THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment Pronounced on: 2nd August 2011
+ CS(OS) 789/2004
MICROSOFT CORPORATION ..... Plaintiff
Through: Mr. Pravin Anand and Ms. Jaya
Negi, Advs.
versus
VIJAY KAUSHIK & ANR. ..... Defendant
Through: None.
CORAM:-
HON'BLE MR JUSTICE V.K. JAIN
1.
Whether Reporters of local papers may
be allowed to see the judgment? No
2. To be referred to the Reporter or not? No
3. Whether the judgment should be reported
in Digest? No
V.K. JAIN, J (ORAL)
1. The plaintiff Microsoft Corporation is a company
registered in USA and has setup a marketing subsidiary in
India known as Microsoft Corporation India Private Limited.
The plaintiff company provides a number of software
products such as Microsoft Windows, Microsoft Office, etc.,
which are being installed and used on large number of
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computers all over the world including India. It is claimed
that the software developed and marketed by the plaintiff is
a „computer program‟ within the meaning of Section 2(ffc) of
the Copyright Act, 1957 and is also included in the
definition of literary work as per Section 2(o) of the Act. It is
alleged that the computer program of the plaintiff company
have been created by its employees for the company and the
copyright in those works belongs to the plaintiff company.
2. The plaintiff also claims to be the owner of the
trademark Microsoft, which it adopted in the year 1970 and
which it has since then been using continuously and
extensively not only as a trademark but also as a key and
essential component of its corporate name. It is also
claimed that the trademark Microsoft is a well-known mark
and no other person is entitled to use the aforesaid mark in
relation to any goods or business. The trademark Microsoft
has also been registered in favour of the plaintiff company
in India in Classes 9 and 16 vide registration No.430449B
and 430450B, respectively.
3. In May 2004, on receiving information that the
defendants have been infringing the copyright and
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trademarks of the plaintiff, by preloading software on the
hard disk forming part of the computer being assembled
and sold by them, the plaintiff engaged an Investigator to
verify the complaints received by it. The Investigator Mr.
Manoj Kumar visited the premises of defendant No.2 M/s
Supreme Peripherals Pvt. Ltd. on 8th June 2004 and placed
order for a computer system. On 9th June 2004, he was
given delivery of the computer by defendant No.1 Mr. Anil
Kumar, an employee of defendant No.2. That computer was
loaded with unlicenced software of the plaintiff company.
Mr. Manoj Kumar delivered that computer in sealed boxes
to the office of M/s Anand & Anand at New Delhi. The
sealed boxes were got photographed by plaintiff‟s technical
expert Mr. Gurjot Singh on the next day. He then opened
the boxes, inspected the computer purchased from the
defendants and took printouts of the directories of its hard
disk. The inspection revealed that the operating system
Microsoft Windows XP Professional Version 2002 and
software Microsoft Office 2000 and Microsoft Visual Basic
6.0 had been loaded in the computer without any
authorization. It was opined by the expert that the hard
disk contained unlicenced and/or pirated version of the
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plaintiff‟s software. The software program was not
accompanied by the original Media, i.e. Compact
Disc/Floppy Disks, Certificate of Authenticity, End User
Licence Agreement, User Instruction Manuals, Registration
Cards, etc. which are normally accompanying the genuine
software of the plaintiff company. The defendants are thus
alleged to have infringed the trademark and copyright of the
plaintiff company by selling the computer containing hard
disk loaded with the aforesaid pirated computer program.
The plaintiffs have sought injunction restraining the defendants from keeping, selling, offering for sale, distributing or issuing to the public any counterfeit/unlicenced version of its software or any deceptive version thereof. The plaintiff has also sought
delivery up of all the counterfeit/unlicenced copies of the
plaintiff‟s software besides rendition of accounts.
4. The defendants were proceeded ex parte on March
23, 2005.
5. The plaintiff has filed affidavits of Mr. Manoj
Kumar, who was the Investigator appointed by it, Mr.
Sanjeev Sharma, who is a Chartered Accountant, Mr.
CS(OS)No.789/2004 Page 4 of 19
Achuthan Shreekumar, Constituted Attorney of plaintiff
company, Mr. Bhagwati Prasad, Advocate, who is working
with Mr. Anand & Anand Advocates and its technical expert
Mr Gurjot Singh.
