Copyright

Placing Software Piracy Raids in Perspective: A Response by the BSA


Our last post on software raids elicited some very interesting responses. The post was an attempt to highlight the various inequities inherent in some intellectual property raids.

No doubt some of these inequities can be easily addressed by courts that could, whilst granting the order to raid premises and collect evidence, ensure that the business of the raided party is not drastically impacted and that such party is not put to undue losses.

We plan to run a future post synthesizing some of the more recent court orders in this regard to ask if the orders draw an optimal balance between the need to protect IP owners against infringement, whilst at the same time safeguarding the interests of a raided party.

In the meantime, we bring you an interesting perspective on software raids from the Business Software Alliance (BSA), a nonprofit trade association created to advance the goals of the software industry. It is headquartered in Washington, DC and counts all the big IT majors amongst its members including Microsoft, IBM, Adobe, Autodesk etc. Having been at the forefront of some of the leading software piracy actions in India, the BSA has considerable experience in this area.

Placing Software Raids in Perspective
By BSA India

We, Business Software Alliance (BSA) India, as a non-profit international trade association and voice of the commercial software industry, respond to a post on SpicyIP to ensure that a balanced and holistic picture is represented on behalf of the software industry as a whole, which grapples with serious challenges of piracy at all levels and fights for protection of software intellectual property (IP).

Independent studies conducted by internationally reputable research organizations have found unequivocally that PC software piracy results in significant damage to the domestic economy through negative impact on a nation’s GDP, jobs and tax revenues to the government. It is in this regard that we wish to present a broader and more balanced perspective to the discussion chain below.

Interestingly, while the author of the blog has openly painted all actions of the software industry with one brush, in fact one stroke, and has used a title (“court extortion”) demeaning to the courts, the author has chosen to remain anonymous, calling into question the motivation of the author. This practice of anonymity should be discouraged in issues of academics and research.

At the very outset, we need to establish that engaging in the use of unlicensed software is a criminal offence and is also subject to potentially severe civil consequences under the Copyright Act, 1957. Managers of businesses large and small have a choice. They can abide by the law and use licensed software or ignore the rule of law and seek a commercial advantage by using illegal software. Regrettably, we find that many managers knowingly choose to flout the law, which speaks volumes about business ethics and disregard for IP rights. What is astonishing is the knee jerk reaction, as the one raised by the anonymous author, of what happens when one gets caught. Knowingly breaking the criminal and/or civil laws of a country is a serious matter with potentially unpalatable consequences. To spin the consequences of one’s own illegal acts and point the finger at the software industry and the courts is approaching the very limits of credulity.

The fact is, the software industry in India is one of the leading lights in the economy and has benefited from protection of software, including in international markets. It has brought an untold number of jobs and improved the livelihood of millions. But maintaining the reputation and growth of this sector of the economy is a very delicate exercise. Acts such as the blatant disregard for the IP of others such as in the indiscriminate use of unlicensed software in the workplace causes untold harm to the reputation of India and also to the potential new investments into the software industry. With software piracy levels hovering at 69% in India software related revenue, jobs and government taxes are stunted.

A copyright violation under Section 63 B of the Copyright Act, 1957 (the Act), is a cognizable criminal offence where, upon complaint, police can raid and arrest officials of an infringing company and seize all evidence. In view of the unequivocal provisions contained under Section 69 of the Act, all persons responsible for the conduct of affairs of the company concerned, are liable for imprisonment and fine. While this strong legal remedy is available in India, as is in most other countries, in India, software companies more typically take select action against end-user piracy through milder civil actions. At the same time, the software industry engages in educational campaigns to promote the use of software asset management (SAM) within organizations.

Coming to the issue of Civil Search and Seizure process adopted by the court, we have no hesitation in saying that Indian courts have been pro-active in attacking piracy of all kinds, not just software, while being cautious of the remedies granted to the plaintiffs. In the past few years, Courts have themselves built-in safe guards to protect the interest of the defendants at the ex-parte stage itself, such as data back-up, and security cost in appropriate cases. Out of 100s of cases filed over the last 10-15 years, there has not been a single software anti-piracy case where an incident of abuse of the court order has been brought to courts attention and courts have held the plaintiffs liable.

