Delhi High Court - Orders
Trimble Solutions Corporation vs Mold-Tek Technologies Limited & Anr on 27 May, 2024
Author: Sanjeev Narula
Bench: Sanjeev Narula
$~40
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ CS(COMM) 445/2024
TRIMBLE SOLUTIONS CORPORATION ..... Plaintiff
Through: Mr. Pravin Anand, Mr. Shantanu
Sahay, Ms. Shreya Shukla and Ms.
Vareesha Irfan, Advocates.
versus
MOLD-TEK TECHNOLOGIES LIMITED & ANR. ..... Defendants
Through: Mr. Jayant K. Mehta, Senior
Advocate with Mr. Ashutosh Kumar,
Mr. Vaibhav Vutts, Mr. Vinod
Chuhan, Ms. Radhika Pareva, Ms.
Anupriya Shyam and Mr. Yagish
Pandey, Advocates.
CORAM:
HON'BLE MR. JUSTICE SANJEEV NARULA
ORDER
% 27.05.2024 I.A. 30549/2024 (seeking exemption from advance service to the Defendants)
1. The Plaintiff has sought exemption from effecting advance service on the Defendants. Noticing the matter in the cause list, Defendants have entered appearance through Senior Counsel. A copy of the paper-book has not yet been provided to them.
2. Let a copy of the paper-book be provided to the Defendants during the course of the day.
CS(COMM) 445/2024 Page 1 of 15This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 31/05/2024 at 23:19:28
3. With the above directions, the application is disposed of.
I.A. 30547/2024 (seeking leave to file additional documents)
4. This is an application seeking leave to file additional documents under the Commercial Courts Act, 2015.
5. Plaintiff, if they wish to file additional documents at a later stage, shall do so strictly as per the provisions of the said Act.
6. The application is disposed of.
I.A. 30548/2024 (seeking exemption from filing originals, certified copies, clearer copies, translated copies, left side margins, electronic documents etc.)
7. Exemption is granted, subject to all just exceptions.
8. The Plaintiff shall file legible and clearer copies of exempted documents, compliant with practice rules, before the next date of hearing.
9. Accordingly, the application stands disposed of.
I.A. 30550/2024 (seeking exemption from conducting pre-litigation mediation)
10. Issue notice. Mr. Ashutosh Kumar, counsel for the Defendants, accepts notice. Reply, if any, be filed within four weeks from today. Rejoinder thereto, if any, be filed within two weeks thereafter.
11. Re-notify on 22nd October, 2024.
I.A. 30551/2024 (seeking extension of time from filing court fee)
12. Mr. Pravin Anand, counsel for the Plaintiffs, states that the court fee has been applied for, and undertakes to file the same within one week from today.
CS(COMM) 445/2024 Page 2 of 15This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 31/05/2024 at 23:19:28
13. In view of the above, the application is disposed of with a direction that the Plaintiff shall furnish the deficient court fee within a period of one week from today.
CS(COMM) 445/2024
14. Let the plaint be registered as a suit.
15. Issue summons. Mr. Ashutosh Kumar, counsel for Defendants accepts summons. Written statement(s) shall be filed by the Defendants within 30 days from today. Along with the written statement(s), the Defendants shall also file affidavit(s) of admission/denial of the documents of the Plaintiff, without which the written statement(s) shall not be taken on record.
16. Liberty is given to the Plaintiff to file replication(s) within 15 days of the receipt of the written statement(s). Along with the replication(s), if any, filed by the Plaintiff, affidavit(s) of admission/denial of documents of the Defendants, be filed by the Plaintiff, without which the replication(s) 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 the timelines.
17. List before the Joint Registrar for marking of exhibits on 27th August, 2024. It is made clear that any party unjustifiably denying documents would be liable to be burdened with costs.
18. List before Court for framing of issues thereafter.
I.A. 30545/2024 (u/Order XXXIX Rules 1 & 2 r/w Section 151 of CPC, 1908) and I.A. 30546/2024 (for appointment of local commissioners)
19. The Plaintiff, Trimble Solutions Corporation, has filed the instant suit alleging infringement of their copyright in the software programme "TEKLA," protected under Section 40 of the Copyright Act, 1957 read with CS(COMM) 445/2024 Page 3 of 15 This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 31/05/2024 at 23:19:29 International Copyright Order, 1999. It is contended that the Defendants are utilizing 136 unauthorized and pirated versions of the "TEKLA" software, in excess of the 106 valid licenses purchased by them.
