I’m sure most of us are rather saturated with this blog’s coverage of the happenings IPRS and PPL. But before these issues die the quick death that they are destined to, I would like to discuss, in this post, the massive litigation initiated by PPL against hotels and restaurants in the December of 2010 over the music that these venues play for ‘New Years’ celebrations.
On the 29th of December, 2010 the Copyright Society for the public performance of ‘sound recordings’ – the Phonographic Performance Ltd. (PPL) filed two suits before the Delhi High Court seeking ex-parte injunctions against a number of entities which were planning to host special ‘New Years’ parties. Since the Delhi High Court was on vacation at that time, both suits were heard by the ‘vacation judge’ – Justice Ajit Bharihoke who granted PPL ex-parte interim injunctions in both suits (available over here and here). The first suit had named at least 25 defendants based in Delhi, including Olive Bar, Chonas, Claremont, Blanco Urban Pind etc and was argued by Senior Advocate Mr. A.S. Chandiok, who I think is also the Additional Solicitor General for the Delhi High Court. The second suit had named at least 9 defendants, possibly more.
There are about five issues that are required to be discussed in this case:
First Issue: After granting the interim injunction, the Judge posted the matter for the 7th of February, 2011. This time round the matter came up before Justice V.K. Jain, who I must say is possible one of the sharpest judges in the Delhi High Court, maybe even in the league of Justice Bhat. When Justice Jain heard the matter he pointed out some pretty embarrassing mistakes committed by PPL in both suits. For instance PPL had named ‘brand names’ as its defendants instead of naming the legal entities that owned the brand name. Let me explain with an illustration – if Spicy Thali was a restaurant owned by Kachori Gujaratis Pvt. Ltd. then only Kachori Gujarati Pvt. Ltd. could be named as a defendant in a lawsuit, not Spicy Thali. PPL however sued the equivalent of Spicy Thali. In any case Justice V.K.Jain ordered PPL to amend the memo of parties to name the legal entities owning these restaurants and hotels. Interestingly in the same order Justice Jain permits one of the defendants to sue PPL for extracting more money than was permitted by its own tariff cards.
Second Issue: Although PPL has the permission of the law to enforce public performance rights for only ‘sound recording’, the Delhi High Court granted PPL a much wider injunction covering even underlying musical works and lyrics, rights which can be enforced by only IPRS. I reproduce the pertinent part of the order as follows: 6. Till the next date of hearing, the defendants, their servants, agents and employees are hereby restrained from causing the reproduction,broadcast/performance or communication to public, literary and/or musical works and sound recordings of the plaintiff society, without obtaining licence from the plaintiff. So does PPL get to collect royalties on behalf of IPRS?
Third issue: As discussed in an earlier post of mine, the Delhi High Court is making a serious mistake by not wording the injunction orders in the language of the Copyright Act, 1957. For example if you read the highlighted portion above you will notice that the Court orders the defendants to restrain from infringing the works ‘of the plaintiff society’. How in God’s name are the defendants supposed to know which works are owned by the ‘Plaintiff Society’? The only way the defendants will know exactly which works are owned by the plaintiffs is if the order refers to the works mentioned in the ‘Register of Owners’ as defined by the Copyright Rules, 1958. The Delhi High Court however never seems to require either PPL or IPRS to disclose the ‘Register of Owners’ or the ‘Register of Agreements’ to defendants who are being sued. In the case of PPL such a disclosure is even more necessary because they may not have the rights to a lot of foreign music and even if they did have the rights to foreign music, some of them like U.S. recordings may not have the same rights as Indian works under the Copyright Act, 1957. Nikhil has done an excellent post on this sometime ago.
Fourth issue: One of the striking features of this litigation is the fact that PPL named 25 defendants in one suit. The question is whether there is a misjoinder of parties and cause of action i.e. whether the law permits the joining of 25 different parties in the same suit despite the fact that the infringement was going to occur in 25 different locations by 25 different parties. Such rules exist to ensure some kind of convenience in litigation. For example, the court-rooms in the Delhi High Court do not even have the room for 25 lawyers to stand in a line before the judge. At the most they can handle 6-7 lawyers, depending on their size. If a defendant were to move an application alleging misjoinder of parties it is likely that the Court may allow for separate trials for the sake of convenience. Another angle on clubbing so many defendants in one suit is to save ‘Court-Fees’. Since the minimum pecuniary jurisdiction of the Delhi High Court is Rs. 20 lakhs, the court fees per suit would be about Rs. 20,000. (Please correct me if I’m wrong) So if PPL were to file law-suits individually against 25 defendants it would have to pay Rs. 5,00,000 (5 lakhs) as court-fees. Looks like the Delhi High Court missed out on a nice tidy sum.
Fifth issue: Another aspect of this case is whether or not PPL was justified in invoking the jurisdiction of the Delhi High Court in this matter. In Delhi the High Court can hear only those cases which are valued above Rs. 20 lakhs. In the case of PPL, I think most of its licences for these parties are in the neighbourhood of Rs. 1 lakh which means that if the suits were filed individually then the Delhi High Court would have remanded the matter to the City Civil Court in Delhi and most corporates are kind of nervous of taking IP cases before the subordinate judiciary. A word of advice, if you want to file directly in High Courts then Chennai is the place because I’ve been told that the Madras High Court has automatic jurisdiction in all copyright cases irrespective of the value of the suit. Apparently the Madras High Court is considered the ‘district court’ for the purposes of the Copyright Act, 1957.
On your first issue: The fact that the Hon’ble Court has permitted the defendant No: 3 to file a civil suit against the plaintiff for charging more amount that the due amount for license in the garb of the ex parte ad interim injunction, it is clear that the plaintiff is misusing the position.
On your second and third issues; The point has been very well thought of.
On your fourth issue: I am aware of a Deputy Registrar (original side), High Court of Delhi who used to put objections about joining of several defendants in a suit having no connection with each other and used to insist on the Court Fee/filing separate suits. His post has since been changed now. Hence no such objections are being put by the Registry. This definitely is the misjoinder of defendants and causes of actions, not permitted by CPC. Even the concept of Mareva Injunctions would fall in this catagory, but I am aware of some cases where the Hon’ble Delhi High Court has passed Marvea injunction orders where the unknown defendants are normally named Ashok Kumar’s. later the actual name of the defendant is replaced from Ashok Kumar without paying any additional court fee. Normally the said Ashok Kumar’s are infrigners, they surrender without trial.
On your fifth issue: This is the reason that the plaintiff makes many defendants and values the relief of damages/rendition of account to more that Rs20/- Lakh, saving the hefty amount on court fee. The basic problem is that these points go unnoticed mainly on the ground that the cases get compromised without any trial which encourages the plaintiffs to go on with the said vice.