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Diyora and Bhanderi Corporation v. Sarine Technologies Ltd.

Civil Appeal · 2018 INSC 650Decided 30 Jul 2018
Civil Appeal Nos. 7304-7305 of 2018
Justice Abhay Manohar Sapre · Justice Uday Umesh Lalit

Background

Sarine Technologies sued Diyora and Bhanderi Corporation in a Commercial Court at Surat, alleging that the defendants had infringed its copyright in "Advisor" software (used to analyze how best to cut and polish diamonds), relying on both a US copyright registration for version 6.0 and common-law copyright rights. After the trial court initially refused an interim injunction, the Gujarat High Court remanded the matter for the source code/object code of both parties' software to be compared by an independent expert. Disputes then arose over who should be appointed as that expert and whether the comparison should be limited to the registered version 6.0 or extend to earlier versions as well, leading to these appeals before the Supreme Court.

Decision Breakdown

The Supreme Court addressed two specific issues: first, whether the appointment of the proposed expert, Mr. Zeidman, was proper, and second, whether the scope of comparison should be restricted to the registered version 6.0. On the first issue, the Court rejected the defendants' objection to the expert, noting the appointment had effectively been accepted and acted upon by the defendants through correspondence, and clarified that the expert's role was only to compare the software technically, whether that amounted to infringement remained for the courts to decide. On the second issue, the Court agreed with the defendants that since the trial court's own earlier order (never challenged by the plaintiff) had already restricted comparison to the registered version, the scope should not have been expanded to cover earlier versions, and it set aside the trial court's order widening the comparison. The Court made clear it had not examined the underlying merits of the infringement dispute, which would proceed uninfluenced by this ruling, and disposed of the appeals with a direction on sharing the expert's travel costs.

Lesson Learnt

In intellectual-property disputes involving technical comparison (such as software source code), courts will police the fairness and scope of the expert-comparison process itself, including who is appointed and what exactly they compare, without prejudging whether infringement actually occurred, which remains a separate question for the trial.

Official source (sci.gov.in)View Judgment (PDF)

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