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NON-REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOS. 7304-7305    OF 2018 (Arising out of Special Leave Petition (Civil) Nos.17685-86 of 2018)

Diyora and Bhanderi Corporation  through its partner and Ors.         ………Appellants

VERSUS

Sarine Technologies Ltd.                             ..…. Respondent

JUDGMENT

Uday Umesh Lalit, J.

1. Leave granted.

2. Commercial  Trade  Mark  Suit  No.8  of  2017  was  filed  by  the

respondent herein (‘plaintiff’, for short) in the Court of District Judge, Surat

contending  inter alia that it had validly subsisting Copyright in Advisor™

software both in Israel as well as in USA; that it had secured registration in

USA in the 6th version (or version 6.0) of its Advisor™ software bearing

registration   No.TX8-252-522;  that  as  per  International  Copyright  Order,

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1999 this right also extended to India, being a Member Country under the

Berne Copyright Union in like manner as if it was published in India and

that  the  petitioners  (‘defendants’,  for  short)  herein  had  infringed  the

copyright  of  the  Plaintiff  over  Advisor™  software.   According  to  the

plaintiff  said  software,  using  a  three  dimensional  representation  helps  in

analyzing how best a raw precious stone can be cut and polished so that best

quality diamonds and precious stones could finally emerge and thus helps in

deriving maximum advantage. The plaintiff prayed inter alia for permanent

injunction against the defendants in respect of …… “Advisor™ software,

for  which  copyright  subsists  under  common  law  and  also  version  6.0

whereof,  the  code  for  which  also  includes  programming  from  previous

versions, has been registered in the USA copyright No.TX8-252-522”.  The

plaintiff also filed an application for interim injunction (Exh.-5) and prayed

for following relief:-

“(i) An order of ex-parte ad interim injunction be passed in favour  of  the  Plaintiff  and  against  the  defendants,  their affiliates,  subsidiaries,  related  parties,  officers,  directors, representatives,  agents,  distributors,  assigns,  nominees  and customers restraining them from directly or indirectly, jointly or severally,  using  distributing,  selling,  offering  for  sale  any inclusion  scanning  services  that  infringe  the  Plaintiff’s copyright  as  well  as  any  future  machine/device  that incorporates  the  copyrighted  software  of  the  Plaintiff  and infringes  the  copyright  of  the  Plaintiff  in  its  Advisor™

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software, for which copyright subsists under common law and also  version  6.0  whereof,  the  code  for  which  also  includes programming from previous versions, has been registered in the United States of America as Copyright No.TX8-252-522; And be made absolute till final decision of the suit.”

3. The  matter  was  contested  and  the  trial  court  by  its  order  dated

22.09.2017 dismissed the application for interim injunction.  In an appeal

preferred by the plaintiff, the High Court by its order dated 21.12.2017 set

aside the order passed by the trial court and remitted the matter back to the

trial court for fresh consideration.  It was observed by the High Court as

under:-

“[6.1] In any case as observed hereinabove whether the source code  or  the  object  code  of  the  plaintiff’s  software  and  the defendants’ software are the same or not or the defendants have copied  the  source  code  or  the  object  code  of  the  plaintiff’s software or not would go to the root of the matter.  The source code  or  the  object  code  of  the  plaintiff’s  and  defendants’ software are required to be compared by calling upon both of them to provide their respective source code and object code which can be sent to any impartial and independent expert for comparison.   Therefore,  we  are  of  the  opinion  that  without further entering into the merits of the case and /or expressing anything on merits, the matter is required to be remanded to the learned Judge, Commercial Court for deciding the application Exh.5 afresh and after calling upon both, the plaintiff and the defendants to provide their respective source code and object code to the Court so that the same can be sent to any impartial and  independent  expert  for  comparison.   On  the  aforesaid ground alone the impugned order passed by the learned Judge,

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Commercial Court deserves to be quashed and set aside and the matter  is  required  to  be  remanded  to  the  learned  Judge, Commercial  Court  for  deciding  the  application  Exh.5  afresh and after undertaking the exercise as stated hereinabove.

[7.0] In view of the above and for the reasons stated above, present Appeal from Order succeeds.  Impugned order passed below  Exh.5  application  by  the  learned  Judge,  Commercial Court, Vadodara in Commercial Trade Mark Suit No.8/2017 is hereby quashed and set aside and the matter is remanded to the learned Judge,  Commercial  Court,  Vadodara for  deciding the application Exh.5 afresh in accordance with law and on its own merits,  however  while  deciding  the  application  Exh.5,  the learned Judge, Commercial Court to call upon the plaintiff and the  defendants  to  provide  their  respective  source  code  and object code of their respective software to the Court and the Court may send the same to some impartial and independent expert for comparison with the source code and object code of the plaintiff.  The aforesaid exercise shall be completed within a period of 4 weeks from the date of receipt of the present order and/or  the  receipt  of  the  writ  of  the  present  order.   Present Appeal  from  Order  is  allowed  to  the  aforesaid  extent.   No costs.”

