© Ravi
Visvesvaraya Prasad, May 2000. Reproduction strictly prohibited and
will be prosecuted without warning.
Published in The Telegraph, Calcutta, India on Wednesday, 03 May 2000, on the Edit Page. Go to http://www.telegraphindia.com Click on Archives and go to issue dated 03-May-2000. Click on Editorial. Then Click on "In The Company of Pirates" |
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India’s software industry lost Rs 9,000
million last year to piracy. For the last decade the National Association
of Software and Service Companies (NASSCOM) has been carrying out an
educational campaign impressing upon users that they should purchase legal
software, emphasizing the risks associated with pirated software such as
viruses, bugs, and lack of documentation, technical support and upgrades. While it has conducted a few raids on
pirates, NASSCOM’s focus until now has been on persuading organizations
to trade in their pirated software for legal versions, rather than on
prosecuting them. But NASSCOM has now stepped up its campaign by
installing a nationwide toll-free hotline at 1600-334455 (and 011-301-5419
in Delhi) where reports of suspected piracy can be lodged anonymously. Since most calls to such hotlines are from
disgruntled employees, directors and officers of many of India’s
best-known organizations now face the prospect of being charged with non-bailable
criminal offences under sections 51, 63-B and 69 of the Indian Copyright
Act which carry a minimum jail term of six months extending to three
years. To their horror company officials may find out that they are personally
liable for jail terms of at least six months for any illegal software
found on their company’s computers or on its premises, even if the
piracy was done by a junior employee or an independent contractor without
their permission, let alone their knowledge. Even leaving aside willful
piracy by the company to save on the high cost of software, many
employees genuinely believe that because their employer bought one copy of
a software package, they can make multiple copies of it. Several employees
make extra copies of frequently used software so they can work at home or
on a laptop when they travel. While there are no decided Indian cases to
date, Indian courts would rely on precedents from other countries having
similar copyright laws, especially Britain. Liability of employers for copyright
infringement by their employees has long been established in English
common law. In the landmark 1926 case Falcon
vs. Famous Players Film Company, Justices Bankes and Atkin held:
"A person is liable for any infringement of copyright which his
servants or agents may commit in the course of their duty and within their
authority, even though he has no knowledge of the act of infringement and
despite the fact that he has given a general order to his servants
prohibiting the doing of acts which might amount to infringement." English courts have gone so far as to state
that any person in authority who should have known that any type of
copyright infringement was possible under a set of certain circumstances
and who did not attempt to prevent it could be held liable. In the 1924
case Performing Right Society Ltd
vs. Ciryl Theatrical Syndicate Ltd, in the Court of Appeal, Justices
Bankes, Scrutton and Atkin held: "If anything in the nature of even
indirect evidence of permission or countenance of the performance of the
works could be found, it would be sufficient to constitute authorizing of
the infringement. The Court may infer an authorization or permission from
acts which fall short of being direct and positive. We go so far as to say
that indifference exhibited by acts of permission or omission may reach a
degree from which authorization or permission may be inferred. Where such
a permission or invitation may be implied, it is clearly unnecessary that
the authorizing party have knowledge that a particular act comprised in
the infringement of copyright will be done." This principle was
stretched even further by Justice Gibbs in the 1975 case Moorhouse
vs. University of New South Wales: “A person who had under his
control the means by which an infringement of copyright may be committed
– such as a photocopying machine – and who made it available to other
persons knowing or having reason to suspect that it was likely to be used
for the purpose of committing an infringement and omitting to take
reasonable steps to limit its use to legitimate purposes, would be held to
have authorized any infringement that resulted from its use. Further, that
it is sufficient if there was knowledge or reason to suspect that any one
of a number of acts, rather than the particular act of infringement
actually committed, was likely to be done.” Although Indian courts give much higher
weightage to English precedents compared to American ones, US courts have
extended the liability of third parties even further, having developed the
theories of vicarious and contributory infringement though these are not
mentioned in the US Copyright Act of 1976. Vicarious
infringement was formulated by the US Court of Appeals for the Second
Circuit in 1963 in Shapiro, Bernstein & Co. v. H.L. Green Co.
It is based on the common law doctrine of respondeat
superior and may be imposed on any person “who has the legal right
to inspect or supervise the actions of the primary infringer provided he
also receives a direct financial or other benefit from the
infringement”. It is not necessary that the supervisor have any
knowledge of the infringing activity, nor even any reasonable grounds for
suspecting that an infringement was occurring. According to Leslie Berkowitz of LawInfo Forum: “An employer
will be vicariously liable for an employee's copyright infringement, even
if the employer has no knowledge and no intent to infringe and even if the
employee has been directly told by the employer not to engage in the
activity.” Contributory
infringement was formulated by the US Court of Appeals for the Second
Circuit in 1971 in Gershwin
Publishing Corp vs. Columbia Artists Management.
