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, if 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.

Javed Akhtar giving a speech in Parliament on the
requirement of  amendments to the Copyright Act 1957

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.

Provisions for Persons with Disabilities

The amended section 52(1)(zb) allows any person to facilitate access by persons with disabilities to copyrighted works without any payment of compensation to the copyright holder, and any organization working the benefit of persons with disabilities to do so as long as it is done on a non-profit basis and with reasonable steps being taken to prevent entry of reproductions of the copyrighted work into the mainstream. Earlier s.52(1)(zb) dealt only with formats that were “special designed only for the use of persons suffering from visual, aural, or other disabilities”. Due to the amendment it now covers “any accessible format”. Even for-profit businesses are allowed to do so if they obtain a compulsory licence on a work-by-work basis, and pay the royalties fixed by the Copyright Board.

This exception is a progressive one which very few countries have till date adopted and the Indian legislatures must be commended for incorporating the same.

Digital Rights Management (DRM)

Prior to the amendment the United States had shown its eagerness for a change in India’s copyright laws in order to match the U.S. copyright laws. This is evident from the Special 301 report of U.S. in the year 2009 wherein it stated; “The United States encourages India to enact legislation in the near term to strengthen its copyright laws and implement the provisions of the WIPO Internet Treaties.”[6] 

DRM includes measures that amount to a 'digital lockup' of content and networks by right-holders/service providers. The most commonly deployed measures include encryption, metadata, watermarking or fingerprinting.[7] They can be used to simply restrict access or even to protect copyrighted material.

The reason for implementation of anti-circumvention laws may not only be because of pressure from other countries. According to a BSA-IDC Global Software Piracy Study, in 2008 global software manufacturers lost an estimated $2.76 billion to software piracy in India[8]. In 2009 the Indian government suffered revenue losses of $866 million in 2009 due to the high rate of illegal software trade in the country[9]. The Indian film, entertainment and media industry has also been hit heavily due the increasing rate of piracy.

Section 65A(1)[10] seeks to make circumvention of “effective technological measure” on copyrighted material a criminal offence, with imprisonment for a maximum period of two years. The word “effective” is rather vague and can also be interpreted to mean that circumvention of technological measures which are easy to circumvent. Based on the usual doctrines applied in intellectual property laws, the courts may adopt an interpretation along the lines of; if a common man who has no special skills which enable her/him to circumvent such technological measures, manages to do so, then such technological protection measures cannot be said to fall within the purview of “effective technological measures”. In modern times, professional hackers and crackers are generally youngsters with no special training, so determining whether a person has ‘special skills’ or not may sometimes become difficult to prove.

Section 65A (2), however, provides various exceptions, enumerating permissible acts of circumvention. These exceptions include:-

·        doing anything necessary to conduct encryption research using a lawfully obtained encrypted copy; or

·        conducting any lawful investigation; or

·        doing anything necessary for the purpose of testing the security of a computer system or a computer network with the authorization of its owner or operator; or

·        doing anything necessary to circumvent technological measures intended for identification or surveillance of a user; or

·        taking measures necessary in the interest of national security[11].

When compared to the anti-circumvention provision in the U.S. Digital Millennium Copyright Act (DMCA), section 65 (A) seems to be more consumer friendly and far more balanced. However, this provision does not disallow certain DRM systems which prohibit the common man from exercising any of the fair use exceptions. It only gives the common man the legal right to circumvent in case of such exceptions. Therefore, the dilemma of the legality of DRM systems restricting fair use still remains. It was for this reason that Yahoo India had suggested deletion of Section 65A.[12] The Indian Broadcasting Federation (IBF) had recommended an increase in the imprisonment term from 2 years to 3 years for first offence, 5 years for second offence and all offences to be treated as cognizable and non-bailable was the first suggestion made[13]. It was also recommended by IBF that any person found circumventing the technology should be deemed to have circumvented it with the intention to infringe copyright. This way the burden of proof would fall on the circumventer. Also, copyright owner should be entitled to seek damages from the offender. Google India suggested that illegal circumvention be only a civil offence and not a criminal offence[14].  MediaNama also advocated deletion of this section, as consumers buy the right to listen to music, this right cannot be restricted to particular devices or a medium.

