Delhi High Court - Orders
Dassault Systemes & Anr vs Acd Communications Private Limited & ... on 12 April, 2023
Author: C.Hari Shankar
Bench: C.Hari Shankar
$~38(Original)
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ CS(COMM) 183/2023, I.A. 6125/2023, I.A. 6126/023, I.A.
6127/2023
DASSAULT SYSTEMES & ANR. ..... Plaintiff
Through: Mr. Pravin Anand, Mr.
Shantanu Sahay and Mr. Apoorv Bansal,
Advs.
versus
ACD COMMUNICATIONS PRIVATE LIMITED & ANR.
..... Defendants
Through:
CORAM:
HON'BLE MR. JUSTICE C.HARI SHANKAR
ORDER
% 12.04.2023 I.A. 6126/2023/2023 (under Order XI Rule 1(4) CPC) in CS(COMM) 183/2023
1. The plaintiffs are granted permission to file additional documents, if they so choose, within a period of four weeks from today, subject to the rights of the defendants to admit or deny the said documents.
2. The application stands disposed of.
I.A. 6127/2023 in CS (COMM) 183/2023
3. Subject to the plaintiffs' filing clear copies of documents which may be dim, on which the plaintiffs seek to place reliance, within a period of four weeks from today, exemption is allowed for the present.
4. Signature Not Verified The application stands disposed of. Digitally Signed By:KAMLA RAWATCS(COMM) 183/2023 Page 1 of 10 Signing Date:17.04.2023 11:21:41CS(COMM) 183/2023
5. Issue summons.
6. Written statement, if any, be filed within a period of four weeks accompanied by an affidavit of admission/denial of documents filed by plaintiffs. Replication thereto, if any, be filed within a period of two weeks thereof accompanied by an affidavit of admission/denial of documents filed by defendants.
7. List before the Joint Registrar (Judicial) for admission/denial of documents and marking of exhibits on 6th July 2023.
I.A. 6125/2023 (under Order XXXIX Rules 1 & 2 CPC) in CS (COMM) 183/2023
8. Issue notice, returnable on 21st July 2023.
9. Response to this application, if any, be filed within a period of four weeks with advance copy to learned counsel for the plaintiffs, who may file a rejoinder thereto, if any, within two weeks thereof.
10. The plaintiffs essentially seek an injunction against the defendants for directly or indirectly using, copying, or otherwise dealing with pirated/unlicensed copies of the CST software programme, in which the plaintiffs claim copyright, or its versions or any other software programmes developed by the plaintiffs which may infringe the copyright of Plaintiff No. 1. Plaintiff no. 2 is a sister concern of M/s Dassault Systemes France and claims to have been established by the aforesaid French company to manage all its affairs with respect to the CST software in India. Plaintiff No. 1 is stated to Signature Not Verified Digitally Signed By:KAMLA RAWATCS(COMM) 183/2023 Page 2 of 10 Signing Date:17.04.2023 11:21:41 be carrying on business in India through Plaintiff No. 2.
11. The CST software is a computer aided design (CAD) software, aimed at modelling and simulating three dimensional (3D) solid products and is stated to cater to the aerospace, defence, automotive, transportation, consumer products and educational industries amongst others.
12. The CST software programme is in the nature of compact CAD and computer aided engineering (CAE) software which facilitates the development of products in a 3D environment.
13. The software programme of the plaintiff, as well as the instruction manuals relating thereto are, in the submission of plaintiffs, "literary works" entitled to copyright protection. It is stated that these software programmes were developed by the employees of the plaintiffs for use by the plaintiffs and that, by application of the "work for hire" doctrine, the copyright therein belongs to the plaintiffs, as the employer of the employees who had developed the software.
14. Plaintiff No. 1 is, therefore, according to the plaint, the copyright owner of the software programmes which are "artistic works", within the meaning of the Copyright Act, 1957.
15. The software programme in issue was, it is submitted, first published in the United States of America. The plaint further avers that India and the United States are members of the Berne Convention, the Universal Copyright Convention and the World Trade Organisation Agreement (WTO), which provide for protection of Signature Not Verified Digitally Signed By:KAMLA RAWATCS(COMM) 183/2023 Page 3 of 10 Signing Date:17.04.2023 11:21:41 copyright in India, for works which were first published in United States, as though they were first published in India, under Section 40 of the Copyright Act, 1957 (hereinafter referred to as "the Act") read with the International Copyright Order, 1999.
