Copyright Law in Indian Film Music: Ownership and Control of Music Rights, Summaries of Law of Torts

Download Copyright Law in Indian Film Music: Ownership and Control of Music Rights and more Summaries Law of Torts in PDF only on Docsity! THE BACKGROUND SCORE TO THE COPYRIGHT (AMENDMENT) ACT, 2012 Prashant Reddy T. The Copyright (Amendment) Act, 2012 stands to correct the legislative im- balance of rights assigned to composers and lyricists and is a path-breaking remedy for the copyright regime in India. The build-up to the amendment demonstrates the undying efforts of the otherwise passive composers and byricists. In order to understand the context of the amendment and the man- ner in which these new provisions are likely to be interpreted by courts, the paper attempts to appreciate Mr.Javed Akhtar’s contribution to the move- ment and describes the long, contentious history between authors and mu- sic labels and the nature of their conflict. The panacea was sought in the form of a legislative amendment addressing the concerns of the composers and lyricists for the purpose of protecting their rights. These include pro- tecting the composers and lyricist from unfair contracts through a statu- tory right to remuneration, protection from the assignment of copyrights in future technologies by the authors and a change in the manner in which copyright societies were administered, as they were primarily controlled by the music labels. However, the extent to which the amendments will succeed in achieving its objectives would largely depend upon the collective efforts of the authors and the judiciary alike. * Prashant Reddy T., B.A.LLB (Hons.), National Law School of India University, Bangalore; Masters of Law (Law, Science & Technology) Candidate 2013, Stanford Law School. Most of the primary sources used in his articlewere secured by filing applications with the Copyright Office under the Right to Information Act, 2005 during my time as a Research Associate to Prof. Shamnad Basheer, the Chair Professor for IP Laws at the WB National University of Juridical Sciences, Kolkata (NUJS). The original intent of the RTI applications was to scrutinize some of the regulatory filings of copyright societies but due to either an act of com- mission or omission, I was given partial copies of an investigation being conducted by the Registrar of Copyrights into the affairs of copyright societies. This article would never have been completed without the gracious assistance of several people. In particular, I am indebted to Prof. Basheer, for convincing the Copyright Office that the RTI Act was not a figment of my imagination and urging them to respond to my initial RTI applications. I am also grateful to Mr. Manab Ghosh at NUJS, who took care of all the logistical work involved in filing the RTIs, collating the responses and scanning them into a digital format for wider public dis- semination on Spicy IP. Without Manab da, I would have probably never even found the post offices in Kolkata. I would also like to thank Dr. Silke Von Lewinski, Achille Forler, Ananth Padmanabhan (Advocate, Madras High Court) and the readers of Spicy IP for their comments and pointers on earlier versions of this article which were published on Spicy IP. Last but not the least I would like to thank the Editors of the NUJS Law Review, especially Ms. Aparajita Lath, for all their editorial assistance. It goes without saying that all mistakes, if any, remain mine. Disclosure: During the course of this paper I was professionally consulted by a music publisher on the history of Indian copyright societies. 470 NUJS LAW REVIEW 5 NUJS L. Rev. 469 (2012) I. INTRODUCTION On August 24, 2012, the Parliament of India hosted a rare event - a ‘shukrana’ or a concert of gratitude, by some of the most famous musicians and lyricists, who had lobbied with the Parliament for the enactment of the Copyright (Amendment) Act, 2012 (‘Copyright Amendment’).’ Unlike previ- ous amendments to the Indian Copyright Act, which was originally enacted in 1957, the debate over the amendments in 2012, was public and vocal, leading to several divisions within Bollywood.’ For the first time in the history of Indian copyright law, musicians and lyricists (‘authors’) headed by the noted poet & lyricist, Javed Akhtar, shed their passive silence on the subject of copyright law and lobbied with the Parliament to amend the law in their favour.* Much of the debate played out like a conventional Bollywood movie, where the ‘small guys’ would take on the might of a massive industry with deep pockets and end up winning hands down. In this case, the battle was one wherein a handful of musicians and lyricists took on the combined might of the biggest music labels in India and concluded it with a victory.* At one point of time, the producers of Bollywood cinema and music labels felt so threatened by the amendments that they almost hit the streets in protest —a first for the de- bate on copyright law in India.* Despite this stiff opposition from film produc- ers and music labels, our Parliament which otherwise agreed on precious little, unanimously enacted the Copyright Amendment to bring about revolutionary 1 Gargi Parsai, Music Industry's Shukrana for MPs, Tas Hinpu (New Delhi) August 24, 2012, available at http:/‘www.thehindu.com/news/national/article3813111.ece (Last visited on December 18, 2012) 2 Subhash K Jha, Stop Interfering, Aamir: Javed Akhtar, Tae Times oF bypia Feb 16, 2010, avail- able at http://articles.timesofindia.indiatimes.com/2010-02-16/news-interviews/28118553_1_ javed-akhtar-aamir-khan-javed-saab (Last visited on December 18, 2012). 3 IBN Live, Lata Mangeshkar Joins Javed Akhtar’s Fight for the Copyright Bill, May 21, 2012, available at _http:/ibnlive.in.com/news/lata-mangeshkar-joins-javed-akhtars-fight-for-the- copyright-bill/260010-8-66.html (Last visited on December 18, 2012). ‘Vickey Lalwani, Industry Divided on Copyright Amendment, Tite. Times oF Ixpia (Mumbai) May 20, 2012, available at http://articles.timesofindia. indiatimes.com/2012-05-20/news-and- interviews/31779033_1_javed-akhtar-lyricists-amendment (Last visited on December 18, 2012), See also Bollywood Life, Javed Akhtar Wins the Fight for Copyright Amendment Bill, May 18, 2012, available at http://www. bollywoodlife.com/news-gossip/javed-akhtar-wins- the-fight-for-copyright-amendment-bill/ (Last visited on December 18, 2012) 5 Filmdom up in Arms against Copyright Act Bill, Tw Times oF Iyp1a (Hyderabad) June 10, 2012, available at_http://articles.timesofindia.indiatimes.com/2012-06-10/hyderabad/32155355_1_ film-industry-royalty-trade-bodies (Last visited on December 18, 2012), See also Shabana Ansari, Copyright Act: Filmmakers Decide to Take Protest Ahead ,DNA (Mumbai) December 25, 2010, available at http:/www.dnaindia.com/mumbai/rep ort_copyright-act-filmmakers- decide-to-take-protest-ahead_1485842 (Last visited on December 18, 2012) October - December, 2012 RIGHTS OF LYRICISTS AND COMPOSERS 473 musical work is deemed to be the ‘author’ of the musical work and the person penning the lyrics in deemed to be the ‘author’ of the literary work." The third ‘work’ is ‘sound recording’ which is created when the musical work and the literary work are recorded onto a fixed medium such as a CD ora cassette in a recording studio.!5 The producer responsible for the re- cording is deemed to be the ‘author’ of the sound recording.!