Wieden+Kennedy India Private Limited v. Jindal Steel and Power Limited

Delhi High Court · 24 Apr 2024 · 2024:DHC:3220
Anish Dayal
O.M.P.(I) (COMM.) 109/2024
2024:DHC:3220
civil petition_dismissed Significant

AI Summary

Delhi High Court held that copyright infringement claims arising from a services agreement are arbitrable, declined interim injunction against respondent's launched campaign, but directed deposit of security pending arbitration.

Full Text
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O.M.P.(I) (COMM.) 109/2024 Page1/36
HIGH COURT OF DELHI
Reserved on : 16thApril,2024 Pronounced on : 24th April, 2024
O.M.P.(I) (COMM.)109/2024,I.A. 8220/2024, I.A. 8221/2024& I.A.
8222/2024 WIEDEN+KENNEDY INDIA PRIVATE LIMITED ..... Petitioner
Through: Ms. Swathi Sukumar, Mr. Essenese Obhan, Ms. Yogita Rathore, Ms. Anjuri Saxenaand
Mr. Rishab, Advocates.
VERSUS
JINDAL STEEL AND POWER LIMITED ..... Respondent
Through: Mr. Sandeep Sethi, Sr. Adv.
WITH
Mr. Saikrishna Rajagopal, Mr. Saket Sikri, Mr. Naman Joshi, Mr. Angad Singh Makkar, Mr. Akshat Agrawal, Ms. Ayushi Bansal, Mr. Manish Kharbanda, Ms. Ekta Gupta, Mr. Gurpreet, Ms. Shruti Joshi, Ms. Riya Kumar, Mr. Sumair, Ms. Shreya Sethi, Ms. Gauri Rasgotra and Ms. PriyashreeSharma, Advocates.
ANISH DAYAL, J.
JUDGMENT

1. This petitionunderSection 9 oftheArbitration& ConciliationAct, 1996 (hereinafter referredto as “A&C Act”)was referred to theIntellectualProperty Division ofthis Courtsinceit related toprotectionofintellectual propertyrights of the petitioner. Petitioner seeks a restraint before the commencement of O.M.P.(I) (COMM.) 109/2024 Page2/36 arbitration, on the respondent, from distributing and publishing the impugned video titled ‘Jindal Steel- the Steel of India’ on all platforms including videos, social media etc. during the pendency of arbitration proceedings or in any manner infringing petitioner’s copyright in the ad film campaign which was preparedby petitioner under theagreement (hereinafterreferred toas “Services Agreement”) dated 8th May, 2023 executed between the parties. Relief is also sought for recognizingthepetitioneras theoriginalcreatorand copyrightowner of the impugned video, and restraining the respondent from disclosing petitioner’sconfidentialinformation i.e. theimpugned video and from creating any third-party rightsin thesaidintellectualproperty/confidentialinformation.

2. The petitioner, an advertising agency, is the Indian Arm of Wieden + Kennedy Inc., which is a global creative companyclaiming to have developed someofworld’sbest-knownbrands. Petitionerclaims to havebeen instrumental in building India's biggest brands and campaigns including Make in India, IndiGo, OberoiHotels amongstothers and globalbrands likeNike, Airbnb,and Audi.

3. Petitioner had previously been engaged by respondent for developing their ‘Steel of Oman’ campaign and ‘Jindal Panther TMT Rebars’ campaign which were successfully executed. In April 2023, Services Agreement was executed between petitioner and respondent to develop a brand campaign to bringout roleofsteelin shaping thenation, particularlyin the76th yearofIndian independence and collaterally, make respondent (Jindal) synonymous with steel. The scope of work under the Services Agreement involved deliverables of a Television Commercial(TVC)/ digital film or a series of films (one up to O.M.P.(I) (COMM.) 109/2024 Page3/36 four) in case of a multiple film approach. Project milestones included - (a) arriving at a strategic platform, (b) core creative idea leading to the brand campaign; (c) film production, (d) final film presentation and release. All this was to be executed within 4 months of the effective date i.e. 1st May to 31st August, (term). Considerationfor provisionofservices was agreed at Rs. 1.75 crores plus taxes which was to be paid in the following manner: i. 50% was to be paid immediately, ii. 25% of the fees by end of second month i.e. 30th June 2023, iii. Balance 25% on completion of the final deliverable, and iv. within 14 days from thedateofinvoice for (ii) and (iii) above. These provisions are encapsulated in clause 3.[1] to 3.[3] of the Services Agreement. Relevant provisions of the Services Agreement

4. Clause 5.1, 5.[2] and 5.[3] of the Services Agreement, essentially provided that all advertisingmaterialspreparedandpresentedby theagency andaccepted by respondent, will be transferred to respondent, subject to release of all the payments;thoserejected by therespondentwouldremainexclusiveproperty of the petitioner; and all material and services procured from 3rd parties, would subject to receipt of payments, be the property of respondent, subject to other conditions.

5. Terminationprovisionsare inter alia providedin clause 7.[1] to 7.[3] of the Services Agreement. Clause[7].[1] requiredtheterminatingparty to give30 days’ priorwrittennoticein caseofa no-fault termination,andclause[7].3required the aggrieved partyto notify thepartyin breach with cureperiod of10 days, before O.M.P.(I) (COMM.) 109/2024 Page4/36 terminating the agreement.

