Bombay High Court rules in favor of Shemaroo Films

Bombay High Court rules in favor of Shemaroo Films

The single judge granted an interim injunction against News Nation

The Bombay High Court has observed that the defence of de minimis and fair use has to be seen through the prism of the fact of the parties involved. The case pertained to Shemaroo Entertainment Limited and News Nation Network, where the two entered into an agreement for a non-exclusive license.

Shemaroo, which primarily deals in film production, later filed a suit against News Nation after the premature termination of its non-exclusive licensing contract. It alleged that Shemaroo exploited its content sans an agreement.

Ruling on the matter, Justice NJ Jamdar said, "It is not the case of the defendant that there was a qualitative change in the nature of the exploitation during the continuance of the license agreement and post-termination. If for an identical activity, the defendant obtained the license for valuable consideration, on first principles, these defences (of de minimis and fair use) may not be readily available to the defendant."

While allowing the interim application moved by the plaintiff, the court stated, "If injunctive relief is not granted, the defendant would, in fact, continue to enjoy the benefits under the license agreement, despite voluntarily terminating the same. This would result in irreparable loss to the plaintiff."

Shemaroo and News Nation had entered into a non-exclusive license agreement commencing from 1 July 2019 to 30 June 2022. This was in connection to broadcast and exploit the audio-visual song clips copyrighted by the plaintiff. On request of the defendant, the agreement was terminated on 1 August 2020.

Post-termination, the defendant explicitly agreed and undertook not to exploit any of the plaintiff's content without obtaining prior permission and license.

However, the plaintiff noticed that the defendant had broadcasted the contents of the copyrighted cinematographic films on its channels. In April 2021, the plaintiff brought to the notice of the defendant the August to October 2020 instances of infringement of the copyright. It also demanded a consolidated amount towards the damages.

But, in response, the defendant contested the liability despite admitting the unauthorized exploitation of the content. It justified the use of the content by referring to the principles of fair use and de minimis.

Thereafter, the plaintiff approached the court seeking to restrain the defendant from further exploitation of the content on its channels.

The defendant contended before the court that the use of the plaintiff's content was permissible under the Copyright Act, 1957, as it fell under the doctrine of 'fair dealing.' The defendant further submitted that it had only disseminated the plaintiff's content as part of its regular program and not to individually and commercially exploit the material for personal benefit. It added that instant action was, anyways, barred by the principle of de minimis non-curat lex.

The bench cited an earlier case wherein the Delhi High Court had observed that four factors determined whether it was a case of fair use. These were – the purpose of character of the use, including whether such use was of a commercial nature or was for non-profit educational purpose; the nature of the copyrighted work; the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and the effect of the use upon the potential market or value of the copyrighted work.

The Delhi High Court had also enumerated five commonly considered factors - the size and type of harm; the cost of adjudication; the purpose of violated legal obligation; the effect on the legal rights of the third party; and the intention of the wrong work.

Justice Jamdar regarded whether the principles were applicable to the case. He then allowed the interim application of the plaintiff to restrain the defendant from using the content under contention.