Copyright Others

Novex Communications Pvt. Ltd. v. DXC Technology Private Limited – Analysis I


For summary of the case, click here.

Section 33 and Business of granting licenses through Copyright Societies

33. Registration of Copyright society.— (1) No person or association of persons shall, after coming into force of the Copyright (Amendment) Act, 1994 (38 of 1994) commence or, carry on the business of issuing or granting licences in respect of any work in which copyright subsists or in respect of any other rights conferred by this Act except under or in accordance with the registration granted under sub-section (3):

Provided that an owner of copyright shall, in his individual capacity, continue to have the right to grant licences in respect of his own works consistent with his obligations as a member of the registered copyright society:

Provided further that the business of issuing or granting licence in respect of literary, dramatic, musical and artistic works incorporated in a cinematograph films or sound recordings shall be carried out only through a copyright society duly registered under this Act:

………………..

Firstly, the definition of “business” forms part of the core reasoning of the High Court. The High Court held that the “business” implies continuity and is “a commercial enterprise carried on for profit“. (9th edition Black’s Law Dictionary and State of M.P v. Mukesh, 2006 13 SCC 197). (para 29).

In Sodan Singh v. New Delhi Municipal Committee (1989) 4 SCC 155), the Supreme Court interpreted “business” as a term which is wide enough to include anything which occupies the time, attention and labour of a man for the purpose of profit. I could not get access to the 9th edition of Blacks Law Dictionary. But I went through the 4th edition (page 248) which provides for a similar definition.

The definition relied on by the Madras High Court focuses on the ‘enterprise’ aspect only. Going by this definition, an individual can never run a business. This incomplete appreciation of “business” had an adverse effect on appreciating the statutory framework set out by Section 33 of the Copyright Act.

Secondly, the Court distinguished first and second provisos to Section 33(1) as follows: “29…..To put it in simple terms, the right of an owner, in his individual capacity, to exploit a right by issuing a license remains untouched. However, when it comes to the “business” i.e., a commercial enterprise of issuing licenses, the law, as it presently stands, requires it to be routed only through a copyright society registered under Section 33(3) of the Act.”

I do not agree since the granting of licenses is by itself a business irrespective of whether the license is granted at an individual or non-individual level.

Further, a proviso “carves out an exception to the main provision to which it has been enacted as a proviso and to no other.” (Union of India v. Sanjay Kumar Jain) The main provision in Section 33(1) states that the business of issuing or granting licenses can be carried only through copyright societies. The first proviso i.e. “an owner of copyright shall, in his individual capacity, continue to have the right to grant licences in respect of his own works consistent with his obligations as a member of the registered copyright society” has to be interpreted as against the main provision i.e. the business of issuing or granting licenses only through copyright societies. The logical deduction is, individual licensing is allowed as an exception to licensing through copyright societies.

The second proviso (i.e. “the business of issuing or granting licence in respect of literary, dramatic, musical and artistic works incorporated in a cinematograph films or sound recordings shall be carried out only through a copyright society”) has to be read as an exception to the first proviso. [It will be incoherent if the second proviso is read as an exception to the main provision (as the second proviso will then tend to repeat the main provision).] When second proviso is read as an exception to the first proviso, it leads to the following logical conclusion: the business of granting licenses in respect of literary, dramatic, musical and artistic works incorporated in a cinematograph films or sound recordings can be carried only through the copyright societies. It is irrelevant whether the above business is carried in individual or non-individual capacity.

That leads to the next question: how to reconcile Section 33 with other provisions of the Copyrights Act?

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 second year of Law School (in the prestigious Nani Palkhiwala Essay Competition on Intellectual Property). His stint as a student of Prof. Shamnad Basheer further accentuated his interest in 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. Mathews is, currently, based out of Munich, Germany. He had earlier done his LLM in 'IP and Competition Law' from Munich Intellectual Property Law Centre (jointly run by Max Plank Institute for Innovation and Competition, University of Augsburg, Technical University of Munich and George Washington University, Washington).

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