Violation of a Copyright Creates an Estoppel of a Tort Claim against Software Vendor
In Mifram Projects and Shipment (92) Ltd. vs. Hashaveshet Ltd. the Haifa magistrate court discussed a claim brought against Hashaveshet, a leading vendor of accounting software. Plaintiff claimed that it bought such a program from the defendant as well as the defendant’s conversion kit to correct for the year 2000 (Y2K) bug. Plaintiff filed this lawsuit claiming that defendant’s conversion kit was defective, causing errors in the plaintiff’s spreadsheets and as a result the defendant suffered losses and damages.
Honorable Judge Tauber dismissed the Plaintiff’s claim in its entirety stating the Plaintiff did not meet its burden of proof with regard to each element of its claim: the business relationship between the parties, the offer by the defendant to the Plaintiff to purchase the conversion kit and the damages that it allegedly sustained.
The court held that the Plaintiff did not provide evidence that it had actually purchased the defendant’s program or the conversion kit. The Plaintiff did not submit into evidence any receipts, invoices or checks. Moreover the Plaintiff admitted that it had neither the original installation disk nor the installation instruction booklet. The plaintiff also did not prove that it was contacted by the Defendant to purchase the conversion kit, offering inconsistent testimony to that claim and the Plaintiff did not appear on any of the defendant’s records, even as a purchaser.
In dismissing the lawsuit the court noted that it is not possible to ignore the fact that the Plaintiff was not able to prove that it had legally purchased the Defendant’s computer program or its conversion kit and consequently, there was a high likelihood that the Plaintiff had indeed violated the Defendant’s copyrights. As such, the court held that the general rule that committing a tort will bar the right to bring an action applies here as well.
Although, conscious to the fact barring a right to bring an action is a harsh stance and it must be weighed against the public interest of imposing liabilities against those who cause damages due to negligence, the court stated that it cannot ignore the fact that using the doctrine of estoppel against law suits in a case such as this will serve as a great deterrence to the commission of illegal acts such as violation of copyrights. Furthermore, the court stated that proper judicial policy should not allow a claim for loss of profits due to the use of a computer program where the plaintiff was not able to prove that it legally purchased the software in question.
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