6. Confidentialityprovisionswereencapsulated in clause[9] of the Services Agreement. By clause11.4, theagreementwas subject to jurisdiction ofcourts in New Delhi. Dispute Resolution was provided for by clause 11.[3] of the Services Agreement which reads as under:

7. Petitioner claimed that it developed the ad film titled ‘Steel of India’ including the script, elements, narrative flow in the form of a montage video which consisted oforiginalworksincludingscript, screenplay, novelelements, unique expressions, musical themes. Petitioner, therefore, claims the authorship and copyright in these works which included literary works and dramatic works under Section 2(1)(h) and 2 (1)(o) of the Copyright Act, 1957 O.M.P.(I) (COMM.) 109/2024 Page5/36 (hereinafter referredto as“theCopyrightAct”). Grievanceofpetitioner arises from the fact that despite having substantially worked on the project and delivered on a substantialset ofmilestones, havingshared thepetitioner’swork with therespondent, therespondentterminatedthe Services Agreement on 25th July 2023, did nothonourthetermsofpayment, andthereafter, wentaheadand launched the impugned video in March 2024. Efforts at settlement post notice of termination, did not bear fruit; petitioner issued a cease-and-desist notice to which respondentreplied. In thesecircumstancespetitionerwas constrained to approach this Court, prior to invocation of arbitration under clause 11.[4] of Services Agreement for interim relief under Section 9 A&C Act. Sequence of Events

8. For a fuller appreciation of facts, it would be worthwhile to narrate the flow of events in a chronological sequence: 8.[1] From 9th to 15th May 2023, work was commenced to develop the campaign and various meetings took place between the parties; 8.[2] On 27th May 2023, petitioner presented 4 options for the ad campaign including ‘Jude Raho India’ as potential themes. The presentation to the respondent is appended as Document 6 to the petition which included a suggested montage format, the summary of the ‘Jude Raho’ campaign, emotionsto beachieved, threescratch films (which included scratch film 1 and 2 on ‘Jude Raho’ theme) and a poem for ‘Jude Raho’ theme; 8.[3] On 5th June 2023, pursuant to discussion between the parties, it was agreed they wouldproceed aheadwiththe‘JudeRaho’optionforthecampaign; recording of the meeting has been appended as Document 7 to the petition; O.M.P.(I) (COMM.) 109/2024 Page6/36 8.[4] On 12th June 2023, a presentation and recording were shared via email where the petitioner explained the montage concept, the ‘Jude Raho India’ concept, provided a humanising sequence with expression, elements bucket, voice over transcript, suggestions of director and other team members to execute the said ideas. Three scratch films were also shared during the said meeting of 12th June 2023. Importantly, the long list of steel elements which would form the basis of montage were provided in the said presentation. It would be instructive to extract the text of the email sent by petitioner to respondenton 12th June2023. To this, respondentreverted selectingelements from the long list and provided a shorter list. Both the email from and to the petitioner are extracted hereunder for ease of reference: “On Mon, 12 Jun 2023 at 16:24, Preksha Shinde preksha.shinde@wk.com wrote: Dear Venkatesh and Mr. Misra, Thank you again for your time this morning. Attached herewith is the deck presented and here's the link for the recording of the meeting. Sharing a quick summary of important action points below: - Route 1(Jude Raho India) is the final route we go ahead with - The idea of bringing India together is approved, alternate tag line options need to be shared for Jude Raho India - While most important use cases were highlighted on call, Jindal team to share a shortlist from the larger listen closed in the presentation. Post that we can discuss those eventually with the director and finalise visuals as we proceed - W+K can start reaching out to the suggested directors and lyricists and come back with costs and final recommendations O.M.P.(I) (COMM.) 109/2024 Page7/36 - The largest flag pole idea to be worked on priority - in collaboration with Flag foundation of India. Thank you for sharing the POC Mr. Misra, will reach out to Gen Kohli soon - Jindal team to pick from the remaining surround ideas and let us know the order of priority. In the meantime, W+K team to fine tune the ideas and also think of collaborations to facilitate activity for Jindal Steel to create actual impact - W+K to share a time plan with key milestones and outlined next steps leading up to the 15th August live date - Concepts and photographer suggestions for the print/OOH campaign will be shared by W+K - Correct logo files to be shared with W+K We will reach out soon as to when we meet next. Regards, Preksha Shinde W+K India” “On Mon, 12 Jun 2023 at 6:50 PM, V J <vj@jspadvisory.com> wrote: Hi Preksha, Nicely captured. Feel free to reduce the below list to make it even sharper after discussing with director etc:

1. Nation building (large) • Fighter jets, tanks, army troops, artillery • Trains & railway line • Wind mills • Large construction: sea link (Mumbai), skyscrapers, flagpole, bridges over rivers • Space: rocket launch, satellite • Transmission towers • Shipping O.M.P.(I) (COMM.) 109/2024 Page8/36

2. Personal (small) • Automobiles • Thali (utensils) • Stethoscope • Washing machines, refrigerator • Roof over home • Watch • Tiffin (steel tiffin) • Pen (fountain pen) • Bottle opener

