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RAJIV GANDHI NATIONAL UNIVERSITY OF

LAW, PATIALA

LAW & PRACTICE OF


ONLINE SOFTWARE
PIRACY IN INDIA

SUBMITTED BY: ARNAV BISHNOI


ROLL NO. 15244
SUBMITTED TO: DR. IVNEET WALIA
ASST. PROFESSOR OF LAW, RGNUL
ACKNOWLEDGMENT

As my work gets ready for submission, I recall the assistance, encouragement and inspirations

received from many people. I would like here to put on record humbly and with gratefulness

the necessary help, encouragement and inspirations they extended to me at different stages

during the course of the work.

Gratitude is a noble response of one’s soul to kindness or help generously rendered by another

and its acknowledgment is a duty and a joyance. I am deeply indebted to my supervisor Dr.

Ivneet Walia Ma’am for approving and giving me this interesting project topic. Also, her

precious guidance and time matched unrelenting support kept me on track throughout the

completion of this project.

ARNAV BISHNOI

IVTH YEAR

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TABLE OF CONTENTS
ACKNOWLEDGMENT ................................................................................................................... 1

Research Methodology .............................................................................................................. 3

Scope and limitation of the study ........................................................................................... 3

INTRODUCTION ..................................................................................................................... 4

THE MENACE OF SOFTWARE PIRACY .......................................................................... 4

Online Software Piracy in India ................................................................................................. 6

Computer Software and its Conflicts on Availability ............................................................ 6

Evolution of Software Piracy ................................................................................................. 7

Rise of the Internet—Towards a New Progress ..................................................................... 8

Organizations Fighting against Software Piracy .................................................................... 9

Protection of computer software in India................................................................................. 12

Indian Copyright Act, 1957 .................................................................................................. 12

Information Technology Act, 2000 ...................................................................................... 14

Judicial Approach ................................................................................................................. 16

Action taken against Piracy .................................................................................................. 19

PROTECTION UNDER INTERNATIONAL INSTRUMENTS ........................................... 22

4.1 Trade Related Aspects of Intellectual Property Rights (TRIPS) .................................... 22

4.2 Berne Convention (BC) .................................................................................................. 22

4.3 Universal Copyright Convention (UCC)........................................................................ 23

4.4 World Intellectual Property Organization (WIPO): ....................................................... 23

CONCLUSIONS AND IMPLICATIONS ............................................................................... 25

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RESEARCH METHODOLOGY
The proposed research work is a Doctrinal and Non-Empirical Research. Hence, this research
work is purely based on the resources from libraries, archives and online databases and various
e-learning resources

• SCOPE AND LIMITATION OF THE STUDY

This proposed research work being a Doctrinal and Non-Empirical research did not require any
field data or sample collection. The data collection was restricted to only the primary and
secondary sources. All the relevant sources were broadly classified into two basic categories
namely Primary and Secondary sources, with primary resources being the decisions of the
Court in a number of judgments that I have relied upon to establish the arguments and the
secondary sources being the scholarly works of other researchers either on those decisions or
on the points of arguments that I have attempted to make. The study is limited to analysis of
the Software Piracy in India in the light of Online Piracy and their impact upon the several
other issues circumscribing to Software Piracy in India which are to be adjudicated on the basis
of Research papers which are duly cited as well as Case Laws mentioned in the books of Cyber
Crimes. The study does not make an in-depth analysis of those propositions and provisions
which deals with Software Piracy outside of the Contents within the Project.

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1. INTRODUCTION

O
ver the past few decades, the world has seen rapid growth and great achievements
in the field of information technology. This has resulted in the expansion and rapid
progression of the software companies. As the software companies have expanded
in huge numbers, so has the criminal activity of software piracy. Software companies have
been plagued by piracy for years. Technological advances have made it easy for anyone to
reproduce and distribute copyrighted works anywhere, anytime and to any-one. These same
technologies have made large-scale commercial copyright infringement a major form of thefts
and fraud. Software piracy has been identified as the worst problem facing the software
companies today. It has not only affected the soft-ware companies but also has caused much
panic for the content owners. The development of technological tools such as computers,
software and the Internet has made our lives easier, but abuse of such tools has created a serious
issue like software piracy which is now a growing concern for several countries.

Software piracy is a crime commonly defined as illegal copying, downloading, sharing, selling
or installing of copyrighted software. The majority of software today is purchased as a single-
user license, meaning that it can be used by exactly a single authorized user in one or more
machines as long as the same licensee is the only user. Making multiple copies of it and sharing
it with friends or relatives is considered to be violation of the license terms and conditions.
Although most computer users today are aware of unauthorised use and duplication of software
being illegal, software piracy still exists as a serious issue. The Global Software Survey
conducted by Business Soft-ware Alliance (BSA) in partnership with International Data
Corporation (IDC) shows that 43 percent of the software installed on personal computers
around the world in 2013 were not properly licensed. The total loss due to installations of
unlicensed soft-ware was $62.7 billion. The survey was conducted among 22,000 consumers
and enterprise PC users.1

• THE MENACE OF SOFTWARE PIRACY

1
Business Software Alliance. The Compliance Gap [online]. June 2014.
URL:http://globalstudy.bsa.org/2013/downloads/studies/2013GlobalSurvey_Study_en.pdf. Accessed 28 June
2014.

