One of my clients recently had a case which I am explaining below and if you are stuck in such similar situation, here is what to do.
Note: Due to attorney-client privilege, I cannot disclose complete case details or identify the actual parties involved. However, I am sharing the essential facts and legal approach so that if you find yourself in a similar situation, you can understand the available solutions and legal remedies.
TL;DR: Receiving compliance emails or calls from CorelDRAW representatives about unlicensed software is common, but these are typically pressure marketing tactics, not immediate legal threats. Under Indian law, copyright infringement cases involve complex procedures and high thresholds for court action. The best step is to consult a lawyer experienced in IP matters before engaging with the compliance team or paying any demand.
Key Facts of the Case
- A small business owner in Indore received emails and calls from a person calling himself Ashish Vishwakarma, claiming to be from CorelDRAW's compliance team.
- The compliance team alleged unlicensed use of CorelDRAW software was detected on one device in the business.
- The business owner's employee may have installed a pirated copy on a company laptop, but the owner claimed he could not afford the Rs. 1,09,000 license fee given a monthly profit of Rs. 20,000-30,000.
- Multiple compliance emails followed, demanding purchase of a valid license to avoid legal action.
- The business owner contacted others who reported similar experiences, describing it as a "pressure marketing technique" rather than a genuine legal process.
- The office of Advocate Sudhir Rao was approached after initial self-help efforts failed, and the specialized handling led to a swift resolution without any payment or court proceedings.
The Direct Legal Answer
Let's address the two core questions from the post head-on.
Is this a genuine legal threat or a marketing tactic?
Make no mistake, it's almost always a pressure marketing tactic. Companies like CorelDRAW often outsource compliance to third parties who use aggressive emails and calls to scare small businesses into buying licenses. The goal is revenue, not litigation. A genuine legal action would involve a formal court notice or an Anton Piller order (a search-and-seizure court order), not just emails from a "compliance" team.
Can a small business be sued for using a pirated copy installed by an employee?
Legally, yes. Under the Copyright Act, using unlicensed software is copyright infringement. However, the company or its compliance team would need to prove the infringement in court. This is expensive, time-consuming, and rarely pursued against small shops with limited profits. Courts also consider whether the business owner knowingly installed the pirated copy or if an employee acted independently. A good lawyer can argue that the business was not the wilful infringer.
Advice in Such Cases
Consult with Lawyer: The very basic and important step to start is talk to Lawyer / advocate. You should not hesitate in paying his consultation fee i.e. might be in range of Rs. 10,000 to 50,000 depends case to case. He is helping you in this situation to come out. He is expert in the domain and can help you explain the procedure which you might have never explored. A good lawyer can get the issues resolved much faster than you think.
Here's another tip: Do not engage directly with the compliance team beyond acknowledging receipt of their communication. Anything you say can be used against you. Instead, have your lawyer draft a formal response stating you are verifying the claim and will respond legally if needed. This often stops the harassment.
And one more thing. This category of case — software compliance and copyright infringement — involves nuanced procedural and evidentiary strategies that a general practitioner may not be fully familiar with. Engaging an advocate who regularly handles such matters typically leads to faster and better outcomes. They know how to spot the bluff from the real threat.
Applicable Sections of Law
This is a civil case concerning copyright infringement. The primary law is the Copyright Act, 1957. Specific sections include:
- Section 14 of the Copyright Act: Defines the exclusive rights of a copyright owner, including the right to reproduce, distribute, and sell copies of the software.
- Section 51 of the Copyright Act: Defines what constitutes copyright infringement, including using unlicensed copies.
- Section 55 of the Copyright Act: Provides for civil remedies for infringement, including injunctions, damages, and accounts of profits.
- Section 63 of the Copyright Act: Criminalizes copyright infringement with imprisonment and fines, but criminal action is rare in software compliance matters and typically requires police investigation.
The Indian Contract Act, 1872 is also relevant, as software licenses are contracts.
Punishment and Penalties
Since this is a civil compliance matter, the immediate "penalty" is the demand to purchase a license. If legal action proceeds, civil remedies under the Copyright Act can include:
- An injunction restraining further use of the software.
- Damages for infringement (which can be substantial if proven willful).
- An order for accounts of profits (handing over profits made using the unlicensed software).
Criminal penalties under Section 63 are rare in these scenarios but include imprisonment up to three years and a fine. The compliance team's threats of "legal action" almost always refer to civil proceedings, which are expensive for the copyright holder to pursue against a small business.
Jurisdiction — Where to File the Case
If software compliance escalates to litigation, jurisdiction lies with the civil court (District Court or High Court) having territorial jurisdiction where the infringement occurred or where the defendant resides. Copyright suits can also be filed in the High Court under its original jurisdiction. For criminal complaints, the police station with jurisdiction over the business location would handle the investigation. Jurisdiction matters because filing in the wrong court means the case will be dismissed, wasting time and money.
Limitation Period
The limitation period for filing a civil suit for copyright infringement is three years from the date the infringement is discovered or could have been discovered with reasonable diligence, as per the Limitation Act, 1963. For a compliance demand, the clock starts ticking from the date of the alleged detection. Missing this limitation can be fatal to the copyright owner's case, which is why they send compliance emails — to preserve their rights.
Interim Reliefs Available
In a copyright infringement suit, the copyright owner can seek injunctive relief under Order 39 of the Code of Civil Procedure, 1908 and the Specific Relief Act, 1963. This includes:
- Temporary injunctions: To immediately stop the defendant from using the software until the final decision.