° Therefore, a simple CD will have at least three different copy- rights — one belonging to the composer of the musical work, one belonging to the author of the lyrics and another belonging to the producer of the sound- recording. While authorship of a work can never change, the ownership of any of these copyrights can change depending on the contractual obligations of the authors. This has been further discussed in detail in the paper. In the case of film music, the composer, lyricist and producer of the soundtrack may license to the producer of the cinematograph film, only the rights to synchronize their works with the cinematograph film. They may retain the right to exploit their works in other forms such as ringtones for mo- bile phones and public performances in hotels and restaurants. § 13() of the Copyright Act recognizes the fact that a ‘sound-recording’ incorporated in a cinematograph film can continue to have an individual copyright, separate and distinct from the copyright in the cinematograph film.” Similarly, this pro- vision also recognizes that a musical work and literary work incorporated in a ‘sound-recording’ can have individual copyrights that are distinct from the copyright in the sound recording. This would mean that the law recognizes each category of works as a separate property right that is protected by itself doing of any of the following acts in respect of a work or any substantial part thereof, namely:~ @ in the case of literary, dramatic or musical work, not being a computer programme, - (D to reproduce the work in any material form including the storing of it in any medium by electronic means; (ii) to issue copies of the work to the public not being copies already in circulation; (iii) to perform the work in public, or communicate it to the public; (iv) to make any cinematograph film or sound recording in respect of the work; @) to make any translation of the work: (vi) to make any adaptation of the work: (Vii) to do, in relation to a translation or an adaptation of the work, any of the acts specified in relation to the work in sub-clauses (i) to (vi). 4 ‘The Copyright Act, 1957, § 2G) & (ii): “author” means (j) inrelation toa literary or dramatic work, the author of the work; (ii) in relation to a musical work, the composer. ‘The Copyright Act, 1957, § 2(xx): “sound recording” means a recording of sounds from which such sounds may be produced regardless of the medium on which such recording is made or the method by which the sounds are produced. ‘The Copyright Act, 1957, § 2(d) (¥): “author” means (v) in relation to a cinematographer sound recording the producer. "The Copyright Act, 1957, § 13(4): The copyright in a cinematograph film or a [sound record- ing] shall not affect the separate copyright in any work in respect of which or a substantial part of which, the film, or as the case may be, the [sound recording] is made. ™ Id October - December, 2012 414 NUJS LAW REVIEW 5 NUJS L. Rev. 469 (2012) despite being incorporated into another work. Thus, the composer of a musical work or the author of a literary work can continue to maintain copyright in their works despite licensing the same to the producer for the creation of a ‘sound- recording’. The same stands true for a ‘sound recording’ that is incorporated into a cinematograph film. In the case of Bollywood, the producer of the cinematograph film usually owns the copyright in the ‘sound-recording’. Unless, these film pro- ducers have the capacity to market their ‘sound-recordings’ (CDs, ringtones etc.), the normal industry practice is to licence or assign the copyrights in these ‘sound-recordings’ to music labels such as Saregama, T-Series (Super Cassettes Industries Ltd.), Tips ete. An illustrative example of ownership of the copyright in different works in a typical Bollywood soundtrack is as follows: In Om Shanti Om (the ‘super hit’ movie released in 2007), the music was composed by the composer duo, Vishal-Shekhar, lyrics were authored by Javed Akhtar and the producers of the sound recording were Shah Rukh Khan & Gauri Khan, both of whom were also the producers of the movie.!° The music label responsible for publish- ing and marketing the music was T-Series. As explained earlier, the concept of authorship is distinct from ownership and in this particular case, T-Series owned the copyrights in the music, lyrics and the sound recording.” In India, composers and lyricists often assign away their entire copyright to the producer of a movie for a one time lump-sum payment.” According to some insider accounts from the music industry, in the seventies, there were several composers and lyricists who entered into royalty sharing agreements with producers because producers often lacked the finances to pur- chase the entire copyright in the music. For the last few decades however, it is rare for a composer or lyricist to assigns his copyright to a producer, subject to aroyalty sharing arrangement. For instance, the Oscar winning A.R.Rahaman, who composed the music for Slumdog Millionaire, is one such author who has the market power to claim a share of royalties, but even Rahaman was unable to take on the biggest labels in the music industry such as T-Series.?? It was reported that Rahaman was the original choice for composing the music used 1° See Musiconnect, Om Shanti Om, available at http://www.musiconnet.com/mreview/om_ shanti_om_music php (Last visited on December 28, 2012). One India Entertainment, Z-Series owns Om Shanti Om Music Rights, July 27, 2007, available at _http://entertainment.oneindia. in/music/indian/2007/om-shanti-om-t-series-270707.html (Last visited on December 18, 2012) 4 See A Different Tine, Frontuine June 30- July 13, 2012, available at http://www frontline.in/ static /html/£12913/stories/20120713291310000.htm (Last visited on May, 25 2013). = Reuters, A.R. Rahman Wins Oscar for “Slumdog”, February 23, 2009, available at http:// in.reuters.com/article/2009/02/23/idI NIndia-38155020090223 (Last visited on December 18, 2012) October - December, 2012 RIGHTS OF LYRICISTS AND COMPOSERS 475 in Om Shanti Om but that he had to drop out because T-Series refused to enter into a royalty sharing agreement with him.” One possible reason why Indian composers and lyricists have weaker bargaining power compared to their counterparts in developed coun- tries, such as the U.S. and U.K., is the absence of the institution of ‘music publishers’. The term broadly refers to agents specializing in representing composers and lyricists in marketing and valuing their music, in negotiating licensing deals with third parties and ensuring royalty collections from copy- right societies.