A COMPARATIVE CASE LAW ANALYSIS OF JOHN DOE AND ANTON PILLER ORDERS
A COMPARATIVE CASE LAW ANALYSIS OF JOHN DOE AND ANTON PILLER ORDERS PILLER ORDERS -Pri yanka Devgan, Devgan, I L S L aw Coll Coll ege, ge, Pune
Successful protection of Intellectual Property Rights (IP Rights) depends on effective laws, proper judicial adjudication, and execution of judicial orders. In other words, all the three organs of the State, namely, Legislature, Judiciary and Executive have to be extremely alert in protecting and preserving IP Rights, particularly, the trans-border reputation. The 'John Doe’ order is used to describe an injunction sought against a person whose identity is not known at the time of the issuance of the order. It thus, enables an IP owner to serve notice and take action against anyone, whose identity is unknown and found to be infringing the IP Rights. In other words, the order does not specify any one defendant in particular. The John Doe o rder allows the plaintiff’s solicitor to search the premises and deliver up evidence of infringement of the rights of the plaintiff by the unknown Defendant (John Doe). More often than not, the John Doe order, also known as the ‘Ashok Kumar’ order includes provisions for an interim injunction. The ‘John Doe’ order also affords the trademark or copyright owner the possibility of curtailing the infringer’s future activity by means of an injunction, while depriving the infringer of his stock of counterfeit goods by means of a seizure of those goods. The John Doe orders are descendants of the “defendant -specific” Anton Piller injunction that originated in the 1976 decision of the English Court of Appeal Appeal in Anton Piller KG v. Manufacturing Processes 1 Ltd. In this case, the Court of Appeal was required to Judge the legality of certain ex parte orders, being passed by lower Courts, ordering the Defendants to allow Plaintiffs to enter the premises of the Defendants for an inspection and removal of critical evidence which could be easily destroyed by the Defendant, if it had a forewarning of any any legal action. In In this particular case, it was the trade secrets of of the Plaintiff that were being illegally traded by the Defendant and the Plaintiff needed to search the premises of the Defendant, without prior notice, in order to seize the material intact. If prior notice had been issued to the Defendant, it is likely that the Defendant would have destroyed the critical evidence in order to evade legal action. Lord Denning, the presiding judge, explained in detail that such orders were extraordinary, since in England the citizenry has always had the right to privacy of their own homes and a man was often considered the king of his own home. 2 Most importantly, Lord Denning took the pains to clarify that these orders were not the same as ‘ search ‘ search warrant s’ and that such orders did not authorize the Plaintiff to
1
Anton Piller KG v. Manufacturing Processes Ltd., [1976] 1 All E.R. 55(C.A.), Lord Denning M.R., Ormrod and Shaw L.JJ. It is to be noted, however, according to the English Court of Appeal’s decision in that case, that the ancestry of such orders can be traced back much further, to the decision of the House of Lords Lords in United Company of Merchants of England, Trading to the East Indies v. Kynaston (1821), 3 Bli. (O.S.) 153 (H.L.), Redesdale L.J 2 With regard to this point the Court relied on the landmark civil liberties judgment in the case of Entick v. Carrington [1765] EWHC KB J98.
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Electronic copy available at: http://ssrn.com/abstract=2224153 http://ssrn.com/abstract=2224153
forcefully enter the premises of the Defendant. 3 Keeping in mind the extraordinary nature of remedy, Lord Denning stated in no uncertain terms that Defendants could resist entry of the Plaintiff into premises, with the caveat that such resistance is bound to be treated as “contempt of Court” and accordingly punished. 4 The grant of such orders were justified only in instances where the Plaintiffs demonstrated a strong prima facie case of infringement and where there was the possibility of the Defendant destroying the evidence that was required by the Plaintiff to establish its case at trial. The first such order was passed in the case of Taj Television v. Rajan Mandal 5 where the Plaintiffs owned an Indian sports-broadcasting channel and also the Indian broadcasting rights for the Football World Cup organized by FIFA. The Plaintiff had filed this law-suit against 6 known cable-operators and another 14 unknown cable-operators and had sought injunctions against not only the 20 cable-operators but also against all other un-named cable-operators who maybe violating the broadcast rights of the Defendants. In this particular case, the Plaintiff had tried to convince the Court that such an exceptional request had to be accepted since sporting events like the FIFA “World Cup” are time -bound events, wherein it was not possible to identify each and every possible infringer before approaching the Court and that the Plaintiffs would face an irreparable loss if such orders were not granted because cable-operators could easily destroy the infringing evidence. The Plaintiff then attempted to convince the Court that it could frame such an order under its inherent power available under Section 151 of the Civil Procedure Code, 1908 6 and also pointed the Court’s attention to several judgments in other common law countries which permitted the passing of such orders against un-named Defendants.7 The Judge convinced by the arguments of the plaintiff issued interim injunctions under Order 39 of the CPC (i.e. prima facie case, balance of convenience and irreparable loss proved) read along with the inherent powers of a Court under Section 151 of the CPC, against all named and un-named Defendants, who may be violating the broadcast reproduction rights of the Plaintiffs, under Section 37 of the Copyright Act, 1957. In order to ensure that its orders were complied with the Judge also appointed a judicial officer as a Commissioner 8 with instructions to the local police officers that they were to assist the Commissioner in seizing any broadcasting equipment that was being used to violate the Court’s order. In ESPN Software India Pvt. Ltd. v. Tudu Enterprise and Ors., 9 it was observed that John Doe orders are a common feature in the courts of Canada, America, England, Australia and in some other countries. The judicial systems of all these countries have basic similarity with our judicial system. Therefore looking at 3
In support of this argument, Lord Denning cites the case of East India Company v. Kynaston, (1821) 3 Bligh, 153 where it was held that “The arguments urged for the Appellants at the Bar are found ed upon the supposition that the Court has directed a forcible inspection. This is an erroneous view of the case. The order is to permit; and if the East India Company should refuse to permit inspection, they will be guilty of conte mpt of the Court. ... It is an order operating on the person requiring the def endants to permit inspection, not giving authority of force, or to break open the doors of their warehouse” 4 Id. 5 CS (OS) No. 1072 of 2002 before the High Court of Delhi. 6 Sec.151. Saving of inherent powers of Court — Nothing in this Code shall be deemed to limit or otherwise affect the inherent power of the Court to make such orders as may be necessary for the ends of justice or to prevent abuse of the process of the Court. 7 Id. 8 The Code of Civil Procedure, 1908 allowed for the appointment of “Commissioners” under Order 26 and also the preservation of evidence under Order 39 Rule 7. 9 CS (OS) No. 384 of 2011 before the High Court of Delhi. The same Plaintiff had filed a similar suit in the year 2006: ESPN Software India Pvt. Ltd. v. Mr. Arabinda Maharan & Anr.
