Foundry Visionmongers Limited Plaintiff vs Parish Tekriwal

G.S. Patel, J. - I have heard Dr. Saraf for the Plaintiffs He seeks to move without notice in this action for copyright infringement. The immediate application is for urgent ex parte reliefs in the nature of an Anton Piller order. Such orders have been passed before. There is a reference to one such order recognised by the Supreme Court in Mohit Bhargava v. Bharatbhushan Bhargava (2007) 4 SCC 795. The Calcutta High Court too has passed such orders in the past. I myself have had previous occasion to pass such an order. Order dated 13th August 2014 in G. M. Breweries Ltd. v. The Sanjivani (Takli) Sahakari Sakhar Karkhana Ltd. & Ors., Notice of Motion (L) No. 1834 of 2014 in Suit (L) No. 766 of 2014. Dr. Saraf also points out that annexed to the Plaint is a copy of another reported decision in Foundry Visionmongers Limited v. Ankur Sudhir Sachdev & Ors. 2016 (65) PTC 388 (Bom); Plaint, p. 250. This was an order by S.C. Gupte J. It is in respect of the very same software, the infringement of which is complained of in this Suit as well. Gupte J. also relied on the decision of a Division Bench of the Delhi High Court in Autodesk Inc & Anr. v. A.V.T. Shankerdass & Anr. 2008 (37) PTC 571 (Del.)

For the record, I must note that these orders are well-known. They have been established in England in the 1975 case of EMI Limited v. Pandit [1975] 1 All ER 418, per Templeman J. and, a little later in the same year in Anton Piller KG v. Manufacturing Processes Limited, [1976] 1 All ER 779 the case from which the principle takes its name.

In Anton Piller, Ormrod LJ set out the three probanda necessary for grant of such an order. First, that the Plaintiff must make out an extremely strong prima facie case against the Defendant. Second, that there must be in the Plaint itself sufficient material to show that the potential damage to the Plaintiff is indeed very serious. Third, that there is clear evidence that the Defendants have in their possession relevant documents or things by which it is established that there is a real possibility not only of their use but that should they be given notice, they will destroy this material before a proper application with notice can be made.

It is on this basis that Dr. Saraf makes the present application: these are precisely the grounds and reasons formulated by Dr. Saraf in paragraphs 24 to 26 of the Plaint.

The Plaintiff was established in 1996. It is a Company incorporated in England and Wales. It has its registered office in London. It carries on business in India of licensing and distributing its software programs �NUKE� and �NUKE X� as also variants on these software packages. It has a local distributor. The Plaintiff is the leading innovator of visual effects (VFX) and image processing technologies for films, animation, graphics, commercials, post- production and so on. It has several hundred employees in offices in London, Los Angeles and Mountain View, California. Its software is well-known in the industry and is used by several prominent production companies in India and overseas.

The Plaintiffs principal or flagship product is its software program �NUKE�. This is a powerful compositing product that delivers a rich feature set and unparalleled processing speed unique in the desktop market. It is used by film directors and creative teams to be able to achieve visual effects and post-production results under severe time pressure without sacrificing quality or efficiency, including cost efficiency. The software comes in three editions �NUKE�, �NUKE-X� and �NUKE STUDIO�. The three editions of the software provide a progressively increasing number of tools and feature sets. Major studios and production houses use this software in their films. A list of some of the films in which these products are used is in paragraph 4 of the Plaint: The Dark Knight, District 9, 2012, Transformers, Hugo, Avatar among others. This is indeed a most imorsive listing. Indian studios too use this product. Their VFX work has also received recognition. A list of these Indian movies is set out in paragraph 5: Race 2, Dabangg 2, Agneepath, Ra.One, and more. This list is no less impressive than the foreign films mentioned in the preceding paragraph.

The Plaintiff is the sole and absolute owner of copyright in all this software. These are literary works within the meaning of the Copyright Act, 1957. The software has been created or developed and written for the Plaintiff by its employees during the course of their employment.

The software programmes were first published in the UK and then in USA. The Plaintiff has copyright registrations for its software �NUKE� in USA. India is a signatory to the International Conventions and Treaties that recognize these registrations, including the Berne Convention, the Universal Copyright Conventions and the World Trade Organization (WTO) treaties. The Plaintiffs copyright is therefore recognised in India by virute of Section 40 of the Copyright Act, 1957 read with the International Copyright Order, 1999. The Plaintiff is, therefore, solely entitled to license the use and distribution of its software. Users must obtain the necessary licenses from the Plaintiff. Any unlicensed use is directly and immediately an infringement of the Plaintiffs copyright.

The Plaintiff has spent and continues to spend a vast amount on research and development. The Plaintiff says that unauthorized use is piracy and infringement and causes the Plaintiff incalculable harm and damage to its business and to its Intellectual Property Rights.

As part of its licensing regime, the Plaintiff routinely limits the number of copies that a licensed user may install. Any installation in excess of this number is also a copyright infringement, as much as piracy, i.e., obtaining illicit or bootleg copies of the software and using �cracked� software. This is in conformity with the industry norm of licensing software rather than selling it. The software in question may be licensed through Internet delivery, but it is always accompanied by an end-user license agreement that contains the limitations and restrictions on installation and use.

