Manisha Singh Nair
Lex Orbis

A recent survey on piracy released by the Business Software Alliance (BSA) shows that there has been a fall in piracy in India. The survey notes that there was significant progress made in the battle against PC software piracy in 2007. Of the 108 countries studied, the piracy rate had dropped in 67 countries and increased in only eight. India’s piracy rate dropped two percentage points to 69% in 2007 from 71% in 2006 as a result of government and industry education and enforcement efforts, software vendor activation controls and an increase in the PC market share by multinational vendors.

An illustration of the above scenario can be found in the Delhi High Court’s decision in Microsoft Corporation v Rajendra Pawar & Another 2008 (36) PTC 697 (Del). The Court decreed the suit by awarding damages to the plaintiff in the sum of Rs. 20 Lakhs payable by the defendants jointly and severally.

Microsoft Corporation, the plaintiff, filed a suit for permanent injunction, delivery up, rendition of accounts and damages against the defendants for infringement of copyrights, infringement of trademarks and passing off. The suit was the result of the plaintiff’s discovery of the defendant carrying on the business of unauthorized hard disk loading. The defendant was pre-loading various pieces of software belonging to the plaintiff on to the hard disks of the computers that were being assembled and sold by it.

The plaintiff’s main contentions were:

• That the software developed and marketed by it is a “computer programme” within the meaning of Section 2(ffc) of the Copyright Act 1957 and is included in the definition of a literary work as per Section 2(o) and Section 13(1)(a) of the Copyright Act 1957 both the computer programme as well as the supplementary User Instructions and Manuals are “original literary works”.

• India being a signatory to the Universal Copyright Convention as well as the Berne Convention, the plaintiff’s work is protected in India under Section 40 of the Copyright Act 1957 read with the International Copyright Order 1999.

• The plaintiff, being the owner of the copyright of the literary works within the meaning of Section 17 of the Copyright Act 1957, is entitled to all exclusive rights flowing from such ownership as given in Section 14 of the Copyright Act.

• The plaintiff is the proprietor of the trademark “Microsoft”, which was adopted in 1970, registered under Classes 9 and 16 respectively and is still valid.

The defendant chose not to rebut the averments but in the meeting called by the plaintiff, in order to settle the matter out of court the defendant declined to acknowledge the rights of the plaintiff. The Court in these circumstances granted an ad interim ex parte injunction in favour of the plaintiff. The plaintiff also filed ex parte evidence by way of affidavits on the direction of the Court. The affidavit of the technical expert (mentioning that the plaintiff’s programmes contained in the hard disk of the impugned computer were unlicensed and/or pirated) and the computation of the damage by a charted accountant, as stated in his affidavit, assisted the Court in reaching the conclusion that the plaintiff was entitled to a decree of permanent injunction. The factum of non-rebuttal of the averments made in the plaint and the perusal of evidence filed along with the plaint established the exclusive rights of the plaintiff as emanating from ownership of copyright and also the defendant’s action of violation of the copyright of the plaintiff by copying the same onto the hard disks of computers thus causing loss and damage to the plaintiff.

The important aspect of this case is the Court’s consideration on the issue of damages for the loss of reputation and business, and also the cost of proceedings. The Court condemned the conduct of the defendant, remarking “It is now an inherited wisdom that evasion of court proceedings does not de facto tantamount to escape from liability. Judicial Process has its own way of bringing to task such erring parties while at the same time ensuring that the aggrieved party who has knocked the doors of the Court in anticipation of justice is afforded with adequate relief, both in law and equity.”

The Court used the above as the foundation for awarding punitive damages as a manifestation of equitable relief in the face of difficulty or inability of the aggrieved party to prove actual damages. Revisiting the landmark judgment in Time Incorporated v Lokesh Srivastava and Another 2005 (30) PTC 3 (Del.) and acknowledging it as a harbinger of the practice of awarding punitive damages, the Court held that in spite of the non-appearance of the defendants the plaintiff was entitled to damages in light of the judicial dicta observed in the Times Incorporated case. Accepting the damage claim of the plaintiff in place of the damages according to the affidavit of the charted accountant, the Court decreed the suit in terms of the prayer clause of the plaint and by awarding damages in the sum of Rs. 20 Lakhs carrying interest at the rate of 6% per annum from the date of decree until realization.

The Court’s remark about having no choice but to limit the claim of the plaintiff reflects the urgent need to put flagrant piracy to rest through the deterrence of punitive damages.

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