Introduction:

Over the past few decades, the world has been seen a rapid growth and had contributed in
the field of the Information Technology in different ways. The most dominant
contribution is the digitalization of everything in and around us. However, every person
is living in a digital world and every walk of our life is somewhere connected with
Computers and Internet. So for proper functioning of the system, obviously we require
both hardware and software. Being an integral part of the software, it has also got much
popularity and importance. It is an important technology and has rapidly contributed
towards the growth of the economy. With the arrival of the computer enhanced
technology, software has actually captured much attention in such a way that it generates
a large number of jobs across the world with a cost-effective economic advantages. Even
though the development of software has generated large amount of jobs, the reproduction
of these software has also become productive and cost effective. As India is one of the
leading manufacturer of the software in the world and , at the same time it has become
home for pirated software. The way software is enumerating to the business and
generating income, multiplicity of income is generated through the pirated software
business. This occurrence is not only limited to India, but having an expansion of the
software industry with an another parallel industry i.e pirated software industry and it has
built across the world. This has become the biggest threat to the existing software
industry that too had a greater impact in terms of revenue for the software industries
across the world. Threat of Piracy has been identified and dealt by numerous countries,
nationally and internationally. Many steps have been taken to tackle threat of piracy in
the software industry. Due to pirated industries, it has not only affected the software
industry but most of the revenue generated states are also affected. Many initiatives have
been taken in the national and international level, but still the instances of software piracy
has only eased a little.

In the 21st century, Software piracy is one of the most difficult, important and transitional
problem. In this technology advanced world, it is evident that the internet plays a major
role in pirating computer software. By an illegal copying of computer software via
internet, it creates a heavy economic loss not only to the owner of the copyrighted
software but also to the nation. By the end of the May 2013, worldwide value of
unlicensed software touched $59 billion. Indian revenue loss is $2.739 million 1 and India
ranks 4th in the economies with the highest commercial value of pirated software, though
it is not in the list of top 30 countries having highest piracy rates. 64% of the total
software using in the country as pirated. 2 It is well known that at this present situation
zero piracy rate is not possible, but the law must also extend the protections which are
available to the conventional copyrights. This paper deals with the concept of software
piracy, issues and challenges and critically analyzes the existing legal framework to find
out the lacunas in the system.

Understanding the concept

Software is one of the integral part of a computer to work efficiently. With the growth of
information technology, the requirement of software has also increased which resulted
into rapid growth of software in developing countries. Being an important part, the
availability of software in the market is not so easy. In normal cases, when a person
purchases a computer either the software will be inbuilt or have to purchase the software
whichever is required by the customer. Hence, everybody wants to use a computer for a
certain purpose and that particular software needs to be installed in a computer for its
proper functioning, otherwise the expected work may not be performed. Availability of
the software is not wide and the same time the products are expensive and they are not
pocket friendly. So people decided to opt for pirated versions of these software which
could be easily available in the market at cheaper prices and eventually that resulted in
the boom for pirated software in the market.

1
8th Annual Global Software Piracy Study, 2010 commissioned by Business Software Alliance and
International Data Corporation.

2
IBID
Software programs are basically programs created by the programmers and which are
written in the binary codes. When these software programs are made, then they are meant
to be use by single user with the authority of the manufactures. Being a product written in
the code, software programs are treated as literary works and entitled to get protection
under the Copyright protection given as literary work. It is also acknowledge that the
software or computer programs are registered which will help in the case of the copyright
violation and to prove the ownership of the software in dispute as the court will look after
the registered copy of the copyright as proof. Once the software is registered for
Copyright protection then with such protection it becomes the copyright owner and the
exclusive rights has been given to the copyright holder. Anyone who uses the software
without permission will be violating the exclusive right of the copyright holder and will
called committing the offence if software piracy.

