The Madras High Court has held that assignee of the copyright is not legally permitted to issue or grant license under the Copyright Act, 1957 without being a copyright society under the said Act as contemplated under its Section 33.
Deliberating on the difference between the first and second proviso to Section 33(1), the Court held that the business of granting or issuing licenses in respect of any work in which the copyright subsists, can be undertaken only through a copyright society registered under Section 33(3).
The High Court was of the view that the right of an owner, in his individual capacity, to exploit a right by issuing a license remains untouched. However, in case of ‘business’ i.e., a commercial enterprise of issuing licenses, the law required it to be routed ‘only’ through a registered copyright society.
The Court in its Judgement dated 8 December 2021 also considered the background of the amendment made in the Copyright Act in 2012 which was to ensure that the business of issuing licenses in copyrights were routed only through copyright societies so that the royalties could be shared between the authors and composers and the owners of the copyright.
Reliance was also placed, in this regard, on statement of the Minister of Information and Broadcasting made on the floor of the Parliament while introducing the amendments to the Copyright Act in 2012.
Plaintiff’s contention that by virtue of the assignment agreements executed in their favour by the owners of copyright, they have become the absolute owner of the copyright and has the right to issue licenses to any person, was thus not agreed with by the Court.
According to the Court, Section 30 merely recognises the right of the owner to grant a license and does not make a distinction between individuals and business entities, a distinction which is at the heart of Section 33.
Allowing the preliminary objections by the defendant, the Court in Novex Communications Pvt. Ltd. v. DXC Technology Pvt. Ltd. also dismissed the suit and directed the plaintiff to pay costs to the defendants.