20. Since the parties are represented by counsel, the Court has heard them on the question of an ad-interim injunction.
21. The Plaintiff's case, as presented by Mr. Anand, is as follows:
21.1. The Plaintiff is a renowned developer of building information modelling software including, "TEKLA." "TEKLA" software facilitates detailing and management of 3-D models of physical structures, irrespective of the material or structural complexity, and is highly acclaimed by users worldwide, including India.
21.2. The Plaintiff permits use of the software "TEKLA" through grant of licenses, known as End-User License Agreement.1 Thus, use of a pirated software programme or unauthorized reproduction of the same would amount to infringement of their copyright under Section 51(a) of the Copyright Act as also a breach of the terms contained in EULA. 21.3. The Defendants are consultancy service providers in the field of civil, structural, and mechanical engineering, particularly in the field of automotive, poles, towers, and oil and gas domains. As per the Plaintiff's internal database, Defendants presently own 106 valid licenses of the Plaintiff's "TEKLA" software. The details of such valid licenses held by the Defendants have been annexed with the plaint.
21.4. In February 2024, through market sources, the Plaintiff gathered information that the Defendants have been using unauthorised/ pirated versions of the Plaintiff's "TEKLA" software for their business operations CS(COMM) 445/2024 Page 4 of 15 This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 31/05/2024 at 23:19:29 in their offices situated at Hyderabad and Vijaywada. In order to verify this information, the Plaintiff availed the services of eCluewise Services, an independent investigation agency to ascertain the scope and extent of the Defendants' purported infringing activities. During his investigation, the Private Investigator telephonically interviewed two employees of Defendant No. 1-company, who are holding positions of significance in the company. In this telephonic investigation, it was revealed that nearly 300 employees in the Hyderabad and 80 employees in the Vijaywada offices use the "TEKLA" software.
21.5. Thus, the Defendants' use of the Plaintiff's "TEKLA" software is approximately 200 (for Hyderabad office) and 40 (for Vijaywada office) during their working hours. Since their permissible use through EULA is of 106 units, the Defendants are using at least 136 unauthorised/ pirated versions of the Plaintiff's software. This figure is an estimate, based on the alleged admissions of the employees of Defendant No. 1.
22. In light of the above facts, the Plaintiff not only an seeks ad-interim injunction restraining the Defendants from using the pirated versions of the "TEKLA" software, but is also requesting for appointment of a Local Commissioner to visit the Hyderabad and Vijaywada offices of Defendant No. 1 to inspect their systems and ascertain the extent of purported violations.
23. Mr. Jayant Mehta, Senior Counsel representing the Defendants, strongly controverts the allegations raised by the Plaintiff. He states that Defendant No. 1 is a recognized public listed company, having a formidable client base in India and abroad. The parties have a long-standing commercial 1 "EULA."
CS(COMM) 445/2024 Page 5 of 15This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 31/05/2024 at 23:19:29 relationship of nearly fifteen years. In fact, recently, in March, 2024, the Defendants purchased licenses of Plaintiff's "TEKLA" software programme worth Rs. 2.19 crores. This is all indicative of the fact that the Defendants are fully compliant with the legal norms. He contends that the allegations in the suit are incorrect, scandalous, and intended to damage the Defendants' reputation. The Defendants therefore, reserve their right to take legal actions against the Plaintiff in this regard. Mr. Mehta submits that the estimated figures of pirated copies mentioned by the Plaintiff, do not account for the mode of working in Defendant No. 1's offices. He explains that the employees of Defendant No. 1 work in shifts and thus, the use of number of software programmes does not, at any given point, exceed the number of licenses procured by the Defendants from the Plaintiff. In addition to the above, Mr. Mehta raises an objection to the maintainability of the suit, emphasizing that the suit has been instituted without adhering to the mandatory requirement of attempting pre-litigation mediation as per Section 12A of the Commercial Courts Act, 2015. Therefore, he submits that the Defendants should be afforded an opportunity to file a detailed reply to the injunction application.
