Tag Archives: copyright

The Mickey Mouse Debate

Mickey Mouse has always been synonymous with Disney, and has served as their ultimate mascot.Disney Corporation has always been protective of its creations and has ensured that their copyrights and their beloved mascot, Mickey Mouse, never fall into the public domain.  Every time the first Mickey Mouse copyright is set to expire, Disney springs into action to extend the copyright term.

The debate of copyright term duration is a long standing one. Initially, US copyright law provided for a copyright term which lasted for a period of fourteen years from the date of publication. This term could be renewed for an additional fourteen years if the author was still alive at the expiry of the first term. In 1831, the Copyright Act was amended and the term was extended from fourteen years to 28 years, which could be renewed for an additional 14 years.

In 1976 the copyright act went through major changes when the first Mickey Mouse copyright was set to expire. The amendment extended the term of copyright for works copyrighted before 1978 to life of the author plus fifty years after the author’s demise and 75 years for works of Corporate.

With only 5 years left on Mickey Mouse’s copyright term in 1998, Congress again changed the duration with the Copyright Term Extension Act, 1998 (CTEA) providing retroactive extension of the copyright term.It extended the term of protection to life of the author plus 70 years, and for works of corporate authorship to 120 years after creation or 95 years after publication, whichever endpoint is earlier. According to the Act works made in 1923 or afterward will not enter the public domain till 2019 or afterward, depending on the date of production. Disney’s Mickey Mouse is set to expire on 2023 and the debate on extension is set to begin again.

The Debate

So why is there so much debate about how long creative work can be protected by copyright? Copyright provides duality of purpose which is fundamentally at odds with each other. One purpose of copyright is to educate the public culturally by disseminating cultural knowledge. The other purpose is to foster creativity by allowing authors to reap benefits from works for a limited period thus encouraging them to create more works. It is in this battle that the debate for duration of copyright finds place.

The longest debate on duration of term with respect to copyright laws is in the US. Both proponents and opponents of extension have put put forth several arguments in favour of their stand, and this debate is set to resume soon, with the effect of the CTEA expiring at the end of 2018 and the first Mickey Mouse copyright entering the public domain in 2023.

Proponents of extension have maintained that the purpose of copyright is to promote creativity and art by allowing monopoly to the creators, thus giving them an incentive to create more. According to them, by giving exclusive rights to the creator for a limited time, both the author and the public benefit. The purpose of granting exclusive rights to authors isn’t so that they recoup their initial investment, but to let them earn substantial amounts so that they can create more works. In order to achieve this, copyright term must be for a considerable period.

Proponents of extension also argue that if works fall into the public domain they will go unused. If owners know that a particular copyright is going to lapse into the public domain, they would be unwilling to utilize it further, or create derivative works, and the public could lose out.

Another argument put forth by proponents of extension is that due to increase in life expectancy and longevity of business, copyright term must also be extended.Also, with better technology, the lifespan of a created work has become virtually infinite. This means that works can be exploited longer. Therefore, proponents of extension argue that unless copyright term is extended it to match the longevity of owners, and the longevity of the work itself, it no longer becomes an incentive for authors to create more work.

Copyright is as an extension of the creator’s persona. If it gets distorted or tarnished due to lack of protection, creators are discouraged from creating more works, potentially damaging their reputation. This also means that creators will be unwilling to disseminate quality copies of work if they are soon to fall in the public domain and risk being tarnished. This would mean that the public would lose out on culturally rich works.

Opponents of extension argue that authors have always known that their works would fall into the public domain, but this has never deterred them from creating new works. Further, extension of copyright stifles creativity as another person cannot build upon the works of the owner if it has not entered the public domain. Getting permission and licenses deters new creators from building on already existing works. This means the public would miss out on better works.

Opponents also argue that the increase in life expectancy argument is invalid as copyrights are protected for the lifetime of the author. Hence, if the life expectancy has increased it means that the copyright term will automatically increase as well.

When it comes to business entities owning copyrights, longevity of the creator is irrelevant. The opponents of extension have argued that copyrights are borrowed rights from the sovereign. Copyright is not an inherent, but a statutory, right given by the sovereign. However, irrespective of copyright being a statutory right, it needs to foster creativity. When business concerns know that copyright term is limited to a shorter duration, they are discouraged from investing further or creating derivative works. For example, when concerns like Disney know that their copyright over Mickey Mouse is set to expire soon, they would stop creating further derivative works, such as theme parks, products, animated works etc,.

In 2003, a study proved that the last two major copyright changes before CTEA, the Copyright Act of 1976 and the 1988 Berne Convention, had significant effects on copyright registrations.Yet another study, conducted in 2006, proved that countries that extended the terms of copyright from the author’s life plus fifty years to the author’s life plus seventy years anytime between 1991 and 2002, saw a significant increase in movie production.This clearly shows that copyright extension is in the best interest of creativity.

The Indian Scenario

The media and entertainment industry in India is still in its nascent stage. Copyright protection under the Indian Copyright Act is for a period of 60 years from death of the author. In 2008 Yash Raj and FICCI approached the HRD Ministry to extend the copyright term to 95 years like in the CTEA.The ministry welcomed film producers’ recommendations in extension of copyright term for the Copyright Amendment Act, 2010. While Parliament may not have agreed to extending the term of a copyright to 95 years like in the US, they did amend the law dealing with copyright term of films. The amendment has allowed joint authorship of the producer and the principal director for a film. Thanks to the amendment, a principal director will have a copyright protected for 70 years, as opposed to the producer who has only 60 years. This has effectively increased the term of protection for movies from 60 years to 70 years. The momentum for increasing copyright term is just starting and India will soon get to see similar debates as faced by CTEA in the US.

About the Author : Nadine Kolliyil, an intern at Khurana & Khurana, Advocates and IP Attorneys looks into the debate surrounding copyright extension in the US, and Bollywood’s attempt to extend copyright term.

References:

Simplified account of Copyright Registration in India

This article is intended with covering the basic FAQs about Copyright registration in India. For the sake of better focusing, format of questions and answers has been adopted.

  1. What is Copyright?

Copyright is a right given by the law to creators of literary, dramatic, musical and artistic works and producers of cinematograph films and sound recordings. It is important to note that Copyright does not protect the ideas but protects the expression of the ideas.

  1. What kind of works can be protected by Copyright?

The Copyright Act, 1957 protects original literary, dramatic, musical and artistic works and cinematograph films and sound recordings from unauthorized uses.

  1. What kind of works cannot be protected by Copyright?

Ideas, procedures, methods of operation or mathematical concepts as such, titles, or names, short word combinations, slogans, short phrases, methods, plots or factual information are not protected by Copyright.

  1. Who can file for Copyright registration?

Any individual who is an author or rights owner or assignee or legal heir can file application for copyright of a work.

  1. Where can applications for Copyright be filed?

Applications can be filed both online and through Physical mode. Physical applications have to be directed to:

Copyright Division.

Department Of Industrial Policy & Promotion,

Ministry of Commerce and Industry;

G-30 Super Market August Kranti Bhawan

Bhikaji Kama Palace

New Delhi- 110066

For e-filing, instructions available at http://copyright.gov.in/UserRegistration/frmLoginPage.aspx may be referred.

