This post is co-authored with SpicyIP Intern Tejaswini Kaushal. Tejaswini is a 3rd-year B.A. LL.B. (Hons.) student at Dr. Ram Manohar Lohiya National Law University, Lucknow. She is keenly interested in Intellectual Property Law, Technology Law, and Corporate Law. Her previous posts can be accessed here.
Readers would recall that in the past we have written about Government notifications stressing on the menace caused by the threats of legal proceedings (see here and here). Section 60 of the Copyright Act is one safeguard against such “groundless threats” of legal proceedings, whereby the affected party can seek an injunction or recover damages. On September 27, 2023, the Karnataka High Court in M/s Chancery Pavilion v. Indian Performing Rights Society Ltd., passed an order interpreting the scope of this safeguard, reiterating that the right of the plaintiff to initiate actions against the “groundless threats” under Section 60 would be terminated in light of a separate suit by the defendant alleging copyright infringement, even if filed subsequent to the Section 60 suit. For this, the High Court relied on the proviso to Section 60, which states that the right to seek actions against the groundless threat of legal proceedings will not apply if the person making such threats, “with due diligence, commences and prosecutes an action for infringement of the copyright claimed by him.” The Court clarified that since one such action was initiated by the Indian Performing Rights Society Ltd. (IPRSL) (defendant) before the Delhi High Court, M/s Chancery Pavilion (plaintiff) cannot seek benefits under Section 60, regardless of the fact that the IPRSL’s suit was subsequent to Chancery Pavilion’s suit.
On a surface level, this order seems to offer an important insight into the nature of Section 60. However, the Karnataka High Court seems to have clearly overlooked the fact that the Delhi High Court suit was disposed of in 2015 with directions to IPRS to file it before a competent court in Bangalore!
Before we get to discussing this controversy in detail, let’s take a quick look at the background of this case. The plaintiff is a company operating hotels, restaurants, taverns, etc., which was aggrieved by the public notices and letters sent by the defendant, a copyright society, directing the plaintiff to obtain necessary licenses before playing any of their sound recordings. Though the plaintiff had taken a license earlier, the same expired in 2007, after which the defendant continued to threaten the plaintiff with legal actions against which the plaintiff filed a suit u/s 60 in Bangalore on January 19, 2013. Subsequently, the defendant filed a separate suit before the Delhi High Court on April 2, 2013. In light of the subsequent suit by the defendant, the trial court rejected the plaintiff’s suit on December 5, 2014 against which the plaintiff preferred an appeal before the Karnataka High Court. In the appeal, Karnataka High Court agreed with the trial court’s interpretation of the provision and disposed of the appeal without issuing any finding on merits.
Understanding the Implications of Section 60
The proviso of section 60 has seen a rather divergent application over time. On the one hand, in a Calcutta High Court decision in Radio Today Broadcasting Ltd. v. Indian Performing Right Society Limited, the court has held that a Section 60 suit alleging groundless threat does not become infructuous if the defendants file a subsequent infringement suit. In contrast lie a plethora of cases, including that of the Supreme Court in M/s Mac Charles (I) Ltd. v. M/s Indian Performing Rights Society Ltd, the Delhi High Court in Super Cassette Industries Ltd. v. Bathla Cassettes India (P) Ltd., and the Madras High Court in Q.D Seatamon Designs Private Limited v. P. Suresh, where it has been held that a Section 60 suit does become infructuous on filing of a subsequent infringement suit. The Supreme Court’s presence for the latter proposition weighs the scales down in its favor. So, the bottom line from the decisions is that the defendant, against whom the suit under Section 60 of the Copyright Act is filed, or the threatener, can defeat the plaintiff’s suit by commencing a prosecution against the plaintiff, but only after carrying out “due diligence” (the multi-faceted nature of this term have been discussed here) in light of the proviso of Section 60.
However, one may wonder whether this interpretation is taking away the primary purpose of Section 60, as after all, it can be perceived that the subsequent infringement suit is filed to essentially counterblast the suit filed under Section 60. On this note, in Zee Entertainment Enterprises Ltd. v. Saregama India Ltd., the Delhi High Court commented on the “juridical philosophy” of Section 60, which aims to prevent harassment of parties receiving copyright violation notices and activates the proviso when the party alleging infringement initiates an action after due diligence. Similarly, in the Bathla Cassettes case, the Delhi High Court has explained that Section 60 is designed to protect a person against any wrongful threats, and thus, the remedy is to seek injunctions against such threats. However, the provision will not be applicable when an action against the alleged infringement has been initiated in furtherance of such threats. Thus, it makes it clear that Section 60 has a very limited scope and perhaps cannot be seen on the same footing as that of a suit alleging infringement.
Can Section 60 Suit be Dismissed in Absence of an Existing Infringement Suit?
From the above discussion we can see that any suit under Section 60 operates parallelly with the infringement suit and thus, the existence of a separate infringement is sine qua non before disposing of the suit under Section 60. In M/s Chancery Pavilion, too, section 60 has been interpreted narrowly but is still in line with the more popular interpretation of the courts. However, what’s amusing here is that before the Karnataka High Court order was passed, the Delhi High Court had already returned the plaint back to IPRSL in 2015, with directions to file the suit before a competent court in Karnataka. The Karnataka High Court, while dismissing the appeal, relied on M/s Mac Charles (I) Ltd., vs. M/s Indian Performing Rights Society Ltd and regarded the suit in the Delhi High Court as a substantial action fulfilling the condition of due diligence. The court thus seemed to operate under the assumption that the infringement suit before the Delhi High Court suit is still open. This is clear from the observation in para. 32 – “it is always open for the plaintiff to have its defence filed before the High Court at Delhi and get the suit decided on the merits…” But in reality, though, the Delhi High Court disposed of the case on October 1, 2015. On this, it is pertinent to note that the proviso of Section 60 clearly uses the words “commences” and “prosecutes,” and thus, where there is no ongoing “prosecution” anymore in Delhi, the question arises: shouldn’t the court have considered this fact while disposing of the appeal?
Furthermore, it is noteworthy that none of the parties have also pointed out these facts to the court as seen from the orders passed by the Karnataka High Court (see the list of the orders here). In one of the orders dt. November 09, 2017, the significance of this dispute vis a vis the chance to interpret Section 60 was highlighted. But if an interpretation of Section 60 was expected, shouldn’t the parties inform the court about all the aspects of the case, including the information about the fate of the Delhi High Court suit?
Now, in practice, the Delhi High Court seems to have no ongoing infringement case, and the appeal against the Section 60 order has also been denied. It is possible that the parties may have resolved this matter long ago and are no longer interested in pursuing it. However, by omitting to consider the developments in the Delhi suit, it is unclear if the Karnataka High Court order can be regarded as a robust interpretation of the provision.
In Need of a Relook
While the Court’s interpretation, in line with the Supreme Court case, lends this order higher precedential weight, it should have also taken into account the subsequent developments that took place since the impugned order. However, dismissing the appeal without due consideration of the facts in parallel matters sets an undesirable precedent. This can potentially impact the long-term interpretation of Section 60. The section’s language, indicating an ongoing, present case, demands meticulous interpretation to uphold its correct application, and this order’s precedential value could jeopardize that. The current order unmistakably contains significant oversights in both factual and legal aspects that cannot be overlooked.
A big thanks to Lokesh for his help on this!