Delhi District Court
Siemens Product Lifecycle Management vs Lucent Engineering Company on 3 March, 2021
Link : https://delhidistrictcourts.webex.com/meet/ddc.vc.south12
IN THE COURT OF DISTRICR JUDGE (COMMERECIAL-02)
SOUTH DISTRICT, SAKET COURT, NEW DELHI
CS (COMM) 272/19
1. SIEMENS PRODUCT LIFECYCLE MANAGEMENT
SOFTWARE INC.
At 5800 GRANITE PARKWAY, SUITS 600,
PLANO, TEXAS-75024,
UNITED STATES OF AMERICA ..... PLAINTIFF NO. 1
2. SIEMENS INDUSTRY SOFTWARE(INDIA) PVT LTD.
E-20, 1ST & 2nd FLOOR, HAUZ KHAS,
NEW DELHI-110016 ..... PLAINTIFF NO. 2
VERSUS
1. LUCENT ENGINEERING COMPANY
(THROUGH ITS DIRECTOR) ..... DEFENDANT NO. 1
2. MR. PRANAV CHAUHAN
(DIRECTOR OF DEFENDANT NO. 1) ..... DEFENDANT NO. 2
BOTH AT : INDUSTRIAL SHED NO. 7,
SUBHADRA ESTATE, SECTOR-58,
RSPL COMPOUND, BALLABGARH,
FARIDABAD-121004, HARYANA
Date of Institution : 13.08.2019
Date of arguments : 25.02.2021
Date of decision : 03.03.2021
JUDGEMENT
1. This is a suit for permanent injunction for restraining infringement of copyright, rendition of account and for damages on the ground that the defendants are using the unlicensed softwares of the plaintiffs which is causing injury to plaintiffs' interest and business. BACKGROUND FACTS
2. The case of the plaintiff, in brief is that plaintiff no. 1, Siemens Products Lifecycle Management Software (earlier known as UGS Corporation) is a company, registered under the laws of United States of America and plaintiff no. 2 is wholly owned subsidiary of plaintiff no. 1 company having its registered office at Hauz Khas, New Delhi-110016 and duly incorporated under Indian Companies Act, 1956. It is stated that plaintiff no. 1 is a leading global provider of software systems and services Siemens Product Lifecycle Management Software Inc & Anr. Vs. Lucent Engg. Co. & Anr. Page 1 in the area of managing the product lifecycle and management of industrial operations. It has sold 15 million licenses and has a client-base of 1,40,000 customers worldwide. Plaintiff No. 1 company offers wide software ranges like "concurrent simultaneous user", "node locked or Floating" and "Named User" having mandatory licence for all its products and has spent huge amount of money in developing, promoting and advertising its products all over the world. Plaintiff No. 2 being duly incorporated under the provisions of Indian Companies Act, 1956, is a subsidiary of the plaintiff No. 1 and is duly authorized by plaintiff no. 1 to license its software in India.
3. It has been averred that the plaintiff No.1 is the exclusive and rightful owner of the intellectual property in its software/products and of all confidential or proprietary, commercial, financial, marketing and/or other technical or business information or trade secrets which are used and/or accessed by assessed by any customer through the licensed softwares. Plaintiff No. 1 provides digital product development software, featuring applications like NX (formewrly known as Unigraphics) software with various versions. NX software is an integrated product design, engineering and manufacturing solution that helps its' customer to deliver better products faster and more efficiently and has various versions. NX Nastran is another premium computer-aided engineering (CAE) software which is unlicenced by the plaintiffs and is relied upon by major manufacturers worldwide.
4. It is further averred that defendants are engaged in the designing and manufacturing of services for Jigs, Fixtures, Gauges, Press Tools, Dies & SPM as well as designing and automation solution for which they require plaintiff No.1's software program NX Software. Plaintiff from reliable sources got to know that the defendants have been infringing the copyrights of plaintiff No. 1 by proving services to its clients using unlicensed aforesaid software program namely NX various versions, thereby infringing the copyrights of the plaintiff No. 1. As per information, defendants are in possession of infringing materials. Consequently, plaintiff no. 1 engaged Mr. Vincent Jose, who is a professional investigator, to enquire into the matter who reported that the defendants have a dedicated Siemens Product Lifecycle Management Software Inc & Anr. Vs. Lucent Engg. Co. & Anr. Page 2 team of 4-5 members, who for their designing purposes are applying designing and programming techniques by using plaintiff No. 1's NX software programe and its various versions which were never sold/licenced by the plaintiffs to them. Affidavit of Mr. Vincent Jose has been filed on court record with the plaint. Consequently, the present plaint has been filed thereby praying for a decree of permanent injunction restraining the defendants, their principle officers, Directors, Agents/Agencies, servants and all other acting for and on their behalf from directly or indirectly reproducing/creating/storing/installing and/or using the pirated/unlicensed softwares of the plaintiffs, including NX Software various versions, amongst others and decimating/accessing the confidential information of the plaintiffs. Alongwith the above prayer, decree for rendition of accounts of profits illegally earned by defendants and decree for damages has also been prayed for.