3. Sentiment / steely resolve ▪ Athletes / winning / lifting the cup ▪ Cultural (kerala sword fight and more to show pan India) Paddy – please come back with a timeline on next steps. I will come back on the rest. Thanks, and best, Venkatesh” 8.[5] On 21st June 2023, another presentation was shared by petitioner which contained furtherlyrics ofthe‘JudeRahoIndia’campaign, theelements bucket and details of the print campaign. These are appended as Document 10 to the petition. Various pictures and images were also provided in the said presentation. 8.[6] On 29th and 30th June 2023, treatment note by Director Aakash Bhatia was shared by petitioner for a video film itselfwhich included aspectsof screen play, cinematography, charactersand performance, stock and design, narrative flow, editing, sounddesign, casting, look and feel etc. As partofthe look and feel a number of images were provided by the Director in the treatment note. The communication as well as the treatment note have been annexed by the O.M.P.(I) (COMM.) 109/2024 Page9/36 petitioner as Document - 11 (Colly). 8.[7] On 1st July 2023, respondent emailed thepetitioner providingslides and YouTube links and some suggestions, this mail is extracted as under: “Narendra Misra <narendra.misra@jspadvisory.com>Sat, Jul 1, 2023 at 2:42 PMTo: Preksha Shinde <preksha.shinde@wk.com>Cc: V J <vj@jspadvisory.com>, Ayesha Ghosh <ayesha.ghosh@wk.com>, Santosh Padhi <santosh.padhi@wk.com> Hi Preksha Thanks for this. I have been able to see the slides and view YouTube links. I will give my views separately but wanted to share a perspective, if that helps in the narrative in some way. Steel has two unique qualities which no other everyday use metals have and both have to do with 'jodna'.

1. It is weldable - two separate steel pieces can be joined perfectly and seamlessly in one. Everyday use is welding of steel rails to make long railway lines running thousands of kilometers (transsiberian rail - longest in the world – is close to 10,000 kms length).

2. It is the only major metal which is magnetic - sticks quickly and firmly to the magnet Regards” 8.[8] On 4th July 2023, a request was made by petitioner for payments, in particular 50% advancepayment which wasoverdue. Thesaid mailwasreplied to by respondenton thesameday askingthepetitioner to continueservices and that payments wouldbe released within a week. The said emails are extracted O.M.P.(I) (COMM.) 109/2024 Page10/36 as under: “On Tue, Jul 4, 2023 at 12:41 /span>PM Preksha Shinde <preksha.shinde@wk.com> wrote: Dear Ashok, Hope you’re doing well. This is in regard to our 50% advance payment that is overdue. The team has been working on the project for over a month without any payments flowing in and we would unfortunately need to pause operations on the project until the above-mentioned payment comes through. Awaiting your response on the status of the same. Regards, Preksha” “On Tue, Jul 4, 2023 at 3:33 /span>PM Ashok Mahunta <ashok.mahunta@jindalsteel.com> wrote: Hi Preksha, Please continue the services, the payments shall be released within this week. Regards Ashok Mahunta” 8.[9] On 14th July 2023, petitioner shared through email the ‘Steel of India’ film campaign, visual of which is appended as Document 12 to the petition. Further emails wereexchanged on 11th July 2023, 13th July 2023, 17th July2023 and 19th July 2023 by petitionerto respondentregardinginvoices and payment O.M.P.(I) (COMM.) 109/2024 Page11/36 not being received.

8.10 On 25th July 2023, an email was sent from respondent to petitioner simply statingthat they were terminatingthe services contract with immediate effect on grounds that there was a change of team and there were inadvertent delays along with a proposal to pay 15% of the contract price as one time settlement. The said email is extracted as under: “On Tue, Jul 25, 2023 at 5:52 PM Ashok Mahunta <ashok.mahunta@jindalsteel.com> wrote: Hi Ayesha, This is in reference to our conversation earlier regarding the termination of “Steel of India” contract/assignment, please note that we are compelled to do so because of the following reasons and/or event which are solely attributable to W&K, although we had very good partnership in “Steel of Oman” assignment:

1. Change of team: We had decided to engage with you for the Steel of India campaign only looking at the quality of output delivered by the team that was engaged in the Steel of Oman project. However, to our surprise we have learned that there is a complete change of team for this project, reasons of which are best known to you. You didn’t inform us about the same. It may be noted that there are several agencies that are working with us India, but we choose you on single vendor basis only because of the team’s quality that had worked on the Steel of Oman project. O.M.P.(I) (COMM.) 109/2024 Page12/36

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2. Inadvertent delays: There were several delays from your side in various deliverables against committed timelines. This not only affected the progress but also jeopardised the 15th August launch, which was the primary motive of our engagement. The project doesn’t make as much sense if it can’t be launched on the said date. Hence looking at all the above facts, we are hereby are terminating the Steel of India contract/ assignment with immediate effect. Although we shouldn’t be paying anything against this contract as none of the deliverables made till date are of any use to us or were adequately aligned to our vision, however looking at our association in the past, wepropose to pay you 15% of the contract price as an one time settlement against your claim of 50% of the contract price. This is probably the best that we can do under the current circumstances, and we expect you to give your acceptance on the same, considering that the door for future business relationship stays open. Regards Ashok Mahunta”

8.11 On 26th July 2023, the said email was responded to by petitioner with detailed responses onissues raisedby respondent statingthat50% oftheproject fee was dueand requestingrespondentnottosharepetitioner’s ideasand scripts with other agencies / partners without petitioner’s prior knowledge. The said O.M.P.(I) (COMM.) 109/2024 Page13/36 email response is as under: “On Wed, Jul 26, 2023 at 3:12 /span>PM Ayesha Ghosh <ayesha.ghosh@wk.com> wrote: Hi Ashok, With all due respect, we strongly disagree with the points you have brought up in your mail.