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Electronic copy available at: http://ssrn.com/abstract=2224153
the extraordinary facts and circumstances of the case in the interest of justice, the courts in India would also be justified in passing the John Doe orders. In the absence of a comprehensive law and lack of precedents, guidance has been taken from the foreign courts in evaluating these orders and building a strong basis for future reference of Indian Courts.
BASIC CONDITIONS FOR GRANT OF JOHN DOE AND ANTON PILLER ORDERS In arriving at its original decision to grant an Anton Piller order, the English Court of Appeal set forth three specific preconditions for granting an order: 10 1. There must be an extremely strong prima facie case. 2. The damage, potential or actual, must be very serious for the applicant. 3. There must be clear evidence that the defendants have in their possession incriminating documents or things, and that there is a real possibility that they may destroy such material before any application can be made. Each of these conditions shall be now taken into consideration.
STRONG PRIMA FACIE CASE The plaintiffs have been required to establish that they have an “extremely” strong prima facie case. 11 The plaintiff’s right or title is clear and that the infringement of this right is widespread. In trademark infringement cases, the plaintiff should convince the Court that the trademark is: Valid i.e. ownership, distinctiveness, and accuracy of the statements made in the application for the registration of the trade-mark should be carefully considered, 12 Registered i.e. not based on trade-mark applications, 13 Untainted by unresolved invalidity attacks i.e. a trade-mark owner should avoid relying on a trade-mark the validity of which has been previously contested before the Trial Division in the absence of a judgment, with reasons, emanating from the court affirming the validity of the mark. Indeed, an infringer could seek the rescission of the John Doe order executed against him on the basis of previous unresolved attacks on the validity of the trade-mark that forms its basis,
10
Anton Piller KG, supra note 3, at 62, Ormrod L.J. Both in Nintendo of America Inc. v. Coinex Video Games Inc. et al. (1982), 69 C.P.R. (2d) 122 (F.C.A.), Heald and Urie JJ. and Cowan D.J. and more recently in Top Star Distribution Group Inc. v. Sigma (2000), 4 C.P.R. (4th) 168 (F.C.T.D.), Lutfy A.C.J., both the Court of Appeal and the Trial Division have referred to the need for the plaintiff to establish an extremely strong prima facie case. 12 Top Star Distribution Group Inc. v. Sigma (2000), 4 C.P.R. (4th) 168 (F.C.T.D.), Lutfy A.C.J. 13 Indian Manufacturing Ltd. et al. v. Lo et al. (1996), 110 F.T.R. 201, at 205 (F.C.T.D.), Reed J., rev’d. on grounds of procedure (1997), 75 C.P.R. (3d) 338 (F.C.A.), Stone, Linden, and Robertson JJ.A. 11
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Widespread Infringement- In Club Monaco Inc., the Trial Division reaffirmed the need for the plaintiff to show infringement on a large scale. 14 Specificity of infringement- In Indian Performing Right v. Mr. Badal Dhar Chowdhry 15, the Court noted that it ought not to issue an injunction which is vague or indefinite. Breach of injunction has serious consequences for the violator. However, before the Defendant can be so injuncted, the Defendant ought to be made aware of the precise act which he is prohibited from doing. A vague injunction can be an abuse of the process of the court and such a vague and general injunction of anticipatory nature can never be granted. Thus, the plaintiff must provide in order for the Court to grant an ex-parte injunction: (a) the valid, registered trademark in which the infringement is alleged; (b) the anticipated source based on prior experience of infringement; (c) limited steps which can be taken by the plaintiff to enforce the injunction.
