Software copyright infringement established via automated detection technology warrants permanent injunction and license-cost damages.

The Plaintiffs, owners of the 3D CAD software "SOLIDWORKS," filed a suit for permanent injunction and damages against the Defendants for copyright infringement

The Plaintiffs alleged that their software, classified as a "literary work," was being used by the Defendants without valid licenses

The Plaintiffs utilized "Phone Home" technology—an inbuilt security mechanism that captures MAC addresses, IP addresses, and license keys—to detect unauthorized usage

The Plaintiffs' database, 'Exalead,' recorded 474 "infringement hits" across seven computer systems belonging to the Defendants starting from October 2018

Despite receiving legal notices in December 2020, the Defendants failed to cease usage or obtain licenses

Procedurally, the Defendants entered an appearance but failed to file a written statement, leading the Court to close their right to do so and proceed ex-parte

1. Whether the Defendants’ unauthorized use of the SOLIDWORKS software constitutes an infringement of the Plaintiffs' copyright under the Copyright Act, 1957.

2. Whether the Plaintiffs are entitled to a decree of permanent injunction and compensatory damages in the absence of a written statement by the Defendants.

The Court applied Section 40 of the Copyright Act, 1957, read with the International Copyright Order, 1999, which extends copyright protection to works first published in the USA (a Berne Convention signatory) in India

The software was protected as a "literary work" under the Act

Procedurally, the Court relied on Order VIII Rule 10 of the Code of Civil Procedure (CPC), 1908, which empowers the court to pronounce judgment if a party fails to present a written statement

Furthermore, Rule 4 of the Delhi High Court (Original Side) Rules, 2018, was applied to treat the Plaintiffs' unrebutted averments and evidence as deemed admissions

The Court accepted the technical evidence provided by the Plaintiffs regarding the "Phone Home" technology and "Exalead" portal.

It found the methodology of capturing MAC addresses and "infringement hits" to be a plausible and proven means of identifying unauthorized use

The Court noted that the Defendants’ "deathly silence" following the legal notices and their failure to file a written statement despite appearing in court fortified the Plaintiffs' claims

Since the Defendants did not cross-examine the Plaintiffs' witnesses (PW-1 and PW-2), the court deemed the evidence—specifically the logs showing unauthorized use on seven machines—to be admitted

Regarding damages, the Court accepted the testimony of PW-2, who calculated loss based on the "net profit" the Plaintiffs would have earned if the Defendants had purchased seven genuine licenses at the prevailing market rate of 2021

The Court granted a permanent injunction restraining the Defendants from using any pirated or unlicensed software of the Plaintiffs and ordered the "delivery-up" of all infringing material

The Defendants were held jointly and severally liable to pay the Plaintiffs ₹64,79,941 as cost and damages, alongside ₹3,21,013 in legal costs

The suit was decreed in favor of the Plaintiffs under the provisions of Order VIII Rule 10 of the CPC