5. It is stated that this suit has been filed by Shri Gaurav Shankar who is authorized representative of plaintiff company and duly authorized and verified and institute the present suit vide resolution of Board of Directors of Plaintiff company on 01.03.2018 and this court has jurisdiction to entertain and try this suit by virtue of Section 62(2) Copyright Act, 1957 as plaintiff no. 2 carries on its business activities within the jurisdiction of this court having its office located at E-20, First and Second Floor, Hauz Khas, New Delhi-110016.
6. Learned counsel for the plaintiffs has prayed that a decree of permanent injunction be passed restraining the defendants, their Principal Officers, Directors, Agents/Agencies, servants and all other acting for and on their behalf from directly or indirectly reproducing/ /creating/storing/installing and/or using the pirated/unlicensed softwares of the plaintiffs, including NX Software various Versions as well as a decree of rendition of accounts of profits illegally earned by the defendants after infringing the copyright of plaintiff no.1 and a decree of payment of damages of Rs. 10 Lakh along with pendente & future interest @ 18% apart from the costs.
Siemens Product Lifecycle Management Software Inc & Anr. Vs. Lucent Engg. Co. & Anr. Page 3 RELEVANT DATES & EVENTS
7. Vide order dated 16.08.2019, Ld. Predecessor of this court had granted an exparte ad-interim relief to the plaintiffs whereby Shri Ravinder Singh Dhaka, advocate was appointed as Local Commissioner to visit the place of defendants and to carry out an inspection and during inspection, it was found by the LC that defendants were using unlicenced/pirated software i.e. NX and its various versions of the plaintiff no. 1 company, defendant shall be immediately restrained from using the said software in any form till next date of hearing. The LC was further ordered to prepare inventory and take into custody the material etc..
8. On 28.09.2019, Shri Vijay Tangri, counsel filed appearance on behalf of D-1 and D-2 and sought time to file written statement.
9. On 24.10.2019, Ld. Predecessor of this court closed right of the defendants to file written statement as no written statement was filed by D-1 and D-2 and statutory period was already over.
10. On 24.02.2020, the case was received by way of transfer by this court. On the same day, both the parties were directed to file their affidavits of admission/denial of documents within four weeks and matter was referred to Mediation for exploring possibility of settlement and the case was listed for report of mediator and first case management hearing on 16.04.2020.
11. On 01.09.2020, counsel for plaintiffs had appeared and informed that parties had failed to settle the matter in mediation. However, no one appeared from the side of the defendants. It is a matter of record that right of defendants for filing WS was closed on 24.10.2019 and no one had appeared from the side of the defendants. The following issues were framed :-
i Whether defendants have infringed copyright of the plaintiffs SIEMENS SOFTWARE NX"? OPP ii Whether plaintiffs are entitled to relief of permanent injunction? OPP iii Whether plaintiffs are entitled to rendition of accounts? OPP Siemens Product Lifecycle Management Software Inc & Anr. Vs. Lucent Engg. Co. & Anr. Page 4 Iv Whether plaintiffs are entitled to damages of Rs.10 Lakhs? OPP v Relief
12. To establish its case, plaintiffs examined its AR Shri Gaurav Shankar as PW-1 and Shri Vincent Jose as PW-2, investigator.
13. It may be noted that on 14.01.2021, when plaintiffs examined and tendered affidavits of PWs in evidence, again none appeared from the side of defendants. PE was closed and defendants were proceeded exparte and the matter was listed for final arguments. On the next date i.e. 01.02.2021, Shri Vijay Tangri, counsel for defendants had appeared and filed an application U/o IX Rule 7 CPC. The said application was allowed subject to costs of Rs.3,000/-. Counsel for defendants cross-examined PW- 1 on 01.02.2021 and PW-2 on 17.02.2021.