- Anton Piller orders: (Similar to a search warrant) To enter the defendant's premises and seize evidence of unlicensed software. This is extreme and rarely granted in small business cases.
- Status quo orders: To maintain the current position pending trial.
These interim reliefs are powerful tools for copyright holders but require strong prima facie evidence and substantial court fees, making them unlikely for a shop with monthly profits of Rs. 20,000-30,000.
If You Are the Victim
If you are the business owner being targeted by compliance demands, here is what to do:
- Do not ignore the emails or calls, but do not pay anything immediately.
- Document every communication — save emails, record call details (with caller's consent if possible).
- Do not admit to using pirated software in any response.
- Consult a lawyer experienced in intellectual property matters before responding.
- Consider whether the alleged infringement actually occurred — check your systems and employee usage.
Documents You Must Keep Ready
- All compliance emails and written communication from the compliance team.
- Details of any phone calls, including caller ID, timestamps, and notes of what was said.
- Proof of any genuine software licenses you may already hold.
- Identity proof (Aadhaar, PAN of the business owner).
- Business registration documents (GST registration, shop licence, etc.).
- Employee records showing who used the laptop where the alleged pirated copy was detected.
What Evidence Is Required?
For a copyright infringement case, evidence must establish:
- Primary evidence: The unlicensed software found on the device (screen recordings, system logs, evidence from the compliance team's detection system).
- Secondary evidence: Communications from the compliance team, response from the business, and bank records of any past software purchases.
- Witness testimony: Employees who used the laptop or installed the software.
- License agreements: Original software licenses if any were purchased.
- System logs: Confirming the installation date and how the software was obtained.
Primary evidence is the actual software. Secondary evidence supports it.
How Courts Typically Approach Such Cases
Courts view software compliance cases cautiously, especially when the defendant is a small business. They balance the copyright holder's rights against the practical realities of small enterprises. Courts often require strong evidence of willful infringement before granting injunctions or damages. In cases where an employee acted without the owner's knowledge, courts are more sympathetic to the business. The court's approach is to encourage settlement first, often through mediation, and to award costs only after a full trial on merits.
Timeline of Legal Process
If litigation proceeds, the timeline generally looks like this:
- Notice to comply: The compliance team sends demands (could take days to weeks).
- Plaint and Summons: If suit is filed, the court issues summons to the business (1-2 months after filing).
- Written Statement: The business owner must file their defence (30 days, extendable up to 90 days).
- Issues and Evidence: The court frames legal issues, and parties submit evidence (6-12 months).
- Arguments and Judgment: Final arguments and judgment (3-6 months after evidence).
- Execution: If the copyright holder wins, they may seek execution of the decree (damages/injunction) — a separate process.
Total duration for a contested case: 1-3 years. Most compliance matters are settled much earlier.
Understanding the Costs
The total cost of a matter like this varies significantly from one case to the next — it depends on the complexity of the dispute, the forum involved, the number of hearings, and the specific facts of your situation. There is no single fixed figure that applies to everyone.
A professional advocate can give you an accurate estimate only after reviewing all your facts and documents in a consultation.
Can the Matter Be Settled Out of Court?
Yes, absolutely. In fact, settlement is the most common outcome. The copyright holder's compliance team is typically open to settling for the cost of a valid license, sometimes with a discount. Mediation or direct negotiation between lawyers can resolve the issue without court proceedings. The matter can also be referred to Lok Adalat if pending in court. Settlement is advisable because it avoids the expense and stress of litigation, and the business gets a genuine license. However, the business should never settle for a price that is clearly inflated or for multiple licenses if only one was detected.
Common Mistakes People Make
- Ignoring compliance emails entirely, leading to escalation to litigation.
- Communicating directly with the compliance team without a lawyer, which can result in unintentional admissions.
- Destroying evidence (e.g., uninstalling the software without documentation), which can harm the defence.
- Paying the demanded amount immediately without verifying the claim or the compliance team's authority.
- Engaging a lawyer who does not regularly handle intellectual property or software compliance cases — domain-specific experience directly affects procedural strategy and the ability to negotiate favourable settlements.
- Posting about the matter on social media, which can be used as evidence against the business in court.
FAQs People Normally Have
Is it mandatory to comply with the compliance team's demand?
No. It is not a court order; it is a commercial demand. You have the right to verify the claim, consult a lawyer, and decide on the best course of action.
Can I be arrested for using pirated CorelDRAW?
Arrest is extremely unlikely in a software compliance matter. Criminal action requires a police investigation and court order, which rarely happens for small businesses. The threat of arrest is almost always a scare tactic.
What if the employee installed the pirated software without my knowledge?
This is a valid defence. Under copyright law, you may argue that you were not the wilful infringer. A lawyer can help prove you took reasonable steps to prevent infringement.
How do I verify if the compliance team is genuine?
Ask for their company registration number, GST details, and a written notice on official letterhead. Independently check CorelDRAW's official website for anti-piracy contact details. Do not rely on email addresses or phone numbers given in the demands.
What happens if I simply delete the software?
Deleting the software may stop the infringement going forward, but it does not absolve liability for the past period during which you used it without a license. The compliance team can still sue for damages for that period.
This article is general legal information, not legal advice. Consult a qualified advocate about your specific situation.
Advocate Sudhir Rao, Supreme Court of India
Facing a similar matter? Speak to a Delhi criminal defence lawyer — Advocate Sudhir Rao appears in bail, trial and appellate matters before the Delhi District Courts, the Delhi High Court and the Supreme Court of India.