Gujarat High Court
Galatea Ltd & vs Diyora & Bhanderi Corporation & 13 on 18 July, 2017
Author: C.L.Soni
Bench: C.L. Soni
C/SCA/11240/2017 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CIVIL APPLICATION NO. 11240 of 2017
With
SPECIAL CIVIL APPLICATION NO. 11242 of 2017
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GALATEA LTD & 1....Petitioner(s)
Versus
DIYORA & BHANDERI CORPORATION & 13....Respondent(s)
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Appearance:
SENIOR ADVOCATES MR NEERAJ MALHOTRA AND MR SANDEEP
GROWER WITH MR DILIP B RANA, ADVOCATE for the Petitioner(s) No. 1 - 2
SENIOR ADVOCATE MR SAURABH SOPARKAR with MR MANAN A SHAH,
ADVOCATE WITH MR TARUN KHURANA, ADVOCATES for the
Respondent(s) No. 1 - 14
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CORAM: HONOURABLE MR.JUSTICE C.L. SONI
Date : 18/07/2017
ORAL ORDER
1. Challenge made in these two petitions filed under Article 227 of the Constitution of India is against the order made by learned Additional District Judge, Surat of fixing hearing and issuing only notice on applications for appointment of Commissioner under Order XXVI Rule 9 of the Civil Procedure Code, 1908 ("the Code"). This Court made following order on 14.06.2017 in first petition:
1. The petitioners have filed Patent Suit No.3 of 2017 alleging infringement of Patent No.271425 (Suit Patent) granted to the petitioners for invention, titled as "Method for the Evaluation of a Gemstone".
2. As alleged in the suit, the components of the patent granted to the petitioner are being used secretly by the respondents through their machines and devices.
3. With the suit, the petitioners have preferred an application for local inspection under Order XXVI Rule-9 read Page 1 of 13 HC-NIC Page 1 of 13 Created On Fri Aug 18 10:12:18 IST 2017 C/SCA/11240/2017 ORDER with Order-XXXIX Rule-7 of the Code of Civil Procedure, 1908 ('the Code'). The grievance made in the petition is that learned Judge has only fixed the hearing on the said application and issued notice to the respondents.
4. Learned senior advocate Mr. Mehul Shah appearing with learned advocate Mr. Rana for the petitioners submitted that the petitioners have come with a strong case of infringement of their patent right by the defendants and if there is no ex-parte order made for local inspection, the respondents- defendants will remove all their machines and devices, which will seriously affect the very right of the petitioners to bring before the Court the evidence to establish that the respondents in fact have indulged into infringement of the patent of the petitioners. Mr. Shah has taken the Court to the averments made in the application for local inspection and also pointed out that as averred in the plaint, the petitioners could get concrete information as to the use of the patent of the petitioners.
5. From the averments made in the plaint as also the averments made in the application, the Court finds that learned Judge ought to have considered issuance of ex-parte order for appointment of the local Commissioner at least to make inventory of the machineries/devices by the Commissioners which are alleged to have been used by the respondents for secretly using the components of the patent granted to the petitioners. Mr. Shah states that the petitioners are restricting their prayer for respondent Nos.1 and 12, and want the Commissioners to carry out inspection at below mentioned addresses of such respondents:
Respondent No.1:
Diyora & Bhanderi Corporation, A-302, Diamond World, Mini Bazar, Varachha Road, Page 2 of 13 HC-NIC Page 2 of 13 Created On Fri Aug 18 10:12:18 IST 2017 C/SCA/11240/2017 ORDER Surat-395010, Gujarat, India.
Respondent No.1:
Diyora & Bhanderi Corporation, DBC (Diyora & Bhanderi Corporation) House, Besides Sargam Complex, Hirabagh, Near Turavva Compound, Varachha Road, Surat-395010, Gujarat, India.
