BSA’s response on Spicy IP – in perspective

So the BSA actually responded to this scathing anonymous post on Spicy IP that offers rare insights into the way software piracy raids are conducted in India.
This response by the BSA is unprecedented, in that one has grown accustomed over years to being fed only trite, patently manufactured, always staggering figures of ‘piracy’ from the BSA stables. This attempt at conversation and legitimation is new.

In Hyderabadi there’s a saying that I’m fond of – Jiski phati chaddi hai, uski beizzati nai hoti – when you already have a torn “chaddi” it’s impossible to embarass you (as opposed to when your intact chaddi rips in public). One had grown to imagine the BSA as this imperious being with a torn chaddi and a tough hide that didn’t seem to care that nobody cared about its ‘fake figures’. Evidently, we are mistaken. Seems the BSA doesn’t like that it’s being called a bully-boy. Who knew.

Gratituous sarcasm apart (I couldnt resist!), I want to pick up on some of the elements of this response:

1. The market for market studies is always bullish
2. The fact is.
3. The limits of credulity
4. Search and Seize
1. Quo Warranto?
2. “Investigation”
3. Criminal Investigation
5. Issues of Academics and Research

1) The market for market studies is always bullish.

“Independent studies conducted by internationally reputable research organizations have found unequivocally that PC software piracy results in significant damage to the domestic economy through negative impact on a nation’s GDP, jobs and tax revenues to the government. It is in this regard that we wish to present a broader and more balanced perspective to the discussion chain below.”

I’m not going to make a refreshingly original points here by saying the following:

• The BSA has, for years funded the IDC to cook up its figures. These no more count as ‘independent’ than if Xinhua declared the Chinese press to be free and open.
• If any of these “studies” has disclosed a methodology other than idle speculation I am yet to see it. By ‘methodology’ I mean a means to discover truth (as opposed to a means to cook up lies to legitimate one’s position).
• It appears evident that the BSA itself doesnt attach too much credulity to the details of its figures. A regular component of their piracy statistics have been grand promises of increased employment, foreign investment and taxation revenues in exchange for reduced piracy levels. Thus, in 2003, a 10% reduction in piracy could earn India 50,000 new jobs and added investment of $2.1 billion in the economy. By 2005 this estimate had doubled – now a 10% reduction in piracy would add no fewer than 115,847 new jobs, $5.9 bn to the economy and $386 million in taxation revenues. This appears to have been, even within the optimistic BSA-IDC camp, an ambitious exaggeration and in 2008 the BSA-IDC were more circumspect. A 10% reduction in piracy would now only add a paltry 44,000 jobs, lead to $3.1 bn in added investment and only increase taxation revenue by $208 million. A far cry from the dizzying days of 115,847 jobs and $386 taxation revenues.
• I have already blogged previously on the deceit and the lies behind the claim of enhanced taxation revenues in India due to reduction in software piracy. You can also read about it on Rediff

2) The fact is.

The fact is, the software industry in India is one of the leading lights in the economy and has benefited from protection of software, including in international markets.

• The fact is also that the software industry has been the most pampered schoolboys of the Indian economy for over a decade and has benefitted from inter alia, heavily subsidised rates of land and land purchase rebates, 10 year tax holidays, exemption from labour laws, power subsidies and many other state-specific concessions that would cumulatively add up to many thousands of crores of rupees of public money.
• Also, India’s big IT miracle has ridden on the back of its being a favoured destination for “body shopping” in software. So the Microsofts, Adobes etc outsource their development to India and the finished product is always owned by the parent company. “Protection of Indian software” is like saying “Protection of the Indian Moon Rocket”. The category of the signified is empty.
• Third, outside the elite preserves of the Microsoft/Adobe/Autodesk technoparks there is a different more quotidian IT miracle of “cottage IT Industries” consisting of assemblers of cheap software, basement cyber cafes, garage software development and web-services firms (according to one study this comprises almost 80% of the IT industry), neighbourhood schools and colleges with computer labs humming with pirated software installed. If India is the favourite recruiting ground for ‘coolie-techs‘ by the big ITs, this is largely because of the unacknowledged success of these cottage IT industries in proliferating IT across the country on a scale the Microsofts of this world could never have imagined or achieved by themselves. Show me an Indian born Microsoft employee who has never used pirated software and I’ll show you a liar.
• All of the above to show that the BSA’s insinuation that the big software industry has engendered an economic miracle all on its own is as disingenious, as fake as its cry of “115,847 jobs and $386 taxation revenues”.

