30 July, 2018
Copyright exploitation right emanates from contract
This is regarding an appeal filed in the Madras High Court by Kajal Agarwal (the “Appellant”) against the judgement and decree passed by the Single Judge in a suit filed by the Appellant against the Managing Director, V.V.D. & Sons Pvt. Ltd. (the “Respondent") for restraining the Respondent to commercially exploit the cinematograph film created for promoting hair oil products by the Appellant.
The Respondent approached the Appellant, who is a famous actress, to endorse their hair oil products and created a cinematograph film for this purpose. The Appellant performed in the cinematograph film and also did photo shooting for two days. The Appellant and the Respondent mutually agreed the terms of the Appellant’s performance in the cinematograph film and these terms were reflected in an agreement dated 29th December, 2008 (“Agreement”). The Respondent signed the Agreement but the Appellant did not sign the Agreement stating that the Agreement did not contain all the agreed terms. The Appellant commenced advertising its hair oil products through the cinematograph film. The Appellant stated that even though she didn’t sign the Agreement the Respondent was entitled to exploit her performance in the cinematograph film only for one year, that is, from 29th December 2008 to 28th December, 2009. The Appellant claimed that the Respondent violated the terms of the Agreement by commercially exploiting the cinematograph film beyond the agreed term of one year. The Respondent contended that they didn’t violate the terms of the Agreement as the specific terms of the Agreement conferred copyright over cinematograph film in favour of the Respondent which entitled the Respondent to exploit the cinematograph film for the copyright term, that is, a period of 60 years as per the provisions of the Copyright Act, 1957 (“Act”). The Respondent also contended that the Appellant cannot claim royalties under Section 38-A of the Act as this provision came into force on 21st June, 2012, having prospective effect, when the subject suit was not instituted.
The Court upon observing the facts along with evidence filed by both the parties considered the following points:
A) Where the Act gives the first owner of the copyright of the cinematograph film a term of 60 years to exploit the work under section 26 of the Act, whether the same could be restricted by the parties by way of a contract for a lesser period?
B) Whether in a cinematograph film more particularly in an advertisement film, where apart from the Appellant as performer it also involves various other players like the cameraman, music director, director of the advertisement film etc., and the Respondent as a producer and the first owner of the copyright of the film can be restricted to exploit his production for a lesser period than the one conferred by the Act based on an agreement entered into by him with one of the performers?
C) What is the scope of proviso (c) to Section 17 of the Act and whether the order passed by the division bench of this Court during the interlocutory stage on this issue will have a binding effect while deciding this issue at the stage of final hearing when all the materials are before the Court?
D) What is the effect of the deletion of sub Sections (3) and (4) of section 38 and the insertion of Section 38-A of the Act and whether the Appellant can take advantage of these provisions which came into effect from 21/06/2012?
E) Whether the exploitation of the cinematograph film by the Respondent beyond the period stipulated by the Agreement will restrict/prevent the Appellant from endorsing or acting in the advertisement film of the competitors or other persons who deal with similar products?
The Court first analysing issue C stated that the parties did not dispute that they entered into the Agreement, and the counsel for the Appellant relied upon clause 9 of the Agreement stating that the Agreement was for a period of one year, and that the Respondent cannot be considered as the first owner of the cinematograph film as the terms of the Agreement is contrary to the claim of the Respondent. The Court analysed various provisions of the Act pertaining to “author”, “cinematograph film” and further analysed Clause 3 and 4 of the Agreement and stated that the advertisement created by the Respondent would mean a cinematograph film as per the provisions of the Act and the Respondent would fall within the definition of “author” and consequently a “producer” as the Respondent produced the cinematograph film which falls under the term “work” under the Act. Therefore, the Respondent being the author of the work would also be the first owner of the copyright having the exclusive right to communicate the cinematograph film to the public and such right would subsist for a period of 60 years.
The Court then analysed whether consequent to clause 9 of the Agreement, the Respondent would be permitted to enjoy the copyright therein for a period of 1 year and not beyond. The counsel for the Appellant suggested that by virtue of the provisio (b) and (c) to Section 17 of the Act, and due to an Agreement to the contrary, the Respondent cannot become the first owner of the copyright. The Court analysing Section 17 of the Act stated that to enforce the provisio under Section 17, the parties should agree that the producer will not have the copyright in the film. However, under the Agreement, the Appellant had agreed that the entire copyright in the film and the promotional material would vest with the Respondent. Analysing provisio (c) to clause 17 the Court held that the Respondent made the cinematograph film and as the producer took the initiative and responsibility for making the work and not under any employment under a contract of service. Therefore, the Court held that this provisio does not apply to this case and the Respondent is the first owner of the copyright in the cinematograph film and the promotional materials produced by the Respondent.
In relation to the contention of the Appellant that the Single Judge did not consider the order of the Division Bench in favour of the Appellant for granting interim relief and stay on the cinematograph film, the Court stated that the order was passed at the interlocutory stage based on prima facie consideration of the materials for deciding the interim injunction application. Hence, the Appellant cannot rely upon this interim order when a case is taken up for final hearing as the entire materials are before the court to come to a final conclusion.
In regard to issue A and B, the Court stated that the Appellant was one of the performers in the cinematograph film and Respondent was the author of such film which makes him the first owner of the film. Hence, he enjoys the copyright over that cinematograph film for a period of 60 years which cannot be taken away by a performer in the film by virtue of any agreement. The Court further stated that clause 9 of the Agreement should mean that the Respondent has the right to produce the cinematograph film and the promotional materials for a period of 1 year and the clause does not curtail the copyright of the Respondent.
The Court while answering issue D further stated that a reading of Section 38-A of the Act makes it very clear that if a performer by a written agreement, consents to incorporate the performance in a cinematograph film, the performer cannot object to the producer's right in the cinematograph film, unless there is a contract to the contrary. In the present case, as the Appellant consented to incorporate her performance in the cinematograph film, the Appellant cannot prohibit the Respondent from enjoying their producer's right. The Court further reiterated that the Agreement did not contain any clause to the contrary which restricted the Respondent from having the copyright in the cinematograph film or restricting its rights as the producer. The Court stated that the Appellant cannot claim royalties under Section 38-A as Section 38-A was not in force at the time of initiating the suit. Even though the Court can take note of any subsequent development in the interest of the parties, the Court in this case was unable to determine the royalty entitlement to the Appellant due to lack of evidence to substantiate her claim. The Court also noted that the Respondent was unable to commercially exploit the cinematograph film from 2011 onwards due to the interim order restraining the Respondent to exploit the cinematograph film.
The Appellant’s claim for compensation from the Respondent due to exploitation of the cinematograph film beyond the period of one year and that the Appellant was not able to endorse similar products were not entertained by the Court. The Court held that the Appellant is not entitled to any compensation as the Appellant failed to provide any basis for her demand and the fact that the Respondent was permitted to commercially exploit the cinematograph film being the first owner of the copyright. As the Agreement between the parties was for a period of one year, the court held that there was no restriction or prohibition on the Appellant from endorsing or acting in advertisement or films of other producers dealing with similar products.
The Court dismissing the appeal vide its order dated 25th June, 2018 stated that the Appellant would be at liberty to file fresh proceedings in the Court for the enforcement of the right to receive royalties under Section 38-A of the Act.
For further information, please contact:
Vineet Aneja, Partner, Clasis Law
vineet.aneja@clasislaw.com
