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Facts of the case: Autodesk, Inc. (hereinafter “Plaintiff 1”) is a renowned U.S.-based design software and digital content company, providing design software to professionals, has several authorized resellers in India and also claims to be the owner of various trademarks in India, including AUTODESK and AutoCAD. Microsoft Corporation, (hereinafter “Plaintiff 2”) owns software such as Microsoft Windows and Microsoft Office and is almost a household name regarding computer peripherals. It also has a subsidiary company in New Delhi. The plaintiffs claim that the software developed and marketed by them are computer programs as per Section 2(ffc) of the Copyright Act, 1957 and also covered as ‘literary work’ as per Section 2(o) of the Copyright Act. Moreover, the rights of authors of member countries of the Berne and Universal Copyright Conventions are protected under Indian Copyright laws since both India as well as U.S.A. are signatory to both these conventions. Based on information regarding large-scale use of unlicensed/pirated software by the defendants, plaintiffs have alleged infringement of their copyright and trademark rights by the defendants.
Issues: Whether the defendants are guilty of having infringed the copyright and trademark right associated with the software that belong to the plaintiffs?
Remedies sought by plaintiffs: Injunction restraining the defendants from infringing the plaintiffs’ copyright and registered trademarks, damages of Rs.20 lakhs and rendition of accounts and delivery up of the unlicensed/pirated software contained in hard disks, compact disks, floppies etc.
Decision: The defendants never tried to contest the suit by filing a written statement. Evidence revealed that defendants 1 and 2 were not holding any license from Plaintiff 1, while defendant 3 (M/s Space Designers Syndicate) was a licensed user of AutoCAD LT 2005. Mr. Devesh J. Tiwari, the person who had informed the plaintiffs of the infringement, was an employee of M&S Consultancy Services (one of the defendants) as a computer service engineer. He revealed in the court that his employer company did not possess any legal licensed software and that his superiors were fully aware of the pirated software, including the Microsoft Windows 95/98 Operating System; Microsoft Office 97/2000 and AutoCAD Versions 12, 14 and 2000 etc. being used from printed CDs within the company. It was also contended on the plaintiff’s behalf that the word Microsoft has been continuously and extensively used by Plaintiff 2 since long and has come to be identified and recognized exclusively with Plaintiff 2.
The person-in-charge of the IT Department of the Legal Representatives of the plaintiff companies also testified that mostly all licenses used by commercial entities regarding plaintiff’s products can be used in perpetuity and that a software programme purchased by an entity anytime should reflect in the data base of the product purchase summary maintained by the plaintiff companies. Needless to say, the defendants’ names were conspicuously absent from that data base.
With regard to applicability of the Act to work first published in any territory outside India such as U.S., the court referred to Section 40 of the Act and also to paragraphs 2 and 3 of the International Copyright Order 1999 and held the provisions of the Act, especially S. 51 (dealing with infringement in the absence of a license), to be applicable vis-à-vis the rights associated with defendants’ products in this case. Moreover, as per S. 14 of the Act, the court believed that by using pirated versions of the software copyrighted by the plaintiffs, the defendants were certainly guilty of infringement, besides having also caused trademark infringement.
Regarding the issue of punitive damages in matters of piracy and infringement, reference was made to precedents such as Time Incorporated v. Lokesh Srivastava & Anr., 2005 (30) PTC 3 (Del), Hero Honda Motors Ltd. v. Shree Assuramji Scooters, 2006 (32) PTC 117 (Del), Microsoft Corporation v. Deepak Raval MIPR 2007 (1) 72, and Larsen and Toubro Limited v. Chagan Bhai Patel MIPR 2009 (1) 194, all of which favor the awarding of punitive damages for dissuading the infringers, even if the infringers decide not to appear in the suit proceedings at all. It was also argued that given the energy and resources spent by right-holders in infringement litigation, failure to award punitive damages would only foment encouragement for actions such as infringement and passing off.
The court also voiced concerns about increasing instances of piracy of software of reputed companies such as Microsoft and AutoCAD in the country, which might cause discouragement amongst the investors in the development of such software in the lack of dwindling license fees. Furthermore, the use of pirated software for commercial rather than personal purposes should, according to the court, be more heavily frowned upon, and therefore the court awarded the plaintiffs the permanent injunction sought for as also punitive damages amounting to Rs. 1 lakh against Defendant No. 2.