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D. Murali

An engrossing account of how Microsoft set the ball rolling to fight software piracy.

A FEW months ago, Microsoft Corporation won a case in the Delhi High Court against Yogesh Papat. The matter in dispute was piracy.

No new phenomenon, you may say; yet, the verdict of Justice Pradeep Nandrajog makes for educative reading, especially if you're keen on knowing how an aggrieved company goes about seeking remedy.

Microsoft explained to the court that YP, the first defendant, had no licence to load the company's software; nor did YP have any permission from Microsoft to sell the licensed programs.

So, Microsoft prayed for five reliefs as follows: One, permanent injunction against YP's "directors, officers, servants and agents and all others" from "copying, selling, offering for sale, distributing, issuing to the public, counterfeit/ unlicensed versions" of Microsoft's software.

Two, an order restraining YP from unauthorised selling of Microsoft software, "or any deceptive variants thereof", thus infringing registered trademarks.

Three, action against YP for "passing off of the counterfeit/unlicensed software and products as genuine products."

Four, "an order for delivery" to Microsoft of all the counterfeit/unlicensed copies of its software, articles/software with "any other mark which may be identical with or deceptively similar to" Microsoft's; also, duplicating equipment used in the copying the software "including computers, compact disc writers, stampers, burners, `plates' as defined in Section 2(t) of the Copyright Act, 1957, hard disks, diskettes, packaging and advertising material, labels, stationery articles" and all other infringing stuff.

And the fifth remedy sought was "an order for rendition of accounts of profits illegally earned" by YP.

If you see the bare Act, you'd find that plate is defined in detail. It includes "any stereotype or other plate, stone, block, block mould, matrix, transfer, negative, duplicating equipment or other device used or intended to be used for printing or reproducing copies of any work, and any matrix or other appliance by which sound recording for the acoustic presentation of the work are or are intended to be made."

Evidence through exhibits

On behalf of Microsoft, it was Nikhil Krishnamurthi who presented evidence to the court through a bunch of exhibits that included the company's programs such as Office 2000, Windows 98, Visual Basic, and Visual C++.

Another exhibit was the affidavit of Vikas Arora, an employee of Microsoft, who had purchased a computer from YP loaded with pirated software of Microsoft such as Visual Studio 6.0, MS Windows 98 and MS Office 2000.

YP didn't issue a formal bill/cash memo to Arora, but gave a business card instead. However, when Arora insisted on a bill, YP gave him one dated September 3, 2002 "pertaining to sale of a computer".

The judgment notes that the bill did not list any software, software literature or CD being sold. Yet another exhibit was an affidavit from Sunil John, a computer expert, stating that the hard disk of the computer purchased by Arora was loaded with Microsoft's software. The bill plays a key role further on.

Enter CA

An important exhibit produced before the court was an affidavit of Sanjiv Sharma, a Chartered Accountant. This document helped the judicial process with some number crunching.

Such as: One, YP is in business since April 1, 1996, because his bill records sales tax registration effective from that date. Two, the sale price of the computer was Rs 27,050. Three, estimate of Microsoft's loss of business at Rs 64 lakh, on the basis of cost per unit of licensed software.

To arrive at the number, Microsoft assumed that YP sold "approximately 100 computers a year", that Windows 1998 was loaded onto 400 computers, and that 200 and 20 computers, respectively, were loaded with Office 2000 and Visual Studio 6.0.

Four, arriving at a net loss of Rs 61.6 lakh, by deducing dealers' profit of Rs 2.40 lakh. And five, computation of loss of profit to Microsoft at Rs 19.75 lakh; for this the company had worked out an average gross profit of 32.1 per cent using previous four years' annual returns. (If you want to verify, here's some help: (64 - 2.4) x 32.1/00 = 19.7736.)

Reasoning and decision

Evidence establishes that Microsoft is the registered proprietor of the mark/name Microsoft and also of the copyright in the products in question, stated the court.

Also stood established was the fact of `hard disk piracies' by YP. "Before a computer can function to carry out the tasks required by its owner, it has to be properly loaded with one or more operating systems. The operating system is nothing but software contained in a CD. The defendants are supplying computers pre-loaded with the software of the plaintiff," observed the court.

What about the financial compensation? "Though assumptive, i.e. based on the assumption of sale of 100 computers each year and on the basis of the popularity of the computer software, as also sold computers being loaded with the pirated software, loss of profit to the plaintiff in sum of Rs 19.75 lakh stands established," stated the judge.

He added, "It may be true that the financial loss is based on certain assumption, but it cannot be helped for the reason the defendant has chosen to remain ex-parte."

This was apart from the `wide-ranging injunctions' restraining YP from any further infringement of intellectual property rights of Microsoft.

The damages awarded were to be payable by the defendants jointly and severally. And the amount carried interest at 9 per cent per annum from the date of decree till date of payment.

"Plaintiff would also be entitled to damages for the reason that it would be futile to direct the defendants to render accounts for the reason that the defendants have been carrying on business surreptitiously," reasoned Justice Nandrajog.

Lord Byron spoke of chasing "the glowing hours with flying feet".

But this case is an example of chasing gory pirates with fitting exhibits and evidence, prepared and documented with clinical precision.

When IP disputes become more common, one wonders if Microsoft would think of incorporating a litigation module in its suite to help its users increase their chances of getting justice.

Cases@TheHindu.co.in

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