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Sap aktiengesellschaft and Anr. Mr. Sadiq pasha, proprietor 2011 (46) PTC 335(Del) INTELLECTUAL PROPERTY RIGHTS In the partial fulfilment of Formative Assessment –VI of Even Semester Submitted by: Submitted to: JAISHIKA Prof. Samridhi Chauhan Semester V1 School of Law BA-LLB (Hons.) 180060401011 G. D. Goenka University Gate Number 3, G. D. Goenka Education Society, Gurugram-Sohna Road, Gurugram, Haryana. MARCH 2021
TABLE OF CONTENT
- INTRODUCTION
- FACTS AND ISSUES
- HOLDINGS 05-
- ANALYSIS 07-
- CONCLUSION
- BIBLOGRAPHY
FACTS
It’s a case of plaintiff that the software programme developed and marketed by them are, computers programmes,” within the meaning section 2 (ffc) of INDIAN COPYRIGHT ACT,1957 and are also included in the definition of a, literally work” as per section 2(o) of the copyright act. It is also alleged that both India and Germany are signatories of the berne convention, universal copyright convention and WTO agreement and, therefore, rights of the plaintiff companies are protected in India under copyright act. Defendant Sadiq Pasha is stated to be the proprietor of m/s. Neologik India and is stated to be engaged in the business of providing ERP/eCRM training services to its clients and also providing training services to its clients and also providing training programme in ERP software at Bangalore. It was found by the plaintiffs that on its website www.neologikindia.com the defendant was making offer for providing various training programmes in relation to plaintiffs” software products and had also been regularly advertising the training programmes of the plaintiffs, especially software programmes of the plaintiffs, especially on SAP R/3 and ABAP/4. It also alleged that only a formal training agreement with the plaintiffs renders training license in respect of SAP software products and training packages are prohibited from being implemented as commercial industry solutions. It is claimed that there is not a single valid license granted by the plaintiffs to the defendant and, therefore, he has illegally obtained and is using pirated software products belonging to plaintiffs, It is further claimed that during the search operation on 19th^ October 2004 the police was able to recover two servers containing pirated software SAP R/3 version 4.7 IDES which were being for used for providing training on SAP software. Thereafter an e-mail was sent by the defendant to the plaintiff wherein he not only acknowledged use of plaintiffs “unlicensed software programmes but also admitted that despite raid by police he continued to conduct unauthorized training programmes in SAP software. The plaintiffs have accordingly sought an injunction restraining the defendant from reproducing and using pirated software programmes of plaintiff NO.1 including SAP R/3 and ABAP/4 for the purpose of training otherwise. They have also sought delivery up of the infringing material besides seeking rendition of account. ISSUES
- Whether a permanent injunction restraining the use of SAP Aktiengesellschaft’s products should be granted due to copyright infringement by the Proprietor of M/s. Neologik India.
- Whether punitive damages should be awarded against the Proprietor of M/s. Neologik India for the infringement.
