Indian Copyright Orders and Judgments 2020-Part I

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Music Broadcast Limited and Ors. v Tips Industries Ltd. and Ors., The Intellectual Property Appellate Board (IPAB), OP (SEC-31D)/3/2020/CR/NZ

The issue of the amount of license fee payable by the FM Radio companies to the music companies has been the subject matter of dispute for long time. As a result of this, the court decided ten similar applications by this one order. The Copyright Amendment Act, 2012 introduced Section 31D which provides a statutory license to all broadcasting organizations desirous of communicating to the public by way of a broadcast, provided that such broadcasting organization will pay the owner of such rights royalties in the manner and at the rates fixed by the Appellate Board.

The legislature’s intent of introducing 31D was not only as a right in favour of broadcasting organizations but also with the objective to ensure public access to sound recordings over the FM radio, without subjecting the broadcasting organizations to tedious negotiations with the owners of the sound recordings.

The music companies pleaded to be able to negotiate the rate of royalty in a free market and that the royalty should not be fixed on net advertising revenue. Advertising revenue, they argued, can drop solely due to the broadcaster because of poor curation of content, sub-par understanding of consumer taste and other such concerns. They, instead, proposed the needle per hour (NPH) method or the gross revenue method.

The radio companies, on the other hand, refused to pay higher royalty on the grounds that they were promoting social welfare activities. But with the onset of privatisation of radio channels, radio companies have started to be driven by profits. Before the amendments to the Copyright Act, 1957 in 2012, when commissioning or employing the authors/composers, a film producer would be the first owner of the copyright in the literary and musical works incorporated in the cinematograph film/sound recording. Before this, there was no statutory requirement for royalty to be payable for the literary and musical works.

The right to receive royalty is usually shared right between the assignee alongside the author and music composer, however, the court was of the opinion that the liability or payment of royalty lies on the actual utilizer because payment is connected to the utilization of the work.  The broadcasting organizations wanted to pay the royalty under a single head of “sound recording”, making it the duty of the producer/ music companies to share the revenues with the authors and music composers. On the other hand, the music companies argued that the authors and composers were entitled to the royalties under the separate head just as the Broadcasters were doing earlier.

Section 31D (1) reads that the broadcasting organization is the sole beneficiary of the statutory license and the license cannot be conferred upon anyone else. Therefore, the broadcasting organization alone is statutorily obliged to make payment of the royalty to the owners of the works. In this way, the broadcasters are utilizing the said work for commercial benefit and the said liability of the broadcasters cannot be shifted or imposed on any other participant. Therefore, the broadcasting organization is the sole entity that has to pay the royalties as prescribed.

The IPAB then went on to highlight the necessity that such a provision is applied in accordance with the due process and keeping in mind the interests of the copyright owner as balanced against the public interest to access music by way of radio broadcast. Due to this, giving prominence to the commercial interests of radio broadcasters in fixing royalty rates under the said provision would be prejudicial to the copyright owner and skew the balance heavily in favour of the radio broadcasters contrary to the letter and spirit of the said provision. Thus, on a careful reading of the statute, it was held that Needle per Hour (NPH) would be the appropriate method for the determination of the rate of royalty.

Link to the order: https://ipab.gov.in/ipab_orders/delhi/OP-(SEC-31D)-1-to-9-2020-CR-NZ-and-OP-(SEC-31D)-1-2020-CR-WZ.pdf

Jagran Prakashan Limited vs. Telegram FZ LLC & Ors., Delhi High Court, CS(COMM) 146/2020

The plaintiff in this matter was a publishing company which published a leading newspaper in Hindi, known as Dainik Jagran, and had registered the associated trademarks for the newspaper in several classes. Readers could either subscribe to the physical copy of the Dainik Jagran newspaper, or access the digital version of the newspaper from the corresponding webpage. The subscribers of the digital version of the newspaper could access it only from the webpage and were not permitted to download the PDF version of the newspaper. The Defendant offered a cloud based instant messaging service called Telegram and the app version of this service is available on several operating systems for users to download. This app also allowed users to anonymously start channels and post content on these channels.  Soon many users of Telegram started various channels named after the plaintiff’s publication and posted the news articles published on the plaintiff’s website, in  PDF format which could be downloaded by other users.  Since the Defendant claimed that it was an intermediary and did not reveal the identity of the users that started these channels, which were infringing on the plaintiff’s content, the Plaintiff sent a notice to the defendant asking them to shut down the infringing channels. However, after sending four such notices to the defendant and not receiving any response, the Plaintiff then filed a lawsuit in the High Court of Delhi and included the anonymous users who had started the infringing channels, as co-defendants to the lawsuit.

