A company ran Microsoft software on 130 computers — but its licences didn’t match its usage. After a 12-year fight, the Delhi High Court held that under-licensing is copyright infringement, granting Microsoft a permanent injunction and ₹20 lakh in damages.
What happened
Microsoft discovered the defendants were using its products — Windows, Office and Windows Server — unlawfully. On investigation, the defendants had 130 computer systems, most running Microsoft software, but the licences they held did not match their usage — a clear sign of unlicensed use. Despite repeated requests, the defendants refused to conduct a Software Management Assessment Review to gauge the extent of the piracy.
The proceedings
The court granted an ad-interim ex-parte injunction restraining the defendants from infringing Microsoft’s programs. The parties were referred to the Delhi High Court Mediation and Conciliation Centre, but couldn’t settle.
The ruling
The court found Microsoft was the owner of the copyright in its computer programs, manuals and user instructions, with the exclusive rights the Copyright Act, 1957 confers. The defendants failed to prove genuine (licensed) use for all the installations across their organisation. So the court held them liable for infringement, ordered ₹20,00,000 (about US$25,000) in damages, and directed them to immediately cease and desist.
Why it matters
The case is a plain lesson for every business:
- Under-licensing is infringement. Owning some licences doesn’t cover using the software on more machines than licensed.
- The burden is on the user to prove genuine, licensed use for every installation.
- Refusing an audit doesn’t help. Declining a licence-compliance review (SAM) doesn’t shield you — and looks bad.
- Damages follow. Courts will quantify and award damages for organisation-wide unlicensed use.
The takeaways
- Match licences to actual usage across all machines — a licence count below your install count is infringement.
- Keep proof of genuine use — you must be able to show valid licences for every installation.
- Cooperate with compliance reviews — refusing a SAM assessment won’t protect you.
- Expect injunction plus damages — as Microsoft secured here.
Frequently asked questions
Is using software beyond your licence count copyright infringement? Yes — running software on more machines than you’re licensed for is unlicensed use and infringes the owner’s copyright, as this Microsoft case shows.
Who must prove licensed use? The user — the defendants here failed to prove genuine, licensed use for all their installations and were held liable.
What did the court award Microsoft? A permanent injunction and ₹20 lakh (about US$25,000) in damages, plus a cease-and-desist direction.
Does refusing a software audit protect a company? No — refusing a Software Management Assessment review doesn’t shield an infringer and can count against them.
Legislation referred to
- The Copyright Act, 1957