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Software piracy is one of the most difficult, yet important, transnational problems in the
twenty-first century. It is an undeniable fact that the internet plays a major role in pirating
computer software in this technologically advanced world. Such an illegal copying of computer
software via internet creates heavy economic loss not only to the owner of the copyrighted
software but also to the nation as well. By the end of May 2013, worldwide value of unlicensed
software touched S59 billion. Indian revenue loss in turn is $2,739 million.2 India ranks 4th in
the economies with highest commercial value of pirated software though it is not in the list of
top 30 countries having highest piracy rates, with 64% of the total software using in the country
as pirated.3 In responding to the shock that the internet poses to copyright law, it is of course
considerable to take into account the enhanced opportunity to the pirates to steal the
copyrighted computer programs. But the law must also extend the protections which are
available to the conventional copyrights and keep in pace with the increased risk of theft to
assure that it does not simultaneously erase the important range of access.4 It is well known to
everyone that zero piracy rate is not at all possible in the present situation, this research is to
identify the loopholes and lacunae in legal provisions which indirectly permits and encouraging
the illegal reproduction of computer software by analysing the mechanism prescribed by
international organizations and followed in other countries, focusing only on the role of service
providers including search engines in restricting and promoting software piracy.

2
8th Annual Global Software Piracy Study, 2010 commissioned by Business Software Alliance and International
Data Corporation. BSA., a non-governmental organization (trade) functioning at 69 countries, is an experienced
body in software antipiracy lobbying and enforcement. It has reported its greatest success in reducing software
piracy rates in most of the Asian countries and conducting antipiracy conferences in a proper interval. available
at: http://portal.bsa.org/global piracy2010/dowmloads/ study_pdf/2010_BSA_ Piracy_Study-Standard.pdf
(Visited on March 10, 2013).
3
IBID
4
Daniel J. Gervais, "Towards a new core International Copyright Norm: The Reverse Three-step Test", 9(1)
Marquette Intellectual Property Laiw Review 30 (2005).

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2. ONLINE SOFTWARE PIRACY IN INDIA

A. COMPUTER SOFTWARE AND ITS CONFLICTS ON AVAILABILITY

At present, the world becomes very small and it comes under one's hand in a single click. This
major development that has occurred in the last century is the result of the invention and
advancement of computer technologies. The digital technology brings an unbeatable and
tremendous change in almost every field. Advancement of computer technology and internet
has changed the way one works, learns and communicates. The technology enabled everything,
including problems. As much as how the use of computer and the internet gives rise to the
advancement of human nature and development of research works, it brings conflicts and
problems. The major problem which the digital technology brought is in the field of intellectual
property rights. Copyright is the most critical and complex area which is facing greatest
challenge because of the technological developments: Copyright law in general protects
original literary, musical and dramatic works including sound recording and Cinematograph
films. The software industry is one of the fastest growing segments of the world's economy.
The computer programs are protected as a literary works under the Indian Copyright Act and
getting copyright protection. Countries like United States of America and Japan gives patent
protection to the computer software.

Computer software is a collection of related data that provide the instructions telling a computer
what to do and how to do it. Software is a series of instructions joined together in a language
which is understandable by the programmer or the operator, on the one hand, and translated
into a language understandable by the computer, on the other hand.5 It is basically a list of
instructions that the computer executes to achieve the result desired by the programmer. 6 The
computer programs are generally known as 'software' as opposed to the physical component of
the computer system called 'hardware'. In general, there are three types of computer software,
the system software, the application software and the programming software. System software
provides the basic functions for computer usage and helps run the computer hardware and
system. Application software is developed to aid in any task that benefits from computation. It
is a broad category, and encompasses software of many kinds, including the internet browser

5
S.K.Verma and Raman Mittal, Legal Dimensions of-Cyberspace 168 (Indian law Institute. New Delhi, 2004),
p. 9
6
Shailaja Menon, Protection of Intellectual Property in Cyber Space 40 (Authors Press, New Delhi, 2003), p. 11

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being used to display the internet webpages. Programming software usually provides tools to
assist a programmer in writing computer programs, and software using different programming
languages in a more convenient way.7 These computer programs are available to the public in
four ways:
(A) PAYWARE,
(B) SHAREWARE,
(C) FREEWARE,
(D) OPEN SOURCE.

B. EVOLUTION OF SOFTWARE PIRACY

Stealing copyrighted software has never been easier in olden days. But the advent of the internet
technologies and file sharing programs has enabled stealing costly software for free with a
single mouse click. It is common misconception among the people that the software piracy
evolved recently, but people have stolen the computer programs for years. The roots of
software piracy may lie in the early 1960s, when the computer programs were distributed with
the machine itself by the hardware manufactures at free of cost. Later on they began selling
their software separately. There it starts the problem of software piracy. But pirating a computer
programs is not much prevalent and easy during those times, because the computer programs
used in one company may not provide the similar results for another company. The programs
created were very costly and are small in size (maximum 32kilobytes). In 1970s, the illegal
copying of a computer programs means only the literal and non-literal copying of codes of a
particular program by its competitor. Copyright protection also covered the elements of the
computer program: object code, source code and the documentation. There is no such a concept
of piracy by the end-users.

Later on the technology started expanding its branches into many fields and the end-users of
the computer technology were availed those benefits through intermediaries and those
intermediaries are the direct users of a computer program. They used to do their customer's
task by installing a single copy of the program in all their computers. This is the first form of
software piracy which leads to a heavy economic loss to the software creators who had invested
much in the field. Further one could freely copy computer programs and pirate without getting

7
Computer Software, available at:http://en.wikipedia.org/wiki/Computer_software (Visited on March 18,
2013).

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any legal sanction from the owner of the program. It was also quite common in the 1980s to
use physical floppy disks and the postal service for spreading software, in an activity known
as mail trading. Prior to the sale of software that came on Floppy disks, Compact Disks and
after hard drives had become available, the software did not require the floppy disc to be in the
drive when starting and using the program. So, a user could install it onto his/her computer and
mail the disk to the next person, who can do the same. Software piracy via mail trading was
also the most common means for many computer hobbyists in the Eastern bloc countries to
receive new Western software for their computers.8 An open letter written by the founder of
Microsoft, Bill Gates on 3rd February 1976 was a famous act which led to the enactment of a
legislation that started the protection of software integrity. In that letter he particularly
mentioned that the quality of available software would increase if software piracy was less
prevalent. But until 1990, this problem was not considered by the world community as a serious
concern.