SERIOUS DAMAGE: ACTUAL OR POTENTIAL TO THE PLAINTIFF In order to meet this second criterion, a plaintiff must establish that, in the absence of the requested John Doe order, the defendant’s actions cause harm that will potentially or actually result in financial losses. In Reliance Big Entertainment Pvt. Ltd. v. Jyothi Cable Network & Ors., 16 the Single Judge of the Delhi High Court passed an order restraining 5 named Defendants and 25 un -named Defendants from infringing the Plaintiff’s copyright. The plaintiff apprehended that their Bollywood movie ‘Singham’ will be copied onto DVDs/CDs which will be distributed in the market and exhibited on Television by the cable operators. This would thereby cause huge financial losses to the plaintiff. Past practice of unauthorized persons indulging in such illegal activities of copying the film on CDs/DVDs/Blue-ray disc and distributing the same has also been recognized in the judgment relied upon by the plaintiff. The Federal Court has also taken into consideration the damage the counterfeit goods would have on the copyrighted goods of the plaintiff and has considered this as a serious damage to the Goodwill of the plaintiff.17
POTENTIAL DANGER OF LOSING EVIDENCE MUST BE SHOWN There would be an obligation in either case to adduce some convincing, concrete, factual evidence and not a mere statement of opinion or belief by a witness, to justify on the issue of real or great danger that the evidence will be destroyed or removed. 18 Thus a clear perusal of the activities of these counterfeiters needs to be taken up and the ways they are most likely to destroy the evidence. Also the likely measures 14
Club Monaco Inc. v. Woody World Discounts (1999), 2 C.P.R. (4th) 436 (F.C.T.D.), Pelletier J. CS (OS) 1014/2004 before the High Court of Delhi. 16 CS (OS) No. 1724 of 2011 before the High Court of Delhi. 17 Oakley, Inc. v. Jane Doe, [2000] F.C.J. no. 1388, at paras. 17-18 and 20 (F.C.T.D.), Pelletier J. 18 Chin-Can Communication Corporation et al. v. Chinese Video Centre Ltd. et al. (1983), 70 C.P.R. (2d) 184, at 188 (F.C.T.D.), Addy J. 15
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needed to counter the threat of the John Doe’s have to be evaluated and brought into reality. The available details should be clearly evaluated and enquired about and the steps towards protection of your data have to be taken quickly and with diligence.
JOHN DOES: UNVEILING THE MASQUERADE
STREET VENDORS The foreign precedents cited in the Taj Television case dealt with Defendants who were basically “fly -bynight” operators, i.e. street -side vendors or make shift shops, both of which categories lacked fixed addresses.19 Their makeshift approach makes it difficult to track them down and to name them specifically.
In Ardath Tobacco Co. Ltd. v. Munna Bhai and Ors .,20 the plaintiff, engaged in the business of manufacture and sale of internationally known cigarettes STATE EXPRESS 555, instituted the suit for restraining the defendants No. 1 to 3, vendors/ stockiest of cigarettes at Calcutta and defendants No 4 to 6 the vendors/stockiest of cigarettes at Delhi from dealing in the cigarettes under the label PEACOCK which had identical or deceptively similar packaging and trade dress to that of the plaintiff’s cigarettes. The Court made an observation and opined that the sale of cigarettes in India was different from the Western countries. In Western Countries sale of loose cigarettes is not the norm, while in India sale of loose cigarettes is a common practice. Any action for infringement of trademark in relation to cigarettes in this country was stated to be viewed/tested in this light. It was also stated that customers normally did not get to see the packet or the whole of it but may get to see only the colour or the trade dress of the packet and identify the brand. The individual cigarettes were observed to be devoid of the trade name or the manufacturer's name boldly. In such circumstances, the colour of the packaging and the trade dress was stated to assume special significance. The Court stated that the cigarettes being marketed by the defendants may not fool or deceive a buyer of a packet but that the same had the potential to deceive or confuse the buyer of loose cigarettes, who constitute a large section of the buyers of the said product. In this light, an attempt to pa ss off or sell the goods as those of Ardath was said to have been out.” Counterfeiting has reached a completely new level of sophistication in areas of technical and physical replication that it has become difficult to spot the difference between genuine and fake products. Thus, the John Does can easily hide behind their new level of expertise attained and which gives them the attitude of not being identified and caught easily.
CABLE OPERATORS In UTV Software Communications Limited v Home Cable Network Ltd. and Ors., 21 The plaintiff urged that the defendants were of unknown identities who would without authorization illegally telecast pirated version of the plaintiff’s films by their network. The Court thus granted an injunction to prevent the 19
See generally, G. F. Nelson, “Anton Piller order – Equity’s commando remedy against illicit traders & Ors. Criminal Law Journal 3 (July 1993) (This article notes how “John Doe” orders are required against Defendants such as street side vendors since they often vanish without a trace.) 20 CS (OS) 141/2004, 2009 (39)PTC 208 (Del.) 21 CS (OS) No.821/2011 before the High Court of Delhi.
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broadcast of not only the plaintiff’s movie ‘7 Khoon Ma af ’ but also preemptively prevent the broadcast of the plaintiff’s upcoming movie ‘Thank You’. In Satellite Singapore PTE Ltd. v. Star Cable Network & others 22 also the Court ordered that any person/organization/body who was indulging in the act of piracy of the signal of the Appellant and/or in which the Appellant has the exclusive right is also prohibited/injuncted from distributing or broadcasting the said signal/programme of the Appellant qua the IPL Cricket Tournament. A Commission was also ordered to be executed to visit the premises of the Respondent and/or any other during the hours IPL matches were being telecast live and seize the receiving and transmitting devices, if it was found that the latter had been downloading Sony Set Max channel signal without proper authorization.
