HC awards Rs 30 lakh as damages to Microsoft Corporation, Adobe system in Internet and software piracy[Read Judgment]

On 26^th May 2020, The High Court of Delhi in the case of MICROSOFT CORPORATION & ORS versus SATVEER GAUR & ANR, a bench comprising of Justice HON'BLE MR. JUSTICE V. KAMESWAR RAO awarded Rs 30 lakh as damages to Microsoft Corporation, Adobe system in Internet and software piracy

PARTIES

Parties to the present suit are as follow:

1. The plaintiff No.1 is Microsoft Corporation
2. The plaintiff No.2 is Microsoft Corporation Pvt. Ltd.
3. Plaintiff No. 3 is Adobe Systems.
4. The plaintiff No.4 is Quest Software Inc.
5. The defendant No.1 appears to be the system administrator of the defendant No.2 entity.
6. The defendant No.2 company into the business of providing IT services and solutions to its clients.

ISSUE

The plaintiffs that the copyrights in the plaintiffs’ software products are infringed inter alia in one of the following ways:

1. End-user piracy,
2. Counterfeiting,
3. Channel piracy and
4. Internet piracy.

PLAINTIFF SUBMISSION

The plaintiffs through its plaint submitted before the Honourable High Court of Delhi that;

1. They suffered incalculable damages to their intellectual property rights and business on account of various forms of copyright piracy in their software programs. A brief description of common methods of copyright infringement employed in relation to piracy are

• reproducing the plaintiffs’ software and the packaging of that software so that purchasers are deliberately misled to believe that the product they are buying is genuine software,
• reproducing or burning the plaintiffs’ software into a blank writable CD/DVD where no attempt is made to represent that the copy is genuine,
• reproducing a number of plaintiffs’ programs on a single CD/DVD-ROM, known as a compilation CD/DVD and
•  making more copies than permitted by the End-User License Agreement.

2. It is also averred that the corporate or end-user piracy is the most damaging form of software piracy which occurs when businesses, corporations, companies, institutions, schools, non-profit organizations, etc., make additional copies of plaintiffs’ software without authorization. The reproduction of the plaintiffs’ software without the plaintiffs’ permission is an infringement of their copyright in their software programs.

DEFENDANT SUBMISSIONS

The defendant through their written submission submitted before the court that:

1. the software belonging to plaintiff No.4, it is stated that at no point did the defendant No.2 use any software of the plaintiff No.4 which requires a paid license.
2. any software of the said plaintiff that was found on the defendant No.2’s systems is freeware and was downloaded by the defendant No.2’s employees for personal use and the same was never used in connection with the business activity of the defendant No.2 or for that matter its parent company. It is also stated that at the time of seizure by the local commissioner, the only software of plaintiff No.4 on the answering defendant system was Quest TOAD, which is Open Source and does not require a paid license.
3. it is stated that the defendant No.2 has not violated any of the rights available with the plaintiffs under the Copyright Act and seeks dismissal of the suit. That apart, the defendant No.2 has also challenged the jurisdiction of this Court to try and adjudicate the suit.

ISSUES BEFORE COURT

1. Whether the court at Delhi is not vested with the territorial jurisdiction to try and entertain the suit?
2. Whether the suit is devoid of any cause of action against the defendants?
3. Whether the plaintiffs are the owners of the copyright over the works claimed in the suit?
4.  Whether the defendants have infringed the copyright of the plaintiffs in the said works?
5. Whether the defendant No.2 has purchased the necessary license from the plaintiff for the usage of the software in question?
6. Whether the plaintiff is entitled to the relief of permanent injunction against the defendants, as prayed for in para 64 (a) of the plaint?
7. Whether the plaintiff is entitled to the relief of delivery up of the impugned products against the defendants, as prayed for in para 64(b) of the plaint?
8. Whether the plaintiff is entitled to the rendition of accounts of the profits, as prayed for in para 64(c) of the plaint?
9.  Whether the plaintiff is entitled to damages for a sum of Rs.60.00 lacs or any lesser amount from the defendant, as prayed for in para 64(d) of the plaint?

COURT DECISION

The High Court of Delhi for the issue 1 referred judgment of the Supreme Court in the case of Indian Performing Rites Society vs. Sanjay Dalia (2015) 10 SCC 161, wherein the Supreme Court inter-alia held that a suit can be filed at a place where the plaintiff has a principal place of office and not a subordinate office. The principal place of office of the plaintiff No.2 is in Delhi. Further, the Court stated that the registered Office of defendant No.2 is also in Delhi, and Issue no. 1 was decided accordingly.

Defendant failed to appear for the issue no. 2to 9 and the same was decided accordingly in the favor of the plaintiffs.

Further, the Delhi High Court awarded damages to the tune of Rs.30 lakhs in favor of the plaintiffs to be shared equally by all of them.

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