The newly added section 65B provides for protection of Rights Management Information (RMI)[15]. The purpose of section 65B is to make the Indian copyright laws in compliance with the WIPO Copyright Treaty (WCT), article 12 of the treaty in particular[16]. The Amendment Act even defines RMI at Section 2(xa).[17]

The Standing Committee, after taking these suggestions under consideration concluded that it would be better to give only limited legislative guidelines for anti-circumvention and allow the judiciary to evolve the law based on practical situations[18].

It is also worth noting that the Amendment Act does not list the type or class of goods or services for which circumvention applies. This may lead to an overlap with the ‘right to information’ or ‘freedom of speech’ or other laws calling for accountability.

Limited Protection to Some Internet Intermediaries

The amendments to section 52, which provide some level of protection to 'transient or incidental' storage of a work or performance either purely in the technical process of electronic transmission or communication to the public, or for the purpose of providing electronic links, where such link has not been expressly prohibited by the right holder, unless the person responsible is aware or has reasonable grounds for believing that such storage is of an infringing copy. This provision would protect search engines which provide hyperlinks to other websites.

Procedures Simplified

The amendment to section 21 of the Copyright Act, which deals with the right of authors to relinquish copyright, allows the author to relinquish the copyright by a simple public notice. Earlier, the author relinquish parts of one’s copyright by submitting a form to the Registrar of Copyrights Additionally, s.30 of the Act, which required licences to be in writing and signed, now only requires it to be in writing. This puts Creative Commons, the GNU Public Licence, and other open licensing models, on a much surer footing in India.

The newly added section 31D will also has also simplified the procedure for obtaining statutory licenses for public broadcasting.

Protection of Moral Rights

The newly added section 38B safeguards moral rights of the performer of a performance even

after assignment. The performer is entitled to claim identification as the performer of the performance.  The performer can also restrain or claim damages in respect of any distortion, mutilation or other modification of the performance that “would be prejudicial to his reputation”. To protect ‘fair use’, the explanation to the provision clarifies that mere removal of any portion of a performance for the purpose of editing, or to fit the recording within a limited duration, or any other modification required for purely technical reasons shall not be deemed to be prejudicial to the performer’s reputation[19].

Conclusion

The Copyright (Amendment) Act, 2012 has added some provisions to Indian Copyright Law which have not yet been incorporated in several developed countries. It is a boon to authors of copyrights as well as users of the copyright. The clarifications on what amounts to infringement have relieved those, who have always advocated ‘fair use’, but feared allegations of infringement.

However, the issue of ‘parallel imports’, which is discussed in detail has not been addressed by the Amendment Act at all. Provisions of parallel imports can be found in Section 107A (b)[20] of the Indian Patent Act, 1970 and Section 30(3)[21] of the Trademarks Act, 1999.

Also, Other than the disability rights groups, which had campaigned very hard for the amendment to section 52(1)(zb), the Parliamentary Standing Committee did not invite any non-industrial groups for deposition before it. It is perhaps for this reason that the amendments do not focus on rights of small-time lyricists, writers or composers. The Standing Committee should have deposed persons from all the relevant groups. Provisions affecting the rights of libraries were passed without even calling a single person running a library or working in one.

Section 65A relating to DRM should be amended so as to replace or delete or explain the word “effective”. There is indeed a need for laws which restrict the adoption and use of DRM systems on certain classes of copyrighted material. However, it should also provide that it be compulsory for the manufacturers who are using DRM to make freely available their contact information, in case any user wishes to seek permission to break the DRM system for legal use.

 How the authors, copyright society and, ultimately, the Courts will compute ‘equal share of royalty from exploitation of works’ for different types of works is yet to be seen. A large amount of litigation may crop up on this issue itself.