3) The limits of credulity

Knowingly breaking the criminal and/or civil laws of a country is a serious matter with potentially unpalatable consequences. To spin the consequences of one’s own illegal acts and point the finger at the software industry and the courts is approaching the very limits of credulity.

So say the experts in the business of breaching credulity. As I’ve mentioned before, this is an industry which obviously does not recognize “tax” as a law that must be followed. I wonder,somewhat idly, if promises made of additional USD 200 million in revenue, while siphoning off twice that amount to the developed world through DTAAs does not strain credulity. Incidentally, under the Indian Contract Act, a promise made without the intention of fulfilling it goes by a rather charming name – Fraud.

On a more serious note, BSA’s response typically skirts the question of the affordability of software. A simple comparative GDP table will demonstrate that selling Microsoft Windows Vista (Home Premium) in India for $226 has the same effect as selling it in the US for USD 10070. With IT having become one of the new passphrases for access to economic well-being, high software prices have the effect of determining who will share spoils from this new economy and who may be barred entry at the threshold. The stakes of not knowing how to use M$ Office or Tally are almost too enormous for India’s vast underclass of educated youth. For them, piracy is a too minor a risk compared to the hazard of being, once again, excluded from the means of economic self-actualization. Access to software is more than just the power to fiddle with sophisticated gadgetry, it is access to the nuts and bolts of the new economy itself.

This doesn’t affect the criminality argument that the BSA parrots with its Animal Farm simplicity  – Breaking law bad. Following law good.

4) Search and Seize

“Out of 100s of cases filed over the last 10-15 years, there has not been a single software anti-piracy case where an incident of abuse of the court order has been brought to courts attention and courts have held the plaintiffs liable.”

As this statement rather alarmingly reveals, the practice of appointing Local Commissioners to conduct investigations in piracy cases – so-called Anton Pillar orders – has become quite common in the Delhi High Court. Most recently a Division Bench of two Justice Manmohans issued guidelines governing the appointment of Local Commissioners in Autodesk Inc Vs. AVT Shankardass. Divya Subramanian has an excellent article reviewing this decision, so I am not going to dwell on it in this post.

I want to confine my comments to an exploration of a theme that the Anonymous poster at Spicy IP hinted at – that in this case, the court order itself might constitute the abuse.

• §4.1 Quo Warranto?

Section 75 of the Code of Civil Procedure (CPC) empowers a Civil Court to issue a ‘Commission’ in fit cases-

(a) to examine any person (who is sick or infirm);
(b) to make a local investigation;
(c) to examine or adjust accounts; or
(d) to make a partition;
(e) to hold a scientific, technical, or expert investigation;
(f) to conduct sale of property which is subject to speedy and natural decay and which is in the custody of the Court pending the determination of the suit;
(g) to perform any ministerial act.

Rule 9 of Order XXVI of the CPC expands on the powers of a Civil Court to appoint commissions for ‘local investigations’. Accordingly:

In any suit in which the Court deems a local investigation to be requisite or proper for the purpose of elucidating any matter in dispute, or of ascertaining the market-value of any property, or the amount of any mesne profits or damages or annual net profits, the Court may issue a commission to such person as it thinks fit directing him to make such investigation and to report thereon to the Court:

Provided that, where the State Government has made rules as to the persons to whom such commission shall be issued, the Court shall be bound by such rules.

