G.S. Sistani, J:

1. The plaintiff has filed the present suit for permanent injunction, delivery up, rendition of accounts and damages against the defendants for infringement of copyrights, infringement of trademarks and passing off.

2. The facts, as set out by the plaintiff, are as follows. The plaintiff, Microsoft Corporation, is a company organised and existing under the laws of the State of Washington, USA. It has, however, its presence all over the world. In New Delhi, it has its marketing subsidiary Microsoft India Pvt. Ltd. The plaintiff is world famous for its business software such as Microsoft Windows, Microsoft Office etc. which are installed and used on millions of computers all over the world including India. It also manufacturers a large range of computer peripherals (hardware). The hardware group was established in year 1982 and during this period, the plaintiff has built its reputation for technological expertise in hardware by developing and launching a series of successful devices including the ergonomically designed `Mouse and Keyboard.

3. It is stated that the software developed and marketed by the plaintiff is a "computer programme" within the meaning of Section 2(ffc) of the Copyright Act, 1957 and included in the definition of a literary work as per Section 2(o) of the said Act. The plaintiffs computer programmes are "works" that were first published in the USA and are also registered in the USA. These programmes have been created by employees of the plaintiff for the plaintiff. Under the US Copyright Law, US Code Title 17, Section 201(b), the copyright is a work created by an employee and belongs to the employer under the `Work made for Hire doctrine. Both the computer programme, as well as the supplementary User Instructions and Manuals, are `original literary works as contemplated under Section 2(o) and Section 13(1)(a) of the Copyright Act, 1957. The plaintiff is the owner of the said copyright. A complete list of the software programme owned by the plaintiff is filed with the plaint. It is further stated that the rights of authors of member countries of the Berne and Universal Copyright Conventions are protected under Indian copyright law. India and the USA are signatories to both the Universal Copyright Convention as well as the Berne Convention. The Plaintiffs works are created by authors of member countries and originate from and are first published in the said member countries. Plaintiffs works are, thus, protected in India under Section 40 of the Copyright Act, 1957 read with the International Copyright Order, 1999. It is thus the case of that the plaintiff that being the owner of the copyright in the aforesaid literary works within the meaning of Section 17 of the Copyright Act, 1957 is entitled to all exclusive rights flowing from such ownership as set out in Section 14 of the said Act.

4. The plaintiff claims to be the proprietor of the trademark "Microsoft" which was adopted by the plaintiff in the year 1970. The plaintiffs registration for the said marks are in Classes 9 and 16 bearing Registration Nos. 430449B and 430450B in Classes 9 and 16 respectively. The said registrations are still valid.

5. In October 2002, it came to the knowledge of the plaintiff that the defendants were infringing the plaintiffs copyrights, trademarks and other intellectual property rights by carrying on the business of unauthorised hard disk loading. In other words, the defendants were pre-loading various software of the plaintiff on to the hard disk of the computers that were being assembled and sold by them. A decoy customer, namely, Mr. Ravindra Pawar, was sent to the outlet of the defendants on 05.10.2002 and 23.10.2002 to place an order for a computer. On 24.10.2002, the decoy customer was given the delivery of the computer which, it is alleged, was loaded with the unlicensed software of the plaintiff company. Affidavit of Mr. Ravindra Power is filed alongwith the plaint.

6. On 01.11.2002, a Technical Expert, Mr. Sunil John, inspected the computer purchased from the defendant and took print-outs of the directories of the hard disk, which, as stated in paragraph 2 of his affidavit, clearly evidenced the fact that the following software programmes of the plaintiff were present on the computer sold by the defendants:

"Operating System: Microsoft Windows 98 Second Edition 4.10.2222A

Registered to : dk

29602-OEM-0071184-69816

Computer : Genuine Intel

x86 Family 6 Model 11 Stepping 1127.0 MB RAM

Software:

(i) MS Office 2000

Registered to : dk

Product ID No.: 50106-707-9999992-02103

(ii) MS Visual C++

Registered to : dk

Product ID : 50021-111-1111111-65321

(iii) MS Visual Basic 6.0

Licensed to : dk

Serial No. : 50021111111111165321

(iv) Corel DRAW 9 (R)