It may be imposed on anyone “who, with knowledge, induces,
causes, or materially contributes to the infringing activity or provides
services or equipment to the primary infringer...Actual knowledge by the
third party of the infringing act is not required if a reasonable person
would have known that the underlying infringing act was possible under the
same circumstances.” A contributory infringer is jointly and severally
liable along with the direct infringer. In the 1988 case Telenate
Systems vs. Caro, a company was found liable for contributory
infringement when its customers copied software using equipment provided
by it. There are several measures that Indian
organizations should take to reduce their liabilities for copyright
infringements by their employees, consultants and contractors: (a)
Adopt an
organization-wide anti-piracy policy which specifically states that any
employee who infringes copyrights will be dismissed, and will also
indemnify the employer for any acts of infringement committed by him. (b)
Incorporate clauses
prohibiting use of pirated software in all contracts with computer
vendors, contractors, system integrators and consultants, with
indemnification for liabilities. (c) Purchase an adequate number of authorized copies of all software, either under site licenses or concurrent use licenses. (d) Maintain a record of all software on each computer, register these with the respective software publishers, and conduct regular audits. (e)
Place
a notice beside each computer that pirated software should not be used
or downloaded from the internet, and that any employee who does so
will be dismissed. (f) Segregate hard drives into application and workspace partitions with write protection. This will prevent the unauthorized installation or downloading of application software. Further, any unauthorized applications must necessarily be loaded into the workspace domain, allowing them to be quickly identified. While such measures are not a defense against liability, they would probably persuade a copyright holder to agree to an out of court settlement. However
if the matter goes to trial, the employer may be shocked to find that the
measures taken above do not constitute a valid defense, at best being a
mitigating factor while determining the quantum of punishment. Courts in
both Britain and USA have held that clauses in employment or consulting
contracts indemnifying the employer have no legal validity and provide no
protection to the employer. On the contrary, the St. Louis federal appeals
court recently ruled: “Such a ‘hold harmless’ clause does not
represent a good faith effort to avoid copyright infringement, but is
actually an attempt to circumvent the copyright law…An employer is
liable for copyright infringement even if the illegal copying occurred in
violation of an expressly documented and circulated company policy.” According to Leslie Berkowitz of LawInfo Forum:
“A person who engages on-site consultants or contractors will be
vicariously liable for the latter’s copyright infringement (if performed
on-site) even if the contract specifically excludes the client from having
any right to supervise or inspect the consultant’s or contractor's
actions…It is not a valid defense that it is not technically or
physically feasible to supervise every action of every employee,
contractor or consultant.” By Ravi Visvesvaraya Prasad Published in The Telegraph, Calcutta, India on Wednesday, 03 May 2000, on the Edit Page. Go to http://www.telegraphindia.com Click on Archives and go to issue dated 03-May-2000. Click on Editorial. Then Click on " In The Company of Pirates" |
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Published in The Telegraph, Calcutta, India on Wednesday, 03 May 2000, on the Edit Page. Go to http://www.telegraphindia.com Click on Archives and go to issue dated 03-05-00. Click on Editorial. Then Click on "In The Company of Pirates" Reproduction of any portion of
the above article in any manner, including paraphrases, rewording, translations, abridgements,
excerpts, etc., in any medium, in any jurisdiction, in any language, for
any purpose, without the prior written permission of both Ravi
Visvesvaraya Prasad and The Telegraph, is strictly prohibited, and will be
vigorously prosecuted in criminal and civil courts without any prior warning. We continuously monitor the contents of the Web
as well as all downloading and copying operations from our web-site for violations of our copyrights. |
Ravi Visvesvaraya
Prasad & Associates |
We
represent multinational vendors of telecom and datacom equipment and services
in India.
We
have marketed telecom and datacom equipment and services to Indian basic
telecom operators, GSM cellular mobile operators, Internet service providers,
VSAT service providers, POCSAG paging operators, software exporters, etc.
We specialize in sales to the Department of Telecommunications (DoT), Videsh Sanchar Nigam (VSNL), Mahanagar Telephone Nigam (MTNL), large organizational customers, and private service providers. We obtain all regulatory permissions and licenses from central, state and local governments, obtain type approvals and interface approvals from the Telecom Engineering Centre, perform public and media relations, and introduce our clients to influential government officials, politicians, and print and television journalists. We perform customer requirements analysis, project feasibility analysis, return-on-investment analysis, risk analysis, financial closure, identification of joint venture partners, due diligence, contract negotiations and documentation. We have provided such advisory services to equipment suppliers, basic telecom operators, GSM cellular mobile operators, Internet service providers, VSAT service providers, POCSAG paging operators, radio trunking operators, etc. We market GSM cellular handsets of most major international brands at the best rates in North India.
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