India: Delhi High Court dismisses Saregama’s infringement suit against Eros Digital

Source: www.delhihighcourt.nic.in

Last year, on October 2017, in the case of Saregama India Ltd Vs. Eros Digital FZ LLC & ANR[1]., pertaining to infringement of Copyright, the Delhi High Court stated that since it has no territorial jurisdiction to entertain the suit, relief as claimed cannot be granted by it and the plaint has to be returned to Saregama India Ltd. (herein after referred to as Plaintiff) for presentation before the Court of competent jurisdiction i.e. High Court of Calcutta.

Brief Background

In the above case, the Plaintiff has acquired rights in numerous songs, including regional and Hindi film as well as non-film sound track music from the respective producers. The Plaintiff is also the owner of copyright in the musical works (musical compositions) as well as the literary works (lyrics) embodied in the said sound recordings which were assigned to it by the producers of the respective sound recordings. The Plaintiff holds the exclusive right to ‘grant a license’ or ‘authorize the doing’ of any of the acts provided for in the Copyright Act, 1957 (hereinafter referred to as the ‘Act’).

The Plaintiff entered into a Content Licensing Agreement dated July 13, 2015, with Eros Digital FZ LLC (hereinafter referred to as the Defendant) whereby they were granted a non-exclusive license to exploit the copyrighted works of the Plaintiff through the Defendants website, ‘www.erosnow.com’ and their mobile application ‘ErosNow’.

According to the License Agreement, the Defendant was permitted to use the Plaintiff’s content of ‘streaming’ and ‘online caching’ wherein the latter permitted the end users i.e. clients of the Defendants to access the temporary copies of the Plaintiff’s works in cache memory of internet enabled devices.

Contentions by the Plaintiff 

1. The Content License Agreement was granted for a period of 24 months effective from July 13, 2015, and, as per the terms of it the Defendant No. 1 was required to pay the Plaintiff a Minimum Guarantee Amount of INR 9,50,00,000 (USD 1425475 approx.). Further, he was also liable to pay a streaming fee of 0.14 per stream in case the value of the utilization of the Plaintiff’s works exceeded the Minimum Guarantee Amount.
2. The Defendants did not pay the installments on time for which they were served with various notices. Meantime, the license has now come to an end by passage of time on July 12, 2017, for which, it was alleged that, the Defendants are guilty of copyright infringement due to default in making payment to the Plaintiff. Further, the Plaintiffs contended that, the Defendants continue to infringe the copyright on account of continued exploitation of the work despite expiry of the agreement.
3. Defendant is in default of payment of INR 6,12,50,000 (USD 918979 approx.) besides interest and penal interest. The Plaintiffs further contended that the Defendants are in process of selling their business to the third parties. Since both the Defendants are based out-side India, grave hardship and significant damage would be caused to the Plaintiff if immediate steps to restrain them from selling the business were not taken. 

Contentions by the Defendant

1.      The Defendant sought time to file response to the application and, denied the Plaintiff’s allegations.

Decision 

1. The Court held, in the instant case that Clause 29 of the agreement is clear and unambiguous. The Courts in Calcutta alone has jurisdiction, to which the parties by this clause would bound themselves in any matter arising between them, under the said License Agreement. Once parties bound themselves as such, it is not open for them to choose a different jurisdiction as such, as the suit would be in violation of the said agreement.
2. It is relevant to note that in the plaint, the Plaintiff did not aver at all that the license agreement was executed at Kolkata. And, it was also not revealed that the installments were paid in the bank account maintained by the Plaintiff at Kolkata.
3. Since the Court has no territorial jurisdiction to entertain the suit, relief as claimed cannot be granted by this Court. The Plaintiff will have to approach the Court of competent jurisdiction to avail the relief claimed.

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[1] CS(COMM) 625/2017