IN THE HIGH COURT OF DELHI AT NEW DELHI RFA (OS) No.25/2008 Reserved on : August 29 th , 2008 Date of Decision : September 26 th , 2008 ESPN STAR SPORTS .... Appellant Through Mr. C. A. Sundaram, Senior Advocate with Mr. N. Ganpathy, Advocate. versus GLOBAL BROADCAST NEWS LTD. & ORS. .... Respondents Through Mr. Soli Sorabjee, Senior Advocate with Mr. Anup Bhambhani and Ms. Nisha Bhambhani, Advocates for respondents No.1, 3 and 5. Ms. Pallavi Langar, Ms. Amrita Bhattacharya and Mr. Prithvi Sidhu, Advocates, for respondent No.2. Ms. Pratibha M. Singh and Mr. Sudeep Chatterjee, Advocates, for the respondent No.4. CORAM: HON'BLE MR. JUSTICE MUKUL MUDGAL HON'BLE MR. JUSTICE V. K. SHALI 1. Whether the Reporters of local papers may be allowed to see the judgment? Yes 2. To be referred to the Reporter or not? Yes 3. Whether the judgment should be reported in the Digest? Yes RFA(OS) 25/2008 Page No.1 of 68 JUDGMENT 26 .09.2008 : MUKUL MUDGAL , J . 1. This Regular First Appeal arises out of the judgment dated 18 th February 2008 delivered by a learned Single Judge of this Court, where in the first part deals with interlocutory relief and second part deals with the non-maintainability of the suit. The learned Single Judge had dismissed the entire suit of the appellant/plaintiff for non-compliance of Section 61 of the Copyright Act, 1957 (hereinafter referred to as the “Act”). 2. After the arguments were heard in this appeal, both the parties including News Broadcasters Association, agreed to attempt to arrive at a broad consensus on the question of 'fair dealing' in light of the existing guidelines framed by Prasar Bharti and accordingly requested this court to defer the delivery of this judgment. However, even after giving ample opportunity, the parties have failed to arrive at a settlement for consensus on the question of fair dealing, RFA(OS) 25/2008 Page No.2 of 68 consequently, we are delivering this judgment as requested by the Counsels on 29 th of August 2008 as this judgment would affect several pending cases before the Original side of this Court. 3. The facts of the case briefly stated are as follows: (a) The appellant ESPN Star Sports (hereinafter referred to as the “ESS”) has obtained the sole and exclusive rights/license from various sports bodies including Cricket Australia (hereinafter referred to as the “C.A.”), to televise in India various sporting events including the India versus Australia test matches, One Day International (ODI) matches and the solitary T20 cricket match to be played in Australia from December 26, 2007 onwards till March 8, 2008 and therefore, no other person, entity and/or Cable Operators could broadcast/telecast in India, the Cricket Matches without a license from the Appellant or its sole and exclusive distributor ESPN Software India Private Ltd. The appellants had granted licenses to over 5000 cable operators in India to transmit their channels on their cable networks. (b) The respondent no.1 Global Broadcast News Ltd. is a Broadcaster having a RFA(OS) 25/2008 Page No.3 of 68 number of news channels by the name of CNN-IBN and IBN7. The respondent no.2, TV Today Network Pvt. Ltd. is a Broadcaster which has news channel(s) by the name of “Aaj Tak” and “Headlines Today”. The respondent no.3 Media Content and Communications Services India Pvt. Ltd. is a Broadcaster having a news channel by the name of “STAR News”. The respondent no.4, Zee News Ltd. is a Broadcaster having a news channel by the name of “Zee News”. The respondent no.5, New Delhi Television Ltd. is a news channel by the name of “NDTV 24x7”. (c) After the commencement of the Cricket Matches, the field staff of the appellant's distributor in various locations had noticed that the news channels owned by the respondents/defendants had been unauthorizedly telecasting the signals of the Cricket Matches in a manner which was inconsistent with their primary obligation of being news based channel(s) showing scheduled news bulletins and/or current affairs programmes. The respondents had indulged in using/appropriating without authority, substantial portions of the footage of the appellant's channel namely Star Cricket which had telecast the test matches RFA(OS) 25/2008 Page No.4 of 68 exclusively from December 26, 2007 to January 28, 2008 for creating programmes which they were commercially exploiting. (d) The appellant thereafter filed a suit for permanent injunction seeking orders restraining the respondents from utilizing their transmission and/or using the footage for any television programme except for the usage of regularly scheduled news bulletins provided such usage would not be for more than two minutes per day. 4. The pleas of the respondents were as under: (a) The suit was not maintainable on the ground that in