Rajasthan High Court - Jodhpur
Costar Group Inc vs Aregate Teleservices Private Limited on 30 July, 2021
Author: Vijay Bishnoi
Bench: Vijay Bishnoi
HIGH COURT OF JUDICATURE FOR RAJASTHAN AT
JODHPUR
S.B. Civil Writ Petition No. 9384/2021
1. Costar Group Inc., A Corporation Registered Under The
Law Of The State Delaware And Having Its Principal Place
Of Business At 1331 L Street, Nw, Washington, District Of
Columbia 20005, United States Of America.
2. Costar Realty Information, Inc., A Corporation Registered
Under The Laws Of The State Of Delaware And Having Its
Principal Place Of Business At 1331 L Street, Nw,
Washington, District Of Columbia 20005, United States Of
America Through Power Of Attorney Holder Bharat
Madakan Having My Office At Samridhi Bangolow No. 97,
Plot No. 123, Sector 4, Bh. Charkop Bus Depo Charkop
Kandivali ()W) Mumbai - 400047.
----Petitioners
Versus
Arcgate Teleservices Private Limited, A Company Incorporated
Under The Companies Act, 2013 Having Its Registered Office At
G1-10 I.t. Park, Madri Industrial Area, Udaipur, Rajasthan
313001.
----Respondent
For Petitioner(s) : Mr M.S.Singhvi, Sr. Advocate assisted
by Mr Muktesh Maheshwari
Mr Faraz Sagar
Mr Hiren Kamod
Mr Aidan Choudhary
Ms Simran Agarwal
For Respondent(s) :
HON'BLE MR. JUSTICE VIJAY BISHNOI
Order 30/07/2021 This writ petition is filed by the petitioners being aggrieved with the order dated 06.04.2021 passed by Judge, Commercial Court, Udaipur (for short 'the trial court' hereinafter) in C.I.S. No.06/2021, whereby the application preferred on behalf (Downloaded on 30/07/2021 at 08:56:37 PM) (2 of 11) [CW-9384/2021] of the petitioners for ex parte appointment of Court Commissioner as per the provisions of Order XXVI Rule 9 of the Code of Civil Procedure, 1908 (for short 'CPC' hereinafter) has been dismissed.
The petitioners filed a suit for injunction against the respondent - Arcgate Teleservices Private Limited before the trial court, which is pending consideration. Along with the said suit, the petitioners also preferred an application under Order XXVI Rule 9 CPC seeking ex parte appointment of Court Commissioner.
As per the petitioners, petitioner No.1 is a company incorporated under the laws of the State of Delaware in the United States of America and petitioner No.2 is a wholly owned subsidiary of petitioner No.1. It is claimed that the petitioners are leading provider of commercial real estate information, analytics and online marketplaces in the United States of America and they have developed the most comprehensive database of commercial real estate in the world.
It is also claimed that the petitioners are touching average 24,000 brokers, owners, developers and other real estate professionals daily through phone calls canvassing a half million properties per year and are taking nearly one million photographs annually.
It is contended by the petitioners that website 'LoopNet' (available at http://www.loopnet.com) is the foremost digital marketplace for commercial real estate in the United States and it contains petitioners' copyrighted photographs and data from its database. Every day, buyers, sellers, lessors, lessees, owners and brokers access and use LoopNet to list, buy, sell, lease, rent or browse commercial real estate.
(Downloaded on 30/07/2021 at 08:56:37 PM)
(3 of 11) [CW-9384/2021] It is further contended by the petitioners that one of the current competitors of the petitioners in the United States of America is Commercial Real Estate Exchange, Inc. (CREXi). CREXi is a company incorporated in the State of California in the United States of America and as per its website, it describes itself as a commercial real estate marketplace that simplifies transactions for brokers with a suite of easy to use tools to manage the entire process from listing to closing. CREXi's website allows to use commercial real estate listings in markets across the United State of America. CREXi also runs an online auction marketplace.