The powers under this rule are frequently invoked by plaintiffs seeking Anton Pillar orders (for instance, the application of the plaintiffs in Autodesk vs.Shankerdass). The adjective “local” qualifies investigation so that Order XXVI Rule 9 does not empower the civil court to establish its own investigative apparatus parallelling the Police. Thus, on the face of it, with due respect to the Delhi High Court, this provision can only be activated when investigations are sought to be conducted outside the jurisdiction of the court appointing the commission. This is fortified by the proviso which makes the Commission subject to the local laws of the State within which the investigation is sought to be carried out.

(Another alternative rule that the BSA response alludes to is the power of the court to appoint Commissions for ’scientific investigation’ – a power set out in Rule 10A of Order XXVI.  However, the search and seizure contemplated in these cases of software piracy can hardly be regarded as scientific investigations unless one regards software piracy and blood tests as equal candidates of ’scientific investigation’.)

• §4.2Investigation?

Even if we concede the statutory powers of a civil court to issue commissions for software piracy raids, it is still unclear what kind of an entity this Commission is and what it is empowered to do. Is it empowered to act in the sense of a Tribunal – to only admit, record evidence, examine witnesses etc – or in the sense of an active investigative raid party as in Income Tax cases?

Rules 16, 16A and 17 of Order XXVI suggest strong grounds to presume the former avatar – that the Commission is exercising a judicial function and not a police function.

Rule 16 of Order XXVI lays down the power of commissioners

16. Powers of Commissioners
Any Commissioner appointed under this Order may, unless otherwise directed by the order of appointment,-
(a) examine the parties themselves and any witness whom they or any of them may produce, and any other person whom the Commissioner thinks proper to call upon to give evidence in the matter referred to him;
(b) call for and examine documents and other things relevant to the subject of inquiry;
(c) at any reasonable time enter upon or into any land or building mentioned in the order.

This suggests an entity more akin to a Tribunal than a police investigative party. This conclusion is fortified if one reads Rules 16A and 17.

16A. Questions objected to before the Commissioner


(1) Where any question put to a witness is objected to by a party or his pleader in proceedings before a Commissioner appointed under this Order, the Commissioner shall take down the question, the answer, the objections and the name of the party or, as the case may be, the pleader so objecting:

Provided that the Commissioner shall not take down the answer to a question which is objected to on the ground of privilege but may continue with the examination of the witness, leaving the party to get the question of privilege decided by the Court, and, where the Court decides that there is no question of privilege, the witness may be recalled by the Commissioner and examined by him or the witness may be examined by the Court with regard to the question which was objected to on the gtound of privilege.

(2) No answer taken down under sub-rule (1) shall be read was evidence in the suit except by the order of the Court.]

This suggests that the Commission is meant to be an inquisitorial body and that the defendant has the right to legal representation throughout the process.

Rule 17 offers the strongest evidence that the Commission cannot act as a raid party. This rule clothes the Commission with the powers of a civil court – thus making it a Court.

17. Attendance and examination of witnesses before Commissioner
(1) The provisions of this Code relating to the summoning, attendance and examination of witnesses, and to the remuneration of, and penalties to be imposed upon, witnesses, shall apply to persons required to give evidence or to produce documents under this Order whether the commission in execution of which they are so required has been issued by a Court situate within or by a Court situate beyond the limits of ¹[India], and for the purposes of this rule the Commissioner shall be deemed to be a Civil Court:

When one is empowered to act as a Civil Court, in fact deemed to be a civil court, is there not a corollary obligation, a duty to function as a court?

If a Commissioner lands up on my doorstep and insists on conducting a raid instead of examining witnesses, can I lawfully resist him (if necessary through the use of physical force) on the ground that he was acting in excess of his powers?

• §4.2.2 – Criminal Investigation

The Copyright Act offers the plaintiff recourse to a criminal investigatory apparatus if he/she so chooses. Since the 1984 Amendment to the Copyright Act, police officers of  the rank of a sub inspector and above may, if they are “satisfied” that an offence of infringement is being or is likely to be committed seize without warrant infringing copies and produce them before a magistrate.
I know this is a dangerous path to tread – surely one cannot be advocating police raids in order to resist civil raids. However, it does beg the question – why employ a civil apparatus to do the same thing that the criminal enforcement machinery can accomplish with deadlier precision? And if a criminal investigative apparatus exists to do an identical job, is the civil court justified in inventing its own investigative machinery. Is this not tantamount to an intrusion on police functions by the judiciary?