The 3rd Defendant is apparently a private limited company that also provides visual effects, post-production and computer graphs (CGI) services. It also uses the trade name �After Studios� from the same address. It seems that the 1st and 2nd Defendants are both Directors or have some other principal connection with the 3rd Defendant. At this stage, of course, the particulars of this are not known to the Plaintiff.

The Plaintiff says that in December 2014 it received information that the Defendants were extensively using the Plaintiffs software for commercial and business purposes but without any license from the Plaintiff. The Defendants� website www.after.org.in showed that the Defendants were actively hiring qualified �Nuke Compositors�, i.e., persons skilled in using the Plaintiffs software, NUKE and NUKE-X. It needs to be stated at this stage that the use of this software has a fairly steep learning curve and is not something that can be used competently or proficiently by an average user without a fair degree of training, learning and experience.

The Plaintiff in good faith approached the Defendants through the Plaintiffs technical team to assess the extent of piracy. The Plaintiffs representatives visited the Defendants premises on 17th December 2014. They met with the General Manager (Finance) of VRG Digital Corporation Private Limited. With the permission and cooperation of the Defendants, the Plaintiffs technical experts inspected and audited the Defendants� computer systems. They concluded that the Defendants were using unauthorized versions of the Plaintiff�s NUKE and NUKE-X software on as many as 50 computer systems. The Plaintiff were able to identify the IP address for the server that hosted the license file. In a tabulation below paragraph 16 of the Plaint, the Plaintiffs have set out the various versions of its software and the number of installations found.

It seems that on this audit being done, the Defendants accepted the findings and agreed to comply with the licensing terms by purchasing the necessary number of licenses and to discontinue using unlicensed or pirated software. In good faith, the Plaintiffs representatives left the premises and continued to communicate with them by email and telephone.

Despite further attempts by the Plaintiffs representatives including a personal visit in September 2015, the Defendants did not comply. It must be remembered that the Plaintiffs first audit was several months earlier in December 2014. The Plaintiffs representatives informed the Defendants of the consequences of non-compliance. There was no response from the Defendants.

In February 2016, the Plaintiff again learnt that the Defendants were now about to use the Plaintiffs software in a new film project. Using an embedded feature in software, the Plaintiff were able to trace and track down the Defendants� installations of unlicensed and pirated software. They now found that there were as many as 59 installations, used 895 separate times, each of which would constitute an infringement. Incident Reports generated on 18th February 2016 and 29th February 2016 are annexed to the Plaint. Dr. Saraf also tenders a printout of an email dated 11th February 2016. This is taken on record and marked *X� for identification now; Dr. Saraf says it will be placed on Affidavit by the next hearing. This shows that as recently as 11th February 2016, the 2nd Defendant was still promising payment of USD 25000 towards acquisition of the necessary licensing. The difference between the parties seems to be on the question of deferred payments, the Defendants seeking a longer time to pay.

Today, this much is certain: the Defendants have not a single license to any of the Plaintiffs software programmes installed on their systems. Dr. Saraf is, therefore, justified in his submission that the entire use, continued use and repeated access by the Defendants, including the installation of unlicensed and possibly pirated software on the Defendants systems, is an infringement of the Plaintiffs copyright. The Plaintiff also points out that in at least seven cases, apart from the one to which I have referred earlier, the Plaintiff has been vigilant in protecting its rights.

As Gupte J. observed in Foundry Visionmongers Ltd. v. Ankur Sudhir Sachdev & Ors. swift judicial action is necessary. If not, incriminating evidence is likely to be lost, removed or destroyed. Gupte J. spoke of the element of surprise in such orders. This is also an essential part of the Anton Piller doctrine. Such search orders are now known in international jurisprudence. There is no question of this being in the nature of a forcible entry. As Lord Denning said in Anton Piller the nature of the order is a mandatory direction to the Defendant to allow the necessary search within his or its premises. The Division Bench of the Delhi High Court in Shankerdass has also noted that such orders are necessary for the purposes of a fair determination of the trial. Here again, it is the element of surprise that is said to be of critical importance and, therefore, equally necessary.

In paragraph 14 of the Delhi High Court decision in Shankerdass, several guidelines have been set down. These guidelines should, in my view, be adopted as they stand. For convenience, these are reproduced below:

"(i) 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;

(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 practise 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 dis appearance of the pirated software/incriminating evidence in case the decoy customers is exposed. Accordingly, visit by decoy customer or investogator is not to be insisted upon as pre condition. A report of private Investigator need not be dis-regarded or rejected simply because of his engagement by the Plaintiff. The information provided by private Investogator 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."

In my view, these guidelines are an elaboration of the three tests set out by Ormrod LJ in Anton Piller.

