Siemens Industry Software Inc. (formerly known as Siemens Product Lifecycle Management Software Inc) v Inzign Pte Ltd [2023] SGHC 50
Employee installed unauthorised version of Siemens’ commercial software on a company laptop for his work without permission. Siemens sued the company for copyright infringement. Court held the company vicariously liable for the employee’s infringement but not directly or primarily liable.
The court considered that the employee did not do the infringing acts as an agent of the company or in the exercise of specific powers found in the company’s constitution or in general company law. Notably, the company had an anti-software privacy policy.
On the meaning of ‘authorisation’ under section 31(1) of the previous Copyright Act, the court held that the company did not have the power to prevent the employee’s infringing acts, even if it may have been negligent in failing to install admin controls. The court found that the company did not give adequate supervision to the employee and there were no reminders about the software priacy policy and its implementation. There was no evidence that the company knew of the infringing acts before it was notified to the company by the allegation from Siemens. The court held that the company did not authorise the infringing acts within s 31(1) of the Act as the company did not “did not sanction, approve, or countenance Mr Win’s infringing acts because it did not possess the knowledge that the infringing acts had occurred and had little practical control over Mr Win’s actions on the Lenovo Laptop. Moreover, the very existence of its anti-software piracy policy and the measures taken in furtherance of this policy support the conclusion that the Defendant would not have granted [the employee], either expressly or impliedly, the right to commit the infringing acts”: at [30].
On vicarious liability, the court held that the doctrine extends to copyright infringement. Nothing in the Copyright Act prevents it. Copyright infringement is a statutory tort. And other jurisdictions have taken this position. The court found there was a sufficient connection between the employment relationship between the employee and the defendant and the infringing acts which occurred. The infringing acts were committed in the context of employment for the company’s benefit.
The court also was of the view that a finding of vicarious liability in this case will incentivise employers to take further steps in reducing the incidence of copyright infringement by their employees.
On the quantum of damages, the court considered that generally there are 3 possible approaches for copyright infringement:
– loss of profit
– established licence royalty
– hypothetical bargain
The court held that the hypothetical bargain approach should apply here. The plaintiff failed to establish evidence of loss of profit or the established licence royalty approach (e.g. prices of actual licences granted). The plaintiff only adduced evidence of its price book which is a mere reference for distributors and resellers.
There was a lack of clear evidence of the actual use of the software but the court found on the available evidence that the employee only used two modules in the software. The court then applied the relevant licence fee for those two modules and even so, based on perpetual licences and not time-limited licences because at the time of the breach only perpetual licences were available. Also, only node-locked and not floating (i.e. for use across multiple devices) licence fees were applied. The court thus applied a discount to reflect the node-locked licence fee rather than floating licence fee.
The court also refused to grant additional damages under section 119(4) of the Copyright Act (present s 307 of the Copyright Act 2021).