Novex Communications Pvt Ltd. Vs Trade Wings Hotels Ltd (Commercial Suit No. 264 of 2022) and Phonographic Performance Ltd. V/s Bunglow 9 and 99 Ors. (Commercial Suit No. 363 of 2019)
OVERVIEW
Under the Copyright Act, 1957, Copyright Societies can issue licenses for the use of copyrighted works, enabling them to manage licensing and royalty collection on behalf of copyright owners. Novex and PPL, as licensing entities, sought to enforce their rights against establishments using copyrighted music without proper licenses. Defendants argued that Novex and PPL lacked authority, as they were not recognized as Copyright Societies, raising questions on the legality of their licensing claims.
FACTS
In a recent legal battle, two companies, Novex Communications Pvt Ltd (referred to as ‘Novex’) and Phonographic Performance Ltd (referred to as ‘PPL’) (collectively referred to as ‘Plaintiffs’), found themselves at odds with various restaurants, hotels, and malls over allegations of copyright infringement.
The crux of the matter lay in the unauthorized usage of sound recordings owned by music labels like Tips, T-series, Eros, etc., which had granted partial rights to Novex and PPL through ‘Assignment Agreements’ for public communication and licensing.
Novex and PPL sought to enforce their rights through legal action, demanding that the defendants cease using their sound recordings without obtaining proper licenses. They pursued perpetual injunctions, aiming to prohibit the defendants from any further use of these recordings without a valid license.
However, the defendants argued that Novex and PPL lacked the authority to demand royalties, as they were not recognized as Copyright Societies. The defendants cited Section 33(1) of the Copyright Act, asserting that Novex and PPL could not issue licenses without being registered as Copyright Societies. Further, the defendants also contended that Novex and PPL were ineligible for any relief or entitlement to royalties.
This legal dispute sheds light on the intricacies of copyright licenses and provides valuable insights on the role of Copyright Societies and their rights in managing copyrighted material.
ISSUES:
- Can Novex and PPL issue licenses without being registered as a Copyright Society?
- Are Novex and PPL entitled to seek relief without being registered as a Copyright Society?
JUDGEMENT :
After careful consideration of the arguments presented by both parties, the Hon’ble High Court of Bombay ruled in favor of the Plaintiffs. The Court determined that the Assignment Agreement between the Music Labels and Plaintiffs is lawful and valid, rejecting the Defendants’ claims to the contrary. It emphasized that the Plaintiffs rightfully own the copyright to the sound recordings, as specified in the agreement.
Furthermore, the Court made a crucial distinction between copyright owners and Copyright Societies. It clarified that Section 33(1) which pertains to Copyright Societies, does not preclude owners from granting licenses for their own work. This interpretation, the Court reasoned, aligns with the intent of Section 30, which empowers owners to license their creations. The purpose of Section 33(1), the Court emphasized, is primarily to regulate Copyright Societies and their licensing activities, rather than restrict owners’ rights to license their creations.
The Court underscored that Section 33(1) does not prevent non-members of a copyright society, including copyright owners, from exercising their ownership rights to grant licenses. Therefore, the absence of registration as a copyright society does not impede an owner’s ability to license their work. Consequently, the Court affirmed that entities like Novex and PPL possess the authority to grant licenses under Section 30 of the Act.
In conclusion, the Court ruled that Novex and PPL have the legal right to seek relief against unauthorized exploitation of their work by Defendants, even without being registered as Copyright Societies under Section 33(1) of the Act.
KS&CO’S COMMENTS :
This judgment carries notable implications for stakeholders in the music licensing landscape. Here are some informative insights:
Flexibility for Rights Holders: The court’s ruling enhances the flexibility for music rights holders like PPL and Novex, affirming their ability to issue licenses without compulsory registration as copyright societies. This flexibility may influence the strategic choices of rights holders in managing and monetizing their copyrighted works.
Interplay of Sections 30 and 33(1): The judgment clarifies the interplay between Sections 30 and 33(1) of the Copyright Act. It highlights that Section 30, which empowers copyright owners to grant licenses, takes precedence over Section 33(1), which pertains to Copyright Societies. This nuanced understanding is crucial for rights holders navigating licensing decisions.
Consideration for Non-Registered Copyright Societies: The decision prompts a consideration of the role and benefits of being registered as a copyright society. While the court ruled in favor of non-registered entities, copyright societies may still find value in voluntary registration for various administrative and organizational reasons.
Impact on Licensing Practices: The judgment may influence licensing practices within the music industry. Companies engaging in music licensing agreements may assess their approaches, considering the newfound clarity on the rights of copyright owners and the implications for licensing dynamics.
Striking a Balance in Interpretation of Copyright Societies: The court’s rejection of a broad interpretation of ‘business’ in Section 33(1) signifies a balanced approach. It recognizes the need to preserve the rights of copyright owners while addressing concerns related to the business aspect of licensing activities.
In essence, the judgment underscores the importance of recognizing the rights of copyright owners while maintaining regulatory oversight over collective management organizations. It provides valuable guidance for both copyright owners and users of copyrighted material, emphasizing the need for compliance with licensing requirements while respecting the legitimate interests of rights holders.
The Court’s thoughtful analysis and its contribution to the jurisprudence surrounding copyright law is nuanced. The ruling serves as a precedent for future cases involving the intersection of copyright ownership, licensing, and the role of copyright societies in India’s legal framework.
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