Territorial copyright exhaustion rejected where resale outside licensed markets was treated as prima facie infringement and injunction justified.

Territorial copyright licensing was treated as preserving the owner's exclusive right to issue copies not already in circulation, so resale and export of low-price editions outside authorised territories was analysed as prima facie infringement when done with notice of the territorial limits. The first sale doctrine was held not to defeat the owner's reserved rights or support an international exhaustion theory that would permit exploitation beyond the licensed market. For interim relief, Delhi jurisdiction was found on the basis that business, online orders, and dispatch occurred there, and the injunction test was satisfied on prima facie case, balance of convenience, and irreparable harm. The observations were confined to the interim stage.

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Issues: (i) Whether the defendants' purchase of low price editions from authorised licensees and their subsequent offer for sale and export to territories outside the authorised territories amounted to prima facie copyright infringement; (ii) Whether the first sale doctrine or exhaustion of rights defeated the plaintiffs' claim; (iii) Whether the court had territorial jurisdiction and whether interim injunction relief was justified.

Issue (i): Whether the defendants' purchase of low price editions from authorised licensees and their subsequent offer for sale and export to territories outside the authorised territories amounted to prima facie copyright infringement.

Analysis: Copyright in literary works was held to include the exclusive right to issue copies to the public not already in circulation, and the owner was entitled to structure distribution through territorial licences. The licencees' rights were limited by the territorial conditions imposed by the copyright owners. Once the defendants, with notice of those restrictions, offered the books for sale and circulated them into unauthorised territories through online sales and shipment, their conduct was treated as a direct violation of the owners' distribution rights and also as a breach of the licence conditions.

Conclusion: Prima facie copyright infringement was made out against the defendants.

Issue (ii): Whether the first sale doctrine or exhaustion of rights defeated the plaintiffs' claim.

Analysis: The doctrine of exhaustion was held, at the highest, to affect the rights of the licencees whose sale had already taken place, but not the broader rights of the copyright owners. The court declined to accept an international exhaustion theory that would allow a purchaser from a territorial licensee to exploit the copies outside the authorised market and thereby neutralise the owner's reserved rights. The doctrine could not be used to defeat the owners' territorial market segmentation and control over circulation beyond the licensed territories.

Conclusion: The first sale doctrine did not defeat the plaintiffs' claim and did not protect the defendants' conduct.

Issue (iii): Whether the court had territorial jurisdiction and whether interim injunction relief was justified.

Analysis: The defendants carried on business in Delhi, the online orders were taken and executed there, and the books were couriered or speed-posted from Delhi, giving rise to a material part of the cause of action within the court's jurisdiction. On the injunction tests, the plaintiffs established a prima facie case, the balance of convenience favoured them, and irreparable harm was likely if the restraining order was not continued.

Conclusion: The court had territorial jurisdiction and the interim injunction was warranted.

Final Conclusion: The injunction in favour of the plaintiffs was confirmed and the defendants' request to vacate it was rejected, but the observations were expressly tentative and confined to the interim stage.

Ratio Decidendi: A purchaser from a territorial copyright licensee cannot invoke the first sale doctrine to exploit the copies beyond the licensed territory so as to defeat the copyright owner's reserved right to control issuance and circulation of copies not already in circulation.

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