Agent must disclose agency while granting copyright license: BHC

In an important ruling, the Bombay High court held that an authorized agent issuing license on behalf of a copyright owner must disclose the factum of agency so that the licensee knows that it has a valid license from the copyright owner.

Differentiating between the copyright license as granted by an authorized agent (Section 30) and copyright society (Section 33) respectively under the Copyright Act, the Court said, “There is also the seemingly nice distinction between “issuing” and “granting” a license. Both words must be read together with their conjunctive. “Issuing” speaks possibly to the physical act of generating a license. “Granting” is the legal effect of that issuance. What Section 33 forbids is an engagement in the “business of issuing and granting” licenses in works in which copyright subsists. This cannot mean that a copyright owner cannot appoint an agent to grant any interest on behalf of the copyright owner. That is something that Section 30 in terms permits. The express permission in Section 30 cannot be occluded by an extension of the express prohibition in Section 33.

While Section 30 talks about granting of license by copyright owner through a duly authorized agent, Section 33 states the same through registered copyright society.

“All that the two sections, read together, require is that the factum of agency must be disclosed so that the licensee knows that it has a valid license from the copyright owner; i.e., that it is made known by the agent that it is acting on behalf of the holder of copyright in the works in question, even though the licensee may throughout deal only with the agent and never directly with its principal. The minute the principal is undisclosed and the license is issued and granted in the agent’s own name, the prohibition in Section 33 comes into play”, the Court added.

The Court further said that the mere “carrying on of business” is not interdicted by Section 33. It is the carrying on of the business of issuing or granting licenses in its own name, but in which others hold copyright. Every agent also “carries on business”, but that is the business of agency, with the agent functioning as such, i.e., clearly indicating that it is acting on behalf of another, one who holds the copyright. This is the only manner in which both Section 33 and Section 30 can be harmonized. An absolute bar even on an agency, invoking Section 33, would undoubtedly run afoul of the plain language of Section 30 and render the words “or by his duly authorized agent” entirely otiose.

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