PUBLISHERS In Bloomsbury Publishing Plc, JK Rowling v. Newsgroup Newspapers Limited & Ors., 23 a ‘John doe’ order was issued in relat ion to the book ‘Harry Potter and the Order of Phoenix’ that prohibited anyone who came into possession of all or part of the book from disclosing it or any information in it to any third party, and required immediate delivery of the book or any copies of it to the publisher. In this case, The Sun, the Daily Mail and The Mirror had received phone calls from someone offering for sale chapters of the unpublished book asking for £25,000 for each chapter. A ‘John Doe’ order was thus issued to prevent disclosure of the contents of the book. A similar order was also issued for ‘Harry Potter and the Half Blood Prince’.
WEBSITE OPERATORS/ISP Website blocking is addressed by the Information Technology (Procedure and Safeguards for Blocking for Access of Information by Public) Rules, 2009 which authorizes the Department of Information & Technology (DIT) to block websites and confers investigation powers for reasons connected with national security or public order or incitement of any unlawful activity as laid down in Section 69A of the IT Act. Additionally, the court exercising its inherent powers under Section 151 CPC may grant any relief it deems fit in order to protect proprietary interests of plaintiffs from any irreparable harm, including blocking of websites. Blocking of sites directly affects individual’s right to freedom of speech and expression under Article 19(1)(a). Logical corollary would mean that any denial of access should fall within the reasonable restrictions specified under Article 19(2). A ‘John Doe’ order to block a website falls within reasonable restrictions because refusal to do so would be a ‘contempt of court’, a ground under Article 19(2). Caveat here is that the right can be taken away only under the authority of and procedure established by the law. Therefore, unless there is an express direction from the Court or the DIT, the ISPs are not bound to block any internet source. A John Doe order only permits a copyright owner to seek action against any errant website by the ISPs upon authorization of the DIT and not to bypass the authority under the law.
22
FAO (OS) No. 211 of 2010 before the High Court of Delhi. HC 03 C01725 dated 23rd May, 2003
23
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A John Doe order was passed in favour of Reliance Communications restraining websites, cable operators and Internet Service Providers (ISPs) illegally screening the film Bodyguard. 24 An action was brought by members of the Motion Picture Association of America (“MPAA”) against British Telecom (BT), UK’s largest ISP, Twentieth Century Fox Film Corporation and Others v British Telecommunications Plc. 25 The application for an injunction to block access to Newzbin2 was made by the MPAA under section 97A of the UK Copyright, Designs and Patents Act 1988 which provides that a High Court has the power to grant an injunction against a service provider, “where that service provider has actual knowledge of anot her person using their service to infringe copyright.” For actual knowledge to be shown, the service provider should have received a notice with the details of the infringement in question. Mr. Justice Arnold in his judgment showed his full conviction that BT had full knowledge of other persons using its service to infringe copyright and hence granted an injunction in favour of the right holders. John Doe can use the Internet's widespread reach to inflict serious harm on a corporation. A cybersmear lawsuit may alert the public to the falsity of certain Internet statements. Credit Suisse First Boston sued ten John Does and one named defendant in the Southern District of New York in July 2000. Credit Suisse alleged that certain Internet postings concerning the integrity of the investment bank and one of its research analysts were false and defamatory and claimed that the postings could potentially harm its business.26 The bank sought one million dollars in damages and an order to prohibit further defamatory postings. Credit Suisse negotiated a non-monetary settlement agreement in which the named defendant agreed not to make further false statements about the company or its analyst. " Lucent Technology's stock price fell 3.6% the day after a false Internet press release stated that the company expected an earnings shortfall. This illustrates the potential impact of false Internet postings and indicates that companies have an interest in protecting the integrity of information posted on Internet financial boards. 27
COUNTERFEIT IMPORTERS The Canadian Federal Court plays an important role in redressing the Plaintiffs costs of litigation and understanding the gravity of piracy and counterfeiting in Canada. A Trial Court Judge has gone to the extent of issuing a judgment in the amount of C$1million against an importer of counterfeit Polo Ralph Lauren garments.28 This was the single largest award ever granted in counterfeit litigation in Canada, and it contained an explicit recognition of the need to reinforce and convey a powerful deterrent to defendants.
24
CS (OS) No. 2066 of 2011 before the High Court of Delhi. [2011] EWHC 1981 (Ch) 26 Credit Suisse Files Suit Alleging One of Its Analysts Was Cybersmeared, CYBERSECURITIESLAWTRIBUNAL, Jul. 17, 2000 available at http/www.cybersecuritiesaw.co m 27 See Trader Charged with Fraud for Lucent Posting, NEWSDAY, Mar. 30, 2000, at A56, available at 2000 WL 10004943 (noting that incident reduced Lucent's market capitalizatio n by more than 7.1 billion dollars). 25
28
The Polo/Lauren Company LP v John Doe et al, Federal Court T-1704-03, Judgment, 23rd June 2005.