HOLDINGS
Section 2 (o) defines 'literary work' and includes computer programs, tables and compilations including computer databases. Section 13 provides the categories of work in which the copyright subsists which includes original literary work. The author of a work is the first owner of copyright in the work. However, in case of employer-employee if a work is made in course of employment under a contract of service or apprenticeship, the employer shall be the first owner of the copyright in the above of any contract to the contrary4. These provisions of the copyright law are applicable mutatis mutandis to computer software/ programmes as well. Section 51(a)(i) of the Indian Copyright Act, 1957- Section 51 defines infringement of copyright and states that a person infringes copyright of another if he unauthorizedly commits any act which only the copyright folder has exclusive rights to do. Civil remedies to copyright infringement s are provided in chapter XII of Copyright Act, 1957 granting injunction and damages for copyright infringement and criminal liability provisions are provided in chapter XII of Copyright Act, 1957 wherein abetment of infringement is also unlawful and punishable with imprisonment of upto three years and a fine up to Rs. 2 Lacs7. A person who knowingly uses the infringing copies of Computer software commits a criminal offence punishable with imprisonment for not for not less than seven days extendable up to three years and a fine not less than Rs. 50,000/- which may extend to Rs. 2 Lacs. Section 62 of the Copyright Act, 1957 entitles a Plaintiff to file for a suit for injunction against infringements within District Court of the jurisdiction where Plaintiff resides or carries on business or works for gain. Section 40(a)of the Indian Copyright Act, 1957- This provision of the Copyright Act enables the Central Government to extend copyright to foreign works by publishing an Order in the Official Gazette. An essential feature of this provision is that only the countries mentioned in the Order, which is The International Copyright Order, 1999, can be accorded copyright in India. The “territories outside India” mentioned in subsections of this section must be included in the International Copyright Order of 1999. Hence countries which do not find their names in the International Copyright Order, 1999 cannot claim copyright for their works in India. The Central Government can extend any or all provisions of the Copyright Act to the works falling under the following categories, thus treating them in a manner as if they were Indian Works. (a) Works published in any territory outside India to be treated in a manner as if they were first published in India (b) Unpublished works whose authors at the time of making the work were subjects or citizens of a foreign country to be treated in a manner as if the authors were Indian citizens. (c) With respect to the domicile of an author in any territory outside India, the Copyright Act will apply to him as if his domicile were in India
ANALYSIS
The court while granting the injunction took into consideration that there was not a single license agreement between the two parties and during the search operation the police recovered two servers containing pirated software SAP R3. Moreover, the Proprietor of M/s. Neologik India, having never appeared in the court for contesting had rather sent an email to SAP, after the police raid, not only acknowledging the use of pirated software but also admitting to continue with it. The court while deciding for the punitive damages was of the view that if punitive damages are not awarded then it would amount to encouraging and giving an unfair advantage to an unscrupulous infringer over those who have a bona fide defense to make and therefore come forward to contest the suit and place their case before the Court. The Court referred to the case of Microsoft Corporation v. Deepak Raval [2006 (33) PTC 122 (Del)], where it had observed that in our country the Courts are becoming sensitive to the growing menace of piracy and have started granting punitive damages even in cases where due to absence of Defendant, the exact figures of sale made by them under the infringing copyright and/or trademark, and therefore exact damages are not available. It was also held that use of pirated software by a commercial enterprise needs to be dealt with more strictly than use by an individual for his personal purposes.[ CITATION Ban11 \l 16393 ] Section 14 of the Copyright Act 1957 provides that copyright means the exclusive right subject to the provisions of the Act, to do or authorize to do the specified acts in respect of a work or any substantial part thereof, which in the case of a computer programme would include the reproduction of a work in any material form including the storing of it in any medium by electronic means. The Court held that the Defendant had infringed the copyright of the Plaintiff as it had been found in evidence that the Plaintiff had issued no license to use the aforementioned software to the defendant. Further, the Defendant, on their part offered no explanation or clearance that the software found loaded in its hardware was not pirated software. Section 40 of the Copyrights Act provides, that the central Government may, by order published in the Official Gazette, direct that all or any provisions of the Act shall apply to work first published in any territory outside India to which the order relates in like manner as if they were first published within India. Para 3 of the International Copyright Order 1999, published in the Gazette of India put the aforementioned Section into practice. Accordingly, it provides that all provisions of the Copyright Act, 1957 except those in Chapter VIII and those other provisions which apply exclusively to Indian works extend to any work first made or published in any country mentioned in Part I, II, III, IV or VI of the Schedule in like manner as it were first published in India. Germany is one of the countries mentioned in Part I. Paragraph 2 of the aforesaid order provides that "Berne Convention Country" means a country which is a member of the Berne Copyright Union and includes a country mentioned either in Part I and II of the Schedule.