1. Paddy, as Chief Creative Officer, is the highest authority on creative at W+K India. He is the one who is responsible for the Steel of Oman turning out the way it did. He re-wrote the football script with the team, he insisted on Ayappa as the first preference, as he strongly felt Ayappa would do justice to the script. Paddy was seeing the film in a certain way and wanted that brought to being at every step of the film, which is why he was closely involved throughout. It is very unusual for the creative head of an agency to be on shoot but Paddy was in Oman for a whole week. He was the one taking all important calls with Ayappa during the shoot. After the shoot, he solely fronted the post production, right from the edit, grading to music, as the production house was based in Mumbai and so is Paddy. His involvement in the Steel of India project has been total. He has himself been conceptualising and writing for this project. His creative prowess is a well documented fact in the industry and his haul of awards speaks to the same. We have given you his O.M.P.(I) (COMM.) 109/2024 Page14/36 dedicated time for this project because we were inspired by the brief and we knew a lot was at stake. Over the past three months that we have been working on this brief, Venky never asked for a team; he kept telling Paddy to once again (like the Steel of Oman) deliver a great product. The one time he brought up a team was recently, when we decided to explore directors other than Akash Bhatia. In any case, to ensure a width of exploration, we had involved 2 executive creative directors (Yogesh Rijhwani and Abhishek Deshwal) plus most of the Mumbai creative team was working on print and activation ideas as well as scripts. In fact one of the routes was presented by Yogesh and along with Preksha, he was interacting with the ex-army person on activation ideas. Since Venky prefers a lean team, only the key people were at meetings, all of whom are department heads of W+K. Head of planning- Anirban Head of creative - Paddy Head of business - Ayesha Beyond scope of work Apart from TV, we presented more than a dozen activation ideas which we were asked to proceed on. The same happened with print and outdoor. We presented 4 concepts as options and one was picked and we were asked to proceed with that. Both the above were not part of the scope but since Venky asked for it, we went ahead and presented those as well. O.M.P.(I) (COMM.) 109/2024 Page15/36 Technically we deserve a separate cancellation fee for that, as activation and print were approved and given a go ahead, while not being in scope. When Paddy presented the idea of static images to be turned into an exhibition by printing them on steel plates, even that was given a go ahead. We presented 5 different campaign / film routes and many alterations on the final approved route, including 4 options of lyrics, two of which were done by professional lyricists, as favours to us.

2. There were no delays from our end. In fact the go ahead for this project came much later than anticipated. The Steel of Oman project took us 4-5 months to deliver. In comparison, we got a go ahead for this one towards the end of June, for a 15 August delivery. That's a 2 month time frame. Even in this time frame, we have presented work rapidly at every stage. We can pull out text messages and mails to show you this. We've sent mails asking for quick feedback so that we could have moved quicker. In close to three decades of having worked in this business, we've done a plethora of projects for a plethora of clients. Due to the subjective nature of advertising, especially something like this, which involves translating a vision to a concept, we start with a wider set of approaches, of which the ones that the client likes get shortlisted, till we refine further and arrive at the one we want to take forward. That's the process we followed here too. We would not have spent as much time and energy as we did on finding the O.M.P.(I) (COMM.) 109/2024 Page16/36 right directors for the script, unless we had a script that we were asked to progress to the production stage. With Akash Bhatia, we had almost reached the stage of PPM and then we opened it up again and took the same script to other directors. Our fee is secondary and the primary concern is creating a superb creative product. We invested 3 months of time and energy for the love of the task and to get to the best work. We think we had a winner and some top notch directors that we had been speaking to, were even more excited about the script than us. So we are demoralised and disappointed that this is being called off. We should be paid what is owed to us. As our contract states, at the stage of talking to directors about production of a script, 50% of the project fee is due. This is an accurate representation of the intense work that has gone into this project. Future business with JSPL is always welcome. We respect your team and have worked well with the creative autonomy given to us. But that is a separate matter from this one. We trust that you will do the fair thing and pay us our due 50%. And we also trust that you will not share our creative ideas and scripts with other agencies/partners without our prior knowledge. Regards, Ayesha” O.M.P.(I) (COMM.) 109/2024 Page17/36

8.12 Subsequent emails were exchanged from 7th August 2023 onwards; essentially thediscussion involved petitioner’sdemandfor a proper settlement of their fee, as evident from the extract of email of 22nd August 2023; “..7. Therefore, as per the terms of the Agreement, you rightfully owe us: (i) 75% (seventy-five percent) of the Fees amounting to Rs. 1,54,87,500/- Incl GST; plus (ii) interest at the rate of 54% on the amount of Rs. 15,65,723/-, payable from the date the amount were due till such time as the Fees with due interest is received by us; plus (iii) additional fees of Rs. 80,00,000/- for the "Special Services" performed outside our "Scope of Work"; all collectively referred to as the “Due Amounts”. We believe this figure is an accurate representation of the time and creative efforts we have invested in this Project… This communication is without prejudice to all rights and entitlements that we may have under the Agreement, or under any document or otherwise under law or in equity. Best regards, Utpal Sharma Head of Finance”

8.13 Discussionsbetween theparties did not fructify as therespondent agreed to pay only INR 25 lakhs as payment towards full and final settlement.