1. The visits of the Local Commissioner to the premises of the Defendants are ‘unannounced’ because the Court Order recognizes the fact that an element of surprise is imperative in such cases and if prior notice were to be issued, the very purpose of conducting a software audit to determine unlicensed software usage, would obviously be defeated. The digital nature of software allows itself to be removed, deleted, uninstalled, stored and transferred with ease and speed. It is for this reason that the Defendants are denied the courtesy of prior notice. It is pertinent to note that a Division Bench of the Delhi High Court which laid down detailed guidelines on the issue of appointment of Local Commissioners in software cases, highlighted the importance of an element of surprise in gathering evidence relating to pirated/unlicensed software usage and held that unless an element of surprise is not preserved, the suit filed by the Plaintiff itself would stand frustrated.

2. The Court Orders which envisage backup of data, clearly stipulate that the backup of data could only be permitted in cases of data created through licensed software of the Plaintiff or through use of third party software. In stark contrast with what is alleged, this is not a distinction that is made by the Plaintiff’s lawyers. An impression is sought to be created that the Plaintiff’s lawyers overreach the Orders of the Court and read in conditions that are non-existent. It is extremely regretful that the writer of the blog has not read or has chosen to ignore what is clearly stipulated in the Order, for purposes of backup. We would like to stress that the industry always errs on the side of caution and a case in point is where over 500 unlicensed/pirated installations were found and yet no seizure was effected since there was no time left for the Defendants to make backups of their data, as directed by the Court. At the request of the Defendants, the systems were not seized and were left in an unsealed condition.

3. A Division Bench of the Delhi High Court, while laying down guidelines for appointment of Court Commissioners in software piracy cases, underscored the objective of appointment of Court Commissioners by holding that the purpose of appointing Court Commissioners is not to collect evidence but to preserve infringing evidence. Suits instituted by copyright owners for software piracy are also inter alia, for damages. In the absence of the media containing infringing software being taken into custody, it would be impossible for the Plaintiff to establish that the Defendant concerned actually illegally used the software as opposed to merely installing the same on its computer systems.

4. The audit of the Defendant’s computer systems are always done in the presence of the defendant’s IT personnel and once an inventory of the software contained on the systems is made, the defendants are called upon by the Local Commissioner, to furnish corresponding licenses. Contrary to the claims of the writer of the blog, the Local Commissioner, an officer of the court, arrives at an objective determination of what software is licensed and what is not, based on the licenses, if any, produced by the defendants themselves and not on the basis of the Plaintiff’s lawyers’ claims. In fact, a copy of all licenses produced by the Defendants is annexed with the Report filed in Court in terms directed by the Court. It is pertinent to note that in case any additional licenses are subsequently found by the Defendants, the defendants may move an application in Court seeking de-sealment of their computer systems.

5. It is not unusual for defendants to insist that settlement discussions commence immediately after the local commission proceedings have been concluded. There is obviously an urgency to enter into an out-of-court settlement and the fact that the Plaintiff’s lawyers agree to discuss a possible settlement, after several hours of hard work, can by no stretch of imagination be considered being unreasonable. On almost all occasions, the Plaintiffs have shown objectivity in optimizing the actual usage of the defendants and have accepted post-inspection usage requirements, which is substantially lower then what was actually found to be in actual use. It is curious that, on the one hand, the blog writer claims that the Plaintiff does everything in its power to delay the matter and in the same breath, claims that the Plaintiff’s lawyers are in a hurry to forge an out-of-court settlement. In any legal dispute, an out-of-court settlement is always the preferred option as it enables parties to move on after settling their disputes rather being involved in a long drawn litigation for years. Finally, all out-of-court settlement terms are reviewed by the Judge concerned and only upon satisfaction of the legality of the same does the Court pass a decree in terms of the settlement.