The process of search and seizure by the police is governed by various provisions of the Code of Criminal Procedure which strike a balance between the need to obtain evidence to try offences and the preservation of the sanctity of the domestic sphere from state intrusion. In fact it is these safeguards which prevent the powers of search and seizure from being violative of our Fundamental Rights under Articles 14, 19 and 21. In Pooran Mal v. Director of Inspection of Income Tax the power of Income Tax officials to conduct raids was assailed on the grounds of being violative of the the freedom to acquire and hold property (erstwhile Article 19 (1)(f)) and to carry on a trade or business (Art. 19(1)(g)) of the Constitution. Further, these procedures were attacked as arbitrary and hence violative of Article 14 of the constitution. The Supreme Court held that these “temporary incursions” were “reasonable restrictions” on the Article 19 freedoms since they were governed by statutory safeguards contained in the Code of Criminal Procedure. The fact that ample safeguards existed in both the Cr.PC and the Income Tax Act also negatived the suggestion of arbitrariness,thus saving the search and seizure powers under the IT Act from being struck down as unconsitutional.

As a broad proposition, it can be stated that if the safeguards while carrying out search and seizure are generally on the lines adopted by the Criminal Procedure Code they would be regarded as adequate and render the temporary restrictions imposed by these measures as reasonable. On detailed examination of the provisions .. it is clear that the Safeguards are adequate to render the provisions of search and seizure as less onerous and restrictive as is possible under the circumstances. The provisions, therefore, relating to search and seizure in Sec. 132 and Rule 112 cannot be regarded as violative of Arts. 19(1)(f) and (g).

We are, therefore, of opinion that safeguards provided in S. 165 also apply to searches made under sub-s. (2). These safeguards are
(i) the empowered officer must have reasonable grounds for believing that anything necessary for the purpose of recovery of tax may be found in any place within his jurisdiction
(ii) he must be of the opinion that such thing cannot be otherwise got without undue delay,
(iii) he must record in writing the grounds of his belief, and
(iv) he must specify in such writing so far as possible the thing for which search is to be
made,. After he has done these things, he can make the search.

These safeguards, .. also clearly show that the power to search .. is not arbitrary. In view of these safeguards and other safeguards provided in Chapter VII of the Code of Criminal Procedure, which also apply .. we can see no reason to hold that the restriction, if any, on the right to hold property and to carry on trade, by the search provided in sub-s. (2) is not a reasonable restriction keeping in view the object of the search, namely, prevention of evasion of tax.
The object of the enquiry .. is to reduce the, inconvenience to the assessee as much as possible so that within a reasonable time what is estimated due to the Government may be retained and what should be returned to the assessee may be immediately returned to him. Even with regard to the, books of account and documents seized, their return is guaranteed after a reasonable time. In the meantime the person from whose custody they are seized is permitted to make copies and take extracts.

I’ve included this lengthy quote to demonstrate the extraordinary legitimation test that something as fundamental to state governance – taxation raids – have to undergo before they are declared constitutionally permissible. It is doubtful that court sanctioned software piracy raids – severe transgressions on the fundamental freedoms of citizens for the purpose of securing private rights of litigants – would stand up to this test of reasonableness. Unfortunately, the higher judiciary in India has seldom insisted on the rigorous application of its own Constitutional standards to its actions.

5) Issues of Academics and Research

“the author has chosen to remain anonymous, calling into question the motivation of the author. This practice of anonymity should be discouraged in issues of academics and research.”

But secrecy, espionage and ex-parte orders are ok in the realm of business – real life. I’m wondering if in the interests of “academics and research”, the author of the BSA response would care to identify himself/herself and the law firm they represent. (Likely suspects: someone from SriKrishna Associates?). As an academic and a researcher I am extremely interested in how much they get paid per raid. And can I please have a copy of your extortion settlement agreements? In the interests of research. Hiding behind the BSA mask of course calls into question motives..