6. In his affidavit by way of evidence Mr. Manoj
Kumar has stated that on instructions from the plaintiff
company, he visited the premises of M/s. Supreme
Peripherals Pvt. Ltd. located at 205 Meghdoot Building, 94,
Nehru Place, New Delhi on 8th June 2004 and met its
employee Mr. Anil Kumar, who handed over the visiting card
of Mr. Vishal Kaushik, Director of defendant No.2 company
to him. He has further stated that he sought quotation for a
Pentium IV desktop computer with a particular
configuration. Mr. Anil Kumar then handed over a
quotation invoice to him on the letterhead of defendant No.2
company, which is Annexure III to his affidavit. Mr. Kumar
also said that he would be able to provide any software free
of charge when he indicated that he would like to have
Microsoft Windows XP, Microsoft Officer, Microsoft Visual
Studio, Norton Antivirus, Games, etc. The witness also
made advance payment of Rs.5,000/- for which the receipt,
CS(OS)No.789/2004 Page 5 of 19
which is Annexure III to the affidavit, was handed over to
him and he was asked to take delivery of the machine on
the next day. He again visited the premised of defendant
No.2 on 9th June 2004 and delivery of the machine was
given to him after loading the software. On checking the
machine he found Microsoft Windows XP Professional,
Microsoft Office and Microsoft Visual Basic, installed in the
machine along with other software. The computer was
thereafter packed and sealed in the boxes in his presence
and a receipt which is Annexure IV to the affidavit was given
to him after taking the balance amount from him. He took
delivery of the computer at about 5:30 PM and placed his
name seal on the compute boxes, indicating date and time
as well. He then delivered the machine in the office of M/s.
Anand & Anand, B-41, Nizamuddin East, New Delhi at
about 6:00 PM. He has further stated the no amount was
charged from him for the software installed in the computer
and no literature pertaining to licences or any original
CDs/Floppy Disks or operating CD for the software was
given to him. In his affidavit by way of evidence Mr. Gurjot
Singh, who is a qualified Microsoft Certified Systems
Engineer and a Microsoft Certified Professional, has stated
CS(OS)No.789/2004 Page 6 of 19
that on 10th June 2004, he was asked by the
representatives of the plaintiff company to examine the
contents of a computer purchased from defendant No.2
company, which was kept at the office of the plaintiff‟s
representatives at B-41, Nizamuddin East, New Delhi. He
was handed over sealed boxes which M/s. Anand & Anand
received on 9th June 2004. The boxes handed over to him
were in a sealed condition. He took digital pictures of all the
three boxes and computer printout of those pictures is
Annexure A to his affidavit. He then opened the boxes and
took out the monitor, CPU, keyboard, etc. After switching
on the computer, he took out a printout of the contents of
the hard disk, which revealed Microsoft Windows XP
Professional Version 2002, Microsoft Office 2000 and
Microsoft Visual Basic 6.0 loaded into it. He took coloured
printout of the screenshots of all the printouts as well as
printout of the directory which are Annexure B to his
affidavit. The printout indicated the time and date when the
software were loaded in the machines. On examining the
software contained in the hard disk, he concluded that they
were pirated softwares for the following reasons:-
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(a) Unlike in the case of original software, the computer
loaded with the aforesaid software was not
accompanied by Media (CDs/floppies), Instructional
Manuals, End User Licence Agreement, Certificates of
Authenticity and Registration Cards.
(b) In the case of original software, each of the software
accompanying the sale of a computer would
necessarily be packaged and sold along with Media
(CDs/floppies), Instructional Manuals, End User
Licence Agreements, Certificates of Authenticity and
Registration Cards.
(c) The product keys of the software loaded in the
computer inspected by me were “installation break
codes” as an original product key of a plaintiff‟s
software does not contain nos. such as “00000” or
“1111111111”. “Break codes” are product keys codes
which can bypass the requirement of providing
authentic installation codes during software
installation.
7. Mr. Achuthan Sreekumar, Constituted Attorney of
the plaintiff company has supported on oath the case setup
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in the plaint and has deposed about the trademark and
copyright of the plaintiff company.
8. In his affidavit Mr. Bhagwati Prasad, Advocate has
stated that he has been working with Anand & Anand
Advocates since 1983 and on 9th June 2004 one box
containing monitor, one box containing CPU and two boxes
containing the accessories were delivered in their office by
the investigator Mr. Manoj Kumar in a sealed condition. He
further stated that on 10th June 2004 contents of the
computer system purchased by the investigator from the
defendants were examined by Mr. Gurjot Singh in their
office. He further stated that computer system examined by
Mr. Gurjot Singh was the same which was purchased by Mr.
Manoj Kumar from defendants on 9 th June 2004.
9. Ex. P-8 is the Certificate of Registration of the word
mark Microsoft in the name of Microsoft Corporation in
respect of computer programmes prerecorded on tapes,
disks, disketee cartridges, cassettes, and within ready only
memories, computer programs and related user manuals
and instructional guides sold as a unit, whereas Ex.P-9 is
the Copy of registration in Class 16 in respect of computer
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documents relating to computer hardware, software
manuals, computer documentation, reference, user,
instructional and general utilities manuals and data sheets
for computer hardware and software manufacturers,
producers and users. It would thus be seen that plaintiff is
the proprietor of the trademark Microsoft in India in respect
of the computer programme recorded on tapes, disks, CDs,
etc. as also all the accompanying users, manuals,
instruction guide, etc.