  1. Can both the unpublished and published works be protected by Copyright?

Yes

  1. Is quality of work important for Copyright registration?

It is the originality of the work that is mandatory for the registration and not the quality of the work.

  1. What is the procedure for Copyright Registration in India?

After application has been filed and diary number has been allocated, applicant has to wait for a mandatory period of 30 days to check if any objection is filed in the Copyright office against applicant’s claim that particular work is created by him. If such objection is filed it may take another one month time to decide as to whether the work could be registered by the Registrar of Copyrights after giving an opportunity of hearing the matter from both the parties. If no objection is filed then application goes for scrutiny from the examiners. If any discrepancy is found the applicant is given 30 days time to remove the same. Therefore, it may take 2 to 3 months time for registration of any work in the normal course.

copyright_blog

Source: http://copyright.gov.in/ 

  1. What kind works of website can be protected through Copyright?

A web-site contains several works such as literary works, artistic works (photographs etc.), sound recordings, video clips, cinematograph films and broadcastings and computer software too. Separate applications have to be filed for registration of all these works.

  1. Whether computer Software or Computer Programme can be registered?

Yes. Computer Software or programme can be registered as a ‘literary work’. As per Section 2 (o) of the Copyright Act, 1957 “literary work” includes computer programmes, tables and compilations, including computer databases. ‘Source Code’ has also to be supplied along with the application for registration of copyright for software products.

  1. What kinds of right are granted to Copyright owner?

Copyright owner has two types of rights related to his work:

Economic Rights: Economic rights include for example right of reproduction, right of performance, right of broadcasting and right of communication which are derived from right of performance, rights of translation and adaptation.

Moral Rights: These are the rights that allow owner to maintain his image. These rights allow author to claim authorship of the work and to restrain or claim damages in respect of any distortion, mutilation, modification or other act in relation to the said work which is done even after the expiration of the term of copyright if such distortion, mutilation, modification or other act would be prejudicial to his honour or reputation. It’s important to note that moral rights remain with original creator even after whole or in part assignment of the work.

  1. What is the term of Protection granted by Copyright?

Term of the protection depends on the type of work. Generally, it’s until the expiration of the 50th year after the author’s death. In case of anonymous work, it’s until 50th year after the work has been lawfully made available to the public. In case of pseudonymous work, it’s until 50th year after the work has been lawfully made available to the public, but if author leaves no doubt about the identity or reveals the identity of his or her work, the general rule applies. In case of Audiovisual (cinematographic) works, it’s 50 years after the making available of the work to the public (“release”) or if such event did not take place, then from the creation of the work. In case of applied art and photographic works, it’s 25 years from the creation of the work.

  1. Is India member of the international treaties related to Copyright?

Except, WIPO Copyright Treaty (WCT) and the WIPO Performances and Phonograms Treaty (WPPT), India is a member of most of the important international conventions governing the area of copyright law, including the Berne Convention of 1886, the Universal Copyright Convention of 1951, the Rome Convention of 1961 and the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS).

  1. Which sections of the Act define what is and what is not infringement of Copyright?

Section 51 of the Act deals with the provisions related to infringement of the Copyright. Section 52 of the Act provides a detailed list of acts that do not constitute infringement. Owner of the copyright can seek criminal and civil remedies against accused infringer.

Reference:

copyright.gov.in/frmfaq.aspx

Deciphering the Intricacies Related to Protection of Graphical User Interface in India

Mahima Sharma, an intern at Khurana & Khurana looks into the intricacies involved in the process of protection of Graphical User Interface in India which seems to be in limelight wherein there exists some uncertainty over the same.

GUI Protection under Designs Act, 2000:

In India, a Design registration can be obtained for new or original features of shape, configuration pattern, ornamentation or composition of lines or colors as applied to an article, whether in 2 or 3 dimensions or both.

India enacted the New Design Act, 2000 to protect the rights and designs of creators and innovators in compliance with TRIPS. The new Design Act which replaced the preceding Design Act, 1911 has widened the scope of classification system as an earlier act was based on the material categorization of the article whereas the new act provided an elaborate classification adopted in 2008 based on Locarno Classification System which deals with the subject matter for particular design to be registered according to the respective classes, for instance: Class 2 deals with article of Clothing, Class 14 deals with Recording, Communication or Information Retrieval Equipments. While India not being signatory to Locarno Agreement, its new design classification system is a prototype of the Locarno classification system includes Class 14-04 titled “Screen Displays and Icons”. This new classification acknowledges visual images, graphical user interfaces or Icons shown on an image display of a portable electronic device which includes tablet computers and Smartphone and all other electronic gadgets which have an image display to be registrable under Design Law. Through the records as maintained and reflected on the IPO website for Design Registration, it has been observed that icons as such have usually been registered under Class 14-99, titled “Miscellaneous” and not in class 14-04 while none of GUI is registered under class 14-04.

A Questionnaire dealing with the Design Registration in India titled “SPECIAL TOPICS for Design Committee of APAA 2013” deals with certain aspects related to GUI Protection in India under Designs Act, 2000. In the same article it was explicitly mentioned at Question 3-2:

What matters should an applicant/attorney be aware of when preparing or drafting an application request and drawings of a design for a visual image, graphical user interface (GUI) or icon shown on an image display of a tablet computer and a smartphone to be submitted at your national Office under your Design Law?

“Under Section 6 of the Act, a design may be registered in respect of any or all the articles comprised in a prescribed class of article. Under Section 2(a) “article” means any article of manufacture or any substance, artificial, or partly artificial and partly natural; and includes any part of an article capable of being made and sold separately.

In the circumstances, the Applicant/Attorney must ascertain that visual image, GUI or icon shown on an image display of a tablet computer or smartphone must be an article capable of being made and sold separately. Alternatively, an application for registration of a design can be made in respect of a tablet computer or a smartphone bearing the visual image GUI or Icon shown on an image display thereof. In such a case the application and each of the representation should be endorsed with a brief statement that novelty resides in the visual image, GUI or icon shown on an image display of a tablet computer or a smartphone as the case may be (Rule 12).”[1]

Instances of Attempt to protect GUI under Designs Act, 2000[2]:

There are certain incidents where certain designs and icons have been registered under Design Act, 2000 vide application no. 205350 under class 14-99. However, regarding GUI there was one incident known from the past wherein Amazon filed for Design Registration for GUI in India, but the same was refused by the Patent Office on the ground that impugned design does not fall within the purview of definition as provided under section 2(a) and 2(d) of the Design Act, 2000.[3] After the verdict of Amazon’s case, the Patent office has started considering stringent interpretation of the definition of the word “article‟ in the Act and it can be concluded that no screen display could be registered.

GUI as a subject matter under Copyright Act, 1957..?

Artistic work, literary, dramatic, musical or sound recording, source code for software among others are subject matter of Copyright. GUI as a subject matter also seems to be governed and protected under Indian Copyright Act, 1957 to some extent.[4]  As such there are no specific guidelines as to armor GUI in India. This led to an anomalous situation particularly in view of section 15 of the Copyright Act which specifically states that “Copyright in any design, which is capable of being registered under the Designs Act, 2000, but which has not been so registered, shall cease as soon as any article to which the design has been applied has been reproduced more than fifty times by an industrial process by the owner of the copyright, or, with his license, by any other person.” So if at all GUI is a subject matter under Designs Act as prima facie it seems from the newly adopted classification based on Locarno Classification, the Copyright in the same will cease immediately after application of the same more than 50 times to any article.

