Copyright

Madras HC in Miss Kajal Aggarwal v. The Managing Director, M/s V.V. D & Sons Pvt. Ltd


This appeal on the Original Side (Original Side Appeal No.269 of 2017), was  filed under Order XXXVI Rule 1 of the O.S. Rules  read with Clause 15 of the  Letters Patent  against the  judgment and decree dated 03.07.2017 delivered in C.S.No.635 of 2011. The dispute was inter alia pertaining to the extent of copyright protection over the subject-matter cinematograph film. The judgment is available here.

Brief facts

The appellant-actress is a well-known actress in South India. In early stages of her career, she entered into a promotion / advertising agreement with the respondent wherein it was contended that the parties limited the term of copyright protection over the advertisement (which is a cinematograph film) to a period of one year. In other words, it was contended that, as per the agreement, the respondent can use the advertisement material only for a period of one year from 29/12/2008 to 28/12/2009.

The appellant issued a legal notice dated 12/09/2011 and called upon the respondent to immediately desist from using the advertisement materials. It was contended that, in spite of the receipt of notice, the respondent continued to use the advertisement materials. The appellant filed the suit seeking for the relief of compensation and for a permanent injunction so as to restrain the respondent from using the advertisement materials.

The respondent contended that the appellant, who had already received the remuneration for her performance, did not enjoy subsisting rights in the cinematography work over which the respondent holds the copyright. Citing the specific clause in the agreement which conferred copyright to the respondent over the cinematograph film, it was contended that the appellant cannot be allowed to turn around and deny the statutory rights of the respondent.

Judgment

It was held that the respondent is the producer of the cinematograph film and therefore, will fall within the definition of ”author” and consequently will also fall within the definition of ”producer”. Further, since what was produced by the respondent is a cinematograph film, it will also come within the purview of the definition of ”work”.

It is an admitted fact that the appellant, by virtue of Clause 4 of the agreement, had acknowledged that the copyright rests with the respondent. By virtue of this condition, the respondent who is the author of the “work”, shall be the first owner of the copyright. As the first owner of the copyright, the respondent will have the exclusive right to communicate the cinematograph film to the public by virtue of Section 14 (i) (d) (iii).

Once the respondent becomes the first owner of the copyright, the right shall subsist for a period of 60 years as provided under Section 26 of the Copyright Act.

Proviso to Section 17 of the Copyright Act

“17. First owner of copyright:- Subject to the provisions of this Act, the author of a work shall be the first owner of the copyright therein: Provided that—

(a) in the case of a literary, dramatic or artistic work made by the author in the course of his employment by the proprietor of a newspaper, magazine or similar periodical under a contract of service or apprenticeship, for the purpose of publication in a newspaper, magazine or similar periodical, the said proprietor shall, in the absence of any agreement to the contrary, be the first owner of the copyright in the work in so far as the copyright relates to the publication of the work in any newspaper, magazine or similar periodical, or to the reproduction of the work for the purpose of its being so published, but in all other respects the author shall be the first owner of the copyright in the work;

(b) subject to the provisions of clause (a), in the case of a photograph taken, or a painting or portrait drawn, or an engraving or a cinematograph film made, for valuable consideration at the instance of any person, such person shall, in the absence of any agreement to the contrary, be the first owner of the copyright therein;

(c) in the case of a work made in the course of the author’s employment under a contract of service or apprenticeship, to which clause (a) or clause (b) does not apply, the employer shall, in the absence of any agreement to the contrary, be the first owner of the copyright therein;

……….”

In order to use the proviso in (b) against the respondent, there must be an agreement to the contrary to the effect that the parties themselves agreed that the producer will not have the copyright in spite of producing the cinematograph film. In the instant case, this proviso will not be applicable since the appellant agreed that the respondent will enjoy copyright over cinematograph film and the entire promotional material.

Further, proviso in (c) will come be applicable only where the author makes a work in the course of his employment under a contract of service. In the instant case, the respondent took the initiative and was not under any employment under a contract of service. Therefore, the proviso is not applicable.

In short, the copyright of the respondent is not curtailed by proviso (b) or ( c ) to Section 17 of the Act. The respondent was, therefore, held to be the first owner of the copyright of the cinematograph film and the promotional material produced by them.

Section 26 of the Copyright Act

The respondent was conferred with a statutory right for a period of 60 years over the cinematograph film. This statutory right cannot be taken away by a performer in the cinematograph film by virtue of an agreement. The Court held that “Clause 9 in the agreement should be assigned the meaning that as between the appellant and the respondent, the right to produce the cinematograph film and other promotional material will continue for a period of one year and the said Clause does not curtail the copyright of the respondent.” Therefore, there is no restriction or prohibition upon the appellant from endorsing or acting in the advertisement film of other producers who deal with similar products.

Section 38 A(2)

“(2) Once a performer has, by written agreement, consented to the incorporation of his performance in a cinematograph film he shall not, in the absence of any contract to the contrary, object to the enjoyment by the producer of the film of the performer’s right in the same film:

Provided that, notwithstanding anything contained in this sub-section, the performer shall be entitled for royalties in case of making of the performances for commercial use.”