** The western model of ‘music publishers’ works to the relative advantage of the lyricists and composers as the revenue of publishers bears a strong nexus with those earned by composers and lyricists, thereby giving the former an incentive to aggressively protect the interests of the latter and act as a shield against predatory music labels.** The lack of such an institution in India may have contributed to the weak bargaining powers of Indian composers and authors. With this basic understanding of the Indian music industry, the paper shall move to the history of the amendments in the next part, starting with Mr. Akhtar’s role in the same. III. THE ROLE OF AKHTAR IN LOBBYING FOR THE COPYRIGHT (AMENDMENT) ACT, 2012 It is impossible to narrate the history of the Copyright (Amendment) Act, 2012 without referring to the key role played by Javed Akhtar, one of India’s most noted, award winning lyricist/poet and public in- tellectuals.*° As mentioned earlier, Mr. Akhtar was for all purposes, the face and the voice of the lobbying effort for greater protection of the rights of com- posers and lyricists.” His efforts caused much turmoil in the music industry and at one point, several powerful lobbies in the movie industry, especially Subhash K Jha, Rahman, Fights for Copyright of his Music, Tite Times oF Iypia (Lucknow) October 12, 2006, available at http:/timesofindia.indiatimes.com/articleshow/2161297.cms (Last visited on December 18, 2012). See Music Publishers Association, Frequently Asked Questions, available at http://www. mpaonline.org.uk/FAQ (Last visited on December 18, 2012)(The term is wrongly associated with music labels in India. Please note that later in the paper, the term ‘music publisher’ when used in the context of the governing rules of IPRS, has a different meaning which will be explained later in the paper) ‘See generally Tim BaskeRviLie & Davin BaskERVILLE, Music Business HANDBOOK AND CAREER Gume (2009). % See IMDb, Javed Akhtar, available at http:/Avww.imdb.com/name/nm0015287/ (Last Visited on December 30, 2012) (Provides for more information about Javed Akhtar’s works). ‘See Good that Copyright Bill Being Taken Up in Parliament: Akhtar, Tee Ixpian Express May 14, 2012, available at http://www. indianexpress, com/news/good-that-copyright-bill-be- ing-taken-up-in-parliament-akhtar/949268/ (Last visited on December 18, 2012)( “I am very happy that the copyright bill has been presented in the Parliament and I just hope that it passes. T have been fighting for it for two years. People in Parliament recognise the bill as Javed Akhtar’s bill now”), October - December, 2012 478 NUJS LAW REVIEW 5 NUJS L. Rev. 469 (2012) before the High Court of Delhi. The case in question was that of Javed Akhtar v. Magic Mantra Vision,” where Mr.Akhtar unsuccessfully sued a production house which had used his lyrics in the music of a cinematographic film called Pyar Ki Dhun (which it had produced) for copyright infringement. Mr.Akhtar did not dispute the fact that he had written and assigned to the defendants, only the synchronization rights to the lyrics for seven of the songs in the mov- ie.3® However, he claimed that he had retained copyright over all the remaining rights apart from the synchronization rights ie., the rights to make and sell the music in the form of cassettes or tapes.*° According to Mr. Akhtar, the rea- son that he was suing the production house was because they had, without his authorization, assigned to Saregama (a music label), even those rights which Mr. Akhtar had allegedly not licensed to the production house. The defendants, however, produced a ‘letter’ to the Court which was from Mr. Akhtar, wherein he had assigned to them all the rights in the lyrics, including the publishing rights and not just the synchronization rights as alleged by Mr. Akhtar in his initial plaint.*° When confronted with what app eared to be irrefutable evidence, Mr.Akhtar reportedly responded stating that while it was his signature that was affixed on the ‘letter’, he “had no idea that he was being made to sign an agreement, giving away or assigning or transferring his rights”.*! Ultimately, Mr.Akhtar withdrew the lawsuit and the Court imposed a fine of Rs. 1 lakh (Rs. 1,00,000) on him for causing ‘hardship’ to the defendant.*” This particular case is a typical example of a transaction between a ‘legally illiterate’ composer or lyricist and the ‘legally savvy’ production house. Most artists, including the popular ones like Mr.Akhtar, had no idea about the copyright contracts they were entering into with producers, and un- fortunately they never seemed to have employed anybody to advise them on the same. While Mr.Akhtar almost never references this case in his interviews, it appears to have substantially impacted the design of the copyright amendments passed in 2012 and in a way, goes way beyond the issue of the composer and lyricists losing control of IPRS. IV. AKTHAR’S MAIN DILEMMA WITH THE PRE-2012 COPYRIGHT LAW Briefly put, Akhtar had four main problems with the copyright law as practiced and interpreted in India. Firstly, there was the problem of ownership of copyrights in film music, especially the concept of first own- ership which was also known as the work-hire doctrine. Secondly, the weak 37 CS (OS) NO. 1743/2005 (Delhi H.C), August 21, 2006, (Unreported), * 1d.,46. » 1d,93 © Id,44. “ Id,45. © Id,47. October - December, 2012 RIGHTS OF LYRICISTS AND COMPOSERS 479 negotiating power of composers and lyricists was also problematic. Thirdly, the emergence of mobile ringtones as a new market for composers also raised certain issues. Lasly, there was also the problem of music labels taking over the IPRS and expelling composers & lyricists from these societies. These issues will be discussed below in their historical context. A. THE PROBLEM OF OWNERSHIP OF COPYRIGHTS IN FILM MUSIC: WHO OWNS THE ‘MUSIC & LYRICS’ OF A SOUNDTRACK USED IN A MOVIE? One of the most confusing issues in Indian copyright law has been the question of ownership of copyright in music and lyrics of a soundtrack used in a movie. A large part of this confusion stems from a Supreme Court judgment, rendered in 1977, in Indian Performing Right Society v. Eastern India Motion Pictures Association (‘IPRS case’). This was a case which was initially decided by the Copyright Board before it was overtumed by the High Court of Calcutta, whose judgment was then upheld by the Supreme Court of India.