As soon as the Defendant received the notice from the court, it responded claiming that the infringing channels had been blocked, but the Plaintiff provided evidence that these channels were in fact still active. The Plaintiff also stated that the user base for one of the infringing channels on the defendant’s platform was increasing each day. After examining all the evidence presented by the Plaintiff, the court ruled in favour of the Plaintiff and granted an ad-interim injunction. Further, the court agreed with the Plaintiff’s contention that the Defendant could not continue to claim its intermediary status, and ordered the Defendant to block the infringing channels and to disclose the names of all the users who had started each of these channels.

A copy of the order may be accessed here.

Ramgopal Varma and Ors. vs. Perumalla Amrutha, High Court of Telangana, MANU/TL/0352/2020

The appellants in this matter include the director and others involved in the making of the film ‘Murder’. The respondent in this matter, had claimed that, the film is allegedly based entirely on her life story, with regard to her husband’s death. Earlier this year the Telengana High Court set aside an injunction from the Trial court, that had halted the release of the film Murder.

When the promo for the film was released on YouTube, the respondent filed a suit against the appellants for a perpetual injunction restraining the release of the film. In the lawsuit, the respondent, claimed that her right to privacy guaranteed by Article 21 of the Constitution of India, had been violated, specifically because of the appellants’ reference to her name, her husband’s name and her father’s name in various social media posts, while announcing the release of the film.

After referring to another honour killing in August 2020, the court stated that the events which had occurred in the life of the respondent are not unique to her and to her family alone. While summarizing the principle of protection of right to privacy, the court clarified that, while there was a definite right to privacy, the exception to the principle was that “once the matter becomes a matter of public record, the right to privacy is no longer subsisting and it becomes a legitimate subject for comment for press and media among others.” The court, made notice of the fact that events concerned in this case had been widely covered by newspapers and are “in public domain” because of the FIR and Session’s case filed with regard to the respondent’s husband’s death.

In the final decision given by the court, the appellants were allowed to release the film after being instructed by the court that, they were not allowed to use the names of the respondent and her family members, in order to ensure that the respondent does not suffer any further pain and anguish. The court also directed the appellants, to publish a disclaimer stating that the film was a work of fiction.

A copy of the order may accessed be here.

Super Cassettes Industries Private Limited and Ors. Vs. Nandi Chinni Kumar and Ors., High Court of Telengana, Civil Miscellaneous Appeal Nos. 355, 356, 357 and 358 of 2020

The plaintiff in this case is a music record label and film production company and the defendant no.1 is a former gangster turned football player. According to the plaintiff, defendant no.1 had signed an agreement with the plaintiff, through which defendant no.1 gave the film rights to his life story to the plaintiff for a sum of money. Following this, the plaintiff registered the film script with the title ‘Slum Soccer’ with the Telangana Cinema Writers’ Association. However, soon after registering the film script for Slum Soccer, the plaintiff read about a film titled ‘Jhund’, which was based on the life story of defendant no.2 who was defendant no1’s coach. Although the film Jhund was based the life story of defendant no.2, the film’s story also showed the story of defendant no.1. The plaintiff then informed defendant nos. 1-12, about the previous agreement that the plaintiff had signed with defendant no.1, which gave the plaintiff absolute rights over defendant no.1’s life story and that if the defendants continued shooting for the film Jhund, they would be liable for copyright infringement. The plaintiff also issued a cease and desist notice to defendant nos.1-12 and stated that defendant no.1 admitted to the plaintiff that he had signed an agreement with defendant no. 3 subsequent to assignment of rights in favour of the plaintiff by receiving substantial consideration and also permitted the defendant no.3 to incorporate the character of 1st defendant in the said film. The plaintiff contended that he owns the concept, thought, characterization, image, identity and expression apart from copyright in respect of true life story events of 1st defendant, that the action of defendant nos. 1 to 12 in making the said film with a character/image/identity and scenes based on the true life story events of the 1st defendant constitutes infringement of the copyright of the plaintiffs original work ‘Slum Soccer’, that defendant nos. 1 to 12 have without his consent used the literary work and/or its constituent elements contained in the plaintiff’s copyrighted story.

