1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION NOTICE OF MOTION NO.658 OF 2006 In SUIT NO.607 OF 2006 Maganlal Savani & anr. .. .. Plaintiffs v/s. M/s.New Orient Pictures & ors. .. Defendants Mr.H.N. Thakore with Ms.Mhatre i/by M/s.Thakore Jariwala & Asso. for Plffs. Ms.Sheetal V. Kanakia i/by P.V. Dhopatkar for Deft.No.3. Mr.D.A. Joseph i/by M/s.Navid & Asso. for Deft. No.5. Mr.Pratik Pawar i/by M/s.AZB Partners for Deft.No.6. ---- CORAM : SMT.ROSHAN DALVI, J. DATED : 17 th July 2009 P.C. : 1.The Plaintiffs are the assignees of a copyright in respect of the 3 suit films (the films) mentioned and described in paragraph 1 of the Plaint. This assignment is in respect of exploitation, exhibition and distribution of the films under Agreements, Exhibits A- (1), A-(2) and A-(3) to the Plaint. The specific clause under the Agreement, Exhibit A-(1), between the parties relating to the assignment of copyright in favour of the Plaintiffs, is Clause-1, which is as follows:- 2 1. The Vendors hereby agree to sell and the Purchasers hereby agree to purchase from the Vendors the sole exclusive and perpetual sale rights of exploitation, distribution and exhibition commercial as well as non-commercial in respect of the said picture DELHI KA THUG (35 m.m. As well as any reduced size or sizes) including the right of television and all other rights attached to such distribution, exploitation and exhibition of the said picture for the consideration of Rs.65000/- (Rupees Sixty five Thousand Only ----------) payable as mentioned below for the territories of complete OVERSEAS circuit (comprising the areas specified in Clause (2) hereof) which territories are hereinafter referred to as the Contracted Territory . Consequently, the vendors mentioned therein, Defendant No.1 herein, covenanted not to exploit or distribute or exhibit the films in the territories specifically assigned to the Plaintiffs. The negative covenant of Defendant No.1 is contained in Clause-5 of the aforesaid Agreement, which runs as follows:- 3 The Vendors hereby agree and undertake that the said picture shall not be exploited or distributed in the Contracted Territory either by themselves their servants or agents or otherwise and hereby indemnify and keep indemnified the Purchasers against such unauthorised distribution or exploitation of the said picture in the Contracted Territory. Any breach in this connection will make the Vendors liable to damages which in no case shall be less than twice the amount of the said price. 2.The Plaintiffs seek to enforce the aforesaid clauses under the aforesaid agreements. It is the Plaintiffs case that assignment to them was in respect of the exhibition of the films in cinemas as well as on reduced size screens, including television and all other rights attached thereto. The Plaintiffs, therefore, contend that exhibition of the films even on later technologically advanced media such as CDs, DVDs, computers and generation-4 equipments would all be covered as they would be only different means of exhibition, exploitation and distribution of those films, the copyright of which is assigned to the Plaintiffs. The Defendants contend that though the agreement is in respect of the films in the general cinema as well as on television, exhibition of films in 4 the other media is not included in the agreement and hence, does not form part of the assigment. 3.The Defendants also contend that the parties undertook to execute a Deed of Assignment of the copyright in favour of the Plaintiffs which has not been done and the agreement between the parties, albeit expressed in writing, remained at that and hence, no rights in respect of the media other than film cinemas and television can be available to the Plaintiffs for exploitation. 4.The execution of the agreements is not denied. An assignment is created under Section 18 of the Copyright Act, 1957 (the Act). The mode in which it is created is specified in Section 19 of the Act. Section 19 runs thus:- 19. Mode of assignment. (1) No assignment of the copyright in any work shall be valid unless it is in writing signed by the assignor or by his duly authorised agent. (2) The assignment of copyright in any work shall identify such work, and shall specify the rights assigned and the duration and territorial extent of such 5 assignment. (3) The assignment of copyright in any work shall also specify the amount of royalty payable, if any, to the author or his legal heirs during the currency of the assignment and the assignment shall be subject to revision, extension or termination on terms mutually agreed upon by the parties. (4) Where the assignee does not exercise the rights assigned to him under any of the other sub-sections of this section within a period of one year from the date of assignment, the assignment in respect of such rights shall be deemed to have lapsed after the expiry of the said period unless otherwise specified in the assignment. (5) If the period of assignment is not stated, it shall be deemed to be five years from the date of assignment. (6) If the territorial extent of assignment of the rights is not specified, 6 it shall be presumed to extend within India. (7) Nothing in sub-section (2) or sub- section (3) or sub-section (4) or sub- section (5) or sub-section (6) shall be applicable to assignments made before the coming into force of the Copyright (Amendment) Act, 1994. Section 19 requires the assignment to be in writing and signed by the assignor or his duly authorised agent. Hence, a written agreement signed by Defendant No.1, who assigns copyright to the Plaintiffs, would fully meet the legislative requirement. Though the parties may have agreed to execute a Deed of Assignment, such execution is not required to be separately made. The Articles of Agreement, as in Exhibits A-1, A-2 and A-3, would constitute assignment of copyright of Defendant No.1 in the films to be validly made by Defendant No.1 identifying the films and specifying the rights assigned, duration as well as their territorial extent together with the amount of royalty payable to the author of the copyright for the period of assignment mentioned therein (which is in perpetuity). Hence, the said Articles of agreements are in terms of Section 19 of the Act and can be enforced without the execution of any further documentation like the Deed of 7 Assignment. 