Delhi High Court - Orders
The Foundry Visionmongers Limited vs Resonance Digital Llp & Anr on 14 July, 2021
Author: Sanjeev Narula
Bench: Sanjeev Narula
$~17
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ CS(COMM) 323/2021
THE FOUNDRY VISIONMONGERS LIMITED ..... Plaintiff
Through: Mr. Pravin Anand, Mr. Shantanu
Sahay, Mr. Rohan Sharma and Mr.
Apoorv Bansal, Advocates.
versus
RESONANCE DIGITAL LLP & ANR. ..... Defendants
Through: Mr. Faisal Sherwani, Mr. Shikher
Deep Aggarwal & Mr. Areeb Ahmad,
Advocates.
CORAM:
HON'BLE MR. JUSTICE SANJEEV NARULA
ORDER
% 14.07.2021 [VIA VIDEO CONFERENCING]
I.A. 8158/2021 (u/O XI Rule 1 (4) r/w Section 151 of the CPC, 1908 for filing additional documents)
1. This is an application seeking leave to file additional documents under the Commercial Courts Act, 2015.
2. The Plaintiff, if they wish to file additional documents at a later stage, shall do so strictly as per the provisions of the said Act.
3. Accordingly, the application stands disposed of.
I.A. 8159/2021 (exemption from filing Court fees and one-time process fees) CS(COMM) 323/2021 Page 1 of 9
4. The present application under Section 149 r/w Section 151 of the Code of Civil Procedure, 1908 (in short 'CPC') on behalf of the Plaintiff seeks exemption in filing the Court fees and one-time process fees.
5. The application is allowed, subject to the Plaintiff filing court fees and one time process fees, within a period of one week from today.
6. The application stands disposed of.
I.A. 8160/2021 (for exemption from filing originals, certified copies, clearer copies, translated copies, left side margins, affirmed affidavits, electronic documents etc.)
7. The application is allowed, subject to just exceptions.
8. The Plaintiff shall file the originals copies of documents, which are in their possession, within two weeks from today.
9. The Plaintiff shall file legible copies of any document which is dim/illegible/has improper margins, on which they may seek to place reliance, at least one week prior to the next date of hearing.
10. The application stands disposed of.
CS(COMM) 323/2021
11. Let the plaint be registered as a suit.
12. Issue summons. Mr. Faisal Sherwani, learned counsel appearing on CS(COMM) 323/2021 Page 2 of 9 advance summons on behalf of the Defendants, accepts summons. Written statements be filed by the Defendants within 30 days from today. Along with the written statements, the Defendants shall also file an affidavit of admission/denial of the documents of the Plaintiff, without which the written statements shall not be taken on record.
13. Liberty is given to the Plaintiff to file a replication within 15 days of the receipt of written statement. Along with the replication, if any, filed by the Plaintiff, an affidavit of admission/denial of documents of the Defendants be filed by the Plaintiff, without which the replication 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 these timelines.
14. List before the Joint Registrar for marking of exhibits on 21st September, 2021. It is made clear that any party unjustifiably denying documents would be liable to be burdened with costs.
15. List before Court on 11th November, 2021 for framing of issues thereafter.
I.A. 8157/2021 (u/O. 39 Rules 1 and 2 r/w Section 151 of the Code of Civil Procedure, 1908)
16. This application seeking temporary injunction under Order XXXIX Rules 1 and 2 of CPC is accompanying the suit filed for permanent injunction and restraining of the infringement of copyright, delivery-up, rendition of accounts of profits, damages etc. against the Defendants, who CS(COMM) 323/2021 Page 3 of 9 are using unauthorized/pirated version of the Plaintiff's software programs- NUKE and NUKE X.
17. 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. 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, 1957 in respect of the aforesaid software.
18. 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 (in short '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 CS(COMM) 323/2021 Page 4 of 9 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 whether the Plaintiff's software is being used in accordance with the terms of the EULA.
19. 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 42 of the plaint, wherein the instances of infringements have been recorded. There are a total of 3053 infringement hits generated against the Defendants. He further submits that the said infringement hits link to the MAC and IP addresses 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.
20. Mr. Faisal Sherwani, counsel for the Defendants who appears on advance notice, submits that the Defendants have had a cordial business relationship with the Plaintiff over the last four years. The Defendants had, in fact, purchased at least five licenses for the software programmes from the Plaintiff, although the specifics of such software(s) licensed to the Defendants is not readily available. He further submits that the said five CS(COMM) 323/2021 Page 5 of 9 licenses were due for renewal, however, on account of the COVID-19 pandemic and the resultant lockdown restrictions, the meetings between the parties could not take place and hence, those licenses were not renewed. He submits that nevertheless, the Defendants are keen to renew the licenses expeditiously and are willing to make the requisite payments for renewal. He further submits that as per his instructions, the software in question is installed on not more than five machines. Mr. Sherwani states that the Defendants have no objection in case their premises are inspected by a Local Commissioner to verify whether any software is being used by the Defendants without license or prior authorization from the Plaintiff. In case any machine is found to contain an unauthorised/pirated version, the Defendants would, without prejudice to their rights and contentions, be willing to negotiate with the Plaintiff for the purchase of licence of the software.
