Novex Communication Pvt. Ltd. v. Lemon Tree Hotels Ltd. & Anr.
Court: High Court of Delhi at New Delhi
Date of Order: January 11, 2019
Case No.: RFA No. 18/2019
Citation: AIRONLINE 2019 DEL 96
Judge: Hon’ble Mr. Justice Valmiki J. Mehta
Introduction
In the realm of intellectual property law, the case of Novex Communication Pvt. Ltd. v. Lemon Tree Hotels Ltd. & Anr., decided by the High Court of Delhi, stands as a significant exploration of copyright ownership and enforcement rights under the Copyright Act, 1957. This legal battle pits Novex Communication Pvt. Ltd., a company claiming ownership of sound recording copyrights through assignments, against Lemon Tree Hotels Ltd., accused of unauthorized use of these works. At its heart, the case grapples with the interplay between individual ownership rights and the statutory framework governing copyright societies, challenging the boundaries of who can sue for infringement and claim damages in the absence of a registered copyright society.
Detailed Factual Background
Novex Communication Pvt. Ltd., the appellant and plaintiff, is a private entity that asserts ownership over copyrights in sound recordings through a series of assignment deeds executed by prominent media companies. Specifically, Novex claims rights stemming from agreements with:
- Zee Entertainment Enterprises Ltd. (dated August 11, 2015)
- Eros International Media Limited (dated January 9, 2017)
- Shemaroo Entertainment Limited (dated March 9, 2017)
Additionally, Novex acts as an agent for Yash Raj Films Private Limited (Yash Raj), the second defendant turned prospective co-plaintiff, with respect to certain sound recordings.
The first respondent, Lemon Tree Hotels Ltd., is accused of infringing these copyrights by playing the sound recordings on its premises without obtaining licenses. Novex contends that this unauthorized use began prior to the suit’s filing in 2018, prompting demands for injunctive relief and damages amounting to ₹5,00,000.
The second respondent, Yash Raj Films Pvt. Ltd., initially a defendant, becomes a pivotal figure as Novex concedes during the appeal that Yash Raj should be transposed as a co-plaintiff, reflecting an agency relationship.
Detailed Procedural Background
The dispute originated in the trial court under suit number CS(COMM) 18/2019, where Novex sought a permanent injunction and damages. In its judgment dated August 7, 2018, the trial court allowed the suit to proceed only with respect to Yash Raj’s works (where Novex acted as an agent), but dismissed claims related to Zee, Eros, and Shemaroo’s assignments.
The court ruled that Section 33(1) restricts the business of issuing licenses to registered copyright societies and held Novex lacked standing to sue based on its assignee status. Aggrieved by this, Novex filed a Regular First Appeal (RFA No. 18/2019) under Section 96 of the Code of Civil Procedure, 1908.
The High Court, presided over by Justice Valmiki J. Mehta, heard the appeal as a legal question and delivered judgment on January 11, 2019, setting aside the trial court’s ruling and reinstating Novex’s broader claims.
Issues Involved in the Case
- Can Novex, as an assignee of sound recording copyrights, sue for infringement and damages despite not being a registered copyright society under Section 33(1)?
- Does the absence of a copyright society nullify an assignee’s enforcement rights?
- Do Sections 33 to 35 override individual ownership rights?
- Did the trial court err in its interpretation of licensing provisions under the Copyright Act?
Detailed Submission of Parties
Novex’s Argument:
- It is the lawful owner by virtue of assignment deeds from Zee, Eros, and Shemaroo.
- It is an authorized agent for Yash Raj.
- Section 18(2) recognizes assignees as owners with the right to sue under Section 55.
- The first proviso to Section 33(1) allows owners to grant licenses unless delegated exclusively.
- The absence of a registered society should not result in a legal vacuum.
Lemon Tree’s Argument:
- Section 33(1) mandates that only registered societies can issue licenses and collect royalties.
- Novex, not being a registered society, cannot sue for infringement.
- The 2012 amendments aim to protect licensees and prevent exploitation.
- Relied on the judgment in Event and Entertainment Management Association v. Union of India to claim Novex’s ineligibility.
Judgments Cited and Their Context
- Event and Entertainment Management Association v. Union of India: Used by Lemon Tree to assert that only registered societies can collect royalties. The High Court clarified this judgment did not deal with infringement suits by owners.
- Indian Performing Right Society Ltd. v. Eastern India Motion Pictures Association (1977): Differentiates ownership from licensing rights.
- Super Cassettes Industries Ltd. v. Music Broadcast Ltd. (2012): Interprets the protective intent of the 2012 amendments.
Detailed Reasoning and Analysis
The judge analyzed the Copyright Act holistically:
- Section 17 defines the author as the first owner.
- Section 18 allows assignment, and Section 55 provides infringement remedies to owners.
- Section 33(1) bars businesses from issuing licenses without being a registered society, but the first proviso protects owners’ rights unless delegated exclusively.
- The second proviso applies only to embedded works in films or recordings, not to sound recordings as standalone works.
- Novex’s ownership rights are not extinguished simply due to lack of a copyright society.
The court distinguished the EEMA case as irrelevant to ownership-based infringement claims and emphasized that denying Novex the right to sue would result in an absurd legal vacuum.
Final Decision
The High Court allowed Novex’s appeal on January 11, 2019, setting aside the trial court’s judgment. The court held the suit maintainable and affirmed Novex’s right as an assignee to seek damages. Yash Raj was to be transposed as a co-plaintiff.
Law Settled in This Case
The ruling clarifies that an assignee of sound recording copyrights can sue for infringement and damages under Section 55 even if not a registered copyright society under Section 33. The first proviso to Section 33(1) preserves an owner’s licensing authority unless exclusively delegated, and the absence of a society does not strip owners of enforcement rights.
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Written By: Advocate Ajay Amitabh Suman, IP Adjutor – Patent and Trademark Attorney
Email: [email protected], Ph no: 9990389539
