Copyright assignment/licensing issues in movie sequels

Narendra Hirawat & Co. (Appellant/Original Plaintiff)


M/s. Alumbra Entertainment & Media Pvt. Ltd. & Ors. (Respondents)




Brief facts:

The blockbuster movie “Sarkar” was released in 2005 starring the legendary actor Amitabh Bachchan. The film was produced by K Sera Sera Productions Ltd., (hereinafter referred to as KSS). A sequel movie “Sarkar Raj” was released in the year 2009. This case revolves around the agreement between KSS, RGV Film Factory (hereinafter referred to as RGV), and Z Picture Company (hereinafter referred to as ZPC), which was executed on 31st of March 2008 and the agreement between KSS and Narendra Hirawat (NH). All rights in the Film “Sarkar” including Copyrights were assigned to Narendra Hirawat (NH), the Appellant/Original Plaintiff.
Before the release of the sequel movie “Sarkar Raj”, KSS assigned all rights in the said movie to ZPC. But, the agreement also mentioned that, all the Copyrights and Cinematography rights vests with KSS alone. The heart of the case is Appellant/Original Plaintiff asserting that the movie “Sarkar-3” by ZPC was in complete violation of the agreement between KSS and NH. Because the other agreement between KSS, RGV and ZPC reads that, all the rights pertaining to “Sarkar Raj” and the sequels vests with ZPC.
Let us further analyze what both the agreements says:

Agreement between KSS, RGV, and ZPC:

The aforementioned parties entered into an agreement on March 31st of 2009. The agreement assigned necessary rights to ZPC. The necessary clauses, which are the essence of the agreement, are Clauses 6, 10 and 15. The agreement reads as follows-
(6). “The parties hereto agree and confirm that all the Copyrights envisaged in the film ‘Sarkar Raj’ shall be registered in the name of ZPC and the Copyrights in cinematographic work of the film ‘Sarkar’ shall vest with KSS alone. For the purpose of registration of Copyrights as provided under the Copyrights Act, 1957 KSS irrevocably grants their No objection on a separate letter.”
(10). “…. ZPC is the producer and the negative right holder of the motion picture titled “Sarkar Raj” in Hindi language, 35 mm format, color, directed by Ramgopal Varma and having the principle cast of Amitabh Bachchan and others and the said motion picture may be referred to as a sequel to the motion picture “Sarkar” and therefore, in this context, for the sake of brevity, it is expressly understood and agreed between KSS, RGV and ZPC that no claims objections, notices and / or liabilities of any nature and / or manner whatsoever whether monetary or otherwise whether raised, existing or may be raised hereinafter from / by any person shall be raised and / or deemed to be raised against the motion picture “Sarkar Raj” or ZPC or any other third parties with whom any aspect of “Sarkar Raj” may have been / will be transacted and all claims, objections, notices and / or liabilities of “Sarkar” whether raised and existing or may be raised at anytime hereinafter shall be solely and exclusively discharged or otherwise be settled by KSS to the absolute and complete exclusion of “Sarkar Raj”, ZPC and / or any third parties with who any aspect of “Sarkar Raj” may have been will be transacted for any
purpose ….”
(15). “KSS…. shall not claim any right/title/interest or claim with respect to any of the rights of the film “Sarkar Raj” through any right emanating from the film “Sarkar”, RGV and ZPC have irrevocably agreed to grant credits to KSS in perpetual manner….”
The above-mentioned clauses clearly indicate that the Copyrights, Trademarks pertaining to the film “Sarkar Raj” vests with ZPC alone and such rights have been transferred on an assignment by KSS to ZPC. It is also mentioned that ZPC owns all rights in “Sarkar Raj” whereas all rights vests with KSS for the movie “Sarkar.”

Deed of Assignment between KSS and NH:

After the release of the movie “Sarkar Raj” in 2008, the Appellant/Plaintiff signed an Assignment Deed in 2009, which clearly gives all the Intellectual Property rights in this movie to ZPC and never does it mention about sequel rights to NH. The executed Deed reads as follows-
The Assignor hereby assigns, assures and conveys unto the said Assignees free from all encumbrances, charges and liens, the rights, titles and interest vested in the said films hereto including all the rights vested therein namely: copyrights, negative, positive, sound, playing, performing, screening, video, satellite, TV distribution, exhibition and exploitation of 35 mm and a reduced or enlarged versions, theatrical and non-theatrical rights which include all conceivable electronic media rights for all the territories of the world and the income, recoveries and realizations there from and as well as all other rights whatsoever which may accrue in favour of the Assignee/s in future, including the copyrights and performing rights in the script and music of the said films including its songs as well as the copyrights and all other works comprised in or in relation to the said films including the rights of re-making, including duping, dubbing, reducing etc. of the said films in length, language/s, scope, versions, and property and the rights perpetually and forever. However, the Assignee hereby acknowledges that the rights as aforesaid are being transferred and assigned hereunder subject to the Third Party Rights details whereof are mentioned in the Annexure….”
At the very outset, the Deed, prima facie gives rights to NH to only remake the film and not to make a sequel. It is clearly evident that KSS neither meant to give nor it is mentioned in the agreement about NH’s sequel rights for the latter two movies. NH, basically assumed that they were assigned to make sequel rights for the movies, “Sarkar Raj”, and “Sarkar-3” but all they had was right to remake.

Procedural history

The case was first filed before the Single Bench of Bombay High Court for a temporary injunction to stop ZPC from releasing the movie “Sarkar-3” claiming that ZPC and KSS breached the Assignment Agreement. However, the Single Bench rejected the Motion to grant ad-interim relief based on the grounds that restriction under the agreement was applicable only to remakes. Aggrieved by the decision of the single judge, NH had approached the division bench of the Bombay High Court. The division bench of the Bombay High Court upheld the Single Bench decision.

Ratio and Decision

The Court found that on the grounds that, KSS only granted NH the right to remake the movie “Sarkar” and not to make sequels like “Sarkar Raj” and “Sarkar 3”. The Court held that NH clearly misunderstood the very essence of the agreement, that gave all the sequel rights to ZPC alone. The Court found that after being fully aware of the contents of the Assignment to ZPC, NH cannot make a claim for breach of contract. All the rights that were vested in NH in the Agreement between NH and KSS were subject to Assignment Agreement with ZPC, which at the very outset gave all the sequel rights to ZPC.
Therefore, the Court rejected the claim by the Appellant who claimed that the Assignment Agreement was violated by ZPC.

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