Delhi High Court
Microsoft Corporation & Anr vs Rupesh Waidande & Anr on 14 December, 2022
Author: Navin Chawla
Bench: Navin Chawla
Neutral Citation Number: 2022/DHC/005562
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Reserved on: 25.11.2022
Date of decision:14.12.2022
+ CS(COMM) 1049/2016 & I.A.7150/2010
MICROSOFT CORPORATION & ANR ..... Plaintiffs
Through: Mr.Bharat S. Kumar, Adv.
versus
RUPESH WAIDANDE & ANR ..... Defendants
Through: Ms.Ajunee Singh, Adv.
CORAM:
HON'BLE MR. JUSTICE NAVIN CHAWLA
1. The present Suit has been filed by the plaintiffs praying for a decree
of permanent injunction against the defendants restraining them
from directly or indirectly reproducing/storing/installing and/or
using pirated/unlicensed software programmes of the plaintiff no.1,
thereby infringing the copyright in the plaintiffs' computer
programmes/software titles. The plaintiffs further pray for delivery
up, rendition of accounts, damages as also costs of the Suit.
FACTUAL BACKGROUND
Case of the plaintiffs:
i) Software
2. The plaintiff no.1 was set up in the year 1975 under the laws of the
State of Washington, United States of America (in short, 'USA')
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and is a global software publisher for personal and business
computing. The software products of the plaintiff no. 1 include
operating systems for servers, personal computers (in short, 'PC')
and intelligent devices; server applications for distributed computing
environments, information worker productivity applications and
software development tools.
3. The plaintiff no.2 is the Indian subsidiary of the plaintiff no. 1, set
up in the year 1989. The plaintiff no.2 provides marketing,
promotion, anti-piracy awareness campaigns and actions, and
channel development support to the plaintiff no.1 or/and its affiliates
in India.
4. The plaintiff no.1's popular software products include the
'Microsoft Windows Operating Systems‟ (various versions) as also
application software such as „Microsoft Office‟ and development
tools like „Visual Studio‟ and 'Visual C++'. The 'Microsoft
Windows' family of the plaintiff no. 1 includes software tools like
Windows 1.0, Windows 95, Windows 98, Windows Me, Windows
2000, Window XP Home and Windows XP Professional, among
others.
5. The 'Microsoft Office' family includes versions like Office 97,
Office 2000, Office XP, Office 2003, Office 2007, Office 2010 and
the product line includes Microsoft Access, Microsoft Excel,
FrontPage, Microsoft Word, PowerPoint, Microsoft Project,
Publisher and Outlook to name a few. These software are today
installed and used on millions of computers all over the world,
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including in India. The products of the plaintiff no.1 are distributed
in New Delhi through various authorized distributors.
ii) End User Agreement
6. The computer programs of the plaintiff no.1 are always licensed in a
'soft‟ version of the 'End-User License Agreement', 'Registration
Card' and other relevant 'User Manuals', all contained in the
Original CD-ROM carrying the actual software. The licenses of the
latest versions of the plaintiff no.1's computer programs are either
bought off the shelf or a licensed copy of the software is supplied as
Original Equipment Manufacturers (in short, 'OEMs') along with a
PC, however, in both the circumstances the software requires
activation.
7. The entire process of software registration can be completed via
Internet or by speaking with a customer service representative of the
plaintiff no.1. A unique Product Key or Installation ID is required
for each installation. During the process of installation, the user is
required to fill in the Installation ID or a unique Product Key
number in order to finalize the installation and to activate the
software. To ensure the end user's privacy, the plaintiffs use a one-
way mathematical algorithm to create the hardware hash used by
Product Activation to create the Installation ID. This ID is unique to
the particular PC on which the software is loaded.
iii) Copyright of the plaintiffs in the Software and End User
Agreement
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8. Under the provisions of the Copyright Act, 1957 (in short, 'the
Act'), the software programmes developed and marketed by the
plaintiff no. 1 (and the plaintiff no.2 in India) would fall within the
definition of 'computer programmes' under Section 2(ffc) and are
also included in the definition of a 'literary work' under Section
2(o) of the Act. The plaintiff no. 1's computer programmes are
'works‟ that were first published and are also registered in the USA.
9. It is further asserted by the plaintiffs that the Supplementary User
Instructions and Manuals supplied along with the software also fall
within the ambit of 'original literary works' as contemplated under
Section 2(o) read with Section 13(1)(a) of the Act.
10. The plaintiffs assert that as the computer software created as also the
final version of the End-User Agreement and Manuals being 'work
for hire‟ created by employees of the plaintiff no. 1, the plaintiff no.
1 would be the first owner of the copyright vested in the
aforementioned works under Section 17(c) of the Act. The plaintiff
no. 1, being the owner of the copyright in the aforesaid literary
works within the meaning of Section 17 of the Act, is therefore
entitled to all the exclusive rights flowing from such ownership as
set out in Section 14(b) of the Act.
