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Sec. 61(1) of the Copyright Act, 1957, dealing in the subject of owners of Copyright being party to proceedings reads:
"In every civil suit or other proceeding regarding infringement of copyright instituted by an exclusive licensee, the owner of the copyright shall, unless the court otherwise directs, be made a defendant and where such owner is made a defendant, he shall have the right to dispute the claim of the exclusive licensee."
Sec. 61 is an extraordinary provision in as such it provides for statutory impleadment of a party without the plaintiff actually impleading him in the suit. From the reading of the Copyright Act 1957, it appears necessary that such provision be applied subject to the rigour and restraint of doctrines involved in common law and natural law.
Deliberating on the cited section, the case of BCI Optical Disc v. M.R.S Film Craft & Advertising Pvt. Ltd., 2009 (41) PTC 256 (Del.) sets to limit the extent of Sec. 61 of the Copyright Act, 1957 which, in the words of the Hon'ble Judge, " exempts the 'exclusive licensee' from impleading the owner of the copyright in suits relating to infringement of copyright."
BCI Optical Disc Ltd. had filed a suit seeking permanent injunction restraining interference with the exercise of copyrights admittedly vested in their favour of (being an exclusive licensee) via an agreement between them and the owner of the copyright, Magnasound Pvt. Ltd. M/s Magnasound Pvt. Ltd. is a company engaged in the manufacturing and marketing of Audio/Video CDs and DVDs, and was on the verge of liquidation. It entered into an agreement dated 20th September, 2002 with MRS Film Craft and Advertising, regarding the transfer of copyright of Music Videos. Subsequently, they entered into another agreement with one of the other co-defendants and transferred to him the rights bestowed MRS Film Craft through the abovementioned agreement. This was again challenged as being a clear case of fraud and cheating.
The copyright however, was finally transferred to BCI Optical Disc Pvt. Ltd. by one Mr. Sashi Gopal, the in charge and controlling authority of Magnasound India Ltd., acting under a power of attorney of the co-defendant. The agreements being under challenge, the following issues were framed for the Court's deliberation:
- Is the plaintiff a valid claimant of being the ultimate beneficiary of a transaction, which he himself claims to be fraudulent, conspiratorial and intended to defeat the rights of the creditors of the Company and as such, would he be rewarded a relief of injunction?
- Can M/s. Magnasound India Ltd., being the owner of the copyright be made a defendant in the suit by virtue of Sec. 61(1) of the Copyright Act, 1957?
Deciding on the first issue, the Court relied on the common law principle of 'pari delicto potiar est conditio defendants' which may be interpreted to mean that the Courts will refuse to enforce an illegal agreement at the instance of a person who himself is a party to an illegality or fraud, to hold that it would not come to the remedy of the plaintiff who whose case is 'steeped in illegality. In the case at hand, it could be reasonably assumed that BCI Optical was aware of the illegality of previous transactions before himself becoming a party to it. And hence, as such, the relief of injunction could not be granted.
The Court also answered the second issue, in the negative, in as much as Magnasound being disallowed from being party to the proceedings. The Court stated that for the application of Sec. 61 of the Act, it was mandated that at least, an application in that regard or a prayer to such effect be made. The court held that in the absence of this natural law exercise, there would be no impleadment of the owner of the copyright even if the statute provides for it.
The Court in the case seems to have kept in mind the legislative intent behind the provision thus explicating that the Courts must exercise necessary discretion and look at the facts and circumstances of each case to adjudge whether the case mandates such an exemption to the plaintiff.
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