Copyright

The Delhi High Court Judgement in the IPRS Case (2021)


This blog carried a piece on the Delhi High Court’s recent judgment in IPRS v. Entertainment Network (India) Ltd. last week. As pointed out there, the judgement distinguishes between cases where underlying works (lyrics/musical composition) are used in the context of the broadcast of sound recordings versus other situations (e.g. live performances). In the latter case, the Court held that an injunction could be sought by authors/composers (or by the Copyright Society representing their interests) but not in the former case. The judgment has been appealed, and the Division Bench has issued notice in the matter, with the interim direction that the judgment from the Single Judge will not be treated as a precedent in other proceedings (DB order is available here).

This is my two cents on the judgement.

Contradictory legal plea?

Adyasha has already pointed out that the two suits considered in the case, viz., CS (OS) 666/2006 and CS (OS) 1996/2009, involved causes of action pre-dating the 2012 Amendments. The first suit was by IPRS alone and the second suit was jointly by IPRS and PPL.

According to the Court (para 16), IPRS and PPL had jointly pleaded the following in the subsequent suit: “Ultimately, the producer of the sound recording…… will own all rights in the sound recordings as well as the underlying works i.e., lyrics and musical compositions…” The Court believed that this admission in the subsequent suit practically negated the cause of action claimed in the earlier suit, which was that separate license was needed from the lyricist/composer, apart from the owner.

Ultimately, this seems to be one of the factors (and not the dispositive one) considered by the Court. Even though this could not have been sufficient to dismiss the claim because admissions of law cannot bind parties, it does create the impression that even IPRS was not entirely clear with its legal stand. Taking self-contradictory legal positions would affect the credibility of the case, even if it’s not fatal.

No licensee estoppel

The Court also rejected the IPRS’ contention that the Defendant was estopped from challenging the need for a license because they had previously taken a license from IPRS. The Court rejected this licensee estoppel contention because there can be no estoppel against the law (para 28); if by the law, no separate license was needed from IPRS, prior conduct to the contrary did not matter.

Procedural correctness?

The suits were disposed off finally (without trial), but under what provision? In its inception, the order records that it concerned two (2) suits and four (4) different I.A.s in one of them. The four I.A.s were under Section 10 of the CPC, Order 6/Rule 17 of the CPC, Section 151 of the CPC, and Order 11/Rule 12 of the CPC. None of these provisions concerns summary disposal of the suit without a trial. The judgment purportedly does this summary disposal under Section 151 (para 20). Section 151 may seem wide enough, but it cannot be invoked for this purpose because that would amount to circumventing other provisions of the CPC. Where other provisions of the CPC prescribes specific procedures/thresholds for summary disposal, viz. Order 8/Rule 10, Order 12/Rule 6, Order 13-A in case of commercial suits etc., the legislative intent is that the suit cannot be disposed off without trial in other situations. Thus, the disposal of the suits by this judgment seems questionable.

P.S: The suit is categorised as CS(OS) and not CS (COMM), and so, Order 13-A under the Commercial Courts Act could not even be invoked. But the Court acknowledges that these cases were transferred to the Commerical Division of the HC as per the Delhi High Court Notification dated 28.04.2016, under the 1st proviso to Section 7 of the Commercial Courts Act. In which case, the case would have been categorised as CS (COMM), and the procedure under the Commercial Courts Act would have applied. So, the whole thing seems odd, but perhaps, I am missing something.

Value of Interim Orders?

This judgment brings to light a question that has intrigued me for some time. At para 26, the Court operates as if that findings of law in the prior interim order of the Supreme Court in ICSAC v. Aditya Pandey, are practically final because it was not contingent on the Defendant or Plaintiff proving anything on trial. The Court even records that despite repeated queries, IPRS could not answer what would be established in evidence/trial that would require a different interpretation than was previously taken in the Supreme Court’s interim order.

While the Supreme Court has held that there must be consistency in interim orders in similar fact situations as a matter of judicial discipline and fairness, it is equally well-settled that interim orders are not precedents and do not operate as res judicata. But what the Court did here is slightly different – it decided a case finally based on a prior interim order. How far is this legally appropriate?

We have seen several interim orders, especially in IP cases, containing detailed/comprehensive analyses and conclusions of law. In theory, even on pure questions of law, a judge could take a different view at the final stage in the very same case. But what if every argument has been considered and answered in the interim order? What if no new legal reference/material is cited at the final stage? Even then, a judge is not bound to follow the findings in the interim order. But there is no legal principle preventing a Court from adopting an interim order’s reasoning in a final judgment, as long as the Court has not taken a close-minded approach to the case and has afforded a reasonable opportunity to the parties to defend their respective cases. It directly relates to one of the principles of natural justice – justice must only be done, but should (manifestly and undoubtedly) be seen to be done.

So, there is an element of procedural correctness/fairness to the issue – even if the Court were to adopt the reasoning from an interim order, it cannot do so at its whims and fancies, because that would affect a party’s ability to defend its case. For instance, where there is no application of an application for summary disposal (or even the possibility of one), forcing the party to demonstrate the need for a trial, affects due process in my opinion.

