The Copyright (Amendment) Act, 2012:
A Landmark in Indian Copyright Legislation
"It is a step in the right direction in protecting the interest of the lyricists, who create wonderful songs,"[1]
Introduction
Prior
to 2012, the Copyright Act, 1957 has been amended five times. Of these, the
amendment of 1994 is perhaps the most significant because it partially dealt
with issues relating to digitisation of copyrighted works.
The
Copyright (Amendment) Act, 2012 (‘the Amendment Act’) is popularly concerned a
boon, due to progressive amendments such as ‘right to royalty’ and exceptions
for persons with disabilities, which received large media coverage. However,
there are also a few regressive amendments which have not received much public
attention. Also, many important issues, particularly those with regard to the
dissemination of copyrighted material over digital networks, have not been sufficiently
addressed by these amendments.
The
Amendment Act received the assent of the President on 7 June, 2012 and was
officially notified, as coming into force as the law of the land, by the
Central Government on 21 June, 2012[2].
Although the Amendment Act sought to make Indian Copyright Law conform to the
World Intellectual Property Organisation (WIPO) Copyright Treaty, or WCT, 1996
and the WIPO Performances and Phonograms Treaty (WPPT), 1996[3] it
has gone far beyond these international treaties.
Commissioned Works and Works under Contract of
Employment
According
to Section 17 of the original Act, the author is the first owner of copyrights
in a work unless such work is commissioned by another person or is created
under a contract of service or employment, in which cases the employer or the
person commissioning the work is the owner. A new proviso has been added to the
section providing that the logic or notion of commissioned work or work created
under employment does not accord ownership to the employer where such work is
incorporated in a cinematograph film[4].
Therefore,
a production house will not own the copyrights created by its employees during
the course of their employment. Interestingly, this provision does not apply to
works incorporated in a ‘sound recording’ and therefore, a record label can
still own the works created by its employees or commissioned authors.
Assignment of Copyrights and Right to Royalties
Under
section 18 of the original Copyright Act, author of a literary, artistic or
musical work could assign the copyright to the producers for incorporation in a
film. Such assignment could broadly be for both current and future modes of
exploitation. The amendment has added three new provisos to Section 18[5]:
Firstly, an
assignment made under this section is not applicable to any medium or mode of
exploitation that is not in existence at the time of the assignment unless
specifically mentioned in the assignment agreement.
Secondly,
the author of a literary or musical work incorporated in a cinematograph film
cannot assign or wave his right to receive ‘equal share of royalties’ from the
‘assignee’ for utilisation of such work in any form other than communication to
the public in a cinema hall. The only exceptions are copyright societies and
legal heirs to whom an author may assign the right. Therefore, producers should
now share the non theatrical exploitation royalties equally with the script
writers, lyricists and composers. The proviso clarifies that any amendment to
the contrary would be void;
Prior
to the amendment the authors did not have the right to receive any royalty for
exploitation of the works. Where such right existed, it could be transferred or
waived.
Thirdly,
the author of a literary or musical work incorporated in a sound recording
shall not assign or waive his right to receive equal share of royalties from
the ‘assignee’ for utilisation of such work in any form. The permitted
exceptions are copyright societies and legal heirs to whom an author may assign
the right.
The
introduction of the above provision would make it necessary to specify in
agreements of assignment that such assignment will apply in relation to a mode
‘whether in commercial use or not’. Further, the agreements will have to be
carefully drafted taking into account possible technological advances since the
amendment to section 18 also disallows the assignment of copyright in a manner
which would allow the assignee to exploit the copyright assigned to it via
unspecified ‘future technologies’ i.e. any medium or mode of exploitation of a
work which did not exist or was not in commercial use when the assignment was
signed.