8.14 Around18th March 2024,therewas a media launch of respondent’snew O.M.P.(I) (COMM.) 109/2024 Page18/36 campaign titled ‘Steel of India’ stated to have been developed by Ambrish Kondulkar, Director of Kondulkar Studio, Film Director Ayappa K. M. and Bharat Sikka, photographer, the track being composed by Sneha Khandalkar. Thesaid campaign wasstatedto havejuxtaposed physicalattributes ofsteel, its presence in every Indians’ life, emotional aspects including grit and growth, portraits of individuals from various backgrounds, blended with images and music.

8.15 Pursuantto thismedia launch on 1st April2024, a cease-and-desistnotice was issued by petitioner to respondent expressing their shock to see the new video campaign released on 14th March 2024 on YouTube, alleging it was flagrant reproduction of works which were developed and pitched by the petitioner duringthecurrency of Services Agreement and that impugnedvideo had all thenarrativefactorsand worksdoneby thepetitioner. Respondentwas called upon ontoceaseand desistfrom playing anddisseminatingtheimpugned video and to take it down from all digital platforms.

8.16 The cease and desist was responded to by respondent on 6th April 2024 refutingtheallegations andstatingthat the presentations providedby petitioner were merely broad ideas which were not protected under the Copyright Act. Submissions on behalf of the Petitioner

9. In this factual context, Ms. Swati Sukumar, counsel for the petitioner asserted that petitioner had fleshed out all elements of the ad campaign under theServices Agreement includingthescript, elements,narrativeflow, montage video, screenplay, unique expressions, musical themes, scratch films format which would collectively be encapsulated within the definition of literary and O.M.P.(I) (COMM.) 109/2024 Page19/36 dramatic works under the Copyright Act. The overarching theme of ‘Jude Raho’ had also been selected by the respondent, as evident from the sequence of meetings, details of which are providedabove. Themontageformat set to a background music score involved a visual sequence showing broad spectrum examples of steelusageincludingexamples fromeveryday useofsteelto largescale use of steel in nation building. These visual sequences were stitched together to conveytheroleofsteel and how it joins everybodytogether. Thead campaign included a video score with steel-based sounds and petitioner had provideda detailed listofexamplesofsteelusagefor thefilm categorised under variouscategories. Shehad drawnattentionto thelist of elements providedby petitioner which are extracted from presentation as under: O.M.P.(I) (COMM.) 109/2024 Page20/36

10. She further dwelled on the fact that the meetings were attended by top leadership of respondent company and therefore they had a bona fide belief in the seriousnessofrespondent’sintention to completetheproject. In particular, she fleshed out the following aspects of what would be included between dramatic works, literary works and cinematograph film. O.M.P.(I) (COMM.) 109/2024 Page21/36 O.M.P.(I) (COMM.) 109/2024 Page22/36

11. Petitioner’s counsel therefore asserted that having provided respondent with considerable material and respondent having selected certain elements from the list of elements suggested, as evident from exchange of communication(particularlyon 12th June2023 and 29th June2023)the sudden termination on 25th July 2023, without any reason or warning was dishonest, mala fide and intended to deprivethepetitionernot only ofcopyright ofworks but also of fee under the Services Agreement.

12. It was argued that considering the respondent had rejected the work, question of it claiming copyright does not arise; moreover, payment itself was not dependent on deliverables as was evident from clause 3.[3] of the Services Agreement. It is stated that the launch of the impugned video / campaign by O.M.P.(I) (COMM.) 109/2024 Page23/36 respondent on 14th March 2024 not only infringed their copyright but also amounted to breach of confidentiality having shared various aspects of presentations madeby petitioner to therespondent withthe3rd partyin order to develop the impugned video. While at this stage, petitioner’s counsel stated that they have no problems with the stills which the respondent had used on billboards but they do have serious grievance with the impugned video being disseminated.

13. In support of her submissions, she relied inter alia on the decision in Brand David CommunicationsPvt. Ltd. & Anr. v. Vivo Mobile India Private Limited & Anr., 2019 SCC OnLine Bom 9389 where in similar facts and circumstances, a restraint was sought against dissemination of a TVC/ advertisement / film, so as to not infringe plaintiff’s copyright. The Bombay High Court reached a prima facie conclusion that plaintiffs wereentitled to an injunction, however, considering the balance of convenience, direction for depositofmoney hadbeen passed;AnilGupta & Anr. v. KunalDassGupta & Ors. (2002)SCC OnLineDel 250 wherethis Courthadheld that when an idea had been developed and substantial fundamental aspects of the mode of expression were present in defendant’s work, it will amount to violation of copyright. Submissions by Respondent