14. Thereafter, this court heard submissions advanced by Shri Ankur Katyal and Ms. Aashi Jain, Ld. counsels appearing for plaintiffs as well as Shri Vijay Tangri, Ld. counsel for defendants and has perused material on record. Issue-wise findings of this court are as under :-
ISSUE NO. 1Whether defendants have infringed copyright of the plaintiffs "SIEMENS SOFTWARE NX"? OPP
15. The onus to prove this issue was on the plaintiffs. Averments made in the plaint have been deposed by Shri Gaurav Shankar/PW-1. He deposed that Plaintiff No. 1 is the globally renowned company namely Siemens Product Lifecycle Management Software Inc. duly registered under the laws of USA, having its registered office at E-20, 1 st and 2nd Floor, Hauz Khas, New Delhi-110016 and duly incorporated under the Indian Companies Act, 1956. The Plaintiff No.1 is the exclusive and rightful owner of the Intellectual property in its software/products (the details of the plaintiff's software as the same have not been hereby repeated for the sake of brevity as already mentioned in the suit) and all confidential or proprietary, commercial, financial, marketing or technical or trade secrets which are used and accessed by any customer through the licensed software. It also provides the digital product development software featuring Siemens Product Lifecycle Management Software Inc & Anr. Vs. Lucent Engg. Co. & Anr. Page 5 applications like NX (formerly known as Unigraphics) software with various versions. NX Software is an integrated product design, engineering and manufacturing solution that helps its customer to deliver better products.
16. PW-1, in his deposition stated that Plaintiff No.1 has marketing arrangements with Plaintiff No. 2 for issuing end user licenses for its software in India and that Defendant No. 1 having its office at Industrial Shed No. 7, Subhadra Estate, Scetor-58, RSPL Compound, Ballabgarh, Faridabad-121004, Haryana is engaged in designing and manufacturing services for Jigs, Fixtures, Gauges, Press Tools, Dies & SPM etc. which requires the usage of Plaintiff No 1 Software. The Defendants are involved in providing services to its clients using Unlicensed software program of Plaintiff no.1 namely NX Version 10.
17. PW-1 has deposed that plaintiffs have learnt from reliable sources that defendants are in possession of infringing/unlicence software and has indeed indulged in un-authorised usage of Software of Plaintiff no. 1 namely NX Version 10, thereby infringing the Copyrights of the Plaintiff No. 1. The aforesaid unauthorised usage of the software of Plaintiff No.1 and infringement of the copyright of the Plaintiff No.1 is not possible without the active involvement of Defendants and other officials/Partners/Proprietor, who manage the affairs of the Defendants. It is also pertinent to mention that the Defendants are making huge profits on daily basis with the help of unauthorized usage of the said softwares.
18. Shri Vijay Tangri, Ld. counsel for the defendants submits that PW-1 during cross-examination insisted that their primary responsibility is protecting IPR of plaintiff no. 1. However, the facts of the affidavit of PW-1 shows that primary responsibility of plaintiff no. 2 is marketing the software licences of plaintiff no. 1. It is submitted that the investigating report presented by plaintiff no. 2 in court is flawed in the sense that the primary consideration in preparing report had been ignored as the informant and the person confirming the initial findings is the same person and that this report was presented alongwith the pleadings before this court to obtain summons Siemens Product Lifecycle Management Software Inc & Anr. Vs. Lucent Engg. Co. & Anr. Page 6 and to institute the case. It is stated that this court was misled by the plaintiff.
19. Sh. Tangri submitted that the pleadings of the plaintiff do not contain statement of truth and are liable to be rejected on this ground alone and plaintiffs have failed to provide any credible evidence in support of their claim that as the investigation report and its products are flawed and compromised and the investigation is incomplete as it does not provide details of the software on the machines of the defendants (i.e. was it partially copied; fully copied or a piece of new work as PW-1 in his cross- examination as admitted that the software in question is capable of being altered and do not have any impenetrable defence mechanism to prevent this from happening.
20. In response, Shri Ankur Katyal, Ld. counsel appearing for the petitioner, has submitted that all the pleadings are complete and AR of plaintiff being the director of compliance of plaintiff company is duty bound to protect IPR of the company which he had mentioned many times in the court as well. It is further submitted that defendants' counsel has completely ignored report of Local Commissioner which clearly establishes the fact that infringement of software was being done on five machines which is part of evidence and record submitted in the court.