every action claiming infringement, the owner of copyright should necessarily be made a party to the proceedings in terms of Section 61(1) of the Copyright Act, 1957 and that since C.A had not been made a party to the suit, the suit ought to be dismissed as not maintainable. (b) In every action claiming infringement, the owner of copyright should necessarily be made a party to the proceedings. The counsel for the respondents also questioned the credibility of the appellant being an exclusive licensee of RFA(OS) 25/2008 Page No.5 of 68 C. A. on the ground that the license Agreement dated July 26, 2002 produced in Court redacted crucial sections of the Agreement, particularly, those dealing with the content of the license. 5. The counsel for the appellant withdrew the suit CS(OS) No.146/2008 with the liberty to refile. The appellants filed a suit bearing CS (OS) No.219/2008. 6. The learned Single Judge after hearing all parties to the proceedings, dismissed the suit as not maintainable for non-compliance of Section 61(1) of the Act holding that C.A. being the owner of the copyright had not been made a party to the suit under Section 61(1) of the Act. The Court also dismissed the application for injunction holding that the action of the appellant in not disclosing the full license agreement weighed against the appellant in the matter of grant of ad interim relief. 7. The learned Single Judge in his judgment dated 18 th February, 2008 held as follows: “40. No doubt, Chapter VIII deals with a species of rights known as broadcast reproduction rights. The content and extent of that right has been defined in Section 37. Section 39-A of the Act refers to RFA(OS) 25/2008 Page No.6 of 68 certain provisions of the Act, it has inspired an argument that the absence of a reference to Section 61 means that the requirement of impleading the owner of copyright in a sporting event does not apply to broadcast rights and that such rights are “special”. Facially, the argument seems logical; yet a careful examination would reveal several flows in it. Firstly, there is no legislative intention to elevate “broadcasting rights” to a special status, immune from the operation of the other parts of the Act. If such intention were there, Parliament would have used legislative devices such as non-obstante clauses, exclusions, etc. Secondly, the argument flies against well established canons of legislative interpretation that a statute must be read as a whole and the legislature should be deemed to have intended application of each part for the situations intended. If the plaintiff's contentions were accepted, Section 61 would operate only in some situations and not all, even though non express provision manifests such intention nor can it be drawn by necessary implication. The requirements of Section 61, procedural in nature, apply with equal vigor to all nature of rights that are subject matter of the Act. 41. The third reason why the plaintiff's argument is unacceptable is that though Section 39- A refers to a few sections, and applies them with suitable modifications, yet, there is express reference to copyright in Section 39; similarly, there is reference to application of what is meant by fair dealing under Section 52, over and above what is enacted under Section 39, in relation to copyright. It is not as if the plaintiff says that Cricket Australia does not have copyright in the content of the broadcast; what is argued is that such owner is not RFA(OS) 25/2008 Page No.7 of 68 necessary party to these proceedings. Section 39-A proviso also negatives the plea, because it clearly refers to the copyright of a performer or owner of copyright, where reproduction of a broadcast is involved. 42. For these reasons, it has to be held that the mandate of Section 61(1) applies in case of claims for infringement of broadcast reproduction rights; the non-impleadment of the owner of copyright is fatal to the maintainability of the suit. Similarly, the non-joinder of owner of the copyright renders the suit liable to be rejected. The proviso to Order 1, Rule 9 Civil Procedure Code enacts that a suit can fail for non-joinder of a necessary party. In Udi Narain Singh Malpaharia v. Addl. Member, Board of Revenue, Bihar 1963 Supp (1) SCR 676 pointed out to the distinction between “necessary party” and “proper party”. The Court held that: “The law on the subject is well settled: it is enough if we state the principle. A necessary party is one without whom no order can be made effectively; a proper party is one in whose absence an effective order can be made but whose presence is necessary for a complete and final decision on the question involved in the proceedings.” The failure to implead the owner of copyright in the present case has resulted in keeping out a party whose presence is necessary for a final and complete decision on the question involved in the proceedings. Thus, apart from the suit being not RFA(OS) 25/2008 Page No.8 of 68 maintainable due to Section 61 (1) of the Act, it is also bad for mis-joinder of a necessary party. 