14. Mr. Sandeep Sethi, Senior Advocate for respondent, in response, submitted that thequestion ofinfringementofcopyrightdoesnotarisesincethe impugned videopreparedby respondentand now launchedon 14th March 2023, had distinct elements from what had been presented by the petitioner, in that O.M.P.(I) (COMM.) 109/2024 Page24/36 therewas no voice over, no poem used, screen play had not been used, images used were different, manner in which images were stitched together was different and theme of montage was not a novelty in the steel industry. Moreover, he submitted that there was no copyright in an idea and what the petitioner hadpresentedwas merely an idea which had not been converted into an expressed form or crystallised in literary and dramatic work. In any event, the preparation of material with petitioner in the ad campaign which was not used, was collaborative, in thatrespondenthadalso madetheirownsuggestions, particularly with respect to elements of steel. He has drawn attention to the scratch films (which were played in Court) provided by petitioner as well as their impugned video / campaign to point out that not only they were totally different but there was no element of similarity between them. He relied on decision of the SupremeCourtin R. G. Anand v. Delux Films & Ors., (1978) 4 SCC 118 to contend that therecan be no copyright ofan idea, subject matter, themes it can only beconfined totheform, mannerandarrangement, expression of idea by the author. Where the theme is same but presented and treated differently so that the work becomes completely new work, no question of violation of copyright arises.

15. He further stressed on issue of balance of convenience supported by an affidavit to contendthattheimpugned video had alreadybeen launched on 14th March 2024andhad been livefor 34 days ason 16th April2024. Thepetitioner had issued notice only on 1st April 2024, after 19 days of the launch despite knowledge that the launch had happened. A detailed response was given by respondent on 6th April 2024; however, the cease-and-desist notice did not O.M.P.(I) (COMM.) 109/2024 Page25/36 invoke arbitration. In the meantime, the respondent had spent significant resources amountingto Rs. 11.88crores in developing thenew ad campaign. It was pointed out that respondent had hired 251 billboards, digital screens and static panels across India in major cities and hubs such as airports and metro stations for JSPL campaign. The total cost of billboards, digital screens and static panels was estimated at Rs. 16.35 crores details of which were given in said affidavit. It was stressedthatthecampaign hadalsobecomepart oftheIPL event with buy out of 1,980 seconds costing Rs. 27 crores; the print advertisements which were booked, costed estimated Rs.1.85 crores and the launch on digital platforms was estimated at Rs.[1] crore; screening at PVR cinemas before movies and during intervals, commenced on 15th March 2024, estimated at Rs. 5 crores. It was therefore, highlighted that grant of any injunction wouldcausemassiveirreparableprejudiceto respondentand in any event, as evidentfromcorrespondenceexchanged, thedemandofpetitioner was essentially of monies which could be liquidated to a maximum amount of Rs.1.75crores in terms of clause 3.[3] of theagreement. Injunction could not be granted when reliefwas compensablein money, withoutprejudiceto theirrights and contentions. Seniorcounselstated thatwithoutprejudiceto their rightsand contentions, respondent is willing to deposit Rs.50 lakhs to express their bona fides in the matter before commencement of arbitration.

16. An additional point of arbitrability was raised by the senior counsel for respondentrelyingon decision ofthis Court SupremeCourt’s observationin A. Ayyasamy v. A. Paramasivam (2016) 10 SCC 386 where the Court has stated in para 14 that the categories of disputes which are treated as non-arbitrable O.M.P.(I) (COMM.) 109/2024 Page26/36 include patent, trademarkand copyright disputes. Reliancewas also placed on Vidya Drolia. & Ors. v. Durga TradingCorporation (2021)2 SCC 1 wherethe Hon’bleSupremeCourtstatedin para 48 that whererights asserted arein rem, disputescannotbe arbitrable. However, a claim for infringement of copyright against a particular person was considered as arbitrable even though the examination of the rights of petitioner would be essentially in rem. Submissions in Rejoinder

17. Ms. Swati Sukumar, counsel for the petitioner objected to the issue of arbitrability by relying on the decision of this Court in Liberty Footwear Co. v. Liberty International, (2023)SCC OnLineDel83 notingthat this Courtheld in para22 thatdisputes relatingto subordinate’ rightsin personam arisingfrom rights in rem are considered to bearbitrableincludinga claim for infringement of copyrightagainsta particularperson even though thelarger right arises as a right in rem. She further statedthattherespondent’scontentionthatpetitioner had delayed approaching the Court was due to mutual discussions through which they had hoped to close thematter with respondentand were, therefore, constrained to come before this Court only when the settlement talks broke down. She pointed out to the dishonest attitude of respondent and that they unilaterally terminated the contract midstream, while the work was going on, and did not give name of other agency which they had involved, even in reply to the cease-and-desist notice and within a few months came up with a new campaign which was a substantial reproduction of the themes, screen play context and images provided by the petitioner.

18. As regards balance of convenience, she pointed out various old O.M.P.(I) (COMM.) 109/2024 Page27/36 advertisementsandcampaigns ofrespondentandthey would bein a position to use them without using the impugned video / campaign and would not cause any harm whatsoever. She further stated that the fact that the video would be disseminated would cause petitioner a considerable harm since advertising agencies essentially rely upon the reputation they earn from successful campaigns including various advertising awards which add to their goodwill and commercial reputation. Analysis and Conclusion

