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  • Order 39, Rule 3
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Citation Codes
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  • Order 39, Rule 3
Smart Summary

Factual and Procedural Background

The Plaintiff, an English company conducting business in India through its authorised distributor, sells and distributes the “NUKE” and “NUKEX” software programmes. It alleged that Defendant No. 4 and its directors, Defendant Nos. 1 to 3, held only two licences but used the software on approximately 35 machines. [1]

Private investigators reported that Defendant No. 4 had approximately 30–35 computer systems containing versions of the software, used by about 60 employees, and appeared to have downloaded or recommended downloading the latest version from Internet websites. [2]

The Plaintiff filed a copyright infringement suit and sought ex-parte interim relief, including search and seizure-related directions, before the Defendants could remove or destroy evidence. [3]

Legal Issues Presented

  1. Whether the Plaintiff had established a prima facie case warranting an ex-parte search and inventory of the Defendants’ computers for unauthorised or pirated software. [4]
  2. Whether an ad-interim injunction should restrain the Defendants from infringing the Plaintiff’s copyright in “NUKE”, “NUKEX” and their variants. [5][6]

Arguments of the Parties

Plaintiff’s Arguments

  • Advance notice could enable the Defendants to uninstall or remove infringing software, tamper with evidence and frustrate the purpose of the application. [3]
  • The matter was suitable for an ex-parte order and appointment of a local commissioner to conduct search and seizure operations. [3]
  • The Plaintiff relied on Delhi High Court decisions, particularly Autodesk Inc v. A.V.T Shankerdass, concerning ex-parte appointment of local commissioners in software infringement and piracy cases. [3]

Defendants’ Arguments

The opinion does not contain a detailed account of the parties’ legal arguments.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Autodesk Inc v. A.V.T Shankerdass 2008 37 PTC 571 Del. Guidelines for exercising discretion in appointing a local commissioner ex-parte in software infringement and piracy matters. The Plaintiff relied on the decision to support ex-parte search and seizure-related relief; the Court accepted that the circumstances justified an ex-parte inventory order. [3][4]

Court’s Reasoning and Analysis

The plaint, supporting documents and two private-investigator reports established a prima facie case for searching the Defendants’ premises and preparing an inventory of the software installed on their machines. [4]

The Court considered surprise essential in software-piracy cases because advance notice could result in pirated software and other incriminating evidence being removed, destroyed or otherwise concealed. [4]

On that basis, the Court appointed the Court Receiver, High Court, Bombay, as Commissioner to inspect the Defendants’ premises, search their computers and inventory machines containing the Plaintiff’s software. The Receiver’s representative could use the Plaintiff’s authorised representative and seek local police assistance. [7][8][9]

The representative was also authorised to copy relevant hard discs, with the copies sealed in the presence of both sides’ representatives, and the Receiver was directed to submit the sealed record and report to the Court by the next date. [10][11]

Holding and Implications

AD-INTERIM RELIEF GRANTED. The Court appointed a Commissioner for inspection and inventory, authorised related evidence-preservation measures, and restrained the Defendants from reproducing, circulating, installing or using pirated or unlicensed versions of “NUKE”, “NUKEX” and their variants. [5][7][10][6]

The Plaintiff was required to comply with Order 39, Rule 3 within 48 hours of the inspection. The Defendants could seek variation or vacation of the order on 24 hours’ notice and were directed to file their reply within two weeks. [12][13][14]

The opinion does not state broader implications or establish a new precedent; its direct effect was to preserve evidence and temporarily restrain the alleged infringement pending further proceedings. [11][6][15]

    Foundry Visionmongers Ltd. v. Ankur Sudhir Sachdev

    S.C Gupte, J.:— This is a copyright infringement suit filed by the Plaintiff against Defendant No. 4 and its directors, who are Defendant Nos. 1 to 3. The Plaintiff carries on business of sale and distribution of its software programmes known as “NUKE” and “NUKEX”. The Plaintiff is a Company incorporated under the laws of England and Wales and carries on business in India through its authorised distributor, Ark Infosolutions Pvt. Ltd. The Plaintiff has developed a flagship software programme for rendering visual effects known as “NUKE”. The software is claimed to be a powerful compositing product, which delivers unparalleled speed and highest quality of visual effects. This software comes in three editions, which are designated as “NUKE”, “NUKEX” and “NUKE STUDIO”. The grievance of the Plaintiff is that the Defendants, who hold two licences for software programmes “NUKE” and “NUKEX” from the Plaintiff, have been unauthorisedly using the software on about 35 machines.

