The Bombay High Court, in the case of Mad Man Film Ventures Pvt. Ltd. v. Reliance Entertainment Studios Pvt. Ltd. & Ors., in Commercial IPR Suit (L) No. 4433 of 2022 decided on 24.03.2022, rejected an interim application filed by Mad Man Film Venture Pvt. Ltd. for grant of ad-interim injunction against OTT Platforms Star India and Netflix from exploiting the satellite and/or the digital media rights as obtained by them from Reliance Entertainment, without the consent of the former.
FACTS
The present suit was filed by Mad Man Film Ventures Pvt. Ltd. (Hereinafter referred to as “the Plaintiff”) against Reliance Entertainment Studios Pvt. Ltd. (hereinafter referred to as “the Respondents”), Star India (Star), and Netflix Global LLC (Netflix).
In the year 2021, the Plaintiff filed an Execution Application against the Respondents with regards to interpretation of the Consent Terms. In furtherance to the Execution Application and the Arbitral proceedings which followed thereafter, the Bombay High Court (hereinafter referred to as “the High Court”) passed a Consent Award dated 3rd March, 2021.
Several disputes arose with regards to the Consent Award, after which, the parties executed and had entered into Consent Terms, dated 6th December, 2021. According to the Consent Terms the intellectual property (hereinafter referred to as “IP”) ownership of the film “83” (hereinafter referred to as “the Film”) based on India winning the 1983 cricket world cup belonged to the Plaintiff, the Respondents, and the other producer in the ratio of 37.5%, 37.5%, and 25 % respectively.
The aforementioned Consent Terms stated that the exploitation rights of the Film shall vest exclusively and absolutely in the Plaintiff after the entire ‘First Cycle’, i.e., 10 years after the release of the Film. However, on 10th February, 2022, the Plaintiff came to know that the Film has been delivered on the said OTT platforms without seeking prior consent from the Plaintiff.
The present suit is on the premise that the Respondents did not obtain the Plaintiff’s prior consent for delivery of the Film for exploitation on satellite and/or digital media.
ISSUE BEFORE THE HIGH COURT
Whether or not the prior consent of the Plaintiff is required for exploitation of broadcasting rights by the Respondents?
CONTENTIONS OF THE PARTIES
In the backdrop of the foregoing facts, the Plaintiff, by referring to the various clauses in the Consent Terms asserted that the prior permission of the Plaintiff was required for delivery of the Film and for exploitation of satellite or digital media by Star and Netflix, which was obtained from the Respondents instead.
The Plaintiff submitted that during the first 10 years after the release of the Film, the Respondents would share a certain percentage of the net collections from the exploitation of domestic and overseas theatrical rights in Hindi as well as other languages, and in event of failure, the Plaintiff shall have no obligation to provide consent to the delivery of the Film for exploitation of digital and/or satellite rights of the subject Film.
The Plaintiff also contended that in case the Plaintiff’s rights or interest in the subject film is not satisfied at least 15 days prior to the theatrical release, the Plaintiff shall have no obligation to consent to the delivery of the film for exploitation of digital and/or satellite rights of the subject film.
The Plaintiff, therefore, asserted that since the Respondents and the OTT Platforms have failed to comply with the Consent Terms, the High Court should consider granting an injunction, in order to refrain them from exploiting the film through satellite and/or digital media, and against the alleged copyright infringement.
Furthermore, the Plaintiff relied on Cescinsky v. George Routledge & Sons Ltd. 1915 C 3065 2 KB 325, Nav Sahitya Prakash and Ors. v. Anand Kumar and Ors 1980 SCC Online All 444, Angath Arts Pvt. Ltd v. Century Communications Ltd & Anr 2008 (4) Mh.L.J. 926, amongst others, and contended that the co-owner of a copyright cannot exercise the rights available under the copyright alone, even if he/she accounts for the profit made under it.
Finally, the Plaintiff claimed that the balance of convenience lies in his favour, and irreparable loss would be caused to him if the Respondents are not restrained from exploiting the film through satellite and/or digital or other media.