Interpretation of the 2012 Amendment to the Copyright Act

I have made this point earlier: on the face of it, the 2012 amendments to Sections 18-19 of the Copyright Act grant an in personam statutory right to authors of underlying works to claim royalties/equal share of royalties from the assignee. It is a cause of action for money, and it is a cause of action against the assignee. It does not create a cause of action against others, such as a radio broadcaster who has already taken the assignee’s license.

If the 2012 Amendment were to be enforced by IPRS (assuming standing, cause of action etc.) against radio broadcasters who have taken a license from PPL, the appropriate mechanism would have been for them to make a money claim against PPL, seeking an equal share in the royalty received by PPL from the radio broadcasters. Attempting to enjoin the radio broadcasters under the amended Sections 18/19 of the Copyright Act, in my opinion, is not correct.

That said, I agree with Adyasha that some of the observations in the judgment on the effect of the 2012 Amendments are erroneous. Consider the following statement (para 31):

“… It cannot mean that utilisation of the work as embodied in the sound recording also entitles the owner of the copyright in such work to demand an equal share of royalties and consideration payable for the sound recording.”

With due respect to the Court, this is ex facie erroneous when the statute’s plain text is considered.

IPRS and film producers – another missed opportunity?

One other point bothered me. When relying on the 2012 Amendments, IPRS appears to have emphasised on Section 19(10) alone as per the judgment. Section 19(10) is limited to situations of underlying works within a sound recording that does not form part of a cinematograph film. Yet, there is a finding of fact that the Plaintiff(s)’ claim in both suits concerned sound recordings forming part of the cinematograph film (para 31). If this finding of fact by the Court were correct, even assuming the 2012 Amendments are applicable retrospectively, I am not clear why Section 19(10) even applies; if at all, Section 19(9) and the 2nd proviso to Section 18(1) would apply.

Pointing to Section 19(9) and the 2nd proviso to Section 18 (1) may have raised another set of issues – the relationship with film producers. Readers may recollect the prior ruling of the Supreme Court in IPRS  1977, which is considered/interpreted/applied in subsequent caselaw as suggesting an automatic assignment of all rights in the underlying works in favour of the film producer even after the 1994 Amendment to the Copyright Act (my critique on this issue can be read here and here). In theory, the Court would then have to consider the following issues:

  • For a cause of action arising post-1994, but pre-2012, amendment, could IPRS even initiate this infringement litigation?
  • Does the proviso to Section 17 inserted in 2012 have retrospective effect?
  • In particular, is the proviso to Section 17 inserted in 2012, a reflection of the approach suggested by Justice Krishna Iyer in para 21 of IPRS 1977 (“…The film producer has the sole right to exercise what is his entitlement under s. 14(1)(c) qua film, but he cannot trench on the composer’s copyright which he does only if the ‘music’ is performed or produced or reproduced separately, in violation of s. 14(1)(a). For instance, a film may be caused to be exhibited as a film but the pieces of music cannot be picked out of the sound track and played in the cinema or other theatre. To do that is the privilege of the composer and that right of his is not crowned in the film copyright except where there is special provision such as in s. 17, proviso (c). So, beyond exhibiting the film as a cinema show, if the producer plays the songs separately to attract an audience or for other reason, he infringes the composer’s copyright. Anywhere, in a restaurant or aeroplane or radio station or cinema theatre, if a music is played, there comes into play the copyright of the composer or the Performing Arts Society….”)?
  • Assuming the 2012 Amendments to Sections 18-19 applied, who is the ‘assignee’ for the purposes of the 2nd proviso to Section 18(1) r/w Section 19(9)?

Now that the judgment is under appeal, the correct approach to a complete judgment in this matter will require the Division Bench to answer these questions. It was a missed opportunity at the Single Judge stage; I couldn’t fully appreciate (and I don’t want to speculate) why these issues were not considered at the Single Judge stage given the express finding of fact in para 31 of the judgment.

Retrospective at the 2012 Amendment to the Copyright Act

This is an issue acknowledged by the Court as arising in the case (para 17 (b)) but was not answered as pointed out by Adyasha in the previous post. Hopefully, the Division Bench will have the occasion to answer this issue.

Note: I represent/have represented clients on related and unrelated issues. Views expressed here are personal.

Adarsh Ramanujan

Adarsh Ramanujan

Adarsh is an independent counsel with offices in Delhi and Chennai. Before starting his own practice he spent considerable time with Lakshmikumaran & Sridharan at their New Delhi and Geneva offices. He obtained his B.Sc. LL.B. (Hons.) degree (Gold Medalist) from National Law University, Jodhpur and LL.M. degree from University of California, Berkeley. He is a qualified Patent Agent in India. A major portion of his time is spent practicing in the areas of IP & Technology Laws as well as in International Trade Law. He has however branched out into doing commercial litigation and arbitration work. His expertise also extends to regulatory laws such as environmental laws, biodiversity laws and cyber laws. Adarsh has taught patent law in NLU, Delhi, NLU, Jodhpur and at the CEIPI Institute (University of Strasbourg). He has authored or co-authored close to 30 publications on diverse topics, including on IP, WTO, constitutional law and international tax.

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