SHEMAROO VS NEWS NATION: BOMBAY HIGH COURT REJECTS FAIR DEALING & DE MINIMIS DEFENSE, GRANTS INJUNCTION IN FAVOUR OF SHEMAROO

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I often receive queries on whether one can use clippings for up to 30 seconds or less without requiring any license? Isn’t it permissible under principle of de minimis non curat lex? Can a news channel simply use songs in one of its programmes and claim defense of fair dealing under Section 52 of the Copyright Act?

The Bombay High Court recently addressed a few of these questions in the matter of Shemaroo Entertainment Limited vs News Nation Network Private Limited where it granted injunction in favour of Shemaroo in a copyright infringement suit against News Nation and restrained the latter from exploiting Shemaroo’s content in any manner whatsoever on their TV channels “News Nation”, “News State UP and Uttarakhand”, “News State MP and Chattisgarh” or any other channels or any other platform. While granting the injunction the Court factored the previous license executed between the parties, the qualitative and quantitative analysis and the commercial purpose for which the content was used.

Read order here.

Facts:

Shemaroo and News Nation had entered into a non-exclusive license agreement in 2019 wherein News Nation was granted a non-exclusive license to broadcast and exploit audio visual songs clip(s), scenes and dialogue clip(s) on the defendant’s said channels for the period commencing from 1st July, 2019 to 30th June, 2022. The parties had entered in a similar license in 2018 as well.

On 17th July 2020 vide an email communication, the defendant conveyed its inability to continue with the license agreement dated 19th July, 2019 possibly due to loss of business due to Covid and the said agreement came to be terminated from 1st August, 2020. The defendant had undertaken not to exploit any of the plaintiff’s content without obtaining prior permission and license from the plaintiff.

Despite the termination of license agreement, the plaintiff noticed that the defendant had unauthorizedly and illegally broadcast the audio-visual songs, clippings, and scenes of the plaintiff’s copyrighted cinematographic films on its channels. Correspondences were exchanged between the parties where Plaintiff brought to the Defendant’s notice the infringing activities and demanded the consolidated amounts towards damages.

The Defendant admitted the unauthorized exploitation of Plaintiff’s content but attempted to justify the use citing principles of fair use and de minimis. Asserting that neither the defence of fair use nor de minimis non curat lex is available to the defendant, the plaintiff instituted the copyright infringement suit against News Nation.

Defendant’s submissions:

(i) Fair Dealing: the defendant contended that the plaintiff’s content was disseminated by the defendant as a responsible news agency as a part of its regular and ordinary course of business i.e. report news and other programmes. It contended that such use of the plaintiff’s content by the defendant is permissible under section 52 of the Copyright Act, 1957, as it is covered under the doctrine of ‘fair dealing’.

Reliance was placed on on the judgment of Delhi High Court in the case of Super Cassette Industries Ltd. vs. Hamar Television Network Pvt. Ltd. And Another wherein after adverting to the various pronouncements of Indian as well as foreign Courts, the learned single Judge of Delhi High Court, culled out the principles of law on the aspect of ‘fair dealing’. (Paragraph 9 of the Judgement here)

(ii) No independent commercial exploitation:  the defendant only disseminated the plaintiff’s content as a part of its regular program and not to individually and otherwise commercially exploit the plaintiff’s material for their own personal benefit.

(iii) De Minimis Non Curat Lex: The defendant contended that the instant action is barred by the principle of de minimis non curat lex and that the defendant had used the plaintiff’s content only for extremely limited and short span of time in their regular and ordinary programs and that its action of disseminating the plaintiff’s content was bonafide.

Reliance was also placed on a Division Bench judgment of Delhi High Court in the case of India TV Independent News Service Pvt. Ltd. and Ors. vs. Yashraj Films Pvt. Ltd. wherein the Delhi High Court, considered the defence of ‘fair dealing’ as well as the ‘de minimis’. As to what constitutes a ‘fair dealing’, the Delhi High Court, after adverting to the statute in the USA and the principles enunciated by the precedents in India, observed that four factors determine whether it is a case of fair use. These are :-

(i) The purpose of character of the use, including whether such use of a commercial nature or is for non-profit educational purpose.

