Delhi High Court: Asha Menon, J., is considering a very interesting case where the dispute between the parties is regarding the ownership of a YouTube channel. The Court has found a prima facie case in favour of the plaintiff and issued certain directions.
Plaintiff was a part of a Group Company division, ‘Frankfinn Institute of Air Hostess Training’, which was a reputed organization, engaged in the field of imparting training in the field of Aviation, Hospitality, Travel Management and Customer Services. It has also entered the arena of music and had its first home entertainment release. It has also produced a movie named, “SAT SRI AKAL”
Senior Counsel for the plaintiff submitted that defendant 2 through its proprietor Kanwal Deep Kohli, created a YouTube channel, initially called ‘Divine Amrit Bani’ for and on behalf of the plaintiff. The content for uploading on the said channel was provided solely by the plaintiff. The YouTube channel was renamed “Shabad Kirtan Gurbani – Divine Amrit Bani” having the URL: http://www.youtube.com/user/divineamritbani and was available on the platform of the defendant 3/Google LLC.
Defendant 2 used to manage the Suit Channel for the plaintiff and there was no doubt about the ownership of the channel vesting with the plaintiff. However, defendant 1 started unlawfully asserting ownership rights in respect of the Suit Channel, on the basis of some arrangement with defendant 2, which was only to manage the Suit channel.
Crux of the Matter
Ownership of the Suit channel
The applicant stated that it is a necessary party to this suit as, on the determination of the ownership, the Suit Channel would become their asset, whereas the plaintiff asserted that the Suit Channel was created for it and was initially managed by Kanwal Deep Kohli, proprietor of defendant 2 who, later on, engaged the services of the defendant 1 to manage the Suit Channel and for that purpose, created a JVA.
Kanwal Deep Kohli took the stand that he had created the Suit Channel.
Analysis and Discussion
Applicant claimed that the assets of Kanwal Deep Kohli in his proprietorship firm, namely defendant 2/Indya Records, had been transferred to it under the JVA. However, there was absolutely no document that set out the Suit Channel as an asset of defendant 2 or Kanwal Deep Kohli’s own assets and which stood transferred to the applicant when it was created through the JVA.
Moreover, there was not a whisper of any money coming to the share of the JVA entity or it’s having asserted any such claim since it came into existence seven years ago.
In the JVA ‘content’ had been defined, but there was no reference whatsoever to a ‘YouTube channel’. Prima Facie, therefore, it was clear that the Suit Channel was not part of the JVA.
It was also noted that the Suit Channel stood created in the year 2012 while the JVA was entered into in 2013, hence it was reasonable to assume that had the Suit channel been part of the assets of defendant 2, which merged with applicant/entity pursuant to the JVA, there would have been no reason why it would not have found mention in the document.
As per the Agreement, it was recorded that the company was to “acquire content” and then license it to the defendant 1 for commercial exploitation on a revenue-sharing basis. There was a reference to platform owners, but not a whisper on the Suit Channel, or any YouTube channel for that matter.
In Court’s opinion, the applicant failed to disclose any right or interest that would make it a proper or necessary party to this suit.
Defendant 1 had not been transferred any ownership rights by Mr Kanwal Deep Kohli, who created the Suit Channel by registering the domain name.
Furthermore, in lieu of services, revenue was shared between the plaintiff and the defendant 1 i.e., 70% going to the plaintiff and 30% going to the defendant 1 as per the agreements between them.
Had the Suit Channel been the exclusive property of the defendant 1, there was no logic in taking the smaller share as the Agreements were with the plaintiff on a “non-exclusive basis‟, whereas the Suit Channel was to be “exclusively” used for the plaintiff’s content.
Further, so long as the Suit channel was earning revenue, defendant 1 was obligated to disclose the revenues to the plaintiff and could not have staked claim to the entire revenue as it had done. Unfortunately, despite the directions of this Court to defendant 1 to file the complete accounts with the plaintiff, defendant 1 did not comply with the same. Hence, defendant 3/Google LLC will have to be directed to file before the Court the earnings of the Suit Channel from 16-4-2021 till date.
Plaintiff disclosed a prima facie case in its favour as the Suit channel was created for uploading only its contents.
With respect to the question of “irreparable loss and injury”, the impact on viewership, the loss of goodwill and viewer satisfaction cannot be measured only in monetary terms.
High Court gave the following directions:
(a) The application being I.A.7062/2021, filed by defendant 1 under Order XXXIX Rule 4 CPC seeking setting aside/modification of the ex parte ad interim injunction granted by this court vide order dated 20th April, 2021, is dismissed.
(b) I.A. 6086/2021 and I.A.7691/2021, both filed by the plaintiff under Order XXXIX Rule 2A CPC, are disposed of requiring the defendant 1 to file an affidavit, (i) disclosing the restoration of the entire content of the plaintiff in the Suit Channel, (ii) affirming that the Username, Password and other details of the Suit Channel have been handed over to the plaintiff.
The affidavit be filed within a week of this order, failing which further action, as contemplated under law and Order XXXIX Rule 2A CPC, will be initiated against defendant No.1 through its Directors/Officers responsible for compliance of this order.
(c) I.A.5727/2021 filed by the plaintiff under Order XXXIX Rules 1 & 2 CPC is disposed of, further restraining defendant 1, its directors, promoters, as the case may be, servants, agents, franchisees or anyone acting for and, on its behalf, from removing, copying, destroying, transferring, or deleting the plaintiff’s content on the Suit Channel or uploading third party videos on the Suit Channel.
(d) Defendant 1 shall also disclose on an affidavit the revenues earned since the year 2015 till date. Defendant 1 shall further disclose on an affidavit the revenue that has been transferred by it to the plaintiff till date, including after the expiry of the Agreement between the two and shall continue to disclose on an affidavit the up-to- date revenue collected from the Suit Channel.
If within one week of this order, defendant 1 fails to disclose these revenue details, the defendant No.3/Google LLC, on being informed by the plaintiff about the same, shall do so within a week thereafter.
(e) The participation of the applicant/Indya Records and Films Private Limited in the suit neither appears to be proper nor necessary for the just disposal of the suit. Accordingly, I.A. 6250/2021 filed by the applicant under Order I Rule 10 CPC for its impleadment is dismissed.
[Frankfinn Entertainment Company (P) Ltd. v. Unisys Infosolutions (P) Ltd., 2022 SCC OnLine Del 657, decided on 2-3-2022]
Advocates before the Court:
For the Plaintiff:
Mr. Sanjeev Sindhwani, Senior Advocate with Mr. Kapil Midha, Ms. Pritika Juneja and Ms. Versha Singh, Advocates
For the Defendants:
Mr. Asutosh Lohia, Mr. Rohan Dewan and Ms.Shraddha Bhargava, Advocates for D-1
Mr. Arjun Natarajan, Mr. Mayank Sapra and Ms. Lakshmi Kant Srivastava, Advocates for D-2
Mr. Aditya Gupta and Ms.Aishwarya Kane and Mr. Raunaq Kamath, Advocates for D-3
Mr. Sagar Chandra, Ms. Sakshi Pande and Ms. Urvashi Garg, Advocates for applicant/proposed D-4 in I.A. 6250/2021