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The Polo litigation illustrates the new degree of precision that counterfeiters use in establishing the socalled provenance of fake products. In a pattern that has appeared in a number of import schemes, the Canadian distributor received multiple layers of paperwork, purporting to authenticate the garments, including a fake purchase order addressed to Polo’s Hong Kong licensee and a fake letter of authentication releasing the shipment for sale into North America: remarkably convincing documents created at a keyboard far from Hong Kong. The judgment stands as a warning to importers, who have been too willing to accept fabricated authentication in order to turn a quick profit for products priced at obviously counterfeit levels.
PROCEDURE TO BE FOLLOWED
JURISDICTION OF THE SUIT Section 62 of the Copyright Act, 1957 and Section 134 of the Trademarks Act, 1999 both allow for the copyright owner and trade mark owner, respectively, to sue before the Court within whose jurisdiction these companies or persons are residing or carrying on business. In case of Companies having various offices in the country, the application of the ‘explanation’ 29 to Section 20 of the Civil Procedure Code is required. The first judgment on this point was by a Single Judge in the case of Indian Performing Rights Society Ltd. v. Sanjay Dalia.30The Plaintiff, a copyright society registered under the C opyright Act, 1957, with its registered/principal office in Bombay, had filed a copyright infringement suit before the Delhi High Court. The Plaintiff sought to establish jurisdiction of the Delhi High Court under S ection 62since it had a branch office within the jurisdiction of the Court and thus averred that it was carrying on business, in terms of Section 62, within the jurisdiction of the Delhi High Court. The Defendant however sought to contest the jurisdiction of the Delhi High Court since both the Plaintiff and the Defendant had their registered/principal offices in Bombay and the Defendant had no business or offices within the jurisdiction of the Delhi High Court. The Court opined that the aim of Section 62 (2) is to remove the fetter and expand the scope of Section 20 CPC by extending the jurisdiction with reference to not only the Defendant but also the Plaintiff. The word ‘corporation’ may be a Plaintiff or a Defendant. This decision was however appealed before the division bench of the Delhi HC where it was dismissed. Presently, it is pending before the Supreme Court.
INVESTIGATION The modus operandi, is as explained in one of the orders of the Delhi High Court, is to sue the Defendant company on the basis of an ‘investigator’s report’ outlining the suspicions of the investigator. 31 The investigator takes into consideration all the material facts available to him as well as all the information
29
A corporation shall be deemed to carry on business at its sole or principal office in India or, in respect of any cause of action arising at any place where it has also a subordinate office, at such place. 30 MIPR 2007 (3) 204 31 See generally, Microsoft Corporation & Ors. v. Y. Parthasarathy & Ors. CS(OS) No. 875 of 2011 before the High Court of Delhi
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implied can be collected. The ‘investigator’s report’ is used to establish a prima facie case before the High Court, which if convinced of the same, the Court passes an ex parte interim injunction order restraining the Defendant from infringing the Plaintiff’s copyright.
OBTAINING THE ORDER A John Doe order is obtained without notice on the person to whom it is addressed, because the identity of the person is unknown to the plaintiff at the time of the application for the order. While in Anton Piller orders, the order is in relation to a named defendant. Given that John Doe orders usually contain interim injunctions, which require evidence of urgency, a plaintiff’s tardiness in petitioning the court could result in the order being denied.
EXECUTION OF THE ORDER In the enforcement of this order, the plaintiffs must act with due circumspection. On the service of it, the plaintiffs should be attended by their solicitor, who is an officer of the court. They should give the defendants an opportunity of considering it and of consulting their own solicitor. This applies the principle of natural justice. If the defendants wish to apply to discharge the order as having been improperly obtained, they must be allowed to do so. If the defendants refuse permission to enter or inspect, the plaintiffs must not force their way in. They must accept the refusal, and bring it to the notice of the court afterwards, if need be on application to commit. 32
DISPOSAL OF COUNTERFEITS AFTER MAKING COPIES Where the seized items are documents, unless their ownership is in dispute, the Federal Court will usually order the plaintiff to copy them and return them to their owner as soon as possible. 33 The goods will only be released into the hands of the plaintiff once a final order has been obtained from the court. 34
REVIEW OF EXECUTION The motion for review of an execution of the order must be supported in court by a full report from the supervising solicitor of the execution or executions to which it relates, including occasions on which the identity of the defendant is not ascertained. The report must include a description of all the goods, equipment and records seized, when and from whom they were seized. The most effective and efficient way of providing such, in many cases, will be by photographs coupled with an inventory. 35
COSTS INCURRED Currently, plaintiffs in infringement proceedings recover somewhere between 40 and 80 per cent of their costs as concluded by the Business Software association of Australia.
