Intellectual Property Rights are the exclusive legal rights given to the owners of the ‘intangible property’ for protecting their creative works from commercial exploitation. These works also include Computer language, programs, compilations, websites, web pages, databases, software codes created by the owner. India is one of those countries, which is witnessing the huge advancement in the field of Information Technology. With the growth in technology, it becomes the duty of the Government to grant exclusive rights called copyrights to protect the creativity of those creators from commercial exploitation.
The purpose of this study is to advance the understanding of one particular aspect in IP rights protection i.e. software piracy. Therefore, this paper focuses on analyzing the current menace of software piracy in India, the online piracy of software programs by hacking and other means, and to study the laws and mechanisms which are available to protect the creators and lastly few judicial precedents related to software piracy.
The world since the last decade is experiencing rapid growth in the field of Information technology and digitalization. Most of the nations are advancing in the technological field. Nowadays a ‘developed country’ means’ technologically advanced country’. Along with this, such countries have to protect the creators of these technologies, with whose help the country is economically progressing.
The world of digitalization and technological development draws the concern of the Government to make laws for the protection of such works. The problems faced because of such advancements in technology are illegal duplication and distribution of the original work like software, which has a significant impact on the economy. The copyright infringement of these computer programs means unauthorized, illegal copying of programs through hacking or by any other means, selling those duplicated programs in the market. Such duplicating of works is called piracy. These pirated works do not cause loss only to its developers but also to the users.
Hence, for the protection of copyrighted software and to prevent piracy of computer programs, the Government is attempting to enforce statutes with strict laws, abiding by the various International Organisations related to IP Rights and Copyrights.
The Peril of Software Piracy
The advancement in technology and digitalization has caused rapid expansion and growth of software companies in India and all around the world. This growth has thus increased the number of cybercrimes; such as hacking, software piracy, etc. Software companies have been badly affected by piracy which is not only harmful to the software developers but also its users. Technological advancement has made it easy for anyone to copy the programs, duplicate it, and sell it in the market. But due to digitalization, the new concepts of data storage such as cloud computing processes have made it difficult to recognize “the cause of actions” arising as per the simple procedural or substantial laws of the country, as a result of all these the software piracy is regarded as the worst of the crimes faced by the software companies and resulted in panic attack to its developers and users.
The use of computer software has made the lives of the people much easier and manual work has been completely transformed into technological. But this software piracy is currently a huge problem faced by almost all countries in the world. Hence, because of these problems, it is a dire necessity to introduce strict cyber laws to overcome these crimes.
It is defined as a ‘crime relating to illegal copying/duplicating, selling or installing of the copyrighted software’. The ‘copyrighted software’ is nothing but a license given to the licensee for a certain price by the licensor. This software can be used in any number of devices, as long as it is used by the licensee/creator. The licensee should not make further sale of the software to any unauthorized users by making multiple copies of it.1 If the licensee sells violating the terms of the license, then it also amounts to software piracy. Piracy is considered a crime because; it is no different than theft, it defeats the innovative ideas of the person.
The economy of the country in recent years is mostly dependent on such software technologies; IT contributes around 7.7% to the GDP of the country. Indian revenue loss is attributed to 3 million dollars. India is ranked 43 in the list for the highest piracy rates, 64% of the total software users are using the pirated version of the original software. There was a survey conducted in 2013 named “Global Software Survey” by Business Software Alliance partnered with International Data Corporation which revealed that among the 20,000 users and enterprise users of the personal computers 43% of software installed is unauthorized and unlicensed. As a result of this unauthorized material, the loss credited is more than 60 billion dollars. Therefore, there is a need for the protection of copyrighted material utilizing law.
Developing new software products are tremendously costly and time-dependent. Microsoft employs approximately 35,000 people in research and development and spends billions of dollars. On the other hand, the incremental production cost of computer software is negligible with the advent of the Internet, since software products can be distributed over the Internet at little or no Incremental cost. This creates a problem for the software developer as consumers can share products for free, leaving the developer of the software without income.
The purpose of protection of IP rights is to encourage new inventions by granting the monopoly (exclusive statutory rights) rights to the innovators for a limited period; therefore the reduction of these rights practically has the potential to lessen the future advances in knowledge. Additionally, the reduction in profits due to piracy of the software may also reduce the investment in future research and development activities. Hence, it’s the need of the hour for the Government to somehow prevent the infringement of Copyrighted materials by enacting more and more strict laws.
Protection against Software Piracy
The software vulnerability is most often blamed for making counterfeiting and piracy possible and it is mostly possible because of a lack of robust software copy protections. The attempts to protect infringement of copyrighted software are made worldwide. The application of copyright protection for software products was established internationally via the World Trade Organization’s (WTO) Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs) which came into force from 1st January 1995. The obligations under the TRIPS agreement relate to the provision of minimum standard protection within the member countries’ legal systems and practices. India’s copyright law, laid down in the Indian Copyright Act, 1957 as amended by Copyright (Amendment) Act, 1999, fully reflects the Berne Convention on Copyrights, to which India is a party. Additionally, India is an active member of the World Intellectual Property Organisation (WIPO), Geneva, and UNESCO.