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[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 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.”’

[6] Office of the United States Trade Representative 2009 Special 301 Report , April 30, 2009

[7] Herman, B.D., 'Breaking and Entering My Own Computer: The Contest of Copyright Metaphors', (2008) Communication Law and Policy 13(2) 231-274, p231

[8] The Economic Times, ‘Software piracy in India down by a notch; losses up at $2.7 bn’, New Delhi, May 12, 2009

[9] The Hindu, ‘Software piracy caused $866-m tax loss in 2009: Study’ Pune, June 4, 2012

[10]Section 65A (1) “Any person who circumvents an effective technological measure applied for the purpose of protecting any of the rights conferred by this Act, with the intention of infringing such rights, shall be punishable with imprisonment which may extend to two years and shall also be liable to fine.”

[11] Section 65A (2), the Amendment Act

[12] Department-Related Parliamentary Standing  Committee On Human Resource Development,  Two Hundred Twenty-Seventh Report  On  The Copyright (Amendment) Bill, 2010, presented to the Rajya Sabha On 23^rd November, 2010, laid On The Table Of Lok Sabha On 23^rd November, 2010, 20.4

[13] Ibid.,  20.3

[14] Ibid.

[15] Section 65B of the Amendment Act “Protection of Rights Management Information Any person, who knowingly

(i) removes or alters any rights management information without authority, or

(ii) distributes, imports for distribution, broadcasts or communicates to the public , without authority , copies of any work, or performance knowing that electronic rights management information has been removed or altered without authority, shall be punishable with imprisonment which may extend to two years and shall also be liable to fine;…”

[16] Article 12 of WCT: Obligations concerning Rights Management Information: (1) Contracting Parties shall provide adequate and effective legal remedies against any person knowingly performing any of the following acts knowing, or with respect to civil remedies having reasonable grounds to know, that it will induce, enable, facilitate or conceal an infringement of any right covered by this Treaty or the Berne Convention:

(i) to remove or alter any electronic rights management information without authority;

(ii) to distribute, import for distribution, broadcast or communicate to the public, without authority, works or copies of works knowing that electronic rights management information has been removed or altered without authority.

(2) As used in this Article, “rights management information” means information which identifies the work, the author of the work, the owner of any right in the work, or information about the terms and conditions of use of the work, and any numbers or codes that represent such information, when any of these items of information is attached to a copy of a work or appears in connection with the communication of a work to the public.

[17] Sec 2 (xa) of the Copyright Amendment Act, 2012-  “Rights Management Information”, means‐ the title or other information identifying the work or performance; (ii) the name of the author or performer; (iii) the name and address of the owner of rights; (iv) terms and conditions regarding the use of rights; and (v) any number or code that represents the above information; but does not include any device or procedure intended to identify the user.

[18] Ibid.

[19] Section 38B of the Amendment Act

[20] Section 107 A of the Indian Patent Act, 1970 – “Certain acts not to be considered as infringement

[Certain acts not to be considered as infringement. For the purposes of this Act,—

(a) any art of making, constructing, [using, selling or importing] a patented invention solely for uses reasonably relating to the development and submission of information required under any law for the time being in force, in India, or in a country other than India, that regulates the manufacture, construction, [use, sale or import] of any product;

(b) importation of patented products by any person from a person [who is duly authorised under the law to produce and sell or distribute the product], shall not be considered as an infringement of patent rights.]”

[21] Section 30(3) of Trademarks Act, 1999- “Where the goods bearing a registered trade mark are lawfully acquired by a person, the sale of the goods in the market or otherwise dealing in those goods by that person or by a person claiming under or through him is not infringement of a trade by reason only of—

(a) the registered trade mark having been assigned by the registered proprietor to some other person, after the acquisition of those goods; or

(b) the goods having been put on the market under the registered trade mark by the proprietor or with his consent.”