Observing that the arbitration clause in the 2018 Deed of Assignment binds the plaintiff as an assignee in succession, the Madras High Court has held that the civil remedy under Section 55 of the Copyright Act can be pursued through arbitration as an agreed alternative dispute resolution mechanism. The Court referred the parties to arbitration under Section 45 of the Arbitration and Conciliation Act, 1996, holding that the arbitration clause in the Deed of Assignment binds the plaintiff as a subsequent assignee in the chain of title from the original assignor.
The Court rejected the plaintiff’s contention that the defendants were third parties, observing that in a copyright infringement claim by a licensee or assignee, the owner of the copyright must necessarily be made a party under the statutory mandate of Section 56 of the Copyright Act. The Court held that the civil remedy under Section 55 of the Copyright Act can be pursued through arbitration as an alternative dispute resolution mechanism if agreed between the parties, and that the issue of non-arbitrability cannot be gone into while dealing with an application under Section 45.
A Single Judge Bench of Justice K. Kumaresh Babu observed that while Section 55 of the Copyright Act provides for a civil remedy in cases of copyright infringement, the civil remedy can also be pursued through arbitration as an alternative dispute resolution mechanism if agreed between the parties. The Court noted that the plaintiff claims to be a copyright holder by way of assignment of copyrighted works from a third party who is none other than Defendants 1 and 2, whose rights had been assigned as early as 2018 by Ayngaran International Limited, of which Defendants 1 and 2 are former group companies.
The Court further observed that Defendants 1 to 3 cannot be termed as third parties, since in a claim for infringement of copyright by a licensee or assignee, the owner of the copyright would necessarily have to be made a party under the statutory mandate of Section 56 of the Copyright Act. The Court found no prima facie evidence that the arbitration agreement was null and void, inoperative, or incapable of being performed. The Court noted that if the agreement were null and void, the plaintiff itself would have no right to sue, as its right over the copyright works by way of assignment would fail; similarly, if the agreement were incapable of being performed, the suit for infringement would fall within the mischief of no cause of action.
The Court also observed that the issue of non-arbitrability raised by the plaintiff cannot be gone into while dealing with an application under Section 45, and what could be seen by the Court is only a prima facie finding on whether the agreement is null and void, inoperative, or incapable of being performed.
Briefly, Eros Technologies Digital FZE, a UAE-incorporated company approached the High Court seeking an ad-interim injunction to restrain Respondents 1 to 3, Ayngaran International Media Private Limited, Ayngaran International Films Private Limited, and their Director Mr. Kumarasamy Karunamoorthy, along with internet platforms Google LLC, YouTube LLC, Meta Platforms Inc., and X Corp., from uploading, streaming, communicating to the public, distributing, or monetising the schedule-mentioned cinematograph films.
The plaintiff’s rights over the suit schedule movies arose out of an assignment agreement executed by one Ayngaran International Limited on behalf of its group companies, including Defendants 1 and 2, in favour of Copsale Limited, which in turn assigned the rights to the plaintiff’s predecessor-in-interest under a transfer and assignment agreement. Despite the assignment, Defendants 1 to 3 allegedly began exploiting the assigned rights on various social media platforms, causing continuous and irreparable injury, loss of revenue, and dilution of rights to the plaintiff.