DAMAGES 32
Anton Piller KG, supra note 3, at 61, Lord Denning M.R. For example, the Anton Piller order in Titan Linkabit Corp. et al. v. S.E.E. Electronic Engineering Inc. (1993), 62 F.T.R. 241, at 243 (F.C.T.D.), MacKay J., was maintained on the understanding that the seized documents were returned to the defendants upon being copied by the plaintiffs’ solicitor. 34 Fila Canada Inc. v. Doe et al. (1996), 114 F.T.R. 155, at 159-60 (F.C.T.D.), Reed J. 35 Id. 33
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In the US, statutory damages per infringement range from $500 to $20 000 in the case of innocent infringement, and up to $100 000 in cases of intentional infringement. 36The Canadian scheme, which commenced on 1 October 1999, allows a plaintiff to elect to receive a single amount for all infringements in the proceedings. The statutory amount is from $500 to $20 000 in the case of intentional infringement, and generally from $200 to $500 in the case of innocent infringement. 37 In cases where the quantum of damages is contested by a defendant, the Trial Division has specifically mentioned that it will determine the quantum on the basis of the evidence before it. The courts have, for example, held that the license fee approach is not always an appropriate way to calculate compensatory damages.38
SHORTCOMINGS OF JOHN DOE AND ANTON PILLER ORDERS
SUPPRESSION OF VITAL FACTS BY THE PLAINTIFF In the cases of Columbia Picture Industries Inc. v. Robinson 39 and Universal Thermo sensors Ltd. v. Hibbing and Others, 40 it had been noted by the English Courts that the balance had swung too much in favour of Plaintiffs who were often suppressing vital facts while procuring Anton Piller orders and that during the execution of the orders the Defendants were not properly bri efed by the Plaintiff’s solicitors as to the extent of the orders because of which the Defendants were consenting to the removal of material which was not even covered by the Order. 41 The Robinson judgment in particular emphasized that Judges had to be exceptionally careful while wording such orders since there was enough evidence that Plaintiffs were abusing the scope of such orders. 42
BIASED INVESTIGATION The investigators, who had filed affidavits to establish a prima facie case for the Plaintiffs, were not “independent” but in fact employees of the law firms who represent the software companies in the law suits.43
SEALING OF HARD-DISKS The Anton Piller orders allowed the Plaintiffs to seal the hard-discs of the computers of the alleged infringer-Defendant which contained the infringing software. In this case, the Court criticized this practice of allowing for the “sealing” of hard -discs since the effect of such an order would be to shut down the entire business of a company which was using pirated software to run an otherwise legitimate
36
Ms Lenaburg, BSAA, Transcript, p. 181. Section 38.1(1), (2) and (5) of the Copyright Act (Canada). 38 Columbia Pictures Industries Inc v Luckins (1996) 34 IPR 504 at 509 per Tamberlin J. 39 [1986] 3 W.L.R. 542. 40 [1992] I W.L.R 840. 41 [1986] 3 W.L.R. 542. 42 Id. 43 CS (OS) No. 2027 of 2009 before the High Court of Delhi. 37
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business establishment.44 In one of the cases, 45 the Court ordered the unsealing of the computers after 15 months; this resulted in the business coming to a grinding halt and losses being sustained.
BLACKMAILING AND CONSIDERABLE RECOVERY AMOUNT The Judge then notes that once computers are sealed and the entire business of the Defendant is brought to a grinding halt, the Defendant companies more often than not succumb to the “blackmailing” tactics of the Plaintiff software company and settle the dispute during negotiations by buying legitimate copies of the Plaintiff’s software and also paying damages for lost profits. 46 The Court recorded a settlement of Rs. 97 Lacs (US $ 200,000 approx.) towards the purchase of software from the Plaintiff and a sum of Rs. 16 Lacs (US $ 16,000 approx.) towards damages. 47
JUNIOR INEXPERIENCED ADVOCATES AS COMMISSIONERS The most active High Court in granting Anton Piller orders, Delhi HC mostly appoints Junior Advocates, and not experienced Advocates as Commissioners since the Delhi High Court rules require only Junior Advocates to be appointed as Commissioners. 48 In Autodesk Inc. v. Mr. Kumar Sam Prahlad,49 the Commissioner seized and sealed the hard-discs of the Defendants despite the order of the Court stating in no uncertain terms that the hard-discs were to be symbolically seized and returned to the Defendant with an undertaking that the same would be produced before Court as required.
FORCEFUL IMPLEMENTATION OF ANTON PILLER ORDERS The Court has no inherent power to forcibly seize its property. If it does so, it invades the private rights of the party. Specific procedure is laid down in the Code for getting the relevant documents or books in Court for the purpose of using them as evidence. 50
WRONGFUL EXECUTION OF ORDER The decision of the Trial Division in Louis Vuitton Malletier S.A. 51 is clear on this point. In that case, the plaintiff failed to effect proper service of a ‘John Doe’ order. As a result, while acknowledging the evidence of the counterfeit nature of the goods seized, the court ordered the plaintiffs to return the seized goods to the infringers and dissolved any injunction against them. In so doing, the court mentioned that “the difficulty is that the prima facie proof of counterfeiting wa s obtained as a result of an unlawful seizure. To ignore an unlawful seizure is to condone it. I decline to do so.”