The aforesaid order was challenged in this Court by the defendants

but this Court did not find any ground to interfere and the Special Leave

Petition was dismissed on 16.03.2018.

4. While  the  matter  thus  stood  remitted  to  the  trial  court,  following

orders were passed by the trial court:-

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a) On 12.02.2018 a local Commissioner was appointed and both

the parties were directed to provide source code and object code of

their respective software to the local Commissioner.  Paragraph 12 of

the order was as under:-

“12. The Court Commissioner is directed to furnish the source  and object  code  of  defendants’ software  “Work Manager” in sealed cover on 21.02.2018.  Plaintiff is also directed to submit the certified copy of the copyrighted software’s source code and object code in sealed cover on 21.02.2018.”

The parties were also directed to furnish the names of experts

for comparing source code and object code.

b) On  28.02.2018  some  directions  were  passed.   One  such

direction was,

“The plaintiff  is further directed to furnish on affidavit that whatever source code and object code is registered, the same has been furnished to the Court Commissioner.”

  c) On 16.03.2018 the trial court appointed one Mr. Robert “Bob”

Zeidman  whose  name  was  suggested  by  the  plaintiff  as  technical

expert to compare the software of the plaintiff and defendants and “to

report the Court as to whether the source code and object code of the

defendants have infringed the copyright of the plaintiff”.  The order

indicates  that  names  of  three  Institutions  namely  Centre  for

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Development  of  Advanced  Computing  (C-DAC),  Department  of

Computer  Science  and Engineering  Indian  Institute  of  Technology,

Bombay  and  Department  of  Computer  Science  and  Engineering

Indian  Institute  of  Technology,  Madras  were  suggested  by  the

defendants but were objected by the plaintiff on grounds inter alia that

the Advocate for the defendants was associated with these Institutions

and there was an apprehension regarding impartiality, independence

of those Institutions.  This objection was rejected by the trial court

saying that merely because one of the Advocates had got educated

from these Institutions would not mean that these Institutions could be

won over by the defendants.   The trial court however found that the

profiles of the professors of the Institutions which were attached with

the  application,  did  not  reveal  that  they could  conduct  the  task  of

comparison of source code and object code.  The trial court thus found

said Mr. Zeidman to be the most competent person to undertake the

task of comparing the software of source code and object code of the

plaintiff and the defendants.   

5. The order dated 16.03.2018 passed by the trial court appointing said

Mr. Zeidman as an expert was challenged by the defendants by filing Special

Civil  application  No.4468  of  2018  in  the  High  Court  of  Gujarat  at

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Ahmedabad.  One of the objections raised by the defendants was that if their

software were to be shared with third parties, knowingly or unknowingly, the

defendants would face tremendous prejudice and hardship.  The submission

was rejected by the High Court.  It also observed that it was open to the trial

court to appoint any expert available in India or any other foreign expert and

the trial court having found Mr. Zeidman to be the most appropriate person,

such assessment made by the trial court was not erroneous on any count.

The High Court thus dismissed said Special Civil Application by its order

dated 01.05.2018.   

6. After the disposal of the matter by the High Court on 01.05.2018, an

application was preferred by the defendants and one of the prayers was:-

“(d) Direction  be  issued  to  compare  the  source  code  and object code of the defendants’ software with the certified copy of  the  Registered  Advisor  Software  6.0  only,  in  consonance with the order of this Hon’ble Court dated 12.02.2018.”

It was contended that the plaintiff had submitted additional material to

be compared by the expert and that the matter be confined to source code of

software  Advisor  6.0.   This  matter  was  dealt  with  by  the  trial  court  by

passing following direction in its order dated 04.05.2018:-

“Having  considered  the  submissions,  in  these circumstances,  it  is  made clear that  the expert  shall  compare registered object code and source code of the software of the plaintiff  with  the  defendants’  software.   The  other

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material/additional material (which is not in accordance to the orders of the court) produced by the plaintiff in the sealed cover need not to be considered by the expert.  It is made clear that this Court has passed the order for comparison of the source code  and object  code  in  respect  of  registered  version of  the plaintiff.  The orders dated 12.02.2018 and 28.02.2018 passed by this court and order dated 21.10.2017 of the Hon’ble High Court be complied with in letter and spirit.  It is again made clear by the court that at the time of deciding the logistic for comparison of source and object code,  the Court will  decide that  what  material  is  required  to  be  sent  for  comparison  in compliance  of  the  orders.   Further,  keeping  in  view  the confidentiality of source code, the certified copy of the software advisor 6.0 be kept in sealed cover.  The separate order for safe custody of the software will be passed today.”