16. The plaint also places reliance on Section 51(a)(i) 1 of the Act, read with Sections 14 2 and 17 3 thereof. The plaint alleges that use of 1
51. When copyright infringed. - Copyright in a work shall be deemed to be infringed -
(a) when any person, without a licence granted by the owner of the copyright or the Registrar of Copyrights under this Act or in contravention of the conditions of a licence so granted or of any condition imposed by a competent authority under this Act -
(i) does anything, the exclusive right to do which is by this Act conferred upon the owner of the copyright, or
(ii) permits for profit any place to be used for the communication of the 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; or
(b) when any person -
(i) makes for sale or hire, or sells or lets for hire, or by way of trade displays or offers for sale or hire, or
(ii) distributes either for the purpose of trade or to such an extent as to affect prejudicially the owner of the copyright, or
(iii) by way of trade exhibits in public, or
(iv) imports into India, any infringing copies of the work:
Provided that nothing in sub-clause (iv) shall apply to the import of one copy of any work, for the private and domestic use of the importer. Explanation. - For the purposes of this section, the reproduction of a literary, dramatic, musical or artistic work in the form of a cinematograph film shall be deemed to be an "infringing copy.2
14. Meaning of copyright. - For the purposes of this Act, "copyright" means the exclusive right subject to the provisions of this Act, to do or authorise the doing of any of the following acts in respect of a work or any substantial part thereof, namely:-
(a) in the case of a literary, dramatic or musical work, not being a computer programme, -
(i) to reproduce the work in any material form including the storing of it in any medium by electronic means;
(ii) to issue copies of the work to the public not being copies already in circulation;
(iii) to perform the work in public, or communicate it to the public;
(iv) to make any cinematograph film or sound recording in respect of the work;
(v) to make any translation of the work;
(vi) to make any adaptation of the work;
(vii) to do, in relation to a translation or an adaptation of the work, any of
the acts specified in relation to the work in sub-clauses (i) to (vi);
(b) in the case of a computer programme, -
(i) to do any of the acts specified in clause (a);
(ii) to sell or give on commercial rental or offer for sale or for
commercial rental any copy of the computer programme:
Provided that such commercial rental does not apply in respect of computer programmes where the programme itself is not the essential object of the rental.3
17. First owner of copyright: - Subject to the provisions of this Act, the author of a work shall be the first owner of the copyright therein:
Provided that -
(c) in the case of a work made in the course of the authors employment under a contract of service or apprenticeship, to which clause (a) or clause (b) does not apply, the Signature Not Verified employer shall, in the absence of any agreement to the contrary, be the first owner of the Digitally Signed copyright therein;By:KAMLA RAWATCS(COMM) 183/2023 Page 4 of 10
Signing Date:17.04.2023 11:21:41 any pirated copy of the plaintiffs' CST software programme would amount to copyright infringement, as pirating involves, necessarily, the making of an unauthorised copy and installation of said copy in the computer system which seeks to use it. Even during the course of use of the programme, it is asserted, unauthorised temporary copies would be created on the Random Access Memory (RAM) of the computer system. The plaint places reliance, additionally, on Section 63B 4 of the Copyright Act, 1957, which makes knowing use of a pirated computer programme to be a criminal offence.