Software piracy is a crime commonly defined as illegal copying, downloading, sharing,

selling or installing of copyrighted software. As it can be used by exactly a single
authorized user and it can be use in one or two machines as long as the same license is
the only user. Making various copies of it and sharing with friends or relatives is
considered to be violation of the license terms and conditions. So, basically when a
customer purchases a software he merely receives a license to use the software not the
copyright. As software piracy still exists as a serious issue because now a days most
computer users are aware of unauthorized use and duplication of software being illegal.
The Global Software Survey conducted by Business Software Alliance (BSA) in a
partnership with International Data Corporation (IDC) shows that, in 2013, 43% of the
software installed on personal computers around the world were not properly licensed.
The total loss due to installations of unlicensed software was $62.7 billion. The survey
was conducted among 22,000 consumers and enterprise having personal computer users.3

Evolution of Software Piracy:

3
Business Software Alliance. The Compliance Gap, June 2014.
In older days, stealing copyrighted software has never been easier but by the beginning of
the internet technologies and file sharing programs it has enabled stealing costly software
for free with a single mouse click. It is a common misconception among the people that
software piracy has emerged recently, but people have stolen the computer programs for
years. In the early 1960, the roots of software piracy lied when the computer programs
were assigned with the machine itself by the hardware manufactures at free of cost. Later
on they began selling their software separately and it is there where the issue of piracy
started. During those times, pirated a computer program is not much common and easy,
because the computer program in one company may not provide the similar results by
another company. At that time, computer programs were expensive and are small in size
(maximum 32kilobytes). In 1970, the illegal copying of a computer program meant only
the literal and non-literal copying of codes of a particular program by its competitor.
Copyright protection also enclosed the elements of the computer program i.e object code,
source code and the documentation. There is no such a conception of piracy by the end
users.

Later on the technology had started expanding its branches into many fields and the end
users of the computer technology has taken the advantage through the mediator and those
mediator are the direct users of a computer program. They used to do their customer work
done by installing a single copy of the program in all the computers and this is the first
mode of software piracy which leads to a heavy economic loss to the software creator
who had invested much work in the field. So, one could freely copy computer program
and pirate without getting any legal sanction from the owner of the program. In 1980, it
was quite common to use floppy disks and the postal service for spreading software and
is known as mail trading. So, a person using a computer install it into his computer and
mail the disk to another person who can do the same thing. On 3 rd February 1976, a letter
was written by the Bill Gates, founder of Microsoft for the enactment of a legislation that
started the protection of software upbrightness. He particularly mentioned in that letter
that the availability of software would increase if the software piracy was less prevailing.
But till 1990, this problem was not treated as a serious issue by the world community.
Reasons for Software Piracy:

Software piracy has become business across the world and even India is not an exception
it to. There are various reasons to it:

 Software being an important element of the computer for the proper functioning
and it is much needed in the market, but most of the software are priced at higher
value and from there the beginning of the pirated software starts. Commonly, the
developed countries are the main developers of the software products and they
sell it at a high price and which it becomes less affordable for the developing
countries. Developing country like India, though having a good and expanded
software industry and also catering the world in terms of manpower in the
production of software, it is not less when it comes to pirated software. As this is
all because of the higher price of the software products and the users always turn
to look their substitute their demands and this has make the way for the increase
in pirated software.

 One of the most influencing point in the software piracy is the lack of awareness
among the people about software and related intellectual property rights. Many
countries provide intellectual property right to the software product either as a
patent or copyright, but the knowledge regarding the same is very less among the
computer users. When an individual purchases a computer, the software
companies provide proper information about copyright of a software in terms of
licensing agreements during the installation process but none of the user bother to
read the license agreement completely before proceeding further with the
installation of the software. At the same time, they think they are the owners of
that product as they have purchased the software by paying an amount, but none
of them give much attention to the fact that it is only the license which they have
them. In such a way they misuse the software product by making copy of it and
 giving it to others. Hardly people are realizing that they are doing an illegal act
which is against the copyright laws of the country.

 In a society where there is a high demand for software products and the
availability of the software product is less , then in that case also people will
misuse and turn it to use the copy of available software. This also leads to
increase the instances of software piracy. It is important that when everything gets
digitalized then the related products must be available in the market for the
consumers or it will lead to the transportation of pirated software across the
boundaries, either through the medium of online or offline.

 Software industry is widespread, so to deal with it proper legal enforcement

should be framed in each country. It must be clear that what kind of protection
and what kind of liability given to the software programs and how to establish on
the commission of software piracy. Copyright protection is given almost in all
countries, software piracy is looked upon as copyright infringement and it draw
attention to both civil and criminal liability. It is important to have a proper
enforcement of law on copyright infringement so it will be helpful to decrease the
incidents of software piracy. If the law goes weak then there is always a chance
that people will deal with such kind of wrong things. Hence, a strong legal system
has to be adopted to deal software piracy.

