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Saregama drags Eros Digital to court for alleged copyright infringement & non-payment of dues

Saregama India Limited (Saregama) has filed a case of copyright infringement against Eros Digital for non-payment of dues, as per a Content License Agreement signed by the companies dated 13th July, 2015. This was first reported by Bar&Bench. Saregama wants an ad-interim injunction till such time that the case is live, which has been contested by Eros Digital.

The agreement was for a period of 24 months from the date of signing, and it allowed Eros Digital to showcase the licensed content on the SVOD platform Eros Now. As per the agreement, Eros had to pay Saregama a ‘minimum guarantee’ amount of Rs 9.5 crore, as well as a streaming fee of Rs 0.14 per stream, in case Eros’ usage exceeded the ‘minimum guarantee’ amount.

According to Saregama, Eros Digital still owes it Rs 6.12 crore plus interest and penal interest. The company also mentions that:

It is further pleaded that defendants (Eros Digital) are in the process of selling their business to third parties. Since the defendants are based outside India, grave hardship and significant damage would be caused to the plaintiff (Saregama) if immediate steps to restrain them from selling the business were not taken.

Note that Eros Digital confirmed to the court that it has taken down the content licensed from Saregama from the Eros Now platform.

Highlights from Delhi HC’s judgment

  • According to the Delhi HC, the dispute here is “purely contractual and there is no infringement of any copyright after the expiry of the License Agreement on 12.07.2017 by e-mail dated 25.07.2017.”
  • More importantly, as per the agreement this matter comes under the jurisdiction of the courts in Kolkata.

Clause 29 of the License Agreement reads as under: “This Agreement shall be governed by and interpreted in accordance with the Laws of India and in case of any matter or dispute arising here from, the High Court of Calcutta, India alone shall have jurisdiction.”

  • Plus, invoices for the installments paid by Eros Digital were raised in Kolkata and the payments were credited to a bank account in Kolkata. Hence, the court asked Saregama to approach Calcutta High Court, as it has no territorial jurisdiction in the matter.

Read the full copy of the judgment here.

Eros International’s class-action lawsuit

Just last month, the class-action lawsuit brought against Eros International in the US, by investors who alleged that the company had misled them regarding the potential of its movie streaming service Eros Now, was dismissed by the United States District Court for the Southern District of New York. The court was of the view that Eros had been adequately upfront about the prospect of Eros Now, plus the difference between projections stated by the company and the actual result was minor, and definitely didn’t amount to securities fraud.

The lawsuit had been filed in November 2015 and alleged that between November 13, 2013 and November 12, 2015 Eros made misleading statements about the growth in Eros Now’s registered users without disclosing that most of them were using low-quality Internet connections that weren’t fit for streaming, and failed to disclose that Eros enriched its controlling family at the expense of shareholders through a series of related-party transactions.

As of August 2017, Eros Now claims to have a paid subscriber count of 2.9 million, i.e., 4.84% of Eros Now’s 60 million users are paying subscribers.

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