Delhi High Court rejects ‘copyright misuse’ doctrine

“Copyright misuse” is a doctrine recognized in the US as an equitable defence against an allegation of copyright infringement, based on a copyright owner’s wrongful exploitation and misuse of its exclusive rights. This doctrine is not embodied in any US law but is found only in case law and is derived from the doctrine of patent misuse.

Justice Rajiv Sahai Endlaw of Delhi High Court dealt with the copyright misuse doctrine in detail for the first time in India in his recent judgment in Tekla Corporation & Anr v Survo Ghosh & Anr, dated 16 May.

The US doctrine

The doctrine of copyright misuse was enshrined in a judgment of a US Court of Appeals in Lasercomb America v Reynolds in 1990. In this case the court held that the copyright holders had misused their copyright because restrictions in their licence agreement were for a period of 99 years instead of the standard 75 years. The court held that since the copyright holders’ exploitation of their copyright was not merely anti-competitive but also against public policy, it amounted to copyright misuse. Because of the copyright holders’ “unclean hands”, the court would not enforce their copyright and would not sustain their allegations against the defendants.

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Facts and arguments

In the Indian case, Tekla, the owner of a software programme, instituted a copyright infringement suit seeking a permanent injunction against the defendants, who had installed the software without obtaining a licence. In the course of the case the defendants raised a plea before the court alleging copyright misuse by Tekla.

The defendants alleged that Tekla was involved in “malpractices and restrictive conduct”, which could be seen in the terms of use of the software. The defendants argued that Tekla was charging unreasonable licence and maintenance fees, and through its licence agreement was forcing the licensee to accept unreasonable terms and conditions.

The defendants relied on various judgments of the US Court of Appeals to support their stand. Tekla maintained that the doctrine of copyright misuse is not recognized in India and copyright is governed by statute. The Copyright Act, 1957, provides defences that can be relied on by a defendant faced with an infringement action and copyright misuse is not among these defences.

Further, even if it was assumed that copyright misuse is accepted in India, it had been wrongfully invoked by the defendants as none of the defendants’ allegations regarding the licence agreement were valid, thereby corroborating that the defence of copyright misuse had been incorrectly raised.

The court’s decision

The court held in favour of Tekla and granted a permanent injunction against defendants. Justice Endlaw rejected the copyright misuse defence, holding that the Copyright Act is an independent and self-contained law containing the rights of copyright owners. The exceptions to these rights are governed completely by section 52 of the act. The act does not mention copyright misuse anywhere, including in the provisions governing infringement and defences to infringement. Also, the act has laid down elaborate provisions for compulsory licensing to deal with misuse situations.

The court further held that accepting this defence might lead to making copyright a conditional right subject to being misused by the owner, which in turn would disentitle the copyright owner. The court found the fact that the doctrine could be invoked only as a defence and not as an independent cause of action “unpalatable”.

The court was of the opinion that it is against the principle of equity to deny a copyright owner its exclusive right when there is apparent copyright infringement, and substantial relief should be granted to the copyright owner even if it has acted wrongly. However, it is an established position of law that when there is a conflict between equity and law, law would prevail as it is the duty of the courts to uphold the letter of the law and not doing so would lead to uncertainties and violation of the law. Moreover, such an equitable defence would likely cause undue delay in the litigation process thereby helping infringers to escape justice and buy more time.

Finally, the court stated that granting an injunction to a copyright owner should not encourage any copyright misuse and in addition the court may add a condition on the owner to refrain from such misuse.

It can be concluded from the above that although copyright misuse has been accepted in US jurisprudence, it is not in any statute. As far as India is concerned, it is clear from the above- mentioned reasons in the Tekla judgment that the Copyright Act governs copyright matters and the defences available are contained in the act, thereby eliminating the need to accept equitable defences.

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Safia Said, a senior associate at Saikrishna & Associates, appeared for Tekla in the above case. Suvarna Mandal is an associate at the firm. The views expressed in this article are personal.