 By investing a lot of time and money, a software product is created. But in the
case of software piracy they don’t have to invest anything rather only to
reproduce and distribute it for making income and it is an easy earned money
from the view of pirates and by that they get a huge amount of profit which
ultimately resulted in the increased number of software piracy.

In the process of reproduction and distribution of software without proper authorization is

carried out in different forms. Different types of software piracy are Reseller piracy,
Counterfeit piracy, Mail-order piracy, Bulletin Board Piracy and End User piracy.
Organizations Fighting Against Software Piracy:

Organizations are working efficiently all over the world to fight against software piracy.
Since 1988, Business Software Alliances- a non-governmental organization working on
representing a number of software developers with a primary objective to stop copyright.
BSA has issued an important policy for promotion of strong intellectual property
protection both through instituting and implementing of good copyright laws. It has an
independent anti-piracy portal and piracy reporting link in its website to get through the
complaints against software piracy. With the help of the local investigation agencies, it
often conducts raids to find and take legal actions against pirates. In the year 2007,
famous raid action has been conducted in India and BSA carried out civil enforcement
action against Hyderabad based SM Technologies as they were having a pirated software
approximately worth $475,000. In total 1,843 CDs were recovered and this was the
second time in three years that the same company was raided. BSA filed a criminal
complain against the company in September 2004, leading to police raids at three
locations in Hyderabad. SM Technologies was making “compilation pirated CDs” with a
line of a products from Adobe, Autodesk, Microsoft and Symantec and they are selling
the pirated software through multiple transmit, including the internet, resellers and
directly to the end users. When the BSA has taken the action against the SM
Technologies and mentioned in the press room that in India, most of the pirated are used
to reproduce the copyrighted software through the internet.

In 1984, another bigger organization was fighting against software piracy via Internet is
the Software Publishers Association. It has incorporated with the Information Industry
Association and became the Software and Information Industry Association in the year
1999. Similar like the BSA , the SIIA also has an anti-piracy division which controls the
software piracy. SIIA checks on it and take legal action against the people who are taking
content through the internet. This includes downloadable software, new groups, content
offered in website, Torrent and share hosting sites, as well as physical copies of software
and content sold through websites, auction sites and classifies sites. If they get to know
about the unlicensed copies of copyrighted computer programs are being misused by the
pirates, then they immediately remove the infringing contents and they often sends a
report to the ISPs.

At the state level, there are numerous national institutions established by the government
and the non-governmental organizations for fighting against the online software piracy.
In India, the National Association of Software and Service Companies has planned to
provide comfort to the government and private agencies to fight against cyber hacking.
NASSCOM drives out an Anti-piracy division that was introduced at New Delhi. The
reported cases of the piracy are investigated by the NASSCOM and pass to the authorities
for the necessary legal steps. A common program has been lined up by NASSCOM and
BSA for campaigning against piracy. National Information Technology Security Centre
has been set up by a ministry of information and technology to take different approaches
to control crime.4

Protection of Software Piracy in India:

Indian Copyright Act, 1957

In India, copyright protection is given under the Indian Copyright Act, 1957 under the
section 13(1)(a) 5to all kind of original literary work which includes computer
programme and if there is an infringement then strict legal and civil actions be taken off.
In India, software is treated as a literary work and accordingly Copyright Protection has
been given to the software. The existing patent law is not in any way to extend its
protection to software, hence it been given protection under Copyright Act, 1957. The
definition of literary works was amended in the Copyright Act to include computer
programmes and computer database. Computer software has been given a special status

4
Tabrez Ahmad: Cybcrlaw e-commerce & m-commerce, APH Publishing Corp. New Delhi, 2003.
5
Section 13(a) of the Copyright Act, 1957.
compare to any other literary work. Copyright protection is given for the software when it
will be entitled that the work is original and adequate efforts have been put to impart its
originality. Under Section 13(2)(i)6, says that it is also required that the work should be
published first in India or the work is published outside India, the author on the date of
publication or if the author is dead at the time of his death should be a citizen of India.