Registered to : dk

Serial No.: DR9XR-38542K4733

PIN:

(v) Adobe Pagemaker 7.0 Licensed to : dd dd dd 10391121299875867388

(vi) Adobe Photoshop 6.0 Licensed to : dd dd dd PWW600R7105467"

7. The inspection of the technical expert revealed that the plaintiffs programmes contained in the hard disk of the computer were unlicensed and/or pirated. It was also revealed that the plaintiffs software programmes were not accompanied by the original media, being the compact disc(s)/floppy disks, Certificate of Authenticity, End user License Agreements, User Instruction Manuals, Registration Cards, etc. which are usually accompanied with the plaintiffs genuine software. Further, the registration/licence details and product ID numbers available clearly appeared to pertain to the pirated software. Affidavit of the said technical expert, Mr. Sunil John, is filed alongwith the plaint.

8. It is thus the case of the plaintiff that the defendants have violated the copyright of the plaintiff by copying the same onto the hard disks of computers being sold by them, which consequently, has caused incalculable loss and damage the plaintiff. Vide letter dated 22.11.2002, the plaintiff called upon the defendants stating that they had infringed the intellectual property rights vested in the plaintiff. The defendants were called upon for a settlement meeting on 27.11.2002. However, in the meeting, the defendant No. 1 declined to acknowledge the rights of the plaintiff, and therefore, the plaintiff was constrained to file the present suit seeking the following relief stated in paragraph 33 of the plaint:

"33. (a) An order for permanent injunction restraining the defendants, officers, servants and agents and all others acting for and on their behalf from copying, manufacturing, selling, offering for sale, distributing, issuing to public, counterfeit/unlicensed version of Plaintiff software preloaded onto the Hard Disks of the computer, compact discs or in any other manner, amounting to infringement of the Plaintiffs copyright in the said computer programs and related manuals;

(b) An order for permanent injunction restraining the defendants, their directors, officers, servants and agents and all others acting for and on their behalf from copying, manufacturing, selling, offering for sale, distributing, issuing to public, counterfeit/unlicensed version of Plaintiff software preloaded onto the Hard Disks of the computer, compact discs or in any other manner, amounting to infringement of Plaintiffs registered trademarks;

(c) An order for permanent injunction restraining the defendants, their directors, officers, servants and agents and all others acting for and on their behalf, from copying, manufacturing, selling, offering for sale, distributing, issuing to public, counterfeit/unlicensed versions of the Plaintiffs software pre-loaded onto the Hard Disks of the computer, compact discs, and/or any other product to which the Plaintiffs trademarks, or any deceptive variants thereof has been applied without the license of the Plaintiff amounting to passing off of the counterfeit/unlicensed software and products as genuine products of the Plaintiff;

(d) An order for delivery-up to the Plaintiff, of all the counterfeit/ unlicensed copies of the Plaintiffs software, and/or articles/software to which have been applied the Plaintiffs trademarks, or any other mark which may be identical with or deceptively similar to the Plaintiffs trademarks without license of the Plaintiff, the duplicating equipment used in the copying the software of the Plaintiff, including computers, compact disc writers, stampers, burners, "plates" as defined in Section 2(t) of the Act, hard disks, diskettes, packaging and advertising material, labels, stationery articles and all other infringing material under Section 58 of the;

(e) An order for damages be passed in favour of the Plaintiff and against the defendants;

(f) An order for rendition of accounts of profits illegally earned by the defendants by reason of infringement of the Plaintiffs copyrights, including conversion damages which are presently indeterminate, infringement of trademarks as aforesaid and by passing off their goods and/or business as the goods and business of the Plaintiff, and a decree be passed against the defendants in the sum of the amount so ascertained;

(g) An order for costs in these proceedings."

9. In pursuance of the present suit filed by the plaintiff, this Court, vide order dated 03.03.2003, granted an ad interim ex parte injunction in favour of the plaintiff. Summons of the suit were served on the defendants. However, despite service, the defendants did not appear and thus were proceeded ex parte on 28.08.2003 and the interim order dated 03.03.2003 was made absolute. The plaintiff was also directed to file ex parte evidence by way of affidavits.