I’m delighted by this response by the BSA – I think it is demonstrative of the extent to which Spicy IP has managed to carve out a space for public debate on matters IP in India. As usual I’m all awe and admiration. :)

Fair dealing and the right to reproduce (articles)

I’m still on my “fair-dealing” hobby horse. Earlier last week, in my post relating to the Mint Legal notice, I had rather hastily admitted that Copyright law might not expressly permit the reproduction of articles in their entirety. Now, I’m not so certain.

1. Firstly, there’s the express language of Section 52(1)(m) of the Copyright Act which reads:
   

   “(m) the reproduction in a newspaper, magazine or other periodical of an article on current economic, political, social or religious topics, unless the author of such article has expressly reserved to himself the right of such reproduction;”

   The clause creates a blanket presumption that all newspapers, magazines (including online) and periodicals can reproduce in entirety articles on “current political, social or religious topics” . This is subject to the author expressly reserving to himself/herself the right of such reproduction.

   The article that sparked the Mint’s ire was authored by one Seema Singh. I just checked the Mint site and there is no statement by her either at the foot of the article or anywhere on the website where she expressly reserves the right to reproduce to herself.

   Section 52(1)(m) only allows the author (as opposed to the publisher/”first owner”) to reserve the right of such reproduction – which means that HT-Media’s prohibition on reproduction in its Terms of Use will not serve the same purpose. The reservation must be “express” which means that it cannot be arrived at impliedly.

   There are good grounds to believe that Section 52(1)(m) survives even the exclusive assignment of copyrights by authors to publishers, and may even be seen as an additional right in the hands of the author not enumerated in Section 14. It is the right of the author of an article of political importance to reach the maximum possible audience if she wishes, and not to be silenced by non-publication, merely because he or she happened to assign rights to a particular media company.

   There is legislative wisdom behind the vesting of such powers in the author, and behind setting up the right to reproduce articles as the general presumption against which the author has the right to demur.

2. Secondly, the ambit of the fair-dealing right enshrined in Section 52(1)(a) and (b) is fairly wide and recognizes that the extent of permissible copying may vary with the purpose and characteristics of the use. Specifically, reproducing works to make them more accessible might amount to a transformational use even though it is not transformation in the sense of “altering the original expression with new expression meaning or message”.

   (See THE CHANCELLOR MASTERS and SCHOLARS of the University of Oxford Vs. Narendra Publishing House The rule regarding “the extent of copying.. does not entail that the reproduction of the entire work would militate against the finding of fair use. There could be cases where the copying could be substantial and the courts finds fair use, at the same time there could be cases where the copying though insubstantial could be held as infringement”)
   (See Also Kelly v. Arriba Soft)

There are a host of other authorities in India to support the view that CSE’s non-commercial, public-interest use will weigh heavily in the court’s determination.
I’m following this article up with a longer one that analyses fair-dealing in India.

The ‘authentic’ tree

In his paper “The Command of Language and the Language of Command” (Subaltern Studies IV) Bernard Cohn describes the successive labours of various Europeans during the 18th century in compiling dictionaries and thesauri of Indian languages. This task necessitated a Latinization of Indian languages – the tracing of a “root” /”original” / “pure” ancient language to which all other languages could trace their ancestry.

“Sir William Jones, in his declaration of the relationship of Latin, Greek and Sanskrit in 1785, provided the impetus for the development, largely by German scholars, of comparative philology, which in turn supplied the ’scientific’ model for the comparative study of law, religion and society… The theory of language implicit in the comparative method is that there are ‘genetic’ or ‘genealogical’ relations among languages which have been determined to belong to a ‘family’. What is posited is that there was once a single, original language from which all the languages in the family descend. .. The goal of the method was to establish a history; those features which appear from formal comparison as the most common in the family of languages were thought to be the most ‘authentic’. The end of the exercise was the reconstruction of ‘the unrecorded languages of the past’”