Respondent No.1:
Diyora & Bhanderi Corporation, A-204, Diamond World, Mini Bazar, Varachha Road, Surat-395010, Gujarat, India.
Respondent No.12:
Zwelex Technologies Private Limited, C-202, Diamond World, Mini Bazar, Varachha Road, Surat-395010, Gujarat, India.
6. The Court finds that considering the averments made in the plaint as also in the application, especially the averments as regards appointment of the private detectives by the petitioners who are stated to have found that the components of the patent are in use through the machines and devices by the respondents, it will be appropriate to order local inspection for the purpose of making inventory of the machines/ devices at Page 3 of 13 HC-NIC Page 3 of 13 Created On Fri Aug 18 10:12:18 IST 2017 C/SCA/11240/2017 ORDER the above premises of the respondent Nos.1 and 12 (as for them only the prayer is restricted at this stage).
7. The Court today has passed interim order in Special Civil Application No.11242 of 2017, which is filed in connection with the proceedings of the copyright suit against the respondents wherein the grievance is made about non-exercise of the powers by learned Additional District Judge for ex-parte appointment of the Commissioner for local inspection, directing the Additional District Judge to appoint four officers to work as Commissioners for local inspection at the premises of the respondent Nos.1 and 12.
8. Since the respondents in both the matters are same and the inspection restricted is also for the premises of respondent Nos.1 and 12, the same Commissioners shall carry out the inventory of the machines and devices at the above-said premises of the respondent Nos.1 and 12 and submit separate report of such inventory before this Court. The petitioners are allowed to send their experts with each Commissioner.
9. NOTICE returnable on 4th July 2017. Direct Service is permitted. The impugned order shall remain stayed.
10. The Commissioners shall produce the report before this Court before the returnable date.
2. In second petition also following order was made on 14.06.2017:
1. The petitioner has filed Copyright Suit No.2 of 2017 alleging infringement of its copyright in the software version, especially its 6th version- the Advisory Software. In the plaint, the petitioner has averred in para Nos.3 to 5 and 30 to 35 as under:-
3. In 2008, the plaintiff purchased Galatea Ltd. a Page 4 of 13 HC-NIC Page 4 of 13 Created On Fri Aug 18 10:12:18 IST 2017 C/SCA/11240/2017 ORDER company established in Israel in 2004 (hereinafter referred to as Galatea) which pioneered automated, comprehensive and accurate inclusion detection in rough diamonds through various models of its GalaxyTM system, used for different stone sizes and scanning accuracies. The GalaxyTM system machines manufactured and sold by Galatea create a highly accurate 3D map of the internal inclusions within a rough diamond using an inventive technology protected by a number of patents and patent applications worldwide. The said information output is then integrated into the plaintiffs planning products, which take rough diamond planning to an entirely new and unmatched level.
4. The plaintiffs planning products incorporate the AdvisorTM software which is the worlds most widely used rough gemstone planning software. The said software integrates internal inclusion scanning information and geometrical 3D analysis, and provides multiple planning solutions. In other words, the objective of the said AdvisorTM software is to generate an optimal planning and polishing plan so that the maximum value can be derived from the rough stone.
An image of a rough diamond which has been mapped using Galateas GalaxyTM system, an image of the corresponding 3D model of the diamond generated by such mapping, and an image of the same 3D model with a finished diamond planned therein using the AdvisorTM software, are being placed on record.