5.The ambit of the clause relating to the assignment of the copyright has been considered in a number of judgments (also relating to Agreements to Assign (and not Deeds of Assignment), by which this case is covered. In the case of Maganlal Savani vs. M/s.Khosla Enterprises & ors. in Notice of Motion No.863 of 1999 in Suit No.925 of 1999, an identical clause was a part of the agreement of assignment between the parties. It was held that the Plaintiff had become the exclusive owner of the copyright in respect of not only big size screens but also all reduced size rights. The term all other rights came to be interpreted to include even non-commercial exhibition in any manner either by the Defendants themselves or through third parties by satellite television, cable rights, video cassettes, VCDs, DVDs, though they were separate rights. Further, it was held that their assignment would be in perpetuity and it would be without any restriction in lieu of the negative covenant by the assignors. It was observed that the agreement would naturally provide the normal distribution, exhibition and exploitation of the film having the copyright by the then known modes, but if all the rights were assigned to the Plaintiffs even though they were not specifically provided for, they would include all rights since the copyright under 8 Section 18 of the Act consists of a bundle of rights vested in the owner. Hence, it was held that future inventions would be included in the assignment. This would include technological equipments of more and more and reduced sizes. Hence, the term all rights would include all rights available in future due to technological innovations and inventions. 6.It was similarly held that all the rights, commercial as well as non-commercial, exhibited in any manner not contemplated by the parties at the time of the agreement and in all sizes, including the reduced sizes by way of inventions would be covered in the assignment since a wider meaning to the term exploitation is required to be granted for including even the internet and satellite telecast. 7.In the case of Maganlal Savani & anr. vs. Rupam Pictures (P) Ltd. & ors. in Notice of Motion No.1481 of 2000 in Suit No.1806 of 2000 and in the case of Maganlal Savani & Anr. vs. Uttam Chitra & Ors. in Notice of Motion No.51 of 2008 in Suit No.29 of 2008 the case of Maganlal Savani (supra) has been followed by this Court upon similar analogy. The exploitation and execution would include all the rights attached to such exploitation and execution and the term any other manner after the term commercially or non- 9 commercially would include all the other rights attached to such exploitation, exhibition, etc. Hence, it has been held that assignment of these rights is prima facie absolute and would include copyrights in video, satellite transmission, DVDs, VCDs, video cassettes and other modes not until then invented as media for public or private entertainment. This would be, as by any of these means the film communicated to the public would contain copyright in the film, which is the exclusive right of the film maker or producer to authorise under Section 14(1)(d) of the Act, which had been already assigned. Consequently, a prima facie case for grant of the injunctions sought by the Plaintiffs is made out. 8.The Plaintiffs have further sought a direction against the Defendants to disclose on oath the profits earned by the Defendants from illegal exploitation of the films and for directions to pay over the amount to the Plaintiffs together with interest thereon. The Plaintiffs seek to avoid the loss which would result to the Plaintiffs, if the Defendants are not so directed. The Plaintiffs are required to value such loss. The Plaintiffs have valued their loss at only Rs.51,000/- and paid Court fees thereon. The Plaintiffs cannot be granted any relief of disclosure to the extent exceeding Rs.51,000/-. The Plaintiffs have undertaken 10 to pay the additional Court fees, if directed by this Court in future. Upon the Plaintiffs making a reasonable approximate valuation of the loss which, according to them, the Defendants have caused to the Plaintiffs and paying additional Court fees thereon, they would be entitled to the further relief of disclosure, upon the amounts alleged to have been earned by the Defendants by exploitation of the 3 suit films. Upon the present valuation, the Defendants can, at best, be directed to pay a sum of Rs.51,000/- in the Suit. That has no bearing or nexus upon any amounts or profits earned by them by illegal exploitation. Hence, in the absence of a reasonable approximation of such earned profits and Court fees paid thereon, the prayer for disclosure of profits cannot be granted. 9.Hence, the following order:- (i)The Notice of Motion is made absolute in terms of prayer (a)(i), (ii) and (iii). (ii)Prayer (b) is refused. (iii) The Notice of Motion is disposed of accordingly. (SMT.ROSHAN DALVI, J.)