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2014 DIGILAW 828 (DEL)

Microsoft Corporation v. Hitendra Idnani

2014-03-10

RAJIV SAHAI ENDLAW

body2014
JUDGMENT 1. The plaintiffs have instituted the present suit for an order of permanent injunction restraining the defendants from violating the plaintiffs’ copyright by way of unauthorized hard-disk loading of the plaintiffs’ software on the branded computers sold by them to their customers, and for ancillary reliefs of delivery-up, rendition of accounts and damages, pleading: (I) that the plaintiff no. 1 Microsoft Corporation is a company organized and existing under the laws of the State of Washington, USA and engaged in manufacturing and licensing a range of software products, whereas plaintiff no. 2 Microsoft Corporation India Pvt. Ltd. is its wholly owned marketing subsidiary having its office in Nehru Place, New Delhi; (II) that the popular software products developed and marketed by the plaintiffs such as MICROSOFT WINDOWS and MICROSOFT OFFICE are ‘computer programs’ within the meaning of Section 2(ffc) of the Copyright Act, 1957 and included in the definition of ‘literary works’ as per Section 2(o) of the Act and the plaintiffs being the owner of the copyright in the aforesaid literary works are entitled to all the exclusive rights flowing from such ownership enumerated under Section 14 of the Copyright Act; (III) that the plaintiffs’ computer programs are ‘works’ that have been first published and registered in the USA, and as such also enjoy protection in India by virtue of Section 40 of the Copyright Act read with the International Copyright Order, 1999; (IV) that the plaintiffs in the month of November 2008 learnt that the defendant no. 1 Mr. Hitendra Idnani, in his capacity as proprietor of defendant no. 1 Mr. Hitendra Idnani, in his capacity as proprietor of defendant no. 2 M/s Laptech Solutions Pvt. Ltd. – a business entity engaged in marketing and selling of computer hardware (including computer accessories and peripherals) and having its offices/shops in Pune – was infringing the plaintiffs’ copyrights and other intellectual property rights by unauthorized hard-disk loading of the plaintiffs’ software on the branded computers sold by him to his customers; (V) that accordingly the plaintiffs deployed an independent investigator to purchase one of such computers being sold by the defendants and which confirmed that the defendants were offering their customers pre-loaded software of the plaintiffs without charging any additional costs; (VI) that the computer purchased by the independent investigator from the defendants was also inspected by the plaintiffs’ technical expert and which revealed that software programs of the plaintiffs’ being MICROSOFT WINDOWS XP (Professional Version 2002) and MICROSOFT OFFICE (2007), were present on the computer without any authorization from the plaintiffs; and, (VII) that since the software programs supplied by the defendants were not accompanied by the Certificate of Authenticity Label, Holographic CD and the User Manual which are supplied by the plaintiffs along with their software, it was evident that the software programs pre-loaded by the defendants on the hard-disk of the computer sold to the independent investigator were pirated versions. 2. This Court issued summons in the suit to the defendants on 19.11.2008 and vide order of the same date granted an ex-parte ad-interim injunction in favor of the plaintiffs. Though a Local Commissioner was also appointed by this Court at the request of the plaintiffs to inspect one of the premises of the defendants, however no report of the Local Commissioner is found on record. Since none appeared on behalf of the defendants despite due service, they were ordered to be proceeded ex-parte vide order dated 04.05.2009 and the interim order dated 19.11.2008 was made absolute. Upon the plaintiffs, tendering their ex-parte evidence, the suit was listed for ex-parte hearing on 22.11.2013, when this Court stressed the need for the plaintiffs to also examine the independent investigator and the technical expert, upon whose reports the plaintiffs have predicated their case for infringement of copyright, and adjourned the matter for today to enable the plaintiffs to produce the said witnesses. Though the counsel for the plaintiffs has circulated an adjournment slip for today, but considering that the ex-parte matter has been languishing for more than five years now and that locating and examining the independent investigator and the technical expert would consume further substantial time, I have nevertheless perused the record to ascertain whether a decree can be passed forthwith. 3. The plaintiffs, in support of their case, have examined one witness - Mr. Achuthan Sreekumar, the Constituted Attorney of the plaintiffs, who has tendered in evidence the Court Certified Copies of Original Copyright Registration Certificates of the various software programs of the plaintiffs (including MICROSOFT WINDOWS XP and MICROSOFT OFFICE). 4. The defendants, though ex-parte in the matter, are found to have filed a written statement as well as a reply to the application of the plaintiffs for temporary injunction under Order 39 Rule 1 & 2 of the CPC. However, a perusal of the same reveals no substantial defense to have been raised by the defendants to the case set up by the plaintiffs. 5. As far as the primary relief of permanent injunction is concerned, I am of the opinion that the plaintiffs have made out a case of infringement of their copyright and other intellectual property rights by the defendants. Though, as pointed out vide order dated 22.11.2013, it perhaps would have been desirable that the independent investigator and technical expert employed by the plaintiffs were personally examined, I do not see the omission to do so as being fatal to the case of the plaintiffs insofar as I find on the record the original duly notarized affidavits of the two and the contents whereof alongwith supporting documents filed as annexures thereto, in my opinion sufficiently corroborate and affirm the averments made in the plaint in this regard. There is no reason for this Court to disbelieve the said affidavits and a technical error, if any, in my opinion must not prevent the Court from passing an order of permanent injunction preventing infringement of intellectual property rights, where there is otherwise sufficient material on record to sustain such a finding. Moreover, by issuing such injunction, the Court is doing nothing more than enforcing the law as the activity which the defendant is proved to be indulging in, there can be no doubt, is illegal. Moreover, by issuing such injunction, the Court is doing nothing more than enforcing the law as the activity which the defendant is proved to be indulging in, there can be no doubt, is illegal. I accordingly pass a decree for permanent injunction in terms of prayer paragraph (a) of the plaint and also order delivery-up of the infringing copies of the plaintiffs’ software programs. 6. The plaintiffs have also claimed damages of Rs.20 lakhs from the defendants on account of various factors such as illegal profits earned by the defendant by sale of such pirated software, loss of revenue to the plaintiffs from such unauthorized sale, as well as damage to the plaintiffs’ reputation and goodwill by such infringing activities of the defendants. This Court in Time Incorporated Vs. Lokesh Srivastava 2005 (30) PTC 3 (Del.), while awarding punitive damages of Rs.5 lakhs in addition to compensatory damages also of Rs.5 lakhs has held that time has come when the Courts dealing in actions for infringement of trademarks, copyrights, patents etc., should not only grant compensatory damages but also award punitive damages with a view to discourage and dishearten law breakers who indulge in violation with impunity out of lust for money, so that they realize that in case they are caught, they would be liable not only to reimburse the aggrieved party but would be liable to pay punitive damages also, which may spell financial disaster for them. In the facts and circumstances of this case, I deem it fit to award damages to the tune Rs.5 lakhs with a right to the plaintiffs to demand rendition of accounts from the defendant in order to ascertain and receive the shortfall, if any, in the figure awarded above. 7. Decree Sheet be drawn up in the aforesaid terms. The plaintiffs shall also be entitled to costs of the suit with the counsel’s fees quantified at Rs.20,000/-.