10. In the meantime, the plaintiff filed an application under Order VI, Rule 17 of the Code of Civil Procedure, 1908 for amendment of the plaint by, inter alia, incorporating the factum of damages caused to the plaintiff. The same was allowed by this Court on 23.01.2006.

11. The plaintiff has filed the ex parte evidence by way of affidavit of Mr. Anand Banerjee, constituted attorney of the plaintiff, Mr. Banerjee has proved the letter of authority issued in his favour by the plaintiff as Ex. PW-1. He has deposed that the plaintiff has copyright in its computer programmes and the User Instructions and Manuals. He has also deposed that the plaintiff, being the owner of the copyright, is entitled to all the rights flowing from such ownership as set out in Section 14 of the Copyright Act, 1957. He has proved the certified copies of the Additional Copyright Registration Certificate for the software programmes, namely, Microsoft Office 2000, Microsoft Windows 98 and Microsoft visual Studio as Ex. P-2, Ex. P-3 and Ex. P-4 respectively. He has also proved the trademark registrations of the plaintiff as Ex. P-5 and Ex. P-6. Mr. Banerjee has deposed that in the month of October, 2002, the plaintiff came to know that the defendants were infringing the plaintiffs copyright, trademark and other intellectual property rights. He has proved the affidavit of Mr. Ravindra Pawar, the decoy customer who purchased the computer from the defendants on 24.10.2002, as Ex. P-7. Mr. Banerjee has deposed that the said computer was inspected by one Mr. Sunil John, technical expert who has opined that the plaintiffs programmes contained in the hard disk of the computer were unlicensed and/or pirated. He has proved the affidavit of said Mr. Sunil John as Ex. P-8. He has also stated, in paragraph 15 of his affidavit, that due to blatant infringing activities of the defendants, the plaintiff has suffered enormous amount of damages under the following heads:

"(a) Actual Damages--Plaintiff has suffered heavy loss of revenue due to the defendants unauthorised loading of plaintiffs pirated software free of cost onto the computers of its consumers. By award of actual damages, the plaintiff seeks to be put in the same position as it defendants caused no loss to the plaintiff.

(b) Damages to Goodwill and Reputation--Plaintiff company and its software are indisputably No. 1 market leader in the world for software products and thus, enjoy enormous world-wide reputation and goodwill. Defendants by unauthorisedly loading free software of the plaintiff from pirated CDs, have undermined plaintiffs reputation and goodwill in the market. The infringing acts of the defendants not only weaken the market position of the plaintiff but also causes bad image before its existing and potential customers.

(c) Exemplary Damages--Under this head, damages are awarded if there is a flagrant violation by the defendants of the plaintiffs rights, to set a deterrent example for others. Such violation can be inferred from, inter alia, nature of the infringing act, reasonable knowledge of a person skilled in the concerned trade and continuance of violation despite knowledge. Defendants act leaves no doubt as to their international and flagrant violation of the plaintiffs intellectual property rights."

12. The plaintiff has also filed affidavit of one Mr. Sanjeev Sharma, a Chartered Accountant with 18 years of experience. Mr. Sharma, who is presently working as a tax-accounting consultant has stated in his affidavit that he was approached by the plaintiffs attorneys to offer his advise on the computation of damages in the present case. After perusing the documents on record, the report of the investigators and other evidence in support of the defendants business activities, Mr. Sharma has taken into consideration the facts which were put before him. The said facts, stated in paragraph 7 of Mr. Sharmas affidavit, are reproduced as under:

"7. I state that according to the facts put before me:

(a) No accounts of the defendants are available;

(b) The defendants have been in the business of selling computers since at least April 1996 (see Annexure "A") and at least until when the continuing piracy activities of the defendants were confirmed on 29th April 2005 as is evidence from the affidavit of the independent investigator, Mr. Viraj Gurao, which has been filed in the present proceedings. The tax invoice dated 29th April 2005, which has been filed in the present proceedings, disclose the Local Sales Tax Registration No. and the Inter State Sales Tax Registration No. of the Defendants which are as under:

Local Sales Tax No: 411011/S/668 w.e.f. 1.4.1996 Inter Sate Sales Tax No: 411011/C/439 w.e.f. 1.4.1996

(c) The approximate average market price of licensed Microsoft products, which were pirated and distributed illegally by the defendants by way of hard disk loading on a continuous and repeated basis (See, Investigation Affidavits dated 23rd October, 2002 and 29th April, 2005), are as follows:

a. Microsoft Windows 98 -Rs. 3,650

b. Microsoft Office 2000 -Rs. 10,500

c. Microsoft Office 2002 -Rs. 12,200

d. Microsoft Visual Studio 6.0 -Rs. 12,600"

13. Mr. Sharma has assessed the loss suffered by the plaintiff in the sum of Rs. 1,27,00,800, the basis whereof is contained in paragraphs 8 and 9 of the affidavit, and quoted verbatim as under:

"8. I state that in order to arrive at the approximate sales by the Defendants of the computers loaded with the abovementioned pirated software of the Plaintiff, the following conservative and fair assumptions and estimates have been made:

(a) That the Plaintiff caught the Defendants violating their copyrights by indulging in blatant piracy of their software was in the year 2002. The Court has granted the injunction against the Defendants on 3rd March 2003, which was confirmed on 28th August, 2003. The Defendants repeated and continuous infringing activities were again confirmed in April 2005. Keeping the Defendants conduct in view, it will be fair and justified to conservatively assume that the Defendants were indulging in piracy of Plaintiffs software programs on a continuous basis for the last 5 years in the least i.e. since 2000 (the year of their inception).

(b) That the Defendants have sales of a minimum of 3 computers per week, pre-loaded with copies of unlicensed software of the Plaintiff. This translates into sales of 12 computers a month and 144 computers in a year pre-loaded with pirated copies of Plaintiffs software. This is a conservative, fair and justified estimate, considering that the Defendants are doing business in Pune, which has one of the highest student populations in the country and Defendants are habitual and compulsive infringers.

(c) That any person who purchases a computer would have been provided with the operating system to run the computer. That person would have also opted for Microsoft Office application software since the Defendants were willfully offering to load/install a pirated copy of the same onto the computer. The conduct of the Defendants clearly demonstrates that.

(d) However, Microsoft Visual Studio, which is a software development environment, is very popular in the student community, as it provides them with the entire range of development tools such as Visual Basic, Visual C++, Visual Sourcesafe, Visual FoxPro and Development Environment. Thus, I am assuming that conservatively at least 25% of the computers would have been pre-loaded with pirated copies of this software, sold by the Defendants. Therefore, atleast 36 computers in a year would have been pre-loaded with the Visual Studio software programme.

9. That in the light of the above-mentioned facts and assumptions, I state that the sales turnover for an approximate 5 years is estimated to be 720 computers. I state that the potential revenue that the Defendants could have earned by distribution of licensed copies of the Plaintiffs software and keeping in view the assumptions above, is computed as follows:

Name of SoftwareApprox. average market price of Licensed SoftwareComputers sold by defendantsApprox. potential revenue that could have been earned by the defendants

Microsoft Windows 98Rs. 3,650 per unit720 (In 5 years)Rs. 26,28,000

Micorsoft Office 2000Rs. 10,500 per unit576 (In 4 years)Rs. 60,48,000

Microsoft Office 2002Rs. 12,200 per unit144 (In 1 year)Rs. 17,56,800

Microsoft Visual Studio 6.0Rs. 12,600 per unit180 (In 5 years)Rs. 22,68,000

TOTALRs. 1,27,00,800





14. The plaintiff has also filed the affidavits of Mr. Viraj Gurav and Mr. Gurjot Singh to show that even in April 2005, after the injunction order dated 03.03.2003 was confirmed, the defendants were manufacturing and selling computers containing pirated versions of the plaintiffs software programmes.

15. I have heard learned counsel for the plaintiff and also perused the documents and the evidence by way of affidavits filed on behalf of the plaintiff.