5. It is pertinent to state here that since computer programs (software) are recognized as literary works in both the USA under the USA Copyright Act of 1976 and Title 17 of the United Stated Code (hereinafter collectively referred to as the US Copyright Laws), and Israel under the Israeli Copyright Act of 5766-2008 (hereinafter referred to as the Israeli Copyright Laws), the plaintiff has a validly subsisting copyright in the Page 5 of 13 HC-NIC Page 5 of 13 Created On Fri Aug 18 10:12:18 IST 2017 C/SCA/11240/2017 ORDER said AdvisorTM software in both Israel as well as the USA. Both countries require, for the purpose of copyright protection, that a work such as a computer program be (i) original, and (ii) fixed in any tangible medium or expression, from which it can be communicated, either directly or with the aid of a machine or a device. Neither the US Copyright Laws nor the Israeli Copyright Laws require the registration of a work in any form, or with any party, as a condition for protection. Further, in Israel, registration is neither required nor possible. As fro the USA, while registration with the United States Copyright Office is possible, it is not a condition for copyright protection, and is rather beneficial for litigation purposes in the USA only. An Affidavit duly sworn by Mr. David Mirchin, who is an expert on copyright laws in Israel and in the USA, explaining the aforementioned legal position in the said jurisdictions, is being duly placed on record. In any case, the plaintiff has secured a registration in the USA for the sixth version (or version 6.0) of its AdvisorTM software, bearing registration No. TX 8-252-522, the test whereof also includes programming from all previous versions. A true copy of the copyright registration certificate is being duly placed on record. However, as registration is not mandatory in either country and as also described above, the plaintiff has a valid and subsisting copyright in all versions of its AdvisorTM software, whether registered or not, under the US Copyright Laws as well as the Israeli Copyright Laws, and consequently, the plaintiff also has the exclusive right to use and offer for sale the said AdvisorTM software. Further, the fact that the test of the sixth version (or version 6.0) of the AdvisorTM software, bearing registration No. TX 8-252-522, also includes programming from all previous versions, the plaintiff therefore also has a registered copyright in all previous versions of the AdvisorTM software.
30. The Defendants being fully aware of the reputation that the Plaintiff has in the Indian market, especially in Page 6 of 13 HC-NIC Page 6 of 13 Created On Fri Aug 18 10:12:18 IST 2017 C/SCA/11240/2017 ORDER Surat, in relation to the Plaintiffs machines / products and having full knowledge of the copyright held by the Plaintiff, have willfully and deliberately infringed the copyright of the Plaintiff by hacking into / developing a pirated version of the copyrighted AdvisorTM software (all versions), and provide inclusion scanning services to third parties by infringing / using such pirated software. The Plaintiff reserves its right to subsequently seek appropriate relief against the Defendants as well as the customers of the Defendants to whom the inclusion scanning services have been rendered to or for whose benefit the Defendants have developed the infringing / pirated software.
31. The Plaintiff has recently learnt from reliable sources that the Defendants herein have , unlawfully and in utter disregard and violation of the provisions of the Act, developed a pirated version of the AdvisorTM software and are offering inclusion scanning services to third parties, using such infringing software, which directly infringes the suit copyright, as set out in more detail hereinafter. It is pertinent to mention here with in the past whenever the Plaintiff sought to initiate any action against the Defendants, the Defendants were successful in removing the infringing products from their premises, and the Plaintiff therefore could not reach the stage in order to enable it to file the present suit.
32. Further, the Plaintiff has also recently learnt from reliable sources that the Defendants herein not only provide inclusion scanning services to third parties by using the infringing / pirated versions of the AdvisorTM software but also camouflage their inclusion scanning service reports to look deceptively similar to the Quality Check files generated by the Plaintiffs AdvisorTM software.
33. In order to verify the above information which was Page 7 of 13 HC-NIC Page 7 of 13 Created On Fri Aug 18 10:12:18 IST 2017 C/SCA/11240/2017 ORDER otherwise available with the Plaintiff, the Plaintiff, through a private investigator, submitted ten rough diamonds for scanning with Defendant No.1, in order to identify and locate the inclusions contained in such stones. The Defendant No.1 provided the data output after carrying out the scanning services on the stones on both a flash drive (disk-on-key) and via the Defendant No.1s website for which a link, user name and password was provided by Defendant No.1. The date output received was then analyzed by the Plaintiff to determine whether or not a case of infringement is made out. The result of the analysis clearly proves beyond doubt that the software used to generate the data output is a product of infringement of the AdvisorTM software. It also shows that the machines used for scanning are products of infringement of the GalaxyTM system machines, for which the Plaintiff, together with Galatea, is filing a separate action before the Honble Court. It is absolutely clear from this analysis that the data output provided by the Defendant No.1 was based on and copied from the original GalaxyTM software code as well as the AdvisorTM software code and even further that such code was manipulated and modified by the Defendant No.1 to show items differently from the original coding.