6. Contrary to the claims of the blog writer, there has not been a single case of any adverse publicity being given of any end-use court matter involving a company or an organization involved in usage of pirated/illegal software. Although the press is free to cover court proceedings and peruse court records, software publishers have always been alive and sensitive to these issues and have actively respected the privacy of these proceedings for all concerned.

7. It must also be emphasized that most software companies follow a series of escalatory steps prior to initiating legal proceedings in the form of a civil suit. Initiation of an action is most often preceded by a series of letters/personal visits of company representatives, appealing to the end-user concerned to refrain from using unlicensed software and engage in a Software Asset Management exercise so as to identify shortfalls in licenses. It is pertinent to note that such audits are offered free of cost by most software companies. In other words, a legal proceeding is initiated most often as a matter of last resort when companies brazenly continue to use unlicensed software without paying heed to the legitimate demands of the software company concerned.

8. Lastly, the Court, while granting Orders for appointment of Local Commissioners, is doing so on account of being prima facie satisfied of the case of the Plaintiff. It is pertinent to note that the investigation enquiries are articulated in the form of a sworn statement and if the falsity of the contents of the statement is subsequently established, the consequences would obviously follow.

We hope the above observations give an objective, non-personalized analysis of the situation to the readers. We regret that the tenor of the blog writer seems to suggest that all equities must favour an entity that is deliberately and brazenly engaging in pirated software usage, with complete disregard to the legal rights of software companies, which are critical for the survival and sustainability of these companies. It is also important to point out here that respect for these legal rights will not only protect existing software companies but also provide a secure space for nascent IP owners in India at the threshold of marketing their new product and benefiting from their innovations.

Shamnad Basheer

Shamnad Basheer

Prof. (Dr.) Shamnad Basheer founded SpicyIP in 2005. He's also the Founder of IDIA, a project to train underprivileged students for admissions to the leading law schools. He served for two years as an expert on the IP global advisory council (GAC) of the World Economic Forum (WEF). In 2015, he received the Infosys Prize in Humanities in 2015 for his work on legal education and on democratising the discourse around intellectual property law and policy. The jury was headed by Nobel laureate, Prof. Amartya Sen. Professional History: After graduating from the NLS, Bangalore Prof. Basheer joined Anand and Anand, one of India’s leading IP firms. He went on to head their telecommunication and technology practice and was rated by the IFLR as a leading technology lawyer. He left for the University of Oxford to pursue post-graduate studies, completing the BCL, MPhil and DPhil as a Wellcome Trust scholar. His first academic appointment was at the George Washington University Law School, where he served as the Frank H Marks Visiting Associate Professor of IP Law. He then relocated to India in 2008 to take up the MHRD Chaired Professorship in IP Law at WB NUJS, a leading Indian law school. Later, he was the Honorary Research Chair of IP Law at Nirma University and also a visiting professor of law at the National Law School (NLS), Bangalore. Prof. Basheer has published widely and his articles have won awards, including those instituted by ATRIP, the Stanford Technology Law Review and CREATe. He was consulted widely by the government, industry, international organisations and civil society on a variety of IP issues. He also served on several government committees.

16 comments.

  1. AvatarAnonymous

    Good God, you guy are dinosaurs.
    “2. The Court Orders which envisage backup of data, clearly stipulate that the backup of data could only be permitted in cases of data created through licensed software of the Plaintiff or through use of third party software.”
    Really? And you get to decide what has been created where? Also, the data is a creation of the end-users effort – your software is a tool. Do you also claim profits from authors who have written best sellers on you ‘licensed’ software? If not, this claim is hollow.

    “Managers of businesses large and small have a choice. They can abide by the law and use licensed software or ignore the rule of law and seek a commercial advantage by using illegal software.”

    Yes. They do. Use Free and Open Source Software. I do. All my organizations do. And I evangelise this to every single person I meet. Remember the name Ubuntu – it’ll soon be your worst nightmare.

    Such wonderful legal rhetoric and not a whit of common sense. Much like your masters.

