Tag: statutory interpretation

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Where to file suit for copyright infringement? Supreme Court’s purposive interpretation amounts to re-writing the Copyright Act

vijayaraghavannarasimhamA plain reading of Section 62 of the Copyright Act, 1957 will reveal that Section 62(2) of the Copyright Act is an exception to the general rule vesting jurisdiction in a civil court in case of ‘infringement of copyright in any work’.

Under Section 62(1), such a suit has to be instituted before ‘the district court having jurisdiction’ in respect of the ‘infringement of copyright in any work’.

The general rule, seen in Section 20 of the Code of Civil Procedure, 1908 (“CPC”), is that a civil proceeding complaining of ‘infringement’ has to be instituted where the ‘cause of action’, that is, the ‘infringement’ arose, or where the defendants reside or carry on business.

S62CopyrightAct S20CPC

Section 62(2), however, has a non obstante clause vis-a-vis Section 20 of the CPC and any other law in force. Therefore, only Section 62 is invoked to determine whether such a suit is territorially tenable.

Section 62(2) thus makes an exception to Section 62(1). It means that a ‘district court within whose jurisdiction plaintiff resides or carries on business’ is also a place of permissible jurisdiction. This necessarily means that even if the ‘infringement of copyright in a work’ arose within the jurisdiction of Court A, the suit can be filed by the plaintiff in Court B, within whose jurisdiction he resides or carries on business.

Once the plaintiff proves that he was residing at the chosen venue or he was carrying on business there, he can surely sue at that location. The plaintiff need only show that he was ‘actually and voluntarily residing’ there or ‘carrying on business’ or personally working for gain. Once these ingredients are satisfied, the suit has to be held maintainable. In effect, the criteria under Section 20 of the CPC, that is, where the ‘cause of action’ arose or where the ‘defendant was residing’ or ‘carrying on business’ are rendered otiose.

The reasoning behind creating this exception was that an artist must have total control and dominance over his ‘copyright in a work’. The artist has the right to carry his right to sue wherever the artist resides or moves to reside or carries on business or moves to carry on business, irrespective of where the cause of action or infringement arises. It is a clear and lucid departure from the ordinary rule of territorial jurisdiction.

How Sanjay Dalia rewrote the Copyright Act, all in the name of “purpose”

Unfortunately, in one more exhibition of the ‘purposive interpretation’ rule, the Supreme Court has affirmed the decision of the Delhi High Court in Indian Performing Rights Society Ltd. v. Sanjay Dalia.

The plaintiff was carrying on business through a branch office in Delhi though their head office was in Mumbai. The alleged ‘infringement’ had taken place in Mumbai. The concurrent findings of the Delhi High Court declining to entertain the suit in Delhi was affirmed by the top court.

“In our opinion, the provisions of section 62 of the Copyright Act and section 134 of the Trade Marks Act have to be interpreted in the purposive manner. No doubt about it that a suit can be filed by the plaintiff at a place where he is residing or carrying on business or personally works for gain. He need not travel to file a suit to a place where defendant is residing or cause of action wholly or in part arises. However, if the plaintiff is residing or carrying on business etc. at a place where cause of action, wholly or in part, has also arisen, he has to file a suit at that place, as discussed above.”

‘Purposivism’ and ‘consequentialism’ cannot be used to tide over the ‘convenience or inconvenience’ of parties. When the Parliament has conferred on the plaintiff, the right to sue for infringement wherever he resides or carries on business, is the Supreme Court right in concluding that plaintiff could not do so in a case where the infringement arose in Mumbai and defendant carried on business in Mumbai and plaintiff also had its head office? This amounts to re-writing the legislation. Oh, for an Antonin Scalia dissent of the Obamacare and Obergeleff genre.

Vijayaraghavan Narasimhan is an advocate practicing at the Madras High Court.

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The abuse of a dominant position acquired through a patent is a subject for competition law

JSaiDeepakpicTypically, patent litigation involves suits for infringement and counterclaims for patent invalidation. The conduct of parties to patent disputes however, has added another dimension — the effect of the patentee’s conduct on consumers and competition in the market.