34. Five of the original diamonds, the original flash drive containing the data output as shared by the Defendant No.1 and the analysis of the said data output undertaken by the Plaintiff in the form of an affidavit, are being placed on record in a separate note in a sealed envelope before this Honble Court as prima facie proof of the infringing activities being carried out by the Defendants. The prima faice proof of the said infringement is being filed in a separate note in a sealed envelope as the details contained therein cannot be made publicly available, being trade secrets of the Plaintiff. The Plaintiff reserves its right to file a separate application to seek directions from this Honble Court to Page 8 of 13 HC-NIC Page 8 of 13 Created On Fri Aug 18 10:12:18 IST 2017 C/SCA/11240/2017 ORDER keep the same in a sealed cover and not disclose the contents of the same to the Defendants and / or public at large as the contents contain the trade secrets of the Plaintiff and is the proprietary information of the Plaintiff. Additionally, print outs of the data output shared by the Defendant No.1 are also being placed before this Honble Court.
35. Further, a true copy of the private investigators report, compiling all the findings of the investigation, is being placed on record before this Honble Court along with an Affidavit in support of the said report and the aforementioned documents, which are the prima facie proof of the said infringement.
2. With the suit, the petitioner applied for appointment of Commissioner under Order-XXVI Rule 9 read with Order-XXXIX Rule-7 of the Code of Civil Procedure, 1908 (the Code). It appears that since the petitioner wanted to carry out the work of commission at different addresses of each of the defendants, it had filed more than one application for each of the defendants giving particulars of their different addresses, otherwise common prayer is for local inspection. The grievance made in the present petition is that learned Additional District Judge, Surat has ordered to fix the hearing and to issue notice to the other side without considering the question as to whether ex-parte order for appointment of Commissioner was required.
3. Learned senior advocate Mr. Mehul Shah appearing with learned advocate Mr. Rana for the petitioner submitted that the petitioner has come with a strong case of infringement of its copyright and the defendants are alleged to have indulged into piracy of copyright of the petitioner and if there is no ex-parte order made for inspection by the Commissioner, the respondents- defendants will remove all infringed products and articles, which will seriously prejudice the very right of the petitioner to bring before the Court the evidence to establish Page 9 of 13 HC-NIC Page 9 of 13 Created On Fri Aug 18 10:12:18 IST 2017 C/SCA/11240/2017 ORDER that the respondents in fact have indulged into infringement of copyright of the petitioner by use of pirated software version of the petitioner. Mr. Shah has taken the Court to the averments made in the application for appointment of Commissioner and also pointed out that as averred in the plaint, the petitioner could get concrete information as to the use of the pirated version of the software belonging to the petitioner by the respondents.
4. Mr. Shah at this stage states that before this Court, the petitioner would like to restrict its prayers for inspection by the Commissioner only at the premises of the respondent No.1 and respondent No.12 as they are the main parties who have indulged into pirating the software of the petitioner.
