India: Delhi High Court On The Question Of First Owner Of Copyright?

Last Updated: 22 September 2017
Article by S.S. Rana & Co. Advocates
Most Read Contributor in India, November 2017

Recently, the Delhi High Court in the case of Neetu Singh vs. Rajiv Saumitra, while revisiting Section 17 of the Copyright Act, 1957, granted an interm injunction to Neetu Singh (hereinafter referred to the 'Plaintiff') since Rajiv Saumitra and others (hereinafter collectively referred to as the 'Defendants') did not place on record any document to show that Neetu Singh was acting as an employee of the Defendants when the literary works were created.

Brief Facts:

The Plaintiff filed the present suit praying for a decree of permanent injunction restraining the Defendants from publishing, distributing and selling the literary work 'English for General Competitions'. The Plaintiff is a renowned author engaged in the business of providing services in relation to 'education, training & educational consultancy in the field of engineering, medical, para-medical, dental, nursing, marketing, management and information technology. Defendant No. 1, Mr. Rajiv Saumitra is the husband of the Plaintiff, and runs and manages Paramount Coaching Centre Private Limited (Defendant No. 2). Defendant No. 3 is the publishing house that prints books and notes for Defendant No.1.

The Plaintiff states that she started an education and training institute titled 'Paramount Coaching Centre' in 1982 which earned much goodwill and reputation in the market. Around 2006 the Plaintiff married Defendant No.1, who was a teacher at the said coaching centre. In order to expand the business, the Plaintiff and Defendant No.1 formed and incorporated a company in the name and style of 'Paramount Coaching Centre Pvt. Ltd' on November, 30, 2009, with Plaintiff and Defendant No.1 as its Directors. During the progress as a trainer/ academician/ educational consultant, the Plaintiff decided to write books on various subjects so as to bridge the gap between the instructional and teaching material available in the market and the actual needs of the students for understanding the concepts in the relevant subjects including those required for success in competitive examinations. After working and researching on various subjects, compiling educational data, question banks along with answers and from her own skill, labour and hard work, the Plaintiff wrote and authored several books under the titles Ënglish for General Competitions-From Plinth to Paramount Vol-I, Rasayan Vigyan- Samanya Pratiyogita Hetu, Jeev Vigyan-Samanya Pratiyogita Hetu, Bhartiya Arthvyavastha-Samanya Pratiyogita Hetu, etc.

Contentions of the Plaintiff

  • The Plaintiff claims that the above referred literary work is the original work of the Plaintiff created and authored for the first time and on applications filed she has been granted copyright certificates in the literary works.
  • The said books were written and authored by the Plaintiff between 2012 to 2014 during a period when the Plaintiff was married to Defendant No.1 and the copyright was secured by the Plaintiff to the knowledge of Defendant No.1 without any objection from him
  • The Plaintiff further claimed that she published the aforesaid books through her proprietary concern 'Paramount Reader Publication' and thereafter 'Paramount Reader Publication OPC Private Limited' was formed and incorporated on January 29, 2015. The said Paramount Reader Publication was a one person company and was given the right to publish the books authored by the Plaintiff to the exclusion of any other party. The rights to publish books was never licensed, transferred or assigned to any person including Defendant No.1 or 2 by the Plaintiff.
  • After May 2015 the relationship between the Plaintiff and Defendant No.1 got soured and they were involved in several civil cases as well as criminal complaints including concerning control of business of Defendant No.2.
  • The grievance of the Plaintiff is that one of the books authored by her titled as 'English for General Competitions - From Plinth to Paramount' was authored by the Plaintiff on or about May 2012 and was an instant success in the market. The book was initially published in July 2012 and thereafter in 2014 and 2016. It was rated as the best seller on the 'Amazon' website and is an excellent guide in case of competitive examination. The Plaintiff was granted copyright in the said literary work vide certificate No. L- 62916/2015. Neither the Defendant No.1 nor any other person has till date challenged her copyright in the literary works published. In and around December 2015, the Plaintiff learnt that Defendant No.1 was illegally copying and publishing certain books authored by the Plaintiff. Invoking Section 63 of the Copyright Act, the Plaintiff filed a criminal complaint at Mukherjee Nagar Police Station where after Police seized around 6000 incriminating copies. Further, the Plaintiff also filed a complaint under Section 63 of the Copyright Act read with Section 420/485/486 and 120 of the Indian Penal Code with the learned CMM, Mukherjee Nagar.
  • In June, 2016, the Plaintiff learnt that Defendant No.1 in connivance with Defendant No.2 published its first lot of books under the title "English for General Competitions - From Plinth to Paramount". The said book of the Defendants contains no mention of any author in the book and the book is a verbatim copy of the Plaintiff's book under identical title and the graphic representations of two mountains has also been copied by the Defendants in toto with a slight color variation. Thus, an ordinary unwary student would be deceived and mislead into believing that the book in fact originated from the Plaintiff and to confuse the students further the Defendants have priced the book at ₹150/- while the Plaintiff's book is being sold at ₹300/- per copy.
  • The Plaintiff further contends that she being the author of the literary work and there being no contract of service between the Plaintiff and Defendant No.2 in terms of Section 17 of the Copyright Act, ownership of the literary work vests with the Plaintiff. Further, since the Plaintiff owns registration of the copyright, the same is a prima facie evidence of ownership, and hence, the Defendants are liable to be restrained from publishing, selling the books authored by the Plaintiff.
  • Learned Counsel for the Plaintiff further submits that there is no material with the Defendant to show that Defendant No.2 was the employer of the Plaintiff thus claiming to be the owner of the copyright in terms of Section 17 (c) of the Copyright Act. No money has been shown to be paid to the Plaintiff. Further assignment if any in a literary work has to be in writing as per Section 19 of the Copyright Act and in the absence thereof there has been no assignment of the literary work by the Plaintiff who is the author of the work.

