Via SpicyIP: The Delhi High Court has its Hands Tied: Writ Concerning Divisional Patent Applications

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Using Unlicensed Software at your Company? Be Ready for Surprise Raids on your Premises under Anton Pillar Orders!

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Ritvik M. Kulkarni, III BSL LLB, ILS Law College, Pune

Under the Copyright Act, 1957 a copyright holder (the Plaintiff) gets a special civil remedy in cases infringement. The Plaintiff can ask the Court to grant an Anton Pillar order to appoint Local Commissioners to inspect the locations and establishments of the infringer (the Defendant) and seize the infringing works. The Plaintiff can avail of this remedy under Order 26 Rule 9 of the CPC, which provides as under:

Order XXVI Rule 9. Commissions to make local investigations- In any suit in which the court deems a local investigation to be requisite or proper for the purpose of elucidating any matter in dispute, or of ascertaining the market value of any property, or the amount of any mesne profits or damages or annual net profits, the court may issue a commission to such person as it thinks fit directing him to make such investigation and to report thereon to the court:

Provided that, where the State Government has made rules as to the persons to whom such commission shall be issued, the court shall be bound by such rules.

The object of the commission under this rule is not to collect evidence which could be taken to court but to obtain evidence which for elucidating matters which are local in character, and it is in the discretion of the court whether to issue it or not[1]. Often in cases of software copyright infringement, the Plaintiff argues that unless the Court grants an ex-parte order, the defendant will get a chance to destroy evidence as it is fairly simple to delete infringing software. Therefore in such cases, a notice to the Defendant is only necessary when the commissioner begins his investigation[2].

In the landmark case of Autodesk Inc. and Anr. v. A.V.T. Shankardass and Anr[3], the Delhi High Court has laid down a few guidelines to abide by, keeping in mind the threat to the Defendant’s privacy:

“(i) The pirated software or incriminating evidence can only be obtained from the premises of the opposite party alone and in the absence of an ex-parte appointment of a Local Commissioner there is likelihood that such evidence may be lost, removed or destroyed;

(ii) Request for ex-parte appointment of a Local Commissioner in such matters is usual and in fact is intended to sub serve the ends of justice as it is imperative to have an element of surprise so that the actual position is not altered; 

(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 itself. It has to be tested on the touchstone of pragmatism and the natural and normal course of conduct and practice in trade.

 

(iv) It may not always be possible for a plaintiff to obtain any admission by employing decoy customers and gaining access to the Defendant’s premises. Any such attempt also inheres in it the possibility of disappearance of the pirated software/incriminating evidence in case the decoy customers is exposed. Accordingly, visit by decoy customer or investigator is not to be insisted upon as precondition. A report of private Investigator need not be dis-regarded 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 certain and 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, it may consider asking the plaintiff to deposit cost in Court so that in case pirated software or incriminating evidence is not found then the defendant can be suitably compensated for the obtrusion in his work or privacy.”

Since this order, there have been numerous cases where such an ex-parte Anton Pillar order has been granted to the Plaintiff. To take an example, Microsoft has been one of the most proactive companies to make a perusal of the above provisions. It has brought infringement proceedings against several companies for allegedly using unlicensed software on their computers.

Remember, copyright in software does not work like it does for other literary works; software copyrights are only licensed to the user and never completely alienated or sold. The main reason for affording this special status to computer programs is based on the fact that there is considerable amount of research done and expenditure made on developing these programs.

Now let’s take a look at how exactly they come across these alleged infringements in the first place.

Huge software companies like Microsoft form a database of their sales; from which they can figure out the computers, and their owners thereof, which are using their software. Next, they cross check their database for the licenses held by (and / or in the name of) these persons / companies. If it turns out that the number of computers carrying the software users is disproportionate to the number of licenses held by the owner(s), they suspect that there is room for infringement on part of the users.

Then in order to get concrete evidence, they hire private investigators to strengthen their claim. These private investigators are required to establish two things: (i) the number of computers or laptops or other related tech installed at the premises and (ii) that these computers carry copyrighted software. The investigators can find out about both these things by simply calling up the concerned officer(s) of the company under the garb of legitimately acquiring other related information. Often, the investigators may even visit the premises of the owner to conduct an inspection. Then on the basis of the preliminary search on the database and the investigations conducted, the software companies immediately apply to the court for an Anton Pillar.

Once the Local Commissioner(s) (“LC”) is appointed, he is required to personally visit the premises of the alleged infringer to inspect the premises for computers carrying the unlicensed software. For the purpose of this visit, the LC may be accompanied by the Plaintiff’s advocate and technical experts (often employed by the Plaintiff). There is a controversy regarding the legality of an arrangement where the Plaintiff’s employees are a part of the commission; since this might prejudice the credibility of the LC’s report.

Read more about this here. (“Can civil courts appoint technical experts in software piracy suits? By Advocate Arun C. Mohan, Madras High Court. Posted on and by SpicyIP.com)

After the inspection is done; all machines found to be carrying the infringing software are sealed, recorded and released on a superdari basis to the Defendant’s authorised agent. The Defendant’s authorised agent present at the spot is required to give a signed undertaking to the Commissioner that the sealed machines and equipment, in their present condition, will be produced before the Court as and when required. The LC then makes his report and produces to the Court. However, such a report is not conclusive evidence of the Defendant’s guilt; the Defendant’s counsel may rubbish the report during the process of cross-examination.

In many cases, once the Defendant realizes that the Court is bound to hold it liable for infringement; the parties commence negotiations, enter into a consent agreement and settle the matter out of Court.

[1] Re Moosa Kutty, AIR 1953 Madras 717

[2] M. Achutan v Kunhipathumna, AIR 1968 Ker 233

[3] {2008 (37) PTC 581 (Del.)}