16. Insofar as the grant of injunction is concerned, the issue is hardly contentious. The facts and circumstances of the present case show that the plaintiff is the owner of the copyright in its computer programme within the meaning of Section 2 (ffc) of the Copyright Act, 1957 and is included in the definition of a literary work as per Section 2 (o) of the said Act. Section 7 of the Copyright Act, 1957 gives exclusive rights to the plaintiff to exploit all rights emanating from the ownership of its copyright. These rights are set out in Section 14 of the said Act.

17. The plaintiff also enjoys the ownership in the trade mark `Microsoft which is a registered trade mark. Therefore, the defendants have no right to use this trade mark and the plaintiffs trade name, especially in respect of same goods.

18. Various averments made in the plaint have gone unrebutted as the defendants have not come forward with any defence. On perusal of the evidence filed alongwith the plaint, it stands established that the defendants have violated the copyright of the plaintiff by copying the same onto the hard disks of computers causing loss and damage to the plaintiff. The defendants have also infringed the trademark of the plaintiff and attempted to pass off their business as that of the plaintiff.

19. In view of the aforesaid, the plaintiff is entitled to a decree of permanent injunction in terms of prayers (a) to (c) of para 33 of the plaint. The defendants are accordingly restrained from copying the unlicensed version of the plaintiffs software onto the Hard Disks of the computers, manufacturing and selling the same which would amount to infringement of the plaintiffs copyright in its computer programmes and related manuals. The defendants are also restrained from infringing of the plaintiffs registered trademarks.

20. The last aspect to be considered in the issue of damages for the loss of reputation and business as also the cost of proceedings.

21. I have no hesitation in stating that the defendants have deliberately stayed away from the present proceedings as a result of which an enquiry into the accounts of the defendant for determination of charges could not take place.

22. Perhaps it has now become a trend of sorts, especially in matters pertaining to passing off, for the defending party to evade Court proceedings in a systematic attempt to jettison the relief sought by the plaintiff. Such flagrancy of the defendants conduct is strictly deprecatory, and those who recklessly indulge in such shenanigans must do so at their peril, for it is now an inherited wisdom that evasion of Court proceedings does not de facto tantamount to escape from liability. Judicial Process has its own way of bringing to task such erring parties whilst at the same time ensuring that the aggrieved party who has knocked the doors of the Court in anticipation of justice is afforded with adequate relief, both in law and in equity. It is here that the concept of awarding punitive damages comes into perspective.

23. Punitive damages are a manifestation of equitable relief granted to an aggrieved party, which, owing to its inability to prove actual damages, etc., could not be adequately compensated by the Court. Theoretically as well as practically, the practice of awarding of punitive damages may be rationalized as preventing under-compensation of the aggrieved party, allowing redress for undetectable torts and taking some strain away from the criminal justice system. Where the conduct of the erring party is found to be egregiously invidious and calculated to mint profits for his own self, awarding punitive damages prevents the erring party from taking advantage of its own wrong by escaping prosecution or detection.

24. The practice of awarding punitive damages in intellectual property law matters, albeit relatively new to the Indian legal and judicial system, has been very popular and well-received abroad. While asserting its claim for damages, the plaintiff herein has cited a catena of Indian and foreign case-law, where apart from compensatory damages, punitive damages were also awarded in favour of the plaintiff. Before reverting to the facts of the present case, it would be an enriching exercise to give a cursory glance on how punitive damages have been awarded in intellectual property law matters by Courts in the United Kingdom, United States of America, Hong Kong, China and India.

25. For felicity of reference, the case-laws relied upon by the plaintiff for buttressing its claim for punitive damages are presented in a tabulated form as under:

1. UNITED STATES

S. No.Case TitleDamages Awarded

(In US Dollars)Damages in Rupees

(approx)

1.Microsoft Corp. V. G.D. Systems Attorney fees and costs.Treble profits plus $39 lakhs in AttorneyTreble profits plus Rs.America Inc. & Anr. 872 F Supp. 88, 780 in 1329 fees and costs.