43. Coming now to the first aspect, i.e., whether the plaintiff has disclosed a cause of action, this Court had noticed in the previous section of the judgment while dealing with the claim for temporary injunction, that the plaintiff had not disclosed the entire agreement, which was a relevant factor for the exercise of discretion in granting or refusing ad-interim relief. However, the same standard cannot be applied while considering whether the plaint has to be rejected as not disclosing a cause of action. A cause of action is a bundle of facts which are required to be proved for obtaining relief and for the said purpose, the material facts are required to be stated but not the evidence (Raptakos Bret -vs-Ganesh Property 1998 (7) SCC 184). As long as the plaint discloses some cause of action that has to be determined by the court, mere fact that in the opinion of the Judge the plaintiff may not succeed cannot be a ground for rejection of the plaint. Therefore, the non- disclosure of the entire agreement at this preliminary stage is not such irregularity as to warrant rejection of the plaint, for reason of its not disclosing a cause of action. 44. In view of the findings on Section 61, this suit is not maintainable, it is therefore, dismissed. The parties are left to bear their own costs.” 8. Shri C. A. Sundaram, the learned Senior counsel appearing for the appellant while contending that the impugned judgment and order dated 18 th February 2008 be set aside, raised his arguments on a three fold basis. RFA(OS) 25/2008 Page No.9 of 68 (i) Broadcasting reproduction rights visa-a-vis Copyright in the Indian Copyright Act, 1957. (ii) The ownership of Cinematographic Copyright in the Cricket Matches telecast in the present case. (iii) Defence of fair dealing. 9. While submitting the first of his three fold argument, the learned senior counsel for the appellant raised the following contentions: (A) Status of Broadcasters before the 1994 amendment of the Copyright Act and after the amendment. (a) Before the 1994 amendment of the Copyright Act, the only broadcaster in India was Doordarshan (DD) which used to telecast free to air channels that could be captured by an antenna installed on rooftops and was connected to the television sets by a wire. With the opening of the Indian markets in 1991, several players involved in broadcasting came into India. (b) The process of relay of Programs by way of cables is a complex relay of feeds. The feed is first uplinked from the venue of the event (for a live event) or a studio which can be located anywhere in the world. The feed is then down RFA(OS) 25/2008 Page No.10 of 68 linked in the concerned territory by cable operators. Such cable operators then transmit the feed to cable homes by way of network of cables. As a natural consequence it was considered necessary to protect broadcasters from against unauthorized receipt by the cable operators of their services without a contract permitting such receipt. (c) Since existing definition of the copyright in the statute of most countries did not provide any protection to the broadcasters on the basis that there was no copyright in their broadcast of a live event or, studio shows and the like, the need to protect the broadcasters from unauthorized reception of their feed by cable operators was felt globally. This issue was discussed during the Uruguay round of the WTO Agreement of Trade-related Aspects of Intellectual Property Rights (TRIPS Agreement) in 1994. Recognizing the need to protect the rights in broadcasts, Article 14 (3) was incorporated into the TRIPS Agreement. It reads as under: Article Protection of Performers, Producers of Phonograms (Sound recordings) and Broadcasting organizations. RFA(OS) 25/2008 Page No.11 of 68 3. Broadcasting organizations shall have the right to prohibit the following acts when undertaken without their authorization: the fixation, the reproduction of fixations, and the rebroadcasting by wireless means of broadcasts, as well as the communication to the public of television broadcasts of the same. Where Members do not grant such rights to broadcasting organizations, they shall provide owners of copyright in the subject matter of broadcasts with the possibility of preventing the above acts, subject to the provisions of the Berne Convention (1971) (emphasis supplied). (d) India being the signatory to the TRIPS Agreement accordingly amended the Copyright Act in 1994 so as to incorporate Section 37. The amendment