It is clear from above that there are a few occurrences, where certain icons have been registered under Design Act, 2000 under class 14-99 while GUI is considered as subject matter under Copyright. Thus fundamentally, there is an earnest call to amend our current Design law to an extent which shall make GUI as a subject matter of Designs Act, 2000, also to bring uniformity in protection of Intellectual Property at International level. It is pertinent to note that Design Act, 2000 provides for any applicant, who has applied for protection of the design in convention countries or countries which are members of inter-governmental organizations, can claim registration of the design citing a priority date in India. This is the date of filing of the application in any of such countries provided the application is made in India within six months. Thus accordingly the fate of any application from Convention country filed in India for GUI protection is at stake which is not desirable particularly in the era of commercialization and globalization and ‘Make in India’ regime. This in fact may discourage the growth of software/GUI domain in India which is not desirable.

To cut a long story short, it is high time that legislature step in and revise the definitions of article and design in the Act to make way for the new age communication devices and their embedded applications-design eligible, the status of protection of GUI under Designs Act seems ambiguous. It is indeed need of the hour that our laws need to be timely updated and such amendments shall also be in total consonance with the complete law in that regards, especially law related to the Intellectual Property Rights.

About the Author: Mahima Sharma, Intern, Khurana & Khurana, Advocates and IP Attorneys and Abhijeet Deshmukh, Trade Mark Attorney, Khurana & Khurana, Advocates and IP Attorneys who can be reached at Abhijeet@khuranaandkhurana.com

[1] http://www.apaaonline.org/pdf/APAA_62nd_council_meeting/DesignsCommitteeReports2013/India-Questionnaire-2013.pdf accessed on 16-May-2016

[2]   http://www.lexology.com/library/detail.aspx?g=1af5cff8-3f1a-42ac-81f1-269a4c949d07 accessed on 16-May-2016

[3] An article published by Ranjan Narula & Sandeep Agarwal of RNA,IP Attorneys –     http://www.lexology.com/library/detail.aspx?g=1af5cff8-3f1a-42ac-81f1-269a4c949d07 accessed on 16-May-2016

[4] http://deity.gov.in/content/copyright-0 as accessed on 16-May-2016

Copyrights Enjoyed By Musicians

Sanyukta Biswas, an intern at Khurana and Khurana, Advocates and IP Attorneys, looks at the rights of singer, lyricist and composer that have been incorporated by the 2012 amendment.

Once upon a time in India even the most noted of film artists and musicians could not secure themselves financially despite their brilliance. In an infamous legal battle, in the dark ages, the rights of royalty of the performers were offered to the producers in a platter. In the recent years, the likes of Javed Akhtar, lobbied for securing the rights of people associated with the entertainment industry. The amendment saw light 7th June 2012 when it received the assent of the President on. The amendment did bring the Copyrights Act in confirmation with the WIPO Copyrights Treaty and WIPO Performances and Phonograms Treaty and reach way beyond that. This article specifically deals with the rights of singer, lyricist and composer that have been incorporated by the 2012 amendment. The main objective behind the article is to describe and reflect upon the newly acquired copyrights of people related to the music industry and why is it a reason to rejoice.

Q1. What is a live performance and who is covered under it?

Answer: The definition of a performance in Section 2(q) of the Copyright Act is: ‘performance’, in relation to performer’s right, means any visual or acoustic presentation made live by one or more performers. The terms ‘made live’ are not defined in the statute. Hence the meaning of live performance is completely dependent on the interpretation that is done by the judiciary when it comes to recorded performance of a singer in a film. The definition of a ‘performer’ in Section 2(qq) of the Act as amended by the 2012 Act contains an inclusive definition which stated that a performer ‘includes an actor, singer, musician, dancer, acrobat, juggler, conjurer, snake charmer, a person delivering a lecture or any other person who makes a performance’. The 2012 Act added a Proviso to the Section which would disable those performers not mentioned in a film’s credits (including film ‘extras’) from being able to claim all but one of the rights granted to performers by the Act. They are entitled only to the protection accorded under section 38B. The Amendment Act 2012 has also sought to amend the definition of ‘Communication to Public’ (Section 2 (ff)) extending the right to performances. The definition explicitly states that it does not matter whether the communication is simultaneous or at places and times chosen individually. The rights under this head hitherto limited to authors have been extended to performers by the present amendment.

Q2. What are moral rights of performers and how are they protected?

Section 38B is a new provision in the Act which deals with the moral rights of performers. Moral rights of copyrights creator are recognized in civil law jurisdiction and also to some extend in common law jurisdiction. Moral rights of a copyright owner includes incidental rights such as right to attribution, the right to have worked published anonymously or pseudonymously, and the right to the integrity of the work. The preserving of the integrity of the work bars the work from alteration, distortion or mutilation. It must be noted that moral rights associated to copyrights work, is different from the economical rights. Even when assignments are made moral rights of the copyright owner remains. This particular provision — Section 38B(b) of the Act — states that ‘the performer of a performance shall, independently of his right after assignment, either wholly or partially of his rights, have the right to restrain or claim damages in respect of any distortion, mutilation or other modification of his performance that would be prejudicial to his reputation’. The other right which a performer would have — under Section 38B(a) of the Act — is the right to claim to be identified as the performer of his performance except where omission is dictated by the manner of the use of the performance. This right under the proposed Section 38B(a) obviously cannot apply to extras in films as they are not credited by definition.

It is pertinent to note that the provision also contains a safeguard against abuse of moral rights in the form of an Explanation which would state that ‘the mere removal of any portion of a performance for the purpose of editing, or to fit the recording within a limited duration, or any other modification required for purely technical reasons shall not be deemed to be prejudicial to the performer’s reputation’. This too is analogous to the rights granted to authors: the moral right of an author would not be considered to have been violated merely because his or her work has, not been displayed to his or her satisfaction.

Illustration 1: A is the original singer of a certain song “ Gullu ke gubbare” who was appointed by the music company XYZ. He assigned his rights to B. Despite the assignment, A would have the rights to be acknowledged for being the singer and he can also prevent others from distorting it.

Illustration 2: P sang in the film “Cocoa” about addiction of chocolate. Later on it was decided by the production unit of the film that due to the entire length of the movie, some scenes containing songs of P had to be modified. Due to this modification, the moral rights of the singer would not be effected.

Q3. What are the positive rights of the performers now and how can they be enforced and protected?

Answer: Section 38A of the Act enumerates acts similar to those listed in Section 14 which defines copyright, but instead of stating that performing them without consent would cause one to violate the performer’s right, it states that it is the exclusive right of the performer to perform or authorize the performance of these acts or any substantial part thereof. So it can be conclusively stated that earlier the rights were proscriptive in nature and now it is prescriptive. Earlier the performers were not entitled to royalties because they only had a negative right to prohibit ‘fixation’ of their live performances. A work is “fixed” in a tangible medium of expression when its embodiment in a copy or phonorecord, by or under the authority of the author, is sufficiently permanent or stable to permit it to be perceived, revproduced. The fixed work does not have to be directly perceivable by a person but can be one that requires some machine or device for its display.

The Act, however, does not completely do away with the performer’s right. Firstly, it contemplates that the consent of a performer for the incorporation of his performance in a cinematograph film would be in writing, and would not merely be oral.

