Latest Indian Copyright Cases – 2021 – Part 3
Muthoot Finance Limited v Shalini Kalra & Ors
In this case, the plaintiff, Muthoot Finance Limited, a non-banking financial institution, provided business and personal loans against the deposit of gold jewellery. As part of this activity, the plaintiff had to maintain proprietary and confidential information relating to its vast clientele in the form of a database which, in turn, constituted a “literary work”. Section 2(o) of the Copyright Act, 1957 and it also amounted to plaintiff’s trade secrets which were not to be disclosed to any third party. The defendants do not. 1 to 4 here were the plaintiff’s former employees. When they took office, each of them had duly signed the confidentiality undertaking provided for in the letter of appointment as well as a declaration of loyalty. The main allegation in the Complaint was that Defendants 1 and 4, in the course of their employment, unauthorized and unlawfully downloaded, mined, copied and then transmitted the confidential information of Plaintiff’s customers to Defendants 2 and 3. with employees of Defendant #5, a company engaged in services similar to those of Plaintiff. Thus, Plaintiff’s clientele began to drift towards Defendant #5. Eventually, Defendants 1 and 3 after being terminated by Plaintiff, in turn joined Defendant 5’s employment. of Police, Crime Branch, New Delhi. However, there were similar instances of disclosure of confidential information at various other branches of the claimant, which resulted in a loss of approximately Rs 9 million to the claimant. Thus, the plaintiff again filed an FIR with PS Special Offenses and Cyber Crime under the relevant sections of the IPC and the Information Technology Act. The Complaint also alleged that Defendant #5 poached Plaintiff’s employees and customers using information illegally obtained by Defendants.
Accordingly, Plaintiff requested this court to obtain a permanent injunctive decree thus prohibiting Defendants and any other person acting on their behalf/through them from using/disclosing any confidential information concerning Plaintiff, ‘use/infringe any copyright or other intellectual property rights belonging to the Claimant, directly or indirectly lure/solicit one of the Claimant’s clients, induce one of the Claimant’s employees to quit his job or pressure him to join Defendant #5 or any of its companies, and relinquish all such confidential information/trade secrets in hand. The plaintiff also sought damages of Rs.2,00,01,000/- payable to the plaintiff jointly and severally by defendants 1 to 5 with interest at 18% per annum until the date of payment. The Court here issued a subpoena to the defendants and gave them the opportunity to file a written statement (if any). And regarding the IA filed by Plaintiff, the court ordered an interim injunction restraining Defendants from disclosing or using confidential information, trade secrets or any other information, relating to Plaintiff’s business and operations, and to use exclusive content. of any kind, including copyrights and other intellectual property rights of the plaintiff company or to do any act or deed that will infringe/dilute the plaintiff company’s intellectual property rights.
Citation: Muthoot Finance Limited v Shalini Kalra & Ors decided by Delhi High Court – Orders of 13and September 2021, available on: https://indiankanoon.org/doc/22108976/visited on 23and September 2021.
Progress Software Solutions vs Dcit 13(1)(2)
In this case, the appellant (the assessee) was a resident company involved in the trading and sale of software licenses and the development of computer software. For the valuation year 2009-10, the assessee filed the tax return declaring Rs.89,29,099/- as a loss. But originally the assessment was completed later in 2011, which was calculated after making some disavowals as u/s 143(3) of the Act. On appeal against this assessment order to the Learned Commissioner (Appeals), partial relief was granted, removing one of the dismissals. Still aggrieved by the same additions repeated once again in the new assessment, the assessee again approached the Tribunal.
Regarding the denial of Rs.23,50,466/-, the assessee advanced the claim that by merely being a distributor, the payment so made to Savvion, USA (a non-resident company) for the purchase of a copyrighted item for the purpose of resale was not in the nature of a royalty under U/A 12 of the Indo-American Tax Treaty or the u/ s 9(1)(vi) of the Act, and therefore tax deducted at source as u/s 195 of the Act was not required. Thus, the court analyzed whether a copyrighted item was genuinely purchased for the purpose of resale/distribution or whether it was made for internal use or according to the convenience and will of the assessee. After checking the reseller agreement, the court concluded that the license granted therein was not for any internal use. The Court found that the agreement also prohibited the reseller/any other third party from translating, modifying, extending, disassembling or reversing the said copyrighted article (the software program included therein). Reseller also acknowledges and agrees that in the event of any unauthorized use/disclosure/copying of the Software, Reseller shall be liable for the remedies and consequential actions of Savvion, USA. Citing some court pronouncements by the Honorable SC, it was found that where a non-transferable, non-exclusive license to resell a copyrighted item without actually transferring the copyright in said item was provided to the end user/end distributor, then there was no additional right granted to sublicense/transfer/reverse/reproduce/modify anything, other than as permitted under the license granted to the end user . It was agreed by the Court that the payment made for the purchase of a copyrighted item for distribution was not in the nature of a royalty and therefore the grounds were authorized and, therefore, the refusal concerned has been deleted.
Citation: Progress Software Solutions … vs Dcit 13(1)(2), Mumbai, decided by Income Tax Appeal Tribunal – Mumbai 30thand August 2021, available on: https://indiankanoon.org/doc/177640115/visited on 13and September 2021.
Cristina Maiorescu vs. M/S Nishangi Enterprises Pvt. ltd. and Ors.
The plaintiff, a professional photographer, brought an action against the defendants asking the Bangalore District Court to pay a sum of Rs 1,56,025/- for an invoice for the services she provided, together with interest at the rate 12% per year. year. Plaintiff entered into an agreement with Defendants to provide photography services relating to products for sale by Defendant #1, a company operating a chain of restaurants/drinks stations under the name and style “Frootality” in Hyderabad and Bengaluru. As per the agreement, a sum of Rs.2,23,000/- was to be paid by the defendants to the plaintiff, who was to provide 62 photographs in two phases. Further, in accordance with the agreement, Respondent No. 1 paid a sum of Rs 1,00,000 to the Claimant as an advance.
It was alleged by the Claimant that after the completion of her assignment, she issued an invoice and the Defendants did not raise any objections to the completion of the assignment or make the payment. It was also the case with Plaintiff that Defendants #1 and 2 used various services of Plaintiff outside of the scope of the photography assignment and she also allowed Defendant #3 to reside with her. The plaintiff alleged that she incurred an expense of Rs. 3,85,000/- to fulfill them and that the defendants grossly violated her intellectual property rights.
The Court held that due to the facts and circumstances of the case, the onus was on the plaintiff to prove that she had provided photography services to the defendant and that the defendants were liable to pay damages for additional services rendered by the plaintiff and for illegal use of photographs clicked by her. The plaintiff filed evidence which included a copy of the email communications between the plaintiff and the defendants, a copy of the invoice, a CD containing photographs, screenshots of the defendants’ websites and a copy of the opinion. The Court, after reviewing the evidence, concluded that the plaintiff had succeeded in establishing that she had provided the services to the defendant, who had agreed to pay the amount she claimed and that the amount of interest had also been deemed appropriate. . However, with respect to the additional services and the illegal use of photographs, except for issuing a notice, no further evidence was available. The Court held that in the absence of any convincing evidence, the plaintiff was not entitled to damages and compensation as claimed in the complaint.
Quote: Cristina Maiorescu v M/S Nishangi Enterprises Pvt. Ltd, September 24, 2021, available at: Maiorescu vs. M/S Nishangi Enterprises Pvt. ltdlast visit 6and October 2021
Latest copyright cases in 2021
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