21. Mr. Anand, in response, is agreeable for the appointment of a Local Commissioner. He submits that this exercise would in fact assist in unearthing the use of the unlicensed/unauthorised software by the Defendants.
22. In view of 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 it in case an ex-parte ad-interim injunction is not granted. Accordingly, taking the statement of Mr. Sherwani on record and binding the Defendants to the same, it is directed that, till the next date of hearing, the Defendants, their CS(COMM) 323/2021 Page 6 of 9 principal officers, directors, agents, franchisees, servants and all others persons acting for and on their behalf, are restrained from directly or indirectly using, for any kind of computer related activities or otherwise in any other manner, any pirated/unlicensed/unauthorised software program of the Plaintiff or reproducing and distributing any pirated/ unlicensed/ unauthorized software of the Plaintiff, in contravention of the terms of the EULA, or infringing in any other manner or causing or enabling or assisting others to infringe the copyrights of the Plaintiff's software including NUKE and NUKE X.
23. In light of the submissions of the Defendants that they do to not have installed on their computers any unauthorised software of the Plaintiff's, it is deemed appropriate to appoint, Ms. Shreya Mathur, Advocate [Contact No:
8527080105] as a Local Commissioner, who is directed to visit the premises of the Defendant - 'Resonance Digital LLP' located at Office No. 802, F Wing, Lotus Corporate Park, Western Expressway Highway, Goregaon East, Mumbai City, MH- 400063, to inspect the computers (including desktops, laptops and tablets) owned/installed/used by the Defendants, including its partners/employees/associates/retainers or other staff members, for the purpose of verifying if any unauthorised/unlicensed software programmes of the Plaintiff have been loaded/installed on the said machines. The Defendants are to ensure that all computers used in its business or by its partners/employees/associates/retainers or other staff members, are available on its premises on the day of the visit of the Local Commissioner. The Local Commissioner, shall visit the office of the Defendants along with a technical expert of the Plaintiff company and with the help of such technical expert, CS(COMM) 323/2021 Page 7 of 9 make an inventory of the number of computers where these softwares are found to be used. They shall prepare mirror images of the hard discs of the computers on which the infringing/unauthorised software is found, and immediately thereafter, the mirror image shall be sealed by the Local Commissioner with her seal/signatures. The Local Commissioner shall deposit the hard disc containing the mirror images, along with a report specifying the details of the machines and unauthorised/infringing software, to the court. The technical expert shall carry all the equipment with him for preparing mirror images. He may keep with him one assistant, if so required. A responsible officer of the Plaintiff, who shall take personal liability to suffer consequences in case the affidavit is found false, shall file an affidavit about the infringements, giving technical details of pirated/infringing software(s). Counsel of both the parties, as well as authorised representatives/technical experts of the parties, shall be permitted to accompany the Local Commissioner, or be present at the time of execution of the commission. Both the parties shall render complete assistance to the Local Commissioner for the purpose of carrying out the inspection. The Local Commissioner shall be entitled to take photographs/videography as she may deem necessary for the execution of the commission. Till such time the commission is executed to the satisfaction of the Local Commissioner, Defendants are restrained from formatting or deleting any software from the computers (including desktops, laptops and tablets) owned/installed/used by the Defendants. If the Local Commissioner finds that any of the machines has been tampered with, and the software has been deleted, the same shall also be indicated in their report. The date of visit shall be fixed by the Local Commissioner forthwith in consultation with the counsel for the parties.CS(COMM) 323/2021 Page 8 of 9
24. Mr. Anand has graciously requested the court to fix the fee of the Local Commissioner at a higher amount than usual, considering the fact the Local Commissioner would be undertaking a risk during the present situation owing to the Covid-19 pandemic. The suggestion is well-founded and accepted. The fee of the Local Commissioner is fixed as 1,25,000/-. The same shall be shared by both the parties equally. At this stage, Plaintiff shall bear the Local Commissioner's travel, lodging and other miscellaneous expenses for the purpose of execution of the commission. During the execution of the commission, the Local Commissioner as well as the parties shall follow social distancing norms and adhere to COVID-19 protocols that are in force in the district where the premises of the defendant is located.
25. Further, at the request of the counsels, the parties are referred to the Delhi High Court Mediation and Conciliation Centre. The authorised representative for the both the parties shall appear before the learned Mediator through video-conferencing mechanism on 28th July, 2021. The Mediation Centre is requested to appoint a Senior Mediator in the present case.
26. List before the Joint Registrar on 21st September, 2021.
27. List before the Court on 11th November, 2021.
SANJEEV NARULA, J JULY 14, 2021/nd CS(COMM) 323/2021 Page 9 of 9