Contentions of the Defendants

  • In response to this claim of the Plaintiff, the Defendant No.1 & 2 filed a written statement and a counter claim. In the written statement and the counter claim the case of the Defendants in a nutshell is that the Plaintiff is not the exclusive owner/author of the book. The Plaintiff authored/compiled the books with the help of a team while she was admittedly working as a Director of Defendant No.2 from the year 2012 to 2014 and even as per the Plaintiff the relations between the Plaintiff and Defendant No.1 soured in May 2015. Thus, the Plaintiff cannot claim any copyright in the books which were authored by and on behalf of the Defendant No.2 who employed its entire team including the Plaintiff who was then one of the Directors of Defendant No.2.
  • It is the case of the Defendant No.1, that he was running a coaching centre in the name and style of M/s. Paramount Coaching Centre at Dr. Mukherjee Nagar, Delhi as a sole proprietorship concern when in July 2005, the Plaintiff came in contact with Defendant No.1 and sought financial assistance. Defendant No.1 allowed Plaintiff to take English classes in his coaching centre. Slowly on being lured and on the insistence of the Plaintiff, the Defendant No.1 converted Paramount Coaching Centre into a private limited company with Plaintiff and Defendant No.1 as its two Directors, as minimum two Directors were required as per the Companies Act, 1956. On March 12, 2006, the marriage between the Plaintiff and Defendant No.1 was solemnized on the Plaintiff furnishing an affidavit on oath that she was a spinster at the time of marriage, though the fact is that she was earlier married. Thus, after conversion of proprietorship concern of Defendant No.2 to private limited company, the Defendant No.1 retained his status as Managing Director but gifted 50% of the shareholdings to the Plaintiff and no consideration was paid to the Plaintiff. The Plaintiff along with the family members started controlling the key positions and in conspiracy with her other family members incorporated companies like Paramount Reader Publication OPC Pvt. Ltd. and thereafter M/s. K.D. Campus Pvt. Ltd. in early 2015.
  • The Plaintiff entered into a competing business with Defendant No.2 despite remaining the Director of Defendant No.2 and started transferring the business of Defendant No.2 to her aforesaid individual companies. Constrained by the acts of the Plaintiff, Defendant No.1 & 2 filed a Civil Suit wherein injunction was passed in favor of Defendant No.1 and against the Plaintiff and an appeal thereon was withdrawn by the Plaintiff in view of the settlement arrived at between the parties.
  • Relying upon the admissions of the Plaintiff in FAO (OS) 60/2016, wherein the Plaintiff demanded salary from the Defendant showing that the Plaintiff was an employee of the Defendant No 2, and contended that with an educational qualification of B.Sc. LLB, the Plaintiff cannot have individually authored the number of books, and thus, the stand of Defendant No 1 & 2 in the written statement and counter affidavit that the Plaintiff is not the exclusive author but has written and compiled the books with the team members of Defendant No. 2 is probabilized.
  • The Counsel for the Defendant while admitting that the Plaintiff was a Director of the Defendant No. 2 when the books were written stated that the Plaintiff had a fiduciary duty as a Director which is greater than that of an agent and the ownership for the books vested in Defendant No 2 on whose behalf the Plaintiff and other team members authored the books.