Further, once a performer gives valid consent for the incorporation of his performance in a film, he would not generally be able to object to the enjoyment by the film’s producer of his performer’s right in it. There are two important caveats under the Act though: firstly, the performer may enter into an agreement to the contrary i.e. there would be no statutory prohibition to his entering into an agreement which stated that he could object to the producer enjoying his performer’s right in the film. Secondly, the producer’s enjoyment of the performer’s right in the film may be interpreted to be limited to the film, so that the producer would not be able to enjoy the performer’s right for the purpose of retaining all the revenues generated through the commercial use of a performance (assuming the performance was live).

Further, the prohibition on the producer’s enjoyment of the performer’s right in respect of commercial use is buttressed by a Proviso which states that ‘notwithstanding anything contained in Section 38A(2), the performer shall be entitled for royalties in case of making of the performances for commercial use’. It thus appears that the intention is to accord to performers the benefits analogous to those which the 2012 Act accords to the authors of underlying works incorporated in sound recordings for live performances. This would make available to performers revenue stream which has thus far not been known to have been accorded to them, particularly since applying the provisions of Sections 18 and 19 to the performers right would give performers an ‘equal share of revenues’ for live performances analogous to the ones which the authors of underlying works in films and sound recordings enjoy.

Illustration 1: S, an upcoming singer was performing at a Christmas party. The audience cannot record the song without taking due permission from S.

Illustration 2: A certain producer can generate revenue through the signing performance of a certain singer, only limited to the film or the album. He is prohibited from generating revenue through using the song as ringtone and caller tune.

No Work Person Amount Use
1 Film (and possibly sound recording) Performer Unspecified Commercial use of their perfomance
2 Non film sound recordings LyricistComposer Royalties to be shared on an equal basis with the assignee of the copyright Any utilization on the underlying works in any form

Q4. What are the relevant provisions with regards to assignment?

Answer: Under Section 18(1) a second proviso has been inserted. It provides that no such assignments shall apply to any mode of exploitation that did not exist or was not known in commercial use when the assignment was made. This amendment strengthens the position of the author if new modes of exploitation of the work come to exist and prevents them from being misused. Section 18(1) provides that the owner of a copyright in any work or prospective owner of a future work may assign the copyright, and the proviso to this sub-section clarifies that in the case of future work, assignment will come into force only when the work comes into existence. Another proviso under S. 18(1), provides that the author of a literary or musical work incorporated in a cinematograph film or sound recording shall not assign the right to receive royalties in any form other than as a part of the film or sound recording. Section 19 relates to the mode of assignment. Sub-section (3) has been amended to provide that the assignment shall specify the ‘other considerations’ besides royalty, if any, payable to the Assignor. Therefore, it indicates that only monetary compensation by way of royalty could lead to assignment. A new sub-section(8)has been inserted making the assignment of copyright void if contrary to the terms and conditions of the earlier assignment to a copyright society in which the author of the work is a member. This amendment is an attempt to streamline the business practices.

CONCLUSION

It is pertinent to note that the lobbyists for the amendment were artists associated with Bollywood. As a result of which the amendments, as time would tell, would probably be beneficial for performers of Bollywood. Following the amendment there have various petitions filed challenging its validity by composers and lyricists themselves. A certain association of Bhojpuri singers claimed, that the said amendment would harm their interests. This is because of the provision for mandatory sharing of royalties with the performers. This would actually in practice reduce their single lump sum advance payment.  The reason would be the fact that regional and classical songs do not enjoy the kind of popularity Bollywood songs do. For similar reasons, people associated offbeat Hindi movies and music would also suffer, as they would have to be commercially successful in order to earn any profits. This would result in ruining of a rich and diverse culture of movies and songs in the country. The only way to avoid compulsory sharing of royalty provision seems to sign a contract which would be governed by the copyright laws of another country.  The chances of this condition being of any help to regional composer and lyricist is slim. The term “equal sharing of royalties” is also vague in the sense that it does not provide for any specific method of for computation of the share of royalties of each one involved in the process. Compulsory joining of copyrights societies is also a coercive measure and its ambiguous if the society is Indian or international.

An insight on the legal implications of BYOD

Bring Your Own Device (BYOD) is a scheme wherein employees are allowed to bring their own devices like mobiles, laptops, tabs and utilize them in the workplace for work purposes. Some employers themselves fund the software to their employees, meanwhile some prefer to simply grant permission for their employees to bring their technology at their own expense.

This is beneficial to the employee since it would be evident that he would be comfortable using his own devices, adding to the fact that he can work from home on his own gadget at his own convenience. Sounds simple, doesn’t it?

Unfortunately, this scheme seems to have created numerous problems as far as employers i.e. companies are concerned. It is a herculean task for companies to keep a check on which device is being used and by whom and for how much time. If companies remain oblivious to this and let the employees have a free reign over the usage of their software, it can serve as a deterrent in the form of unending and expensive infringement litigations due to security breach and/or privacy and data protection interests. Hence, many companies are averse to BYOD since the risks outdo the benefits involved.

If you think about the intellectual property rights that can protect anything being used via the BYOD scheme, the utmost concern would be your copyrighted works. Anything that the user is enabled to see on screen, be it algorithms, source codes, object codes, software designs, databases, manuals, complete written specifications of the software, and so on, can be copyrighted. Now, the question stands as to the ownership of these copyrighted works.

Coming to the Indian scenario, under the Copyright Act, 1956, the ownership of the copyrighted work generally vests with the employer, unless there exists a contrary agreement between the employer-employee.  The question arises here is in case the employee uses his own Device to better the copyrighted works belonging to the employer, who would be the rightful owner of the intellectual property rights of the works? Further, an employee can engage in infringement activities simply by unlawfully copying and storing the copyrighted works on his personal device. Altering or deleting data can also invite severe repercussions for the employee.

Meanwhile if the employees are using unlicensed software for their work purposes, the employers can be held liable for infringement. The employer can be held vicariously liable unless guidelines are not written down to protect their interests.

Hence, companies need to implement guidelines that control the usage of BYOD devices and maintain regular checks of these devices to ensure there are no illegal activities taking place. Along with guidelines, password protection, encryptions, antivirus and wireless access policies can be implemented along with various other privacy policies in order to prevent legal misuse of softwares. The onus, in the end, remains on employees to be diligent while using their own gadgets in workplaces.

About the Author: Ms. Madhuri Iyer, Trade Mark Attorney at Khurana & Khurana and can be reached at: Madhuri@khuranaandkhurana.com

Follow us on Twitter: @KnKIPLaw.

Infringement of comic characters- Comic con?

Graphical characters are commercialized in the form of cartoons, posters, food products or merchandises like toys and clothes, to name a few. The profits garnered would depend on the popularity of the brand that the graphical character represents. Exploitation of the graphical character can take place if it is not legally protected.

Intellectual property and unfair competition law mainly provide protection to graphic characters. Due to the overlapping effect that the provisions intellectual property and unfair competition law stipulate, the two laws may converge to cover the gaping holes in the law. An advantage from commercialization of characters is that these graphic characters can be transformed into new works, depicting new postures in various colours and different mannerisms, than that in which the character was originally depicted.  It is well known that graphic characters act as entertainment products or services when they are depicted on various merchandises through marketing. Hence, they can be said to be merely suggestive of the products or services for which they are used, but cannot be said to indicate the source of origin.