The amendment of Copyright Act has been done in the year 1994, and after that the
copyright implementation has improved. It had made the copyright violation as
cognizable offence. When a person gets a copyright protection to his software, then
certain rights have been imposed to him and if any person infringes the right, then he/she
will be liable for committing an offence under Section 51(a)(i) 7. If any person permits
any place to be used for communication of the copyrighted work to the public for profit,
then the Section 51(a)(ii) will be applicable for an infringement of that work.8 Other than
civil remedies, criminal remedies is also given under the Indian Copyright Act for
infringing copyright in computer program. A provision has been incorporated through the
amendment in 1994 that, Any person who knowingly using an infringing copy of a
computer program shall be liable of punishment under Section 63(B) with an
imprisonment for minimum seven days but which may extend to three years and with fine
which shall be not less than fifty thousand rupees but may extend to two lakh. Section 63
states that one who abets infringement without making any gain shall be imposed with a
lesser punishment.9 One exception to it is under Section 52(ii) 10, it allows to make backup
copies purely as a temporary protection against loss, destruction or damage in order only
to utilize the computer program for the purpose which it was supplied. This act also talks
about the offences committed by a company. Under Section 69(1) 11 it states that if an
offence is committed by a company then every person who is running a business or
managing the company and each person who is responsible to the affairs of the company
are liable for punishment. It exempts those companies which prove the absence of
6
Section 13(2)(i) of the Copyright Act,1957 Act No. 14.
7
Section 51(a)(i) of the Copyright Act,1957 Act No. 14.
8
Section 51(a)(ii) of the Copyright Act,1957 Act No. 14.
9
Section 63 of the Copyright Act,1957 Act No. 14.
10
Section 52(ii) of the Copyright Act,1957 Act No. 14.
11
Section 69(1) of the Copyright Act,1957 Act No. 14.
knowledge about the offence committed and had taken several steps to prevent from
them.

Information Technology Act, 2000

The Information Technology Act, 2000 also gives the provision for the infringement of
software piracy. Under Section 65 of Information Technology Act, 2000 12 it provides
punishment for tampering with computer source documents as any person who
knowingly or intentionally destroys or causes another to conceal destroy, or alter any
computer source code for a computer program or network, which are required to be kept
or maintained by law for the time being in force shall be liable for punishment with
imprisonment up to three years or fine which may extend up to two lakh rupees or both.

John Doe Order

The legal Framework of the India includes another important legal framework or rather
remedy, which seeks to help the owners of software programs in India. Known as the
John Doe order, it helps an owner of a software to protect his work in case where the
person trying to infringe upon his application is unknown. Simply put, a John Doe order
tries to help the creator protect his work when he is unable to identify the person who is
trying to use his software maliciously. By applying a John Doe order, the plaintiff seeks
permanent injunction towards some selected websites and URL’s which helps him avoid
infringement of his work.
The origin of such an order is taken from England which was mainly used when the
Plaintiff was unable to identify the violator. In India, the John Doe order is recognized
under Order 30 rule 1 of the Code of Civil Procedure wherein, a petitioner who seeks or
has clues as to infringement of his copyright works may appear before the court to seek
the John Doe Order. Order 39 rule 1 and 2 of the Code of Civil Procedure empowers the
court to issue an injunction by passing the John Doe order in India.

12
Section 65 of the Information Technology Act,2000, Act No. 21 of 2000.
To further see how these laws and regulations have been applied in India we shall look
into some cases wherein software piracy was in question and how the Indian Judiciary
acted upon it.

JUDICIAL APPROACH TOWARDS PIRACY IN INDIA

 Microsoft Corporation v. K. Mayuri13

This was the first case, when the Indian Judiciary recognized software piracy in
India, the court considered various forms of software piracy for the first time in
India. The court after hearing contentions from both the parties decided that the
defendants had infringed the plaintiff’s right over copyright. The defendants had
pirated the software’s like Microsoft Windows 98, Microsoft Office 2000,
Microsoft Visual Studio 6.0 and Windows XP Professional. In this particular case
the court also looked upon the matter of the damages payable and adjudicated that
in this particular case the damages can be differentiated between three categories
which are-
1. Actual Damages- these refer to the damages that are caused to the Plaintiff
because of the said infringement.
2. Damages to Goodwill and Reputation- the amount of compensation
required towards the Plaintiff for endangering his market reputation for
providing pirated software’s of low quality.
3. Exemplery Damages- such amount of damages that have to be paid by the
defendant which sets an example for other wrong doers to not pursue such
unlaw3ful activities.
 Adobe Systems & Anr v. Mr. Mahindra Saxena & Anr14
Another important case regarding software piracy in India is of, the case filed by
Adobe and Microsoft Corporation for infringement of their copyright by the
defendants. This case is an important part of the discussion as in this case the

