Software User Piracy- Issues

NEERAJ AARORA,AICWA, LLB, PGD (Cyber Law), CFE (USA)

 Nowadays, software has become an indispensable part of our day to day life, running everything in the digital world from our PCs to the internet. It is definitely the most valuable technology of the Internet age. India has also become a major exporter of software. However, the software industries worldwide including India are also facing a very serious threat: Piracy.

 “Software piracy is the unauthorized copying or distribution of copyrighted software. This can be done by copying, downloading, sharing, selling, or installing multiple copies onto personal or work computers (Source: Business Software Alliance).”

 “Software piracy is the reproduction, distribution or use of a software product without the expressed permission of its author. Software piracy is theft – stealing someone else’s original idea and product .” (Source: NASSCOM )

 The Indian Copyright laws does protect computer software as a relatively new recipient of copyright protection, but unfortunately, not only did new technologies enhanced ways to access and distribute copyrighted work legally but also illegally. Software piracy is an illegal and unethical behavior that should be understood by everyone and must be stopped as it hurts everyone from software developers to software vendors and ultimately to all software users. Furthermore, the illegal duplication and distribution of software has a negative impact on the economy. The BSA study reveals that 35% of the software installed in 2006 on personal computers (PCs) worldwide was obtained illegally, amounting to nearly US$40 billion in global losses due to software piracy. Further, Annual BSA and IDC Global Software Piracy Study reveals that piracy rates in India is approximately 71 per cent and it lost about $1,275 million in 2006 due to software piracy.

 However, the study reveals that if the software piracy is effectively checked and lowered down to even 10 %, the IT sector’s contribution to the Indian economy could be even bigger, creating an additional 43,700 jobs, $3.1 billion in local industry revenues, and $208 million in additional tax revenues for government. While the government has enacted tough copyright laws and added amendments to help enforcement, pirated software is still widely available due to the lack of proper implementation and enforcement of legal measures devised to stop piracy.

 The Copyright Amendment Act, 1994 which is in agreement with the TRIPS Agreement has given further impetus to the protection of computer programs/software. These changes or amendments made the Indian Copyright law, one of the toughest in the world. Accordingly, the copyright of computer software is protected under the provisions of Indian Copyright Act 1957. For the first time in India, the copyright law clearly explained:-

  • Computer program/Computer Software
  • the rights of a copyright holder
  • position on rentals of software
  • the rights of the user to make backup copies
  • The amendments imposed heavy punishment and fines for infringement of copyright of software

 Due to the technological advancement, it is very easy to duplicate software which is usually as good as the original; the Copyright law was greatly in demand. According to this Act, the infringer can be tried under both civil and criminal law.

The Copyright Act makes it illegal to make or distribute copies of copyrighted software without proper or specific authorization. As per the Indian Copyright Law, an infringing copy is one which is used without the license and/or permission granted by the owner of copyright (Section 51 of the Copyright Act). Each infringement of the software is in violation of the exclusive right granted to the owner amounts to infringement as defined under Section 51 of the Copyright Act, 1957 and is punishable under the provisions of Section 63 of the Copyright Act, 1957. The only exception is provided by Section 52 of the Act, which allows a backup copy purely as a temporary protection against loss, distribution or damage to the original copy. Further, the 1994 amendment to the Copyright Act has incorporated a special penal provision i.e. Section 63-B for knowingly using infringing computer software. The punishment provided for this act is imprisonment for a term of seven days to a maximum of three years and a fine between fifty thousand and two lakh rupees. In case the infringing copy of the computer software is used not for pecuniary gain or in the course of trade or business, the imprisonment can be relaxed and fine can be maximum of fifty thousand rupees.

 Remedies against infringement of copyright in software:-

There are basically two types of remedies available for the infringement of copyright in software i.e. civil & criminal remedies.

