The company is responsible for the employee's use of unauthorized software.

The decision of the Singapore High Court in the case of Siemens Industry Software Inc v. Inzign Pte Ltd [2023] SGHC 50 addresses issues of penalties for employee copyright infringement and the expansion of the doctrine of complicity in cases of copyright violations. These issues were examined by the Singapore High Court in the new ruling Siemens Industry Software Inc v. Inzign Pte Ltd [2023] SGHC 50.

Arguments.

Siemens Industry Software Inc. ("Plaintiff") was the owner of the copyright for the NXTM software ("NX Software"), which was used for computer-aided design, manufacturing, and engineering. Inzign Pte Ltd ("Defendant"), a Singaporean company engaged in the production of medical supplies, held licenses for three modules of NX Software. The Defendant employed a machinist ("Employee") whose task was to use the NX Software. In 2020, as the Employee wanted to practice using the NX Software, he installed a pirated copy of the software on an unused and unsecured laptop found in the Defendant's unmaintained tool room. Using the automatic reporting feature built into the software, the Plaintiff discovered this installation and identified the infringement by the Defendant. After the Defendant was informed of the infringement, it conducted internal investigations and removed the NX Software from the laptop. Subsequently, the Plaintiff initiated the present lawsuit against the Defendant for copyright infringement. Since it was undisputed that the Employee infringed the Plaintiff's copyright on the NX Software, the two main issues in this case were the extent to which the Defendant is liable for the Employee's actions and whether the doctrine of contributory infringement could apply to cases of copyright infringement.

Main responsibility

Based on primary liability, Article 31(1) of the Copyright Act (1987) ("Copyright Act") states that copyright in a work is infringed if a person who is not the owner or licensee of the copyright either (a) performs or (b) permits the performance of any act included in the copyright. Regarding whether the Respondent committed an infringing act, the Court concluded that it depends on whether the Employee acted within the scope of their duties as a representative of the Respondent. In this regard, the Court found no evidence indicating that the Employee's actions were sanctioned by the charter, the director, or the shareholders of the Respondent, nor were any of the Employee's actions performed as a representative of the Respondent. This is supported by the signed acknowledgment of the Respondent's anti-piracy policy by the Employee, which prohibits the installation, downloading, or use of unlicensed software on the Respondent's computers. The Respondent also licensed the necessary NX Software modules for its business and had no reason to instruct or allow its employees to download unlicensed software. For this reason, the Court concluded that the Employee's infringing actions could not be attributed to the Respondent. As for the question of whether the Respondent "sanctioned" the Employee's infringing actions, the Court concluded that while the Respondent was negligent in managing the laptop used by the Employee and negligent in enforcing its anti-piracy policy, the Respondent did not sanction, endorse, or approve the Employee's infringing actions. The Court found that the Respondent was unaware of the instances of infringement and had little control over the Employee's actions. Furthermore, the existence of an anti-piracy policy supports the conclusion that the Respondent would not have granted the Employee the authority to commit infringing actions. For these reasons, the Respondent is not primarily liable for copyright infringement.

Participation in responsibility

In determining whether the Defendant is liable for the violations committed by the Employee, the Court referred to relevant case law from the United Kingdom and Australia and concluded that, in the absence of explicit limitations in the Copyright Act, the doctrine of complicity may apply to copyright infringement.

Main findings

The ruling in the case of Siemens Industry Software Inc. v. Inzign Pte Ltd established that the doctrine of contributory infringement applies to copyright violations. This is significant because employers can now be held legally responsible for their employees' infringements, even if they did not authorize or were unaware of such actions, if they created or exacerbated the risks of such infringement. To mitigate and manage these risks, employers should adopt and implement appropriate measures, policies, and safeguards to deter and prevent their employees from committing copyright infringements, especially in the context of work activities and the use of the employer's electronic equipment and devices. This includes:

• the introduction of appropriate corporate policies aimed at combating copyright violations and the improper use of office computers, laptops, and equipment;
• regular informing and training of employees on these policies; and
• the implementation of effective controls and checks to monitor and ensure employee compliance with such policies.