The Delhi High Court has come up with yet another landmark
judgment in copyright enforcement case. The Court, in Warner
Bros. Entertainment Inc. and Ors. v. Mr. Santosh V.G. (CS (OS)
No. 1682/2006), reaffirmed that importing original DVDs and renting
them out in India constitutes copyright infringement under the
Copyright Act, 1957 (hereinafter referred to as
Warner Bros. (hereinafter referred to as "Plaintiff"),
in the instant case, alleged that defendant was the
proprietor/partner of a concern by the name and style of,
Cinema Paradiso, which carried out the business of
offering movie titles on rental basis. The defendant was also
offering original DVDs of movie titles, that he had imported from
the USA. Plaintiff contended that he is the copyright owner of the
rental titles by virtue of International Copyright Order, 1999 read
with section 40(a) of the Act. Plaintiff further claimed that under
section 14(d)(ii) of the Copyright Act, 1957; copyright owner has
the exclusive right to do or authorize "to sell or give on
hire or offer for sale or hire, any copy of the film, regardless of
whether such copy has been sold or given on hire...". The
defendant had not obtained any license from the plaintiff for
offering the DVDs on hire and therefore, liable for copyright
The Court held that under section 2(m) (ii) of the Act, which
defines "an infringing copy", as a copy which is
"made or imported in contravention of the provisions of
this Act"; infringement is not restricted to the act of
"making" but also extends to
"importation" in contravention of the Act.
Section 30 of the Act deals with licensing of copyright; like
Section 18, licensing has to be through agreement in writing.
Infringement of copyright, by Section 51, includes an act, when any
makes for sale or hire, or sells or lets for hire, or by way of
trade displays or offers for sale or hire, or
distributes either for the purpose of trade or to such an
extent as to affect prejudicially the owner of the copyright,
by way of trade exhibits in public, or
imports into India,
any infringing copies of the work.
The definition of "infringing copy" under Section 2(m)
makes it clear that the reproduction, copy or sound
recording,...made or imported in relation to a copy, is deemed
to be an infringing copy.
The Court, thereafter, moved on to the issue of exhaustion of
rights, as defendant contended that the DVDs at issue were
purchased legitimately, "long arm" restrictions expressed
on the concerned copies are of no consequence; it lost or
"exhausted" the right to control further sale or commerce
in that copy. The Court held that application of the phrase
"copies in circulation" (in sec. 14(a)(ii)) is limited to
literary, musical and dramatic work and the same can't be
applies to other classes. None of the owners of other classes of
work are subject to that limitation. This limited
"exhaustion" negates the applicability of the principle
in regard to other classes of copyrights. Thus, Parliament having
intervened in one category of copyrights to grant a limited kind of
"exhaustion" and consciously chosen not to extend it to
others, sleight of judicial reasoning cannot extend its
application. The Court, therefore, held that, importation of rental
copies for purpose of rental use or hiring, and in respect of CDs,
DVDs, etc of cinematograph films for which the plaintiffs have not
issued rental licenses, without the plaintiffs' license or
authorization, for commercial use, or profit, or for hiring or
rental, constitutes infringement under Section 51 (a)(i) as well as
Section 51 (b) (iv).
Defendant further contended that India permits 'parallel
importation' and the DVDs and VCDs procured legally, and meant
for rentals, and therefore, could be imported. The Court notices
that the proviso to Section 51(b)(iv), provides the key to
Parliamentary intention. It carves only one exception, permitting
"import of one copy of any work for the private and
domestic use of the importer". It was further held that
the effect of the proviso to section 51(b)(iv) is plainly, not to
relax the importation of genuinely made cinematographic films but
to allow for the importation of one copy of any work "for the
private and domestic use of the importer". This would mean
that the proviso allows for the importation of an infringing work,
for private and domestic use of the importer, and not commercial
use. Importation of DVDs for any of the purposes under Section 51,
other than the one spelt out in it the proviso is in contravention
of the Act. The Court finally confirmed the ad-interim injunction
in favor of the plaintiff. Pursuant to this judgment, DVD Rentals
across the country are likely to come under pressure and may face
frequent raids to curb outlets without proper licenses.
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