19. The first threshold which needs to be crossed is about the issue of arbitrabilityconsideringthat thispetitionis under Section 9 of A&C Act. It is settled law thatactions in rem areexcluded from arbitration and a four-fold test has been propounded bytheHon’bleSupremeCourt in para 76ofVidya Drolia (supra). In para 77 there is a cursory reference to intellectual property issues regarding grant and issue of patents and registration of trademarks which are considered as exclusive matters falling within the sovereign of government function andhaving erga omneseffect. However, in para48 itselftheCourthas specifically stated that a claim for infringement ofcopyrightagainst a particular person is arbitrable though the arbitrator would end up examining the right to copyright which was a right in rem. This aspect has been reiterated by a CoordinateBench ofthis Courtin Liberty Footwear(supra)quitesuccinctly in para 2 which is extracted as hereunder:

“22. The Supreme Court has, therefore, held that a distinction is to be drawn between an action in personam, that is, actions which determine the rights and interests of the parties themselves in the subject-

O.M.P.(I) (COMM.) 109/2024 Page28/36 matter of the case, and actions in rem, which refer to actions determining the title to the property and the rights of the parties, not merely among themselves but also againstall personsat anytime claiming an interest in thatproperty. Whilerights in personam areamenable to arbitration, disputes in rem are required to be adjudicated by the Courts and Public Tribunals, therefore, being unsuitable for private arbitration. However, disputes relating to subordinate rights in personam arising from rights in rem are considered to be arbitrable. The Supreme Court, in fact, gives an example stating that rights under a patent license may be arbitrated, but the validity of the underline patent may not be arbitrable; similarly, a claim for infringementof copyrightagainsta particularperson is arbitrable, though in somemannerthearbitratorwould examine the right to copyright, a right in rem.” (emphasis added)

20. In theopinionofthis Court,theissueofarbitrability ought notto arise in a situation where petitioner claims copyright of works developed as part of Services Agreement and alleges breach ofvarious contractual provisions bythe client, in this case the respondent.

21. These are not situations relating to registration of intellectual property rights but specificallegations ofbreach by a contractingpartyofterms resident in an agreement.

22. Respondent has therefore not made out any case for non-arbitrability of the said dispute. This Court therefore does not consider it fit to deliberate on this further and leaves it to respective rights and contentions to be raised by parties in the arbitration. O.M.P.(I) (COMM.) 109/2024 Page29/36

23. It is an admitted position that the dispute arose under the Services Agreement of 8th May 2023 executed between the parties, which contains a dispute resolution clause 11.3, as has been extracted in para 6 above. The disputethereforehas to bearbitratedundera sole arbitrator as per the clause.

24. Having perused the documents and appreciating contentions of the parties, this Court notes that, as evident from communication extracted above and theflow ofevents, thepartieswereconsistentlycollaboratingto develop an ad campaign under the Services Agreement. Not only were there substantial presentations madefor theproposed theme, format,contentofthecampaign but the respondent also made a choice and selection to go ahead with ‘Jude Raho India’ theme. This is evident from communicationsof27th May 2023, 5th June 2023, 12th June2023, 21st June2023, 29th June2023and 14th July2023. In fact, it is surprising that there was no precursor to sudden termination which the respondentdelivered on 25th July 2023. Thereis no communicationon record nor assertedby respondent, priorto 25th July 2023 when unilateraltermination was communicated, which expressedspecificgrievances in relationto delivery. Emails of 14th July 2023 as mentioned in para 8.[9] above, specifically bear out that ‘Steel of India’ campaign was shared by petitioner. Also, there were discussions on payment of 50% advance in email of 14th July 2023 which significantly were responded to by respondent on the same day stating that “please continue services, the payments shall be released within this week”. Thereafter, within a week or 10 days, respondent issued termination notice which seems to thisCourta bit amissin thesecircumstances. Further,there was no explanationoffered by theseniorcounselfor respondent, as to whypayment O.M.P.(I) (COMM.) 109/2024 Page30/36 of 50% ofthefees as mandatedby clause[3].3(a)ofthe Services Agreement had not been paid. This too was the demand on 4th July 2023 by the petitioner, which ex facie, purely under the terms of contract, could have been due.

25. Even though the parties entered into discussions post the termination noticebeing issued, it is quiteevident from documentson record,at least atthis prima facie stage, that no paymentwasmadeto petitioner as perclause[3].[3] (a), or in fact clause 3.[3] (b) which mandated 25% of the fee by 30th June 2023 nor did the settlement fructify, the demand of petitioner being 75% plus interest whereas offer of the respondent being Rs. 25 lacs (all inclusive).

26. Regards the allegation of infringement of copyright, the Court at this stage does not wish to go through a mini-trialon the aspect ofinfringement of copyright considering it involves various aspects of whether the presentation made by petitioner would amount to a literary, dramatic and cinematographic work; and whether at all the impugned video was substantial reproduction of the same. As has been stated in R. G. Anand (supra)by the Hon’bleSupreme Court,it would haveto bedetermined if therespondent’s work is nothingbut a literal imitation of copyrighted work with some variations here and there and thecopy is substantialand material. It would haveto bedetermined whether or not similarities are on fundamental and substantial aspects of the mode of expressionadoptedin copyrightedwork;or whether thetreatmentin impugned video is different so thatit becomesa completely new work. This, in theopinion of this Court,requires parties to presenttheir casebefore thesole arbitratorfor which Section 17 A&C Act remedy can be perused.