The best protection strategy is to resort to the comic character being protected by copyright, Trade Mark as well as unfair competition laws.

Comic Characters can be differentiated in two categories: Graphic characters and Fictional characters. Both these categories have different tests to determine whether they can attain copyright protection. A graphic character is one which is depicted by a cartoon or other graphic representation. The physical appearance in the form of characterization is visually seen for the readers. When we come to a fictional character, it is a word portrait where the physical appearance is left to the imagination of the reader. Hence, the difference lies in the pictorial and literary representation.

In the case of Detective Comics v Bruns Publication (111 F 2d 432 (2d Cir, 1940), the defendants had created a character called ‘Wonderman’ which had the same physical and emotional characteristics of the well-known character ‘Superman’. The Court held that the defendants had copied more than the general types and ideas from ‘Superman’ and also appropriated pictorial and literary details and embodiments in the complaint’s copyright. The Court declined to grant protection to general ideas about a character. It is only when the character is sufficiently portrayed in details, protection could be granted. The character has to be converted from being just an idea, to become an expression.

Walt Disney v Air Pirates (581 F.2d 751 (9th Cir, 1978) was a landmark case on character protection. The defendants had portrayed Disney’s characters in incongruous settings. The Court held that a two step test should be applied to determine copyright infringement. First, the visual similarities of the characters are to be determined and secondly, the court would analyse the personalities of the cartoon characters. In this particular case, the defendants were held liable for copyright infringement.

Looking at Indian perspective, the case of Malayala Manorama v. V T Thomas (AIR 1989 Ker 49) can be seen where the Court allowed Mr. Thomas to carry on with his work of drawing the characters of Toms Boban and Molly even after leaving employment. The publishing house was restricted from claiming copyright over the character and continuing to draw the same character after terminating Mr. Thomas’s employment. The High Court had opined that since V T Thomas had created the character before entering into employment with the publishing house, he is the one who should be allowed to carry on the exploitation of his work even after leaving employment. The publishing house did not play any role in creation of the character, and hence they would not get copyright over the character. Their right is limited only to the extent of the particular cartoon strips which were created by V T Thomas during the course of employment for being published in the newspaper. The Court impliedly distinguished between the drawings made using the cartoon character and the actual cartoon character. The Court deciphered that the copyright over the drawings made using the character would vest with the publishing house as an artistic work, while the copyright over the actual character remains with Mr. Thomas.

With respect to determining copyrightability of fictional characters, the case of Anderson v. Stallone (11 USP Q 2d 1161) can be referred to wherein the appellant had written the story based on the character of ‘Rocky’, which appeared in the earlier ‘Rocky’ movie series. He then tried selling the same story to Sylvester Stallone for making ‘Rocky IV’. The appellant denied the allegation of infringement and claimed that ‘Rocky’ was not copyrightable. The court ruled in favour of the defendant saying that the physical and emotional characteristics of ‘Rocky’ were set forth in tremendous detail and hence the character was highly delineated.

But in the case, Warner Brothers Pictures v. Columbia Broad-casting Systems (216 F 2d 945), ‘distinctively delineated’ standard was replaced with the ‘story being told’ standard. In the present case, the Court stated that no character is protectable under copyright law unless the character is extremely well-delineated as to constitute ‘the story being told’ rather than merely being a ‘chess man in the game of telling the story’.  This would mean that the story has to be based on the particular character, which is sought to be protected. This was also applied in Universal City Studios v. Kamar Industries (1982 Copyright L Decisions (CCH) 25, 452), where the character ET was held copyrightable because ‘ET’ was the unique and distinctive character about whom the movie was about.

It can be concluded that copyright protection can be granted only when the court is made to believe beyond doubt that the characters are well delineated, and can be conveyed as an expression, and not an idea. It is significant to note that the creator of the comic character should protect his work even before it becomes popular to evade any chances of exploitation of the Trade Mark.

About the Author: Ms. Madhuri Iyer, Trade Mark Attorney at Khurana & Khurana and can be reached at: Madhuri@khuranaandkhurana.com

Ambushed!

India may be a cricket crazy nation but it is the Olympics that has every Indian clinging on to his television set these days, cheering for his country. The Olympics is one of the biggest sporting events in the world where more than 200 nations participate in nearly 400 events. The media exposure became a lucrative business and since it is held once in four years, it is a tussle between brand owners to sponsor this major international event. In the extraordinary growth of sponsorship over the last decade, there is a raging competition between companies to secure and protect their hard-earned sponsorship rights. With this respect, there is a rise in ambush marketing which is the biggest menace when it comes to sponsorship.

Sandler and Shani (1989) were among the first to discuss ambush marketing. They suggested that ‘ambush marketing’ occurred when a non-sponsor of an event attempted to pass itself off as an official sponsor. 

In short, a particular sponsor pays millions of dollars for their brand to grab the spotlight in a major event, and a non-sponsor tries to encash in their glory, by not paying anything, but by freely presenting their brand as another sponsor of the event. In return for the fees, the real sponsor gets exclusive advertising space in the form of billboards, ad campaigns and other promotional gear in the form of T-shirts, bottles, food and drink. Now, rival companies manufacturing the same product, will both not win sponsorship rights for a particular event, hence ambush marketing steps in. It does not weasel its way simply into sporting events; it comes into play in any major international event.

There are two views on whether this is legal or not. Brand owners have taken the stand that it is illegal since it is a burgeoning threat to their own brand. The public on seeing both the brands would naturally assume both of them to be the official sponsors. To determine its legality, it has to be seen whether the impact of passing off is subtle or a complete rip-off.  Let us look at when ambush marketing started first:

In 1984, for the first time, the International Olympics Committee (IOC) presented the first Olympics that did not need public funding. Hence, profitable sponsorship contracts were offered to potential brands for this mammoth event. Fuji won the race against Kodak for the rights to be an official sponsor of the 1984 Olympics. In a backlash, Kodak broadcasted several advertisement campaigns and promotional products during the games. Naturally, the public would be deceived into assuming Kodak and Fuji were both sponsors.

Unfortunately, Fuji could do nothing about it since the laws were very loose in terms of ambush marketing. Kodak had actually gone by what was written in the law. The sloppy mistake was on part of Fuji; nothing in their sponsorship contract guaranteed that no competitor or rival’s advertisements would run during the Olympic games.

In 1988, the tussle between Kodak and Fuji resumed. Kodak secured the worldwide category sponsorship for that year’s Olympic Games, while Fuji had won the sponsorship of the U.S. swimming team. Both the brands aggressively marketed their products. But here, the IOC determined that Kodak was the official sponsor and Fuji was usurping them. Fuji had all the legal rights to ensure their sponsorship in a sub-event, if not the main event, hence their marketing strategies were justified. But it was obvious on the part of the IOC to protect its own revenue streams than it would care to protect its sponsor’s rights. It is pertinent to note that 40% of the IOC’s revenue streams comes from sponsorship fees.

In another famous instance, American Express Co. displayed advertisement campaigns in 1992 with scenes from Barcelona, Spain which was the host for the 1992 Summer Olympics, along with a message “You don’t need a visa to visit Spain”. Visa Inc., the official sponsors of the event, claimed that American Express was trying to ambush Visa. American Express safely said that the commercials did not refer to Olympics so they never ambushed Visa. This was a subtle form of ambushing which was perfectly legal in the eyes of law.