came into effect from May 10, 1995. (e) He contended that it is important to note that even after the aforesaid amendment of the Copyright Act, the definition of 'copyright' under Section 14 was not amended to include 'Broadcast reproduction right', as has been the case in some countries such as the United States of America, United Kingdom and RFA(OS) 25/2008 Page No.12 of 68 New Zealand, where Broadcast reproduction right had been specifically included within the meaning of copyright. Some countries such as France, Germany and India have given a special right known as 'Broadcasting Reproduction Right' which is a related right and is different from copyright. (B) Copyright versus Broadcast Reproduction Rights' under the Copyright Act 1957 – Applicability of section 61. (a) From the reading of Section 37 of the Copyright Act as well as the Statement of Object and Reasons, it is evident that the definition of 'copyright' under Section 14 of the Copyright Act did not provide any protection to the broadcasters. The statement of Object and Reasons itself provides that “Certain Rights akin to copyright are conferred on the broadcasting authorities in respect of programs broadcast by them.” This sufficiently brings out the difference between the two rights in Indian Copyright Act, 1957. The amendment Act of 1994 extended such rights to all Broadcasting Organizations apart from more clearly crystallizing the nature of such rights. (b) The fact that such a distinction exists is demonstrated by Section 51 of the RFA(OS) 25/2008 Page No.13 of 68 Copyright Act which deals with acts constituting infringement of a copyright, whereas there is a separate section, i.e., Section 37(3) that deals with acts constituting infringement of broadcast reproduction rights. From the above mentioned references it is clear that the idea of the legislature was to provide a separate and distinct right to the broadcasting organizations to help them protect their rights in their broadcasts against third parties. (c) Satellite broadcasting rights are treated as separate rights and the said rights are recognized throughout the world as independent rights as held in Raj Video Vision v. M/s Sun TV, 1994 (2), Madras Law Weekly 158 which has also been approved in AA Associates versus Prem Goel AIR 2002 Del 142. A similar view has been taken in M/s Video Master v. M/s Nishi Productions, 1998 (18) PTC 117. (d) Thus, section 13 and 14 of the Copyright Act, makes it clear that copyright will subsist only in work. 'Work' does not include 'broadcast'. As a result there will only be a broadcasters right in the telecast of live events communicated to the public as provided under Section 37 of the Copyright Act, which as explained RFA(OS) 25/2008 Page No.14 of 68 above, is separate and distinct from copyright. Therefore, what emerges from the above is that the Broadcast Reproduction Right, which is different from Copyright, is with the Broadcasting Organization which is causing the Broadcast to be communicated to the public under their Logo by any means of wireless diffusion or by wire, i.e., the Appellants in the present case, as per the Definition of Broadcast under Section 2 (dd) and the definition of the Communication to Public under Section 2 (ff) of the Act. As such Section 61 is not applicable in a proceeding for infringement of Broadcasting Reproduction Right as that provision is only limited to the cases where an exclusive licensee of a copyright institutes a suit or proceeding for infringement of copyright. 10. The learned counsel for the appellant further contended as follows: A. Cinematographic copyright vests in the recording of the event in a cricket match. As per the Agreement dated 26.7.2002, the C.A which was hosting the cricket match permitted ESS the appellant to : a. Receive the live feed from the Host Broadcaster (Channel 9) and to broadcast such feed after making their own additions/alternations etc. RFA(OS) 25/2008 Page No.15 of 68 b. In order to do so ESS has the following: OB Vans, Studio, their own Cameras, Hawkeye Cameras, Satellite equipment etc on the ground. B. Thereafter, what ESS did was the following: 1. Pre-match coverage. 2. Live match coverage. 