[IP Alert] Unlicensed Software Costs Company Over RM1 Million (approximately USD224,000) in Court Decision

Article by Ng Kim Poh, Partner, Veronnie Thu, associate, and Rachel Tan, student, with Tay & Partners in Kuala Lumpur, Malaysia.

In the recent case of Siemens Industry Software Inc. v Unicorn Solutions (M) Sdn Bhd, the High Court dealt with the issue of assessment of damages for copyright infringement in respect of unlicensed software under the Copyright Act 1987 (“CA 1987”).

…This decision provides a significant precedent for future cases on assessment of damages under the CA 1987. As mentioned, the Court awarded just slightly over RM1 million (approximately USD224,000) after a meticulous evaluation of Siemens’ previous transactions, rather than the full claimed amount of over RM58 million (approximately USD12,480,000). The Court’s approach to assessing damages, grounded in tangible data rather than speculative figures, ensures that the amount of damages awarded is fair and just, avoiding overcompensation. This approach provides valuable guidance for similar cases in the future.

This case also serves to illustrate the importance for businesses to ensure that they do not fall foul of copyright law because, apart from the risk of having to pay a hefty amount of monetary compensation in a civil suit, copyright infringement could potentially lead to raids being conducted on the premises of businesses by the authorities, and criminal sanctions (fines and/or imprisonment) being imposed. In fact, in criminal cases, the officers of a body corporate may also be held liable for infringement by the body corporate.

Thus, businesses should ensure that they have a robust internal system to avoid copyright infringement. The system should include elements such as regular audits and employees’ education programmes on the basics of copyright law (in particular on the serious consequences of copyright infringement).

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