Indian Copyright Act, 1957
Indian Copyright Act governs the subject of copyright law in India, which is according to amendments in 1999, 2002, and 2012, fully reflects the Berne Convention.Section 13(1)(a) of the India Copyright Act, 1957 gives protection to all forms of original works which include literary works, dramatic works, sound recording, cinematography tapes, and films. The ‘computer program’ is included in the ‘original literary work’ of the Act and thus its infringement will attract serious penal and civil actions.
Amendment brought in the Act of 1957 in 1994 includes computer program as original literary work in Sec. 2(o) of the Act. This 1994 amendment also added provisions for stringent punishment for the infringement of copyrighted software programs. The Act clearly states that any act which is done by an unauthorized person with the software which was legal to be done by the authorized licensee will amount for civil remedies such as injunctions, damages, and other administrative measures taken by the administrative authorities for the protection of copyrighted software.
Sec. 51(a)(ii) of the Indian Copyright Act, 1957 of the Act states that when a person permits any place to be used for communication of the copyrighted software of other work to the public for generating profit, then this will amount to infringement of copyright. The term “communication to the public” is defined in Sec.2(ff) of the Act as which is heard, enjoy or see the issue of copyrighted work but it lacks the liability of the Internet Service Providers as it does not provide any express provisions to encompass the liability of Service providers like other countries.
In addition to civil remedies, the amendments in Act also provide criminal remedies such as punishment for an infringement of copyrighted work. Sec. 63B of the Act provides for punishment of a minimum of 7 days and may be extended to a maximum of 3 years and fine up-to 15,000 and which may extend to 2 lakhs as per the discretion of the judge. This punishment is attracted when an unauthorized person uses copyrighted software with knowledge. Another notable point here is that the punishment is attributed to the offender even when there is no profit made by him.
There is a separate chapter dealing with the “offense” which includes the act of use and also abetting the use of infringement of copyrighted work. The Internet Service providers who encourage piracy without filtering the search by using the upstream filter are also encompassed in this chapter. This chapter penalizes both the user and the abettor of the infringed copyrighted work. The Act also provides provisions for punishment under Sec. 69(1) which states that every person running, managing the affairs of the company who takes the defense of not having the knowledge or has taken sufficient measures which were supposed to be taken prudently to prevent the infringement of copyright. The Act also encompasses directors individually or board whose permission was taken for the commission of the offense .1
Information Technology Act, 2000
The Information Technology Act, 2000 is regarded as a boon for the prevention of infringement of the copyright software. It is the primary law in India dealing with cybercrime and electronic commerce. Sec. 2(w) of the Act is applied to all Internet service providers and other providers as intermediaries who on behalf of another person receives, stores or transmits the records and this includes telecom service providers, online market places, cybercafés, auction sites, online websites for payments and other search engines.
The Act though fails to provide the extent of liability or quantum of liability that can be put against the service providers. The service providers can be exempted from this section if they prove that they have no knowledge of the commission of the offense or they have taken all necessary care that a prudent man would have taken to prevent the commission of the offense.
There are three kinds of service provided by the Internet Service providers dealt in the section this includes; the transmission of third party information links hosted by the Internet Service Providers, and the storage of third party data. Thus, the Act acts as a safe provision for the search engines and the Internet Service Providers (ISP) to exclude themselves from the third party contents thereby excluding the obligations of taking efficient measures to reduce or stop the piracy.
Furthermore, the Act fails miserably in the situation when any person has drawn the concern of the service providers regarding the use of infringed work or piracy in their services i.e., the Act does not say expressly that what will be the situation when the ISP states that they do not know that their services are being used for infringement of copyrighted work. There to take the benefit of this exemption it has to be shown that they have not initiated the transmission of the wok, neither receive any transmission of the work nor modify any information in transmission.
Thus, the Act does not provide for the imposition of any obligation but only states the due diligence which has to be taken care of by the intermediaries while transmission of the work. The Ministry of communication and Information technology, however, put forward the mandatory guidelines of due diligence which has to be taken by the intermediaries, and also such guidelines have to be provided by their subscribers too. The guideline is given under Sec. 79 of the Act, 2000.
Rule 3(4) of the Act has been boon for the owner of the copyrighted work as it provides mandatory provision to remove the stored pirated material from their services when the material is being detected and is same conveyed to the respective service providers failing to which an appropriate action could be brought against the service providers.
