages, based on the income which the
plaintiffs would have earned in the form of license fees had the defendants chosen
to purchase genuine versions of the plaintiffs' software programs. Thus, the
defendants have deprived the plaintiffs of potential revenue and caused injury to
their business interests. The table showing calculation of damages is set out
below:
Calculation of Compensatory Damages = Value of Infringing Software
I. Value of software programs in 2020:
SI. Software Cost of one Tax Amount (18% Total Cost of
No. License (In GST) (In INR) one License
INR) (In INR)
(excluding (including
taxes) taxes)
1. SOLIDWORKS 7,84,376 7,84,376 X (18/100) 7,84,376 +
2019 = 1,41,187.68 1,41, 187.68
= 9,25,563
2. SIMULIA 60,00,000 60,00,000 X (18/100) 60,00,000 +
= 10,80,000 10,80,000
= 70,80,000
3. CATIA V5 33,45,750 33,45,750 X (18/100) 33,45,750 +
= 6,02,235 6,02,235
= 39,47,985
II. Deployment of pirated software:
S. No. Software Number of Machines
III. Calculation of Infringing Software Value:
SI. No. Software Total Cost of one Total Total Cost of
License (In INR) Number Licenses
(including taxes) of deployed (In
Licenses INR) (including
deployed taxes)
A. SOLIDWORKS 9,25,563 13 9,25,563 x 13 =
2019 1,20,32,319
B. SIMULIA 70,80,000 2 70,80,000 x 2=
1,41,60,000
C. CATIA V5 39,47,985 5 39,47,985 x 5=
1,97,39,925
TOTAL VALUE OF
INFRINGEMENT 1,20,32,319+1,41,60,000+1,97,39,925=4,49,32,244
(A+B+C)
TOTAL VALUE OF INFRINGEMENT = 4,49,32,244 INR
39. Subsequently, the plaintiffs filed a fresh affidavit dated 30 th January, 2025
claiming a sum of Rs. 2,78,34,320/-. The aforesaid amount is calculated on the
basis of commercials providing the infringing value in respect of the plaintiffs'
software programs that are subject matter of the present suit.
40. The plaintiffs have also filed a bill of costs dated 2 nd April, 2024 in respect
of court fees, legal costs and miscellaneous expenses. As per the bill of costs, the
total expenditure incurred by the plaintiffs amounts to Rs. 3,21,000/-, which
appears to be reasonable.
41. On the basis of the discussion above, I am of the view that in the present
facts and circumstances, the plaintiffs are entitled to a decree of permanent
injunction as well as compensatory damages and costs from the defendants.
RELIEF
42. In view of the foregoing analysis, a decree of permanent injunction is
passed in favour of the plaintiffs and against the defendants in terms of prayer
clauses 55 (a) and 55 (b) of the plaint:
"a. A decree of permanent injunction restraining the Defendants, their
directors, officers, agents, franchisees, servants and all others acting on their
behalf, from directly or indirectly copying, reproducing, storing, installing
and/or using pirated/unlicensed software programs of Plaintiffs including
SOLIDWORKS, SIMULIA and CATIA and their various versions or any other
software programs developed by the Plaintiffs in any manner that may amount
to infringement of the Plaintiff No. 1's copyright subsisting in its software
programs and software related documentation.
b. An order for delivery-up to the Plaintiffs, of all the unlicensed copies of the
Plaintiffs' software, and/or articles/ software, the duplicating equipment used
in the copying of the Plaintiffs' software, including computers, compact disc
writers, stampers, burners, "plates", hard disks, diskettes, packaging and
advertising material, labels, stationery articles and all other infringing
material under Section 58 of the Act."
43. A decree of damages of Rs. 2,78,34,320/- (Two crores seventy eight lakhs
thirty four thousand three hundred and twenty only) is passed in favour of the
plaintiffs and against the defendants in terms of prayer clauses 55 (d) of the
plaint.
43.1. The plaintiffs shall pay the additional court fees on the differential amount
awarded in favour of the plaintiffs within three (3) weeks.
44. Costs of Rs. 3,21,000/- (Three lakhs twenty one thousand only) are
awarded in favour of the plaintiffs and against the defendants in terms of prayer
clause 55 (e) of the plaint.
45. In view of the above, the plaintiffs do not press for relief of rendition of
accounts as prayed for in clause 55 (c) of the plaint.
46. Let the decree sheet be drawn up.
47. All pending applications stand disposed of.
AMIT BANSAL
(JUDGE)
FEBRUARY 21, 2025
Vivek/-