C. RISE OF THE INTERNET—TOWARDS A NEW PROGRESS

Digital internet became widely used in the second half of the 1980s. The primary concept of
internet is to transmit data between two different places, connected via some kind of
electromagnetic medium. As the technology evolved, new systems were devised to allow
communication over longer distances, with high speed. Before the widespread software piracy
on the internet. thieves used dial-up Bulletin Board Systems to 'upload and distribute software
to local computer owners. They could log on with a telephone connection and either to
download files to their computer, or in the case of programs with larger file sizes, meet other
software pirates willing to trade floppy disks through the mail system. Law enforcement could
do little to stop the trade of illegal software during the 1980s. Most dial-up BBS systems
distributed software for free, and owners of the BBS usually had little money for restitution to
software companies. The rise of internet companies during the early 1990s allowed users all
across the globe, as distinct from regional BBSs, the ability to steal copyrighted software. 9
Other older forms of internet-based software piracy are still seen but under different efficient
techniques. These techniques include Internet Relay Chat, which are locations on the internet
for real-time, multi-user, interactive conversations, File Transfer Protocol a standard computer

8
http:/en.wikipedia.org/wiki/Warez (Visited on March 18, 2013).
9
Russell Huebsch, "History of Software Piracy", available at: http://www.ehow.
com/about_5444918_historysoftware-piracy.html (Visited on March 18, 2013).

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language that allows disparate computers to exchange and store files quickly and easily, and
newsgroups, established internet discussion groups that operate like a public e-mail inbox.10

In 1991, the first really user-friendly interface to the internet was developed at the University
of Minnesota. Since the internet was initially funded by the government, it was originally
limited to research, education and government's use. The commercial uses were introduced in
the year 1992 which permits the private players as service providers to its subscribers. Later
on, the limitations on the commercial uses disappeared and this made the illegal duplication of
the computer programs much easy. The last decade of the twentieth century shows the drastic
increase of software piracy, as because of the growth of internet. The internet facilitates the
BBS to have a network all over the world and encourage their subscribers to upload and
download software: The BBS industry became so popular in distributing computer programs
to it subscribers by themselves when it reached its peak usage around 1996.

D. ORGANIZATIONS FIGHTING AGAINST SOFTWARE PIRACY

Before going deep into the legal provisions of different jurisdictions which give protection to
the computer software, it will be better to have an overview of the international and national
organizations which are working efficiently all over the world.to curb software piracy.
Business Software Alliances a non-governmental organization working since 1988
representing a number of world's largest software makers with a primary objective to stop
copyright. infringement of software products by its member states. BSA's global mission is to
promote a long-term legislative and legal environment in which the industry can prosper and
to provide a unified voice for its members around the world.11 One of the most important policy
issues advanced by the BSA is promotion of strong intellectual property protection both
through establishment and implementation of good copyright laws. It has a separate anti-piracy
portal and piracy reporting link in its website to receive the complaints; against software piracy.

It often conducts raids with the help of local investigation agencies to find and penalize pirates.
Its famous raid action conducted in India is in the year 2007. BSA carried out civil enforcement
action against Hyderabad-based SM Technologies, leading to the seizure of pirated software

10
BSA Report (Oct 2008) on "Online Software Scams: A Threat to your security", available at:
http://www.portal.bsa.org/faces/pdf/Internet-Piracy-Report.pdf (Visited on March 18, 2013).
11
http://www.bsa.org/GlobalHome.aspx (Visited on October 10, 2014).

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worth approximately $475,000. A total number of 1,843 CDs were recovered. This was the
second time in three years that the same company was raided. In September 2004, BSA filed a
criminal complaint against the company, leading to police raids at three locations in Hyderabad.
SM Technologies was creating "compilation pirated CDs" with a range of products from
Adobe, Autodesk, Microsoft, and Symantec, and selling the pirated software through multiple
channels, including the internet, resellers, and directly to end-users. BSA after the successful
action against the SM Technologies mentioned in their press room that most of the pirates in
India used to reproduce the copyrighted software through the internet.

Another major organization which is fighting against software piracy via internet is the
Software Publishers Association which was founded in 1984. In the year 1999 it merged with
the Information Industry Association and became the Software and Information Industry
Association. Like the BSA the SIIA also has an anti-piracy division which conducts industry
wide campaign to control the software piracy. SIIA monitors and takes action against piracy of
software and content taking place over the internet. This includes downloadable software and
content being offered on websites, news groups, FTP, Torrent and share hosting sites, as well
as physical copies of software and content sold through websites, auction sites, and classified
ad sites.12 Its recent major anti-piracy win was against a former medical student who illegally
reproduced its members test prep materials in the intemet.13 These two bodies often sends
notices to the ISPs under whose control the unlicensed copies of copyrighted computer
programs are being published by the pirates14 and to remove the infringing contents
immediately.

Apart from these international organizations, there are number of national institutions
established by the government and the non-governmental organizations as well fighting against
the online software piracy at the state level. In India, the National Association of Software and
Service Companies has proposed the setting up of a National Cyber crop Committee to provide
helping hand to government and private agencies to combat against cyber hacking. NASSCOM
runs an Anti-Piracy Hotline installed at New Delhi. Reported cases of piracy are investigated

12
http://www.spa.org/index.php?option=com_content&view=article& id=77&Itemid=7 (Visited on January 10,
2014).
13
Civil Action No: l:07-cv-10677-HB, US District Court, Southern District of New York. also available at:
http://www.wired.com/images_blogs/threatlevel/2010/01/siia-mem-in-support-of-mot-for-judg.pdf (Visited on
January 10, 2014).
14
One of the sample notice sent by BSA to an ISP in New York, available at:
http://www.chillingeffects.org/dmca512/notice.cgi?NoticeID=357 (Visited on January10, 2014).

