The Delhi High Court has granted a permanent injunction to infrastructure engineering software company Bentley Systems Inc., and restrained that Oiltech Engineering India Private Limited from copying, installing, or using unauthorized versions of Bentley’s STAAD and SACS software programs.
The Court observed that the plaintiffs had established their ownership of the copyright in the STAAD and SACS software. The evidence of infringement, derived from the plaintiffs’ ‘Phone Home Technology’, was considered significant. This technology provided specific data on unauthorized usage, showing 338 instances of SACS use in the Bengaluru office and other instances in the Chengalpattu office.
Further, the Court took into account the affidavit of the independent investigator, which corroborated the claims of unauthorized software use. Crucially, the Bench noted that the defendants continued their infringing activities even after an ad-interim injunction was passed against them, which demonstrated their malafide intent.
As there was nothing on record to indicate that the defendants’ use of the software was authorized or licensed, the Court found that such usage constituted an infringement of the plaintiff no. 1’s copyright, added the Court.
A Single Judge Bench of Justice Tushar Rao Gedela observed that there was neither a Written Statement from the defendants on record nor a reply to the application for summary judgment. It held that in the absence of any rebuttal or traverse to the facts stated in the plaint and the application, the Court must deem such facts to be admitted. The Bench noted that the defendants’ situation was ‘rather precarious’ as they had failed to file both a Written Statement and a reply, leaving the Court with no choice but to accept the plaintiffs’ narrated facts.
The Bench reiterated that the purpose of summary judgment in commercial suits is to ensure time-bound disposal and that a trial is not the default norm. A summary judgment is warranted if the defendant lacks a ‘realistic’ as opposed to a ‘fanciful’ prospect of success. The Bench concluded that the defendants had no real prospect of successfully defending the claim, and there was no compelling reason to proceed to a full trial, thus making the matter ripe for a summary judgment.
Further, the Bench clarified that in a commercial suit, a summary judgment under Order XIII-A of the Code of Civil Procedure, 1908, is justified when a defendant fails to file a Written Statement and a reply to the summary judgment application, thereby presenting no defence. In such a procedural posture, the facts pleaded by the plaintiff are deemed to be admitted, and if these facts establish a clear case of infringement, it can be concluded that the defendant has ‘no real prospect of successfully defending the claim’.
Consequently, the court is empowered to decree the suit without proceeding to a full trial, as there is no compelling reason why the claim should not be disposed of before the recording of oral evidence.
Briefly, the plaintiffs, Bentley Systems Inc. (a Delaware corporation) and its Indian subsidiary, are providers of infrastructure software solutions. They own the copyright in the STAAD and SACS software programs, which are classified as ‘literary works’ and are protected in India under Section 40 of the Copyright Act, 1957, as they were first published in the USA, a member country of the Berne Convention. The plaintiffs use a ‘Phone Home Technology’ to monitor compliance with their End-User License Agreement (EULA) and detect unauthorized usage, which is recorded as ‘infringement hits’.
The defendant no. 1, Oiltech Engineering India Private Limited, was a former licensed customer of the plaintiffs, having held a license for the SACS software from 2016 to 2017, which subsequently expired. In October 2022, the plaintiffs’ internal infringement portal detected that the defendants were using pirated/unauthorized versions of STAAD. Pro and SACS software at their Chengalpattu and Bengaluru offices since August 2022.
A Litigation Hold Notice was sent to the defendants, but their IT Head denied any unauthorized usage. The plaintiffs then hired an independent investigator who confirmed via a telephonic conversation with a defendant employee that the company was using the STAAD. Pro and SACS software. A pre-institution mediation between the parties ended as ‘Not Settled’.
Following the institution of the suit, an ex-parte ad-interim injunction was granted against the defendants. Despite this, the defendants failed to file their Written Statement within the stipulated time, leading the Court to close their right to do so. Subsequently, the plaintiffs filed an application for summary judgment. The defendants also failed to file a reply to this application despite multiple opportunities, resulting in their right to file a reply being closed by the Court. The plaintiffs presented evidence showing continued infringement even after the injunction, with unauthorized use of SACS Connect Edition recorded 338 times.
Appearances:
Advocates Pravin Anand, Shantanu Sahay, Swstik Bisarya and Manvi Panwar, for the Plaintiffs
Advocates Muralidharan, for the Defendants