2.Microsoft Corporation V. Grey 31 lakhs for

AW 94-221.Damages of $ 300,000 copyright plus $ 3,889,565.16 as treble profits.Damages of Rs. 1 crore Computer, et al, Civ. A. No. for infringement of copyright plus Rs. 17 crore 3 lakhs as treble profits.





II. AUSTRALIA

S. No.Case TitleDamages Awarded

(In US Dollars)Damages in Rupees

(approx)

1.Microsoft Corp. v. TYN Electronics Pvt. Ltd. (2004) FCA 1307Compensatory damages of $ 386,000 plus Additional damages of $ 300,000Compensatory damages of Rs. 1 crore 32 lakhs plus Additional damages of Rs. 1 crore 3 lakhs.

2.Microsoft Corp. V. Glostar Pty Limited (2003) FSR 210Damages of $ 295,750Damages of Rs. 1 crore

3.Microsoft Corp. V. Goodview Electronics Pty. Ltd. (2004) FCA 1852Damages of $ 653,818.55 plus additional damages of $ 500,000Damages of Rs. 2 crore 25 lakhs plus additional damages of Rs. 1 crore 72 lakhs

4.Autodesk Australia Pty. Limited & Anr. v. Cheung (1990) 17 IPR 69Compensatory damages of $ 25,000 plus additional damages of $ 35,000Compensatory damages of Rs. 8 lakhs 61 thousand plus additional damages of Rs. 12 lakhs





III. UNITED KINGDOM

S. No.Case TitleDamages Awarded

(In US Dollars)Damages in Rupees

(approx)

1.Microsoft Corporation v. Electro-Wide Limited & Anr.. (1997) FSR 580Court suggested an awardof additional damagesCourt suggested an award of additional damages.

2.Microsoft Corporation v. Plato Technology Limited (1999) FSR 834Microsoft entitled to an account of profits to the extent of 5000 poundsMicrosoft entitled to an account of profits to the extent of Rs. 4 lakhs.





IV. HONG KONG

S. No.Case TitleDamages Awarded

(In US Dollars)Damages in Rupees

(approx)

1.Microsoft Cor. v. Able System Development Ltd. HCA 17892/1998Compensatory damages of $ 32,575,064 and of additional damages of $ 3,257,506Compensatory damages Rs. 18 crore 29 lakhs and additional damages of Rs. 1 crore 82 lakhs.





V. CHINA

S. No.Case TitleDamages Awarded

(In US Dollars)Damages in Rupees

(approx)

1.Autodesk Inc. v. Beijing Longfa Construction & Decoration Co. Ltd. (2003) Er. Zh. M. Ch. Zi. No. 6227Compensation of RMB 1.49 millionCompensation of Rs 78 lakhs.





VI. INDIA

S. No.CASE TITLE AND CITATIONDAMAGES AWARDED

1.Time Incorporated v. Lokesh Srivastava & Ors.; 2005 (30) PTC 3 (Del) [LQ/DelHC/2005/3] Punitive Damages of 5 lakhs;Damagaes of Rs. 16 lakhs (compensatory damages of Rs. Rs. 5 lakhs Interest @ 12% per annum amounting to Rs. 6 lakhs)

2.Microsoft Corporation v. Yogesh Popat & Ors.; 2005 (30) PTC 245 (Del) [LQ/DelHC/2005/363] Compensatory damages of Rs. 19.75 lakhs plus interest @ 9% per annum.

3.Amar Nath Sehgal v. Union of India & Ors.; 2005(30) PTC 253 (Del)Damages of Rs. 5 lakhs plus interest @ 9% per annum

4.Adidas-Salomon A.G. & Ors. v. Jagdish Grover; 2005(30) PTC 308 (Del)Damages of more than Rs. 5 lakhs plus pendente lite and future interest @ 9% per annum.

5.Adidas-Salomon A.G. & Ors. v. P. Chawla; CS(OS) No. 1994 of 2000Damages of more than Rs. 5 lakhs plus pendente lite and future interest @ 9 % per annum.

6.Adidas-Salomon A.G. & Ors. v. A. Dhawan; CS(OS) No. 2208 of 2000Damages of more than Rs. 5 lakhs plus pendente lite and future interest @ 9% per annum.