India has also been a victim to ambush marketing. There was an instance of 1996 cricket world cup where Coca Cola was the official sponsor but its sponsorship was clearly overshadowed and ambushed by the cheeky and catchy slogan “nothing official about it” of Pepsi. Again in 2003, the Indian cricket team nearly boycotted the Champions Trophy as they took a stand that they could not participate in accordance with the strict International Cricket Council (ICC) sponsorship rules as they went against their individual contracts with other sponsors.

Such cases would make you feel that it is only the sponsors, prospective sponsors and event owners at stake, but we find instances where even the competing athletes and fans are at stake. In 1992, when Michael Jordan accepted his Olympic medal on the podium, he had to drape a towel over the Adidas brand to satisfy his individual contract with Nike. Despite Adidas being the official sponsor, Nike had made this move to protect its individual association with Jordon. With respect to the fans, in the 2006 FIFA World Cup, the brewer Bavaria gave away their branded lederhosen to Dutch fans travelling to Germany for the game which was officially sponsored by the competing brewer Anheuser Busch. When the fans unwittingly arrived, wearing this branded merchandise, the officials forced the fans to remove their lederhosen and watch the game in their underclothes, which caused great inconvenience to the fans who only became an innocent victim. The irony is that even though the fans later on found out that Bavaria was not the official sponsor, because of the magnitude of this incident, they would always continue to associate the product with both Bavaria and Anheuser Busch.

Law in India

At present, India has not enacted specific anti-ambush marketing laws. The Indian courts seek redress from the Trade Marks Act, 1999 and the Copyright Act, 1957.

The Copyright Act, 1957 states that a copyright in a work is deemed to be infringed when any person, without a license granted by the owner of the copyright does anything, which is the exclusive right to do, conferred by the Act upon the owner of the copyright. The alleged infringement should resemble the original in a large measure and it must be derived from the original copyrighted work. In this perspective, the ‘lay observer’ test is to be relied on under which, it states that it if there was no appearance of reproduction, then there is no infringement of copyright in the particular work which is under the scanner.

In the case of ICC Development v. Evergreen Service Station, (2003) 26 PTC 228, the Delhi High Court granted an injunction preventing the defendants from using the logo of ‘ICC World Cup 2003’ consisting of black & white strips and the mascot ‘Dazzler’, and held it to be an artistic work under Section 2( c) of the Copyright Act, 1957.

Further, the Trade Mark Act, 1999 provides privileges to a registered trademark of the title, right to use and the right to obtain relief in the case of an infringing mark. The holder of the mark needs to show that the infringing mark is deceptively similar to his own mark, to claim relief. There must be likelihood of confusion in the mind of a potential consumer.

Several measures are sought to be taken to protect a sponsor’s rights at such major events. Athletes are not allowed to bring their own food and drink in the Olympics village, as they can be photographed holding brands which are not official sponsors. In conclusion, a more stringent law must be enacted. The stake in such major international events is very staggeringly high since the event would promote tourism and develop their own economy. Hence, there is an urgent need to seek relief against ambush marketing. No brand will indulge into direct ambush marketing; it would always be a more subtle spoof or parody which would not attract any provision in the already enacted laws. It is about time that the Indian legislators recognize this urgency and implement a law against ambushers.

About the Author: Ms. Madhuri Iyer, Trade Mark Attorney at Khurana & Khurana and can be reached at: Madhuri@khuranaandkhurana.com

AK 47 needs Copyright to fire?

Who would imagine that AK 47 might need copyright protection? Yes!! You Read it right!! None other than Mikhail Kalashnikov, the inventor of the AK-47 rifle had threatened India for a copyright violation. Story goes way back in 2000 when, an Indian ordnance factory had developed a replica of the AK-47, and put it on display at a defence expo in New Delhi. The weapon caught the eye of the original designer, Kalashnikov himself. He objected and threatened to file a copyright violation case against the government, forcing plans for an Indian AK-47 to be put on hold. Recently, the news came out that India has developed a Desi version of AK-47 by tweaking the technology to ensure no question of copyright violation arises. In layman’s terms, the mechanism which performs one of the key functions during the firing action will undergo a tilting movement as against rotation in the original AK-47. While reading this news I could only think of as IP lover on what basis Mikhail Kalashnikov is claiming copyright on AK-47? And also while seeking for this answer I came up with the conclusion that India should have at least thought of getting a copyright expert’s opinion rather going for circumventing technology of original AK-47. This blog will answer at least the main issue i.e. Is Mikhail Kalashnikov really owns copyright in AK-47?

In order for a creation to be protected by copyright it must fall within one of the following categories of work: (1) literary works, (2) dramatic works, (3) musical works, (4) artistic works, (5) films, (6) sound recording. The only thinkable option to the Mr. AK-47 is to claim copyright as an artistic work. Still mind boggling question remains, does making of deadliest death machine AK-47 an artistic work? The Copyright Act states that “artistic work” means a painting, a sculpture, a drawing (including a diagram, map, chart or plan), an engraving or a photograph, whether or not any such work possesses artistic quality; work of architecture; and any other work of artistic craftsmanship. Under the Act, a copyright owner has wide ranging powers and privileges including the basic rights to reproduce their works in any material forms including reproduction in different dimensions i.e. the reproduction of two dimensional drawings into three dimensional products.

So it’s crystal clear that Mr. Ak-47 might have chance of claiming copyright, in the drawings of making of AK-47 or claiming the work as artistic craftsmanship. Thus, it would be case of Mr. Mikhail Kalashnikov that the copyright in the artistic work in the drawings of which the AK-47 is a 3-dimensional representation, vests with him and his artistic work is subject matter of copyright protection in India by virtue of India’s membership to the Berne Convention and the Universal Copyright Convention as also the International Copyright Order, 1991. So the act of making a replica of AK-47 without his permission and placing it for exhibition, infringes its copyright.

So the question again comes that whether such drawings to make AK-47 is artistic work. It is my contention that such drawings are not artistic work at all and it’s not subject matter of copyright but design or patent. Also Ak-47 has been invented or designed in 1949 and even though it’s registered under designs act or under patents act its term of protection under both is expired and technology falls under public domain and becomes part of prior art. The fact is that Mr. Ak-47 had not claim any patent and design on Ak-47 anywhere in the world.

It is submitted that in terms of Section 15(2) of the Copyright Act the copyright in any design which is capable of being so registered but has not been registered ceases as soon as any article to which the design has been applied has been reproduced more than 50 times by an industrial process by the copyright owner or with his licence. This number 50 is outclassed by mere the age of first Ak-47 as this weapon has been in the use since 1949. The industrial application of such design to such a large number of Ak-47 brings Section 15(2) of the Act into operation and causes the copyright, if any, in the designs to cease and the Mr. Ak-47 forfeit his rights, if any, as the subject matter falls into public domain and any other person is entitled to use or utilize such design/features without restriction.

On the other hand, the Designs Act, 2000 does not protect any trade mark …or any artistic work as defined in clause (c) of Section 2 of the Copyright Act, 1957. So only hope for Mr. Ak-47 is that he has to show his work is artistic work and nothing but an artistic work under the Copyright Act.

