India: Guidelines For Appointment Of Local Commissioner In Software Infringement And Piracy

Last Updated: 29 September 2008

The onset of the computer era brought in just as many adversities as advantages. While softwares customize computers to perform desired functions, the exclusivity and expertise that some of these packages offer, make them susceptible to infringement and piracy. Autodesk Inc., owners of copyright in world famous software 3DS Max and Autodesk Maya filed a suit against A.V.T. Shankardass and another for infringement and unauthorized use of their software to restrain infringement of copyright, delivery up as well as rendition of account of profits and damages for unlicensed usage of their software. The suit was accompanied with an application for interim injunction and a application for ex parte appointment of Local Commissioner. An appeal lay at the Delhi High Court [Autodesk Inc. and Anr. v. A.V.T. Shankardass and Anr {2008 (37) PTC 581 (Del.)}] against the order of the Single Judge dismissing their prayer for appointment of a Local Commissioner ex parte.

The Court while issuing a notice in the appeal appointed ex-parte a Local Commissioner to visit the premises of Shankardass to prepare an inventory of unlicensed software belonging to Autodesk, while allowing him to take into custody the Central Processing Units (CPUs), Floppy Discs/DVDs and while taking the assistance of Autodesk' representatives and their technical expert. The Court having received the Report of the Local Commissioner, which reflected him having found incriminating evidence of unlicensed software being used and noted having taken possession of the same. The Court noted that negotiations thereafter took place between the parties, pursuant to which a proposed settlement was filed before the learned Single Judge.

The parties to the present appeal both urged that in view of divergent views and orders being passed by Single Benches on the request for appointment of Local Commissioner in cases of piracy and infringement of copy right in computer software, it was of critical importance that the Division Bench lay down guidelines for exercise of discretion in such matters. Accordingly, the Court, while appointing Local Commissioner indicated that they did propose to do so. Autodesk while seeking Appointment of Local Commissioner had averred that their software had acquired international acclaim for being a pioneer in designing and in animation programmes. Autodesk' suit claimed damages amounting to Rs.20 lakhs in pursuance of which a settlement had been arrived at. They also stated that a single licence to Media Factory India Pvt. Ltd had been issued for the use of software 3DS Max. They alleged that the use of the software in 29 other computers was unauthorized. No licence had been granted for the software Autodesk Maya.

They appointment of a Local Commissioner ex parte was stated to have been sought on the ground that upon receipt of summons in suit or notice in the injunction application, the infringers could easily remove the evidence of infringing software. In order to make out a prima facie case for appointment of a Local Commissioner an affidavit sworn by a private investigator stating his findings on investigation had been placed on record, which was used in pursuance to getting the matter decided. However, the Single Judge found that the affidavit of the private Investigator alone did not make out the existence of a strong prima facie case . He further held that the question of protection of evidence likely to be erased did not arise since the affidavit did not point to any credible or reasonable suspicion and that the affidavit simply invited the Court to presume a state of affairs.

Autodesk urged that the essential question for consideration dealt with the preservation of infringing and incriminating evidence. They also pointed out the learned Single Judge in another case with similar allegations and wherein an affidavit of the same Investigator was filed, the Judge had granted ex parte appointment of Local Commissioner. Not only that, the learned Single Judge had permitted the Local Commissioner to visit any other premises where the he may have reason to believe that infringing/offending software was being used. Autodesk averred that the Single Judge, declined to appoint the Local Commissioner for reasons as noted by him, held that there was an absence of strong prime facie case, inasmuch as the affidavit did not reveal any material finding and that the investigator had not made even a single visit, while there being no basis for credible or reasonable suspicion.

The Division Bench opined that the order was not sustainable. They stated that the Single Judge had erred in holding that the appellant did not have a strong prima facie case. In view of the circumstances urged by Autodesk, they stated that it was incorrect to conclude that a strong prima facie case was non-existent. Commenting that the element of surprise was crucial to an action of infringement of software and piracy, they stated that issuance of notice would result in effacement of the incriminating evidence, thus being a question of preserving evidence rather than collecting evidence. The decision in Anton Pillar KG Vs. Manufacturing Processes Limited and others[FSR 1976 Pg. 129] was also referred to since the Single Judge had failed to exercise jurisdiction vested in him in accordance with law, especially in failing to pass orders, which would preserve and protect the incriminating evidence.

Shankardass' aversion as to non-seizure and return of computer systems and the CPUs found or suspected to be involved in use of infringing software and the admission of ghost copies of the same including the software for purposes of evidence in Court, was vehemently opposed by Autodesk. The Court opined that it was most appropriate to leave such considerations and concessions to be dealt with on a case-to-case basis.

Hearing the recommendations of both parties as to guidelines to be set, the Court here observed that it was neither feasible nor practical to lay down guidelines, which would cater to numerous and all the situations that may arise. However, the following factors and guidelines were enumerated to govern the appointment of a Local Commissioner in software infringement and piracy matters:-

  1. The object of 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 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;
  2. 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;
  3. 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.
  4. 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 pre condition. A report of 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.
  5. 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.

© Lex Orbis 2008

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