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by NASSCOM and passed on to enforcement authorities for necessary action. NASSCOM and
BSA have formed a joint program of campaign against piracy.15 Further the ministry of
information and technology has setup a National Information Technology Security Centre as a
part of a multi-pronged approach to control crime.16 Now on the footing of the radical
information on the online software piracy and the institutions works with a special interest to
curb and restrict the piracy, we will see some national legislation which provides protection to
the computer software and their effectiveness in the technologically advanced world.

15
FAQ on Software Piracy in India-NASSCOM, available at: http://epi.nasscom
.in/Nasscom/templates/NormalPage.aspx?id=6240 (Visited on January 10, 2014).
16
Tabrez Ahmad, "Copyright Infringement in Cybe- Space & Network Security: A Threat to e-commerce",
available at: http://www.legalserviceindia.com/article/1462-Copyright-infringement-in-Cyberspace-&-
NetworkSecurity.html (Visited on January 10, 2014).

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3. PROTECTION OF COMPUTER SOFTWARE IN INDIA

A. INDIAN COPYRIGHT ACT, 1957

In India, the Indian Copyright Act, 1957 gives copyright protection under section 13(1)(a) to
all forms of original literary work which includes computer programme and its infringement
will attract strict penal and civil actions. Section 2(o) of the act which defines the term 'literary
work' was substituted in the year 1994, by an amendment to the ICA 1957, with a new
definition which includes computer programs. The 1994 amendment has introduced stringent
punishment for obtaining or using infringing software with the knowledge of piracy.17 The act
maintains that the copyright in software is considered to be infringed when a person did
anything which was exclusively conferred upon the owner or creator of the software. 18 It
provides for civil remedies by way of injunction, damages, accounts and other administrative
counter measures as prescribed by the act.19

The 1994 amendment has also substituted Section 51 (a)(ii) of the ICA, 1957 which says that
when one permits any place to be used for communication of the copyrighted work to the public
for profit, it is an infringement of the copyright in that work.20 But the word communication to
the public is defined under section 2(ff) of the act as being heard or seen or enjoyed other
than by issuing the copies of the work and thereby it does not attracts the ISPs'
liability. It does not provide any express provision regarding the authorization of
infringement and the liability of ISPs as like in some other countries.

Besides civil remedies, the ICA also provides for criminal remedies for infringing copyright in
computer programme. With regards the use of infringed copy of a software, the amendment act
has introduced punishment provisions under section 63B. The new section provides for a

17
The maximum punishment provided for such act is imprisonment for a term of three years and a fine between
fifty thousand and two lakh rupees. also see Study on Copyright Piracy in India by the Ministry of Human
Resource Development. Government of India, available at:http://copyright.gov.in/Documents
/STUDY%20ON%20%COPYRIGHT%20PIRACY%20IN%20INDIA..pdf (Visited January 10, 2014).
18
Copyright in a work shall be deemed to be infringed when any person, without a license granted by the owner
of the copyright does anything, the exclusive right to do which is by this Act conferred upon the owner of the
copyright.
19
Section 55 of the ICA, 1957. also see Munish Mehra. "Software cases and the grant of damages in india", 2009
Computer and Telecommunications Law Review 1(2009).
20
Section 51 (a)(ii) of the ICA, 1957. also see Daniel Seng, "Comparative Analysis of the National Approaches
to the Liability of Internet Intermediaries" available at:
http://www.wipo.int/copyright/en/doc/liability_of_internet__intermediaries.pdf (Visited on February 10, 2014).

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punishment of minimum imprisonment for seven days and maximum three years in addition to
the fine amount between rupees fifteen thousand to two lakh when one knowingly uses the
pirated version of the copyrighted software. Proviso to the section sets out penal liability even
if the same pirated copy has not been used for profit or business, which may extend to the fair
use or private use.21 Criminal liability for other forms of software piracy by person other than
the end-user is also given under the act. A separate chapter ‘offence’ provides that any person
knowingly infringes or 'abets' the infringement shall be penalized.22 This provision can be
explained in terms of the online service providers like search engine as in certain instances,
they act as an abettor of software piracy by encouraging piracy without filtering their search
process by employing latest technologies like 'upstream' filter, an application that can restrict
certain kind of downloads and searches which can also be used by the ISP.23

As like the penal liability for the knowing use of infringing copies without the intention of
making profit, proviso of section 63 states that one who abets the infringement without making
any gain shall be imposed with lesser punishment. But here, with respect to the search engines,
the infringement has never been without benefits. Furthermore, as these service providers
having no accountability to install filters under any legal provisions to check copyright
infringement, they may not be accused of any illegal omission. Being so, a search engine also
cannot be held liable for copyright infringement for abetting the same except the situation
where such an act of specifying the presence of a pirated software was already brought into the
attention of them and also the same may differ from case to case.

The act not only talks about the offences by an individual but also on the offences punishable
under the act committed by a company: Section 69(1) of the act says that in case of an offence
committed by a company, every person who is running or managing the company and each
person responsible to the affairs of the company are bound to be punished. This section also
exempts those companies which prove the absence of knowledge about the offence so
committed and have. taken sufficient measures to prevent the commission of such offence. In
like manner, it punishes the director or other officials of the company when such piracy activity

21
Section 63B of the ICA 1957, proviso: "where the computer programme has not been used for gain or in the
course of trade or business, the court may, for adequate and special.reasons to be mentioned in the judgment, not
impose any sentence of imprisonment and may impose a fine which may extend to fifty thousand rupees".
22
Section 63 of the ICA, 1957: "Any person who knowingly infringes or abets the infringement of- (a) the
copyright in a work, or (b) any other right conferred by this Act, shall be punishable with imprisonment for a term
which shall not be less than six months but which may extend to three years and with fine which shall not be less
than fifty thousand rupees but which may extend to two lakh rupees".
23
Sabam: v. S.A.Tiscali (Scarlet), District Court of Brussels, No. 04/8975/A (2007). Order of the Belgian trial
court mandated ISPs to install filtering software to prevent unauthorized downloading of copyrighted works.