 Civil Remedies: Under the civil remedies, the civil court may be approached by way of civil suit for any of the following remedies:-

  • Temporary and permanent injections,
  • Impounding and distinction of all infringing copies including master copies,
  • Actual monetary damages plus the infringer’s profits,
  • Statutory damages
  • Court costs and reasonable attorney’s fees

 Further, in Civil Cases, the District Court can be persuaded not only to give an interim injunction without notice to the other party but also usually gives a direction under Order 39 Rule 7 of C.P.C. what is now known as Anton Piller action order, which allows a local commissioner appointed by the court and sometimes accompanied by the copy right owners representatives to enter the premises of the suspected infringer and assist in identifying the infringed software or goods. The seized material can be used at a later point of time as an evidence to establish infringement.

Criminal Remedies: The criminal remedies provides for the imprisonment of the accused or imposition of fine or both as well as seizure of infringing copies. Copyright infringement being a cognizable offence, a police officer can arrest the infringer without warrant. The criminal actions are more stringer than the civil action as it has a deterrent effect on the infringer.

Criminal action against the infringer can be brought in any of the following ways:-

  • Filing a Complaint / FIR with Police giving out the detail of the accused party/company and fact of the infringement of the copyrighted software by it along with the evidences if any.
  • In case, the FIR is not registered by the police, you can make an application to the court of the competent jurisdiction under Section 200 Cr.P.C. praying for the direction by the court to police for investigation, lodging of an FIR and search and seizure, under sec. 156 of the Code of Criminal Procedure, 1973

Punishment:-

  • Copyright infringement is punishable (for both, the management of the companies and individuals) by imprisonment for up to 3 years and fine of up to Rs. 2 lakhs (Section 63).
  • The, newly added Section 63-B which is a special penal provision for knowingly using an infringing computer software which is punishable for a term of seven days to a maximum of three years and a fine between fifty thousand and two lakh rupees.
  • Under Section 64 of the Copyright Act, 1957, any police officer, not below the rank of a sub-inspector, may if he is satisfied that an offence in respect of Copyright in any work has been, is being, or is likely to be committed, seize without warrant, all copies of the work, and all plates used for the purpose of making infringing copies of the work, wherever found and produce them before a magistrate as soon as practicable.
  • The possession of plates, machinery, and equipment to produce infringing copies of software is punishable with imprisonment which may extend to two years and shall also be liable to fine by virtue of Section 65 of the Copyright Act.
  • The infringing copies of software or plates for purpose of making infringing copies in the possession of the alleged infringer, by order of Court may be delivered to the owner of the software irrespective of the fact whether the infringer is convicted or not (See Section 66 Copyright Act).

 There is nothing wrong with our Copyright Laws, which is considered as one of the toughest in the world, still software piracy is rampant in India due to lack of proper implementation of copyright laws. There is urgent need to take proper steps by executive, judiciary and legislative in consultation with the software industry to curb the menace of software piracy.

5 comments

  • Suresh Singh /

    Software pircacy is rampant in India. No doubt the laws to address the software piracy is in the statute book but I wonder if they are implemented in India.

  • Neeraj Aarora /

    The Copyright Act does protect computer software as a relatively new recipient of copyright protection and makes stringent punishment for the infringement of the same. Now the law enforcement agencies are acting very fast on the complaint of software piracy and book the offender & arrest them. The offence is cognizable and non bailable. The approach of the court is also very positive and they deny bail to the offender to give opportunity to the law enforcement agencies to trace the origin of piracy, like from where the infringed software has been obtained, the person who manufactured or supplied the infringed software to the offender etc., collect other material evidence pertaining to the case.
    You can send the detailed facts of your query at: Cyber.nk@gmail.com

  • I sell a rather high end software product for a private individual and he refuses to sell it to some countries, India included. This is too bad, I’m sure there are pirates in India, but they also live and operate in the countries he does sell to.
    Actually, there doesn’t seem to be a good solution for this problem.
    Owensboro Orthodontist

  • sir,
    Whom do the courts accept as cyber experts so that the technicality of the cases be proved and challenged for the client. Any registration with court is required?

    thanks in advance.

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