Bentley Systems Inc & Anr vs Sm Consultants Private Limited & Anr on 23 February, 2024

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Delhi High Court - Orders

Bentley Systems Inc & Anr vs Sm Consultants Private Limited & Anr on 23 February, 2024

Bench: Sanjeev Narula

                                    $~37
                                    *           IN THE HIGH COURT OF DELHI AT NEW DELHI
                                    +           CS(COMM) 162/2024
                                                BENTLEY SYSTEMS INC & ANR.                                                        ..... Plaintiffs
                                                                                      Through:                 Mr. Pravin Anand, Mr. Shantanu
                                                                                                               Sahay, Ms. Imon Roy, Ms. Shreya
                                                                                                               Shukla and Ms. Vareesha Irfan,
                                                                                                               Advocates.
                                                                                      versus

                                                SM CONSULTANTS PRIVATE LIMITED & ANR. ..... Defendants
                                                            Through: None.

                                                CORAM:
                                                HON'BLE MR. JUSTICE SANJEEV NARULA
                                                                                      ORDER

% 23.02.2024 I.A. 4268/2024 (seeking leave to file additional documents)

1. This is an application seeking leave to file additional documents under the Commercial Courts Act, 2015.

2. If applicants wish to file additional documents at a later stage, they shall do so strictly as per the provisions of the said Act.

3. Accordingly, the application stands disposed of. I.A. 4269/2024 (seeking exemption from filing originals, certified copies, clearer copies, translated copies, left side margins, electronic documents)

4. Exemption is granted, subject to all just exceptions.

5. The Plaintiffs shall file legible and clearer copies of exempted documents, compliant with practice rules, before the next date of hearing.

6. Accordingly, the application stands disposed of.

CS(COMM) 162/2024 Page 1 of 8

This is a digitally signed order.

7. Let the plaint be registered as a suit.

8. Upon filing of process fee, issue summons to the Defendants by all permissible modes. Summons shall state that the written statement(s) shall be filed by the Defendants within 30 days from the date of receipt of summons. Along with the written statement(s), the Defendants shall also file affidavit(s) of admission/denial of the documents of the Plaintiffs, without which the written statement(s) shall not be taken on record.

9. Liberty is given to the Plaintiffs to file replication(s) within 15 days of the receipt of the written statement(s). Along with the replication(s), if any, filed by the Plaintiffs, affidavit(s) of admission/denial of documents of the Defendants, be filed by the Plaintiffs, without which the replication(s) shall not be taken on record. If any of the parties wish to seek inspection of any documents, the same shall be sought and given within the timelines.

10. List before the Joint Registrar for marking of exhibits on 26th April, 2024. It is made clear that any party unjustifiably denying documents would be liable to be burdened with costs.

11. List before Court for framing of issues thereafter.

I.A. 4267/2024 (u/Order XXXIX Rules 1 & 2 r/w Section 151 of the Code of Civil Procedure, 1908)

12. The present suit has been filed by the Plaintiffs seeking permanent injunction against copyright infringement of its software programs namely, MicroStation PowerDraft, OpenRail Designer, OpenRoads ConceptStation, OpenRoads Designer and STAAD.Pro and its various versions.

13. Mr. Pravin Anand, Counsel for Plaintiffs, submits as follows:

CS(COMM) 162/2024 Page 2 of 8

This is a digitally signed order.

The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 26/02/2024 at 23:04:11

14. Plaintiff No. 1, Bentley Systems Inc., is a corporation based in Delaware, United States of America (USA). Plaintiff No.2, Bentley Systems India Private Limited, is a company registered under the Companies Act, 1956 and is a wholly owned subsidiary of Plaintiff No.1. Plaintiffs are in the business of infrastructure engineering software, which are used to design, engineer, build and operate large, constructed assets such as water distribution networks, roadways, railways, bridges etc. Plaintiffs have developed various software programmes, which includes MicroStation PowerDraft, OpenRail Designer, OpenRoads ConceptStation, OpenRoads Designer and STAAD.Pro and its various versions [hereinafter 'Plaintiffs' software programs']. The Plaintiffs' software programs have been created and registered in the U.S.A and owing to Section 40 of the Copyright Act, 1957, and the International Copyright Order, 1999 the said software programs are automatically entitled to copyright protection in India, due to reciprocal protection in terms of Berne Convention, Universal Copyright Conventions and the World Trade Organization Agreement.

15. Plaintiffs' software programs are licensed through different types of licensing models. Plaintiffs inter-alia offer a perpetual licence of its software programs, through a one-time purchase, allowing indefinite use of that specific version of the software. The Plaintiffs' perpetual licences of its software are available in 3 models- "Node Locked Licence" (one user only on one machine), 'Floating Licence' ('multi-user' option of one licence), and 'Retroactive Licence/Quarterly Term Licence'. Further, Plaintiffs offer a 'SELECT Support Services Program' [hereinafter 'SSSP'] through which a 'Node Locked Licence' can be upgraded to a 'Floating Licence'. Additionally, only subscribers of SSSP can opt for a 'Retroactive Licence,' CS(COMM) 162/2024 Page 3 of 8 This is a digitally signed order.