Let’s go through case laws available on the issue since the subject matter of artistic copyright and design monopoly involves an overlapping subject matter of protection, the law in India has sought to create a mutually exclusive divide between artistic copyright and design.

In Samsonite Corporation vs. Vijay Sales and Anr. (FSR (2000) 463) a new range of suitcases introduced by the Plaintiff as an improved version of its earlier range of suitcases, it did not obtain any design protection for its new range. The Defendants introduced same range of suitcases. The Plaintiff objected to the Defendants’ suitcase on the ground that it was a look alike copy of its suitcases. Claiming copyright in drawings, the Plaintiff complained of copyright infringement on the premise that the Defendants’ suitcase range was an unauthorized three dimensional reproduction of the Plaintiff’s artistic copyright in the drawings in question.

Accepting the defence and declining interlocutory relief, the High Court of Delhi held that “The drawings simplicitor are not of any use to the plaintiffs. They are only instructions or ideas to give shape to an article to be manufactured. Therefore, they are designs capable of being registered.” “I am not able to accept this contention because whatever be the nature of the drawing the purpose and intention would be the relevant criterion to consider whether the drawings are designs in the light of the provisions of the Designs Act and the Copyright Act, 1957. No argument was advanced on behalf of the plaintiffs that the ultimate purpose of the drawing was not for the purpose of manufacture but the drawings were made for keeping the artistic quality of the drawings. The distinction between the drawing for artistic purpose and manufacturing is ignored by the plaintiffs. The main thrust of the argument of the plaintiffs was that the suit-cases manufactured by the plaintiffs would easily attract any person because it has got a powerful and attractive shape which would immediately attract the eye. Therefore, the whole purpose of the manufacture was to attract the eyes of customers. Therefore, it would follow from the argument on behalf of the plaintiffs that it is clearly a design coming within the meaning of the definition of design, under the Designs Act, 1911 and coming within the meaning of section 15 of the Copyright Act, 1957. Consequently, the plaintiffs cannot claim any copyright as the same had not been registered. The fact that it is being manufactured industrially is not in dispute…..as the plaintiffs had not registered the designs the plaintiffs cannot claim any protection under the Copyright Act, 1957 with reference to the drawings.”

The rationale and legislative intent came up for consideration before the High Court of Delhi in Microfibres Inc. vs. Girdhar & Co., & Anr., Finding merit in the defence, the High Court of Delhi dismissed the Plaintiff’s suit for injunction, holding: “in order for the work of the Plaintiff to qualify as an “artistic works”, it must fall within the definition of sub section (c) of Section 2 of the Copyright Act. A reading of the said provisions would show that attempt of the Plaintiff can only be to bring it within the concept of “painting.” The comparison with the paintings of M.F. Hussain would be otiose as the work in question, in the present case, is not a piece of art in the form of a painting. There is no doubt that labour has been put and there is some innovativeness applied to put a particular configuration in place. Such configuration is of the motifs and designs which by themselves would not be original…What cannot be lost sight of is the very object with which such arrangements or works had been made. The object is to put them to industrial use. An industrial process has to be done to apply the work or configuration to the textile. It is not something which has to be framed and put on the wall or would have any utility by itself. The two important aspects are the object with which it is made (which is industrial) and its inability to stand by itself as a piece of art. In fact, it has no independent existence of itself.….Furthermore, the legislative intent is also to be kept in mind which is to provide protection for a certain period of time for commercial exploitation. Thus, nature of protection is quite different for an artistic work under the Copyright Act which is for the life time of the author / creator + 60 years. This is not so in the case of commercial exploitation as under the Designs Act and the Patent Act, the period is much lesser. In the present case, the configuration was made only with the object of putting it to industrial /commercial use.” In view of the above findings, the High Court of Delhi dismissed the suit.

Therefore, finally we can say with reference to above authorities that AK-47 was not made keeping in mind that it’s an artistic work. The sole intention of Mr. Mikhail Kalashnikov in 1949 has to be to make a deadliest automatic weapon and he had succeeded in it and not for any artistic purpose. Also, weapons are made for wars and other operations for intention of killing enemies and not for enjoyment like any other art forms. Also, the rationale behind the Copyright is to encourage authors of various artistic works and to protect their work. The same rationale if applied to AK-47 it would be idiotic and illogical. It is pertinent to note that Copyright protects “expression” of an idea and not an “idea” by itself. In fact, when idea and expression become inseparable, copyright is not granted since protection of latter will lead to monopoly over the former and our case is exactly the same. Mr. Mikhail Kalashnikov was claiming copyright because he has no other option as doors of patent and design protection were already closed far years ago. Anyway, if India had stick with the replica of AK-47 and Mr. Mikhail Kalashnikov had sued India for that, we would have witnessed a great case and would have got the answer from none other than court of law with a really furious judgment.

(NOTE: The intention of writing this blog is to find answer of the above issue and enjoyment to an IP lover and not to offend anyone nor does this article encourages manufacturing of other replica products falling under the same circumstances or facts)

About the Author: Mr. Vinayak Aher, Trade Mark Attorney in Khurana & Khurana and can be reached: Vinayak@khuranaandkhurana.com.

 

 

Pine Labs Pvt. Ltd vs Gemalto Terminals India Pvt. Ltd & Others

The present case had been filed by plaintiff (Pine Labs Pvt. Ltd) against defenders (Gemalto Terminals Pvt. Ltd & others) for a decree of declaration, perpetual injunction and rendition of accounts. The suit was listed before High Court of Delhi on 7th October, 2009. Injunction was granted by court restraining the defendants, their assigns, licensees, agents, contractors, employees from in any manner infringing the copyright of the plaintiff.

Defendant filed an application to modify the injunction on 9th October, 2009. Court modified the interim injunction stating that, the defendant can continue providing services to Indian Oil Corporation Ltd. Fleet Card Program.
Brief History of the case:

Plaintiff is a software company, whereas Defendant 1 (Gemalto Terminals) provides computer hardware terminals to retail establishments. Defendant 2 is a bank which also engages in installing Fleet Card System for Hindustan Petroleum Corporation Ltd (HPCL). Defendant no. 3 is a company appointed by defendant no. 1 to modify and adapt the Plaintiffs software.
In 2003, Defendant no.1, Gemalto Terminals approached plaintiff to develop/write certain software and manage the operation of the Fleet Card Program proposed for Indian Oil Corporation Ltd. (IOCL). A work order was issued by defendant no.1 on 17th November, 2003. Plaintiff were asked to provide services for implementation of the system, including providing and maintaining server related hardware etc. along with development of required software. Plaintiff developed the software Version 1.00 and updated it to Version 1.03 with few additional features and completed work by August 2004 along with a written manual providing system specifications for the developed software.

Plaintiff and Defendant no.1 (earlier called as Axalto) entered into a Master Services Agreement (referred to as the MSA for brevity) on 24th June, 2004. According to Clause 7.1 of MSA, plaintiff is asserting its copyright in the software as well as the factum of assignment of the same to defendant no. 1. The clause states that “Axalto shall be entitled to all property, copyright and other intellectual property rights in the Project Materials which property, copyright and other intellectual property rights Pine Labs as beneficial owner assigns to Axalto. Pine Lab shall advise Axalto in writing and ensure that the Project Materials do not infringe the intellectual property rights of any third party.”