The Courts in India are witnessing numerous cases regarding this issue of infringement of software copyrights. The courts have been analyzing the Judgements given by the courts of the U.S.A and other countries and are making attempts to protect against software piracy. Here are the few cases decided by the Indian Courts:
1. Microsoft Corporation vs. Deepak Raval, 2016 commonly known as Microsoft case where the defendant infringed the copyrighted works like Microsoft 2000, Microsoft Windows 98, etc. of the plaintiff (Microsoft Corporation), a company organized and existing in the U.S.A. It is stated that the software developed and marketed by the plaintiff is “computer programme” within the meaning of Section 2(ff) of the Copyright Act and is included in the definition of literary work as per Section 2(o) of the said Act. The plaintiff is the owner of the said copyright. Both India and U.S.A are the signatories to both the Universal Copyright Convention as well as the Berne Convention. Thus, the works of the plaintiff are protected under Section 40 of the Indian Copyright Act, 1957 read with page 3705 of the International Copyright Order, 1999.
The case of the plaintiff is that the plaintiff being the owner of the copyright in the aforesaid literary works within the meaning of Section 17 of the Copyright Act, 1957 is entitled to all exclusive rights flowing from such ownership as set out under Section 14 of the said Act. The Delhi High Court ordered the Defendant to pay huge damages to the Plaintiff for the infringement. Also, the Court held that there is a dire necessity for the protection of copyrighted works which is causing huge losses to the creators as well as to the users.
2. Microsoft Corporation vs. Mr. Kiran and Anr., in this case, the court observed that software piracy has become a menace in the country and there is a need for appropriate measures and stringent Acts to prevent the infringement of copyrighted material. In some cases, the court also granted an injunction against service providers to restrain from using, storing, receiving, and selling of transmission of copyrighted material through their websites.
3. Super Cassettes Industries vs. Yahoo Inc., in this case, the plaintiff contended that the defendant has infringed the copyrighted material of the plaintiff through their portal. The court ordered an injunction for restraining the reproduction and transmission of the copyrighted material of the plaintiff through their portal.
In this digitalized and technologically advanced world, the rise in use of the Internet has resulted in the rise of crimes related to it, and Software Piracy is one such crime. The protection against such offenses for the creator and users has become one of the main obligations of the Government of almost all the countries in the world which are growing in the technological field. India also has been witnessing many cases relating to software piracy which has resulted in the loss of millions of dollars.
Therefore, abiding by the terms of Agreement of TRIPS, the Indian Government has enforced various statutes such as; the Indian Copyright Act, 1957 which is subject to the amendments in 1999, 2002 and 2012, Information Technology Act, 2000, etc. for the prevention of infringement of copyrighted works. When there is a violation of the provisions of the said Acts, the court may order the Defendant (the one who has pirated the works) to pay huge penalties to the Plaintiff.
The Indian laws provide for both civil and criminal remedies for the infringement of copyrighted material through the quantum of liability and compensation depending on the discretion of the Court. The law not only encompasses the users and abettors of the infringement of copyrighted work but also restraints the transmission, copying, receiving, and modifying the copyrighted work. But still, cybercrimes are increasing day-by-day and the only solution for that is to implement more strict laws and to prevent the happening of such crimes.
- What is software piracy? Why is it considered a crime?
- What are copyrights?
- Explain the effects of software piracy on the economy.
- What are the laws available in India against infringement of Copyrighted software?
- Explain a few landmark Judgements decided by the Indian Courts related to the infringement of Copyrighted Software programs.
1. Information Technology in India: https://en.m.wikipedia.org/wiki/information_technology_in_India
2. Software Piracy and IPR protection: https://www.questia.com/library/journal/1G1-332379214/software-piracy-and-intellectual-property-rights-protection
3. All you need to know about Software Privacy in IPR: https://blog.ipleaders.in/ipr-software-privacy/
4. G. Krishna Tulasi and B. Subba Rao “ A detailed study of the patent system for the protection of inventions“
5. Indian Copyright Act, 1957.
6. Information Technology Act, 2000.
7. Microsoft Corporation vs. Deepak Raval, MIPR 2007 (1) 72 from https://indiankanoon.org/doc/1994429
8. Microsoft Corporation vs. Mr. Kiran and Anr, 2007 (35) PTC 748 Del.
9. Super Cassettes Industries vs. Yahoo Inc., CS (OS) No. 1124 of 2008.
 Business Software Alliance. The Compliance Gap. http://globalstudy.bsa.org/2013/downloads/studies/2013Global Survey_Study_en.pdf.
 Information Technology in India: https://en.m.wikipedia.org/wiki/information_technology_in_India
 S.K. Verma and Raman Mittal, Legal Dimensions of Cyberspace 168 (Indian Law Institute. New Delhi, 2004).
 Software Piracy and IPR protection: https://www.questia.com/library/journal/1G1-332379214/software-piracy-and-intellectual-property-rights-protection
 G. Krishna Tulasi and B. Subba Rao “ A detailed study of the patent system for the protection of inventions“
 MIPR 2007 (1) 72
 2007 (35) PTC 748 Del.
 CS (OS) No. 1124 of 2008.