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The Foundry Visionmongers Limited vs Citrus Ink Studios Private Limited & Anr on 17 January, 2022

Author: Asha Menon

Bench: Asha Menon

                          $~18
                          *    IN THE HIGH COURT OF DELHI AT NEW DELHI
                          +    CS(COMM) 36/2022
                               THE FOUNDRY VISIONMONGERS LIMITED              .....Plaintiff
                                             Through: Mr. Pravin Anand, Mr. Shantanu
                                                      Sahay, Mr. Rohan Sharma, Mr.
                                                      Deepesh Bhardwaj, Ms. Imon Roy
                                                      and Mr. Apoorv Bansal, Advocates
                                             versus
                                CITRUS INK STUDIOS PRIVATE LIMITED & ANR.
                                                                       ..... Defendants
                                              Through: None
                                CORAM:
                                HON'BLE MS. JUSTICE ASHA MENON
                                                   ORDER

17.01.2022 [VIA VIDEO CONFERENCING] I.A. 826/2022 (by the plaintiff under Order XI Rule 1(4) read with Section 151 CPC seeking leave to file additional documents)

1. For the reasons stated in the application, the application is allowed, subject to the plaintiff filing the additional documents within a period of 30 days from today.

2. The application is disposed of.

I.A. 827/2022 (by the plaintiff under Section 151 CPC seeking exemption from filing clear/certified copy, etc., and duly notarized affidavits and the suit papers)

1. Allowed, subject to all just exceptions.

2. The duly notarized affidavit(s) and the suit papers be filed within four weeks from the date of resumption of the normal functioning of this court.

3. The application is disposed of.

I.A. 828/2022 (by the plaintiff under Section 12A of Commercial Courts Act, 2015 read with Section 151 of CPC seeking exemption from pre- institution mediation)

1. For the reasons stated in the application, the same is allowed and the plaintiff is exempted from instituting pre-institution mediation.

2. The application is disposed of.

CS (COMM) 36/2022, I.A. 825/2022 (by the plaintiff under Order XXXIX Rule 1 & 2 read with Section 151 CPC for ad-interim temporary injunction)

1. The plaint be registered as a suit.

2. The present suit has been filed by the plaintiff with the following prayers:-

"a. A decree of permanent injunction restraining Defendants, their agents, franchisees, servants and all others acting for and on their behalf, from directly or indirectly copying, reproducing, storing, installing and/or using pirated/unlicensed software programs of Plaintiff including "NUKE", "NUKE X", "NUKE STUDIO" and its various versions or any other software programs developed by Plaintiff in any manner that may amount to infringement of Plaintiff's copyright subsisting in its software programs and software related documentation.

b. An order for delivery-up to Plaintiff, of all the unlicensed copies of Plaintiff's software, and/or articles/ software, the duplicating equipment used in the copying of Plaintiff's software, including computers, compact disc writers, stampers, burners, "plates", hard disks, diskettes, digital footprint, caches, property files, packaging and advertising material, labels, stationery articles and all other infringing material under Section 58 of the Copyright Act, 1957.

c. An order for rendition of accounts of profits illegally earned by Defendants by reason of infringement of Plaintiff's copyright, including conversion damages which are presently indeterminate, and a decree be passed against Defendants in the sum of the amount so ascertained. d. An order for damages of INR 2,00,01,000/- to be paid by Defendants in total on account of infringement of Plaintiff's copyright and also for loss of sales and reputation; e. An order for costs in these proceedings;

Pass any further orders this Hon'ble Court deems fit considering the facts and circumstances of the present case."

3. Issue summons in the suit and notice in the application to the defendants by all permissible modes, returnable before the Joint Registrar.

4. The summons shall indicate that the written statement(s) to the suit and reply(ies) to the application be filed by the defendant(s) within thirty days from the date of receipt of the summons. The defendant(s) shall also file the affidavit of admission/denial of the document(s) filed by the plaintiff(s), failing which the written statement(s) shall not be taken on record.

5. The plaintiff is at liberty to file replication(s) to the written statement(s) and rejoinder(s) to the reply(ies) filed by the defendants before the next date of hearing following the filing of the written statement(s)/reply(ies). The replication(s) shall be accompanied by the affidavit of admission/denial in respect of the documents filed by the defendant(s), failing which the replication(s) shall not be taken on record.

6. If any of the parties wish to seek inspection of any documents, the same shall be sought and given within the timelines.