“ The origins of the dispute can be traced to when IPRS published in the Gazette of India and the Statesman, a tariff scheme laying down certain licence fees.** These licence fees were going to be charged for the public per- formance of musical works and lyrics that were a part of the IPRS’s repertoire. Apart from the foreign music and lyrics which were owned by foreigners, the remaining music and lyrics were owned by Indian composers & lyricists who used to compose most of their music for various Indian movies, be it Bollywood or other regional cinema. Once the tariff scheme was published by the IPRS, the producers of various cinematograph films raised an objection before the Copyright Board, a judicial tribunal, on the grounds that the lyricists and composers did not own any copyright and the associated public performance right, in the music and lyrics which had been incorporated into cinematographic films.‘* Instead, the producers argued that they owned the copyright and all related rights in the music and lyrics of the works that IPRS claimed as part of its repertoire.” ® 1977 SCR @) 206. “Eastern India Motion Pictures Association v. Indian Performing Right Society, AIR 1974 Cal 257 (It was upheld by the Supreme Court in Indian Performing Right Society v. Eastern India Motion Pictures Association), ** Indian Performing Right Society v. Eastern India Motion Pictures Association, 1977 SCR (3) 206, 211 4 Id, 211, 212. "Id. October - December, 2012 480 NUJS LAW REVIEW 5 NUJS L. Rev. 469 (2012) This argument was premised on the simple claim that since pro- ducers commissioned authors to create the music and lyrics for the movies, the resulting works would necessarily be owned by the producer who has com- missioned the creation of the work. On the other hand, the authors argued that while the producers would own the synchronization rights of the music with the movie, the remaining rights, including the public performance rights, in- dependent of its performance with the movie, would remain with the authors.*8 The above argument made by the producers and the subsequent reply by the authors, which will be discussed below, captures one of the clas- sic debates of copyright law- whether the author who has created the work or the publisher/producer who has commissioned the author to create the work in question, should be entitled to own the copyright in that work.*° Typically, in the context of copyright law, one would expect the author of the work to natu- rally have ownership of the work. This is usually the case, except when there is a contract stating something to the contrary or the law deems a certain person, other than the author, to be the first owner of a copyright. This issue of first ownership seems less obvious when the author’s risk of failure is covered by a producer who purchases the copyright from the author even before the market judges the success or failure of the work. In such a case, where the author receives a one-time payment, all of the risk related to the success or failure of the particular work is borne by the producer and only he will be liable for the losses.*° The issue gets confusing when seen in the context of Bollywood or other Indian cinema. A lot of times the popularity and success of a soundtrack depends not only on the melody of the music and the lyrics but also the star cast appearing in the movie, since the songs are often picturized to the star cast dancing or emoting to the music. A top star appearing in the video accompa- nying a particular soundtrack is likely to receive a lot more publicity since the song sequences are the main tools of pre-release publicity for the movie itself. The success or failure thereof of a song depends on several factors, although it would be reasonable to assume that the genius of the author is the most impor- tant factor. Historically, economic policies favour rewarding the risk-taker so as to incentivize capital into making risky investments for the creation of goods or ideas, which can then be used for the greater public good. The text of Indian * Id, 213, 214. * See generally Kling, The Work Mack for Hire Doctrine Under the Copyright Act of 1976: Employees, Independent Contractors and the Actual Control Test, 22 Isp. L. Rev. 619, 622 (1988) 5° See generally A Different Tune, supra note 21 ‘Jha, supra note 2 (Aamir Khan suggested that lyricists don’t really contribute much to the impact of a song), October - December, 2012 THE BACKGROUND SCORE TO THE COPYRIGHT (AMENDMENT) ACT, 2012 Prashant Reddy T. The Copyright (Amendment) Act, 2012 stands to correct the legislative im- balance of rights assigned to composers and lyricists and is a path-breaking remedy for the copyright regime in India. The build-up to the amendment demonstrates the undying efforts of the otherwise passive composers and byricists. In order to understand the context of the amendment and the man- ner in which these new provisions are likely to be interpreted by courts, the paper attempts to appreciate Mr.Javed Akhtar’s contribution to the move- ment and describes the long, contentious history between authors and mu- sic labels and the nature of their conflict. The panacea was sought in the form of a legislative amendment addressing the concerns of the composers and lyricists for the purpose of protecting their rights. These include pro- tecting the composers and lyricist from unfair contracts through a statu- tory right to remuneration, protection from the assignment of copyrights in future technologies by the authors and a change in the manner in which copyright societies were administered, as they were primarily controlled by the music labels. However, the extent to which the amendments will succeed in achieving its objectives would largely depend upon the collective efforts of the authors and the judiciary alike. * Prashant Reddy T., B.A.LLB (Hons.), National Law School of India University, Bangalore; Masters of Law (Law, Science & Technology) Candidate 2013, Stanford Law School. Most of the primary sources used in his articlewere secured by filing applications with the Copyright Office under the Right to Information Act, 2005 during my time as a Research Associate to Prof. Shamnad Basheer, the Chair Professor for IP Laws at the WB National University of Juridical Sciences, Kolkata (NUJS). The original intent of the RTI applications was to scrutinize some of the regulatory filings of copyright societies but due to either an act of com- mission or omission, I was given partial copies of an investigation being conducted by the Registrar of Copyrights into