11. It is further stated in the Plaint that on account of both the USA and
India being member-countries of the Berne Convention, Universal
Copyright Conventions and the World Trade Organization (in short,
'WTO'), the rights of authors in the USA would be equally
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protected under the aegis of Section 40 of the Act read with the
International Copyright Order, 1999.
iv) Nature of infringing activity by the defendants
12. The plaintiffs assert that they suffer incalculable damages to their
intellectual property rights on account of various instances of
copyright infringment of their software programmes. The plaintiff
describes such methods of infringment in paragraph 13 of the Plaint,
reproduced hereinbelow:
"...i. Reproducing the Plaintiffs' softwares and the
packaging of softwares, so that purchasers are deliberately
misled into believing that the product they are buying is
genuine software.
ii. Reproducing or "burning" the Plaintiff‟s softwares onto
a blank CD, where no attempt is made to represent that the
copy is genuine.
iii. Reproducing a number of the Plaintiffs' programs on a
single CD-ROM, known as a "compilation" CD."
13. It is the case of the plaintiffs that the defendant no. 1, in the present
case, is the IT head of the defendant no.2-company (entity engaged
in the business of providing document and printing related to BPO
services) and carries out its business activities from its registered
office located in Mumbai, as well as from other offices.
14. It is the case of the plaintiffs that in the month of April 2010, the
plaintiffs came to know from its market sources that the defendants
were illegally using their software programmes in which the
copyright of the plaintiff no.1 vests- including Microsoft Windows,
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Microsoft Office and Windows Server belonging to the plaintiff no.
1, for commercial purposes at its offices.
15. The plaintiffs subsequently conducted enquiries through their
channel network to determine the number of licenses that have been
purchased by the defendants. This process of enquiry culminated in
the plaintiffs conducting a search within its database to determine
the details of the software licenses with respect to the plaintiffs'
software titles held by the defendants at its offices. The said search
conducted by the plaintiffs revealed that the defendants had
purchased the following software from the plaintiffs:
"a. 8 Upgrade licenses of Microsoft Office;
b. 4 license of Visual Studio NET Professional;
c. 1 license of SQL Server Standard;
d. 2 licenses of Windows Server with CALs
e. 5 Windows licenses
f. 26 Windows upgrade Licenses."
16. Subsequently, the plaintiffs deputed an Investigator to conduct
enquiries about the defendants' use of the plaintiff no.1's software
programmes. From the telephonic conversations between the
Investigator and the defendant no.1, the plaintiffs learnt that the
defendants have about 130 (One Hundred Thirty) computer
systems at their registered office located in Mumbai and most of
the said installations have the plaintiffs' software programmes
installed in it; the licenses held by which do not match with their
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usage and indicate that the defendants are indulging in the
unlicensed use of plaintiff no.1's software programmes.
17. Thereafter, the plaintiffs sent repeated requests to the defendants
for the defendants to conduct a Software Management Assessment
(in short, 'SAM') Review Program to comprehensively evaluate
the extent of the piracy of the plaintiffs' software by the
defendants. However, despite repeated follow ups made by the
plaintiffs, the defendants chose not to respond to the said requests.
COURT PROCEEDINGS IN THE MATTER
18. Vide order of this Court dated 24.05.2010, an ad-interim ex-parte
order of injunction was granted in favour of the plaintiffs and
against the defendants, restraining the defendants from infringing
the plaintiffs' software program. A Local Commissioner was also
appointed by the Court to investigate the extent of alleged
infringement.
19. The learned Local Commissioner submitted his report dated
04.06.2010.
20. This Court subsequently referred the parties to the Delhi High
Court Mediation and Conciliation Centre (in short, 'Mediation
Centre') vide order dated 27.05.2011 to settle their inter se
disputes, however, the parties failed to arrive at an amicable
settlement.
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21. On account of failure to arrive at an amicable settlement, this Court
vide order dated 21.11.2013, framed the following issues:
"i) Whether the defendant has infringed the
copyright of the plaintiffs in software programs
such as SQL Server, Microsoft Office, Microsoft
Windows Operating System and their various
versions, etc.? OPP
ii) Whether the plaintiff is entitled to a decree of
permanent injunction as prayed for in the plaint?
OPP
iii) Whether the plaintiffs are entitled to a claim of
damages of Rs.20,00,200/- or of any other lesser
amount? OPP
iv) Whether the plaintiffs are entitled to any other
relief as prayed for in the plaint? OPP"
22. As none was appearing for the defendants, vide order of this Court
dated 28.08.2018, the defendants were proceeded ex-parte.
EVIDENCE OF THE PLAINTIFF:
23. Mr. Vishal Ahuja, the constituted attorney of the plaintiffs in the
present suit, who also filed the affidavit of admission/denial of the
defendants' documents, was examined as PW-1 in the present suit.