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is being effectuated with their permission.24 There by the act entirely pit down provisions for
liability in respect of individual as well as company who infringes the copyright in computer
programme in any manner. Even a company which is carrying on a business associated to
providing service over internet can be held liable for any offences under the act.

B. INFORMATION TECHNOLOGY ACT, 2000

Another Indian Legislation which talks about the network service providers with respect to the
protection of copyright is the Information Technology Act; 2000. The act under section 2(w)
defines the term intermediary as a person who on behalf of another person receives, stores or
transmits that message or provides any service with respect to that record and includes telecom
service providers, network service providers, internet service providers, web hosting service
providers, search engines, online payment sites, . online-auction sites, online market places and
cyber cafes. This definition covers all online or internet service providers like search engines
and ISPs. Though this act do not have any express provision regarding the infringement of
copyright or the quantum of liability for such violations, it excludes the ISPs and the search
engines (Intermediaries as per the term used in the act) from liability if they can prove that they
had no knowledge of occurrence of such infringement and that they had taken sufficient
measures to prevent copyright infringement.25 The IT Act under a single section has included
three kinds of services provided by the ISPs to the list of exempted acts –

(a) transmission of third-party information,


(b) storage of third-party data and
(c) link hosted by the ISPs.

There by the act institutes an Indian safe harbour provision for the search engines and the' ISPs
to protect themselves from the liability for third party contents in their service without
conferring any obligations on their part for taking any efficient measures to restrict and prevent
piracy. In fact the Act does not talk about the safe harbour liability exembtion particularly for

24
Section 69 (2) of the 1CA. 1957: "Notwithstanding anything contained in sub-section (1), where an offence
under this Act has been committed by a company, and it is proved that the offence was committed with the consent
or connivance of, or is attributable to any negligence on the part of, any director, manager, secretary or other
officer of the company. such director, manager; secretary or other officer shall also be deemed to be guilty of that
offence and shall be liable to be proceeded against and punished accordingly".
25
Section 79(1) of the ITA, 2000: "Notwithstanding anything contained in any law for the time being in force but
subject to the provisions of sub-sections (2) and (3), an intermediary shall not be liable for any third party
information, data, or communication link hosted by him".

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copyright infringement. Indeed, the act does not oblige the intermediaries to furnish the details
of their subscribers who are alleged to have committed software piracy, on the request of the
copyright owners.

Further it does not clearly prescribe, the exclusion from liability and the liability limits when it
was confirmed that the intermediaries failed to take any action even after the owner of
copyrighted software made representation regarding the availability of pirated copies in his
service. i.e., when the intermediaries failed to prove that they had no knowledge of such
infringement through their service. To avail the exemption of this section, an intermediary must
not initiate the transmission or select the receiver of the transmission. and select or modify the
information in the transmission.26 Instead of the imposing obligations on the part of internet
intermediaries, the act is just putting into provisions the due diligence part to prevent the
commission of such piracy activities to claim the liability limitations.27 In a strict sense, this
provision is applicable only in relation to the other sections of the IT Act like cyber-crime, and
not in respect of rights and liability under other related legislations till 2011.

In April 2011, the Ministry of Communications and Information Technology notified the rules
regarding guidelines to the intermediaries under section 79 of the IT Act, 2000.28 The due
diligence to be observed by the service providers was given in the form of rules and it mandates
the intermediaries to publish rules and regulations to its subscribers who use their service,
particularly with a rule not to upload or host any content which infringes copyright in the
service provider's computer resource.'29

The rule introduces new take out policy which was not present under any act concerning
copyright infringement. Rule 3(4) mandates the intermediary to remove the pirated content
which is stored or hosted in their services, when that information was brought into its notice
by an interested/affected person (here, the owner of software) or on gaining such knowledge
itself. Such content which is in contravention to the rule 3(2) should be disabled by the
intermediary within thirty-six hours of receiving such information and it must keep that
information and other records for the purpose of future investigations. The exemption from

26
Section 79(2)(b) of the ITA. 2000.
27
Section 79(2) (c) of the ITA, 2000: "The provisions of section 79(1) shall apply if the intermediary observes
due diligence while discharging his duties under this Act and also observes such other guidelines as the Central
Government may prescribe in this behalf'.
28
Information Technology (Intermediaries guidelines) Rules, 2011
29
Rule 3(1) and 3(2)(d) of the Information Technology (Intermediaries guidelines) Rules. 2011

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liability is not available to the intermediaries if they failed to take necessary action even after
receiving any information about the infringement.30

It also authorizes the intermediary to inform, terminate the access and remove the infringed
contents of its users anytime in the event of non-compliance with the rules.31 Subsection 3 of
79 makes the service providers who are abetting or inducing the commission of unlawful act
to face the legal consequences under the Act. In addition to the responsibility under the IT Act,
2000 the rules direct the intermediary to follow the provisions of other laws for the time being
in force which are having any relevance to them. They should not deploy or install any technical
configuration for circumventing any law and they should employ a grievance officer to deal
with the complaints from its users or victims with respect to the access to their services or any
violation of Rule 3.32 It also dictates .the intermediary to publish rules and regulations for its
users not to publish, transmit or display anything belongs to another person and which violates
any law in existence.33

With regards to monitoring and blocking of any information in the internet, only the
central/state government or its officers authorised (department of information technology) are
vested with the power to issue direction to the 1SPs to monitor, decrypt or block the contents
or information transmitting or available through their services. Such an order of blocking or
monitoring can be issued only when such content post a serious threat to the security of the
nation, public order or friendly relation with foreign states.34 Thereupon the person in charge
of computer resource (intermediary) should block the access as prescribed in the order and
those service providers shall be punished with imprisonment if they failed to comply with the
direction. Now the 2011 rules are trying to authorise the intermediaries even without an order
from the controller to block the contents in contravention to rule 3. At present the network
service providers are having collateral responsibility to check the piracy over their services and
have to be operative, where ever necessary, in protecting the interest of the copyright holders.