7.Buffalo Networks Pvt. Ltd. & Ors. v. Manish Jain & Ors.; 2005(30) PTC 242 (DelCosts of Rs. 1 lakh in favour of the plaintiffs.

8.Tata Sons Limited & Ors. v. Fashion ID Limited; 2005 (30) PTC 182 (Del) [LQ/DelHC/2005/112] Costs of Rs. 1 lakh in favour of the plaintiffs.

9.Cartier International B.V. v. M/s. Cartier Enterprises; CS(OS) No. 1208 of 2003Damages of Rs. 17.80 lakhs awarded in favour of the plaintiff alongwith interest at 12% per annum and also cost of the suit.

10.Win Medicate Pvt. Ltd. v. K. Pharmaceuticals Works; CS(OS) No. 1446 of 2004Damages of Rs. 5.05 lakhs awarded in favour of the plaintiff.

11.M/s L.T. Overseas Ltd. M/s Guruji Trading Co. & Ors.; CS(OS) No. 2711 of 1999Damages of Rs. 3 lakhs alongwith costs awarded to the plaintiff.

12.Microsoft Corporation v. Kamal Vahhi & Ors.; CS(OS) No. 817 of 2004Damages of Rs. 23,62,800 alongwith 9% p.a. interest awarded in favour of the plaintiff.

13. Relaxo Rubber Limited & Ors. v. Selection Footwear & Ors.; 1999 PTC (19) 578Damages of Rs. 3 lakhs awarded in favour of the plaintiff.

14.Hindustan Machines v. Royal Electrical Appliances; 1999 PTC (19) 685.Damages of Rs. 3 lakhs alongwith Rs. 15,000 as costs awarded in favour of the plaintiff

15.P.N. Krishna Murthy v. Cooperative for American Relief Everywhere & Ors; AIR 2001 Delhi 258Damages of Rs. 16,92,950 alongwith costs and 12% interest per annum awarded in favour of the plaintiff.

16.Hero Honda Motors Ltd. v. Shree Assuramji Scooters; CS(OS) No. 849 of 2004Damages of Rs. lakhs alongwith costs awarded in favour of the plaintiff.

17.M/s. The Himalya Drug Company v. Sumit; CS(OS) No. 1719/2000Compensatory Damages of Rs.7,94,227 lakhs, Punitive Damages of Rs. 7,94,227 lakhs alongwith costs and 9% interest per annum.

18.Yahoo! Inc. v. Sanjay V. Shah & Ors.; 2006 (32) PTC 263 (Del.) [LQ/DelHC/2006/73] Damages of Rs. 5 lakhs alongwith costs awarded in favour of the plaintiff.

19.Scotch Whisky Association & Ors. v. Golden Bottling Ltd.; 2006 (32) PTC 656 (Del.) [LQ/DelHC/2006/836] Damages of Rs. 5 lakhs alongwith costs of Rs. 3.10 lakhs awarded in favour of the plaintiff.

20.Microsoft Corporation v. Deepak Rayal; CS(OS) No. 529 of 2003Damages of RS. 5 lakhs alongwith costs awarded in favour of the plaintiff.

21.Microsoft Corporation v. Rahul Panchpore & Ors. CS(OS) No. 2428 of 1999Damages of Rs. lakhs alongwith costs awarded in favour of the plaintiff.

22.IPRS v. Debashish Patnaik; CS(OS) No. 1160 of 2005Damages of Rs. 3.5 lakhs alongwith costs awarded in favour of the plaintiff.

23.NASSCOM v. Ajay Sood & Ors; CS(OS) No. 285 of 2005Damages of Rs. 16 lakhs alongwith costs awarded in favour of the plaintiff.





26. Particularly relevant to note is the case of Mathias v. Accor Economi Lodging, Inc., cited at 347 F. 3d 672 (7th Cir. 2003), where this Court, while elucidating the factors underlying the grant of punitive damages, observed that one of the functions of punitive damages is to relieve the pressure on an overloaded Criminal Justice System by providing a civil alternative to criminal prosecution of minor crimes. It was further observed that the award of punitive damages serves the additional purpose of limiting the defendants ability to profit from its fraud by escaping detection and prosecution.