Take for instance, the anti-trust proceedings initiated in 2012 by the European Commission against Motorola Mobility Inc. The main ground for the investigation was Motorola’s aggressive pursuit of injunctive relief against potential licensees to coerce them into paying unreasonable royalty for the use of Motorola’s Standard Essential Patents (“SEPs”) on video compression standards and standards for Wireless Local

AdvancedProfessionalCertificationinCorporateLawPractice_apcclpArea Network (WLAN) technologies. SEPs, a type of patents, claim inventions that are necessary to comply with the prevailing technology standards. Given the essential nature of the subject-matter claimed by these patents, their abuse or coercive use has serious and adverse implications for consumers and other players in the industry.

In light of these developments,we need to clearly understand the respective realms of the Patents Act, 1970 (“Patents Act”) and the Competition Act, 2002 (“Competition Act”). Although the Patents Act is typically associated with patent grant, validity, and enforcement, Section 140 of the Act lists the restrictive covenants that are forbidden in patent-related contracts such as licenses. The provision, among other things, expressly proscribes any contractual provision that prevents a challenge by a licensee to the validity of a licensed patent. Similarly, Section 84 of the Patents Act provides for a compulsory licensing mechanism to ensure that a patentee fulfils his obligations under the Act, one of which is to provide access to his patented technology at reasonably affordable rates.

Although both these provisions address certain “public” concerns, the Patents Act does not have the mandate, bandwidth, or the teeth to ensure that a patentee’s conduct does not have an adverse effect on other players and consumers. Instead, it is the Competition Act that has the express mandate to deal with and deter anti-competitive conduct and to promote balance in the market.

Section19(4)CompetitionAct2002_AbuseofominantPosition.jpgIn this regard, it would help to read Section 19(4) of the Competition Act. This particular provision spells out those factors which the Competition Commission of India (“CCI”) shall have regard to when enquiring if an enterprise enjoys a dominant position under Section 4 of the Competition Act. One of these factors is the monopoly or dominant position acquired as a result of any statute. This clearly includes a patent right, which is a statutory monopoly granted by and under the Patents Act. Simply put therefore, the CCI has the power under Section 4 of the Competition Act read with Section 19(4)(g) to look into allegations of abuse of dominance acquired as a result of a patent right. In other words, the manner of patent exploitation and enforcement, and its effect on the market are the primary preserve of the Competition Act, and not the Patents Act.

Specific and general legislation

Citing Sections 84 and 140 of the Patents Act, it could be argued that the Act — being the more “specific legislation” which governs patents and patentees compared to the Competition Act — must be treated as a self-sufficient code. This approach however, is flawed since, as stated earlier, addressing market inequities generated as a consequence of a patentee’s abuse of his rights is essentially a subject of scrutiny under the Competition Act, and not the Patents Act. This explains the reason for the presence of Section 62 of the Competition Act, which in effect states that the competition statute shall apply in addition to and not in derogation of, other legislations such as the Patents Act. Therefore, the specific-over-general rule does not apply to Competition Act insofar as the Patents Act is concerned. In fact, the Competition Act goes even a step further and provides in no uncertain terms in Section 60 that the Act shall prevail over any other law in force which is inconsistent with the Competition Act. This “overriding effect” ensures that the Competition Act’s applicability is never watered down or rendered futile because of a conflict with another provision in any other law.

Sections60and62_CompetitionAct2002.jpgAt this point, it may be important to clarify the position of the Competition Act under Sections 60 and 62 to understand the status of the legislation. While on the one hand Section 60 proclaims the overriding effect of the Competition Act over anything that is inconsistent with the Act, Section 62 states that the Act shall be in addition to, and not in derogation of other laws. What this means is that so long as there is no inconsistency between the Competition Act and other legislations such as the Patents Act, both statutes shall apply simultaneously to a situation to which both Acts apply. In the event an inconsistency, the Competition Act will prevail. Therefore, in case of a non-conflicting intersection, both statutes apply, and where there exists or arises a conflict, the Competition Act shall prevail. After all, market and consumer interests have to prevail over domain-specific issues.

