Copyright Act: 'Business Of Issuing Licenses Can Be Routed Only Through Copyright Societies U/S 33'; Madras HC Dismisses Suits Filed For Violation Of Licensing Rights

Recently, Madras High Court had the opportunity to analyse the ambit of statutory embargo on the business of issuing licenses for on-ground performance rights in sound recordings when the entity issuing the licenses does not fall within the meaning of a copyright society under Section 33 of the Copyright Act. The Single Judge Bench of Justice N. Anand Venkatesh accordingly held: "There is no doubt true that an owner need not necessarily join a copyright society. The first proviso to Section 33 makes it clear that the right of an owner to issue licenses, in his individual capacity, remains unimpacted, subject to the rider that such a right must be consistent with his obligations as a member of any copyright society. However, once the grant of license moves from the owner in his individual capacity, and transcends into the realm of a business, Section 33(1) and/or the second proviso applies. The legislative intent is manifestly clear that the business of licensing must be routed only through a copyright society." The court held that the plaintiff's cause of action will 'crumble like a pack of cards' when it is clear that the plaintiff is subject to the statutory bar on issuing licenses under Section 33. When the answer arrived at on the preliminary question of law indicates that the plaintiff doesn't have the authority in law to issue licenses, there cannot be any consequences for the claim of the plaintiff that the defendants have failed to obtain licenses and pay license fees for on-ground performance rights of the sound recordings concerned. Background In the case at hand, Novex Communications Private Limited, the plaintiff had entered into various assignment agreements with the owners of sound recordings, especially the songs in films. By virtue of the rights assigned to them, including the rights for the on-ground public performance of sound recordings of the songs, the plaintiff contended that their acquired rights bestow upon them the absolute copyright for granting licenses to others for on-ground performances of the songs concerned. "Whether the plaintiff is legally permitted to issue or grant license under the Copyright Act without being the copyright society under the Copyright Act as contemplated under Section 33 of the Copyright Act, 1957?", this was the question that the single judge bench of Justice N. Anand Venkatesh framed as the preliminary issue that warrants an answer. In the two suits filed before the court, the allegations levelled by Novox against both defendants, i.e, DXC Technology Pvt. Ltd. and Cognisant Technologies Solutions India Pvt. Ltd, are the same. It has been contended by Novex that despite its absolute copyright over ground performances of some songs under Section 18(2), both the defendants played those songs in the events conducted by them without obtaining a license from Novex. The plaintiff also claimed that they have become the owner of 'sound recordings' and the latter comes within the definition of 'work' under Section 2(y) of the Copyright Act. It was submitted 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 subjected to the constraints of Section 33 of the Act, added the plaintiff counsel. Therefore, according to the plaintiff, joining the copyright society is a voluntary act that has no bearing on the plaintiff's right to grant licenses. However, the defendants argued that the plaintiffs have admitted that they are in the business of granting licenses in sound recordings for all forms of exploitation of copyright in sound recordings. Section 33 of the Copyright Act does not permit Novex to grant license or claim license fees on the assigned rights under Section 30, since they are neither a copyright society nor a member of copyright society. The defendants had also argued that the plaintiff has only claimed rights over on ground performances and that won't make them the owner of 'work', i.e, sound recordings. Accordingly, under Order XIV Rule 2(2)(b) of Code of Civil Procedure, 1908, the court framed the preliminary issue on the question of law that will determine the competency of Novex to institute both these suits. Court's Findings At the outset, relying on ICSAC v. Aditya Pandey (2016), the court observed that Section 18 of the Copyright Act transfers the ownership of the copyright to the assignee while a licensee under Section 30 merely acquires a right of user with the ownership still vesting with the owner/licensor. While tracing the genesis of copyright societies and its transformation over time, the court noted that the copyright amendment Act of 1994 introduced the concept of 'Copyright society' registered under Section 33 (3) of the Act. "Though envisaged with an intent to benefit authors of the work, Section 35 of the...

Copyright Act: 'Business Of Issuing Licenses Can Be Routed Only Through Copyright Societies U/S 33'; Madras HC Dismisses Suits Filed For Violation Of Licensing Rights

Sebin James

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