“Licensing activities can only be channeled through U / S 33 copyright societies”; Madras HC dismisses lawsuits for infringement of license rights
Recently, the Madras High Court had the opportunity to analyze the scope of the statutory embargo on the licensing activity for field performance rights of sound recordings when the licensing entity does not fall within the meaning of a copyright society under section 33 of the Copyright Act.
The Single Judge Chamber of Judge N. Anand Venkatesh thus ruled:
âThere’s no question that an owner doesn’t necessarily need to join a copyright society. The first provision of Article 33 makes it clear that the right of an owner to issue licenses, on an individual basis, remains unchanged, subject to the endorsement that such a right must be compatible with his obligations as a member of a copyright society. However, once the granting of the license passes from the owner to the individual and transcends the domain of the company, section 33 (1) and / or the second condition applies. The legislative intention is clearly clear that licensing matters are to be channeled only through a copyright society. “
The court ruled that the plaintiff’s cause of action will be ‘crumble like a pack of cards’ when it is clear that the applicant is subject to the legal prohibition on issuing licenses under Article 33. When the answer to the preliminary question of law indicates that the applicant does not have the legal authority to issue of licenses, there cannot be consequences of the claim by the plaintiff that the defendants did not obtain licenses and did not pay the license fees for the field performance rights of the sound recordings concerned. .
In the present case, Novex Communications Private Limited, the plaintiff had entered into various transfer agreements with the owners of sound recordings, notably the songs from films. By virtue of the rights assigned to them, including the public performance rights in the field of the sound recordings of the songs, the plaintiff argued that their acquired rights give them absolute copyright for the licensing of third parties for the field performances of the songs concerned.
“If the applicant is legally authorized to issue or grant a license under the copyright law without being the copyright society under the copyright law, as provided for in the 33 of the Copyright Act 1957? “, this is the question that the single judge training of Judge N. Anand Venkatesh formulated as the preliminary question that deserves an answer.
In the two lawsuits filed in court, the allegations made by Novox against the two defendants, namely DXC Technology Pvt. Ltd. and Cognizant Technologies Solutions India Pvt. Ltd, are the same. It was argued by Novex that despite its absolute copyright in the floor performances of certain songs under section 18 (2), both defendants performed these songs in the events they organized without obtaining a license from Novex.
The plaintiff also claimed that he became the owner of the âsound recordingsâ and these fall within the definition of âworkâ under section 2 (y) of the Copyright Act. It has been argued that the owner of a work is different from the original content creators who are the authors of the underlying literary, musical or artistic work; only the latter would be subject to the constraints of article 33 of the law, added the plaintiff’s lawyer. Therefore, according to the applicant, membership in the copyright society is a voluntary act which does not affect the applicant’s right to grant licenses.
However, the defendants argued that the plaintiffs have admitted that they are in the business of licensing sound recordings for all forms of exploitation of copyright in sound recordings. Section 33 of the Copyright Act does not allow Novex to license or claim license rights over the rights assigned under Section 30, as they are not a company of copyright nor a member of a copyright society. The defendants also argued that the plaintiff had claimed rights only to the performances on the ground and that this would not make them the owner of a âworkâ, ie sound recordings.
Accordingly, under Order XIV, Rule 2 (2) (b) of the Code of Civil Procedure of 1908, the court framed the preliminary question on the question of law which will determine Novex’s jurisdiction to bring these two lawsuits. .
Findings of the Court
Initially, relying on ICSAC v. Aditya pandey (2016), the court observed that Article 18 of the Copyright Law transfers ownership of copyright to the assignee, while a licensee under Article 30 simply acquires a user right whose ownership still belongs to the owner / grantor.
While tracing the genesis of copyright societies and its transformation over time, the court noted that the 1994 Copyright Amendment Act introduced the concept of a registered âcopyright societyâ. under section 33 (3) of the law.
“Although envisaged with the intention of benefiting the authors of the work, section 35 of the law placed these companies under the collective control of the owners with little or no room for the authors. In 2008, a situation reached, where, these copyright societies were completely under the control of owners who ignored the interests of songwriters and composers “, observed the court.
