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Edward Kelly |
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Parichart Jaravigit |
In the case of Microsoft v ATEC Computer, (Thai Supreme Court Judgment No 4301/2543 (2000)), the Thai Supreme Court had set a controversial landmark by reversing the judgment of the Central Intellectual Property and International Trade Court, and dismissing a charge of copyright infringement against ATEC.
The case was dismissed because the Supreme Court ruled that the evidence presented by Microsoft to prove copyright infringement by the defendant had been obtained by entrapment. According to the court, ATEC, who had "hard-loaded" unlicensed computer programs onto the hard drive of a computer ordered by an investigator, was "instigated" to commit such an offence, and it was "not the intention of the defendant to commit the crime prior to the entrapment". Therefore, Microsoft was deemed not to be the de jure aggrieved party, as defined by the Criminal Procedure Code, Sections 2(4) and 28(2). This decision had been widely criticized by commentators familiar with the copyright industry.
Hard-loading is defined as the practice whereby some computer assemblers (or traders) may illegally install copies of software onto computers in order to encourage the customers to buy their computers. In case of illegal installation, the buyer may not receive a CD and handbook, or its content may not be complete. In some events, the seller may sell the computer with illegal software together with the software's CD and handbook forged to look so genuine that the buyer does not realize that such software is illegal.
On March 3 2003, the Supreme Court had occasion to revisit the issue of "hard-loading" and entrapment in a factually similar case. In Microsoft v Niyomthai Hi-Tech et al (Supreme Court Case No 6527/2545 (2002)), the Thai Supreme Court affirmed the decision of the Intellectual Property and International Trade Court (IP & IT Court) against the defendants arising from the defendants' violation of the Copyright Act by hard-loading unlicensed computer software programs owned by Microsoft onto personal computers sold to the defendants' customers.
The Supreme Court decided that Microsoft's method of obtaining evidence of infringement by the defendants (by sending an investigator to purchase a personal computer "hard-loaded" with unlicensed software) was done specifically to collect evidence in order to prosecute the defendants. The Court reasoned that this was not entrapment because the defendants were predisposed to this type of infringing behaviour. The Supreme Court therefore agreed with the IP & IT Court and ruled against the defendants.
Microsoft, the plaintiff, is the owner of the copyright for the computer programs Microsoft Windows 98 and Microsoft Office, which are protected as literary works under the Copyright Act BE 2537. Microsoft filed a complaint against Niyomthai Hi-Tech and two other defendants, who were alleged to have infringed Microsoft's copyright computer programs by reproducing and hard-loading the programs without authorization under Section 69, para 2; Section 30; Section 40, para 2; and Sections 31 and 74 of the Copyright Act and Sections 83 and 91 of the Penal Code.
Defendant 1 is the company named Niyomthai Hi-Tech Co, Ltd. Defendant 2 is the company's managing director. Defendant 3 is the company's sales representative.
Investigator uncovers evidence
This case originated when Microsoft hired an investigator to make a pretext computer purchase at the first defendant's shop on May 24 2000. The Niyomthai Hi-Tech's sales representative told Microsoft's investigator that the computer would be installed with unlicensed Microsoft software and that there would be no cost for the software. The investigator paid a deposit of Bt1,000 ($24). When the investigator returned to pick up the computer on a later date, he received one CD from Niyomthai Hi-Tech's sales representative without being given any licensing documents or manual that would tend to authenticate the software.
To counter any allegation of "instigation" or "entrapment", Microsoft hired two independent computer specialists to examine the PC to determine exactly when the unlicensed programs were installed. The unlicensed software was actually installed 10 days before the investigator's pretext purchase, thus it could not be said that the unlicensed programs had been installed only because the investigator had ordered such installation.
Two guilty defendants
The sales representative, defendant 3, fled from the jurisdiction. Therefore, the Court ordered a temporary dismissal of the case pertaining to him. After considering the case, the Court decided that Niyomthai Hi-Tech and the company's managing director were guilty under the Copyright Act, under Section 30(1); Sections 31(1) and (3); Section 69, para 2 and Section 70, para 2 (prohibiting unauthorized duplication of copyrighted computer programs). Since this case involved several distinct offences, the defendants were punished cumulatively for each offence according to Section 91 of the Penal Code.
