Indian business owners are constantly worried about the Ease of doing business, but yet they were not aware of one ranking where the country was in the top 10 places once. It is the Ease of doing Piracy. Twenty years back computer and computing services were very rare thing that was used only for exceptional activities, but now it has become a necessity for everything. When computers started to become the norm for every business in the first decade of the 21st century, businesses had to incur a huge overhead cost in upgrading the physical records and data into digital files. Business owners were not willing to spend beyond the bare minimum, which comprises computers and skilled employees. Spending money on software to process the data was near to impossible considering the pricing of licences that the software companies were charging at that time. For instance, a single licence of Windows XP for a single device was costing around Rs.10000 (Approx US $200 as of 2001). Fast forward two decades we are in the era of SaaS (Software as a Service) and still few companies with or without knowledge resort to piracy for getting software for their business. The eureka moment for writing this article came after reading the recent judgement of the Delhi High Court in favour of Microsoft Corporation. The judgement made headlines for the punitive damage that the court ordered against the infringer. The damages were to the tune of Rs.20 lakh (approx. US$25000).

Courts trend on damages:

This recent judgement is not one of a kind to be left aside, the recent trends in the Intellectual Property cases in India show us that the court is not considering any leniency to infringers and the volume of damages is increasing every day.

This intention of the judiciary started becoming clear in the case of Time Inc. v. Lokesh Srivastava, where the court granted punitive damages of Rs.5 lakhs (approx. US$ 11000 as of 2005)  in addition to the damages for the first time in 2005, stating that it was time to discourage lawbreakers “who indulge in violations with impunity out of lust for money.”

Again in May 2020, the Delhi High Court ruled in favour of the software companies: Microsoft, Adobe and Quest System in Microsoft Corporation & Ors vs Satveer Gaur against a Delhi-based company which had around 300 devices with pirated software which amounted to infringing the copyrights of the corporate giants. In this case, too, the court ordered damages to the tune of Rs.30 lakh  (approx. US$ 36000). And now last week in Microsoft Corporation & Anr vs Rupesh Waidande, it was against a Mumbai-based company for infringing Microsoft’s copyrights on almost 130 devices. Here also the court responded to the infringement with damages of Rs.20 lakhs (approx. US$25000). These cases will act as a precedent for all future cases amounting to software piracy.

What do the Indian Businesses need to do:

With these recent developments, it is easy for software companies to file infringement suits against firms installing pirated software. All it takes is to approach a company for a free software assessment management review (which we Indians would welcome with open hands as it has the tagline “FREE”). Once they have access, it is now a cakewalk for the software companies aka copyright owners to file for infringement and ask for damages. Indian businesses need to understand that India is now the bustling cradle for software development with native companies like Zoho, Freshdesk and Kissflow becoming a tough competition to Silicon Valley. This has made a huge portfolio of services being offered at dead cheap prices. Even giants like Microsoft and Google offer their office 365 and G suite services at a cost of around Rs.100 – Rs.150 (approx. US$ 2) respectively. So, it is advisable that business needs to adopt licenced copies of software or go with free open-source software that is available in the market.

As once Benjamin Franklin said “It takes many good deeds to build a good reputation, and only one bad one to lose it.”, Indian companies need to be careful with their software usage policies and not lose their reputation in software piracy cases like the ones stated above.  It is imperative to note that everybody should have a right to succeed and success should be with ethics.

The article has been authored by Rohit Magesh, Selvam and Selvam.