In the facts of present case before me, there is no manner of doubt that the Plaintiff has done everything within its power to ensure that the Defendants obtained proper licenses. It is not as if they have rushed to Court straight away. They have attempted a negotiation. Indeed, in my view, they have shown a needless amount of indulgence to these Defendants. The first audit was of December 2014. A very large number of installations were detected. The number of illicit installations has only increased since the Plaintiff first audited the Defendants� systems. Clearly the use of the Plaintiff�s software is essential to the Defendants� functioning. This is inter alia obvious from its recruitment strategy. There seems to be no manner of doubt that the Plaintiff�s software is being used, and perhaps even principally used, as a tool for the delivery of the Defendants� services. I do not think that it is remotely possible to suggest that the Defendants can continue to use unlicensed or pirated versions of the Plaintiff�s software. Clearly there is a need to preserve the evidence in this regard.

I have stated all this because in my view these facts constitute that extremely strong prima facie case which is the first of the three requirements set out in Anton Filler.

As to the question of damage, as I noted at the beginning, Dr. Saraf has already pointed to the loss likely to be suffered. This is also evident from the email that he shows me today where the Defendants have themselves accepted that they would have to pay as much as USD 25,000 to obtain the necessary licenses. This constitutes a fraction of the loss likely to have been suffered by the Plaintiff as a result of that unlicensed use.

As to the question of evidence of unlicensed use, I believe this is a case of res ipsa loquitur. The audit reports as also the Defendants� own email make this clear beyond the shadow of doubt.

All the necessary requirements having been met, I am inclined to grant an ad-interim order sought by Dr. Saraf in the following terms:

(a) The Court Receiver, High Court, Bombay is appointed a Commissioner to visit all the premises of the Defendants described in the cause title of the Plaint and the Notice of Motion. The Court Receiver shall be accompanied by an Officer designated by the Deputy Registrar (IT), High Court, Bombay. The Court Receiver and the representative of the IT Department of this Court are directed to carry out an immediate site inspection at all the Defendants� premises. They will, on the basis of this order, search and conduct a thorough audit of all the computer systems including all desktops, laptops and hand held devices or tablets found at any of those locations. They shall also visit the residences of Defendants Nos. 1 and 2 for this purpose. In the course of this, they will note and ascertain the number of copies of the Plaintiffs software NUKE, NUKE-X and, if found, NUKE STUDIO, on any of these computers, along with all software variants and version numbers installed on computers. It is clarified that the use of the word �computer� includes all servers, mirrors, hard drives, arrays and storage devices. An inventory of all of these machines is to be made with complete details;

(b) The Plaintiffs authorised representative and the technical team will be entitled to assist the Court Receiver and the representative of the Registrar (IT) in this exercise;

(c) The Court Receiver and the Deputy Registrar (IT) are directed to first ensure that the entire network in the Defendants� premises is isolated and is taken offline, i.e., it is disconnected from all outside Internet connectivity. All internal LAN communications must also be severed except for the limited purpose required for accessing the servers or the RAID arrays.

(d) In addition, the Court Receiver will be entitled to take the assistance of the Local Police at Santacruz as also the Authorities from the Cyber Crime Cell;

(e) The representative of the Court Receiver will obtain screen shots of the installations as also the installer or executable files and fake licenses, including crackz, patches and warez. I am making it clear that I do not direct the Court Receiver�s representative to make copies of the entire hard disk, as this may well contain other proprietary material that belongs to the Defendants. To my mind, the screenshots will suffice for this purpose. These screenshots are to be stored on the IT Departments systems. Print outs are to be authenticated by the IT Department with the accompanying certificates under Section 65B of the Evidence Act.

(f) In addition to the screenshots of the actual installation, the technical team assisting the Court Receiver will be entitled to make a note, take a print out or a screenshot of the actual system registry entries following the installation of the software in question.

(g) There will be an ad-interim injunction, operative forthwith, restraining the Defendants, through their employees, sister concerns or group companies, and including their consultants and technicians, from using any edition of the Plaintiffs software including without limitation NUKE and NUKE-X and all versions and variants.

(h) The Defendants are also restrained from reproducing, circulating, installing or even having in their possession any unlicensed, unauthorized or pirated version of the Plaintiff�s software, or any patches, crackz or warez in respect of it.

(i) To avoid any controversy, it is clarified that this order will serve as a direction to the Defendants to give such access as the Court Receiver or his assistants may require to the Defendants� desktops, servers, hard drives, storage systems, mirrors, arrays, laptops, tablets and all other computing devices at the Defendants� premises and also to render such other assistance as the Court Receiver may require.

The Plaintiff shall comply with the requirement of Order 39, Rule 3 of the Code of Civil Procedure, 1908 within 72 hours of the Court Receiver executing this commission.

The Defendants will be at liberty to apply for variation, modification or recall of this order after at least 48 hours� written prior notice to the Advocates for the Plaintiff.

This order is not to be uploaded on the server till such time as the Court Receiver executes this commission.

Affidavit in Reply to be filed and served on or before 10th June 2016. Affidavit in Rejoinder, if any, to be filed and served on or before 17th June 2016.

List the Notice of Motion for further ad-interim reliefs on 27th June 2016.

Liberty to the Plaintiffs also to apply if necessary.