CONTEMPT PROCEEDINGS AGAINST THE DEFENDANTS
44
Ibid. CS (OS) No. 2403 of 2007 before the High Court of Delhi. 46 Ibid. 47 Autodesk v. Mr. Anish Singhal, CS (OS) No. 2403 of 2007 before the High Court of Delhi. 48 Part B, Rule 2, Chapter 10 Delhi High Court Rules, 1966. (available at: http:// delhihighcourt.nic.in/writereaddata/upload/CourtRules/CourtRuleFile_VS9KZQS0.PDF) 49 CS (OS) No. 2375 of 2007. 50 Padam Sen and Anr. v. The State of U.P, AIR 1961 SC 218 51 Louis Vuitton Malletier S.A. v. Bags O’Fun Inc., [2000] F.C.J. no. 1432 (F.C.T.D.), Pelletier J. 45
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The legal requirements for a finding of contempt were briefly phrased by the Trial Division in Nintendo of America Inc. v. 131865 Canada Inc.: “The standard of proof required for a finding of contempt of court is that a court order must have been breached beyond a reasonable doubt by the party against whom the order was issued. The standard of intention required for breach of the order is knowledge of the reasons for order and contravention of the order. … Direct intention to disobey the order is not required and “it is no defence for a company to show that its officers were unaware of the terms of a court order, or that they failed to realize that they were in breach of the order.” 52 It has been found that sales conducted off the premises of the defendant, after store closing hours, by an employee of the defendant, who took full responsibility for the off-premises sales, nevertheless constituted an act of recidivism punishable by a contempt order.53 In Hugo Boss A.G. v. John Doe, 54the Trial Division issued a show cause order against a corporation operating a flea market which had been added as a defendant to the proceedings. It was found that the corporation aided and abetted other defendants (in the same John Doe proceedings) operating in its flea market in continuing to infringe the plaintiffs’ trade -mark rights. In issuing the order, the court mentioned that while the corporate defendant and its principal operator did not directly infringe an order of the court, it sufficed that they had first-hand knowledge of the injunctions of the court and of the fact that their actions interfered therewith. In Asian Video Movies Wholesaler Inc. v. West End Video Films, 55 the Trial Division issued an order requiring infringers who had been served with a ‘John Doe’ order to appear before it and ‘show cause’ justifying their refusal to grant the plaintiff access to their premises. A plaintiff who wishes to secure a finding of contempt against an uncooperative infringer may need to provide the court with evidence of counterfeiting activities occurring subsequent to the service of the order.
DISPUTED OWNERSHIP The Copyright Act of Australia currently contains in sections 126 – 30 and 131presumptions to assist in proving subsistence and ownership of copyright. Accordingly, subsistence and ownership will be presumed by a court, unless the defendant puts these matters in issue. The presumptions are designed to facilitate proof, but several witnesses suggested that they are of little practical value. It has been submitted that the defendants, without seriously disputing ownership of copyright, will raise it as an issue as an obstructive tactic. 56 The Motion Picture Association (MPA) agreed that the difficulty of proving ownership can encourage infringers to put owners to proof of copyright in the hope that they can defeat the proceedings on some technical defect. 57 Evidence has also suggested that ownership is often so difficult to prove that the threat of infringement proceedings is a hollow one for some defendants. The
52
Nintendo of America Inc. v. 131865 Canada Inc. (1991), 34 C.P.R. (3d) 559, at 562 (F.C.T.D.), Denault J. Ibid. 54 Hugo Boss A.G. v. John Doe (2000), 5 C.P.R. (4th) 432 (F.C.T.D.), Gibson J. 55 Asian Video Movies Wholesaler Inc. v. West End Video Films (1996), 67 C.P.R. (3d) 35(F.C.T.D.), Reed J 56 Business Software Association of Australia (BSAA), Submissions, p. S346. 57 Motion Picture Association (MPA), Submissions, p. S275. 53
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Australian Attorney General’s Department conceded that the existing presumptions provide no real assistance where subsistence and ownership are challenged. 58
SUGGESTIONS FOR IMPROVEMENTS IN IMPLEMENTATION OF JOHN DOE AND ANTON PILLER ORDERS
LIFTING OF CORPORATE VEIL Most copyright infringers are either shell companies, with few or no assets, or impecunious individuals. Copyright owners are unable to recover damages from such defendants, because they declare themselves insolvent or bankrupt. Motion Picture Association referred to one case in which the plaintiff received none of the $38 000 damages awarded or $120 000 legal costs incurred, because the defendant declared himself bankrupt. In the case of corporate infringers, Mattel et al argued that the corporate veil should be lifted in copyright proceedings and that liability should attach to the governing members of an organization. The Committee notes that in other contexts, the corporate veil may be lifted to allow plaintiffs to recover damages against the directors of a company.
APPOINTMENT OF LICENSED ANTON PILLER COMMISSIONERS In the United Kingdom a practice has developed of having licensed Anton Piller officers independent of the plaintiff, attend and supervise the execution of these orders. 59This may be a practice that is worth adopting in India.
POLICE ASSISTANCE In Canada and England, the mandate of the officers is clearly limited to keeping the peace and the Police Officers are strictly warned against assisting the Plaintiff in searching the premises of the Defendant. 60 The Police are required to act as ‘Protectors’ of Peace rather than its ‘Destructors’.
MIRROR COPIES OF HARD-DISKS In the case of Microsoft Corporation v. Arunava Jana, 61 the HC issued an order on allowing the Court appointed Commissioner to only take mirror copies of the hard-disc containing the infringing software without seizing or sealing the sa me. The “mirror copies” were required to be deposited in the Court.