21. Ld. counsel for the plaintiff has further submitted that cost of one software is about Rs.15 Lakhs and plaintiff has incurred heavy costs on litigation including fees of the Local Commissioner amounting to Rs.50,000/-. Additionally, there has been loss in business, goodwill and reputation of the plaintiff in the market. It is submitted that heavy damages alongwith punitive damages and litigation costs should be incurred on the defendants so that it acts as in deterrent for others to abide by the law. In the present case, 13 hearings have taken place, besides a fee of Rs.50,000/- had been paid by the plaintiffs to the Local Commissioner and Court fee of Rs.12,150/- was deposited by the plaintiffs. In support, Ld. counsel has relied on the decisions of the Hon'ble Delhi High Court titled as Microsoft Corporation & Anr. Vs. Ganesh Wakodoe & Ors., CS/OS Siemens Product Lifecycle Management Software Inc & Anr. Vs. Lucent Engg. Co. & Anr. Page 7 2243/2009 decided on 20.02.2013 and Adobe System Inc & Anr. Vs. P. Bhoominathan & Ors., CS/OS 2065/2003 decided on 05.03.2009.
22. Ld. counsel for the plaintiff has submitted that this suit was filed in the month of August, 2019 in the court of Ld. ADJ-02, South, Saket, New Delhi and hence all the pleadings were complete as per the CPC. It is submitted that this matter was subsequently transferred to this Commercial Court on 24th February, 2020 and that is the reason that statement of truth was not part of the pleadings.
23. Record establishes that the plaintiffs had engaged the independent investigator namely Mr. Vincent Jose who was examined by the plaintiffs as PW-2, in order to make enquiries and gather information through internet searches and telephonic interview with the officials of the defendants regarding the unauthorized usage of the said software by the defendants and their officials. It is submitted that the investigator's inquiries revealed, defendants are applying Designing and Programming Techniques by using Plaintiff No. 1's Software Programs namely NX Version 10 etc., for their designing purposes.
24. During investigation, it was revealed on 30.07.2019 from Shri Shahnavaz (Deputy General Manager of defendant No. 1) that defendants have a dedicated designing team of 3-4 members, having 'NX' software programs and its various versions installed and used by the designers. The investigator clearly stated that the defendants do not have the license for the said software and knowingly violating the plaintiff no. 1's copyright through their computer systems and consequently, resulting in the infringement. Ld. counsel has further submitted that the plaintiffs in past as well after investigator's report have continuously informed the defendants telephonically and requested to immediately to stop the pirated versions of the software but defendants ignored the same issue by continuously using the unauthorized/unlicensed software of plaintiff No.1.
25. Vide order dated 16.09.2019, the Ld. Predecessor of this court by an exparte order restrained the defendants, its employees, agents, servants etc. from using the Plaintiff's unlicensed software. It is a matter of Siemens Product Lifecycle Management Software Inc & Anr. Vs. Lucent Engg. Co. & Anr. Page 8 record that on the said date i.e. 22.08.2019, the Local Commissioner namely Sh. Ravinder Singh Dakha, Advocate, was appointed who visited the premises of the defendants and located five systems, pirated/unlicensed software and filed report dated 28.08.2019 alongwith the inventory/detail of the identified computers as S-1 to S-5 and thereafter those systems specified in the report had been handed over duly sealed to Shri Pranav Chauhan/D-2, stated to be Proprietor of Lucent Engineering Company on the day of seizure i.e. 22.08.2019.
26. PW-1, Shri Gaurav Shankar has proved the averments of the plaint and there is nothing in his cross-examination to impeach this varsity or to rebut his testimony. This court finds no merits in the contentions of learned counsel appearing for the defendants and is in agreement with the submissions advanced by the leaned counsel for the plaintiff and learned counsel for the defendant has totally forgotten and ignored the specific evidence collected against the defendant by the local commissioner.
27. On asking, during cross-examination, PW-1 deposed that was is working as Director of plaintiff company and his role in the organization was to protect and defend the intellectual property rights of the organization vested within the copyright software belonging to plaintiff company. PW-1 further deposed that plaintiff company was a subsidiary company of M/s Siemens, details of which is mentioned in the plaint. During cross- examination, PW-1 has further deposed that the revenue generated by the subsidiary including plaintiff company were reported to the parent company and that the revenue generated by the plaintiff company by way of selling software products, hardware and services. PW-1 has further deposed that plaintiffs follow direct and indirect models of marketing of their products and. On asking by Ld. counsel for defendants, PW-1 explained that they had not dictated anything to the Local Commissioner as he was not under control and that he was independent officer of the court.