The plaintiff filed a suit seeking a perpetual injunction prohibiting defendant nos. 3 to 12 from exhibiting or broad-casting the movie Jhund from all the theatres in India as well as abroad. In response to the suit, the defendants stated that no case had been made out by the plaintiff for grant of injunction against them and other defendants from proceeding with the release of the film, titled ‘Jhund’. Further, defendants 3, 5, 6 and 7 also contended that it is possible to make a movie only on the coach, the 2nd defendant, without having the character of the 1st defendant, the alleged Don turned Footballer who captained the Indian Slum Soccer Team in the Slum Soccer World Cup. But it was held that, the ‘probability’ of the doing it is low because the marketability of a movie about a celebrity sportsperson is far higher than the marketability of a movie about his coach without the celebrity pupil/sportsperson which in this case was defendant no.1 and being a commercial venture, the risk of the film only about the coach without the celebrity pupil ending in a flop, is much more. The court observed from the teaser of the film ‘Jhund’, that there are distinct similarities in the plot, depiction and the life and story of the protagonist of the film as with the registered script of ‘Slum Soccer’ of the plaintiff, and the defendants have not specifically denied any of these aforementioned allegations of the plaintiff with regard to similarities between the film scripts. The court observed that there was a strong prima facie case of infringement against the defendants and opined that an  interim injunction should be granted in favor of the plaintiff.

Link to order: https://indiankanoon.org/doc/82857163/

Disney Enterprises, Inc. and Ors. vs. Kimcartoon.to and Ors., Delhi High Court, CS(COMM) 275/2020

The plaintiffs in this matter were companies incorporated in the United States of America, involved in the business of creation, production and distribution of motion pictures and cinematograph films. The defendants in this lawsuit included several rogue websites that had provided users with free access to pirated content. The Department of Telecommunications (DoT) and the Ministry of Electronics and Information Technology (MEITY), were also included as co-defendants by the plaintiffs, along with several ISPs (Internet Service Providers). The Plaintiffs filed a lawsuit against the defendants for streaming original and copyrighted content created by the Plaintiffs, without acquiring any prior authorisation from the Plaintiffs. After reviewing the list of the infringing websites submitted by the Plaintiffs, and the content being made available on those websites, the court opined that the Defendants were infringing the plaintiffs’ copyrights.

The court therefore restrained the Defendants from hosting, streaming, reproducing, distributing, making available to the public and/or communicating to the public, or facilitating the same on their websites through the internet in any manner whatsoever, any cinematograph work, content, programme or show in which the Plaintiffs owned copyrights. Further, the court granted an interim injunction in favour of the Plaintiffs, in order to ensure that the original content created by the Plaintiffs was protected, and directed the Plaintiffs to file the necessary applications before the court in case of any further infringement by these websites. The court also ordered DoT and MEITY to issue necessary directions/notifications to various ISPs in general, to block access to the defendants’ websites.

Link to order: https://indiankanoon.org/doc/10984797/

Microsoft Corporation and Ors. vs. Satveer Gaur and Ors., Delhi High Court, CS (COMM) 1324/2016, CCP (O) 134/2010 and IA 2667/2016

The Plaintiffs in this matter were Microsoft Corporation (‘Microsoft’), situated in USA, Microsoft Corporation Pvt. Ltd.  a wholly owned marketing subsidiary in India, Adobe Systems incorporated in USA, and Quest Software Inc., incorporated in USA. The defendants in this matter included Defendant No. 2 which appeared to be a company named ‘Chetu’,and was in the business of providing IT services and solutions to its clients. The Plaintiffs in this case accused the Defendants of infringing their intellectual property rights, by committing copyright piracy, and selling the pirated versions of their software using the same kind of packaging that the plaintiffs would have used, to sell the software products. The Plaintiffs alleged that Defendant no.2 copied their respective software programs without acquiring the required licenses and permissions from each of the plaintiffs.