17. It is further asserted that even a violation of the End User License Agreement (EULA), granted to the user of the software programme would amount to a copyright infringement under Section 65A of the Copyright Act, 1957. Para 13 of the plaint sets out the manner in which the use of piracy takes place and reads thus:
"13. The Plaintiffs suffers incalculable damage to its intellectual property rights and business on account of various forms of piracy in its software programs. End-user piracy is the most damaging form of software piracy affecting Plaintiffs and occurs in the following manner:
a. When the number of software copies installed on the computers of an organization or a company exceed the number of copies permitted or authorized by the license agreement, commonly known as the End User License Agreement (EULA) or the Customer License and Online Services Agreement (CLOSA) held by the organization or the company; or b. When the organization avoids paying maintenance and updates its software with the latest version of the software by using illegal methods such as cracking, hacking and the like; or 4 63B. Knowing use of infringing copy of computer programme to be an offence. - Any person who knowingly makes use on a computer of an infringing copy of a computer programme shall be punishable with imprisonment for a term which shall not be less than seven days but which may extend to three years and with fine which shall not be less than fifty thousand rupees but which may extend to two lakh rupees: Provided that where the computer programme has not been used for gain or in the course of trade or business, the Court may, for adequate and special reasons to be mentioned in the judgment, not impose any sentence of Signature Not Verified Digitally Signed imprisonment and may impose a fine which may extend to fifty thousand rupees.By:KAMLA RAWATCS(COMM) 183/2023 Page 5 of 10
Signing Date:17.04.2023 11:21:41 c. When the software is installed and copied from pirated CD ROMs containing single or multiple pirated or unlicensed versions of software programs onto the computers used by an organization or a company; or d. When an unlicensed/pirated version of the software is installed using licenses generated through fake license key generators colloquially referred to as a 'keygen' to misrepresent to the serial-key security mechanism of the software that the software has been installed using a valid license key; or e. When academic or other restricted or non-retail software is acquired without a license and used for commercial purposes; or f. When advantage of upgrade offers is taken without having a legal copy of the version to be upgraded.
g. when a license holder for a limited use of a software including certain modules and 'Add-ins" covered via particular license agreement, uses in an unauthorized manner other modules and/or 'Add-ins' which are beyond the scope of the license entitlements."
18. The plaint further asserts that any customer of the plaintiffs would acquire the right to use software contained in compact disk/USBs, or any other portable or cloud storage medium, and does not acquire any title in the said software. The license, for use of the software developed by the plaintiffs, it is submitted, is provided via internet, during which process the supposed user agrees to the terms of the EULA or a Customer License and Online Service Agreement (CLOSA), prior to installing the software in the system. While installing the software and after subscribing to the aforesaid agreements, the customer is also required to specify the number of computers on which the software would be loaded/installed, and which are in concurrent use at the premises of the customer. Once the customer agrees to the terms of the EULA and the CLOSA, the plaintiffs' authorised representatives will send a licence key to the customer's registered email ID, and it is only by using the said key Signature Not Verified Digitally Signed By:KAMLA RAWATCS(COMM) 183/2023 Page 6 of 10 Signing Date:17.04.2023 11:21:41 that installation of the plaintiffs' software on the customer's system is possible.
19. Any entity, using the original licensed software of the plaintiffs, must, therefore, it is asserted, be in a position to provide evidence of payment or of proof of having procured the requisite number of genuine licenses, corresponding to the exact number of computers on which the software has been downloaded/loaded/installed and which are in concurrent use by the customer.
20. Any entity, employing the plaintiffs' software, in violation of the EULA and CLOSA is, therefore, in breach of the contractual rights of the plaintiffs as well as in breach of its intellectual property rights, subsisting in the aforesaid "CST" software.
21. Para 17 of the plaint sets out the manner in which the plaintiffs detect copyright infringement of its software and merits reproduction, thus:
"17. The security mechanisms are essentially software programs-colloquially known as "phone home" technology-built into the Plaintiffs' software, which verifies whether Plaintiffs' software is being used in accordance with the terms of the EULA and/or the CLOSA. It does so by capturing and recording very specific information about the usage of the software program by the host and the computer on which it has been installed and used. This information is then transmitted to Plaintiffs' servers which automatically crosscheck the details of the software and the computer system on which it is installed i.e. license key, software version, etc. that the software is being used with a fake or a pre- existing unique license key i.e. beyond the scope of the EULA and the CLOSA, the aforesaid mechanism logs the information as an incident report of an infringement known as an "infringement hit".
Each infringement hit accounts for the number of times the pirated/unauthorised software is used by an individual. The Plaintiffs can then check the infringement hits from a database which consolidates all the infringement hits it receives along with such corresponding data relating to the computer and the on line network the computer system is part of to identity the infringing Signature Not Verified user of the software. Once the Plaintiffs have identified the user of Digitally Signed By:KAMLA RAWATCS(COMM) 183/2023 Page 7 of 10 Signing Date:17.04.2023 11:21:41 the infringing software the Plaintiffs can then contact the infringer to curb the unauthorised use of such software and further infringement as well."