28. During cross-examination, PW-1 further deposed that there were multiple ways in which they took action to protect and defend out IP rights which includes independent third party' auditors' appointment to audit Siemens Product Lifecycle Management Software Inc & Anr. Vs. Lucent Engg. Co. & Anr. Page 9 bonafide customers by ensuring the software licence by such customers were being used in-conformane and user licence agreement. PW-1 testified that they also approach companies using pirated or unlicenced software to resolve the issue by offering them to become legitimate licencee.
29. During cross-examination, PW-1 testified that Legitimate software of their company are not freely available on the Internet. PW-1 has voluntarily deposed that there might be pirated software. In his deposition, PW-1 further stated that there were securities mechanism which were inbuilt into the software to ensure the software was not mis-used. However, there was a possibility that they may not receive triggers, alerts in all cases of piracy if the source code of the software was altered.
30. There is no dispute that the software programmes as developed and marketed by the plaintiffs are a 'Computer Programme' within the meaning of Section-2(ffc) of the Copyright Act, 1957 and also included in the definition of literary work as per Section-2(o) of the Copyright Act, 1957 respectively stated as in the Act. Relevant provisions are as under
Section-2(ffc):- "computer programme" means a set of instructions expressed in word, codes, schemes or in any other form, including a machine readable medium, capable of causing a computer to perform a particular result.
Section-2(o):-"literary work" includes computer programmes, tables and compilations including computer databases.
Section 51 and Section 62(2) of Copyright Act read as under :-
Section-51: a. "When any person, without a license granted by the owner of the copyright or the Registrar of Copyrights under this Act or in contravention of the conditions of a license so granted or of any condition imposed by a competent authority under this Act- Does anything, the exclusive right to do which is by act conferred upon the owner of the copyright, or permits for profit any place to be used for the communication of the Siemens Product Lifecycle Management Software Inc & Anr. Vs. Lucent Engg. Co. & Anr. Page 10 work to the public where such communication constitutes an infringement of the copyright in the work, unless he was not aware and had no reasonable ground for believing that such communication to the public would be an infringement of copyright."
Section-62(2): 1.For the purpose of sub section (1), a district court having jurisdiction" shall notwithstanding anything contained in the CPC,1908, or any other law for the time being in force, include a district court within the local limits of which jurisdiction, at the time of the institution of the suit or other proceeding, the person instituting the suit or other proceeding, where there are more than one such persons, any of them actually and voluntarily resides or carries on business or personally works for gains.
31. Perusal of material on record establishes that defendants have indulged in infringement of plaintiff's software thus attracting Section-51 and Section-62(2) of the Copyright Act,1957 to entertain and try the present suit as Plaintiff No. 2 carries on the business activities within the jurisdiction of the Court through its office located E-20, 1 st and 2nd Floor, Hauz Khas, New Delhi-110016.
32. This court is satisfied that the software programmes as developed and marketed by the plaintiffs are a 'computer programme' within the meaning of Section 2(ffc) of the Copyright Act, 1957 and also included in the definition of a literary work as per Section 2(o) of the Copyright Act, 1957. The plaintiffs' work is also protected in India under Section 40 of the Copyright Act, 1957 read with the International Copyright Order 1999 as the rights of authors of member countries of the Berne and Universal Copyright Conventions are protected under Indian Copyright law. India and the USA are signatories to both the Universal Copyright Convention as well as the Berne Convention.
33. Having heard learned counsel for the plaintiffs and perused the documentary and testimonial evidence placed on record, this Court is of Siemens Product Lifecycle Management Software Inc & Anr. Vs. Lucent Engg. Co. & Anr. Page 11 the opinion that plaintiffs have in fact proved the facts stated in the plaint and have also exhibited the relevant documents in support of their case. Since the plaintiffs' evidence has gone unrebutted, said evidence is accepted as true and correct. Therefore, this court is satisfied that plaintiff has established the fact that defendants have infringed their copyright "SIEMENS SOFTWARE NX". This issue is accordingly, decided in favour of the plaintiffs and against the defendants.