It is further contended by the petitioners that the CREXi has raised a significant amount of funding recently and is competing with the petitioners. It is alleged that CREXi is attempting to build its own online commercial real estate marketplace and auction platform by free riding on petitioners' billions of dollars of investments and its three decades of hard work. It is also alleged that CREXi has accessed the petitioners' database and LoopNet more than a million times and forced the petitioners to file a lawsuit against it in the United States District Court for the Central District of California in the month of September, 2020. In the lawsuit, the petitioners have alleged that CREXi is involved in copyright infringement, violation of United States Digital Millennium Copyright Act, misappropriation, unfair competition, false advertising and breach of contract. In the very lawsuit, it is alleged that the respondent - Arcgate Teleservices Private Limited is working for CREXi and is accessing LoopNet without authorization for competitive purposes on behalf of CREXi in violation of LoopNet's terms and conditions, committing contributory infringement of the petitioners' copyrighted (Downloaded on 30/07/2021 at 08:56:37 PM) (4 of 11) [CW-9384/2021] photographs and engaging in piracy/theft, improper access to petitioners' websites and misappropriation of the petitioners' proprietary contents at the behest of CREXi.
It is contended that in the lawsuit filed by the petitioners against the CREXi, it has not denied or disclaimed that the respondent - Arcgate Teleservices Private Limited is accessing LoopNet on behalf of CREXi. The petitioners have placed on record certain documents before the trial court in support of their allegations that respondent - Arcgate Teleservices Private Limited is working on behalf of CREXi and is illegally accessing the LoopNet and transferring the data of the petitioners - company to CREXi.
The petitioners, by way of an application preferred under Order XXVI Rule 9 CPC before the trial court, sought ex parte appointment of a Court Commissioner, which came to be rejected by the trial court vide impugned order. Hence, this writ petition.
Learned counsel for the petitioners has argued that the learned trial court grossly erred in rejecting the application filed by the petitioners for ex parte appointment of Court Commissioner. It is further submitted that the trial court failed to appreciate that granting of ad interim relief is necessary in the present case.
It is argued that the trial court erred in holding that for the appointment of ex parte Court Commissioner, it is insufficient to show that it is possible that the respondent committed the said act of copyright infringement, rather, there must be concrete evidence that the said act of infringement has been committed by the respondent. It is submitted that at the ex parte ad interim stage, the petitioners were required to make out a strong prima (Downloaded on 30/07/2021 at 08:56:37 PM) (5 of 11) [CW-9384/2021] facie case and the petitioners have produced ample evidence on record that there is possibility that the respondent has committed the said act of copyright infringement.
Learned counsel for the petitioners has further submitted that the petitioners have adduced significant evidence of respondent's wrongdoings including evidence that the respondent is working on behalf of the petitioners' competitor - CREXi and is regularly accessing the petitioners' LoopNet website on behalf of the CREXi without authorization and in breach of petitioners' binding terms and as such committed contributory infringement of petitioners' copyrighted photographs and engaging in piracy/theft and misappropriation of petitioners' proprietary content.
Learned counsel for the petitioners has further submitted that the trial court has failed to appreciate that in intellectual property matters, a party is subjected to strict proof of infringement because at the initial stage, it cannot be expected from a party to have full fledged evidence of infringement.
It is further submitted that in case of involving technology/software/internet activity, it is impossible for a party to completely understand the nature of activity of a wrongdoer unless the evidence from its systems and files is taken into custody and preserved for trial.
Learned counsel for the petitioners has further submitted that the trial court has failed to consider the ratio in various judgments relied upon by the petitioners, where in one of the judgments, the Delhi High Court has laid down the principles regarding appointment of ex parte Court Commissioner in similar type of cases.
(Downloaded on 30/07/2021 at 08:56:37 PM)
(6 of 11) [CW-9384/2021] Learned counsel for the petitioners has also submitted that though the petitioners were successful in making out a prima facie case before the trial court but it has illegally rejected the application filed by the petitioners for appointment of ex parte appointment of Court Commissioner.
