Copyright

Copyright societies dealt a severe blow by the Delhi High Court


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.

Prashant Reddy

Prashant Reddy

T. Prashant Reddy graduated from the National Law School of India University, Bangalore, with a B.A.LLB (Hons.) degree in 2008. He later graduated with a LLM degree (Law, Science & Technology) from the Stanford Law School in 2013. Prashant has worked with law firms in Delhi and in academia in India and Singapore. He is also co-author of the book Create, Copy, Disrupt: India's Intellectual Property Dilemmas (OUP).

16 comments.

  1. AvatarSushant

    “After all it is his right and if he wants to make a copyright society the exclusive licensee the statute cannot bar him from doing so.”

    I think this is very naive statement. A statute can do anything till it is constitutional. The only question to ask is whether it “should” bar a copyright holder.

    Copyright as I know is not a right in the same sense as right to free speech or even right to property. This gives exclusive control to a user over the market place for a limited time. So it is for a statute to balance monopoly with that of creation in society.

    Therefore, the question is whether a statute that transfers copyright from an owners to societies is beneficial for the country. I think it surely creates more monopoly as a copyright society can aggressively enforce copyright. But if there is a threat to music creation in India then such copyright societies are essential. I do not know what “should” the answer be.

    It may seem that if a copyright exists then why shouldn’t it be enforced. The problem is that many such societies sue individuals who are with in the “fair use”. Many of these individuals do not have the ability to fight such a case and may refrain from useful activity that is with in fair use.

    DISCLAIMER: I did not read the judgment as I could not find it. My comments are just based on your analysis.

    Reply
  2. AvatarSushant

    Thanks a lot Prashant for bringing this important judgment into public view and a great commentary.

    I searched for this issue a bit and I found a recent supreme court judgment on similar issue.

    M/S Entertainment Network (India) Ltd vs M/S Super Cassette Industries Ltd on 16 May, 2008

    I do not know if these are related in any way.

    Reply
  3. AvatarAnonymous

    Dear Prashant,

    Thanks for reporting the judgement. Its a great report.

    However, I beg to state that I am not too sure if the author of the copyrightable work shall be in his limit to make a copyright society the exclusive licensee.

    The judge himself has mentioned in the judgement that the parties can only agree to what the law permits them to do. Incase of a copyright society since the owner shall always have the right to grant license under Section 33, the agreement making a copyright society the exclusive licensee shall shall be something whicb is permissible under law and to that extent shall not be permissible. Accordingly, I agree with the judge that a copyright society can never be the exclusive licensee as the owner of the cannot be bound contractually.

    Reply
  4. AvatarPrashant Reddy

    Dear Mr. Gangjee,

    We usually give a direct link to the High Court website. Unfortunately the day that I had posted on this judgment the Orders/Judgments section of the Delhi High Court website was down and hence the Manu citation. I promise to ensure that from next time onwards I will give the direct link as soon as possible.

    Best,
    Prashant

    Reply
  5. AvatarPrashant Reddy

    Dear Anon,

    The judge has depended on the proviso to Section 33 which says “Provided that an owner of copyright shall, in his individual capcity, continue to have the right to grant licenses in respect of his own works consistent with his obligations as a member of the registered copyright society”

    The reason behind my disagreeing with the judgment was that the proviso uses the words “continue to have the right to grant licenses in respect of his own works”. The law therefore gives the copyright owner to continue to have the right to license his works. Since its a ‘right’ bestowed upon the copyright owner I presume that the copyright owner is free to exercise this right in any which way he wants to which may include surrendering his right to the copyright society.
    Looking forward to your reply…

    Prashant

    Reply
  6. AvatarAnonymous

    Sorry for the awfull english in my previous post but i am glad that u got the message.

    I think that the use of the words “continue to have the right to grant licenses” cannot be curtailed by binding the owner contractually as it shall be against the provisions of law. An agreement to this effect shall not be permissible under law as the parties can only permit what the laws permit them to do.

    Let me know what u think..

    Reply
  7. AvatarAnonymous

    Another thing which I think needs to be looked into would be the obligations of the owner as a member of the registered copyright society. I wonder where we can find them as I understand it shall largely depend on the membership and the Article of Association.

    Reply
  8. AvatarShamnad Basheer

    Great post Prashant,

    If memory serves me right, a couple of cases (bashesharnath etc) held that one can contract out of any statutory right, provided that:

    i) the right is not a “fundamental right” under the constitution.

    ii) the provisions contracted out of do not embody “public policy”.

    I’m not sure if more recent case law has altered the above proposition. But if it holds good, then it would appear that a provision such as section 33 can be contracted out of, unless there is a showing of duress etc.

    Reply
  9. AvatarPrashant Reddy

    Dear Anon,

    I think Shamnad’s comment deals with the issue in more detail than I have.

    The question therefore is: why do you think such a right cannot be contracted out? There is no statutory bar to it.

    Prashant

    Reply

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