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Novex Communications Pvt. Ltd. v. DXC Technology Private Limited – Summarising the judgment (Part I)


On 8 December 2021, the Madras High Court delivered an important judgment concerning copyright law. The High Court held that the business of granting copyright licenses can be carried out only through the copyright societies. Finding that Novex Communications (the assignee of the copyright) did not fall within the definition of the copyright society, the High Court dismissed its petition seeking for damages and injunction. (paragraph 48)

I intend to critically analyse this judgment. In the first post, I shall summarise the judgment. In the subsequent posts, I shall critically analyse the judgment.

Reasoning

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:

…………………..

The Court distinguished second and third provisos to Section 33 (1) and reasoned as follows:

  • The copyright owner can grant licenses in his individual capacity consistent with his obligations as a member of the registered copyright society.
  • However the business of issuing or granting licenses can be carried out only through the copyright societies.

The Court was of the view that the legislative intent is clear by the fact that “only” is used in the second proviso to Section 33(1) i.e. the business of granting licenses can be carried out only through the copyright societies. In this regard, the Court disagreed with the Single Judge judgment of the Delhi High Court in Novex Communications Private Limited v. Lemon Tree Hotels Limited (2019 SCC Online Del 6568). (paragraphs 39, 42)

Section 34

Administration of rights of owner by copyright society.— (1) Subject to such conditions as may be prescribed,— (a) a copyright society may accept from an author and other owners of right exclusive authorisation to administer any right in any work by issue of licences or collection of licence fees or both; and (b) an author and other owners of right] shall have the right to withdraw such authorisation without prejudice to the rights of the copyright society under any contract.

On Sections 33 and 34, the Court held as follows:

“47.The learned counsel for the plaintiff contended that joining a copyright society is purely optional as is evident from Section 34 of the Act. The right to issue licenses cannot, therefore, be made contingent upon the owner being a member of any copyright society. However, this argument fails to impress this Court. There is no doubt true that an owner need not necessarily join a copyright society. The first proviso to Section 33 makes it clear that the right of an owner to issue licenses, in his individual capacity, remains unimpacted, subject to the rider that such a right must be consistent with his obligations as a member of any copyright society. However, once the grant of license moves from the owner in his individual capacity, and transcends into the realm of a business, Section 33(1) and/or the second proviso applies. The legislative intent is manifestly clear that the business of licensing must be routed only through a copyright society.”

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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