Search on premises vital in software piracy cases

By Abhai Pandey, Lex Orbis IP Practice
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Containing piracy is critical as it creates huge losses for owners of intellectual property and adversely affects national economies and global trade. The menace of piracy has been wrestled with to some extent, as a result of progressive judicial announcements and awareness campaigns by the industry and the government.

One type of software piracy is “softlifting”, where a single licensed copy of a software product is purchased and then loaded onto several computers for business use or distribution to others.

Abhai Pandey Lawyer Lex Orbis IP Practice
Abhai Pandey
Lawyer
Lex Orbis IP Practice

To combat piracy, companies often engage private investigators to inspect premises. To bring an action against the infringer, there are provisions for the appointment of a local commissioner for the search and seizure of unauthorized material, along with interim injunctions in the Civil Procedure Code. If sufficient evidence against the infringers is gathered, a cease and desist letter may be sent, or can be used in a legal proceeding against the reported company.

A recent case decided by Delhi High Court in appeal draws on the importance of investigations and the appointment of a local commissioner to collect and preserve infringing evidence from the infringer’s premises. In Autodesk Inc v AVT Shankardass and Anr, 2008(37)PTC581(Del), the court not only allowed the appointment of a local commissioner pending the notice of interim injunction, but also laid down certain guidelines for such an appointment.

These guidelines, the court said, may not be absolute in catering to all situations that may arise, but could serve as a reference point for courts appointing a local commissioner in software infringement and piracy matters.

The plaintiff filed a suit for a permanent injunction against infringement of their copyright, delivery up, damages and an account of profits from the unlicensed usage of their software, along with an application for the ex-parte appointment of a local commissioner. This was dismissed by a single judge of the Delhi High Court on the grounds that apart from an affidavit, no compelling evidence was placed on record.

On appeal, however, it was held that it would be unrealistic to expect the production of evidence of actual usage at the initial stage.

The element of surprise in a search and seizure for software piracy and infringement is critical, as the issuance of a notice would result in the removal of incriminating evidence of pirated or infringing material.

The affidavit by the private investigator was sufficient to establish a prima facie case, upon which the court appointed a commissioner. The local commissioner found evidence of unlicensed software being used and took it into possession. The appellate court also noted that the single judge was bound by the view of the division bench, even if his own views were different.

The vital question in such cases is the preservation of the infringing and incriminating evidence. In this vein, the court laid down the following guidelines:

(i) The 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 incriminating evidence can only be obtained from the premises of the opposite party and in the absence of the ex-parte appointment of a local commissioner it is likely that such evidence may be lost, removed or destroyed;

(ii) Request for the ex-parte appointment of a local commissioner in such matters is usual and is intended to serve the ends of justice.

(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.

(iv) It may not always be possible for a plaintiff to obtain any evidence of infringement by employing decoy customers and gaining access to the defendants’ premises. Any such attempt also risks the possibility of the disappearance of the pirated software or incriminating evidence in case the decoy customer is exposed.

Accordingly, a visit by an undercover customer or investigator is not to be insisted upon as a pre-condition. The report of a private investigator need not be disregarded 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 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, the court may consider asking the plaintiff for a deposit. This is to ensure that the defendant receives suitable compensation for the obtrusion of his work or privacy, in the case that no incriminating evidence is found.

The possibilities of seepage of information about the raid and search on premises make it imperative to take timely action in these cases. Interim relief brings in equity and enables the complainant to obtain effective recourse.

Abhai Pandey is a lawyer with Lex Orbis IP Practice, a law firm specializing in intellectual property issues.

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