24. Mr. Mehta further submits that sometime before the filing of the suit, the Plaintiff had approached the Defendants, requesting an audit of their systems to verify whether any unlicensed versions of "TEKLA" software were in use. The Defendants were agreeable to such an inspection, provided the Plaintiff's representatives executed a Non-Disclosure Agreement,2 so that Defendants' clients' sensitive information is protected. He, on instructions, assures that the Defendants are not using unlicensed/ pirated CS(COMM) 445/2024 Page 6 of 15 This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 31/05/2024 at 23:19:29 copies of the Plaintiff's "TEKLA" software. Without prejudice to their rights and contentions, in order to demonstrate that the Defendants are not using unlicensed "TEKLA" software, they volunteer for inspection of their computer systems used/ installed at the Hyderabad and Vijaywada offices of Defendant No. 1. Nonetheless, they have highlighted the following apprehensions, and requested for appropriate directions to safeguard the Defendants' interest:
a. Given the nature of Defendants' business operations and their clientele, they are entrusted with highly confidential data by their clients, which are protected by stringent NDA. This confidentiality must be protected; the Plaintiff's representative/ technical experts/ Local Commissioners must be bound by a confidentiality clause to not disclose such information, in order to protect the Defendants from potential legal actions.
b. To assure privacy of the sensitive information, during the inspection, the Plaintiff's representative/ technical experts/ Local Commissioners must not deploy any invasive tools/ devices to access the Defendants' system as the same could potentially breach the confidential information residing on the computer systems.
c. The Plaintiff's conduct in the present matter has been highly improper. Prior to the filing of the suit and without a finding rendered by the Court as a determinative proof of infringement, the Plaintiff has been writing to the Defendants' clients based in the United States, dissuading them from utilizing the Defendants' services on the allegation of infringement. These tactics are intended to coerce the Defendants into 2 "NDA."CS(COMM) 445/2024 Page 7 of 15
This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 31/05/2024 at 23:19:29 purchasing more licenses from the Plaintiff. Therefore, in the event the Court were to direct inspection of the Defendant No. 1's computer systems, the Plaintiff must also correspondingly undertake to not publicise the directions that the Court may issue, especially to Defendants' clients. d. The inspection of Defendant No. 1's computer systems may be done on a non-working day as disruption of the work is bound to cause them huge financial losses.
25. Mr. Anand is agreeable to Mr. Mehta's suggestions. He states that the inspection can be carried out on a non-working day and the Plaintiff's representative shall not use any invasive tools during the inspection. He further assures that the Plaintiff will not publicise the Court's order for inspection in an attempt to harm the Defendants. Additionally, he consents to Plaintiff's representative inspecting Defendant No. 1's systems, to be bound by to the terms of confidentiality as provided in the Delhi High Court Intellectual Property Rights Division Rules, 2022.
26. The Court has considered the afore-noted submissions. In this context, reference must first be made to the judgment in Autodesk Inc and Anr. v. A.V.T. Shankardass and Anr,3 wherein the Division Bench of this Court, while highlighting the object of appointment of a Local Commissioner in software piracy matters, delineated the considerations while evaluating such a request. It was observed that the intent of ex-parte appointment of a Local Commissioner is to subserve the ends of justice by maintaining the 'element of surprise' and preserving the incriminating evidence, which could otherwise be altered by the Defendants. At the same time, conscious of the interference caused to the Defendants' work or privacy by execution of such CS(COMM) 445/2024 Page 8 of 15 This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 31/05/2024 at 23:19:29 commission, it was also observed that where there is absence of definite information concerning the use of pirated software by the Defendants, or where the Court nurtures certain hesitations regarding the evidence presented, the Court should devise a mechanism, to suitably compensate the Defendants for such disruption in the event incriminating material is not found at their premises. Directing the Plaintiff to deposit appropriate costs with the Court, is one such option.
27. In light of the decision of the Division Bench, the Court has deliberated upon the Plaintiff's application for appointment of Local Commissioners. The sole basis for seeking this extraordinary relief to gather evidence for proving the claims of infringement is rested on the findings of Plaintiff's own Private Investigator. The Plaintiff's allegation is that the infringing activities have been admitted in the purported conversations between the Investigator and two employees of Defendant No. 1.
