Financial Times

Colombo court dismisses first software piracy case

By Laila Nasry
The first ever computer software case filed in the Commercial High Court of Colombo by an Indian software development and a consultancy firm alleging that their computer programme had been pirated by a local company was dismissed as the plaintiffs failed to appear before court on successive occasions. Commercial High Court Judge L.K. Wimalachandra vacated the ex parte enjoining order previously issued by court and dismissed the case.

The Indian Company, Software Systems Private Ltd obtained an ex parte enjoining order alleging that their source code version of the computer programme "HARVEST" designed for agri-business activity had been pirated by Visualtech Microsystems (Private) Ltd, a local company, and an identical computer programme "VES- AGRI" had been unlawfully installed.

It said the local company does not have the know how, manpower, or even the required skills to develop a fully fledged ERP solution with parameters for a complete supply chain management in the plantation industry and alleged that the system had been installed with the assistance of one of its former employees currently employed in the local company.

Defendants Visualtech Microsystems (private) Ltd told court that the action alleging piracy had been filed subsequent to them rejecting an offer from Software Systems to become their sole agents for the Indian package "HARVEST". The local company stating that there was no integrated software completely developed by their company further submitted that the offer for sole agency was merely a ploy to acquire monopoly of operations in the lucrative business of providing software packages to the plantation sector.

It said the "VES-AGRI" software programme was being developed to be custom made to achieve a certain solution in the field of plantation management utilizing technical, mathematical parameters and operational components. The defendant further submitted that the source code designs, user date entry interface designs of the software programme reveal a unique system that is not identical or similar to other software programmes including that of "HARVEST" which has been admitted by the plaintiffs to be a composite, ready made, off the shelf software package.

The allegation that the software had been pirated with the assistance of a former employee of the Indian firm was countered by the fact that the person concerned worked in the capacity of a Customer Support Executive who had resigned from the Indian company several months prior to joining the Sri Lankan company and had also been issued a Letter of Release.

Furthermore the expert evidence produced by the plaintiff Company in cross examination revealed that the Indian IT expert neither had the time nor the opportunity to inspect or study the local company's software package and had solely based his findings, that the two systems were identical and therefore the local one was a pirated version of the Indian software, on a marketing proposal submitted by the local company to a prospective client.

Currently a claim for damages amounting to Rs. 50 million is pending before the Commercial High Court filed by the defendant Company against Software systems for the loss and damage caused.

Lasantha Hettiarachchi appeared for the defendant, Visualtech Microsystems Ltd. President's Counsel Desmond Fernando with Dr. Harsha Cabraal and Jayantha Fernando appeared for the plaintiff, Software Systems Ltd.

SL could be next Asian Tiger - - HSBC’s Mehta

By Akhry Ameer
Aman Mehta, Chief Executive Officer of Hongkong and Shanghai Banking Corporation Ltd (HSBC), the Asia Pacific arm of the HSBC Group believes there is potential for growth in the medium to long-term for Sri Lanka. "I would not be surprised if it becomes the next Asian Tiger. We could be looking at a positive picture in five to six years," Mehta told The Sunday Times FT during a recent visit to Colombo.

Adding that there was growing optimism of the country internationally and there would be faster growth with peace setting in, he said, "Sri Lanka is not hugely in debt; it has more cheaper debt than commercial debt. The pace of investment will gradually develop as the political climate progressively recovers."

Responding to the much talked about issue of profits earned by banks and the huge spread in interest rates, Mehta questioned whether it was adequate given factors such as corporate losses and return on equity. "What you need is a vibrant banking sector. You must really look at interest margins in terms of the entire banking industry. In the long-term it is about a liquid market. I am puzzled to hear this because liquidity here is quite good. It should not be mandated, market forces should find the correct level over time."

Mehta added that the local banking industry is also dependent on interest margins as opposed to the West where higher per capita has given way to stronger fee-based income that accounts for nearly 50% of banks' revenues. Locally HSBC recorded 47.7% of non-interest income in 2002 due to significant contributions from its credit cards and treasury operations.

HSBC's AsiaPac head said that the bank is not unduly concerned with political changes here saying they endeavour to stay away from politics and "take it in its stride". "But, we hope that big growth will take place", he added.

The bank has no specific plans on harnessing opportunities of smaller banks merging or being taken over. HSBC does not rule out the possibility especially if the asset portfolio of such institutions "can be digested easily". Mehta said that HSBC in Sri Lanka is part of its core banking units and that the group is committed to developing its Sri Lanka branch while not compromising on its returns.

He said that he is satisfied with the evolving local industry and noted that HSBC is waiting to play its role as the equities market and treasury products take off. He also noted the high quality of the human resources and said the challenge for HSBC locally was to find ways of growing faster.

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