10. Ex.P-4 is the Certificate of copyright registration in
respect of Microsoft Office 2000 Professional. Ex.P-6 is the
copyright registration in respect of Microsoft Visual Basic
Version 6.0, Ex.P-9 is the Certificate of Registration in
respect of the work Microsoft Visual Basic 6.0 and Ex.P-7 is
the Certificate of Registration of the work Microsoft Visual
C++ 6.0 Enterprise Edition. Ex. P-4 to P-6 are US
registrations.
11. Section 40 of the Copyright Act, 1957, to the extent
it is relevant, 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
CS(OS)No.789/2004 Page 10 of 19
any territory outside India to which the order relates in like
manner as if they were first published within India.
12. Para 3 of International Copyright Order 1999
issued vide S.O. 228(E) dated 24th March, 1999 published in
the Gazette of India, Extra Part II would show that vide
aforesaid order, all the provisions of the Copyright Act, 1957
except those in Chapter VIII and those other provisions
which apply exclusively to Indian works have been extended
to any work first made or published in a country mentioned
in Part I, II, III, IV or VI of the Schedule in like manner as if
it was first published in India. USA is included as one of
the countries mentioned in Part I of the Schedule and its
name appears at number 131 of the list. 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 or
in Part II of the Schedule. Therefore, USA is a member of
the Berne Copyright Union and all the provisions of the
Copyright Act, 1957 except those contained in Chapter VIII,
and those other provisions which apply exclusively to Indian
works are applicable to the copyrights in respect of any
CS(OS)No.789/2004 Page 11 of 19
work which has been published first in USA.
13. Clause (d) of Section 3 of the International
Copyright Order, 1999, to the extent it is relevant, provides
that the aforesaid provisions shall apply to any work first
made or published by a body corporate incorporated under
any law of a country mentioned in Part I, II, III, IV or Part VI
of the Schedule, in like manner, as if it was incorporated
under a law in force in India.
14. The provisions of para 3 however have been made
applicable subject to the provisions contained in para 4 to 6
of the order. Paragraph 4 of the International Copyright
Order, 1999 does not apply in this case. Section 32 of the
Copyright Act, 1957 to which paras 5 and 6 of the aforesaid
order pertains relates to licences in public translations and
therefore, does not apply to facts of the case before this
Court.
15. Thus, in view of the provisions contained in
Section 40 of the Copyright Act read with International
Copyright Order, 1999, the provisions of Chapter XI of the
Copyright Act including Section 51 which deals with
infringement of copyright would apply to the copyright
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registrations obtained by the plaintiffs in respect of the
software found to be installed in the computers of defendant
no. 2.
16. Section 51 of the Copyright Act, to the extent
relevant, provides that copyright in a work shall be deemed
to be infringed when any person without a licence granted
by the owner of the copyright or the Registrar of Copyrights
under the Act or in contravention of the conditions of a
licence so granted or of any condition imposed by a
competent authority under the Act does anything, the
exclusive right to do which is by the Act is conferred upon
the owner of the copyright.
17. Section 14 of the Copyright Act, to the extent
relevant, provides that copyright means the exclusive rights
subject to the provisions of the Act, to do or authorize the
doing of specified acts in respect of a work or any
substantial part thereof, which in the case of a computer
programme would include to reproduce the work in any
material form including the storing of it in any medium by
electronic means.
18. The deposition of Mr. Manoj Kumar, who was the
CS(OS)No.789/2004 Page 13 of 19
investigator appointed by the plaintiff company shows that
he had purchased a computer system from defendant No.2
on 8th/9th June 2004, had got it sealed in boxes and later
delivered those boxes in the office of M/s. Anand & Anand
at B-41, Nizamuddin East, New Delhi. His deposition also
shows that he had informed the representatives of
defendant No.2 that he would like to have Microsoft Office
XP, Microsoft Office, Microsoft Visual Studio, Norton
Antivirus, Games amongst other softwares to be loaded in
the computer and on checking the machines, he found
Microsoft Windows XP Professional, Microsoft Office and
Microsoft Visual Basic, etc. installed therein. The
deposition of Sh. Bhagwati Prassad, Advocate shows that
the sealed boxes which Mr. Manoj Kumar had deposited in
their office on 9th June 2004 were inspected by Mr. Gurjot
Singh on 10th June 2004. The affidavit of Mr. Gurjot Singh
shows that Microsoft Windows XP Professional Version
2002, Microsoft Office 2000 and Microsoft Visual Basic 6.0
were found installed in the computers which Mr. Manoj
Kumar had purchased from defendant No.2 and which he
had delivered at the office of M/s. Anand & Anand
Advocates on 9th June 2004. Mr. Gurjot Singh has, in his
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affidavit, given grounds on the basis of which he came to
the conclusion that the software found loaded in the
computer inspected by him were pirated softwares. The
deposition of Mr. Gurjot Singh as well Mr. Manoj Kumar
also shows that the computer sold by defendant No.2 to Mr.