5. The Court finds that in the ordinary circumstances, before making order for local inspection, the Court would issue notice to the defendants and then decide whether to order for local inspection or not. But, when there is a case put up requiring surprise local inspection to ensure that the purpose in the context of subject matter of the suit is served, the Court is empowered to pass ex-parte order for local inspection. In the present case, local inspection is asked for not only under Order- XXVI Rule-9 but also under Order-XXXIX Rule-7 of the Code. Learned Judge has issued notice to the other side and fixed the hearing without giving any returnable date. The Court finds that in the facts of the case, appointment of the Commissioner is called for. The addresses of three different premises of respondent No.1 and one premises of respondent No.12, as the petitioner at this stage restricted the prayer for local inspection only for the above-said premises of respondent Nos.1 and 12, are as under:-
Respondent No.1:Page 10 of 13
HC-NIC Page 10 of 13 Created On Fri Aug 18 10:12:18 IST 2017 C/SCA/11240/2017 ORDER Diyora & Bhanderi Corporation, A-302, Diamond World, Mini Bazar, Varachha Road, Surat-395010, Gujarat, India.
Respondent No.1:
Diyora & Bhanderi Corporation, DBC (Diyora & Bhanderi Corporation) House, Besides Sargam Complex, Hirabagh, Near Turavva Compound, Varachha Road, Surat-395010, Gujarat, India.
Respondent No.1:
Diyora & Bhanderi Corporation, A-204, Diamond World, Mini Bazar, Varachha Road, Surat-395010, Gujarat, India.
Respondent No.12:
Zwelex Technologies Private Limited, C-202, Diamond World, Mini Bazar, Varachha Road, Surat-395010, Gujarat, India.
6. In view of the above, learned Additional District Judge, Surat before whom the copyright suit filed by the petitioner is pending is directed to immediately appoint four officers to work Page 11 of 13 HC-NIC Page 11 of 13 Created On Fri Aug 18 10:12:18 IST 2017 C/SCA/11240/2017 ORDER as Commissioners. It will be open to the petitioner to send its experts with each Commissioner. For such purpose, the petitioner shall provide the names of its experts. The Commissioners shall inspect the computer systems of the respondent Nos.1 and 12 at the above-said premises, in particular with regard to alleged pirated software of the petitioner. The Commissioners shall also inspect hard disks of the computers and Compact Disks and other connected equipments, if found at the above-said premises of respondent Nos.1 and 12, and shall make inventory thereof. It will be open to the Commissioners to take help of the experts while making the inspection. The Commissioners on completion of the inspection at the above-said premises shall make report and submit it to this Court. It will be open to the Commissioners to takeout prints of the image from the computers during inspection or the particulars of the contents of the alleged pirated software. If such prints are taken out, reference thereof shall be made in the report. The respondent Nos.1 and 12 shall cooperate with the Commissioners in carrying out the inspection as per this order.
7. NOTICE returnable on 4th July 2017. Direct Service is permitted. The impugned order made by the Court below shall remain stayed.
8. The Commissioners shall produce the report before this Court before the returnable date.
9. At this stage, the petitioner shall initially deposit Rs.50,000/- towards the cost of the Commissioners before the Court below and thereafter, as and when the cost, to be paid to the Commissioner, is finally decided, if the petitioner is required to deposit more amount, then the petitioner shall so deposit the same within the time limit as may be ordered by the Court.
Page 12 of 13HC-NIC Page 12 of 13 Created On Fri Aug 18 10:12:18 IST 2017 C/SCA/11240/2017 ORDER
3. Pursuant to the above said orders, the Commissioners carried out the work of commission and have sent their reports in sealed cover.
4. Learned advocates appearing for both the parties state that now since the work of commission was carried out pursuant to the orders made by this Court and the Commissioners have also sent their reports in sealed cover, no further order is required to be made in both the petitions and the Court may dispose of the petitions and send the reports of the Commissioners which are in the sealed cover to the trial Court for considering the same in accordance with law.
5. In view of the above, both the petitions are disposed of. Registery shall send back the reports of the Commissioners in sealed covers to the trial Court for consideration of the trial Court in accordance with law. On receipt of the said reports by the trial Court, both the parties shall be made available the copies thereof.
(C.L.SONI, J.) Gupta* Page 13 of 13 HC-NIC Page 13 of 13 Created On Fri Aug 18 10:12:18 IST 2017