C. JUDICIAL APPROACH

In India, the courts have started providing proper protection to the intellectual property rights
in computer program from the beginning of the 21th century even in the absence of specific

30
Section 79(3)(b) of the ITA, 2000
31
Rule 5 of the Information Technology (Intermediaries guidelines) Rules, 2011
32
Rule 11 of the Information Technology (Intermediaries guidelines) Rules. 2011.
33
Rule 3(2)(a) and (e) of the Information Technology (Intermediaries guidelines) Rules, 2011.
34
Section 69 and 69 A of the ITA, 2000.

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legislation with respect to internet piracy. In 2006 for the first time, the Delhi High Court in an
appeal filed by MICROSOFT35 took into consideration, various forms of software piracy and
gave an explanation to the term internet piracy' as stated by the plaintiff. The court after
ascertaining the fact that the defendants have infringed plaintiff's copyright over their software
applications such as Microsoft Windows 98, Microsoft Office 2000, Microsoft Visual Studio
6.0, and Windows XP Professional Version in various forms, analysed the legal position
prevailing in countries like USA, Australia, UK and China with respect to the question of
damages. After examining the existing legal positions with the help of case laws, it was stated
by the Court that
"Coming to the legal position in India, a positive trend has started. Here also as Courts are
becoming sensitive to the growing menace of piracy and have started granting punitive
damages even in cases where due to absence-of the defendant's exact figures of sales by the
defendants under the infringing copyright and/or trade mark, exact damages are not available."

The court in this case has formulated total damages at Rs. 1,28,23,200 on the basis of
three categories namely actual damages, exemplary damages and damage to goodwill
and reputation. But on the basis of actual suit damages claimed by Microsoft, it has
limited the decree amount to Rs. 5,00,000 along with cost of the suit.

In India, there is no specific case came up before the courts concerning the authorization of
software piracy by the service providers. One important case pending before the Delhi High
Court in respect of the search engine liability was SUPER CASSETTES INDUSTRIES V. YAHOO
INC.36 The plaintiff, owner of Indian musical company with label T-series filed a suit against
the defendant claiming that the defendants had infringed their copyrighted works through their
portal video.yahoo.com. Interim injunction was granted by the court restraining defendants
from reproducing, transmitting in any manner on their website, the film, sound recordings of
the plaintiff.37 Similar case was also filed against YouTube by the same plaintiff and injunctions
were allowed by the court. Similar case was also filed against youtube by the same plaintiff
and injunctions were allowed by the court.

35
Microsoft Corporation v. Deepak Raval, MIPR 2007 (1) 72.
36
CS(OS) No. 1124 of 2008.
37
Order dated May 30, 2008

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Likewise, permanent injunction was granted by the same Delhi High Court in software piracy
cases like Autodesk Inc and Anr v. A.V.T Shankardass & Anr38 and Microsoft Corporation
v. Mr. Kiran & Anr.39 In later case, the court expressed its awkward opinion about software
piracy by marking a statement software piracy is a menace and needs to be put down with a
heavy hand.

Regarding the obligations of service providers, very recently the Delhi High Court has given
an injunction order restraining the defendant websites from upload, downloading or showing
plaintiffs copyrighted contents on the internet.40 As an outcome of this order, Reliance
Telecom, an ISP having large number of customers and a sister company of the plaintiff in this
case, has blocked many file sharing websites on an apprehension that those websites might
upload their copyrighted content which was facing its release. The reason given by them is
based on the nature of the order, `john doe' which is basically an order given by the courts to
release the identification of the alleged infringers if the court satisfied that there is a valid
copyright infringement challenge against the defendant.41

This act of blocking websites and the issuance of 'john doe' order was widely criticized
by many scholars and internet users. Indian copyright act does not have any provision which
expressly talks about blocking or decrypting a website for alleged copyright infringement or
`john doe' orders, except the IT Act, 2000 and the rules made under it. The ISP has blocked
entire domain simply with the `john doe' order, though they do not have the right to do anything
than removing the pirated content or blocking the particular URL of such material, which was
not entitled by the order.42 In order to protect the interest of the copyright holders in the cyber
world, the courts in India have given well appreciable orders in a plethora of cases but, without
any basic legal framework, it is hard sometimes extraordinary for the courts to deal with such
issues.

Very recently, Calcutta High Court also joined in hands with the High court of Delhi ip
protecting copyright of the owners. In a particular period of 4 months, Calcutta high court has

38
FAO(OS) No. 116 of 2008.
39
2007 (35) PTC 748 Del.
40
Reliance Big Entertainment Pvt. Ltd. v. Multivision Network & Ors., CS (OS) No. 3207 of 2011,
41
Sameer Kujur and Reshma Tigga, "Copyright Enforcement in Internet - Specific to Music Industry an
International Perspective" Source: www.manupatra.com
42
Apar Gupta, "Widespread Blocking to File Sharing Websites Reported after a John Doe Order is Issued for Don
2", available at: http://www.iltb.net/2011/12/don2johndoe/ (Visited on January 11, 2014).

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issued blocking order in different cases against more than 300 ISPs to block around 200
websites for alleged copyright infringements.43 Justice I. P. Mukerji of Calcutta. High Court,
who has decided all these online piracy cases, framed three methods to be employed by the
ISPs to block access to the websites.