The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 26/02/2024 at 23:04:11 where, similar to a postpaid service, customers can immediately proceed with increased/impromptu usage without paying any fee at that moment, however such usage fee [ hereinafter 'Quarterly Term Licence Fees'] is payable later at the end of a calendar quarter. That apart, the software programs have their own 'Licence Consumption Database Dashboard' which helps the Plaintiffs' in calculating licence usage which is beyond the previously authorized limit. In case a customer defaults in payment of the Quarterly Term Licence Fees, such excess use remains unauthorized amounting copyright infringement of Plaintiffs' software programs.

16. Defendant No. 1, SM Consultants Private Limited, is a company incorporated under the Companies Act, 1956 and is engaged in providing construction services. Defendant No. 2, Mr. Soumendra Kumar Mohanty, is one of the directors of the Defendant No. 1. Defendant No.1 procured 11 valid perpetual licences of the Plaintiffs' software programs, which are tabulated as follows:

Additionally, through an SSSP agreement signed on 19th March 2021 [hereinafter 'SSSP Agreement'], the Defendants subscribed to the Plaintiffs' CS(COMM) 162/2024 Page 4 of 8 This is a digitally signed order.

The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 26/02/2024 at 23:04:11 SSSP program for a period of one year. The said subscription expired in March 2022, thereby ending the Defendants' privileges under the SSSP, especially the ability to impromptu use the new software programs and the multi-user access for its 11 licences. Defendants overused various licenced software programs and certain new software programs of the Plaintiffs in an impromptu manner, even after the expiry of the SSSP subscription. Thereafter, the Defendants failed to legitimise the said excess usage by not paying the over-usage fee and continued to use the said software in an unauthorized manner. Despite being apprised of the over-usage and a demand for overdue payments by the Plaintiffs, the Defendants failed to legitimize such over-usage.

17. Furthermore, in October 2022, through market sources, Plaintiffs' found that the Defendants had started using pirated versions of 2 of Plaintiffs' software programs- STAAD and OpenRail Designer. Thereafter, in January 2024 and February 2024, Plaintiffs received infringement hits on their infringement portal, details whereof are as follows:

CS(COMM) 162/2024 Page 5 of 8

This is a digitally signed order.

The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 26/02/2024 at 23:04:11

18. Notably, the security mechanism, inbuilt in the Plaintiffs' software to detect and report incidents of infringement, specifically captured the user email address '[email protected]' and the email domain <smcindia.com>, which is the domain owned by Defendant No. 1. Furthermore, the Wifi Service Set Identifier was captured as 'SMC- DESIGN', which stands for 'SM CONSULTANTS DESIGN'- Defendant No. 1. Therefore, from the technically generated infringement report, it is evident that the Defendants have used pirated/unauthorised versions of CS(COMM) 162/2024 Page 6 of 8 This is a digitally signed order.

19. The Plaintiffs initially attempted to amicably resolve the issue with the Defendants without any success. Thereafter, the Plaintiffs continuously took steps to investigate into the activities of the Defendants and learned about the unauthorised use of the software. The legal notice, dated 6th October 2022, issued by the Plaintiffs, have also not been acted upon by the Defendants. The Plaintiffs also attempted Pre-litigation Mediation [M.P. No. 20 of 2023] in February 2023, before the Delhi High Court Mediation and Conciliation Centre without success.

20. The court has considered the above-noted contentions. The submissions made by Mr. Anand disclose a prima facie that the Defendants' use of the software is unauthorized/illegal and therefore their use of such software infringes upon the Plaintiffs' copyright.

21. In light of the above, the Court finds that the Plaintiffs have made out a prima facie case in his favour and in case no ex-parte ad-interim injunction is granted Plaintiffs will suffer an irreparable loss; balance of convenience also lies in favour of the Plaintiffs and against the Defendants.

22. Till the next date of hearing, the Defendants and their representatives are restrained from directly or indirectly:

a. copying, reproducing, storing, installing and/or using and/or pirated/unlicensed/unauthorised versions of Plaintiffs' software programs and/or committing unauthorised and illegal usage of Plaintiffs' software programs and its various versions or any other software programs developed by the Plaintiffs, in a manner, that may amount to infringement of copyright subsisting in Plaintiffs' software programs.

CS(COMM) 162/2024 Page 7 of 8

This is a digitally signed order.

The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 26/02/2024 at 23:04:11 b. formatting the computer systems and/or erasing any data, log files, installations, etc. pertaining to assistance provided to others in infringing the copyright subsisting in Plaintiffs' software programs.

23. Issue notice to the Defendants, by all permissible modes, upon filing of process fee, returnable on 22nd July 2024.

24. Compliance of Order XXXIX Rule 3 of the Code of Civil Procedure, 1908 be done within one week from today.

25. List before the Court on 22nd July, 2024.

SANJEEV NARULA, J FEBRUARY 23, 2024 as CS(COMM) 162/2024 Page 8 of 8 This is a digitally signed order.

The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 26/02/2024 at 23:04:12

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