the affairs of copyright societies. This article would never have been completed without the gracious assistance of several people. In particular, I am indebted to Prof. Basheer, for convincing the Copyright Office that the RTI Act was not a figment of my imagination and urging them to respond to my initial RTI applications. I am also grateful to Mr. Manab Ghosh at NUJS, who took care of all the logistical work involved in filing the RTIs, collating the responses and scanning them into a digital format for wider public dis- semination on Spicy IP. Without Manab da, I would have probably never even found the post offices in Kolkata. I would also like to thank Dr. Silke Von Lewinski, Achille Forler, Ananth Padmanabhan (Advocate, Madras High Court) and the readers of Spicy IP for their comments and pointers on earlier versions of this article which were published on Spicy IP. Last but not the least I would like to thank the Editors of the NUJS Law Review, especially Ms. Aparajita Lath, for all their editorial assistance. It goes without saying that all mistakes, if any, remain mine. Disclosure: During the course of this paper I was professionally consulted by a music publisher on the history of Indian copyright societies. 470 NUJS LAW REVIEW 5 NUJS L. Rev. 469 (2012) I. INTRODUCTION On August 24, 2012, the Parliament of India hosted a rare event - a ‘shukrana’ or a concert of gratitude, by some of the most famous musicians and lyricists, who had lobbied with the Parliament for the enactment of the Copyright (Amendment) Act, 2012 (‘Copyright Amendment’).’ Unlike previ- ous amendments to the Indian Copyright Act, which was originally enacted in 1957, the debate over the amendments in 2012, was public and vocal, leading to several divisions within Bollywood.’ For the first time in the history of Indian copyright law, musicians and lyricists (‘authors’) headed by the noted poet & lyricist, Javed Akhtar, shed their passive silence on the subject of copyright law and lobbied with the Parliament to amend the law in their favour.* Much of the debate played out like a conventional Bollywood movie, where the ‘small guys’ would take on the might of a massive industry with deep pockets and end up winning hands down. In this case, the battle was one wherein a handful of musicians and lyricists took on the combined might of the biggest music labels in India and concluded it with a victory.* At one point of time, the producers of Bollywood cinema and music labels felt so threatened by the amendments that they almost hit the streets in protest —a first for the de- bate on copyright law in India.* Despite this stiff opposition from film produc- ers and music labels, our Parliament which otherwise agreed on precious little, unanimously enacted the Copyright Amendment to bring about revolutionary 1 Gargi Parsai, Music Industry's Shukrana for MPs, Tas Hinpu (New Delhi) August 24, 2012, available at http:/‘www.thehindu.com/news/national/article3813111.ece (Last visited on December 18, 2012) 2 Subhash K Jha, Stop Interfering, Aamir: Javed Akhtar, Tae Times oF bypia Feb 16, 2010, avail- able at http://articles.timesofindia.indiatimes.com/2010-02-16/news-interviews/28118553_1_ javed-akhtar-aamir-khan-javed-saab (Last visited on December 18, 2012). 3 IBN Live, Lata Mangeshkar Joins Javed Akhtar’s Fight for the Copyright Bill, May 21, 2012, available at _http:/ibnlive.in.com/news/lata-mangeshkar-joins-javed-akhtars-fight-for-the- copyright-bill/260010-8-66.html (Last visited on December 18, 2012). ‘Vickey Lalwani, Industry Divided on Copyright Amendment, Tite. Times oF Ixpia (Mumbai) May 20, 2012, available at http://articles.timesofindia. indiatimes.com/2012-05-20/news-and- interviews/31779033_1_javed-akhtar-lyricists-amendment (Last visited on December 18, 2012), See also Bollywood Life, Javed Akhtar Wins the Fight for Copyright Amendment Bill, May 18, 2012, available at http://www. bollywoodlife.com/news-gossip/javed-akhtar-wins- the-fight-for-copyright-amendment-bill/ (Last visited on December 18, 2012) 5 Filmdom up in Arms against Copyright Act Bill, Tw Times oF Iyp1a (Hyderabad) June 10, 2012, available at_http://articles.timesofindia.indiatimes.com/2012-06-10/hyderabad/32155355_1_ film-industry-royalty-trade-bodies (Last visited on December 18, 2012), See also Shabana Ansari, Copyright Act: Filmmakers Decide to Take Protest Ahead ,DNA (Mumbai) December 25, 2010, available at http:/www.dnaindia.com/mumbai/rep ort_copyright-act-filmmakers- decide-to-take-protest-ahead_1485842 (Last visited on December 18, 2012) October - December, 2012 RIGHTS OF LYRICISTS AND COMPOSERS 473 musical work is deemed to be the ‘author’ of the musical work and the person penning the lyrics in deemed to be the ‘author’ of the literary work." The third ‘work’ is ‘sound recording’ which is created when the musical work and the literary work are recorded onto a fixed medium such as a CD ora cassette in a recording studio.!5 The producer responsible for the re- cording is deemed to be the ‘author’ of the sound recording.!° Therefore, a simple CD will have at least three different copy- rights — one belonging to the composer of the musical work, one belonging to the author of the lyrics and another belonging to the producer of the sound- recording. While authorship of a work can never change, the ownership of any of these copyrights can change depending on the contractual obligations of the authors. This has been further discussed in detail in the paper. In the case of film music, the composer, lyricist and producer of the soundtrack may license to the producer of the cinematograph film, only the rights to synchronize their works with the cinematograph film. They may retain the right to exploit their works in other forms such as ringtones for mo- bile phones and public performances in hotels and restaurants. § 13() of the Copyright Act recognizes the fact that a ‘sound-recording’ incorporated in a cinematograph film can continue to have an individual copyright, separate and distinct from the copyright in the cinematograph film.” Similarly, this pro- vision also recognizes that a musical work and literary work incorporated in a ‘sound-recording’ can have individual copyrights that are distinct from the copyright in the sound recording. This would mean that the law recognizes each category of works as a separate property right that is protected by itself doing of any of the following acts in respect of a work or any substantial part thereof, namely:~ @ in the case of literary, dramatic or musical work, not being a computer programme, - (D to reproduce the work in any material form including the storing of it in any medium by electronic means; (ii) to issue copies of the work to the public not being copies already in circulation; (iii) to perform the work in public, or communicate it to the public; (iv) to make any cinematograph film or sound recording in respect of the work; @) to make any translation of the work: (vi) to make any adaptation of the work: (Vii) to do, in relation to a translation or an adaptation of the work, any of the acts specified in relation to the work in sub-clauses (i) to (vi). 