7. The case as set out in the plaint is that the plaintiff is the owner of the copyright in its software programmes including- "NUKE", "NUKE X", "NUKE STUDIO" and "NUKE RENDER". NUKE is plaintiff‟s flagship software programme for rendering visual effects. The said software is a powerful compositing product that delivers unparalleled speed and a first- class feature set that is unrivalled in the desktop market. The software provides state of the art tools designed to streamline day-to-day workflow and ensure highest quality visual effects. The software programs and all user instruction manuals included with it are "literary works" capable of protection within the meaning of the Copyright Act, 1957 (hereinafter "Copyright Act"). The same have also been created/developed and written for the plaintiff by its employees, during the course of their employment with the plaintiff. The plaintiff is the "first owner" of the copyright as defined under the Copyright Act in respect of the aforesaid software.

8. It is stated that the plaintiff has spent and continues to spend millions of U.S. dollars annually in research and development of new software products. The plaintiff‟s software programs are licensed through internet delivery, during which process, the customer agrees to the terms of an End- User License Agreement [hereinafter "EULA"] prior to software installation for the requisite number of computers on which the software has been loaded/installed for concurrent use at its premises. The plaintiff maintains an extensive and frequently updated database of all its licensees. Due to the highly sought-after nature of the plaintiff‟s software programs, software piracy has always been a concern. In order to keep piracy in check, a security mechanism is used by the plaintiff, colloquially known as "phone home" technology, which is built into the plaintiff‟s software, which verifies Signature Not Verified Signed By:MANJEET KAUR Signing Date:17.01.2022 23:17:36 CS(COMM) 36/2022 Page 4 of 6 whether the plaintiff‟s software is being used in accordance with the terms of the EULA.

9. Mr. Pravin Anand, learned counsel for the plaintiff, submits that as per the said anti-piracy tool, the plaintiff has recorded infringement hits of the illicit use of its software by the defendants. He draws the attention of this Court to the table extracted in para 36 of the plaint, wherein the instances of infringements have been recorded. There are a total of 7229 infringement hits generated against at least 41 computer systems of the defendants. In light of this fact, Mr. Anand contends that defendants have been found to be knowingly using pirated/unauthorised versions of the plaintiff‟s "NUKE" and "NUKE X" software programs, rather than procuring genuine licenses. They have thereby infringed the plaintiff‟s copyright subsisting in the aforesaid software programs. The learned counsel has also referred to various orders passed by Co-ordinate Benches of this Court in their favour, at pages 69-171 of the documents filed by the plaintiff.

10. In view of the submissions made and the material placed on record, the plaintiff has established a prima facie case in its favour. The „balance of convenience‟ also lies in favour of the plaintiff and „irreparable loss‟ would be caused to if an ex-parte ad-interim injunction is not granted. Accordingly, till the next date of hearing, it is directed that the defendants, their principal officers, directors, agents, franchisees, servants and all others acting for and on their behalf at defendants‟ premises, are: -

i. Restrained from directly or indirectly using for any kind of computer related activities or otherwise in any other manner, any pirated/unlicensed/unauthorized software programs of the Plaintiffs or reproducing and distributing any Signature Not Verified Signed By:MANJEET KAUR Signing Date:17.01.2022 23:17:36 CS(COMM) 36/2022 Page 5 of 6 pirated/unlicensed/unauthorized software of the plaintiff in contravention of the terms of the EULA (s) or infringing in any other manner or causing or enabling or assisting others to infringe the copyrights of the Plaintiffs including "NUKE", "NUKE X"

and "NUKE STUDIO" software and its various versions or any other software programs developed by the plaintiff in any manner that may amount to infringement of the Plaintiff‟s copyright subsisting in its software programs and software related documentation, and ii. Restrained from directly or indirectly formatting the computer systems and/or erasing any data, log files, installations, etc. pertaining to assisting others to infringe the copyrights of the plaintiff subsisting in its software programs and software related documentation including "NUKE", "NUKE X" and "NUKE STUDIO" software and its various versions or any other software program developed by the plaintiff.

11. List before the Joint Registrar on 9th May, 2022 for completion of service and pleadings.

12. Provisions of Order XXXIX Rule 3 CPC be complied with.

13. The order be uploaded on the website forthwith.

ASHA MENON, J.

JANUARY 17, 2022 s Signature Not Verified Signed By:MANJEET KAUR Signing Date:17.01.2022 23:17:36 CS(COMM) 36/2022 Page 6 of 6