The Delhi High Court has recently passed judgment in the case of M/s Phonographic Performance Ltd. v. M/s Hotel Gold Regency & Othrs (MANU/DE/0942/2008) making life supremely complicated for both copyright owners and copyright societies alike. As most of our readers must already know copyright societies in their capacity as licensees usually institute copyright infringement suits in their names on behalf of all their members who are the actual copyright owners. This judgment however put an end to this practice by holding that as per the scheme of the Copyright Act, 1957, the copyright societies do not have any right to institute a suit for copyright infringement in their name and therefore only a copyright owner or an exclusive licensee can sue for copyright infringement. This basically means that all pending suits filed by copyright societies are likely to be rejected in the Delhi High Court. As a result copyright owners will have to restart litigation in their individual names.
The reasons given in the judgment revolve around a combination of various provisions of the Copyright Act namely Sections 33, 34, 54, 55 & 61. To start of with the judgment upholds the defendant’s contention that as per Section 55 only a copyright owner can institute a suit for infringement of his work. As per Section 54 the definition of copyright owner includes an exclusive licensee. Therefore an exclusive licensee has a right to institute a suit.
While in the current case the plaintiff himself had stated that it was not an exclusive licensee the Delhi High Court has interpreted the law to hold that a copyright society can never be an exclusive licensee because of the proviso to Section 33(1) which states that “an owner of copyright shall, in his individual capacity, continue to have the right to grant licenses in respect of his own works consistent with his obligation as a member of the registered copyright society”. In my opinion this is a wrong interpretation of Section 31 since there is nothing barring the copyright owner from surrendering all his rights to a copyright society and making the copyright society an exclusive licensee (as defined in Section 2(j)) if in case this is required by the copyright society. After all it is his right and if he wants to make a copyright society the exclusive licensee the Court cannot bar him from doing so.
Further the Delhi High Court held that from a bare reading of Section 34 it was obvious that the legislature had vested the copyright societies with only rights of administration that included the right to issue licenses and collect royalties and distribute the earnings amongst owners. The Court held that if in case there were disputes regarding the violation of these licenses issued by the society then in that case the copyright society would have the right to sue in its name since it was a contractual dispute and not a case of copyright infringement. Ultimately the Court ended up rejecting the plaint in this suit.
This judgment is definitely going to have quite an impact on the operation of copyright societies and we can expect to see several more rounds of litigation on this point.