(A) DOMAIN NAME BLOCKING


(B) INTERNET PROTOCOL BLOCKING
(C) UNIVERSAL RESOURCE LOCATOR BLOCKING

First one Domain name or DNS blocking means blocking of the alphanumerical address, which
is a user-friendly alternative for Internet Protocol address of a website. Second IP blocking is
the way of blocking binary digit format of a website. Then the last model URL blocking is the
complete form of blocking a website. An URL comprise of hyper-text codes, domain names
and its equivalent IP address and. when an URL has been blocked the access to the website is
not feasible at all.44 The Calcutta High Court has ordered ISPs to use any of this method to
block the access. In an order in one of the online piracy cases, the High Court prevented service
providers from adopting, reproducing, distributing, communicating and transmitting in any
manner infringing the copyright belongs to the holders.45

D. ACTION TAKEN AGAINST PIRACY

Business Software Alliances an international non-governmental organization often conducts


raids in with the help of local investigation agencies to grab and penalize pirates. BSA carried
out a civil enforcement action against Hyderabad-based SM Technologies, which was
completed with the seizure of pirated software worth approximately $475,000. In September
2004, BSA has filed a criminal complaint against the company, leading to police raids at three
of its offices in Hyderabad. SM Technologies were involved in reproducing software through
multiple channels, including the internet, resellers, and directly to end-users. BSA after the

43
Saregama India Ltd. & Ors v. Dishnet Wireless Ltd. & Ors. (CS No. 85 of 2012. Decided on March 2, 2012)
and Sagarika Music Pvt. Ltd. & Ors vs Dishnet Wireless Ltd. & Ors (CS No. 23/2012 Decided on January 27,
2012).
44
"Anti-piracy movement in India gains heat: Cause for concern or justified response?" available at:
http://spicyipindia.blogspot.in/2012/03/anti-piracy-movement-in-india-gains.html (visited on March 10, 2014).
45
"Music industry upbeat over HC order on online piracy", available at:
http://wwv.businessstandard.comlindia'news!rnusic-industry-upbeat-over-hc-orderonline-piracy/l 611 82/on
(Visited on March 24, 2012).

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successful action against the SM Technologies mentioned in their press room that most of the
pirates in India used to reproduce the copyrighted software through the internet.46

In India very, few of national institutions established by the government are fighting against
the online software piracy at the state level. At national level, the National Association of
Software and Service Companies has proposed the setting up of a National Cyber crop
Committee to provide a helping hand to government and private agencies to combat against
piracy and cyber hacking. NASSCOM runs an Anti-Piracy Hotline installed at New Delhi with
the assistance of BSA. Reported cases of piracy are investigated by NASSCOM and passed on
to enforcement authorities for necessary action. One famous legal action taken against the
pirates after receiving information on the software piracy activities was in the case of ADOBE
SYSTEMS, INC ANY V. MR. MAHINDRA SAXENA & ANR.47 The plaintiffs, upon receiving
information of the defendants' infringing activities on BSA/NASSCOM anti-piracy hotline
instituted the suit and later on an investigation was carried out on the premises of defendants
with a local commissioner appointed by the court.

In 2010, a criminal action was taken by the police officials over the executives of guruji.com'
for alleged copyright infringement which was pending before the court of law and this is a
consequential case in this regard. Website called guruji.com is a local search engine, founded
in the year 2006 which allow its users to search like Googly; and it was rated as most preferred
music search engine by an Indian online market search company. When one user searches some
particular song, it will provide the list of songs and subsequently allowed them to both listen
and download, though those songs were not stored on guruji's servers. T-series music
production limited had issued number of notices to guruji.com for infringement of its copyright
in the music files.48 On April, 2010 the police officials arrested the executives and officials of
the guruji com in Bangalore and at present the case is in hearing stage before the local
subordinate court. The main contention of the T-series is that the guruji.com. was infringing
their copyright under the character of a search engine and is liable for punishment under section
14 and 63 or the ICA. Apart from the out-of-doors organizations, the ISP Association of India,
within which all the ISPs in the country are a member, has formulated their own rules and
regulations with certain obligations to Law. It mandates its members not to permit, with

46
BSA Report (Oct 2008) on "Online Software Scams: A Threat to your security", available at:
http://www.portal.bsa.org/faces/pdf/Intemet-Piracy-Report.pdf (Visited on October 17, 2012).
47
CS (OS) No.782 of 2002.
48
Notices were also issued to sites like YouTube, google, and yahoo

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knowledge, any user to engage in any illegal activity in terms of provisions of the IT Act,
2000.49 With effect to the recent IT rules (guidelines) issued by the government to ISPs, this
association also modified the code with all regulations regarding copyright infringement and
the new chart code is yet to be released.

49
Code of Conduct for ISPs. Code 5.1.2

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4. PROTECTION UNDER INTERNATIONAL INSTRUMENTS
4.1 TRADE RELATED ASPECTS OF INTELLECTUAL PROPERTY RIGHTS (TRIPS)

This is the first international treaty to explicitly include computer programs within the
illustrative list of copyrighted works. TRIPS set forth three different forms of protection for
software: copyright, patent and trade secrets. TRIPS includes a specific provision in Article 10
that expressly requires member states to protect software, whether in source or object code, as
literary works under the Berne Convention. However, the member countries have a right to
provide more extensive protection of intellectual property rights within their national legal
systems.