    Reply
  2. AvatarNilanjana

    I agree with anonymous that allowing backup of data generated out of licensed software is taking things too far. I think that the court needs to change its stance here as it is too harsh but anyway its usually a matter of who is able to hire a better lawyer.

    Reply
  3. AvatarQuestionIPR

    “The Court Orders which envisage backup of data, clearly stipulate that the backup of data could only be permitted in cases of data created through licensed software of the Plaintiff or through use of third party software. In stark contrast with what is alleged, this is not a distinction that is made by the Plaintiff’s lawyers. An impression is sought to be created that the Plaintiff’s lawyers overreach the Orders of the Court and read in conditions that are non-existent. It is extremely regretful that the writer of the blog has not read or has chosen to ignore what is clearly stipulated in the Order, for purposes of backup. We would like to stress that the industry always errs on the side of caution and a case in point is where over 500 unlicensed/pirated installations were found and yet no seizure was effected since there was no time left for the Defendants to make backups of their data, as directed by the Court. At the request of the Defendants, the systems were not seized and were left in an unsealed condition”

    If courts are following a practice wherein the a person is allowed to back up only a licensed software without taking into regard the work product of the user, then it is probably not brought to the notice of most of the judges(who are sadly with a few exceptions not so tech savvy).

    As in all technology based litigations-the side which explains clearly wins the case and that does not seem to be the case here- the side explaining is not bringing everything to the courts notice and the poor so called pirates are busy saving their asses that they are not sure if they can demand their legal rights as well.

    Reply
  4. AvatarShamnad Basheer

    I’ve held back a couple of comments since they use offensive language in relation to Microsoft and BSA. If you want to participate in this debate, please restrict your comments to the substantive issues thrown up by this debate i.e do software raids and court orders sanctioning them strike an optimal balance between IP owner’s rights and the defendants interests?

    Please try and avoid name calling etc–lets instead focus on the core issues involved to try and see if we can work out some good policy solutions and appropriate guidelines in this regard.

    So if you happen to be someone who has sent in comments that “name call”, please strike off that portion and resend your comment with just the substantive bits in. Thank you.

    Reply
  5. Avatarprashantiyengar

    Hey Shamnad,
    This post has awakened dead synapses! I’ve written a 3500 word post on my blog that, I think, has something useful to say – particularly towards the end on the subject of search and seizures.
    As I’ve mentioned in my post, I’m all awe and admiration of your good work in integrating views from opposite ends of the spectrum on IP. Kudos!
    Prashant

    Reply
  6. AvatarAnonymous

    I think there is another issue here which isn’t being examined – being that the Copyright Act itself is far from geared to handle the internet age. This is true not only in India, but in most copyright legislation over the world. Further, any updation must be ensured to be a fair and equitable one – not one escorted by lobbyists from large corporates. That is to say – Ensure that the mistake of “progress = Stronger and stricter IP laws” doesn’t take place, since large corporate houses always seem to be trying to push for this kind of ‘development’ as an excuse to mend the law to make more profits for themselves.

    Looking at things from a different angle, if this many people voluntarily choose to engage in and use pirated software (there are countless studies out there stating that over 80% of people online have used pirated software), despite knowing that it is ‘illegal’ – including a large portion of population who normally wouldn’t do other ‘illegal activities’ (This is a fair assumption to make, simply by taking a look around at people).
    Can it not be said that there something inherently wrong with such a law in the first place?

    While I’m in full agreement Anonymous above on Open source software, I’m also of the opinion that there is something wrong with the way the Microsoft types are approaching this. Instead of catering to their audience, they, knowing that they’ve created an almost monopolistic scenario with very little room for interoperability, are ‘forcing’ vendors/clients to opt for their software.
    It can be safely assumed that despite their best efforts, software piracy levels will not go down – as has been shown in multiple jurisdictions. Unless they want to continue losing money to ‘piracy’, they should drastically change the way they’re approaching their clients. Otherwise, there will merely be a slow but sure shift towards software which doesn’t create this lock-in effect – open source software.