7. On  07.05.2018,  an  email  was  addressed  by  the  counsel  for  the

defendants to said Mr. Zeidman asking him whether he was willing to visit

India or the software be sent to him to undertake the task of comparing the

software and further as to what would be his professional fees and other

miscellaneous costs.  Various emails have been placed on record to show

that the defendants were in touch with said Mr. Zeidman regarding his visit

and engagement as an expert to undertake the task.   

8. On 01.06.2018 while considering the application filed by the plaintiff

regarding  logistics  how  the  expert  would  carry  out  the  exercise  of

comparison, it was observed by the trial court :-

“However, the outcome of the aforesaid remains that the expert  may compare the source  code and object  code  of  the

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defendants with that of the plaintiffs source code and object in the  Advisor™  software  (all  previous  and  existing)  whether registered or otherwise.”

9. The  aforesaid  order  dated  01.06.2018  was  challenged  by  the

defendants in the High Court by preferring Special Civil  Application No.

9010 of 2018.  The defendants also challenged the validity of the provisions

of  Section  8  of  the  Commercial  Courts,  Commercial  Division  and

Commercial  Appellate  Division  of  High  Courts  Act,  2015.   The  basic

submission of the defendants was that the scope of the matter which was

clearly restricted to comparison of source code and object code in respect of

registered version of the plaintiff as against the source code and object code

of the software of the defendants vide order dated 04.05.2018, was sought to

be expanded by the order dated 01.06.2018.  As against the source code and

object code in respect of registered version of the plaintiff, the comparison

could now be with all previous and existing software whether registered or

otherwise.  The objection was rejected by the High Court on the ground that

while exercising power under Article 227 of the Constitution, the High Court

could not act as a Court of Appeal.  Since no submissions were advanced

regarding validity of the provisions of aforesaid Section 8, the High Court

felt it unnecessary to go into the validity of said provision.  

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10. These orders dated 01.05.2018 and 04.07.2018 passed by the High

Court  have  now  been  called  in  question  by  the  defendants  by  filing

aforementioned  Special  Leave  Petition  Nos.17685-17686  of  2018  which

were filed on 10th July,  2018.  The matter came up before this Court  on

16.07.2018.  The learned Senior Counsel  who appeared on caveat  at that

stage submitted that the expert in question Mr. Zeidman had already arrived

to  conduct  the  comparison  and  that  the  plaintiff  would  be  put  to  great

prejudice  if  the  work  of  comparison  were  to  be  suspended  pending

consideration by this Court.  This Court, therefore, passed following order

on 16.07.2018:

“Issue notice. Let  counter  affidavit  be filed by the respondent  within

two  days.   Rejoinder  affidavit  be  filed  within  three  days thereafter.

In  the  meantime,  status  quo  as  of  today  shall  be maintained by the parties in relation to the subject matter of the case.

We also direct that the entire expenditure of to and fro passage of the expert shall initially be borne by the respondent in the present matter and in case we dismiss the mater,  then the petitioners shall reimburse the expenses entirety for being paid to the respondent.   

List these matters on 24th July, 2018”

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11. The parties having exchanged pleadings the matter was immediately

taken up for hearing. Mr. Mukul Rohatgi, learned Senior Advocate appearing

for the defendants submitted inter alia:

(a) The apprehension expressed regarding impartiality and independence

of  institutions  of  repute  suggested  by  the  defendants  was  completely

uncalled for.  The profile of the concerned professors indicated tremendous

experience of the   gentlemen in question in matters of decoding software

and appropriate comparison;

(b) In matters such as this, an expert should not normally be taken from

outside  the  country  inasmuch  as  various  confidential  materials  and  data

would have to  be shared with such expert  to  enable  him to conduct  the

exercise of comparison.  If at a later point in time such material and data is

found to be in possession of any third parties, it would be impossible to hold

such  a  foreign expert  responsible  and the  processes  of  the  courts  of  the

country would not be able to reach such an expert and grant appropriate

relief.

(c) The matter as regards the scope of comparison having been concluded

by directions issued by the trial court on 4.05.2018   there was no occasion

for the trial court to expand the scope vide order dated 1.06.2018.  

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12. Mr.  Gopal  Jain,  learned  Senior  Advocate  who  appeared  for  the

plaintiff, in reply submitted:

(a) The record  indicated  that  the  appointment  and engagement  of  Mr.

Zeidman as an expert to undertake the task of comparison was accepted and

acquiesced  in  by  the  defendants.   Various  emails  emanating  from  the

defendants were pressed into service in support of this submission.

(b) In any case, the process undertaken by the expert for comparison was

such  that  a  separate  laptop  was  to  be  used  to  make  the  appropriate

comparison.   Such laptop would be  without  any internet  connection  and

would always be in the custody of the local commissioner.  After the day’s

work regarding comparison,  the  entire  material  would  be  erased.   These

precautionary steps would ensure that the data submitted by either of the

parties would not be compromised in any situation.  

