Dorling Kindersley v. Sanguine Technical Publishers

A recent Delhi High Court order passed on 21 January, 2013  with respect to copyright licensing has come to our notice. An analysis of the judgement has been attempted in this blog post.

Facts:

In 2009, Pearson Education entered into an agreement with Sanguine Technical Publishers and its three partners, M.R.Kamalakar Pandit, Lal.M.Prasad and Dr.D.Ganesh Rao to co-brand engineering books. The agreement was for a period of 48 months and could be extended to 60 month.
In 2012, Pearson was informed by Mr. Prasad that Dr. Rao had resigned from the partnership firm and that he was no longer interested in having books which he authored or co-authored published under the agreement. Pearson contended that this was in breach of the agreement. Pearson requested Sanguine multiple times to disclose the details of the agreement they had with the authors. However, Sanguine refused to comply. It also came to the knowledge of Pearson that titles listed under their agreement with Sanguine was being published by another publishing house, namely, Reed Elsevier India Private Limited. Books already published by Pearson were also being published subsequently by Elsevier.

Therefore, Pearson filed a petition before the Delhi High Court with the prayer that Sanguine and its partners must be restrained from breaching their agreement with Pearson. They also prayed for the appointment of Local Commissioners( LC's) to conduct an inventory of the books in the agreement which were suspected to have been printed by other publishing houses including Elsevier, stored by Sanguine and its partners and to seize the same. The Court on 12th September, 2012 accordingly appointed three LC's to do the same.
 As a result, Elsevier filed this review petition before the Delhi High Court praying the Court to declare that the 12th September is not binding on them and asking for the desealing of the books seized by the LC's.

Contentions:

Elsevier has contended that they have not published the five titles seized by the LC"s as a servant, assignee, nominee, agent, representative or attorney of Sanguine or its partners. According to them, these titles were published pursuant to their agreement with Fillip Learning which had valid existing contracts with the authors of the titles. Their second contention is based on the fact that the LC's raided the premises of their distributors as well, resulting in great hardship to them in spite of the fact that they are not a party to the agreement with Pearson. Elsevier submits that if Pearson believed that their copyright was being infringed upon by it, then the right way forward for Pearson was to seek civil remedy for infringement of copyright.

Pearson responded by stating that Elsevier's petition suffered from the vice of mala fide as it was filed deliberately in collusion with Sanguine and its partners. They submitted that this application has been filed so that Sanguine and its partners do not have to reply to the main petition and consequently, do not have to divulge information vital to the previous and present petitions. Pearson also submitted that they had discovered that Sanguine and its partners were actively attempting to frustrate the 2009 agreement by entering into discussions with other publishing houses for the publication of titles, the exclusive rights of which are vested with Pearson.

 Moreover, Pearson submitted that the refusal to disclose the contracts between Sanguine, its partners, Elsevier and Fillip Learning indicated that Fillip Learning was owned by Sanguine or its partners. Furthermore, Pearson submits that the fact that their employee who played an active role in negotiating the terms of the 2009 agreement has now been employed  at Elsevier indicates that Sanguine and its partners have conspired to benefit Elsevier. Therefore, according to Pearson, unless there is full disclosure , Elsevier cannot be considered alien to the dispute at hand.

Ruling:

The Delhi High Court has held that Elsevier's application is not maintainable. The Court furnished the following reasons for dismissal of the petition: the review petition of Elsevier has already been rejected by the same court on 9/1/13 and no appeal to the 12th September order has been filed by  Sanguine or its partners,  Elsevier has furnished no documentary evidence to conclusively establish their contractual relationship with Fillip Learning nor have they given any details about Fillip Learning.

It has been established on facts that some of the titles under the 2009 agreement have been published by Elsevier. However, unless there is full disclosure it cannot be established whether Pearson's copyrights have been infringed or not. The Court has asked for Sanguine and its partners to file a reply with an advance copy to Pearson so that they can file a rejoinder. The next hearing is scheduled on 18th March, 2013.

(A copy of  the judgement can be accessed here.)