An Indian textile company has been ordered to pay a USD 100,000 penalty within 30 days by a US court to settle charges of using pirated software that gave it competitive advantages over American businesses.
Headquartered in Madhya Pradesh's Indore, Pratibha Syntex Ltd exports cloths to top American companies including Walmart.
As per the settlement reached, which was filed in Los Angeles Superior Court and has been approved by a judge, the textile company has agreed to pay USD 100,000 in restitution within 30 days.
"Pratibha Syntex engaged in illegal business practices that placed California garment companies at a disadvantage, while hurting American software companies' ability to develop new and innovative products," California Attorney General Kamala Harris said.
"Businesses around the globe should be on notice that the state of California will hold them accountable for stealing intellectual property to unfairly undercut their competition," she said.
The case assumes significance as this is first time that a state government has secured a legally enforceable judgement against an international company for such violations.
In 2013, Harris sued Pratibha Syntex on the basis that it did not pay licensing fees for software it relied on for its business, including products manufactured by Adobe, Microsoft, and others, giving the company a significant cost advantage in the low-margin business of apparel manufacturing, shipment and sales.
Harris alleged that Pratibha Syntex gained an unfair competitive advantage over American-based companies by using pirated software in the production of clothing imported and sold in California.
Other terms of the landmark settlement prohibit Pratibha Syntex from using unlicensed software or reproducing any part of a copyrighted software program without the permission of the legitimate copyright holder, and further require the company to perform four complete audits of the software on their computers and fix any violations within 45 days, a media release said.
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Meanwhile, Pratabha Syntex Limited said the statements made in the press release in the US are incorrect and do not reflect the true and complete nature of the settlement reached between the parties.
"It has come to Pratibha Syntex Ltd's (PSL) notice that there have been certain press release made regarding a settlement that was entered into in a court case pending between the People of the State of California, US V/s PSL and others. The statements made in the press release are incorrect and do not reflect the true and complete nature of the settlement reached between the parties," Ashok Jain, head of Legal and Commercial, Pratibha Syntex Ltd said.
"The Settlement clearly records that the Settlement was entered into by the parties, without constituting any admissions by any party (including PSL) regarding any issue of fact or law but to reach resolution of disputed claims to avoid further expense, inconvenience, and the distraction of burdensome and protracted litigation.
"The Settlement further specifically records that PSL has never admitted any claims made against PSL and has specifically denied any liability from any claims arising from such allegations," Jain said in a press release.
Further, the Settlement was entered into by PSL without waiving any of the personal jurisdiction defences it had against the State of California. The settlement amount to be paid has no mention of any 'penalty' agreed to be paid by PSL for settling the disputed claims as falsely suggested in the press release, he said.