    2. It appears that the Plaintiff has appointed private investigators for investigating the piracy of the Plaintiff's software programmes and determining the scope of the impugned unauthorised activities of the Defendants. There are two reports of Private investigators placed on record by the Plaintiff. The reports broadly indicate that Defendant No. 4 is involved in the business of visual effects and computer graphic services and has about 30-35 computer systems installed with the software of “NUKE” version 9 and 9.9, which are used by about 60 employees of Defendant No. 4. One of the investigating reports also indicates that the Defendants appear to have downloaded and even recommend to others to download the latest version of “NUKE” from certain websites on the Internet. Such downloading, of course, would be clearly unauthorised and an act of piracy.

    3. The Plaintiff claims that if this Court were to give notice to the Defendants before passing an ad-interim order, the Defendants are likely to uninstall or remove the infringing versions of the software from their machines, thereby suppressing and tampering the evidence of actual usage of the Plaintiff's software and frustrating a substantial purpose of the present notice of motion. In the premises, the Plaintiff submits that this is a fit case for an ex-parte order against the Defendants, particularly with a view to carry out search and seizure operations at their premises. Learned Counsel for the Plaintiff relies on several judgments of Delhi High Court on similar facts in cases of infringement and piracy of software, where local commissioners are appointed ex-parte to carry out search and seizure. He particularly relies on a Division Bench judgment of Delhi High Court in Autodesk Inc v. A.V.T Shankerdass 2008 37 PTC 571 Del., where the Division Bench of Delhi High Court has laid down elaborate guidelines for exercise of discretion by Courts in the matter of appointment of a local commissioner in software infringement and piracy matters.

    4. Having regard to the averments made in the plaint and the documents produced therewith, including two reports of Private Investigators, the Plaintiff does appear to have a prima facie case for atleast ordering a search at the Defendants' premises and make an inventory of offending software used by the Defendants at their premises. By its very nature, in a case of software piracy, it is imperative that the Court must act swiftly and without advance notice to the Defendant. If an advance notice of an ad-interim application is issued, there is every likelihood that the pirated software and other incriminating evidence may be lost, removed or destroyed. By its very nature, it is necessary to have an element of surprise so that the factual position is not altered.

    5. Since the Plaintiff has made out a prima facie case and it is imperative that an ex-parte order of inventory be passed, the following order is passed by way of an ad-interim relief:-

    (i) Court Receiver, High Court, Bombay, is appointed as a Commissioner for visiting the premises of the Defendants, described in the plaint and the Notice of Motion. The Court Receiver shall designate his representative to carry out spot inspection at these premises and search the computers, including desktops and laptops used by the Defendants, to ascertain if the Plaintiff's software programmes, including “NUKE” and “NUKEX” and their variants, have been installed on these computers. The Court Receiver's representative shall make an inventory of the number of machines installed by the Defendants, where these softwares are actually used.

    (ii) The Court Receiver's representative shall take assistance of the Plaintiff's authorised representative for visiting the Defendants' premises and conducting the search and making the inventory.

    (iii) The Receiver's representative may also seek police assistance from the local police station in Andheri (W), Mumbai, for carrying out the task assigned to him.

    (iv) Whilst carrying out this inventory, the Receiver's representative shall be permitted to make copies of hard discs of the Defendants' computers, where the Plaintiff's software programmes, described above, have been installed. Such copies made shall be sealed in the presence of the representatives of the Defendants as well as the Plaintiff.

    (v) The Receiver shall make available the sealed record together with his report to this Court by the next date.

    (vi) There will also be an ad-interim injunction restraining the Defendants from infringing the Plaintiff's copyright, including software programmes, including “NUKE” and “NUKEX” and their variants in any manner either by reproducing, circulating or installing or using pirated or unlicensed programmes of “NUKE” and “NUKEX” or their variants or otherwise.

    (vii) The Plaintiff shall comply with the requirements of Order 39, Rule 3 within a period of forty eight hours of the Receiver's representative visiting the Defendants' premises for carrying out the inventory.

    (viii) The Defendants shall be at liberty to apply for vacating or varying this order with a minimum notice of twenty four hours to the Plaintiff.

    (ix) Defendants to file their reply to the Notice of Motion within a period of two weeks from today. Rejoinder, if any, within one week thereafter.

    (x) Place the Notice of Motion for hearing on 16 February 2016.

    (xi) The parties, the Receiver and all other concerned agencies to act on the authenticated copy of this order.

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    Comments

    Foundry Visionmongers Ltd. v. Ankur Sudhir Sachdev
    (Jan 20, 2016)