28. To support the above assertions, reference is made to the affidavit of the Investigator, which reads as under:
"7. I affirm that pursuant to the information revealed during the online search on Defendant No. 1, I proceeded to conduct telephonic investigation of Mr. Mohammed Nawaz Mohammed Yousuf and Mr. Vijaysimhareddy in order to ascertain the extent of usage of the Plaintiffs TEKLA software program by the Defendant No. 1. I affirm that Mr. Mohammed Nawaz Mohammed Yousuf, was stated to be and informed to be working as a Steel Detailer at Defendant No. 1 Company's Hyderabad Office when the interview was conducted on 8 April 2024 and 29 April 2024, on his phone number +91- XXXX). During my telephonic conversation with Mr. Yousuf, he informed that around 300 people at the Hyderabad Office of Defendant No. 1 company are using 2018, 2019 and 2022 versions of Plaintiffs Tekla software program. Mr. Yousuf further informed me that employees work at the Hyderabad office in 3 shifts, with the 3 2008 SCC OnLine Del 775.CS(COMM) 445/2024 Page 9 of 15
This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 31/05/2024 at 23:19:29 following number of users using Plaintiffs Tekla software in each shift:
a) 6:00 AM - 3 :00PM- 50 users
b) 11:30 AM- 8:30 PM-150 users
c) 3:00 PM-12:00 AM- 50 users The transcripts of my above-mentioned conversations with Mr. Mohammed Nawaz Mohammed Yousuf are annexed as Document
- B.
8. I further affirm that Mr. Vijaysimbhareddy, who stated to be and informed to be working as the System Administrator at Vijaywada office of Defendant No. 1 company at the time when the interview was conducted on 29 April 2024. During my telephonic conversation with Mr. Vijaysimbhareddy, on his phone number +91- XXXX, he informed that 80 people at the Vijaywada Office of Defendant No. 1 company are using Plaintiffs Tekla software program. He further informed me that employees work at the Vijaywada office in two shifts, i.e., from 6:00 am to 3:00 pm and 3:00 pm to 12:00 am. The transcripts of my above-mentioned conversations with Mr. Vijaysimbhareddy are annexed herewith as Document - C."
29. The transcripts of the conversations with the employees have been placed on record and perused. The conversations between the investigator and Defendant No. 1's employees do not discuss the number of unlicensed "TEKLA" software in use by Defendant No. 1. They only indicate the total and shift-wise employee strength at the two locations of Defendant No. 1- company. Thus, the Court, at this juncture, bears some reservations over the material provided by Plaintiff in support of their apprehensions of copyright infringement by the Defendants. In such circumstances, following Autodesk Inc. (Supra), the Court had, at the first instance, considered directing the Plaintiff to deposit costs in the Court as precondition for appointment of Local Commissioners for inspection of the Defendants' record. To this, Mr. Anand had remarked that such a practice will possibly deter the Plaintiff CS(COMM) 445/2024 Page 10 of 15 This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 31/05/2024 at 23:19:29 from approaching the Court to prevent infringement of their programmes. In the peculiar facts and circumstances of the case, the Court has instead decided to take a slightly different approach. The Court directs Mr. Harsh Pareek, Managing Director of Plaintiff-company, to file, within one week from today, an affidavit in the form of an undertaking that in the event after the inspection, no infringing material or software is found at Defendant No. 1's premises, the Plaintiff shall compensate the Defendants on such terms as the Court deems appropriate.
30. Both the counsel have requested that the Court may appoint members of the Information Technology Cell of the High Court of Delhi.4 Considering that the commission is to be executed on a non-working day, the Court has accepted their request. Therefore, in view of the consensus between the parties regarding physical inspection of the computer systems deployed at Defendant No. 1's premises, the following are appointed as Local Commissioners to visit the premises mentioned against their name:
Local Commissioner Premises to be visited a. Mr. Ankit Pandey, Senior Plot No. 700, Door No. 8-2- System Analyst, IT Cell, 293/82/A/700 Road No. 36, Delhi High Court [Contact Jubilee Hills, Hyderabad, No.: +91-9599220362]. Telangana - 500033.
b. Mr. Javed Akhtar, System Analyst, IT Cell, Delhi High Court [Contact No.:
+91-9599220363].4
"IT Cell".CS(COMM) 445/2024 Page 11 of 15
This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 31/05/2024 at 23:19:29 c. Mr. Vipin Panwar, JJA (IT), Delhi High Court [Contact No.: +91- 9910315695] d. Mr. Kuldeep, JJA (T), Delhi High Court [Contact No.: +91-9987367642].
e. Mr. Zameem Ahmed
Khan, Joint Director, IT
Cell [Contact No.: +91-
9650006732].
a. Mr. Sarsij Kumar, Director 11-102, Thulasinagar, SBI
(IT), Delhi High Court, Road, Kanur, Vijayawada,
b. Mr. Salman Temuri, Senior Andhra Pradesh - 520007.
System Analyst, IT Cell, Delhi High Court [Contact No.: +91-9650006746].
c. Mr. Varun Deshwal, JJA (Technical) [Contact No.:
+91-9013040311].
