S/w piracy, Judiciary sharpens teeth

INDIA: Delhi High Court continues to remain tough on the issues of software piracy in the country. In their efforts to create an effective deterrence in companies and organization using pirated or unlicensed software, the honourable Court fined a company Rs. 10 lakhs as compensatory & punitive damages to the software copyright holders for using pirated software for commercial purposes without adequate genuine licenses. While several judgments for damages have been passed against illegal hard-disk loading by the Delhi High Court, this is the first ever judgment on damages against a corporate end-user company. The Plaintiffs in this case were Adobe and Microsoft.

While granting the order, the Court cited the famous judgment of Time Incorporated v. Lokesh Srivastava, 2005 (30) PTC 3 (Del), which expressed a need for the courts to get tough on the issues of piracy and counterfeiting. In that case the court said: “This Court has no hesitation in saying that the time has come when the Courts dealing with actions for infringement of trademark, copyrights, patents etc., should not only grant compensatory damages but award punitive damages also with a view to discourage and dishearten law breakers who indulge in violations 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." The judgment reflects the changing mindset and tougher stand of the Indian judiciary in view of the threats and risks posed by piracy and counterfeiting to the India economy and the innovative culture of India.

According to BSA estimates, from the approximately 45 to 50 end-user civil actions initiated jointly by its member companies from January 2008 onwards against companies and organizations  using pirated software in India, the approximate value of pirated software found in these companies could be  valued at Rs. 85,78,30,000. This figure of loss would be much higher if it had also taken into account cases where member companies had independently pursued civil action against end-user companies. As per 2008 IDC-BSA Global Software Piracy Study the India software piracy rate stood at high 68 per cent and the revenue losses attributed to software piracy in India in that year was estimated at $ 2.7 billion.

The piracy rate in India has decreased at a slow place - by six percentage points over a period of five years. A whopping 68 per cent of packaged software on PCs were pirated in 2008 in India, amounting to huge revenue and job losses to the domestic software industry. 

According to an economic impact study of software piracy conducted and published by IDC in 2008, in India, reducing software piracy by ten percentage points over a four year period could generate an additional 43,000 new jobs, $3.1 billion in economic growth, and $200 million in Government tax revenues. There was further potential good news for local vendors, where the study also predicted an additional $2.7 billion in revenues to local vendors alone.

“TheBusiness Software Alliance (BSA) welcomes the decision taken by the Delhi High Court. The honorable Court has sent a strong message through this example that piracy and counterfeiting of software not only harms the copyright owner, it also affects the national economy as a whole and is a deterrent to indigenous product innovation and economic growth. Today, the Indian IT industry is in desperate need of tough measures against piracy and counterfeiting, both from the government and judiciary, as the indigenous IT product business sector is growing robustly.   Unless this sector has the security of their innovations being protected from copying and infringement, they will be discouraged to invest in product development and from competing at the global level. Such pioneering efforts by the Indian judiciary communicate the seriousness of the civil wrong, which is also a crime, and helps strengthen India’s claim of it being the leading place to conduct business and innovate in the IT segment” said Keshav S. Dhakad, Chair, BSA India Committee.

“Even though Indian laws provide for strong intellectual property (IP) protection, the system of enforcement and implementation of the said laws need to be strengthened and streamlined. The enforcement system needs to be more efficient, stringent and effective. Besides public being made more aware on the perils of piracy and counterfeiting, greater awareness and training need to be imparted amongst law enforcement officials and the judiciary on the importance of IPRs to the overall economy of India and how IP violations are a direct attack on R&D investments, growth of jobs, indigenous innovations, personal safety, government taxes etc, causing enormous losses to the nation as a whole. India, being regarded as a knowledge economy, cannot lose sight of the need to instill a strong respect for IP rights, and courts definitely play an integral role in setting boundaries and best practices in IP protection.” added Dhakad.