Can an employer be held vicariously liable for its employee’s infringement of another’s copyright? The Singapore High Court answered affirmatively based on the facts of the case in Siemens Industry Software Inc. (formerly known as Siemens Product Lifecycle Management Software Inc) v Inzign Pte Ltd  SGHC 50.
Siemens Industry Software Inc. (Owner) owns the copyright to the NX Software (Software), which is comprised of various modules with differing functions. A Software licence may cover only some modules and the price of a Software licence depends on the specific modules purchased by a user.
Inzign Pte Ltd (Employer) owns licences for three modules of the Software. However, one of its employees (Employee) who uses the Software to carry out his duties downloaded an unpaid full version of the Software, installed it on an unused laptop (Laptop) kept by the Employee’s supervisor (Supervisor) at the Employer’s office and used it on multiple occasions. The Employer did not purchase the Laptop, but it was used to configure a machine which the Employer purchased and was inadvertently left behind by the machine technicians. The Supervisor kept the Laptop without informing the Employer and without securing it. Because the Employer was not aware of the Laptop’s existence, no administrative controls were installed on it. This enabled the Employee to download and install the unauthorised Software on the Laptop.
An employee of the Software’s distributor, which is a related entity of the Owner, discovered the unauthorised use through an automatic reporting function built into the Software and traced such use to the Employer.
The Owner filed a claim against the Employer, seeking to hold it liable for the Employee’s acts.
The court ruled that the Employer was not primarily liable for the Employee’s infringing acts but was vicariously liable.
Employer is Not Primarily Liable
The court ruled that the Employer could not be held primarily liable for the Employee’s infringing acts because:
Employer is Vicariously Liable
However, the Employer was held to be vicariously liable for the Employee’s infringing acts and was ordered to pay damages to the Owner.
Under the doctrine of vicarious liability, a person (i.e., a defendant) is held secondarily liable for the wrongful acts of another, even though the defendant was not negligent. For the doctrine of vicarious liability to apply, both conditions must be present:
The court found that the Special Relationship Test was met because of the contractual relationship between the Employer and the Employee. In addition, the court found that the Sufficient Connection Test was met because:
In reaching its decision, the court also noted that:
Employers should take appropriate steps to carefully manage their employees’ workplace or work-related conduct because they can be held vicariously liable for their employees’ wrongful acts, even if they did not authorise or know about those acts. Having policies in place that prohibit wrongful acts may not be sufficient to avoid liability if employers do not take sufficient steps to monitor the implementation of those policies and to put in place other measures to prevent those wrongful acts from occurring (such as putting administrative controls on company-issued electronic devices).
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Disclaimer: This article is for general information only and does not constitute legal advice.