3. Change of innings show. 4. Post Match show. C. From the above it can be seen that the recording of the final mix as telecast would have given rise to an independent copyright to ESS in such a final recording. This copyright is separate and distinct from the satellite broadcast made of the mix by the ESS which would give rise to a broadcast reproduction right. By the very definition of cinematograph under Section 2(f), the satellite broadcasting per se would not amount to a cinematography, which necessarily requires recording of the same. Therefore, the broadcast through a satellite, of a live coverage of a match would give rise to a broadcast reproduction right but not necessarily a cinematographic right, since the latter would arise only if there is an RFA(OS) 25/2008 Page No.16 of 68 actual recording of what has been broadcast and not when it has been merely broadcast through satellite without also recording the same. D. This distinction is being brought out only to show that even if it is claimed that what is broadcast also amounts to a copyright in a cinematography, the owner of such cinematography copyright would only be ESS. This is an alternate argument taken since the primary contention of ESS is that their broadcast reproduction right is an independent right which is being infringed. He further contended that assuming it is held that Section 61 is applicable as broadcasting right fall within copyright there is also an infringement of a copyright in the cinematography work, i.e., the recorded form of the broadcast as: (a) These are two separate, distinct rights giving rise to two distinct causes of action. (b) Even otherwise the copyright in the cinematograph work in this case would belong to ESS who would be the owner thereof and therefore, ESS would not be an exclusive licensee of the copyright in terms of Section 61. (c) ESS would be the owner of the copyright in the recorded material of what RFA(OS) 25/2008 Page No.17 of 68 is broadcast by them even assuming a substantial portion of it may be the live feed received from from channel 9. 11. The learned counsel for the appellant on the question of fair dealing contended that: a. At the outset, it may be pointed that there is no concept of fair dealing in the infringement of copyright in a cinematographic film and therefore if it is to be held that what is broadcast by ESS amounts to a copyright work then the defence of fair dealing is not available at all. Fair dealing is available as a defence in the case of a broadcast reproduction right by virtue of Section 39. b. On the defence of Fair dealing he submitted that if any form of commercial exploitation is sought to be obtained through the use of the material of the plaintiff, this would ipso facto give rise to a presumption of commercial exploitation thereby negating the plea of fair dealing. For example, if under the guise of news reporting, the defendants were to announce that they would be showing the highlights of the cricket match or something that transpired therein and preceded the same with a commercial break or immediately follow such RFA(OS) 25/2008 Page No.18 of 68 broadcast with a commercial break, it would ipso facto point to a reasonable inference that a specific attempt at commercial exploitation is being made. It shows the duration of such coverage as being of footage taken from ESS's broadcast ranging upto 30 minutes. This again would clearly indicate that it is not a mere case of fair dealing by reporting current news but indicates the object of attracting the audience to view the particular news channel with a view to enhance its viewership. He further submitted that if the object is to get the audience to watch the news channel for such extended coverage rather than to impart news and events, it would ipso facto militate against the concept of fair dealing. Equally to make an entire programme of say half an hour by all the channels revolving around a cricketing incident may not be faulted, but if the visual of the programme is the repeated telecast of what was actually broadcast by ESS, such telecast would certainly amount to commercial exploitation especially when the factum of the programme being aired later in the day is constantly advertised / announced by that news channel and such programme is also liberally interspersed with commercials. This would also amount to a direct RFA(OS) 25/2008 Page No.19 of 68 competition with ESS since ESS also comes out with sporting news. c. He submitted that while fair dealing cannot be defined but would have to be considered in the facts and circumstances of each case, in the facts and circumstances of the instant case this court could decide what could amount to fair dealing in the case of telecasting the material pertaining to the coverage of a cricket match which is of national interest in the course of a news programme. He further submitted that it would be wholly within the jurisdiction of this Court to decide as to what would amount to fair dealing in the case of news coverage of a cricket match. 12. The learned Senior Counsel for the respondent, Mr. Soli Sorabjee, contended as follows: - a. Section 61 of the Copyright Act, 1957 is mandatory. Its effect and operation are not excluded nor limited by any non-obstante clause or by making the said section subject to any other provisions of the said Act, the