PRESERVATION OF EVIDENCE The Commissioner can be ordered to take an inventory of the pirated software in the presence of the Defendant and record any possible objections after which the C ommissioner’s report would be signed by both the Plaintiff and the Defendant. The Commissioner can instead, also take a back-up copy of the 58
Attorney-General's Department(AGD), Submissions, p. S755 Fila Canada Inc. v. Doe et al. (1996), 114 F.T.R. 155, at 159 (F.C.T.D.), Reed J. 60 Daniel S. Drapeau & Jonathan J. Cullen, Anton Piller orders and the Federal Court of Canada: Everything the practitioner would want to know in 2005 at Para. 5.52 (available at:http://www.ipic.ca/spring/anton_piller_~_drapeau_%26_cullen.pdf) 61 CS (OS) No. 478 of 2011 before the High Court of Delhi. 59
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Defendant’s hard-discs which contains the infringing copies of the software. Once the back-up copies are taken the same can be introduced during the course of the trial and the Court can decide on the basis of these copies.
WITHDRAWING THE PRIVILEGE AGAINST SELF-INCRIMINATION As Justice Wadell pointed out in BPA Industries Ltd v Black, 62 the privilege against self-incrimination could be used to defeat an Anton Piller order. This problem has been solved in the United Kingdom by section 72 of the Supreme Court Act 1981 (UK), which removes the privilege against self-incrimination in civil proceedings for the infringement of intellectual property. The section prevents evidence admitted in civil proceedings from subsequently being used in criminal proceedings.
ALTERNATIVES TO COURT LITIGATION The Arts Law Centre of Australia (ALCA) and the National Indigenous Arts Advocacy Association (NIAAA) reported that in South Australia, local courts are exercising jurisdiction in copyright matters. The local courts sometimes have the power to dispense with formal rules of evidence or have a small claims jurisdiction with simplified procedures. 63 The models of settlement and alternative dispute resolutions and other such non-litigious mechanisms should be canvassed to complete a compensatory result to the infringement suit.
INDIAN SCENARIO AND THE WORK DONE TOWARDS PROTECTION OF IP RIGHTS In India, in case of infringements, the remedies available to the plaintiff are in the form of civil, criminal, administrative and technological remedies.
Civil remedies are in the form of interlocutory or permanent injunctions in which damages can be awarded and ex parte orders in the form of ‘John Doe’ and ‘Anton Piller’ orders are also a common feature. Criminal remedies provide for imprisonment for a period of 6 months to 3 years or fine of Rs. 50,000 to 2 lacs as infringement being a cognizable offence. On second and subsequent conviction, the minimum term of imprisonment has been increased to one year which may extend to three years and minimum fine has increased to Rs. 1 lac which may be extended to Rs. 2 lacs. 64 This order may be coupled with seizure, forfeiture and destruction of infringing goods/ material for placing before the Magistrate. 65
62
(1987) 11 NSWLR 609. See, for example, S. 23B of the Local Courts (Civil Claims) Act 1970 (NSW) and the Magistrates Court (Small Claims Division) Act 1989 (Tas) 64 Section 63A of the Copyright Act, 1957. 65 Section 64 of the Copyright Act, 1957. 63
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Administrative remedies have been provided under the Indian Customs Act, 1962 which deals with import / export of goods including protection of patents, trademarks and copyrights. Restrictions against parallel importation of goods have also been imposed. Technological measures can be provided in the form of holograms, electronic devices, encryption and anti-copy devices.
Thus, the mechanism for effective enforcement entails political will to strictly enforce the law, legal power and willingness to conduct secret raids without notice to the infringer, legal power and willingness to seize all infringing products including machinery and business records, willingness to follow through with quick prosecution of damage awards, willingness to impose deterrent fines and jail terms affecting large manufacturers and organized crime syndicates, legal power and willingness to impose preliminary injunction with severe penalties and legal power to confiscate and destroy infringing products. However, the system is infected by judicial/administrative delays, lack of ‘damages culture’ with no deterrence for infringing conduct, lack of effective border enforcement measures, political interference, corruption, lack of technical expertise, delay in case preparation, delay in commencement of prosecution and so on. But a lot of measures in protection of intellectual property rights have been taken up namely the courts being largely fair and pro active in the cases of infringement, Special IP (cells) being set up in major cities and suo motu raids being carried out. The Code of Civil Procedure has also been amended to ensure expedited trial. Industry specific bodies like the National Association of Software and Services Companies (NASSCOM) with the help Business Software Alliance (BSA) in the area of Software piracy, Indian Performance Rights Society (IPRS) and Public Performance Limited (PPL) in the fields of Sound recording and Performance piracy are also playing an active role as watchdogs protecting the recognized rights of copyright and trademark holders.
CONCLUSION Having analyzed, at length, the nature, application, procedure, safeguards and shortcomings of the ‘John Doe’ and ‘Anton Piller’ orders in the copyright and trademark infringement cases, it leads us to the conclusion that these orders are difficult to be implemented and strict safeguards must be followed while implementing them. The Indian courts are still in their nascent stage and need a strong precedent in the field of copyright and trademark infringement that would establish the law and the rules of implementation, providing a strong backbone and clear understanding of the future course of action.
These orders are recognition that extraordinary problems require extraordinary solutions. 66 The present litigations are a tribute to the brand owner’s commitment to the genuineness of its product but a sad commentary on the blanket censorship by the courts. Though the Indian courts have undertaken activities like anti-piracy drive and Website-blocking, it has to exercise this power with caution. The Court has to
66
Club Monaco Inc. v. Woody World Discounts (1999), 2 C.P.R. (4th) 436 (F.C.T.D.), Pelletier J.
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play a balancing role in protecting the rights of the copyright holders in one hand and the rights of the consumers on the other.
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