Article 27.1 recognizes patent protection for software related invention for the member states
so long as the invention satisfies the other requirements (6) for patentability which are country
specific.
Therefore, software may be granted patent protection in a particular country if it fulfils the
specific conditions set forth under the laws of that country. Article 39 of TRIPS provides an
alternative to copyright protection. It talks about protection for undisclosed information and
offers a trade secret regime for software protection. Trade secret regime is applicable for the
protection of trade secrets which may include software. A particular software may contain lot
of valuable and confidential information about a company which forms its trade secret. Civil
and criminal actions are provided for in most legislation against the unauthorized disclosure or
use of confidential information. In this case, there is no exclusive right, but an indirect type of
protection based on a factual characteristic of the information (its secret nature) and its business
value. Unlike patents, trade secrets are protected as long as the information is kept secret. Thus,
TRIPS do not preclude additional forms of protection for computer programs and a member
can offer patent, copyright and trade secret protection for computer programs. Keeping in mind
the higher standards of creativity required by patent law the software developer can choose any
form of protection which is most desirable to him. As the source code is comprehensible only
by a trained programmer and not by normal persons, the proprietors generally protect the source
code under the trade secret regime and the object code is protected as a copyright.

4.2 BERNE CONVENTION (BC)

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The Berne Convention does not explicitly mention computer programs in its illustrative list of
copyright works. However, as per TRIPS, member states should recognize computer programs
(software) as literary works. Article 2 (7) of the Berne Convention makes the protection of
works of applied art dependant on domestic legislation i.e. the extent to which protection may
be granted and the conditions under which such works will be protected is dependant on the
statute of the particular country where the work originated. Works enumerated in Article 2 of
the Berne Convention are mere illustrations of the kinds of works to which copyright might
extend. These illustrations are not exhaustive. Therefore, works such as computer programs
that exhibit utilitarian characteristics and also contain expressive elements can be brought
under the ambit of work of applied art. However, Article 7 (4) of the Berne Convention
exempts, inter alia, the works of applied art from the general term of protection and sets up a
minimum term of only 25 years from the making of the work. As article 2 (7) makes the
protection of works of applied art dependant on domestic legislations, the term of protection
may be applicable accordingly with respect to different countries.

4.3 UNIVERSAL COPYRIGHT CONVENTION (UCC)

Under the UCC’s national treatment provisions, software created by a U.S. author or first
published in the US is protected in other UCC member countries to the extent that the member
country’s copyright laws protect software. The UCC provides that any member country that
requires, as a condition of copyright protection, compliance with formalities (such as
registration, deposit or notice) must treat such formalities as satisfied if all published copies of
a work bear the symbol “©”, the name of the copyright proprietor and the year of first
publication. This provision applies, however, only to works that (i) were first published outside
the country requiring the observance of the formalities, and (ii) were not authored by one of
that country’s nationals. In contrast to Berne Convention, formalities such as registration are
permitted under the UCC in order to bring an infringement suit. India being a member to the
UCC, authors of software in US will get protection in India also as per the terms and conditions
laid down in the Indian copyright law.

4.4 WORLD INTELLECTUAL PROPERTY ORGANIZATION (WIPO)

In 1996, two copyright treaties were negotiated under the auspices of WIPO. These treaties are:
WIPO

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Copyright Treaty (WCT) and the WIPO Performances and Phonograms Treaty (WPPT). The
WCT of 1996 is a special agreement to the Berne Convention and requires compliance with
Berne Convention. This treaty makes explicit that computer programs are protected as literary
works under Berne Convention. It also states that compilations of data for which the selection
or arrangement of the contents are sufficiently original are protected as compilations.

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5. CONCLUSIONS AND IMPLICATIONS

Software piracy can be argued as a consequence of technological innovation and the need to
protect those from their unauthorized reproduction remains an important objective for
copyright owners. Recently, the director of World Intellectual Property Organisation50
observed, “copyright must
be developed to meet the development of new technologies otherwise it will become irrelevant
on the theory and practice. The central issue is how to maintain a balance between availability
of cultural works at affordable prices while assuring a dignified economic existence for creators
and performers”. An important aspect to be considered is statutory provisions concerning
amount of compensation to be determined for infringement claims. Though owners of the
software programs have civil and criminal remedies available to them in the event of violation,
the damages recovered through courts is uncertain. It is the court’s discretion to assess the
quantum of compensation based on the circumstances of each and every case. There exist no
statutory damages provided under the legislation. As for criminal sanctions to the infringers, it
is good that the government has constituted special copyright enforcement units in almost
majority states in India, but the enforcement mechanism in the country is weak. The
Government has also set up a statutory body, ‘The Copyright Enforcement Advisory Council’
for the purpose of boosting the enforcement but is inactive in performance. The copyright laws
of India are as good as those of many advanced countries where concern for copyright is at a
high level.

Punishments imposed for infringers are quite strict but the only problem is that it lacks
enforcement. Laws can do little justice unless properly implemented. This includes police
personnel, who can play a major role in combating piracy, are not fully aware of various
provisions of the law. There is also a lack of adequate number of personnel who can fully
devote to copyright crimes alone. The police are more concerned with usual law and order
problems and copyright related crimes are attached least priority. The awareness level among
end-users is also very low. Software piracy can be reduced effectively at a higher rate only if
the enforcement and the procedure are made strong and the judiciary should be proactive. The
Government should take initiative to set up special courts to deal with IP cases exclusively as

50
Francis Gurry spoke for the future of copyright at a conference, held at the Queensland University of
Technology, Australia, March 3, 2011.

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existing in Malaysia since 2007. Appropriate amendments to be made in the Copyright Act to
include provisions concerning statutory damages. There is an urgent need to reform the law
where the government can avoid frustration in the mind of software owners with respect to
damages available to them and which will for sure protect the interests and the efforts of many
software companies. To combat copyright piracy absolutely, the main industry to be considered
would be colleges and universities in India where the piracy rate is high. The next stage of
research would be to conduct a study through a survey among students to analyse the incidence
of the copyright piracy on the campuses, specifically in the form of software and music piracy
and to propose a legal framework to curb piracy effectively.

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