The Court, thus stated that in view of these conventions, the provisions of the Chapter XI of the Copyright Act including Section 51 which deals with infringement of copyright would apply to the copyright registrations of the Plaintiff. It was, therefore held that the Defendant by using the pirated software R/3 and by imparting training using the aforesaid software had infringed the copyright of the Plaintiff and injunction was granted in favour of the Plaintiff.[ CITATION Bhu11 \l 16393 ] A perusal of the Standard SAP Software End User Value Licence Agreement filed by the plaintiffs would show that such licence does not entitle the licensee to provide training to any third party except to the extent provided in the agreement, nor can the licensee use the software and third-party database for a Service Bureau Application. Licensee is also precluded from sub-licensing or renting the software, documentation or third-party database. It further shows that such a licence is granted to install the software and third party database only on designated units intranet servers, internet servers or third party front ends, as identified by the licensee pursuant to the agreement and the designated units cannot be shared for the purpose of software for the companies who are not defined as licensee or authorized affiliates and who have not been previously approved by SAP in writing or otherwise officially made known to the public as appropriate for use or interoperation with the software and third party database. The maximum number of persons licensed to use the software is specified in the appendices to the agreement. Thus, even if the defendant was to obtain an End User License from the plaintiffs, it could have been used for the purpose of imparting training in SAP R/3 or any other programme copyright in which vests in the plaintiff company. A perusal of the standard Education License Agreement of the plaintiff company would show that the plaintiffs Authorized Training Centres utilize such part of SAP products as are shown in the appendix which SAP may in its discretion deem necessary as part of SAP Academics taught by TP-SAP training centre under the Education Partner Programme in the territory. It further shows that user would mean employees of TP-SAP training centre, who are required to carry out the obligations of the training centre under the agreement and the students who require access to software pursuant thereto. The training centres are required to register its qualified employees participating in any of the published SAP educational services training centres. SAP is required to handle the registration of students to its database registration system and training centre is required to declare and provide and actual number and relevant data of participants to SAP. The training centre is required to ensure that only suitably qualified employees of the centres are selected to attend the SAP academy courses they also rapidly acquire and maintain a comprehensive and fundamental knowledge of SAP products. The training centres are also required to ensure that they have sufficient number of qualified staff and instructors.
For the reasons given in the preceding paragraphs, I am of the view that the defendant infringed the copyright of the plaintiffs by using the pirated software R/3 and by imparting training using the aforesaid software. During the course of arguments, the learned counsel for the plaintiffs confined his prayers to grant of permanent injunction and punitive damages. Regarding punitive damages in the case of Time Incorporated v. Lokesh Srivastava & Anr., 2005 (30) PTC 3 (Del), this Court observed that punitive damages are founded on the philosophy of corrective justice and as such, in appropriate cases these must be awarded to give a signal to the wrong doers that the law does not take a breach merely as a matter between rival parties but feels concerned about those also who are not party to the list but suffer on account of the breach. In the case of Hero Honda Motors Ltd. v. Shree Assuramji Scooters, 2006 (32) PTC 117 (Del), this Court noticing that the defendant had chosen to stay away from the proceedings of the Court felt that in such case punitive damages need to be awarded, since otherwise the defendant, who appears in the Court and submits its account books would be liable for damages whereas a party which chooses to stay away from the Court proceedings would escape the liability on account of the failure of the availability of account books.[ CITATION VKJ11 \l 16393 ]
CONCLUSION
The Court granted injunction restraining the Proprietor of M/s. Neologik India, from using any pirated/unlicensed software of the SAP Aktiengesellschaft Company and also from providing training in those programs. The Court also awarded punitive damages of Rs. 1 lakh to SAP against the Proprietor of M/s. Neologik India. Also, the Court needs to take note of the fact that a lot of energy and resources are spent in litigating against those who infringe the trademark and copyright of others and try to encash upon the goodwill and reputation of other brands by passing of their goods and/or services as those of that well-known brand. If punitive damages are not awarded in such cases, it would only encourage unscrupulous persons who actuated by dishonest intention, in the case of a trademark use the well-reputed trademark of another person, so as to encash on the goodwill and reputation which that mark enjoys in the market, with impunity or in the case of a software use the pirated software thereby depriving the copyright owner of the revenue to which he is entitled by sale of license to use that software and then avoid payment of damages by remaining absent from the Court, thereby depriving the plaintiff an opportunity to establish actual profit earned by him from use of the infringing mark/pirated software.
