Whether dispute involving enforcement of intellectual property rights can be referred to arbitration?
I do not think it is possible to lose sight of the fact that in trade mark and copyright disputes, we very often are confronted with written agreements. In copyright matters, agreements are in fact a statutory requirement for an assignment. There must be a written document. The law does not say that the written document of assignment should have an arbitration clause. But many do. What Mr. Dhond suggests, in effect, is that in every one of these cases, all these arbitration clauses must be treated as entirely null, void and otiose. No law that I am aware of even remotely suggests anything of the kind. I think it would do a very great violence not only to the language but to the purpose and ambit of the Arbitration Act as also the Copyright Act, if I would have to read it in the manner Mr. Dhond suggests.
22. I find Mr. Dhond's protests, to the effect that the view I am inclined to take would turn the entire edifice of intellectual property law on its head, needlessly alarmist. It will do nothing of the kind. On the contrary, I believe an acceptance of Mr. Dhond's view must result in widespread confusion and mayhem in commercial transactions. We often have complex commercial documents and transactions that routinely deal with intellectual property rights of various descripttions as part of the overall transaction. This can be said of mergers, acquisitions, joint ventures, the setting up of special purpose vehicles, technology transfer and sharing agreements, technical tie-ups, licensing and so on. The range of fields of human activity that could possibly be covered by any one or more of these is limited by nothing but our own imagination: steel manufacturing, setting up of power plants, software, motor car manufacture, computer hardware, music, films, books and literature, performances and even services. If Mr. Dhond is correct, then in any of these cases, where intellectual property rights are transferred or, for that matter, in any way dealt with, no dispute arising from any such agreement or transactional document could ever be referred to arbitration, and every single arbitration clause in any such document would actually, in his formulation of it, be void and non-est ab initio. It would have to be so — Sukanya Holdings will not allow a dispute relating to intellectual property rights to be segregated from other disputes. I do not think the world of domestic and international commerce is prepared for the apocalyptic legal thermonuclear devastation that will follow an acceptance of Mr. Dhond's submission.
23. Not to put too fine a point on it, Mr. Dhond's argument misses a fundamental aspect of the Supreme Court's decision in V.H. Patel. What the Supreme Court had before it in that case was a reference to arbitration that related to three trade marks and injunction claims in relation to these. One of the arbitral declarations was that the three registered trade marks continued to be the assets of a particular firm. Others before the arbitrator were declared by arbitral award to have no right, title or interest in these marks. The arbitrator issued an injunction permanently restraining those others from using or explosing in the course of trade or otherwise any of those marks in any territory. No question was ever raised before the Supreme Court in V.H. Patel about the award on the issue of the trade marks being bad on account of nonarbitrability, nor did that issue give the Supreme Court pause. The only question of arbitrability was about the dissolution of the firm, and there, as we have seen, the Supreme Court found that reference to arbitration was indeed competent.
24. I note here that the Defendants Nos. 2 to 8 have all filed Affidavits, agreeing to submit their disputes to the arbitration under the arbitration clause in the Term Sheet. Each of them have also said that they were all sub-licensees of Defendant No. 1. They are also, therefore, covered by the amended Section 8 of the Arbitration & Conciliation Act, 1996.
25. In this view of the matter, I see no reason to deny the relief sought. There will be an order in terms of prayer clause (c), which reads as under:
“(c) That this Hon'ble Court be pleased to pass an order under Section 8 of the Arbitration and Conciliation Act, 1996 referring the present suit to arbitration pursuant to the Arbitration Agreement contained in the Term Sheet dated 13thJune 2012 executed between the Plaintiff and Defendant No. 1;”
In the High Court of Bombay
(Before G.S. Patel, J.)
Eros International Media Limited
v.
Telemax Links India Pvt. Ltd.
Notice of Motion No. 886 of 2013
In
Suit No. 331 of 2013
Decided on April 12, 2016
Citation:2016 SCC OnLine Bom 2179