The single-judge training then built on the 227th report of the Parliamentary Standing Committee on the Copyright (Amendment) Bill of 2010 which paved the way for the 2012 Amendment whereby â authors âwere placed on an equal footing withâ copyright owners â. , in the control of the copyright society.
In addition, the court considered the effect of the changes made so far on licensing as a business:
“Clause (1) of Article 33 makes it clear that ‘no person or association of persons’ shall, after the entry into force of the Copyright (Amendment) Act 1994, start or exercise an activity of issuing or licensing any work in which copyright subsists or in respect of any other right conferred by this Act, except under or in accordance with the registration granted as copyright society under Section 33 (3). “
The court noted that, according to Section 2 (42) of the General Clauses Act of 1897, the word “person” also includes business in the absence of a definition in the Copyright Act. Moreover, Article 33 (1) and its second provision do not impose restrictions on the right of an owner to grant licenses individually for his own works, as long as this is compatible with his obligations as as a member of a copyright society.
On the legality of Novex Communications, a for-profit commercial enterprise, licensing the rights assigned to it, the court observed:
“It is undoubtedly true that the assignee becomes the owner under section 18 (2) of the Act and is, therefore, legally entitled to issue licenses under section 30 as the owner of the right Copyright Article 30 simply recognizes the owner’s right to license and does not distinguish between natural persons and commercial entities in licensing. This distinction, however, is at the heart of the matter. section 33 which prohibits “issuance or licensing activity” except by copyright societies [Clause(1) and second proviso to Section 33], while retaining the right of the owner, individually, to exercise the license right of his works conferred on him by Articles 18 (2) and 30 of the Law. “
Relying on Kalpana Mehta v. Union of India (2018), the tribunal relied on a parliamentary speech by the Minister of Information and Broadcasting who proposed the bill. The bench considered that the intention of the amendment was to protect the rights of authors by emphasizing that authors and other owners can claim equal shares of royalties through the copyright society.
âThe same goes for sound recordings, the idea being that you can get the work attributed to you, but you can’t get the copyright assigned to you. You can use this work through other media, but there can be no assignment of copyright. So the author and the music composer would share the royalty with the producer, the assignee, on equal terms. This is really the concept behind these amendments, protecting the rights of the author and the composer of music â, then commented the Minister of Information and Broadcasting in parliament.
Disagree with the judgment of Novex Communications Private Limited v. Lemon Tree Hotels Limited (2019), the court clarified that the decision of the Delhi High Court was not in line with the legislative history of the Amendment Act of 2012. The Delhi High Court had ruled that the law companies of Author would have the exclusive right to grant licenses only when exclusive permission to do so is obtained from the owners under Section 34 (1) (a). The Madras High Court, on this aspect, reiterated that the first condition of Article 33 only works as the issuance of a license by an owner, on an individual basis. If the entity concerned is in the business of issuing licenses, like the applicant in these cases, it would fall under the second condition, if the work is incorporated in a cinematographic film or sound recording.
“… Furthermore, the second condition is clear that” the activity of issuing or licensing “must only be carried on through a copyright society. allowing entities other than copyright societies to engage in the licensing activity, the Court would clearly make redundant the legislative emphasis on the word “only” appearing in the second qualification of Article 33. This would run counter to established canons of interpretation according to which no word or provision should be considered redundant or superfluous in interpreting the provisions of a law “, the court added, relying on the judgment which describes the legislative intent underlying each part of the law in Sankar Ram & Co. v. Kasi Naicker, (2003).
“It must necessarily follow that the very substrate for injunction and damage relief, claimed in both suits, must crumble like a deck of cards,” the court noted while dismissing the two lawsuits filed by the plaintiff. The court also imposed costs of Rs one lakh each for the two lawsuits to be paid to the respective defendants.
Case title: M / s.Novex Communications Pvt.Ltd v DXC Technology Pvt. Ltd, M / s.Novex Communications Pvt.Ltd v Cognizant Technologies Solutions India Pvt. Ltd.
Case n Â°: CS Nos. 407 & 413 of 2020 (Comm.Suits)