The infringement database portal used by the plaintiff is "Exalead".
22. The plaint alleges that, in June 2021, the plaintiff received information regarding the use, by the defendants, of large volumes of pirated and unauthorised versions of the CST software programme in which the plaintiff holds copyright, on its computers for business purposes. The plaintiff, thereafter, established contact with the defendants and also sent a cease and desist notice dated 24th August 2021 to which no response was received from the defendants. The The plaintiffs thereafter instituted a pre-suit mediation before DHCMCC being MP No. 453/2022. The mediation ended as "not settled".
23. The number of "infringement uses" as detected by Exalead, is stated to be about 371. The plaintiffs have also provided, in para 36 of the plaint, an exact copy of the information from the plaintiffs' Exalead database and have furnished a tabulated statement, in respect thereof, in para 36 of the plaint, disclosing the MAC address, the total instances of infringement as well as the dates when the last occasion of infringement took place. Plaintiffs' suspicion was further confirmed by the investigation, wherein, a current employee of the defendants confirmed to be using CST Software during the course of his employment.
24. The plaint further asserts that the defendants have, till date, not paid the licence fee to cover the unauthorised use of the plaintiffs' CST software and are, rather, denying infringement, despite several Signature Not Verified Digitally Signed By:KAMLA RAWATCS(COMM) 183/2023 Page 8 of 10 Signing Date:17.04.2023 11:21:41 notices having been issued by the plaintiffs to the defendants in that regard. Efforts at an amicable resolution of the issue with the defendants have also, it is asserted, proved futile.
25. It is in these circumstances that the plaintiffs have approached this Court, seeking an injunction as noted hereinabove. Para 44 of the plaint also cites various earlier orders of ad interim injunctions granted in the plaintiffs' favour.
26. Clearly, the averments in the plaint, if true, make out a case of unauthorised infringement of the copyright held by the plaintiffs in their CST software.
27. Software infringement is a serious issue, and deserves to be nipped in the bud.
28. I am convinced, therefore, that the plaintiffs have made out a case for ad interim ex-parte injunction, pending a response from the defendants.
29. Para 46 of this application set outs the prayer for ad interim injunction in the following manner:
"46. In light of the foregoing, it is respectfully prayed that this Hon'ble Court may be pleased to issue:-
a. A decree of permanent injunction restraining the 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 Plaintiffs including CST Studio Suite software and its various versions or any other software programs developed by the Plaintiffs in any manner that may amount to infringement of the Plaintiffs' copyright subsisting in its software programs and software-related documentation.Signature Not Verified Digitally Signed By:KAMLA RAWATCS(COMM) 183/2023 Page 9 of 10 Signing Date:17.04.2023 11:21:41
b. An order for delivery up to the Plaintiffs, of all the unlicensed copies of the Plaintiffs' software, and/or articles/ software, the duplicating equipment used in the copying of the Plaintiffs' software, including computers, compact disc writers, stampers, burners, "plates", hard disks, diskettes, packaging and advertising material, labels, stationery articles and all other infringing material under Section 58 of the Act; c. An order for delivery up to the Plaintiffs, of all the information of the computer systems the Defendants, have been using to run the unlicensed software program of the Plaintiff and other such information regarding the procurement of the unlicensed software program of the Plaintiff from any third-party entity if any. d. An order for a rendition of accounts of profits illegally earned by the Defendants by reason of infringement of the Plaintiffs' copyright, including conversion damages which are presently indeterminate and a decree be passed against the Defendants in the sum of the amount so ascertained;
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."
30. In view of the aforesaid observations, till the next date of hearing, there shall be an ad interim ex-parte injunction, in terms of prayers (a) and (b) in I.A. 6125/2023, reproduced hereinabove.
31. Inasmuch the present order has been passed in the absence of the defendants, the plaintiffs shall take steps to comply with the provisions of Order XXXIX Rule 3 CPC within the time stipulated in that regard.
32. Needless to say, the defendants, being unrepresented today, would be at liberty to move for the modification or vacation of this order, if it so deemed appropriate.
C.HARI SHANKAR, J Signature Not Verified APRIL 12, 2023/ar Digitally Signed By:KAMLA RAWATCS(COMM) 183/2023 Page 10 of 10 Signing Date:17.04.2023 11:21:41