4 ‘The Copyright Act, 1957, § 2G) & (ii): “author” means (j) inrelation toa literary or dramatic work, the author of the work; (ii) in relation to a musical work, the composer. ‘The Copyright Act, 1957, § 2(xx): “sound recording” means a recording of sounds from which such sounds may be produced regardless of the medium on which such recording is made or the method by which the sounds are produced. ‘The Copyright Act, 1957, § 2(d) (¥): “author” means (v) in relation to a cinematographer sound recording the producer. "The Copyright Act, 1957, § 13(4): The copyright in a cinematograph film or a [sound record- ing] shall not affect the separate copyright in any work in respect of which or a substantial part of which, the film, or as the case may be, the [sound recording] is made. ™ Id October - December, 2012 414 NUJS LAW REVIEW 5 NUJS L. Rev. 469 (2012) despite being incorporated into another work. Thus, the composer of a musical work or the author of a literary work can continue to maintain copyright in their works despite licensing the same to the producer for the creation of a ‘sound- recording’. The same stands true for a ‘sound recording’ that is incorporated into a cinematograph film. In the case of Bollywood, the producer of the cinematograph film usually owns the copyright in the ‘sound-recording’. Unless, these film pro- ducers have the capacity to market their ‘sound-recordings’ (CDs, ringtones etc.), the normal industry practice is to licence or assign the copyrights in these ‘sound-recordings’ to music labels such as Saregama, T-Series (Super Cassettes Industries Ltd.), Tips ete. An illustrative example of ownership of the copyright in different works in a typical Bollywood soundtrack is as follows: In Om Shanti Om (the ‘super hit’ movie released in 2007), the music was composed by the composer duo, Vishal-Shekhar, lyrics were authored by Javed Akhtar and the producers of the sound recording were Shah Rukh Khan & Gauri Khan, both of whom were also the producers of the movie.!° The music label responsible for publish- ing and marketing the music was T-Series. As explained earlier, the concept of authorship is distinct from ownership and in this particular case, T-Series owned the copyrights in the music, lyrics and the sound recording.” In India, composers and lyricists often assign away their entire copyright to the producer of a movie for a one time lump-sum payment.” According to some insider accounts from the music industry, in the seventies, there were several composers and lyricists who entered into royalty sharing agreements with producers because producers often lacked the finances to pur- chase the entire copyright in the music. For the last few decades however, it is rare for a composer or lyricist to assigns his copyright to a producer, subject to aroyalty sharing arrangement. For instance, the Oscar winning A.R.Rahaman, who composed the music for Slumdog Millionaire, is one such author who has the market power to claim a share of royalties, but even Rahaman was unable to take on the biggest labels in the music industry such as T-Series.?? It was reported that Rahaman was the original choice for composing the music used 1° See Musiconnect, Om Shanti Om, available at http://www.musiconnet.com/mreview/om_ shanti_om_music php (Last visited on December 28, 2012). One India Entertainment, Z-Series owns Om Shanti Om Music Rights, July 27, 2007, available at _http://entertainment.oneindia. in/music/indian/2007/om-shanti-om-t-series-270707.html (Last visited on December 18, 2012) 4 See A Different Tine, Frontuine June 30- July 13, 2012, available at http://www frontline.in/ static /html/£12913/stories/20120713291310000.htm (Last visited on May, 25 2013). = Reuters, A.R. Rahman Wins Oscar for “Slumdog”, February 23, 2009, available at http:// in.reuters.com/article/2009/02/23/idI NIndia-38155020090223 (Last visited on December 18, 2012) October - December, 2012 RIGHTS OF LYRICISTS AND COMPOSERS 475 in Om Shanti Om but that he had to drop out because T-Series refused to enter into a royalty sharing agreement with him.” One possible reason why Indian composers and lyricists have weaker bargaining power compared to their counterparts in developed coun- tries, such as the U.S. and U.K., is the absence of the institution of ‘music publishers’. The term broadly refers to agents specializing in representing composers and lyricists in marketing and valuing their music, in negotiating licensing deals with third parties and ensuring royalty collections from copy- right societies.** The western model of ‘music publishers’ works to the relative advantage of the lyricists and composers as the revenue of publishers bears a strong nexus with those earned by composers and lyricists, thereby giving the former an incentive to aggressively protect the interests of the latter and act as a shield against predatory music labels.** The lack of such an institution in India may have contributed to the weak bargaining powers of Indian composers and authors. With this basic understanding of the Indian music industry, the paper shall move to the history of the amendments in the next part, starting with Mr. Akhtar’s role in the same. III. THE ROLE OF AKHTAR IN LOBBYING FOR THE COPYRIGHT (AMENDMENT) ACT, 2012 It is impossible to narrate the history of the Copyright (Amendment) Act, 2012 without referring to the key role played by Javed Akhtar, one of India’s most noted, award winning lyricist/poet and public in- tellectuals.