27. Our discussion on punitive damages will remain incomplete without revisiting the landmark case of Time Incorporated v. Lokesh Srivastava & Anr., 2005 (30) PTC 3 (Del) [LQ/DelHC/2005/3] . The said case can be rightfully acknowledged as a harbinger of the practice of awarding punitive damages in intellectual property rights matters in India, a trend which all Courts are zealously endorsing and following today. In the said case, while awarding punitive damages Rs. 5 lakhs in addition to compensatory damages also of Rs. 5 lakhs, R.C. Chopra, J. observed that it was about time the Courts dealing actions for infringement of trade marks, copyrights, patents, etc. should not only grant compensatory damages but also award punitive damages with a view to discourage and dishearten law-breakers who indulge in violations with impunity out of lust for money so that they realize that in case they are caught, they would be liable not only to reimburse the aggrieved party but would be liable to pay punitive damages also, which may spell financial disaster for them. Following observations of the learned single Judge in paragraph 7 of the said case, incarnating the jurisprudence underlying the practice of awarding punitive damages in India, are reproduced as under:-

"7. Coming to the claim of Rs. 5 lacs as punitive and exemplary damages for the flagrant infringement of the plaintiffs trade mark, this Court is of the considered view that a distinction has to be drawn between compensatory damages and punitive damages. The award of compensatory damages to a plaintiff is aimed at compensating him for the loss suffered by him whereas punitive damages are aimed at deterring a wrongdoer and the like minded from indulging in such unlawful activities. Whenever an action has criminal propensity also the punitive damages are clearly called for so that the tendency to violate the laws and infringe the rights of others with a view to make money is curbed. The punitive damages are founded on the philosophy of corrective justice and as such, in appropriate cases these must be awarded to give a signal to the wrong doers that law does not take a breach merely as a matter between rival parties but feels concerned about those also who are not party to the lis but suffer on accounts of the breach. In the case in hand itself, it is not only the plaintiff, who has suffered on account of the infringement of its trade mark and Magazine design but a large number of readers of the defendantss Magazine `TIME ASIA SANSKARAN also have suffered by purchasing the defendants Magazines under an impression that the same are from the reputed publishing house of the plaintiff company." (Emphasis supplied)

28. Coming back to the facts of the present case, on the basis of the evidence placed on record, it has already been established that the defendants are pirating the software of the plaintiff and are also loading the same on the hard disk of the computers sold by them without taking permission from the plaintiff. The defendants have not only infringed the copyright and trademark of the plaintiff but have tried to pass off their products as that of the plaintiff by riding on its goodwill and reputation. However, inasmuch as the defendants have chosen not to appear, it may not be of any use to pass a decree of rendition of accounts. The plaintiff will nevertheless be entitled to damages in light of the judicial dicta observed in Times Incorporated (supra) and the other aforementioned cases. The affidavit of Sh. Sanjeev Sharma, Chartered Accountant is, therefore, accepted as evidence without any challenge thereto. Based on the assumption of the sale by the defendants of 720 computers in 5 years, the potential revenue that the defendants could have earned by distribution of licensed copies of the plaintiffs software, Mr. Sharma has worked out damages amounting to Rs. 1,27,00,800. However, damages claimed by the plaintiff in the suit are Rs. 20.0 lakhs. I, therefore, have no choice but the limit the claim of the plaintiff to Rs. 20.0 lakhs.

29. Suit is accordingly decreed in terms of the Prayer Clause 33, sub-clauses (a) to (c) of the plaint, as noted above in para 19 of this Judgment. Suit is further decreed by awarding the plaintiff damages against the defendants in the sum of Rs. 20.0 lakhs payable by the defendants jointly and severally. The aforesaid amount of Rs. 20.0 lakhs shall also carry interest @ 6% per annum from the date of decree till realisation. The Plaintiff would also be entitled to an order for the delivery-up forthright by the defendants.

30. Decree-sheet be drawn up accordingly.