Kuala Lumpur — In a major legal blow to small businesses relying on unlicensed software, Unicorn Solutions (M) Sdn Bhd, a Penang-based engineering firm, has been ordered by the Malaysian High Court to pay US$227,240.55 (RM1,045,306.53) in damages to Siemens Industry Software Inc. for copyright infringement of its NX CAD/CAM software suite.
The case, decided on 27 May 2024, is a wake-up call for companies of all sizes: the cost of just three unlicensed software installations can result in a six-figure U.S. dollar judgment.
Visit Unicorn’s website: www.unicorn.com.my
The Raid and the Ruling
In January 2022, Malaysian enforcement authorities raided Unicorn’s premises in Penang. They found three of seven computers running unlicensed copies of Siemens’ NX software—powerful industrial-grade design tools used in advanced manufacturing.
Although the company never responded to the legal claim, the court emphasized that Siemens was still required to prove its damages through verifiable licensing data, despite having secured a default judgment earlier.
Siemens originally claimed damages of RM58 million but revised this after judicial scrutiny. Ultimately, the court awarded damages based on realistic commercial license fees for two NX modules commonly used in engineering:
- NX CAD/CAM 3-Axis Milling Foundation
- NX Mach 3 Mold Design
Each machine was assumed to contain one copy of each module, totaling US$227,240.55 in damages.
A Harsh Lesson for Small Businesses
Unicorn Solutions, a company operating in precision engineering and tooling, now faces a devastating financial penalty. For a small Malaysian business, a USD 225,000+ payout is likely to cripple operations, demonstrating the disproportionate risk companies incur when employees install cracked software without management knowledge.
Despite Unicorn’s argument that an employee acted alone for personal learning, the court ruled:
- Intent is irrelevant under Malaysian copyright law
- Employers are vicariously liable for acts committed on company equipment
This reinforces that lack of awareness is not a legal defense.
Why This Matters
This case sets a critical precedent for Malaysia and the wider Southeast Asian region. It highlights:
- That small companies are not exempt from large-scale copyright liability
- That employee misuse of software can expose firms to catastrophic risk
- That judges will scrutinize damages claims, but still award serious penalties when infringement is proven
ITCA’s Take
“This is a clear message to the industry: if just three unlicensed installations can lead to a $225,000 penalty, the cost of non-compliance is simply too high to ignore,” said an ITCA spokesperson.
Companies must take proactive steps to monitor and control what is installed on their hardware. The use of cracked software—whether by interns, employees, or contractors—exposes businesses to existential legal risk.
Contact ITCA to understand how we help software vendors and IP holders take action when piracy is detected, and how we work with companies to prevent cases like this from happening.
