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SAP Aktiengesellschaft & Anr (Plaintiff) Vs. Sadiq Pasha, Proprietor, M/s Neologik India

BananaIP Counsels > Copyrights  > SAP Aktiengesellschaft & Anr (Plaintiff) Vs. Sadiq Pasha, Proprietor, M/s Neologik India

SAP Aktiengesellschaft & Anr (Plaintiff) Vs. Sadiq Pasha, Proprietor, M/s Neologik India

This post was first published on June 24, 2011.
Brief Facts of the case:
The plaintiff,  Sap Aktiengesellschaft (herein after referred to as ‘SAP’) is a company incorporated in Germany, and claims to be the global leader in developing application software products for real time business developing process. SAP developed different versions of an automatic accounting and transaction-processing program that featured standard software and real-time computing known as SAP R/3 in the year 1992. The defendant, Mr. Sadiq Pasha, is the proprietor of M/s. Neologik India and is stated to be engaged in the business of providing training services to its clients in ERP software. It was found by SAP that on the website of  M/s. Neologik India, it  was offering providing various training programs in relation to SAP ’s software products, especially on SAP R/3 and ABAP/4.  SAP filed a suit in the High Court of Delhi seeking a permanent injunction restraining infringement of copyright of SAP, delivery of infringing material and rendition of accounts of profits.
Issue:
1. Whether a permanent injunction restraining the use of SAP Aktiengesellschaft’s products should be granted due to copyright infringement by the Proprietor of M/s. Neologik India.
2. Whether punitive damages should be awarded against the Proprietor of M/s. Neologik India for the infringement.

Rule of Law:

Section 2(o) of the Indian Copyright Act, 1957-  “literary work” includes computer programmes, tables and  compilations  including   computer literary data bases ;
Section 51(a)(i) of the Indian Copyright Act, 1957- 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 this Act or in contravention of the conditions of a licence so granted or of any condition imposed by a competent authority under this Act does anything, the exclusive right to do which is by this Act conferred upon the owner of the copyright.
Section 40(a)of the Indian Copyright Act, 1957-The Central Government may, by order published in the Official Gazette, direct that all or any provisions of this Act shall apply to work first published in any class territory outside India to which the order relates in like manner as if they were first published within India.In the case of Time Incorporated v. Lokesh Srivastava & Anr. [2005 (30) PTC 3 (Del)], this Court observed “punitive damages are founded on the philosophy of corrective justice and must be awarded to give a signal to the wrong doers.”

Case Analysis:
The court while granting the injunction took into consideration that there was not a single license agreement between the two parties and during the search operation the police recovered two servers containing pirated software SAP R3. Moreover, the Proprietor of M/s. Neologik India, having never appeared in the court for contesting had rather sent an email to SAP, after the police raid, not only acknowledging the use of pirated software but also admitting to continue with it.
The court while deciding for the punitive damages was of the view that if punitive damages are not awarded then it would amount to encouraging and giving an unfair advantage to an unscrupulous infringer over those who have a bona fide defense to make and therefore come forward to contest the suit and place their case before the Court. The Court referred to the case of Microsoft Corporation v. Deepak Raval [2006 (33) PTC 122 (Del)], where it had observed that in our country the Courts are becoming sensitive to the growing menace of piracy and have started granting punitive damages even in cases where due to absence of Defendant, the exact figures of sale made by them under the infringing copyright and/or trademark, and therefore exact damages are not available. It was also held that use of pirated software by a commercial enterprise needs to be dealt with more strictly than use by an individual for his personal purposes.

Conclusion
:

The Court granted injunction restraining the Proprietor of M/s. Neologik India, from using any pirated/unlicensed software of the SAP Aktiengesellschaft Company and also from providing training in those programs. The Court also awarded punitive damages of Rs. 1 lakh to SAP against the Proprietor of M/s. Neologik India.

Opinion:
This case sets an example for those who infringe on copyrights and also choose to stay away from the hearing, in order to be saved from the litigation costs as well as from providing the Court with the proper accounts of the profits they accrued by the infringement. The Court has given a detailed reasoning on the importance of punitive damages in such matters and justified the award of punitive damages in the present case.

 

Authored by Sushree Mishra
To know more about the Intellectual Property services offered by BananaIP (Earlier known as Brain League) visit www.bananaip.com

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