Sunday, July 17, 2011

Guest Post: Legitimate Rights of a Copyright (and trade mark) Owner

We bring to you a pithy guest post on Section 62 of the Copyright Act from Sneha Jain, an associate from a leading NCR-based law firm. In this post, it is submitted that Section 62 allows even a non-copyright owner to institute a proceeding for infringement under the Act so long he has an actionable interest. Without further ado, below is Sneha’s take on the issue.

Legitimate Rights of a Copyright (and trade mark) Owner
Why is an IP owner’s cause always a politically incorrect one? Why is any interpretation of the law which protects the legitimate interest of IP owners projected in poor light? Is it probably because we are yet to come out of our socialist mind-set or is it because we think making money is an evil thing?

One of our primary duties as people who encourage public discourse in a niche area such as IP law is to present  honest views, regardless of their political correctness so long as they are supported by legislative intent as reflected in the statute.

My statements above may appear harsh to many but the reason for my harshness is the unending and legislatively unsubstantiated debate on the interpretation of Sec. 62 of the Copyright Act, 1957 (and the identical Sec. 134 of the Trade Marks Act, 1999).

Until now, the raging issue regarding Section 62 was whether the place where the plaintiff “carries on business” should also be the place where the “cause of action” has arisen in order for him to successfully claim jurisdiction under this section. In other words, whether the element of cause of action under the Code of Civil Procedure, 1908 (CPC) should be read into S.62 to avoid it being “misused” by “Money Powers” allegedly resulting in forum shopping?

Thankfully, this controversy has been put to rest by the Supreme Court’s decision in Exphar SA & Anr. v. Eupharma Lab. Ltd. & Anr (2004) where the court categorically held that “S.62 prescribes an additional ground for attracting the jurisdiction of a court over and above the ‘normal’ grounds as laid down in S.20 of the CPC.” 

While the Delhi High Court (Archie Comic Publications Inc. v. Purple Creation) continues to interpret this section without considering the Apex Court's ruling, the Madras High Court (Wipro Ltd. & Anr. v. Oushadha Chandrika Ayurvedic) has put to rest the issue following the Supreme Court’s unequivocal pronouncement of the law of the land.

But now, a new and totally unnecessary controversy seems to have riddled this section – who can institute a suit for copyright infringement under Sec. 62? Some believe that since it is the owner of copyright (which includes the exclusive licensee) who is entitled to remedies as per Sec.55 of the Copyright Act, it is the owner of copyright/exclusive licensee alone who is entitled to institute a suit under Sec. 62. 

According to this school of thought, since the owner of copyright is a foreign entity which has no Indian base, it has no place to “carry on business”, and therefore cannot invoke Section 62.  

Sec. 62 has been held to be a self-contained code so far as the jurisdiction in relation to matters arising under the Copyright Act is concerned (Ritiki Limited v. Pramod Kumar). Consequently, the question of who can claim the benefit of Sec. 62 can be answered by reference to the provision itself. For ease of reference:

62. Jurisdiction of court over matters arising under this Chapter.

(1) Every suit or other civil proceeding arising under this Chapter in respect of the infringement of copyright in any work or the infringement of any other right conferred by this Act shall be instituted in the district court having jurisdiction. 

(2) For the purpose of sub-section (1), a "district court having jurisdiction" shall, notwithstanding anything contained in the Code of Civil Procedure, 1908, or any other law for the time being in force, include a district court within the local limits of whose jurisdiction, at the time of the institution of the suit or other proceeding, the person instituting the suit or other proceeding or, where there are more than one such persons, any of them actually and voluntarily resides or carries on business or personally works for gain.

A clear, open-eyed, sensible reading of Sec. 62 tells us that it does not refer to the owner of copyright AT ALL! The phrase used is “the person instituting the suit” as opposed to “the owner of copyright”. This implies that Sec. 62 does not restrict the right to institute legal proceedings for copyright infringement to the owner of copyright alone. The “person instituting the suit” may be an agent so authorised by the owner of copyright to institute infringement proceedings.

This interpretation finds support in the case of Phonographic Performance Limited v. Lizard Lounge & Ors.(Delhi HC, 2008) where the rights of a Copyright Society to institute a suit in its own name, for infringement of copyright of its members, was questioned before the Division Bench of the Delhi High Court. 

The Single Judge had concluded that the provisions of Sec. 55 of the Copyright Act confers the right for seeking a remedy against infringement only by the owner of copyright, the expression “owner of copyright” having been defined in Section 54 to include an exclusive licensee. Thus, since a Copyright Society is not an exclusive licensee, it was held not to have a right to institute legal proceedings.

Reversing this decision, the Division Bench stated –

if we were to accept the reasoning of the learned single Judge, it would imply that the principles of agency as contained under the Indian Contract Act, 1872 have to be given a go-bye. The Copyright Society is an agent appointed under the agreement by the owner of the Copyright and specific powers have been conferred on the agent to institute legal proceedings. The said Act does not contain any provision prohibiting the institution of legal proceedings in derogation to the general law of agency. The author being the first owner of Copyright under Section 17 of the said Act can certainly appoint an agent to institute legal proceedings.

Moreover, S.62 gives absolutely no importance to the geographical location of the owner of copyright while determining jurisdiction.  For the purposes of jurisdiction under Sec. 62, it is the geographical location of “the person instituting the suit or other proceeding” which matters. 

Consequently, even if the owner of copyright is a foreign entity and has no base in India, its geographical location is irrelevant and it is the Indian subsidiary’s place of business (i.e. the place of business of the person instituting the suit) that is essential to determine jurisdiction. 

The Supreme Court in Exphar has clarified this in beautifully articulated words as follows:

The appellant No. 2 (who had a manufacturing contract with appellant No. 1, the owner of copyright) is certainly ‘a person instituting the suit’. The Division Bench went beyond the express words of the statute and negatived the jurisdiction of the Court because it found that the appellant No. 2 had not claimed ownership of the copyright of the trade mark, infringement of which was claimed in the suit. The appellant No. 2 may not be entitled to the relief claimed in the suit but that is no reason for holding that it was not a person who had instituted the suit within the meaning of Section 62(2) of the Act.” (emphasis added)

Thus, it is clear that the Supreme Court has laid to rest, both the controversies surrounding Sec. 62 – (a) Sec. 62 Copyright Act cannot be circumscribed by reference to Sec. 20 CPC, and (b) jurisdiction is to be determined not by reference to the place of business of the owner of copyright, but by reference to the place of business of the “person instituting the suit”.

I thank Sai Deepak for sharing his views on the issue with me.

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