He filed his evidence by way of affidavit(s)-Ex PW1/A and Ex.
PW1/B.
SUBMISSIONS ON BEHALF OF THE LEARNED COUNSELS FOR THE
PLAINTIFFS
24. The learned counsel for the plaintiffs submits that the unauthorised
installation and use of the plaintiffs' software on the computer
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systems of the defendants amounts to an unauthorized reproduction
of the plaintiff no. 1's copyrighted software and consequently, has
resulted in infringement of the plaintiff no. 1's copyright under
Section 51 of the Act.
25. It is further stated that the defendants have a total of 130
installations of the plaintiffs' software programmes at their
registered office but only hold approximately 46 (forty-six) bona
fide licenses for the said software programmes. The learned counsel
for the plaintiffs further submits that this form of corporate piracy is
the most damaging form of software piracy affecting the plaintiffs.
ANALYSIS AND FINDINGS
26. I have considered the submissions made by the learned counsel for
the plaintiffs. My issue wise findings are as under:
i) Issue No.(i)
27. Mr. Vishal Ahuja- PW1 has filed as Exh. PW1/3 Copyright
Registration Certificates in respect of few software titles owned by
the Plaintiffs. Plaintiff No. 1 has, therefore, been able to prove that it
is the owner of the copyright in the computer programs and the
Supplementary User Instructions and Manuals, and are entitled to
the exclusive rights flowing from such ownership as set out in
Section 14 of the Copyright Act, 1957.
28. The witness has produced the End User License Agreement (EULA)
of the plaintiff Companies as Exh. PW1/4, which it claims is
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accompanied with all genuine licensed software of the plaintiff no.
1.
29. The assertion of the witness that on a search within the plaintiffs
database- 'Microsoft Sales', it was found that the number of licenses
held by the defendants was much lower than the actual usage, has
gone uncontested by the defendants.
30. Moreover, the learned Local Commissioner in his report dated
04.06.2010 has found infringement on part of the defendants. The
report of the Local Commissioner (Exh. PW 1/5) has remained
unchallenged by the defendants. The report also found blatant
attempts on part of the defendants to destroy evidence of their
infringement.
31. The defendants have failed to show proof of genuine use of the
plaintiffs' software programmes for all the installations that were in
use at their organizations.
32. Therefore, from the evidence led, it is evident that the defendants
have infringed upon the copyright of the plaintiffs in their software
programmes.
33. Issue No.(i) is held in favour of the plaintiffs and against the
defendants.
ii) Issue No.(ii)
34. In view of the finding of this Court on Issue No.1, it is established
that the defendants were engaged in infringing the software
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programmes of the plaintiffs and, therefore, the plaintiffs have made
out a case of permanent injunction against the defendants.
35. The Issue No.(ii) is decided in favour of the plaintiffs and against
the defendants.
iii) Issue No.(iii)
36. The plaintiff has relied upon the Local Commissioner Report (Exh.
PW1/5) and the Price Lists (Exh. PW1/6), to arrive out at a claim of
Rs. 27,34,785/- as damages. In support, the plaintiff has filed the
affidavit dated 03.08.2015 of Mr. Vishal Ahuja (PW1) as Ex.
PW1/B. As the Issue No. 1 has been decided in favour of the
plaintiffs, the plaintiffs are held entitled to the damages of Rs.
20,00,200/- against the defendants, as claimed in prayer made in
paragraph 30(IV) of the plaint.
37. The issue no. (iii) is decided in favour of the plaintiffs and against
the defendants in the above terms.
iii) Issue No.(iv)
38. In view of the above findings, the plaintiffs are also held entitled to
the relief of delivery up of all the impugned products, being
unlicensed/pirated software confiscated by the learned Local
Commissioner, and as claimed by the plaintiff in prayer made in
paragraph 30(II) of the plaint.
39. The plaintiffs are also held entitled to recover costs of the Suit from
the defendants.
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40. Issue no. (iv) is decided as above.
RELIEF
41. Accordingly, a decree of permanent injunction in terms of the
prayer mentioned in paragraph 30 (I) of the Plaint is passed in
favour of the plaintiffs and against the defendants.
42. A decree of delivery up, in terms of paragraph 30 (II) of the Plaint
is passed in favour of the plaintiffs and against the defendants. This
would result in the seized goods released to the defendants on
superdari, to be handed over to the plaintiffs for destruction and the
needful shall be done within a period of four weeks from today.
43. Damages of Rs. 20,00,000/- are granted in favour of the plaintiffs
and against the defendants. The plaintiffs are also entitled to
receive the costs of the present proceedings.
44. Since damages have been awarded to the plaintiffs in the present
suit, the prayer for rendition of accounts in paragraph 30 (III) of the
Plaint is rejected.
45. Let a decree-sheet be drawn accordingly.
NAVIN CHAWLA, J.
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