“The power of the comparative method was that it enabled the practitioner to classify, bound and control variety and difference. At a phenomenological level the British discovered hundreds of languages and dialects, and these could be arranged into neat diagrams and tables which showed the relationship of languages to each other. AS with genealogies, which could represent all the members ofa ‘family’ or descent group virtually as a tree with a root, a trunk, branches and even twigs, so cold dialects and languages be similarly represented and grouped. Significantly, the trees always seemed to be Northern European ones, like oaks and maples, and the British never seemed to think of using the most typical South Asian tree, the banyan, which grew up, out and down at the same time.

Fatuous India-related US consultancy services spending set to cross US$1 BILLION this year. No kidding! I swear it!

In a study that costs US$ 10,000 to read, Access Market International, a consultancy which describes itself as “The Leader in Global SMB Actionable Market Intelligence” and “Go-To-Market Strategy” (huh?) says that “Indian small and medium businesses (SMBs) are on track to spend $1.26 billion on Internet-related products and services this year.”

Snippets from the study from our friendly neighbourhood Hindu Business Line who, I dearly hope, did not waste their good money buying such junk.

The study states that the while the Internet has become “a way of life” for medium businesses, barely 25 per cent of small businesses currently have an Internet connection. However, small businesses are embracing the Internet by “leaps and bounds”.

The study states that the penetration of Internet-enabled small businesses is anticipated to rise by more than four percentage points in the current year.

More than 50 per cent of the SMBs said they were in favour of an improvement in Internet speed. Thirty-seven per cent of the respondents said they would like to opt for a total revamp of their Internet access infrastructure such as replacing or upgrading their Internet access routers. Affordability and availability have increased broadband usage with BSNL/MTNL enjoying an SMB penetration of 44 per cent and 33 per cent, respectively. They are followed by VSNL, Tata Teleservices and Reliance.

The study states that SMBs are also heavily dependent on information sources such as vendor Web sites and search engines for gaining awareness about IT products and services.

So.. people in small and medium business are using google. Who knew. They are in fact, in favour of (and not against) improving internet speed. Hallelujah! This is so stupidly banal, that it MUST be dressed up in a title as fruity as “Go-to-market” strategy.

I think the secret to saying anything in this world and being taken seriously, is to insert mention US$ 1 billion in relation to anything you are talking about. US$ 1 billion is a sufficiently fatly rounded monetary figure that makes it hard to ignore.

Here’s another sterling example of corporate fat-headedness dressed up as market research. The Nielsen Company reports:

“Entertainment-themed websites are the most popular with mobile Internet users in the growing Brazil, Russia, India and China (BRIC) mobile markets,

Entertainment, gaming and music websites rank among the top five categories visited in all four BRIC countries, unlike the mature markets like America and Europe, where information and news draw the most mobile Internet browsing.

Mature markets?! F#@# !! I feel like a disgraced schoolboy sitting here in this godawful immature market that prefers to use the internet for fun.

Sorry if I sound overly contemptuous.. I can’t help picking on wooly-headed ‘corporate research”

Update:
Here’s one from the Assocham assessment on ‘E-governance initiatives’

Releasing the Assocham assessment, its Secretary General D. S. Rawat
said, “A country’s e-readiness measures the current state of its ICT
infrastructure and the degree to which its consumers, businesses and
governments are able to capitalise on Internet-based opportunities. It
determines the degree to which a country is prepared to participate in
the networked world. The States have been rated on parameters: network
access, e-learning, network society, e-governance and network economy”.

Textbook cases

There’s this picture in the Hindu today. Shows some 100 schoolchildren in Andhra Pradesh on a march protesting the inadequate supply of free textbooks from the government.

One may look at this picture and read episodes of government ineptitude and, cynically, political manipulation in equal measure. All that is true.

I look at this picture and find it possible to see an instance of the vocalization, however singular, of the human urge to be educated immediately, now, for free.

Here’s another identical one from Karnataka.

Climate Change

From the Hindu Business Line