Thai Supreme Court overturns lower court's decision in a landmark case involving the sale of pirated Microsoft software programs

by
Tilleke & Gibbins International Ltd.

INTRODUCTION

In October, 2000, in a landmark judgment which drew extensive criticism from local and foreign legal practitioners alike, the Thai Supreme Court overturned a decision handed down by the Intellectual Property and International Trade Court ("IP&IT Court") and dismissed criminal charges against a Thai computer assembly company for illegal sale of unlicensed computer software owned by the prominent US computer software company, Microsoft Corp. ("Microsoft").

The Supreme Court ruled that the Plaintiff's method of securing evidence of infringement by the Defendants, i.e. sending an investigator to purchase a personal computer loaded with unlicensed software owned by the Plaintiff for the purpose of prosecuting the Defendants, was a form of entrapment. According to the Court, the Plaintiff could not be regarded as an injured party in this case and was therefore not entitled to file charges against the Defendants under the Thai Criminal Procedure Code. The Court thus dismissed Microsoft's allegations against the Defendants.

How the Entrapment Was Carried Out

In 1997, Microsoft hired an investigator to conduct an investigation of the 1^st Defendant, a manufacturer and distributor of computers, for suspected infringing activities. The investigator, posing as a customer, discussed the purchase of a computer with the 3^rd Defendant, an employee of the 1^st Defendant. The investigator asked that programs for letter writing, text documents, word processing, accounting, etc. be installed in the computer for his private business use, to which request the 3^rd Defendant suggested that unlicensed software programs owned by the Plaintiff could be installed at no additional cost. (Their conversation was recorded on tape, which was later used as evidence in trying the Defendants in court.) After making the purchase, the investigator had the computer in question inspected by a technician. The technician checked the programs which had been installed and confirmed that they had been reproduced, track by track, from another computer. All the programs found were unauthorized Microsoft programs.

Criminal Lawsuit in the IP&IT Court

Using the above-stated evidence, the Plaintiff filed criminal charges against the 1^st Defendant, its director (the 2^nd Defendant), and the 3^rd Defendant with the IP&IT Court, a Court of First Instance.

It was established before the IP&IT Court that the Plaintiff, creator and owner of the software programs, is a foreign owner of copyrighted works entitled to protection under Section 8 (2) of the Copyright Act in compliance with the Berne Convention for the Protection of Literary and Artistic Works to which Thailand is a signatory. The Plaintiff alleged that the Defendants reproduced and installed the Plaintiff's software programs in a computer hard drive without authorization, and furthermore, jointly sold, offered for sale, had possession of and distributed infringing copies of the Plaintiff's software programs for commercial purposes, in violation of the Thai Copyright Act.

The 1^st and 2^nd Defendants countered that they were not involved in the infringing activities as alleged by the Plaintiff, maintaining that their internal policy prohibited their employees from reproducing programs for customers other than those which the company owned the copyright to. In this regard, the 1^st and 2^nd Defendants claimed that an employee had been assigned the responsibility of overseeing such matters in the place where the infringement allegedly occurred. Therefore, they were not involved in the unauthorized reproduction and sale of the programs in question, and that this act was committed solely by the Defendants' employee (the 3^rd Defendant).

After reviewing the evidence, the IP&IT Court determined that the reproduction, track by track, of the software programs from one computer to the purchased computer was a process that required special equipment. It is unlikely that the 3^rd Defendant carried out the said reproduction alone and that the act was done with the assistance of others employed by the Defendants. Based on the evidence, the Court held that the 1^st and 2^nd Defendants were involved with the 3^rd Defendant in committing infringement activities as alleged by the Plaintiff. Thus, the Court ruled in favor of the Plaintiff.

The Defendants lodged an appeal with the Supreme Court against the judgment of the IP&IT Court. In their appeal, the Defendants raised the following significant legal issues:

Based on the above arguments, the 1^st and 2^nd Defendants stated that the evidence was insufficient for the IP&IT Court to rule that they had committed the act of infringement as alleged by the Plaintiff.

Dika (Supreme) Court Decision

The Supreme Court overturned the IP&IT Court's judgment and held that the Plaintiff had no legitimate right to institute criminal proceedings against the Defendants, because the Plaintiff and its investigator were participants in the criminal action committed by the Defendants. Therefore, because the Plaintiff had no legitimate right to file a complaint, the Supreme Court concluded that no further consideration of the case was required and dismissed the case against the Defendants.

In its deliberations, the Supreme Court concentrated on examining the evidence submitted by the Plaintiff of the Defendants' infringement activities, i.e. the tape-recorded conversation between the 3^rd Defendant and the investigator, which had been obtained by means of entrapment carried out by the Plaintiff, and the investigator's testimony. From the investigator's testimony, the Court cited the following points as significant:

In the Court's opinion, the Plaintiff instigated the entire scenario for the purpose of instituting criminal proceedings against the Defendants. The crime of infringement had not been contemplated by the Defendants, and they were trapped by the Plaintiff into committing the criminal offense. According to the Thai Criminal Procedure Code, the Supreme Court is permitted to raise certain issues of law when deliberating a decision, particularly if the issue is relevant to public order. In this case, since inducement to commit a crime is an issue that affects public order, the Court determined that due to the Plaintiff's role in the crime carried out by the Defendants, the Plaintiff was not an injured party entitled to prosecute the Defendants.

Comment

The above decision has been extensively criticized by both local and foreign legal practitioners, as it has established a precedent that will impact on the ways and means by which IP owners can obtain evidence of infringement of intellectual property rights in the future. Unlike in other counterfeiting and pirating activities where counterfeit or pirated products are available for sale at the infringer's place of business, computer programs are not readily evident because they are loaded into computers only after the placement of orders. In most cases, it would be extremely difficult, if not impossible, for copyright owners to secure evidence through conventional trap purchases or trap orders, as the pirated products are not yet ready for sale. As a result of the ruling in this case, it could be very difficult to enforce the law against this type of infringement in the future.