Wieden + Kennedy, an advertising agency filed a copyright infringement case against Jindal Steel with respect to its commercial/advertisement: ‘Jindal Steel – The Steel of India’. Jindal had earlier engaged Wieden + Kennedy for making a TV Commercial/Digital Commercial to promote Jindal Steel’s product for a service fee of Rs. 1.75 Crore. As per the agreement between the parties, Jindal Steel was supposed to pay the advertising agency 50 percent of the amount on executing the agreement, 25 percent after 2 months, and the rest on completion of the project. Though Jindal Steel did not make the requisite payments, the advertising agency proceeded with its work and shared several work products with Jindal Steel.
To their surprise, however, during the last month of the 4-month contract, Jindal Steel terminated the contract on two grounds:
- Change in the team that had worked on Jindal Steel’s earlier projects; and
- Inadvertent delays in project delivery timelines.
Later, Jindal Steel went ahead and released a commercial, which Wieden + Kennedy claimed was infringing its copyrights. On a prima facie view, the Court found that the montage of sequential images and videos stitched together and some designs provided were used by Jindal Steel. However, the Court did not decide the case of infringement or breach of contract.
As the agreement between the parties had an arbitration clause, the Court stated that the issue was arbitrable. Though the question of copyright infringement was involved, the Court stated that this was a private dispute between the parties, which was arbitrable. As the ad was already launched by Jindal Steel and as the ad agency can be adequately compensated, the Court observed that balance of convenience weighed in favour of Jindal Steel and did not grant an interim injunction. However, it asked Jindal Steel to deposit a sum of Rs. 50 Lakhs plus GST, and stated that Jindal Steel would be injuncted from communicating the commercial to the public if this amount is not paid within 2 weeks.
Relevant Paras
Relevant paragraphs from the Judgment read as follows:
28. It is clarified that observations made above are purely prima facie in nature for the reason that this issue of infringement of copyright will have to be considered by the sole arbitrator.
29. Importantly however, balance of convenience clearly tilts in favour of respondent. The impugned video / campaign having already been launched on 14th March 2024, it may not be in the interest of justice to injunct the respondent at this stage. This Court takes note of facts presented by the respondent (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 advertisement slots have already been booked and contracted in with various 3rd parties and monies have been spent, as per respondent, upon development of ad 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, if it is found ultimately that there was infringement of copyright, not only may the petitioner get their declaration, but also suitable recompense.
31. No irreversible prejudice is 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 balance the equities, the respondent however needs to be put to terms seemingly having taken benefit of material which was supplied by petitioner as 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 amount of Rs. 50 lakhs plus 18% GST which offer was later revoked by the respondent and instead a sum of Rs.25 lakhs was offered, inclusive of GST (this is noted in the email of 24 th February 2024). An invoice had also been sent by the petitioner on 12 th January 2024 which was rejected on 16th February 2024 by the respondent. In these circumstances and in 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 amount shall be kept in form of an interest-bearing FDR initially for a period of one year, to be renewed thereafter, and subject to further directions of the sole arbitrator.
34. Needless to state that in the event the said deposit is not made within 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.
35. The parties consented for a sole arbitrator to be appointed by this Court. Accordingly, Hon’ble Ms. Justice (Retd.) Mukta Gupta, a former Judge of this Court ( Mob: 96507 88600, R/o C-8, LGF, Hauz Khas, Delhi – 110016) is appointed as the sole arbitrator. Fee and expenses of the sole arbitrator shall be fixed by the sole arbitrator, with consent of both the parties. It is made clear that all rights and contentions of the parties are left open for adjudication by the sole 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. The said petition can also be treated as an application under Section 17 of the A&C Act before the sole arbitrator, if the parties so choose to press any relief.”
Source: Wieden+Kennedy India Private Limited v. Jindal Steel And Power Limited, O.M.P.(I) (COMM.) 109/2024, I.A. 8220/2024, I.A. 8221/2024 & I.A. 8222/2024, on 24 April, 2024
Disclaimer
The case note/s in this blog post have been written by IP Attorneys at BananaIP Counsels based on their review and understanding of the Judgments. It may be noted that other IP attorneys and experts in the field may have different opinions about the cases or arrive at different conclusions therefrom. It is advisable to read the Judgments before making any decisions based on the case notes.
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