*° As mentioned earlier, Mr. Akhtar was for all purposes, the face and the voice of the lobbying effort for greater protection of the rights of com- posers and lyricists.” His efforts caused much turmoil in the music industry and at one point, several powerful lobbies in the movie industry, especially Subhash K Jha, Rahman, Fights for Copyright of his Music, Tite Times oF Iypia (Lucknow) October 12, 2006, available at http:/timesofindia.indiatimes.com/articleshow/2161297.cms (Last visited on December 18, 2012). See Music Publishers Association, Frequently Asked Questions, available at http://www. mpaonline.org.uk/FAQ (Last visited on December 18, 2012)(The term is wrongly associated with music labels in India. Please note that later in the paper, the term ‘music publisher’ when used in the context of the governing rules of IPRS, has a different meaning which will be explained later in the paper) ‘See generally Tim BaskeRviLie & Davin BaskERVILLE, Music Business HANDBOOK AND CAREER Gume (2009). % See IMDb, Javed Akhtar, available at http:/Avww.imdb.com/name/nm0015287/ (Last Visited on December 30, 2012) (Provides for more information about Javed Akhtar’s works). ‘See Good that Copyright Bill Being Taken Up in Parliament: Akhtar, Tee Ixpian Express May 14, 2012, available at http://www. indianexpress, com/news/good-that-copyright-bill-be- ing-taken-up-in-parliament-akhtar/949268/ (Last visited on December 18, 2012)( “I am very happy that the copyright bill has been presented in the Parliament and I just hope that it passes. T have been fighting for it for two years. People in Parliament recognise the bill as Javed Akhtar’s bill now”), October - December, 2012 478 NUJS LAW REVIEW 5 NUJS L. Rev. 469 (2012) before the High Court of Delhi. The case in question was that of Javed Akhtar v. Magic Mantra Vision,” where Mr.Akhtar unsuccessfully sued a production house which had used his lyrics in the music of a cinematographic film called Pyar Ki Dhun (which it had produced) for copyright infringement. Mr.Akhtar did not dispute the fact that he had written and assigned to the defendants, only the synchronization rights to the lyrics for seven of the songs in the mov- ie.3® However, he claimed that he had retained copyright over all the remaining rights apart from the synchronization rights ie., the rights to make and sell the music in the form of cassettes or tapes.*° According to Mr. Akhtar, the rea- son that he was suing the production house was because they had, without his authorization, assigned to Saregama (a music label), even those rights which Mr. Akhtar had allegedly not licensed to the production house. The defendants, however, produced a ‘letter’ to the Court which was from Mr. Akhtar, wherein he had assigned to them all the rights in the lyrics, including the publishing rights and not just the synchronization rights as alleged by Mr. Akhtar in his initial plaint.*° When confronted with what app eared to be irrefutable evidence, Mr.Akhtar reportedly responded stating that while it was his signature that was affixed on the ‘letter’, he “had no idea that he was being made to sign an agreement, giving away or assigning or transferring his rights”.*! Ultimately, Mr.Akhtar withdrew the lawsuit and the Court imposed a fine of Rs. 1 lakh (Rs. 1,00,000) on him for causing ‘hardship’ to the defendant.*” This particular case is a typical example of a transaction between a ‘legally illiterate’ composer or lyricist and the ‘legally savvy’ production house. Most artists, including the popular ones like Mr.Akhtar, had no idea about the copyright contracts they were entering into with producers, and un- fortunately they never seemed to have employed anybody to advise them on the same. While Mr.Akhtar almost never references this case in his interviews, it appears to have substantially impacted the design of the copyright amendments passed in 2012 and in a way, goes way beyond the issue of the composer and lyricists losing control of IPRS. IV. AKTHAR’S MAIN DILEMMA WITH THE PRE-2012 COPYRIGHT LAW Briefly put, Akhtar had four main problems with the copyright law as practiced and interpreted in India. Firstly, there was the problem of ownership of copyrights in film music, especially the concept of first own- ership which was also known as the work-hire doctrine. Secondly, the weak 37 CS (OS) NO. 1743/2005 (Delhi H.C), August 21, 2006, (Unreported), * 1d.,46. » 1d,93 © Id,44. “ Id,45. © Id,47. October - December, 2012 RIGHTS OF LYRICISTS AND COMPOSERS 479 negotiating power of composers and lyricists was also problematic. Thirdly, the emergence of mobile ringtones as a new market for composers also raised certain issues. Lasly, there was also the problem of music labels taking over the IPRS and expelling composers & lyricists from these societies. These issues will be discussed below in their historical context. A. THE PROBLEM OF OWNERSHIP OF COPYRIGHTS IN FILM MUSIC: WHO OWNS THE ‘MUSIC & LYRICS’ OF A SOUNDTRACK USED IN A MOVIE? One of the most confusing issues in Indian copyright law has been the question of ownership of copyright in music and lyrics of a soundtrack used in a movie. A large part of this confusion stems from a Supreme Court judgment, rendered in 1977, in Indian Performing Right Society v. Eastern India Motion Pictures Association (‘IPRS case’). This was a case which was initially decided by the Copyright Board before it was overtumed by the High Court of Calcutta, whose judgment was then upheld by the Supreme Court of India.“ The origins of the dispute can be traced to when IPRS published in the Gazette of India and the Statesman, a tariff scheme laying down certain licence fees.** These licence fees were going to be charged for the public per- formance of musical works and lyrics that were a part of the IPRS’s repertoire. Apart from the foreign music and lyrics which were owned by foreigners, the remaining music and lyrics were owned by Indian composers & lyricists who used to compose most of their music for various Indian movies, be it Bollywood or other regional cinema. Once the tariff scheme was published by the IPRS, the producers of various cinematograph films raised an objection before the Copyright Board, a judicial tribunal, on the grounds that the lyricists and composers did not own any copyright and the associated public performance right, in the music and lyrics which had been incorporated into cinematographic films.‘* Instead, the producers argued that they owned the copyright and all related rights in the music and lyrics of the works that IPRS claimed as part of its repertoire.” ® 1977 SCR @) 206. “Eastern India Motion Pictures Association v. Indian Performing Right Society, AIR 1974 Cal 257 (It was upheld by the Supreme Court in Indian Performing Right Society v. Eastern India Motion Pictures Association), ** Indian Performing Right Society v. Eastern India Motion Pictures Association, 1977 SCR (3) 206, 211 4 Id, 211, 212. "Id. October - December, 2012 480 NUJS LAW REVIEW 5 NUJS L. Rev. 469 (2012) This argument was premised on the simple claim that since pro- ducers commissioned authors to create the music and lyrics for the movies, the resulting works would necessarily be owned by the producer who has com- missioned the creation of the work. On the other hand, the authors argued that while the producers would own the synchronization rights of the music with the movie, the remaining rights, including the public performance rights, in- dependent of its performance with the movie, would remain with the authors.