Supreme Court Upholds Constitutional Validity Of Section 70 Of Information Technology Act, 2000

The Supreme Court, recently, in B.N. Firos versus State of Kerala and Ors., held that the Government can declare only those computer systems as “protected systems” under the Information Technology Act, 2000, which qualify as “Government Works” under the Copyright Act, 1957.

Contention before the Supreme Court

This proposition came up before the Supreme Court w.r.t. the ownership of the copyright in application software and system software which was being used by the Government of Kerala for a project known as FRIENDS (Fast, Reliable Instant, Efficient, Network for Disbursement of Services).

The Appellant, before the Supreme Court, is a member of a professional group of developers technically supported and guided by the Microsoft Corporation India Private Limited. He pleaded that he created the software under the contract and for consideration, for Microsoft Corporation, and therefore, he is the first owner of the software. Hence, the Government of Kerala cannot declare the software as ‘protected system’.

Supreme Court’s decision

The Supreme Court, while upholding the reasons of the Kerala High Court, took note of the fact that the Appellant created the software for Microsoft for consideration, therefore, the ‘first user’ under Section 17 of the Copyright Act appeared to be Microsoft Corporation and not the Appellant. The Court, therefore, doubted the Appellant’s locus standi to challenge the declaration of FRIENDS system as a protected system under Section 70 of the IT Act.

The Supreme Court, however, did not give any observation on whether the Government was, in fact, the assigned owner of the software. The Supreme Court, although, noted the High Court’s observation that because of the Memorandum of Understanding executed between the Total Solution Providers for E-Governance and Government of Kerala, which states that the intellectual property rights of the systems developed by the Total Solution providers would vest with the Government of Kerala, the Government of Kerala becomes the first owner of the FRIENDS system under Section 17(d) of the Copyrights Act.

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