[Commons-Law] Software as goods

[Prashant Iyengar]

Hi,
I'm forwarding an account of a Feb '05 decision of the Income Tax Appellate
Tribunal (ITAT) in Samsung Electronics Company Ltd. v ITO where the sale of
embedded software has been treated as a sale of a commodity (goods) and not as
a copyrightable subject. For those who are familiar with this line of ruling,
it follows from the decision of the Supreme Court in the Tata Consultancy
Services Decision in Nov of 2004.

Does anyone know of any research that has been done into the implications of 
treating software as a "good" under the Indian regime? Specifically I'm
interested in knowing what are the implications on the status of piracy. To
state it perhaps simplistically, if Compaq sells me a laptop with Microsoft
Windows embedded, since it is "sold" to me as a "commodity", will not the
Copyright Act be sidestepped entirely and the Sale of Goods Act be made to
apply? Two outcomes of this change in regulatory approach are firstly that
"piracy" in the sense of vending unlicensed copyrighted material vanishes
because you don't receive it as copyrightable material in the first place.
Secondly, that piracy begins to be treated as "theft" per se under the IPC
since it is the peddling of goods without the authorisation of the "owner".
This latter development must sound very good to the Jack Valentis and P.
Anand's of the world to whom the distinction never existed in the first place.

Sorry if the argument I've built up sounds too fantastic. If any of you has done
any research on this development, please do let me have a copy.
Regards,
Prashant


T. C. A. RAMANUJAM: ONLY A COPY OF THE COPYRIGHTED SOFTWARE

Source: The Hindu Business Line
Full Article :
http://www.nalsartech.org/tikiwiki/tiki-read_article.php?articleId=6042

INDIA is known to be a leading software services provider. We can teach
the West a lesson or two in enterprise resource planning (ERP) and customer
relationship management (CRM) software. Most software products are embedded in
the equipment purchased and normally there will be a licence agreement between
the vendor and the buyer allowing limited use of the product. The Indian buyer
of the software product cannot alter, copy or sell the product to another
person. A licence agreement transfers a limited non-exclusive right to use a
software product to the buyer. The cost of acquisition of personal computer,
laptop, cell phone, and so on, will depend on the embedded software that can be
put to use. Is there a copyright involved in the transaction between the Indian
buyer and the foreign supplier?

If a copyright is transferred as such, it can be commercially exploited and may
fall in the category of `royalty'. Royalty payment will attract a withholding
tax of 10-20 per cent. This tax element is normally taken into account in
working out the cost of the final price of the product. If the agreements
between the Indian buyer and the foreign supplier are intelligently worded,
there can be an escape from the withholding tax.