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In a news report published in the Mint yesterday, Priyanka Mittal and Harveen Ahluwalia reported on a mind-boggling decision of the Delhi High Court in a lawsuit filed by Gulf DTH FC LLC, a Dubai based company against Dish TV India. In short, a company from the UAE, which had exclusive broadcasting rights for certain channels in certain foreign territories sued Dish TV for selling its Set Top Boxes (STB) and subscription to thousands of consumers in these territories. Rather than toss out the lawsuit as expected Justice Murlidhar issued an interim injunction restraining Dish TV from marketing its STBs and smart cards or receiving payments in these foreign territories.
The two judgments of the Delhi High Court by the Single Judge and consequently the Division Bench on appeal, can be accessed here and here.
The Facts
The facts of the case are quite simple. Dish TV India, which is a part of the Essel Group of Companies (which also owns Zee TV) has been licensed the direct-to-home (DTH) broadcasting rights for several entertainment, news and sports channels. The companies owning these TV channels have authorised Dish TV to broadcast these channels in India and Sri Lanka through its DTH network.
A DTH network basically involves sending the broadcast content in the form of a signal from an earth station to a geosynchronous satellite which then rebroadcasts that signal across a swathe of territory. To access the signal, the consumer needs to have a satellite dish to pick up the signal and a Set-Top-Box (STB) to decrypt the signals and convert it into a format that be viewed on TV. The DTH service provider usually provides the STB and collects a fee from the consumer through online payments or smart cards.
In the present case Dish TV was using three satellites to broadcast its signal across India and Sri Lanka. The signals from these satellites had a “spill over”, in that, their signals were being broadcast over large swathes of South Asia, the Middle East and North Africa, collectively referred to as the OSN territories. The DTH broadcast rights for these territories had been licensed to the plaintiff – Gulf DTH.
Apparently, as per the plaintiffs, Dish TV India was actively marketing its STBs in several of these OSN territories and processing payments through a subsidiary in Singapore called Dish TV Singapore Pvt. Ltd. The scale of this operation appears to be massive and runs into hundreds of thousands of STBs. As per the plaintiffs, one of the dealers of STB boxes raided in the OSN territories had 22,000 customers and another operator had over 61,483 requests for activation pending. The High Court records that Dish TV earned revenues of Rs. 157 crores (US$ 23.60 millions approx.) through Dish TV Singapore Pvt. Ltd.
The plaintiffs, after several attempts to crack down on the import of Dish TV’s STBs through civil, criminal and border enforcement actions in OSN territories appear to have been unsuccessful in stemming the flow of Dish TV’s STBs. Frustrated with their efforts in these territories, they finally sued Dish TV before the Delhi High Court.
The legal issues
Now the obvious problem with this lawsuit is that the copyright infringement is taking place in foreign countries and not in India. Therefore if a signal is being communicated to countries in the Middle East, the rights holder is required to institute legal action in each of these countries under whose laws it has acquired an exclusive broadcasting right. The only way a lawsuit can be filed in India for copyright infringement is if the plaintiff has rights under the Copyright Act and the infringement of such rights is taking place within the territory of India.
So how then did the Delhi High Court agree to even entertain this lawsuit and issue an interim injunction against Dish TV?
I reproduce Justice Murlidhar’s explanation below:
- While under Section 54(a) of the Copyright Act, the expression ‘owner of a copyright‘ includes ‗an exclusive licensee‘, there is nothing to indicate that such exclusive licensee should be in respect of a copyright work in India. In the present case, the broadcasters, viz., the owners of the copyright of the Contents and the Works for the distribution of which over TV channels an exclusive licence has been granted to the Plaintiff can seek remedies against infringement of such copyright. Even as regards the infringement taking place in a territory which may be located outside India, while it is true that under Section 1(2) of the Copyright Act, the Act extends to the whole of India, however, in a situation where the rights of such owner of copyright are not exclusive to the India territory but some other territory outside India and are being infringed by an entity in India, there is no reason why such owner of copyright, which includes the exclusive licensee, cannot come to Indian Courts to seek relief. The Court is, therefore, not prepared to read Section 54 read with Section 55 of the Copyright Act in a narrow manner as suggested by Defendant No. 1. (emphasis mine)
The first error, is the following conclusion: “While under Section 54(a) of the Copyright Act, the expression ‘owner of a copyright‘ includes an exclusive licensee‘, there is nothing to indicate that such exclusive licensee should be in respect of a copyright work in India”.
The second error, is the conclusion that a person’s whose copyright has been infringed outside India can sue for copyright infringement before an Indian court.
The common thread to both errors is the court’s failure to understand that copyright law is territorial. The Copyright Act is crystal clear on this aspect. Section 1(2) of the Indian Copyright Act states that it “extends to the whole of India”. In other words, Indian copyright law extends till the boundaries of India and not an inch more. Further, Section 16 of the Copyright Act is clear that no copyright shall exist except as under the Copyright Act, 1957. So rights created under foreign copyright laws cannot be enforced in India.
So when Section 54 states “exclusive licence” and when Section 55 allows for an exclusive licensee to sue for copyright infringement, it is quite obvious that both provisions pertain to rights created under the Indian Copyright Act. In this case the plaintiff has absolutely no rights under the Copyright Act, 1957. Instead its rights are created under the national copyright laws of the OSN territories where it broadcasts. If it has no rights under Indian law, the lawsuit should have been tossed out of court.
This issue of dismissal of the lawsuit doesn’t appear to have been pressed upon before the appeals court. In any case the appeal was dismissed and matter is posted for trial. The interim injunction stands.