ISSUE NO. 234. In view of the findings on the aforesaid issue in favour of the plaintiffs, and the fact that there is nothing on record to show as to why the reliefs sought by the plaintiffs should not be granted, this court holds that plaintiffs are entitled to relief of permanent injunction. This issue is accordingly, decided in favour of the plaintiffs and against the defendants.
ISSUE NO. 3 & 435. Issue Nos. 3 and 4 are whether plaintiffs are entitled to rendition of accounts and/or Whether plaintiffs are entitled to damages of Rs.10 Lakhs, as prayed. The onus to establish this issue is on the plaintiffs. There is no dispute that before award of damages it is not necessary that the plaintiff must show some particular benefit has accrued to the defendant or that the plaintiff must satisfy the Court by leading evidence that it has suffered actual loss.
36. Sh. Katyal Learned counsel for the plaintiffs referred Microsoft Corporation & Anr. Vs. Mr. Ganesh Wakode & Ors. CS(OS) 2243/ 2009 wherein the factors underlying grant of punitive damages were discussed and it was observed that the award of punitive damages serves the additional purpose of limiting the defendant's ability to profit from its fraud by escaping detection and (private) prosecution. If a tortfeasor is "caught" only half the time he commits torts, then when he is caught, he should be punished twice as heavily in order to make up for the times he gets away.
37. The plaintiff also relied upon Adobe Systems Inc. & Anr. Vs. Mr. P. Bhoominathan & Anr., 2009 (39) PTC 658 (Del.) where the court in a similar software piracy matter has passed a decree of Rs.5,00,000/- by way of Siemens Product Lifecycle Management Software Inc & Anr. Vs. Lucent Engg. Co. & Anr. Page 12 compensatory damages as well as a sum of Rs.5,00,000/- on account of punitive/exemplary damages in favour of the plaintiff and against the defendant. The court also granted costs to the plaintiff in the said case.
38. On asking, counsel for the plaintiffs submitted that minimum cost of one software is about Rs.15 Lakhs and plaintiff has incurred heavy costs on litigation including fees of the Local Commissioner amounting to Rs.50,000/-and there has been loss in business, goodwill and reputation of the plaintiff in the market. It is urged that in response to a proposal, the value of this software NX CAM-only 5 AXIS Machining and NX CAD/CAM 3 AXIS Machining Foundation i.e. having product code NX 12460 and 12450, details of which was furnished, is Rs.21,11,000/- and if GST of 18% is added amounting to Rs.3,79,980/-, the total cost of one software would be Rs.24,90,980/- and value varies as per the variant. In the present case 5 pirated softwares were being used by the defendants.
39. In this context, report of the Local Commissioner Shri Ravinder Singh Dhaka who had visited the premises of the defendants on 22.08.2019 showed that in five systems, pirated/unlicenced software had been found. Details of those computers S-1 to S-5 is on record. Para 6 of the report dated 28.08.2019 shows that Shri Pranav Chauhan, proprietor of D-1 was asked to join the inspection but he remained confined to his room stating that he had licence of the software and he was not aware about the said software of the plaintiffs. Defendants had not shown or placed on record any such licence, obtained from the plaintiff and the report shows that crack software of plaintiffs i.e. NX was found being used by the defendants. There is no dispute and it is the case of anybody that the software developed by the plaintiffs has a market price and a cost and by using pirated and unlicenced software, defendants are causing monetary loss to the plaintiffs.
40. Our High Court in Disney Enterprises, Inc. Vs. Mr. Rajesh Bharti & Ors., CS (OS) 1878/2009 decided on 13th February, 2013 has held as under:-
Siemens Product Lifecycle Management Software Inc & Anr. Vs. Lucent Engg. Co. & Anr. Page 13 "16. Further, this Court in Microsoft Corporation Vs. Rajendra Pawar & Anr., CS(OS) 530/2003 decided on 27th July, 2007 has held "Perhaps it has now become a trend of sorts, especially in matters pertaining to passing off, for the defending party to evade court proceedings in a systematic attempt to jettison the relief sought by the plaintiff. Such flagrancy of the defendant ‟s conduct is strictly deprecatory, and those who recklessly indulge in such shenanigans must do so at their peril, for 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 tasks such erring parties whilst 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 in equity. It is here that the concept of awarding punitive damages comes into perspective."