Decision of the Court

Section 17 - First owner of copyright - Subject to the provisions of this Act, the author of a work shall be the first owner of the copyright therein.

Provided that-

(a) in the case of a literary, dramatic or artistic work made by the author in the course of his employment by the proprietor of a newspaper, magazine or similar periodical under a contract of service or apprenticeship, for the purpose of publication in a newspaper, magazine or similar periodical, the said proprietor shall, in the absence of any agreement to the contrary, be the first owner of the copyright in the work in so far as the copyright relates to the publication of the work in any newspaper, magazine or similar periodical, or to the reproduction of the work for the purpose of its being so published, but in all other respects the author shall be the first owner of the copyright in the work;

(b) subject to the provisions of clause (a), in the case of a photograph taken, or a painting or portrait drawn, or an engraving or a cinematograph film made, for valuable consideration at the instance of any person, such person shall, in the absence of any agreement to the contrary, be the first owner of the copyright therein;

(c) in the case of a work made in the course of the author s employment under a contract of service or apprenticeship, to which clause (a) or clause (b) does not apply, the employer shall, in the absence of any agreement to the contrary, be the first owner of the copyright therein;

[(cc) 52 in the case of any address or speech delivered in public, the person who has delivered such address or speech or if such person has delivered such address or speech on behalf of any other person, such other person shall be the first owner of the copyright therein notwithstanding that the person who delivers such address or speech, or, as the case may be, the person on whose behalf such address or speech is delivered, is employed by any other person who arranges such address or speech or on whose behalf or premises such address or speech is delivered;]

(d) in the case of a Government work, Government shall, in the absence of any agreement to the contrary, be the first owner of the copyright therein;

  • [(dd) 53 in the case of a work made or first published by or under the direction or control of any public undertaking, such public undertaking shall, in the absence of any agreement to the contrary, be the first owner of the copyright therein. " While referring to Section 17 of the Copyright Act, 1957, the Court said that save and except proviso 'c' where a work is made in the course of the author's employment under a contract of service or apprenticeship to which clause 'a' or clause 'b' does not apply the employer shall, "in the absence of any agreement to the contrary" be the first owner of the copyright therein.
  • However, the Court noted that the Defendants have not placed on record any material to show that the literary work was authored as a part of the duties and obligations of a Director of Defendant No.2. In this regard neither any agreement nor the articles or memorandum of association of the company has been placed on record. In the absence of any terms and condition describing that the literary work was also a part of the duties and obligations of the Plaintiff in her capacity as a Director of the Defendant No.2, the plea of the Defendants based on the decision of the Supreme Court in the cases of Ram Pershad vs. The Commissioner of Income-Tax1 and V.T. Thomas vs. Malayala Manorama Co.2, cannot be accepted.
  • On the issue of fair use, the Court reiterated its stand in the case of The Chancellors, Masters and Scholars of University of Oxford & Others vs Rameshwari Photocopy Service & Others3, where the Division Bench of the Delhi High Court distinguished the use of the copyrighted work for the purpose of teaching/studies and for commercial purpose. In the present case the Defendants, after making the copies of the study material which is in the form of the books, is selling the same to the students. Thus, the activity of the Defendants is commercial and for the purposes of profit making.

In view of the above, Hon'ble Ms. Justice Mukta Gupta granted an interim injunction in favor of the Plaintiff and against the Defendants.

Footnotes

1 (1972) 2 SCC 696

2 AIR 1989 Kerala 49

3 2016 (235) DLT 409

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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