    -OutdatedCopyrightLaws

    Reply
  7. AvatarAnonymous

    What the software companies should do is allow the software to be downloaded for free (hear me out). Those without licences would have to put a 10% additional “tax” on every bill that they send to their client. This would be the “software tax” and this money would be paid to the Software Company by the unlicensed user. Big companies for whom it would be cheaper to buy the licence than pay 10% of each bill would obviously get the expensive licenses. But by giving this “pay per use” no one would want to pirate software. In fact those who hide bills from tax authorities would start giving proper details to tax authorities, because if they hide any bill where they used a unlicenced software but did not pay the software company the above mentioned 10%, they would face fines of lakhs and crores (depending upon their size). If this law is brought out and properly governed i guarantee that no one in India would use pirated software. On the other hand if they do not want to do all this, as so much of it depends on the government, they should simply do a “pay what you like” offer or make the software prices respective. Game companies already do this. They charge 60 dollars for a game in the US but give it for Rs 1000 in India. They understand that $60 for an American holds less value than Rs 3000 ($ converted to Rupee @ Rs 50 per dollar). Why dont the bg software companies understand this? Why do they straight convert $ to rupee?

    Reply
  8. AvatarRajashekar Varkala

    Hello, I am the director of Mywavia studios pvt ltd. We are a small company with 5 employees. We bought two adobe master collection licenses costing around 3.5 lakhs and necessary windiws 7 versions are also bought. We use open source blender for our 3d modelling. We evaluated autodesk maya trial version for 30 days and didnot produce any commercial content, and didnot proceed further because the cost was too prohibitive. After an year, march 2013. Autodesk employee came to our office and accused us we are using its software and threatened with audit etc if we dont settle matter. I told him to leave and get proper documentation before u do an audit. This is proper harassment into buying their software. I filed a police complaint against Jijit Abraham, autodesk employee. Any advice on what all actions i should do to avoid further harassment . I have got an attorney now and will see what possible suits I can bring them on.

    What kind of business is this? Oh one more thing. They sent sales executives an year ago. I declined to buy their software.

    -Rajashekar Varkala

    Reply
    1. AvatarRadhika

      Hi,
      Jijit has landed in our office too.. harassing me ever since then. he has locked my deal in autodesk with a service provider and is forcing me to buy 2 full versions when i need just one. what do i do? is there a way to unlock this?

      Regards,
      Radhika

      Reply
  9. AvatarAnonymous

    Hi Rajashekhar
    Can you tell me the which attorney takes up this kind of cases . Most of the lawyers i contacted deals into civil, criminal etc etc.

    I am also into similar situation as you are in with AUTODESK
    Regards
    ROHIT

    Reply
  10. AvatarAnonymous

    This Autodesk Chap has came to my company also and was giving the same to me also. I think the best remedy for them is to use Open Source / GNU software …

    We should also be aware about their rights and powers to check our computers or to do an audits without proper documents

    Reply
    1. AvatarRamkie

      Guys
      Check with your attorneys before allowing them for an audit… the user also have his own rights who should enter and who not….

      Reply
  11. AvatarRamkie

    Hi all readers and responding writers.

    Let me understand one thing from all of you. Do anyone knows the repercussions of doing a civil raid with a court order in India and the vendor companies have a secret agreement with the user and settle their claims outside India.

    Do you think it is right. If it is wrong, what is your options. Secondly settling a claim outside the country of courts purview and action performed in a country, is that not cheating the exchequer of the particular country where the usage is found and you convinced the local courts to get the order get passed, and then you cheat and settle the claim with a secret agreement outside the country.

    How do you all guys who fights against software piracy and supports action going to answer this question??? If anyone, anyone who thinks twice and approach the court to find how the case is settled in India and they unearth the agreement copy, do you anyone know what will happen to the future requests to the courts for action….

    Let me have your honest answer please…

    I request the network administrator to send the copy of replies to my email id please.

    I hope some of the guys in this forum will have guts to answer my query..

    Thanks a lot in advance.

    Reply

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