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2025 MarsdenLR 190
HIGH COURT MALAYA KUALA LUMPUR
SIEMENS INDUSTRY SOFTWARE INC – Appellant
Versus
KB ENGINEERING COATINGS SDN BHD – Respondent
[Suit No: WA-22IP-54-09/2021]
Damages for copyright infringement may be calculated based on the reasonable licensing fees or proven financial loss, with additional punitive damages for bad faith conduct by the defendant.
Headnote:(A) Copyright Act 1987 - Sections 37(1)(b) and 37(7) - Unauthorized use of proprietary software - Plaintiff awarded damages for infringement, including additional damages as a punitive measure due to defendant's bad faith and failure to comply with copyright laws - Damages totaled RM670,000.00, with interest and costs - The court emphasized the need for restorative justice in copyright violations. (Paras 6, 31, 36)
(B) Damages Assessment - The measure of damages follows either lost profit or compensation based on established licensing fees, balancing speculative claims and actual use. (Paras 20, 30)
Facts of the case:
The plaintiff, a registered copyright owner, sued the defendant for the unauthorized use of its NX12 software, leading to financial claims. The Court of Appeal granted summary judgment in favor of the plaintiff, remitting for damages assessment. (Paras 2, 4)
Findings of Court:
The court awarded RM620,000.00 as general damages and RM50,000.00 as additional damages, reflecting the infringement's nature and the need for a deterrent effect. (Paras 37)
Issues: The primary issues include assessing the appropriate measure of general and additional damages for copyright infringement. (Para 9)
Ratio Decidendi: The court ruled that damages must be based on proven damages or a reasonable licensing fee, with additional damages warranted due to the defendant's bad faith conduct. (Paras 24, 35)
Result: The defendant ordered to pay RM670,000.00 in damages, plus interest and costs.
| Table of Content |
|---|
| 1. principle of copyright law established. (Para 1) |
| 2. case facts regarding copyright infringement. (Para 2 , 3 , 4 , 5 , 6 , 7 , 8) |
| 3. plaintiff's argument for damages based on license fees. (Para 10 , 11 , 12 , 13) |
| 4. defendant's counterarguments to liability and damages. (Para 15 , 16 , 17 , 18) |
| 5. court's evaluation of appropriate damages. (Para 20 , 21 , 22 , 23 , 24 , 25 , 26 , 27 , 28 , 29 , 30) |
| 6. assessment of additional damages under s 37(7). (Para 31 , 32 , 33 , 34 , 35) |
| 7. final verdict and judgment on damages awarded. (Para 36) |
Introduction
[1] Copyright law serves as the cornerstone of innovation, safeguarding the rights of creators while ensuring a balanced approach to public access to knowledge. As observed by Peterson J in University of London Press Ltd v. University Tutorial Press Ltd [1916] 2 Ch 601, copyright does not protect mere ideas but rather their expression, granting authors exclusive rights that foster creativity and commercial viability.
[2] This case exemplifies that principle, centering on the plaintiff's claim for damages arising from the defendant's unauthorized use of its NX12 software. The plaintiff asserts that this infringement has caused financial loss, warranting both compensatory and additional damages under s 37(7) of the Copyright Act 1987 . The Court of Appeal, in its decision dated 8 September 2023, upheld the plaintiffs appeal, entering summary judgment against the defendant and remitting the matter to this Court for the assessment of damages. In undertaking this task, the Court must strike a delicate balance-ensuring robust enforcement of intellectual property rights while awarding damages that are fair, proportionate, and rooted in a sound evidentiary foundation.
Background Facts
[3] The plaintiff, Siemens Industry Software Inc, is the registered copyright owner of the NX12 software, an advanced engineering and manufacturing software widely used in design, analysis, and production processes. The defendant, KB Engineering Coatings Sdn Bhd, specializes in protective coatings for mechanical components.
[4] In early 2021, the plaintiff became aware that the defendant had unauthorized copies of the NX12 software installed on its systems Acting on this information, the plaintiff initiated legal proceedings on 8 September 2021, alleging that the defendant had engaged in unauthorized reproduction and use of the software without a valid license.
[5] On 14 March 2022, the High Court dismissed the plaintiffs application for summary judgment (See: Siemens Industry Software Inc v. Kb Engineering Coatings Sdn Bhd [2023] MLRHU 586 (HC)). However, on 8 September 2023, the Court of Appeal allowed the plaintiffs appeal, overturning the High Court's decision and granting summary judgment in the plaintiffs favor (See: Siemens Industry Software Inc v. Kb Engineering Coatings Sdn Bhd [2025] 2 MLRA 657 ( CA )).
[6] In its judgment, the Court of Appeal ruled that the defendant maintained unauthorized reproductions of the plaintiffs proprietary software within its systems While the defendant sought to absolve itself by attributing the infringement to an individual employee's rogue actions-purportedly undertaken without corporate knowledge-the Court of Appeal resoundingly dismissed this contention. It underscored the enduring principle of vicarious liability, affirming that entities bear responsibility for infringements perpetrated by employees acting within the ambit of their employment. The Court of Appeal further cast a discerning eye upon the defendant's decision to purge the illicit software from its devices, deeming such conduct not merely negligent but indicative of a calculated effort to obscure wrongdoing. This act, the Court observed, starkly undermined the defendant's assertions of good faith. It is with these findings that the Court of Appeal awarded the plaintiff the following entitlement towards damages:
"(4) Ganti rugi bagi kerugian dan kehilangan yang dialami oleh