In support of the above contentions, learned counsel for the petitioners has mainly placed reliance on a decision of Delhi High Court in Autodesk Inc and Anr. vs. Mr. A.V.T. Shankardass and Anr., reported in AIR 2008 Delhi 167.
Heard learned counsel for the petitioners.
The learned trial court has rejected the application filed on behalf of the petitioners for ex parte appointment of Court Commissioner while observing that a Court Commissioner appointed by it would not be qualified to retrieve and preserve the relevant evidence or recover data, which might have been deleted. The trial court has also observed that only the police have means to recover any deleted data. The trial court is further of the opinion that mere existence of photographs on servers is not concrete proof of copyright infringement and sufficient to warrant seizing and preserving of evidence at this stage. The trial court is not convinced that FTI Consulting India Private Limited can act as a Commissioner as its capability cannot be determined on the basis of an application and on asking of the petitioners.
From perusal of the impugned order dated 06.04.2021, it appears that the trial court is of the view that the Court Commissioner cannot be appointed for the purpose of collecting evidence for the plaintiff.
Ultimately, the trial court has held that the petitioners have failed to provide sufficient proof to establish the fact that (Downloaded on 30/07/2021 at 08:56:37 PM) (7 of 11) [CW-9384/2021] some photographs are accessed by the respondent-Arcgate Teleservices Private Limited from the petitioners' website on behalf of the CREXi and thereafter transferred to it. The trial court has observed that until and unless this fact is established, it cannot be used as a tool to connect the missing link.
The Delhi High Court in Autodesk Inc and Anr. vs. Mr. A.V.T. Shankardass and Anr. (supra) laid down certain guidelines for appointment of a Court Commissioner in software infringement and piracy. The relevant portion of the judgment reads as under:
"14. Coming now to the question of guidelines to be set, we have heard both the counsel for the parties. We are conscious of the fact that it is neither feasible nor practical to lay down guidelines, which would cater to numerous and all the situations that may arise. However, some of the following relevant factors and guidelines are being enumerated which the Court may take into consideration on the question of appointment of a Local Commissioner in software infringement and piracy matters:
(i) The object of appointment of a Local Commissioner in software piracy matters is not, as much to collect evidence but to preserve and protect the infringing evidence. The pirated software or incriminating evidence can only be obtained from the premises of the opposite party alone and in the absence of an ex parte appointment of a Local Commissioner there is likelihood that such evidence may be lost, removed or destroyed;
(ii) Request for ex parte appointment of a Local Commissioner in such matters is usual and in fact is intended to sub serve the ends of justice as it is imperative to have an element of surprise so that the actual position is not altered;
(iii) The test of reasonable and credible information regarding the existence of pirated software or incriminating evidence should not be subjected to strict proof or the requirement to demonstrate or produce part of the pirated software/incriminating evidence at the initial stage itself. It has to be tested on the touchstone of pragmatism and the natural and normal course of conduct and practice in trade.
(iv) It may not always be possible for a plaintiff to obtain any admission by employing decoy customers and (Downloaded on 30/07/2021 at 08:56:37 PM) (8 of 11) [CW-9384/2021] gaining access to the defendant's premises. Any such attempt also inheres in it the possibility of dis-
appearance of the pirated software/incriminating evidence in case the decoy customers is exposed. Accordingly, visit by decoy customer or investigator is not to be insisted upon as pre condition. A report of private Investigator need not be dis-regarded or rejected simply because of his engagement by the plaintiff. The information provided by the private Investigator should receive objective evaluation.
(v) In cases where certain and definite information with regard to the existence of pirated software or incriminating evidence is not available or where the Court may nurture some element of doubt, it may consider asking the plaintiff to deposit cost in Court so that in case pirated software or incriminating evidence is not found then the defendant can be suitably compensated for the obtrusion in his work or privacy."