(c) The  scope  of  the  matter  was  rightly  extended  inasmuch  as  the

complaint of the plaintiff was not only based on registered copyright but also

under common law and as such it was the specific case of the plaintiff that

the earlier or antecedent versions of version 6.0 were also required to be

compared in order to place complete picture before the Court.

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13. We  have  gone  through  the  entire  record  and  considered  the  rival

submissions.  In our view, two issues arise for consideration:

(I) The  propriety  and  correctness  of  the  order  appointing  said  Mr.

Zeidman as an expert in the mater; and  

(II) Whether the scope of the comparison ought to be restricted to version

6.0 in respect of which the plaintiff has registered copyright.

14. As regards the first submission, we certainly do not approve the nature

of objection which was raised by the plaintiff when names of three reputed

institutions were suggested by the defendants.  These institutions are of great

repute and standing and merely because one of the Advocates had studied in

those institutions was no ground to have any apprehension about impartiality

and integrity of those institutions.   Secondly the professors whose names

were suggested are also individuals of great standing and repute.  They are

experts  in  their  field,  specially  in  computer  software  and  decoding  of

software.  If the idea was only to compare the software,  we see no reason

how  those  experts  could  in  any  way  be  said  to  be  lacking  in  requisite

experience in that behalf.  This is not to suggest that Mr. Zeidman does not

have the requisite experience.  The point is that the other professors were not

lacking in any way in terms of experience and standing.  Be that as it may

since Mr. Zeidman was appointed, the correspondence and emails on record

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suggest  that  such  appointment  was  accepted  by  the  defendants.   The

defendants  were in touch with said Mr.  Zeidman to ensure how best  the

exercise  of  comparison  could  be  undertaken.   The  correspondence  and

emails suggest that the appointment and engagement of said Mr. Zeidman

was not only accepted but the defendants had clearly acquiesced in such

arrangement.  Mr. Gopal Jain, learned Senior Advocate is, therefore, right in

his submission that at this length of time, there would be no reason to upset

the  arrangement.   We,  therefore,  reject  the  submission  of  Mr.  Rohtagi,

learned Senior Advocate and affirm the appointment of Mr. Zeidman as an

expert.  The safety arrangements which have been put in place,  as indicated

by Mr. Jain, learned Senior Advocate do ensure safety and  security of the

data that may be exchanged by the parties in order to facilitate the task of

comparison.  The objection raised by Mr. Rohatgi, learned Senior Advocate

as regards security of the data therefore needs to be rejected.  At this stage, a

clarification is necessary.  The task entrusted to the expert is to compare the

respective softwares and make an appropriate report.  Whether that amounts

to infringement or not is for the Courts to decide.

15. As  regards  the  second  issue,  the  case  that  was  projected  by  the

plaintiff  was  undoubtedly  based  on  the  right  emanating  from  registered

copyright and also under the rights in common law.  But at the interim stage,

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it was not the content and extent of the right under common law which was

gone  into  to  consider  whether  prima  facie  case  was  established  by  the

plaintiff.  The matter went on the aspect of registered copy right and rights

emanating  thereunder.  The trial court, therefore, was justified in restricting

comparison of the source code and object code in respect of the registered

version of the plaintiff vide its order dated 4.05.2018.  That order was never

challenged  by  the  plaintiff.   Having  accepted  that  order,  there  was  no

occasion or reason for the plaintiff to seek expansion of the scope.  The trial

court was in error in expanding the scope of the order by its order dated

1.06.2018.   We therefore,  accept  the  submission of  Mr.  Rohatgi,  learned

Senior  Advocate  on  this  issue  and  direct  that  the  comparison  shall  be

restricted to source code to object code in respect of registered version of the

plaintiff.

16. We now come to the last aspect which was dealt with in the order of

this Court on 16.07.2018.  In terms of said order which was passed at the

instance of the defendants, the entire expenditure of to and fro passage of the

expert would be reimbursed by the defendants to the plaintiff in case the

challenge  were  to  fail.  However,  out  of  two issues  which  arose  for  our

consideration, we have accepted the submission of the defendants as regards

second issue.  We, therefore, direct the plaintiff to indicate the sum that it

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had expended for to and fro passage of the expert within 3 days from the

date of this Judgment and one half of that amount shall be made over by the

defendants to the plaintiff within 7 days thereafter.

17. We make it clear that we have not gone into the factual controversy in

the matter and merits of the case shall be gone into uninfluenced by any

observations in this Judgment or in the Judgments under appeal.

18. With these observations present appeals stand disposed of.  No costs,

apart from what has been indicated in the preceding paragraph.

………………………J. (Abhay Manohar Sapre)

………………..……..J. (Uday Umesh Lalit)

New Delhi, July 30, 2018