Once a performer by a written agreement consents to incorporate that performance in a cinematograph film, the performer thereafter cannot object to the producer’s right in the cinematograph film, unless there is a contract to the contrary. In the present case the appellant having consented to incorporate her performance as an actor in the cinematograph film produced by the respondent who is the author of it, the appellant cannot stop the respondent from enjoying their producer’s right. There is no contract to the contrary in this case and even the agreement dated 29.12.2008 does not contain any Clause preventing the respondent from exercising his absolute right as the producer of the cinematograph film.

For the reasons above, the High Court dismissed the OSA. However, the judgment and decree in the suit  will not stand in the way of the appellant to independently workout her entitlement for royalties by virtue of proviso to sub Section (2) of Section 38-A of the Copyright Act, 1957.

Comments

As to summarise, it was held that Section 26 of the Copyright Act, which provides for the term of copyright protection, is non-derogable. Section 26 of the Copyright Act is couched in mandatory terms. If the Court is to be persuaded to adopt a dynamic or liberal interpretation, sufficient intrinsic and extrinsic materials must be provided. In this context, I guess, jurisprudential arguments might have been helpful. One among the justifications of IPR is utilitarian justification. An IP right comes at a certain cost to the society. If the parties themselves decide to limit the term of copyright protection, it means lesser cost to the society. If parties can exercise discretion by giving due regard to the costs and benefits of the arrangement, it may help the society to preclude incurring unwanted cost. In other words, it can be argued that if parties decide to limit the term of copyright protection, it is in the best interests of the society. Going by this logic, interpreting Section 26 as a derogable provision, makes logical sense.

Even though the Court held in favour of the respondent vis-à-vis term of copyright protection, the net result of this judgment may not be favourable for the respondent. As the actress can enter into agreements with competitors of respondents, who may be armed with legally acceptable puffing, the earlier advertisement of the respondent may not serve the desired purpose. Therefore, generally speaking, in the light of this judgment, the focus in promotion / advertising agreements, may shift to (legally acceptable) restraint of trade.

 

Mathews P. George

Mathews P. George

Mathews is a graduate of National University of Juridical Sciences, Kolkata. His interest in intellectual property was kindled when he bagged the second position in his very second year in the prestigious Nani Palkhiwala Essay Competition on Intellectual Property. Winner of almost a dozen essay competitions in his law school days, he was involved in various research and policy initiatives relating to intellectual property. His stint as a student of Prof. Shamnad Basheer further accentuated his interest in intellectual property.

4 comments.

  1. PVS Giridhar

    This judgment will impact most celebrity endorsement contracts in so far as commercial advertisement videos are concerned. By operation of Sec.17 of the Copyright Act, copyright vests in the Producer, which is usually the endorsee company (which might have engaged an ad agency for the purpose) and under Sec.14 read with Sec.26, the producer is free to exhibit it to the public for a term of 60 years. The statutory term would prevail over any term fixed by the contract. I was delighted to argue this case in the High Court. Unfortunately, often at the stage of preparation of contracts, this legal implication is lost on the authors of the contract. That’s why boiler-plate contracts are a bad idea when high-stakes are involved. An SLP has been filed before the Supreme Court by Kajal Agarwal and is due to come up shortly.

    Reply
    1. Anonymous

      Glad to hear from you, Sir. As stated in my post, strong (extrinsic and intrinsic) arguments must be presented to persuade the Court to not go for textual interpretation. As I dont have access to the petitions submitted by Kajal’s counsel, I cannot comment on the same. I believe, one argument in favour of them is, contextualising the whole case in the light of jurisprudential justifications. Utilitarian justification always calls for a cost-benefit analysis. An IP right confers an exclusive right which comes at a cost to the society. Therefore, if the duration of this exclusive right can be limited by virtue of an agreement between the parties, it should be so allowed in the best interests of the society. On adopting this reasoning, Section 26 can be treated as a derogable provision. If this argument was not taken earlier in the HC, I am not sure wr it will be allowed at the SLP stage.

      Reply
    2. Mathews P. GeorgeMathews P. George Post author

      Glad to hear from you, Sir. As stated in my post, strong (extrinsic and intrinsic based) arguments must be presented to persuade the Court to not go for textual interpretation. As I dont have access to the petitions submitted by Kajal’s counsel, I cannot comment on the same. I believe, one argument in favour of them is, contextualising the whole case in the light of jurisprudential justifications. Utilitarian justification always calls for a cost-benefit analysis. An IP right confers an exclusive right which comes at a cost to the society. Therefore, if the duration of this exclusive right can be limited by virtue of an agreement between the parties, it should be so allowed in the best interests of the society. On adopting this reasoning, Section 26 can be treated as a derogable provision. If this argument was not taken earlier in the HC, I am not sure wr it will be allowed at the SLP stage.

      Reply

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