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B.N. Firos vs. State of Kerala and Ors.

Supreme Court of India

Judges: Justice Ranjan Gogoi and Justice Mohan Shantanagoudar

Applicable law: Sections 2(k) and 17 of the Copyright Act, 1957 and Section 70 of the I.T. Act

Did you know: The government is empowered to declare any computer system as a protected system under the IT Act. Such declaration prohibits any person except the government to access such a computer system. This is to enable the government to protect critical IT infrastructure.

Effect of provisions: Section 2(k) defined a ‘Government Work’ and Section 17(d) vests the copyright of the government work in the government. Section 70 of the I.T. Act allows the government to declare any computer system as a ‘Protected System’ and access to such protected systems is barred to any other person except the government

Where it all began:

  1. The State of Kerala entered into an agreement to develop software for one-stop bill payment systems with the software giant Microsoft. Microsoft agreed to do so for free on a pilot basis and engaged a 3rd party M/s B.N. Firos for the development of the same
  2. After successful implementation State of Kerala sought to expand the project to all districts and an MOU was concluded between B.N. Firos and the state of Kerala.
  3. N. Firos alleged that the State of Kerala was transferring essential rights in the software to third parties and it was not allowed to do so.
  4. Both B.N.Firos and State of Kerala sought to be declared as exclusive owners of the copyright of the software.
  5. During the pendency of the dispute, State of Kerala issued a notification under Section 70 of the Information Technology Act declaring the software as a ‘Protected System’.
  6. N. Firos challenged the notification and held that the same was a violation of its rights as  the author of the software under Section 17 of the Copyright Act, 1957

B.N. Firos’s arguments: B.N. Firos argued that the copyright of the software vested exclusively with it and the notification was taking away its said rights

Kerala’s argument: The State of Kerala argued that the copyright of the software vested with the State government and in any case, it had the right to declare any computer system as a protected system

Issue: Whether any computer system could be declared as a ‘protected system’ under Section 70 of the I.T. Act, even in violation of the Copyright Act?

Judgment: The Hon’ble Supreme court held that:

  1. Only government works as defined in Section 2(k) of the Copyright Act could be declared as protected systems and only those systems can be protected which are very important for the functioning of the state.
  2. The power of the government to declare a computer system as a protected system was not unlimited and the provisions of IT Act and Copyright Act have to interpret harmoniously.
  3. As per the MOU signed between the State of Kerala and B.N. Firos the copyright of the software belonged to the State of Kerala.

Significance:  The Hon’ble Supreme Court has resolved the possible conflict between the rights of the owner of a computer system and the power of the government to declare such a system as a ‘protected system’ in the IT Act. It has in this way balanced the interests of the government in protecting critical computer infrastructure and those of individuals who design unique computer systems in collaboration with the government.