(ii) The nature of copyrighted work.

(iii) The amount and substantiality of the portion used in relation to copyrighted work as a whole.

(iv) The effect of the use upon the potential market or value of the copyrighted work.

 As regards the application of the maxim de minimis, the Delhi High Court enumerated five commonly considered factors as under:-

(i) The size and type of harm;

(ii) The cost of adjudication;

(iii) The purpose of violated legal obligation and

(iv) The effect on the legal rights of the third party

(v) The intention of the wrong work

Plaintiff’s submissions:

(i) defendant having taken a license for a valuable consideration in the past, for exploitation of the plaintiff’s content, can not now turn around and contend that the unauthorized exploitation of the content in which the plaintiff has the copyright, either amounts to a ‘fair dealing’ or deserves to be ignored on the principle of de minimis non curat lex .

(ii) that the benefit of fair dealing cannot be claimed where content is commercially exploited in breach of copyright. The defence of de minimis, is also of no avail to the defendant as the exploitation has

been persistent and in respect of number of works in which the plaintiff holds the copyright. In fact, the defendant continued to exploit the content of the plaintiff as if the license agreement still authorized the defendant to do so.

Court’s Ruling:

The primary issue before the Court was that whether the aforesaid principles could be made applicable to the facts of the present case?

The Court took into account:

  • Previous License: the previous non-exclusive license which the defendant had taken from the plaintiff to broadcast and exploit the content in which the plaintiff had copyright. The defendant got the license terminated as the then prevailing pandemic situation had impacted its revenue and immediately thereafter used the Plaintiff’s content without a license. The Court noted that the defence of fair dealing and de minimis are required to be seen through the aforesaid prism. It is not the case of the defendant that there was a qualitative change in the nature of the exploitation; during the continuance of license agreement and post termination.

If for an identical activity, the defendant had obtained license for valuable consideration, on first principles, these defences may not be readily available to the defendant.

  • Qualitative and Quantitative Analysis :The Court further noted that the material on record indicates that the content of the plaintiff was used by the defendant in connection with its various programmes. It is not only the duration of the exploitation which matters.

There is a qualitative element as well in deciding both the aspects of fair dealing and de minimis. The length and extent of the copyrighted work, infringement of which is complained of, is undoubtedly of vital importance. However, it could not be reduced to just a quantitative test of minute and seconds dehors the qualitative aspect. The submission on behalf of the defendant that the exploitation was hardly for a minute, therefore, does not carry the matter thorough.

  • Purpose (Commercial): The purpose for which the content was used without license also assumes critical significance. The plaintiff has asserted that the content of the plaintiff was used in infringement of plaintiff’s copyright therein, for commercial purpose.

At this juncture, in the context of the nature of the activity engaged in by the defendant, where advertising constitutes the primary source of revenue, onus rests on the defendant to demonstrate that the content was used for the purpose of reporting on current events and affairs. The defendant chose not to place any material on record in support of its claim that the content was used as a part of its ordinary and regular course of business and reporting news and programmes.

In view of the above, the Court held that the Plaintiff had made a prima facie case and the balance of convenience was in its favout and if injunctive relief is not granted, the defendant would, in fact, continue to enjoy the benefits under the license agreement despite voluntarily terminating the same. This would result in irreparable loss to the plaintiff. Hence, the plaintiff was granted ad- interim relief.

Conclusion:

The defense of de minimis non curat lex is often misconstrued as an excuse to infringe copyright. Parties are often mistaken that trivial usage without seeking license is permissible. Whether the principle of de minimis will apply to a particular usage is always ascertained basis facts of each case where the courts have delved into qualitative and quantitative tests, purpose of use, effect of such use on the legal rights of the copyright owner among others. Further, news channels are often mistaken that they are entitled to use third party content under the garb of running the business of reporting news and programmes. Several of these news programmes use third party copyrighted content such as music and film clippings with absolutely no requirement of its inclusion but merely with the intent of increasing viewership and advertisement revenues.

The Bombay High Court’s decision thus seems to be a step in the right direction.

Read our post here on the jurisprudence of doctrine of de minimis.

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