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A Landmark Copyright Ruling: Novex Communications v. Trade Wings Hotels

By Venkatasubramanian Srinivasan

The Bombay High Court recently delivered a significant judgment in the case of Novex Communications Private Ltd. v. Trade Wings Hotels Limited and related matters. The ruling, issued on 24th January, 2024, addresses a contentious issue surrounding the locus standi of entities like Novex Communications and Phonographic Performance Limited (PPL) to issue licenses without being registered as Copyright Societies under Section 33 (1) of the Copyright Act, 1957.

Background and Legal Saga
 The legal saga began with a dispute between Novex Communications and Trade Wings Hotels Limited. The central issue revolved around the rights of copyright assignees and the requirement for such entities to be registered as Copyright Societies. The complainants, Novex and PPL, argued that they were legitimate owners with the right to issue licenses. They emphasized partial assignments under Section 18 (1) and contractual agreements with rights owners.

Conflicting Judgments and Core Issues
The conflicting judgments from different High Courts added complexity to the matter. The core issue was whether entities like Novex and PPL, acting as assignees, could legitimately issue licenses without being registered as Copyright Societies. The defendants challenged the validity of assignment agreements, asserting that they circumvented regulatory requirements.

Arguments and Court Observations 

  • Complainants (Novex and PPL):
    • They based their case on various provisions of the Copyright Act, contending that assignees could issue licenses in line with Section 30.
    • They differentiated copyright societies from assignees, emphasizing that the latter owned the rights.
    • Novex and PPL highlighted the denial of PPL’s registration as a copyright society, claiming a right to issue licenses despite being de jure denied registration.
  • Defendants:
    • They challenged the validity of assignment agreements, asserting that they lacked specificity on “works” as required by Section 19 (2).
    • Defendants argued that the agreements failed to address royalty payments mandated by Section 19 (3).
    • The defendants also relied on clauses in Novex and PPL’s Memorandum and Articles of Association (MOA and AOA) and annual reports.

Court’s Decision
The Bombay High Court declared the assignments in favour of PPL and Novex as valid partial assignments, categorizing them as “owners.” The court ruled that Section 30 indeed empowered owners to be assignees with the authority to grant licenses. It distinguished the role of copyright societies, interpreting Section 34 (1) (b) to mean that authors/owners could issue licenses independently of a society.

This judgment provides clarity on the rights and responsibilities of entities like Novex and PPL in managing and licensing copyrighted content. It ensures that they can continue their operations while adhering to legal requirements.

In conclusion, the ruling stands in stark contrast to the Madras High Court’s earlier decision, intensifying the debate within the legal community.

[The author is a retired international civil servant of the United Nations, presently Founder & Principal Consultant, India i.e., Bharat Knowledge Exchange, and Founder & CEO, Quill & Juris]

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