27. However, some aspects which have appealed to Court, to pass interim O.M.P.(I) (COMM.) 109/2024 Page31/36 measures are: (A) The manner in which termination was issued – the said noticedid not provide10 daysfor rectificationofbreach (so alleged); or alternatively 30 days prior to notice (if no breach was alleged), as per clause[7].[3] and 7.[1] respectively of the Services Agreement; (B) As noted above, thereis norecord of any dissonance between the parties at least till 25th July 2023, when the termination was suddenly issued;

(C) The parties were engaged in prior campaigns including ‘Steel of Oman’ campaign and ‘Jindal Panther TMT Rebars’ campaign and were not alien to each other, to elicit sudden yanking off the Services Agreement;

(D) As noted above, strictly asper clauses ofagreement, paymentoughttohavebeen madeby respondenttopetitioner (subject of course to various other conditions, as may be argued by the respondent) which was not done; (E) Parties werein consultationpost termination notice dated 25th July 2023, which did not fructify, prompting petitioner to approach the Court; (F) The launch by respondent of new campaign prima facie seemed to be substantially based on a similar theme, expressed through montage of sequential images and videos stitched together by a soundscapeofsteel. In this regard, the O.M.P.(I) (COMM.) 109/2024 Page32/36 similarity of images, as has been fleshed out by petitioner, particularlyrespondenthavingusedthesameset ofexamples of images is reproduced below: O.M.P.(I) (COMM.) 109/2024 Page33/36 O.M.P.(I) (COMM.) 109/2024 Page34/36 (G) The choice of elements from elements bucket provided by petitioner to the respondent, as has been extracted in para 8.[4] above are substantially the same.

28. It is clarified that observations made above are purely prima facie in naturefor thereasonthat thisissueofinfringement ofcopyrightwillhaveto be considered by the sole arbitrator.

29. Importantly however, balance of convenience clearly tilts in favour of respondent. Theimpugned video / campaign havingalready been launched on 14th March 2024, it maynotbein theinterestofjusticeto injunct therespondent at this stage. This Courttakes noteoffacts presentedby therespondent (noted in para 15 above) inter alia relating to mass dissemination of the impugned video / campaign on various forms of media including television, digital, IPL broadcast, newspaper print, billboards, static panels, PVR theatres. The advertisementslotshavealreadybeen booked andcontracted in withvarious3rd parties andmonies havebeen spent, asper respondent,upondevelopmentofad film.

30. On the other hand, if the Services Agreement had fully worked out, the petitioner would have received the monies and the respondent, the copyright. Therefore, ifit is found ultimately thattherewasinfringementofcopyright,not only may the petitioner get their declaration, but also suitable recompense.

31. No irreversibleprejudiceis being caused at this stage to petitioner since the relief of damages would still be open for petitioner to seek from the arbitrator as also any interim measures / relief under Section 17 of the Act.

32. To balancetheequities, therespondent however needs to beputto terms O.M.P.(I) (COMM.) 109/2024 Page35/36 seemingly havingtaken benefit ofmaterialwhich was supplied by petitioneras part of development of campaign and for which petitioner has not been paid anything under the contract.

33. Senior counsel for respondent, without prejudice to their rights and contentions volunteered to make a deposit of Rs.50 lakhs. Despite, as per the contract, at least 50% of the fee had to be paid immediately, respondent had offered to pay a reduced amountofRs. 50 lakhs plus 18% GST which offer was later revoked by the respondent and instead a sum of Rs.25 lakhs was offered, inclusiveof GST (this is noted in the email of 24th February 2024). An invoice had also been sent by thepetitioner on 12th January2024which wasrejected on 16th February2024by therespondent. In thesecircumstances andin interest of justice, it would be appropriate that an amount of Rs. 50 lakhs plus 18% GST is deposited in the Court by the respondent, amounting to Rs. 59 lakhs with Registry of this Court within a period of 2 weeks from this order. The said amountshallbekept in form ofan interest-bearingFDR initially for a period of one year, to be renewed thereafter, and subject to further directions ofthe sole arbitrator.

34. Needless to statethat in the event thesaid deposit is not madewithin the period of 2 weeks, as directed above, there shall be an ad interim injunction against the respondent restraining them from playing, distributing, publishing the impugned video titled ‘Jindal Steel – the Steel of India’ on all platforms including social media, digital platforms, broadcast. These directions are passed in interim till the parties seek relief before the sole arbitrator under Section 17 of the A&C Act. O.M.P.(I) (COMM.) 109/2024 Page36/36

35. The parties consented for a sole arbitrator to be appointed by this Court. Accordingly, Hon’bleMs. Justice(Retd.)MuktaGupta, a former Judgeof this Court ( Mob: 96507 88600, R/o C-8, LGF, Hauz Khas, Delhi – 110016) is appointed as thesolearbitrator. Fee and expenses ofthesolearbitratorshallbe fixed by thesolearbitrator,with consent ofboththeparties. It is madeclear that all rights andcontentions oftheparties areleft openfor adjudication bythesole arbitrator. The parties shall approach the sole arbitrator within 2 weeks from today. The interim measures which are being granted by this Court shall continue to remain in force until varied or modified or set aside by the sole arbitrator. Thesaid petitioncan also betreated as an application under Section 17 of the A&C Act before the sole arbitrator, if theparties so chooseto press any relief.

36. Petition stands disposed of with these directions.

37. Pending applications, if any, also stand disposed of as infructuous.

38. Judgment be uploaded forthwith on the website of this Court.

ANISH DAYAL, J. APRIL 24, 2024/sm/ig