Manoj Kumar was not accompanied by any media such as
CDs/floppies, Instructional Manuals, End User Licence
Agreements, Certificates of Authenticity and Registration
Cards. Had the software loaded with the computer been
genuine software purchased from plaintiff company, not
only the CD/floppy, but the instructional manual and
certificate of authenticity, etc. would have been supplied by
defendant No.2 to Mr. Manoj Kumar along with the
computer. In particular the affidavit of Mr. Gurjot Singh
shows that the product keys of the software loaded in the
computer inspected by him were “installation break codes”
since the original product key of plaintiff‟s genuine software
does not contain numbers such as “0000” or “1111111111”.
According to him break codes are products key codes which
can bypass the requirement of providing authentic
installation codes during software installation. In view of
the inspection report of Mr. Gurjot Singh coupled with the
CS(OS)No.789/2004 Page 15 of 19
deposition of Mr. Manoj Kumar, I have no hesitation in
holding that defendant No.2 had sold computer system
having a hard disk loaded with pirated software Microsoft
Windows XP Professional Version 2002, Microsoft Office
2000 and Microsoft Visual Basic 6.0. By selling computer
system which contained a hard disk loaded with the pirated
software in which copyright is held by the plaintiff company,
defendant No.2 infringed the copyright of the plaintiff in the
aforesaid computer program. The contention of the learned
counsel for the plaintiff is that use of the pirated software
also involves use of the trademark Microsoft of the plaintiff
company without any licence from the plaintiff company
and, therefore, defendant no.2 has also infringed the
registered trademark of the plaintiff company which is
otherwise a well-known mark in India.
19. The learned counsel for the plaintiff states that he
is confining his prayer to grant of perpetual injunction and
damages. In Autodesk, Inc. vs. Mr. Prakash Deshmukh,
Suit No. 1755/2003 decided on 9th March 2011, in which
Microsoft Corporation was plaintiff No.2 before this Court,
this Court inter alia observed as under:-
CS(OS)No.789/2004 Page 16 of 19
It is difficult to dispute that the use of
pirated softwares of reputed
companies such as Microsoft and
AutoCAD is widely prevalent in our
country and in fact, use of pirated
software may be far exceeding the use
of licenced software. The companies
which invest heavily in development
of such highly useful software, will be
discouraged from making further
investments in designing new
softwares and improving the existing
ones, if they are deprived of licence
fee which they get on sale of licences,
since it is only from that money that
they can develop new softwares by
making substantial investments in
research and development.
20. Defendant No.2 has been found using the pirated
software of the plaintiff company for making gains in its
business. There is a strong likelihood of defendant No.2
persisting with sale of computer system having hard disk
loaded with pirated software unless adequate punitive
damages are awarded against it. In fact use of pirated
software by a commercial entity such as defendant No.2
needs to be dealt with more strictly then use of software by
an individual for his personal purpose. Defendant No. 2 has
not come forward to contest the suit. Had it contested the
suit, it would have been possible for the Court to scrutinize
its account books to ascertain the profit it has been making
CS(OS)No.789/2004 Page 17 of 19
from sale of computers loaded with pirated software. The
defendant No. 2 is a company, carrying business in Nehru
Place, a prime locality, which is the main market for sale of
such products. It can, therefore, be safely assumed that it
must be making handsome profits by selling computers
loaded with pirated software and that is why it has taken
the risk of carrying business of this nature and has chose
not to come forward to contest the suit. The punitive
damages to be awarded against defendant No. 2, therefore,
need to be adequate, exemplary and deterrent enough.
21. For the reasons given in the preceding paragraphs,
a decree with costs is passed against defendant No.2
restraining it from selling, offering for sale, storing,
distributing of any computer systems or any other computer
hardware loaded with the software Microsoft Windows XP
Professional Version 2002, Microsoft Office 2000 and
Microsoft Visual Basic 6.0 or any other software in which
the plaintiff company hold copyright and/or trademark
registration, except under a licence from the plaintiff
company. Defendant No.2 is also directed to pay Rs.5 Lacs
as punitive damages to the plaintiff company. As far as
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defendant No.1 is concerned, he being a Director of the
plaintiff company, no decree needs to be passed against
him. The suit against defendant No.1 is dismissed without
any order as to costs.
(V.K. JAIN)
JUDGE
AUGUST 02, 2011
Ag
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