On the contrary, the Respondents submitted that they have the right to exploit the film through satellite and/or digital or other like media for the period of the First Cycle i.e. 10 years after the release of the Film, and thereafter the Plaintiff shall be entitled to the rights as provided in the Consent Terms, which includes the requirement to prior consent before any assignment of the concerned rights.
The OTT Platforms i.e., Star & Netflix submitted that the Plaintiff had acknowledged the pre-existing rights created in favor of the concerned OTT platforms in the Consent Terms and therefore the Consent Terms shall now act as an estoppel against the Plaintiff from denying those rights.
Further, the OTT Platforms submitted that the assignment of rights in regard to the Film is antecedent to the rights acquired by the Plaintiff and therefore the Plaintiff cannot challenge those rights and since the OTT Platforms are not a party to the Consent Order, they were not bound by the terms of the same.
DECISION AND FINDINGS
The High Court examined the Consent Terms to which the Plaintiff was the party, wherein it was expressly mentioned that the satellite and digital Rights of Star and Netflix respectively have already been created in respect of the Film and the IP Rights and exploitation rights shall vest in the Plaintiff, subject to the rights already created.
Further, as evidence to the fact that the Plaintiff had acknowledged the rights of the Star and the Netflix, the High Court observed that even in the Arbitral Proceeding which was previously instituted because of some dispute in the execution of the consent award the Plaintiff acknowledged the rights of third party which included Star and Netflix.
Thus, the High Court held that there is no dispute insofar regarding the agreements respectively assigning and licensing the satellite and digital rights in favor of Star and Netflix.
Furthermore, the Plaintiff was a party to, and executed the Consent Terms which already provided that the satellite and digital rights have been created in respect of the Film.
The High Court after referring to the clauses of the Consent Terms held that:
“All necessary third-party approvals in whose favor any right or interest created in respect of the Film “83”, makes it clear that these clauses would necessarily apply to future agreements entered into between the Defendant No. 1 and third parties for exploitation of Digital and/or Satellite Rights of the subject film. This certainly cannot apply to the Agreements which are already referred to in the Consent Minutes of Order.”
Therefore, the High Court took the prima facie view that the Plaintiff cannot claim any IP Rights over the antecedent rights already created in favor of Star and Netflix. The High Court observed that as per the Consent Terms, the Respondents have been authorized to exercise other ancillary theatrical rights or exploitation rights during the first 10 years from the first release of the Film and the Plaintiff is entitled to the exploitation rights only after period of the first 10 years after the release of the Film.
The High Court also rejected the Plaintiff’s argument of being the co-owner, and held that the Plaintiff’s right in the subject film has only arisen after the execution of the Consent Terms, prior to which the satellite and assignment rights were already created in favor of Star and Netflix which has also been accepted by the Plaintiff during various proceedings.
Additionally, the High Court also rejected the Plaintiff’s argument based on Section 18 of the Copyright Act, 1957, i.e., assignment of copyright, by observing that in the present case there has already been an antecedent assignment made in favor of Star and Netflix which has been accepted by the Plaintiff.
The High Court accepted the argument of Star & Netflix that since they are not a party to the impugned Consent Terms it cannot be held binding upon them. The High Court relied on the law laid down by the Supreme Court in Chitraleka Builders and Anr. v. G.I.C. Employees Sonal Vihar Co-op. Housing Society Ltd. and Anr, 2021 SCC Online 153 and held that:
“the Consent Terms does not bind parties, who are not parties to the Consent Terms.”
Based on the above observations, the High Court rejected the ad-interim injunction prayer made by the Plaintiff and accepted the antecedent rights of the OTT platforms to exploit the broadcasting rights.
AMLEGALS REMARKS
The High Court indicated towards the fact that the parties having antecedent rights of any kind, like in the present case satellite and digital rights, will have an overriding effect on the IP Rights claimed by a party which are vested post creation of the antecedent rights.
Providing IP Rights to the parties is extremely important, however the same will not negate or override the other rights acquired by the other parties vide any previous agreements or arrangements. It is important to strike a balance between the several rights vested in the parties.
– Team AMLEGALS assisted by Mr. Aditya Baheti (Intern)
For any queries or feedback, please feel free to get in touch with chaitali.sadayet@amlegals.com or mridusha.guha@amlegals.com.
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