India: Porsche Copyright On Design And Fair Compensation Case

Last Updated: 10 September 2019
Article by S.S. Rana & Co. Advocates

In the recent case filed by the famous sports car designer, Erwin Franz Komenda's daughter claiming compensation from Porsche AG on the grounds of the continued sale of sports cars designed by the company by adding modifications to her father's design has been rejected by the Regional Court of Stuttgart.

The daughter, claimed a fair compensation for the copyright for the merits of her father's work (claim basis: Art. 32a UrhG)1, as a legal successor of her father. The provision (Article 32a) provides for additional fairness compensation in cases where the initial compensation to the author has become inappropriate compared to the overall revenue generated by such work.

Erwin Franz Komenda was employed by the defendant (Porsche AG) from 1931-1966. As an employee under the body-construction department, he played a vital role in the development of the sports car models 356 and 911 of the defendant, as they were marketed in the 50s and 60s for the first time.2

The Regional Court did not subscribe to her view and held that; the designs on which the applicant relies, in view of the purpose of use, provides only a narrow scope of protection, which was not injured taking into account the considerable development of the body shape in the current series of the Porsche 911. Citing Article 24(1) of the German Copyright Act, 1965, the Court held that the current Porsche model series represent 'free use' within the meaning of Art. 24(1) and does not invoke a right for additional compensation.

The German copyright laws, provided for copyright to subsist in the design of the cars, as is clear from this case. Although, Indian laws in the same sphere of application have a different juristic stand point. Under the Indian copyright laws, a copyright over a design of a car would be revoked/lost if the design is reproduced in an article by an industrial process for more than 50 times. This also restricts the period of protection of the protected design. This is done by the Indian laws to restrict dual protection and to limit the term of protection.

The 'free use' provisions under Article 24(1) of the German Copyright Act is similar to India's fair use provision though it has a wider scope than the Indian laws. If a similar case as above, was to be decided under Indian copyright laws, the fair use provisions would not be invoked as the case would get settled using the 'First owner' provision under Section 17 of the Copyright Act,1957 and the company (Porsche AG) would hold the rights over any work of the designers under the course of their employment.

The claims put forth by the plaintiff in her submissions under Article 32a of The German Copyright Act, 1965 resonates in its essence in the Indian copyright laws under the provisions of making revisions to the assignment/ license agreements for changes and amendments under the compensation/ royalty clauses as per the future royalty rates. 3

The Porsche Case and its judgment have shed light across three very distinct feature of IP protection; namely, the compensation for use of creative works, the limitations on protection afforded by such creative work, the dynamics of who holds the IP rights over such work. The case saw that as the protection availed by the plaintiff provided but a narrow scope of protection and the limitations on the laws invoked to prove her case were distinctly applicable to case, there existed no claim of the plaintiff that could be backed by law.

On a first glance, the provision of 'free use' under Article 24(1) of the German Copyright Act,1965 seem similar to the provision of 'fair dealing/use' under Section52 of the Indian Copyright Act, 1957, although the two provisions are vastly different in so much as that the Article 24(1) gives the right to a person to make and exploit subsequent works by "free use" of someone else's work without taking consent of such other person, as long as the work created can be identified as an independent work, whereas Section 52 dictates certain exceptions under which the work of an author can be used without the permission of the author, but no such use gives rise to any subsequent exploitable work. If India was to incorporate a provision similar to Article 24(1) under the Indian Copyright Regime, it would give rise to more problems than it would solve. For example, a person who has written a book on organic chemistry may have his work and research used by another author to create another book on organic chemistry with some independent work of his own and put such book in circulation. The first problem that will arise would be that of copyright infringement under Section 51 of the Copyright Act, 1957; second provision of fair dealing would become redundant; and lastly, there would be no clarity as to the economic rights of an author/ creator/ or copyright holder/ owner.

Hence, though the same case in India would have been settled using a different rationale, but the judgment arrived upon would have been substantially similar or even the same, that is that no economic rights can be availed by the plaintiff and that the rights over the work in dispute lie with Porsche AG itself.

Footnotes

1 Article 32a of the German Copyright Act, 1965

2 No claim of the Komenda co-heir against Porsche on fairness compensation | juris The legal portal | Published on 7/4/2019

3 Phonographic Performance Ltd. vs Ht Media Ltd. (Delhi High Court, 2012)

For further information please contact at S.S Rana & Co. email: info@ssrana.in or call at (+91- 11 4012 3000). Our website can be accessed at www.ssrana.in

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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