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of <h1>Court reinstates interim injunction in favor of Pine Labs against Gemalto for copyright infringement</h1> <h3>Pine Labs Pvt. Ltd Versus Gemalto Terminals India Pvt. Ltd. and Ors.</h3> The court reinstated the interim injunction in favor of Pine Labs, restraining Gemalto from infringing Pine Labs' copyright in the software known as ... - Issues Involved:1. Ownership and assignment of copyright in software developed by Pine Labs for Gemalto.2. Applicability of Section 19(5) and (6) of the Copyright Act, 1957.3. Interpretation of Clause 7 of the Master Agreement for Development Services (MSA).4. Balance of convenience and irreparable injury in granting or vacating the interim injunction.Issue-wise Detailed Analysis:1. Ownership and Assignment of Copyright:The primary issue revolves around the ownership and assignment of the copyright in the software developed by Pine Labs for Gemalto. Pine Labs claimed ownership of the software developed for the IOCL Fleet Card Program, asserting that the assignment of copyright was limited to five years as per Section 19(5) of the Copyright Act. The court noted that Pine Labs was engaged as an independent contractor, making the agreement a contract for service. The court referred to Section 17 of the Copyright Act, which states that in the case of a contract for employment, the ownership vests with the employee unless there is an agreement to the contrary. The court found that the intention of the parties, as reflected in the MSA and other communications, indicated that the copyright was assigned to Gemalto.2. Applicability of Section 19(5) and (6) of the Copyright Act:Pine Labs argued that the assignment of copyright was limited to five years and within the territorial limits of India due to the operation of Section 19(5) and (6) of the Copyright Act. The court examined the provisions of Section 19, which state that if the period of assignment is not specified, it shall be deemed to be five years, and if the territorial extent is not specified, it shall be presumed to extend within India. The court concluded that since the MSA did not specify the duration or territorial extent of the assignment, the provisions of Section 19(5) and (6) were applicable, limiting the assignment to five years and within India.3. Interpretation of Clause 7 of the MSA:Clause 7.1 of the MSA was a focal point of interpretation. Pine Labs contended that the clause assigned the copyright in presenti, while Gemalto argued that it was an agreement to assign. The court analyzed the language of Clause 7.1, which stated that 'Axalto shall be entitled to all property, copyright, and other intellectual property rights in the Project Materials which Pine Labs as beneficial owner assigns to Axalto.' The court concluded that the clause indicated a present assignment of copyright. However, the court also considered Clause 7.2, which required Pine Labs to sign necessary documents to enable Gemalto to obtain, defend, and enforce its rights, suggesting that further steps were required to complete the assignment.4. Balance of Convenience and Irreparable Injury:The court applied the threefold approach from Dalpat Kumar v. Prahlad Singh, considering whether Pine Labs proved a prima facie case, where the balance of convenience lay, and whether denial of relief would result in irreparable injury. The court found that Pine Labs had established a prima facie case, as the MSA appeared to be an assignment in presenti. The balance of convenience favored Pine Labs, as allowing Gemalto to continue using the software would cause more inconvenience and irreparable loss to Pine Labs. The court also noted that Pine Labs had calculated its loss at Rs. 20,00,000, which did not fade the element of irreparability.Conclusion:The court set aside the impugned order of the learned Single Judge, reinstating the interim injunction in favor of Pine Labs. The injunction restrained Gemalto from infringing Pine Labs' copyright in the software known as Version 1.03 for the IOCL Fleet Card Program. The court clarified that the interim order only applied to Version 1.03 and did not affect the relationship concerning subsequent versions of the software. The appeal was allowed, and the interim order dated 17th December 2009 was directed to operate during the pendency of the suit.
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