(Emphasis supplied) I am perfectly in agreement with the view of the Delhi High Court that the object of appointment of a Local Commissioner in software piracy matters is not, as much to collect evidence but to preserve and protect the infringing evidence and strict proof is not required to be given at initial stage.
The petitioners, along with an application for appointment of Local Commissioner, has placed on record certain documentary evidence in support of their claim that the respondent is illegally accessing LoopNet's website containing copyright photographs and database of the petitioners at the instance of CREXi and is transferring to it unauthorisedly.
After examining the said documentary evidence, which is also annexed with this writ petition, I am of the view that the petitioners are able to prima facie prove that the respondent has illegally accessed the copyright photographs and database of the petitioners - company from its website and (Downloaded on 30/07/2021 at 08:56:37 PM) (9 of 11) [CW-9384/2021] might have transferred it to the CREXi, which used the said copyright photographs and database for its profit.
In view of the above discussion, I am of the view that the trial court has erred in not appointing the ex parte Court Commissioner in the matter in hand.
Before the trial court, two applications were moved, one on behalf of Shri Hanuman Sharma, Advocate, who offered himself to work as Court Commissioner and another by Shri Saurabh Kumar, Senior Director, Risk Advisory and Investigation FTI Consulting India Private Limited, who offered his services as Commissioner/Computer Expert.
Taking into consideration the overall facts and circumstances of the case, I find it a fit case for appointing ex parte Court Commissioners and the following directions are issued:
(1) Issue notice of this writ petition to the sole respondent.
Notices are made returnable on 6th September, 2021. (2) The petitioners shall deposit cost of Rs.10,00,000/- (Rupees ten lac) with the trial court within one week from today, so that in case incriminating evidence is not found, then the defendant can suitably be compensated for obstruction in its work.
(3) Mr Hanuman Sharma, Advocate, Udaipur and Mr Saurabh Kumar, Senior Director, Risk Advisory and Investigation FTI Consulting India Private Limited are appointed as Court Commissioners. They shall serve a copy of this order to the respondent before starting commission. They will have all the powers under Order XL Rule 1 or under XXVI Rule 9 CPC in (Downloaded on 30/07/2021 at 08:56:37 PM) (10 of 11) [CW-9384/2021] order to attend at and/or enter either by force or by breaking open the lock or by removing the obstruction or barrier or otherwise, the respondent's premises including office situated at G1-10 I.T. Park, Madri Industrial Area, Udaipur, Rajasthan - 313 001 or any other premises owned or occupied by respondent any time of the day or night without notice to the respondent and with the help of the representative of the petitioners and police. The Court Commissioners - Mr Hanuman Sharma, Advocate and Mr Saurabh Kumar shall make inventory and seize, take possession, custody and control of the petitioners infringing photographs, along with all the respondent's material, printed matter, communication, invoices, records, relevant passwords and passcodes, and such material and documents relating to infringing photographs owned by the petitioners including such material stored electronically on any systems. They shall also make inventory and take a mirror copy of the entire electronic data of the respondent stored on the computer systems, data storage devices, handled devices, hard disks, pen drives, computer records, cloud-based servers, servers (including any servers maintained at a different location for business continuity purposes and/or disaster recovery) of the respondent (which may be belonging to the respondent or on lease) and shall submit the said mirror copy to the trial court in a sealed envelope along with a report within a month.
The respondent is directed to co-operate and provide all assistance to the Court Commissioners but without limitation to providing access.
(Downloaded on 30/07/2021 at 08:56:37 PM)
(11 of 11) [CW-9384/2021] The fees of the Court Commissioners shall be paid by the petitioners as per agreement between the petitioners and the Court Commissioners.
List on 06.09.2021.
(VIJAY BISHNOI),J masif/-PS (Downloaded on 30/07/2021 at 08:56:37 PM) Powered by TCPDF (www.tcpdf.org)