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What is Source Code Theft?

Source code is what a developer writes into a computer program’s coding system in computer language. Once hackers gain unauthorized access into software, they can take the source code and modify it to do whatever they please. The hacker has complete control over the computer system and all data on it.

Preventive Measures to protect source code from theft:

  • Avoid sharing access to the computer or the network on which the program is hosted, primarily to protect during development.
  • Always register the copyright for the computer program, source code for better protection and availing legal remedies.
  • Always have a Non-Disclosure Agreement with various contracting parties.
  • Always have ave a License Agreement with Clients.
  • Provide training to employees and prepare them for phishing attempts and privacy breaches.

Legal Remedies under Indian Law:

Source code theft in India is a cybercrime and copyright infringement, which is punishable under Section 43, 65, 66 & 66B of the Information Technology Act and section 63 of the Copyright Act.

The Information Technology Act:

Section 43 – Penalty and Compensation for damage to the computer, computer system, etc.

Now the Complainant can approach the Adjudicating officer (Who is an IT Secretary of each state) appointed under Section 46 of the Information Technology Act, 2000 (As amended in the year 2008). The respective Adjudicating officer is competent to handle the claim up to Rs. 5 Crore. Suppose the claim amount exceeds Rs. 5 Crore, the Complainant, will have to approach the Competent Court. The adjudication officer is the quickest remedy available to the Complainant. According to the Information Technology Act, the Adjudicating Officer has to pass the final order within the period of 6 months from the date of filing of the Complaint.

Section 65 – Tampering with computer source documents.

The Complainant can approach court when someone knowingly or intentionally alters any programme source code. He/she shall be punishable with imprisonment up to three years or fine, which may extend up to two lakh rupees, or with both.

Section 66 – Computer-related offences.

Suppose any person, dishonestly or fraudulently, does any act referred to in section 43. In that case, he shall be punishable with imprisonment for a term which may extend to three years or with fine which may extend to five lakh rupees or with both.

Section 66B – Punishment for dishonestly receiving stolen computer resource or communication device.

When someone dishonestly receives or retains any stolen source code or having reason to believe the same to be stolen source code. Then he/she shall be punished with imprisonment of either description for a term that may extend to three years or with fine to rupees one lakh or with both.

The Copyright Act:

Section 63 – Offence of infringement of copyright or other rights conferred by this Act.

Any person who knowingly infringes or abets the infringement of

(a) the copyright in work(SourceCode), or

(b) any other right conferred by this Act

  1. Except the right granted by section 53A
  2. He/She shall be punishable with imprisonment for a term that shall not be less than six months but may extend to three years and with fine which shall not be less than fifty thousand rupees but may extend to two lakh rupees.