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)
[2] Gazette of India, Extraordinary, Part-II, Section-1, dated the 8th June, 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 theCopyright (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.”’