J. Sai Deepak, an engineer-turned-litigator, is a Senior Associate in the litigation team of Saikrishna & Associates. He is the founder of “The Demanding Mistress” blawg. All opinions expressed here are academic and personal. 

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Political parties and the BCCI walk into the Right to Information Act

The definition of “public authority” in Section 2(h) of the Right to Information Act, 2005 (“RTI Act”) is elastic. Every now and then, its boundaries are stretched to bring yet another body within it. A recent order of the Central Information Commission (“CIC”) did exactly that when it directed political parties to appoint Central Public Information Officers and Appellate Authorities to respond to RTI applications. The Board of Control for Cricket in India has received a temporary reprieve, but the CIC may still decide whether the top governing body for cricket in India fits within those elastic limits.

First, let’s take a look at Section 2(h).

““public authority” means any authority or body or institution of self- government established or constituted — (a) by or under the Constitution; (b) by any other law made by Parliament; (c) by any other law made by State Legislature; (d) by notification issued or order made by the appropriate Government, and includes any — (i) body owned, controlled or substantially financed; (ii) non-Government organization substantially financed, directly or indirectly by funds provided by the appropriate Government”

Figuring out whether a particular case fits into the boundaries of statutory language is at the heart of the judicial process. Often, the answer is obvious, like the 2010 judgment of the Delhi High Court, which said that the Chief Justice of India came within the meaning of “public authority”. The case of political parties was trickier. The CIC admitted as much, when it said that they did not fit into clauses (a), (b), (c), and (d). After all, in spite of their role in the political process, political parties were quite clearly “not-government”.

Eventually, the CIC went beyond the notions of governmental origin and control and resorted to the term “substantially financed” in clause (ii). It relied on the expansive interpretation given to the term “includes” in a 2011 judgment of the Punjab and Haryana High Court, which said that non-Government organisations substantially financed by government funds was an independent category of “public authority”, distinct from those established or constituted by law made by the centre or the state.

CPIM_Congress_BJP_BCCI_PublicAuthority

When it interprets Section 2(h), the CIC is deciding on its own jurisdiction. That gives us reason to treat those interpretations with suspicion, but the provision itself is probably the clearest indication of the legislative intent to recognise a far-reaching right to information. In this context, the CIC referred to a similar provision — the definition of “state” under Article 12 of the Constitution — and said that the Section 2(h) net was intended to catch a lot more. It held that the Congress, the BJP, the CPI(M), the BSP, and the NCP have been substantially financed by the Union government. The Commission took note of the fact that all these parties had received land from the government at well below the market rate and that they could advertise for free on Doordarshan and All India Radio during election campaigns. The argument that government financing was not substantial was dismissed. “Substantial financing”, the CIC said, need not mean “majority financing”, just “not-trivial financing”. The crucial role of political parties in a democracy, and in particular, their powers under Schedule X of the Constitution, was also considered, but these were only secondary factors in arriving at the final conclusion.

The BCCI receives tax waivers, and until recently, was exempted from customs duty on the import of sports goods. Electricity and security at cricket stadiums is often subsidised, but it is not clear whether all this will amount to substantial financing. The CIC however, may not have to resort to clause (ii) of Section 2(h) because some BCCI operations can be controlled by the government. For instance, the Union government can use its power under Entry 10 of Schedule VII of the Constitution to make law on “foreign affairs; all matters which bring the Union into relation with any foreign country” and restrict the BCCI’s ability to represent India at international competitions. It can also restrict the BCCI’s ability to use the term “India” while referring to its team, under Section 3 of the Emblems and Names (Prevention of Improper Use) Act, 1950.

Sports-Law On the other hand, autonomy from government is a prized virtue for sport, and the Olympic movement is unlikely to take kindly to a judicial determination that cricket’s top governing body in India is controlled by the Indian government.

 

(Aju John is part of the faculty on myLaw.net.)

Images above are from Wikimedia Commons and the first three (from L to R) have been published here under CC BY-SA 3.0, CC BY-SA 2.0, and CC BY-SA 2.0 licenses respectively.