31. The mandate of the Local Commissioners is as follows:
31.1. The Local Commissioners, shall visit the offices of Defendant No. 1 along with a technical expert of the Plaintiff and their counsel, to inspect the computers (including desktops, laptops, and tablets) owned/ installed/ used by the partners/ employees/ associates of Defendant No. 1 for the purpose of CS(COMM) 445/2024 Page 12 of 15 This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 31/05/2024 at 23:19:30 verifying if any unauthorised/ unlicensed "TEKLA" software programmes of the Plaintiff have been loaded/ installed on the said machines. 31.2. For the above purpose, the Local Commissioners at each site are permitted to be accompanied with one assistant.
31.3. The Local Commissioners shall ensure that the computer systems are inspected manually, without insertion of any software, bugs or invasive tools/ device into Defendant No. 1's computer systems. 31.4. 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 Commissioners with their seal/ signatures. The Plaintiff's technical expert/ representative shall carry all the equipment for preparing the mirror images. 31.5. With the help of the technical expert and assistant, the Local Commissioners shall make an inventory of the number of computers where these software programmes are found to be used.
31.6. The Local Commissioners shall access the computer systems in question only for the purpose of ascertaining whether unlicensed/ infringing versions of Plaintiff's "TEKLA" software are in use. There shall be no inspection of data/ information stored on Defendant No. 1's computer systems, except for the purpose of ascertaining the use of Plaintiff's software, such as the details of their clients and ongoing projects. 31.7. The Local Commissioners shall deposit the hard discs containing the mirror images, along with a report specifying the details of the machines and unauthorised/ infringing software, to the Court.
31.8. The Local Commissioners shall be permitted to undertake/ arrange for photography/ videography of the execution of the commission.
CS(COMM) 445/2024 Page 13 of 15This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 31/05/2024 at 23:19:30
32. Defendant No. 1 shall ensure that all computers used in their business or by its partners/ employees/ associates/ retainers or other staff members are available on their premises on the day of the visit of the Local Commissioners. They shall also provide the password particulars of the concerned computer systems, if sought by the Local Commissioners. The Defendants shall also inform the Local Commissioners of all computer systems (including desktops, laptops, and tablets) whereon the "TEKLA" software is installed and is used by their employees outside the premises of Defendant No. 1's Hyderabad and Vijaywada offices.
33. The commission shall be executed in the course of two non-working days in the presence of Defendants or their representatives and their counsel. The dates of visits shall be fixed by the Local Commissioners forthwith in consultation with the counsel for the parties.
34. Both the parties shall render complete assistance to the Local Commissioners for the purpose of carrying out the inspection.
35. Till such time the commission is executed to the satisfaction of the Local Commissioners, Defendant No. 1 is restrained from formatting or deleting any software from the computers (including desktops, laptops, and tablets) owned/ installed/ used by them. If the Local Commissioners find that any of the machines has been tampered with, and the software has been deleted, the same shall also be indicated in their report.
36. The Plaintiff's representative/ technical expert, their counsel, the Local Commissioners as well as the assistants accompanying them shall desist from disclosing, sharing, or utilizing, including to third parties, any confidential or sensitive information that they may access, or become privy to, in the course of execution of the commission.
CS(COMM) 445/2024 Page 14 of 15This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 31/05/2024 at 23:19:30
37. The fee of the Local Commissioners, to be borne by the Plaintiff, is fixed Rs. 1,00,000/- each. The Local Commissioner's assistants shall be paid an amount of Rs. 50,000/- each by the Plaintiff. The Plaintiff shall also bear expenses for travel and lodging of the Local Commissioners and assistants and other miscellaneous out-of-pocket expenses for the execution of the commission. Fee of the Local Commissioners and assistants shall be paid in advance by the Plaintiff.
38. The Local Commissioners shall file their report(s) within a period of four weeks from the date on which the commission is executed.
39. With the above directions, I.A. 30546/2024 is disposed of.
40. Issue notice in I.A. 30545/2024. Mr. Ashutosh Kumar counsel for Defendants, accepts notice. Reply, if any, be filed within four weeks from today. Rejoinder thereto, if any, be filed within two weeks thereafter.
41. List I.A. 30545/2024 on 22nd October, 2024.
SANJEEV NARULA, J MAY 27, 2024 as CS(COMM) 445/2024 Page 15 of 15 This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 31/05/2024 at 23:19:30