It is not clear
whether this proviso would also apply retrospectively, i.e. to the agreements
of assignments entered prior to the Amendment. Although it is very unlikely
that the amendment is to be interpreted so as to
have retrospective application, as such provision would have the effect of
rendering all agreements entered into in the past void, which would create
havoc in the entertainment industry. However, f it is held that it does
so apply, then all earlier assignments will have a limited application and if
the intention of parties was to grant complete assignments, the parties would
have to consider entering into amendment agreements.
Though,
this amendment comes with a noble intention of granting royalty rights to the
authors, the language of the amendment is so ambiguous that it does more harm
than good. The words ‘equal share of royalty from exploitation of works’ has a large
scope of interpretation. The amendments do not specify how the amount of
royalty share is to be computed. There is no possible way to determine the
share of royalty accrued from the lyrics of one song, in an entire film. If it
is to be computed on the basis of ratio of length of the song to length of a
movie then all the songs together could entitle the music director and other
authors to 8-10% of revenue of a movie which can run into several crores. Computing
the share of royalty is even more difficult in case of smaller projects such as
telefilms, television serials, programs, music album videos, etc., which also
qualify as cinematograph films.
Furthermore, the language of the provisos is
far-reaching, to include ‘utilization (of the work)... in any form’. The
royalty sharing principle includes any form of exploitation of the full film
other than theatrical exploitation such as those accrued from DVDs sales,
satellite broadcast, airing of the films
on television or pay per view. The copyright of the Producers of cinematograph
films has been drastically undermined by these new provisions.
On
the hand, in view of the new provisions the producers will not be willing to
pay large up-front payments to composers. Also, if the film does not become a
success, the composer will have worked for almost free. This increases the
pressure on lyricists or composers to create songs which have a huge commercial
following. Even artists who would want a single-shot payment will not given
this option by record companies, as the companies would throw up their hands
and say such payment would be illegal under the amendment.
Also,
it is not appropriate to apply the western system of revenue sharing to Indian
cinema. Unlike Hollywood, in the Indian films, the work of lyricist or composer
is based on the plot, storyline, the lead actors of the film, the situation in
the film during which the song is to be played, etc. The director and producer
have considerable inputs on the final outcome of the songs.
Further,
the agreements cannot run contrary to the rules of any copyright society of
which the author forms part of. However, the Amendment Act does not specify if
this include only the Indian copyright society or also the international copyright
societies.
[1] Sushma Swaraj, as
reported by Prakash Belawadi, Producers face the music, Bangalore Mirror (May 25, 2012)
[3] Zakir
Thomas, Overview of Changes to the Indian Copyright Law, Journal of
Intellectual Property Rights, Vol 17, July 2012, pp 324
[4] Amendment
No. 7 of the
Copyright (Amendment) Act, 2012- “In
section 17 of the principal Act, in clause (e), the following proviso shall be
inserted at the end, namely:
Provided
that in case of any work incorporated in a cinematograph work, nothing
contained in clauses (b) and (c) shall affect the right of the author in the
work referred to in clause (a) of sub-section (1) of section 13;”
[5] Amendment No. 8 of the Amendment Act – ‘8. In section 18 of the principal Act, in
sub-section (1), after the proviso, the following provisos shall be inserted,
namely:
"Provided further that no such assignment shall
be applied to any medium or mode of exploitation of the work which did not
exist or was not in commercial use at the time when the assignment was made,
unless the assignment specifically referred to such medium or mode of
exploitation of the work:
Provided also that the author of the literary or
musical work included in a cinematograph film shall not assign or waive the
right to receive royalties to be shared on an equal basis with the assignee of
copyright for the utilization of such work in any form other than for the communication
to the public of the work along with the cinematograph film in a cinema hall,
except to the legal heirs of the authors or to a copy right society for
collection and distribution and any agreement to contrary shall be void:
Provided also that the author of the literary or
musical work included in the sound recording but not forming part of any
cinematograph film shall not assign or waive the right to receive royalties to
be shared on an equal basis with the assignee of copyright for any utilization
of such work except to the legal heirs of the authors or to a collecting
society for collection and distribution and any assignment to the contrary
shall be void.”’
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