Niyomthai Hi-Tech and its managing director filed an appeal with the Supreme Court.
Sales rep sold unlicensed software
The Court was of the opinion that it can be assumed that the computer programs loaded onto the PC sold to the investigator were unlicensed because there was no password to open the programs. The Court opined that if Niyomthai Hi-Tech had no policy to install unlicensed software for free, it would be unbelievable that its sales representative would dare commit such a wrongful act on the company's premises to gain only a commission. Furthermore, because the sales representative was only an intern and had worked for Niyomthai Hi-Tech for a few days, it would also be unbelievable that the sales representative would dare to act against the company's instructions. Therefore, based on the evidence and circumstances, there was reasonable probable cause to believe that both the company and its managing director were aware and acknowledged the reproduction and distribution of computer software programs without Microsoft's authorization.
In respect to the question of whether Microsoft was the rightful injured party, Microsoft's computer specialist testified that based on his examination of the directory instalment, the file was created on May 14 2000. This showed that the Microsoft Windows 98 program was installed on May 14 2000, which was 10 days before the investigator's pretext purchase. Microsoft's computer specialist opined that the Microsoft Office 97 program was installed on the same date because it could only be installed after Microsoft Windows 98.
Intelligence gathering
After considering all of the evidence, there was probable cause to believe that it is a normal practice in the computer trade to offer customers free software because this business is highly competitive. Although Microsoft's investigator intended to set up the purchase of unlicensed software from the defendants, it was done only to obtain evidence to prosecute the defendants. This was not entrapment since the defendants had installed unlicensed software before Microsoft made the pretext purchase. Microsoft was therefore considered to be a rightful injured party with the right to prosecute the case. With regard to the earlier Microsoft v ATEC case (Supreme Court Judgment No 4301/2543 (2000)), which the defendants raised as persuasive precedent, the Court distinguished ATEC on its facts. The Court therefore agreed with the IP & IT Court and dismissed the defendants' appeal.
Court justifies entrapment opinion
In ATEC, the Supreme Court had ruled that Microsoft instigated the entire situation solely for the purpose of instituting criminal proceedings against the defendants because the defendants installed unlicensed software after Microsoft made the purchase. Therefore, Microsoft caused the offence to occur by entrapping the defendants and could not be considered an injured party who was entitled to prosecute the defendants. The ATEC Court dismissed Microsoft's complaint.
In both ATEC and the present case, the Supreme Court had applied the same criteria in determining whether the defendants were entrapped into committing the offence. The Courts placed substantial weight on whether the defendants were predisposed to committing infringing acts by focusing on when the unlicensed software was installed, before or after the buyer made the purchase.
Not straightforward for copyright owners
Because liability depends upon whether the defendant is predisposed to committing infringing acts without being instigated to do so by the plaintiff, copyright owners may still have a difficult time prosecuting manufacturers, assemblers and retailers. The practice of hard-loading is likely to continue, because free software is often a powerful incentive for closing sales. Thus, a retailer will try to compete by offering to install unlicensed programs as a tool to convince buyers to make the computer purchase.
Although the current Supreme Court decision affirmed the lower court's decision to hold the copyright infringers responsible, the question raised by the decision is whether it could portend a more liberal attitude in the courts of Thailand generally toward finding computer manufacturers, assemblers or traders guilty of copyright infringement when there is evidence of hard-loading. The present decision does not reverse the earlier ATEC decision, but instead distinguishes the earlier decision on the facts. As such, the decision is not a sweeping victory for the copyright industry, but instead is of limited usefulness merely as a guide for the appropriate manner of evidence collection and evidence presentation in cases of suspected hard-loading. In fact, copyright owners may have a heavier burden in collecting the evidence to establish that the offender was predisposed to unlawful behaviour.
© Edward Kelly and Parichart Jaravigit 2003. Edward Kelly is a partner and Parichart Jaravigit a lawyer with Tilleke & Gibbins International in Bangkok
