Featured image for Supreme Court Judgment dated 30-07-2018 in case of petitioner name Diyora and Bhanderi Corporatio vs Sarine Technologies Ltd.
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Supreme Court Rules on Copyright Dispute Between Diyora and Bhanderi Corporation and Sarine Technologies Ltd.

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The Supreme Court of India, in the case of Diyora and Bhanderi Corporation vs. Sarine Technologies Ltd., ruled on an important intellectual property dispute concerning copyright infringement claims over the Advisor™ software. The case involved allegations that the defendants had unlawfully copied the source code of the plaintiff’s software. The Court provided guidance on the handling of such disputes and the appropriate methodology for comparing source codes in copyright infringement cases.

Background of the Case

Sarine Technologies Ltd. (plaintiff) filed a Commercial Trade Mark Suit No.8 of 2017 before the District Judge, Surat, claiming that it had a valid copyright over Advisor™ software in Israel and the USA. The plaintiff argued that Diyora and Bhanderi Corporation (defendants) had unlawfully infringed upon this copyright by using a similar software for diamond cutting analysis.

The plaintiff sought an injunction to prevent the defendants from using or distributing any software that infringed upon the Advisor™ software, particularly Version 6.0, which was registered in the United States as Copyright No.TX8-252-522.

Key Legal Issues Considered

  • Whether the Advisor™ software, particularly Version 6.0, was validly protected under copyright laws in India.
  • Whether the defendants had infringed upon the plaintiff’s software by using a similar source code.
  • The appropriate methodology for comparing source codes to determine copyright infringement.
  • Whether an independent expert could be appointed to analyze the disputed software.

Arguments Presented

Arguments by the Plaintiff (Sarine Technologies Ltd.)

  • The plaintiff claimed to have secured copyright protection in Israel and the USA, and under the International Copyright Order, 1999, this protection extended to India.
  • They argued that the Advisor™ software was an advanced tool used in the diamond industry to analyze the optimal way to cut a rough stone to maximize value.
  • The defendants’ software allegedly copied key elements of Advisor™, thereby violating the plaintiff’s copyright.
  • They sought a permanent injunction preventing the defendants from distributing, using, or selling any software incorporating the copyrighted Advisor™ code.

Arguments by the Defendants (Diyora and Bhanderi Corporation)

  • The defendants denied copying the plaintiff’s software and argued that their software was developed independently.
  • They contended that the plaintiff’s copyright registration in the USA did not automatically confer copyright protection in India.
  • The defendants also objected to the appointment of an independent expert, arguing that their proprietary software should not be shared with third parties due to confidentiality concerns.
  • They suggested using institutions like the Centre for Development of Advanced Computing (C-DAC) or Indian Institute of Technology (IIT) for software analysis instead of a foreign expert.

Supreme Court’s Observations

The Supreme Court carefully analyzed the competing claims and ruled on two major issues: the appointment of an independent expert and the scope of software comparison.

Appointment of an Independent Expert

The trial court had appointed Mr. Robert “Bob” Zeidman, a foreign expert, to analyze the source codes of the plaintiff’s and defendants’ software. The defendants objected, arguing that using an expert from outside India could lead to a breach of confidentiality.

The Supreme Court ruled:

“The appointment and engagement of Mr. Zeidman was accepted and acquiesced in by the defendants. The correspondence and emails suggest that the defendants had clearly acquiesced in such an arrangement. At this length of time, there would be no reason to upset the appointment.”

Thus, the Court upheld the appointment of Mr. Zeidman as the expert for source code comparison.

Scope of Software Comparison

The trial court initially restricted the software comparison to Advisor™ Version 6.0, the registered version. However, a later order expanded the scope to include all previous and existing versions.

The Supreme Court ruled:

“The matter went on the aspect of registered copyright and rights emanating thereunder. The trial court was justified in restricting the comparison of the source code and object code to the registered version of the plaintiff’s software.”

Accordingly, the Court directed that the comparison should be limited only to the registered version (Advisor™ 6.0) and not include earlier or unregistered versions.

Final Judgment

The Supreme Court ruled:

  • The appointment of Mr. Zeidman as the independent expert for source code comparison was upheld.
  • The software comparison should be limited to Advisor™ Version 6.0, the registered version.
  • The defendants were directed to reimburse half the travel expenses incurred for the expert’s appointment.
  • The case was remanded to the trial court for further proceedings based on the expert’s report.

Impact of the Judgment

This ruling sets an important precedent in intellectual property cases, particularly regarding:

  • International Copyright Protection: The judgment reinforces the application of international copyright laws in India through the International Copyright Order, 1999.
  • Software Copyright Disputes: The Court provided clear guidelines on how courts should handle software comparison in copyright infringement cases.
  • Use of Foreign Experts: The ruling affirms that foreign experts can be appointed if agreed upon by both parties, despite initial objections.
  • Confidentiality Concerns: The Court emphasized that precautions should be taken to prevent unauthorized access to proprietary software during judicial proceedings.

Conclusion

The Supreme Court’s decision in Diyora and Bhanderi Corporation vs. Sarine Technologies Ltd. underscores the importance of protecting intellectual property rights while ensuring fair trial proceedings. By upholding the appointment of an independent expert and restricting the software comparison to the registered version, the Court balanced the interests of both parties. This case sets a crucial precedent for future copyright disputes in India’s rapidly evolving software industry.


Petitioner Name: Diyora and Bhanderi Corporation.
Respondent Name: Sarine Technologies Ltd..
Judgment By: Justice Abhay Manohar Sapre, Justice Uday Umesh Lalit.
Place Of Incident: Surat, India.
Judgment Date: 30-07-2018.

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