13
Microsoft Corporation v. K. Mayuri, 2007 (35) PTC 415.
14
Adobe Systems & Anr v. Mr. Mahindra Saxena & Anr CS (OS) No. 782.
 court took upon a harsh legal actions towards the plaintiffs. The Plaintiffs were
entitled to a sum of damages which exceeded Rs. 10 lakhs to be paid by the
defendants.
 Microsoft Corporation Cases
1. Microsoft Corporation v. Yogesh Popat and Anr15
This case was an important case decision as in this case the court decided
in favour of the Plaintiff Corporation and asked the defendants to pay
damages of the ascertained amount. Later this case was referred by many
courts to decide for any damages to be paid to the plaintiff.
2. Microsoft Corporation v. Deepak Rawal16
Another popular case filed by the Microsoft corporation was regarding
infringement of their Intellectual Property Rights where they claimed
incalculable amount of damages towards the Defendants which was
granted by the court.

ACSERTAINING THE ROLE OF THE JUDICIARY

The judiciary plays a vital role in cases of prevention of software piracy in India. It is also
a set back towards the nation because the laws implemented by the government although
are in complete proficiency but yet they fail to accomplish the goals it aims to achieve.
For instance, the Order John Doe tries to prevent Privacy rapidly in India but yet fails to
establish strict laws which completely detoriate the piracy in India. There are yet many
platforms where there are cases available for pirated softwares which are out of the reach
of the judiciary. The judiciary should try to enforce better mechanisms to control such
hazards. The agencies are tremendously working towards avoiding such online thefts but
may work better if granted with more power and access.
In India, only the judiciary can shape the online piracy thefts by bringing strict and proper
justice towards its violation and creating more effective mechanisms in doing so.

15
Microsoft Corporation v. Yogesh Popat, 2005 (30) PTC 245.
16
Microsoft Corporation v. Deepak Rawal, MIPR 2007(1) 0072.
Protection under International Instruments:

Trade Related Aspects of Intellectual Property Rights (TRIPS)

One of the first international treaty that includes computer programs within the list of
copyrighted works. TRIPS sets three different types of protection for software:
17
Copyright, Patent and Trade Secret. Under Article 10.1 of TRIPS , it includes one
specific provision that it expresses member states to protect software, whether in source
or object code, as literary works under Berne Convention (1971). Thus, according to their
legal system, member countries have a right to provide more protection of intellectual
property rights. Under Article 27.1 of TRIPS agreement 18, its states that a software can
be granted a protection of patent if a member of the states fulfill the requirements and the
conditions that are set under the laws of the country. Under Article 39 of TRIPS 19, it
gives an another way to copyright protection and it talks about the protection for
undisclosed information of a company and offers a trade secret regime for software
protection and which forms its trade secret. However, a holder of a property generally
protects the source of code under trade secret regime and object code is protected as
copyright.

Conclusion:
In India, with the ongoing digitalization and development in the information technology,
the pirated software industry has widen up with a larger extend. Though, India has a very
strict laws on copyright, but till today software piracy is much prevalent and the problem
lies in its enforcement. Punishment for infringement of software somewhere is lacking
and the increase the imprisonment in the minimum term that is awarded to the copyright
violation. It can be enforced by giving proper training to the concerned authorities who
does more contribution to eliminate software piracy that to including police personnel. As
more authorities does not have a proper knowledge of the various provisions of the law

17
Article 10.1 of TRIPS agreement
18
Article 27.1 of TRIPS agreement
19
Article 39 of TRIPS agreement
so it is to be ensured that they get the proper training. Even the judiciary is playing its
role in a better manner, giving much importance to the cases of software piracy when the
matter comes before them. Yet the judiciary have to give an appropriate decision in a
quick time, otherwise the rate of piracy will not decrease.

Various reasons are there for it such as lack of awareness among people, lack of
implementation of copyright law, high price of software, increased demand for software
product etc. As quality software and affordable prices also play the major in India to
combat software piracy. Now-a-days, End user awareness is also necessary as by creating
awareness about copyright and related laws will have a high impact upon the end users
which will help in the reduction of software piracy. Single individual cannot take various
steps, to eliminate the software piracy all the stake holders have to act together and the
Legislature, Executive and Judiciary also have to play the major role i.e., have to act
together with the software industry to restraint the threat in the society.`