- JUDGMENT SUMMARY: Deshmukh & Co. (Publishers) Pvt. Ltd. v. Avinash Vishnu Khandekar & Ors.
- DATE OF JUDGMENT: 4 May 2005
- BENCH: V. C. Daga, J.
SUBJECT:
The present case deals with the differences between an assignment and a licence and how to construe whether a document is an assignment of copyright or a mere licence to do certain acts.
FACTS:
The dispute in the present case lies between M/s Deshmukh and Co. (Publishers) Pvt. Ltd., a leading publisher of books based at Pune and the legal heirs well known Marathi figure Late Shri V.S. Khandelkar. The plaintiff, M/s Deshmukh and Company Publishers (P) Ltd. entered into an agreement with Shri V.S. Khandelkar under which exclusive publishing rights were given to him. Shri V.S. Khandelkar passed away in 1976 leaving behind his will under which he bequeathed all his property to his wife who later formed the appellant company and transferred all her publishing rights in the books in favour of the company. The plaintiff filed a suit under Section 62 of the Copyrights Act, 1957 claiming a declaration that the plaintiff (appellant herein) had subsisting copyright in the publication of the 14 books mentioned and a negative declaration that none of the defendants has any rights thereon. Besides, the plaintiff also claimed a decree for a permanent injunction against the defendant and compensation in the sum of Rs. 10,000/-. The trial court observed that the said agreement was nothing but a mere licence to print and publish books subject to the conditions as mentioned and payment of royalty stipulated therein. The trial court while dismissing the suit held that plaintiff was not entitled to a declaration and permanent injunction as prayed for in the said suit. Aggrieved by the said judgment, the plaintiff preferred an appeal.
IMPORTANT PROVISIONS:
Section 18, Section 19, Section 19A and Section 30 of the Copyright Act.
- Section 18- Assignment of copyright
- Section 19- Mode of Assignment
- Section 19A- Revocation of Assignment
- Section 30- Licences by copyright owners
ISSUES:
The main issues in question before the court were:
- Whether the said document is an assignment of copyright or a mere licence to publish books?
ANALYSIS OF THE JUDGMENT:
Appellant's Contentions: It was contended on behalf of the appellant that the said agreement was a deed of partial assignment and not a mere licence to print and publish books. According to them, Clause (iv) of the agreement providing for devolution of rights is contradictory with the concept of a licence.
They submitted that copyright is a bundle of rights as mentioned in Section 14 of the Copyright Act, and, therefore, providing for various rights retained by the author in the agreement was not required if it was only a licence. An assignment creates an interest of ownership in favour of the assignee while a licence simply permits a licensee to do something which otherwise would amount to a violation of the owner's rights. It was urged that mere use of the term "Licensor or Licensee or Licence" by itself does not conclude as to whether or not the instrument is a licence.
Respondents’ Contentions: The respondents contended that the said agreement was not an assignment of copyright but a mere licence to publish books in favour of the appellant. It did not create any permanent rights in favour of the appellant and was revocable at the grantor’s wish. Furthermore, there was a continuous obligation on part of the appellant to pay royalty, therefore, the said agreement has to be construed nothing but a mere licence to publish books.
Court's observations:
The Bombay High Court made the following distinction between an assignment and a licence :
An assignment may be general i.e. without limitations or it may be subject to limitations. It may be for the complete duration of the copyright or any part thereof. An assignment transfers an interest in and deals with the copyright itself as provided under Section 14 of the Act, whereas, a licence does not convey the copyright but only confers a right to do something, which otherwise would be unlawful. An assignment transfers title in the copyright but a licence simply permits certain things to be done by the licensee. The assignee has the title in the copyright may reassign whereas the licence is personal, and therefore, cannot be transferred or reassigned without the grantors' consent. Furthermore, the assignee can file a suit for infringement without joining the assignor. However, the licensee cannot sue in his name for infringement of the copyright, since copyright belongs to the licensor.
The Court further observed that assignment of copyright is valid only if it is in writing and signed by the assignor or by his duly authorized agent. There is no prescribed form of assignment. The assignee to whom certain rights have been assigned by the assigner can be restrained by the court having competent jurisdiction. Copyright is not a positive right but is a negative right, i.e. the right to stop others from exploiting the work without the copyright owner’s consent or licence. Copyright is a personal movable property which can be transferred by assignment etc. or by will or by due process of law, i.e. in the case of the death of the copyright owner.
The court observed that it has been indisputably expressed that it is difficult to extract from precedent cases as to whether any given transaction is an assignment or a licence. To determine whether a document is an assignment or a licence, consideration must be given to the copyright. The document must be read as a whole to spell out the correct nature of the transaction between the parties.
The court applied the general principle laid out in the case of Mishra Bandhu Karyalaya v. Shivratan Lal Koshal[1], in which it was held that if there is a continuing obligation on the part of the publisher such as payment of royalties or share of profits rather than lump sum payment, then courts tend to read the agreement as conferring a conditional right to publish rather than as equitable title to the copyright.
The court held that the agreement, in this case, did not provide an exclusive right in favour of Sri Deshmukh to print and publish books. The payment of royalty instead of a fixed payment also weighed heavily against partial assignment. Mutual reciprocal obligations observed from the terms of the agreement such as payment of royalty, giving of accounts, and supply of copies to the author with a restriction on the right of the publisher to distribute complimentary copies indicated licence, instead of assignment,
The Court held that the said agreement was only a licence to publish books which were also evident from the endorsement made on one of the celebrated books "YAYATI" of late Shri Khandekar published by Shri Deshmukh in which it was expressly mentioned that "All rights are reserved with the author".
Conclusion:
It can be concluded from the present judgment that the terms “assignment” and “licence” are distinct and not interchangeable. Section 19 of the Copyright Act mentions the conditions to be fulfilled for the assignment of copyright whereas Section 30 of the Act deals with licences. The intention of the parties whether it was an assignment or a licence must be gathered from the words used therein.
[1] AIR 1970 MP 261.