In 2009, Defendant no. 1 made a bid for a card program of HPCL, invited by defendant no. 2. Defendant no. 1 e-mailed plaintiff on 26th June, 2009 and informed that it had been awarded the HPCL fleet card program and it would be customizing the existing IOCL system, which the plaintiff had in fact created. On 29th June 2009, plaintiff responded to the mail expressing willingness to work on the said project.

Later, plaintiff discovered that defendant no. 1 had cub-contracted defendant no.3 to create software for HPCL fleet card, and plaintiff realized that defendant no. 1 transferred the source code of IOCL program to defendant no. 3. It is plaintiffs case that Clause 7.1 of the MSA provides no territorial or time constraints/ restrictions, but Section 19 (5) and (6) of the Copyright Act, 1957 would apply which states that in a case of copyright assignment, if no time/territory is mentioned, the assignment would be valid only for a period of 5 years and within the territory of India. As no new work was assigned to plaintiff from the defendant no. 1 regard to IOCL fleet card program, rights provided by plaintiff to the defendant no. 1 expired after 5 years; plaintiff would become exclusive owner of that software, according to Section 19 (5) of the Copyright Act, 1957.

The counsel for the plaintiff argued that the defendant no. 1 provided Version 1.03 of the software to defendant no.3. Plaintiff filed case against defendant no. 1 for infringement of copyright. Further, plaintiff came to know that the defendant no .1 was planning to use the same software in Africa. Plaintiff argues that it was illegal, as the agreement was valid only for 5 years that too only in Indian Territory. Utilization of software outside India will result in breach of Section 19 (6) of the Copyright Act. Plaintiff further agreed that Versions 1.03 to Version 1.08 were assigned to the defendant no.1 and copyrights of Version 1.04 – 1.08 were still valid as per agreement between the parties.

Defendant no. 1 filed case against plaintiff for protection of its intellectual property rights including copyright in various software applications; for restraining the plaintiff from claiming and representing itself as the owner of the said software and from disrupting the business of defendant no. 1 and for damages.

Defendant no.1 submitted that plaintiff agreed to assign defendant no. 1 as equitable owner of the software, for which it is now claiming to be the exclusive owner. Defendant no. 1 outsourced the work to plaintiff with clear understanding that all intellectual property rights would belong to defendant no. 1. Defendant further says that defendant still enjoys the copyright ownership in Version 1.04 – 1.08 of the software.

A submission made by defendant no. 1 is that Version 1.03 of the software is not in use by it as Version 2.00 is being used and the source code of the same was handed over by the plaintiff to defendant no. 1 on 6th, 19th and 20th August, 2009. Defendant no. 1 has then pointed out several alleged admissions on the plaintiffs part in the plaint.
Defendant no. 1 denied plaintiffs allegation of infringement of copyright as false as the software applications to be used by defendant no. 1 are completely different from the ones being used by it currently. These codes are also different from the IOCL Version 1.03 and its subsequent modifications. Defendant No.1 has also referred para 14 of the plaint wherein the plaintiff has admitted that the plaintiff had agreed to assign the copyright in the software development to the defendant No.1. the defendant No.1 has referred clauses 7.2, 7.3 and 7.4 of MSA which read as under:
7.2 – “At the request, and expense of Axalto, Pine Labs shall do all such things and sign all such documents or instruments reasonably necessary to enable Axalto to obtain, defend and enforce its right in the project materials.
7.3 – “Upon request of Axalto, and in any event, upon expiration or termination of this Master Agreement, Pine Lab shall promptly deliver to Axalto all copies of the project material then in Pine Labs custody, control or possession.”
7.4 – “The provisions of this clause shall survive the expiration or termination of this Agreement.”
The senior counsel for the defendant No.1 has argued that in the absence of execution of an actual assignment document, Section 19 of the Copyright Act has no application in the facts of the present case as Section 19 (1) of the Copyright Act lays down the word assignment and assignment means it should be expressly in writing. Therefore, Sections 19(5) & (6) of the Copyright Act are not applicable in the present case.

Plaintiff argued that, in view of the evidence produced by the plaintiff from the website of the defendant no.1 after the passing of interim order dated 7th October, 2009, there is a sufficient material on record to show that the defendant No.1 is still reproducing the work of Version 1.03 in material form wherein the plaintiff has filed screen shots and transaction receipts of HPCL drive track plus program which show almost complete similarity with the IOCL program developed by the plaintiff.
Judgment:
In this case, two issues to be decided:
I) ownership of the copyright and
II) valid assignment of the copyright

I) Ownership of the copyright :
Understanding about ownership becomes important as it is only the owner under Section 18 of the Act who can assign either the current or the future work. The ownership of the copyright is statutorily recognized under Section 17 of the Copyright Act which provides for the rule that the author shall be the owner of copyright, subject to the provisions of the Act.
Section 17 proviso (c) deals with a situation where the work is created in the course of the employment of the employer. In such a case, the work shall belong to the employer who shall be the owner of the work in the absence of any contract to the contrary. This furthers the discussion of the issue relating to contract of employment and contract for employment, which are clearly distinguishable from each other and determine the applicability of the section. In the former case, ownership vests with the employer unless there is agreement/ intention to the contrary and in the latter, ownership vests with the employee unless there is an agreement/ intention to the contrary. The degree of control, supervision, time spent, directions and specifications given by the employer determines the nature of employment.
If we examine the present case from the perspective of a contract of employment, the ownership of the work belongs to the defendant no. 1 who was the employer and there is no need to look into any further agreement or the MSA. It is another thing that the plaintiff in the allegation made against defendant and in the agreement has taken the status of an independent contractor, which means that the plaintiff has created the software for the employer under a contract for service.
Prior to entering into the MSA, the plaintiff wrote an email communication dated 20th February, 2004 wherein the plaintiff has stated that the work has been created for a valuable consideration for and on behalf of the Defendant no. 1 and the plaintiff has been paid in full and the copyright and other rights vest with the Defendant no. 1 and the plaintiff does not claim any right in the same.
Hence, at this stage it is suffice to say that prima facie, doubt can be expressed over the ownership of copyright as claimed by the plaintiff, be it from the standpoint of the contract of employment or contract for employment.

II ) valid assignment of the copyright :
MSA is not as assignment but an “agreement to assign”.
It is admitted by both the parties that the basic system design and the fundamental operative software was contained in version 1.03. All the subsequent versions were primarily adaptations of version 1.03 with a few additional new features, improving the performance of version 1.03. The plaintiff has admitted that the copyright in the new versions vests in the additional features mentioned above. However, these additional new features are not really useable without the source code in version 1.03. From the above, it is clear that even if the rights pertaining to version 1.03 revert back to the plaintiff (which although according to this court is prima facie not possible) for the reasons given in the preceding Para’s of the order, it is not clear how the rights pertaining to the other versions, which are valid and subsisting can revert back. Thus, the contention of the plaintiff is without any substance and is prima facie, irrational and is not sustainable. Therefore, the plaintiff is disentitled from the grant of interim relief on this reason as well.
The rights of the plaintiff revert back to it for the software and thus lead to an enforceable right.

About the Author: Mr. Nagaraj Mannikeri is a Patent Consultant at Institute of Intellectual Property Research & Development (IIPRD).