Plaintiffs claimed that such unauthorised copying, duplicating and selling of the Plaintiffs’ software programs caused serious harm to the Plaintiffs’ goodwill and reputation along with monetary losses to the Plaintiffs’ businesses. The Plaintiffs claimed that they  received information on their Business Software Alliance (BSA) website reporting the usage of unlicensed/pirated software programs by the Defendants on their computers. The BSA is a non-profit association of global software companies including the plaintiffs, formed to fight software piracy through large scale use of unlicensed/pirated software and thus strive to promote a safe and legal digital world. The Plaintiffs also conducted an investigation of their own, through which they learned that the Microsoft and Adobe software programs were being used widely by Defendant no. 2 to service its clients. This was further confirmed when the investigator spoke with Defendant no.1, Mr. Satveer Gaur, who worked as a system administrator with Chetu. After the investigation was completed, the plaintiffs filed a copyright infringement suit in the Delhi High Court, against the defendants and presented before the court the information gathered through the investigation.

The defendants denied the claims made by the plaintiffs and stated that they had the required licenses and were authorized dealers of the plaintiffs’ products. Following this, the Local Commissioner had confiscated and sealed the computers being used by the defendants to conduct their business, and concluded in his report that that the defendants were in fact using unauthorized/unlicensed versions of the plaintiff Nos. 1 and 3’s software on several computer systems. The defendants however, did not contest these allegations made by the Commissioner, as a result of which the court ruled in favour of the plaintiffs. The court granted a permanent injunction against the defendants, along with the monetary compensation deemed necessary by the court.

M/s. Indian Record Manufacturing Co. Ltd. vs. Agi Music Sdn Bhd, Illaiyaraja and M/s.Unisys Info Solutions Private Ltd., Madras High Court, C.S.No.296 of 2016 & O.A.No.338 of 2010

The plaintiff in this matter was a renowned music company engaged in the production, distribution and sales of music albums in various forms. Defendant no.2 was a well known music composer, who, over the years had composed music for several South Indian films. Since this suit was contested solely by Defendant no.2, Defendants no.1 and 3 remained ex-parte. The subject matter of this dispute was the music that Defendant no.2 had composed for many films produced by the Plaintiff, by virtue of which Defendant no.2 claimed to be the author these musical compositions, and was in the process of selling the copyrights to Defendant no.1. The Plaintiff was also made aware of the same, following which it filed a copyright infringement suit against Defendant no.2., claiming that it had acquired the copyright and other rights subsisting in the musical compositions from the respective producers of the films, as they were the first owners of such copyright. The court accepted the Plaintiff’s copyright ownership claims in the musical compositions, and stated that, since the producers of the film had commissioned the musical works composed by Defendant no.2, the producers were the first and rightful owners of such compositions. The court emphasised the definition of the term ‘cinematograph film’, as defined in the Copyright Act, and stated that it is the producer who puts together several elements to make a complete film. Therefore, only a producer was legally vested with the authority to assign to third parties, the individual rights in each of these separate elements.

The Madras High Court observed that, Defendant no.2 was unable to furnish the necessary evidence to support the claims of authorship and subsequent ownership over the musical compositions. The Plaintiff on the other hand was able to satisfy the court, by submitting the agreements between the plaintiff and the respective producers to substantiate the claims of ownership of copyright made by the Plaintiff. As a result of this, the order was decided in favour of the plaintiff, and the claims of Defendant no.2 were dismissed.

Link to order: https://indiankanoon.org/doc/98552858/

A copy of the order is available here.

Part II of the Indian Copyright Orders and Judgments 2020 can be accessed here.

Part III of the Indian Copyright Orders and Judgments 2020 can be accessed here.


Authored and compiled by Neharika Vhatkar and Ashwini Arun (Associates, BananaIP Counsels) 

Updates on recent orders and judgments are brought to you jointly by the Entertainment Law and Consulting/Strategy Divisions of BananaIP Counsels, a Top IP Firm in India. If you have any questions, or need any clarifications, please write to contact@bananaip.com  with the subject:  Copyright Judgments

Disclaimer: Please note that these case updates have been put together from different sources, primary and secondary, and BananaIP’s reporters may not have verified all the decisions published in the bulletin. You may write to contact@bananaip.com  for corrections and take down.

 

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