41. In Microsoft Corporation Vs. Ms. K. Mayuri & Ors., 2007 (35) PTC 415 Del., Hon'ble High Court has held that "The practice of grant of exemplary damages needs to be strengthened particularly in those cases where flagrant infringement is found. Such an exercise of power is not to be fettered by any requirement that the plaintiff must show some particular benefit which has accrued to the defendant or that the plaintiff must satisfy the court by leading evidence that he has suffered actual loss. In a case where the plaintiff proves such actual loss, he would be entitled to the same. However, even without such a proof, in case of flagrant infringement, the court has the complete discretion to make such award of damages as may seem appropriate to the circumstances, so that it acts as deterrent. In some cases, it is not possible to prove the actual damages, namely, that there is a normal rate of profit or that there is a normal or establish licensed royalty. Yet, clearly, the damages have to be assessed."
Siemens Product Lifecycle Management Software Inc & Anr. Vs. Lucent Engg. Co. & Anr. Page 14
42. In Disney Enterprises Inc. & Anr. Vs. Harakchand Keniya & Ors., CS (OS) 1254/2007 decided on 24th October, 2011 wherein the defendants were engaged in selling the counterfeit party hats and other party decoration products bearing the DISNEY characters, this Court while stating that the plaintiffs are the proprietor of the trademark in question and the said trademarks have been infringed by the defendants, awarded damages to the tune of Rs. 2,00,000/- against the defendants.
43. In fact, punitive damages have the effect of deterring not only the defendant from repeating the offence, but also deterring others from committing the same, preserving peace, inducing private law enforcement; compensating victims for otherwise uncompensable loss and payment of the plaintiff‟s counsel fees. In Time Incorporated Vs. Lokesh Srivastava & Anr., 2005 (30) PTC 3 (Del.) while awarding punitive damages of Rs. 5 lakhs in addition to compensatory damages also of Rs. 5 lakhs, Justice R.C. Chopra observed that "time has come when the Courts dealing in actions for infringement of trademarks, copy rights, patents etc., should not only grant compensatory damages but also award punitive damages with a view to discourage and dishearten law breakers who indulge in violation with impunity out of lust for money, so that they realise that in case they are caught, they would be liable not only to reimburse the aggrieved party but would be liable to pay punitive damages also, which may spell financial disaster for them." In the said case the court held that the defendants‟ magazine which used the Hindi translation of the word "Time ‟ with the distinctive red border, was a slavish imitation of the plaintiffs' trademark and held the defendants are liable for infringement." It was held that punitive damages should be really punitive and not flee bite and quantum thereof should depend upon the flagrancy of infringement.
44. This court finds that In the present factual situation, no further rendition of account is required or would serve any purpose and that plaintiffs are required to be compensated by the defendants in these circumstances for using unlicenced and pirated software, owned by the plaintiffs. In view of the aforenoted analysis and discussions, this court Siemens Product Lifecycle Management Software Inc & Anr. Vs. Lucent Engg. Co. & Anr. Page 15 holds that plaintiffs are entitled to compensatory damages of Rs.5,00,000/- and punitive damages of Rs.5,00,000/- respectively. These issues are decided accordingly in favour of plaintiffs and against the defendants. RELIEF
45. In the result, having regard to the totality of aforenoted facts and findings on the aforesaid issues, a decree of permanent injunction is hereby passed restraining the defendants, their principal officers, directors, agents, franchisees, servants and all other acting for and on their behalf from directly or indirectly reproducing/storing/installing and/or using pirated/unlicensed software programmes of the plaintiffs, including NX software, various versions and assessing the confidential information of the plaintiffs comprised in the aforementioned software and plaintiffs are also held entitled to compensatory damages of Rs.5,00,000/- and punitive damages of Rs.5,00,000/- respectively. Plaintiffs are also held entitled to the costs of the suit which is assessed as Rs.1,92,150/-. Defendant shall pay the aforesaid total amount of Rs,11,92,150/- to the plaintiffs within 4 weeks from today failing which Plaintiffs shall also be entitle to interest @ 12 % per annum on the aforesaid amount from the date of this order till its realization. Decree sheet be prepared accordingly.
46. With the aforesaid observations, present suit stands disposed of. File be consigned to record room.
(Dictated and announced today i.e. on 03.03.2021) (VINAY KUMAR KHANNA) District Judge (Commercial Court-02) South Distt., Saket, New Delhi/03.03.2021 Siemens Product Lifecycle Management Software Inc & Anr. Vs. Lucent Engg. Co. & Anr. Page 16