*8 The above argument made by the producers and the subsequent reply by the authors, which will be discussed below, captures one of the clas- sic debates of copyright law- whether the author who has created the work or the publisher/producer who has commissioned the author to create the work in question, should be entitled to own the copyright in that work.*° Typically, in the context of copyright law, one would expect the author of the work to natu- rally have ownership of the work. This is usually the case, except when there is a contract stating something to the contrary or the law deems a certain person, other than the author, to be the first owner of a copyright. This issue of first ownership seems less obvious when the author’s risk of failure is covered by a producer who purchases the copyright from the author even before the market judges the success or failure of the work. In such a case, where the author receives a one-time payment, all of the risk related to the success or failure of the particular work is borne by the producer and only he will be liable for the losses.*° The issue gets confusing when seen in the context of Bollywood or other Indian cinema. A lot of times the popularity and success of a soundtrack depends not only on the melody of the music and the lyrics but also the star cast appearing in the movie, since the songs are often picturized to the star cast dancing or emoting to the music. A top star appearing in the video accompa- nying a particular soundtrack is likely to receive a lot more publicity since the song sequences are the main tools of pre-release publicity for the movie itself. The success or failure thereof of a song depends on several factors, although it would be reasonable to assume that the genius of the author is the most impor- tant factor. Historically, economic policies favour rewarding the risk-taker so as to incentivize capital into making risky investments for the creation of goods or ideas, which can then be used for the greater public good. The text of Indian * Id, 213, 214. * See generally Kling, The Work Mack for Hire Doctrine Under the Copyright Act of 1976: Employees, Independent Contractors and the Actual Control Test, 22 Isp. L. Rev. 619, 622 (1988) 5° See generally A Different Tune, supra note 21 ‘Jha, supra note 2 (Aamir Khan suggested that lyricists don’t really contribute much to the impact of a song), October - December, 2012 RIGHTS OF LYRICISTS AND COMPOSERS 483 a certain specified category of works and not literary, musical works or sound recordings that were incorporated into the cinematograph film. The criticism therefore is that the Supreme Court travelled beyond the plain words of the statute by including even music and lyrics composed for a cinematograph film, within the bounds of proviso (b). The golden rule of statutory interpretation re- quires a court to give the black letter of the law its most literal interpretation.*¢ A court can digress from such a rule only if the literal interpretation results in an absurd result.” A simple reading of the provision in question demonstrates that the provision extends only to cinematograph films and not the music and lyrics created separately from the film, which are subsequently incorporated into the film. One of the reasons for the above conclusion was the fact that the definition of ‘cinematograph work’ in the Copyright Act, as it existed in 1957, included the phrase ‘soundtrack if any’.* Although the term ‘sound track’, was undefined in the legislation, the Supreme Court presumed that the phrase in- cludes both, music and lyrics.*° While this interpretation may have been cor- rect, the Supreme Court could have also confined the scope of the producer’s rights to only the synchronisation rights of the soundtrack with the movie. This would have meant that the authors of the music and lyrics would still own all the remaining rights to the music, when used independently of the cinemato- graph film. This would include the lucrative public performance rights of the music. The exact scope of these rights would have depended on an examination of all independent contracts. The law, especially § 13(4) of the Copyright Act as it existed then, clearly provided for works incorporated into a film or a sound- recording to have their own independent copyright, even after they had been incorporated into the former class of works. The Supreme Court however fails to make this distinction between synchronisation rights and other rights such as public performance rights. The second limb of the Supreme Court’s conclusion was on the basis of proviso (c) which is as follows: in the case of a work made in the course of the author’s em- ployment under a contract of service or apprenticeship, to which clause (a) or clause (b) does not apply, the employer shall , in the absence of any agreement to the contrary, be the first owner of the copyright therein. 86 Illachi Devi v. Jain Society, Protection of Orphans India, AIR 2003 $C 3397, 4] 35 Id 58 The Copyright Act, 1957, § 2(f): “‘cinematograph film” includes the sound track, if any, and “cinematograph” shall be construed as including any work produced by any process analogous to cinematography” (un-amended 1957 Act). 8 See generally Nandita Saikia, The BollywoodAmendments: Film. Music and Indian Copyright Law (2010 to 2012), February 21, 2010, 18, available at http://papers.ssrn.com/sol3/pap ers cfm?abstract_id=1566350 (Last visited on May 26, 2013). October - December, 2012 484 NUJS LAW REVIEW 5 NUJS L. Rev. 469 (2012) In its analysis, the Supreme Court appears to have accepted the producers’ contention that all the musical and literary works, involved in the case, had been made during the course of employment under contracts of ser- vice. This was most likely untrue, since most authors in the film industry compose music and lyrics for a number of producers and are not ‘employed’ by any single producer in the legal sense of the term. At the very least, the Supreme Court should have laid down appropriate criteria to determine which categories of contracts would qualify as ‘employment contracts’ as opposed to ‘independent contracts’. Unfortunately, the Supreme Court’s judgment came to this conclusion without any such analysis. The U.S. courts faced with a similar situation, while determin- ing whether a work fell within the purview of the ‘work-for-hire’ doctrine, laid down certain criteria, such as mode of payment, tax treatment and other factual grounds, to determine whether the person in question was an employee or an independent contractor.# Regardless of the criticism, the Supreme Court’s judgment was the law of the land by virtue of the Constitution of India and the immediate ramification of the judgment was that all of the producers who had commis- sioned authors to create musical or literary works for their movies would be deemed to be the first owners of copyrights in those works, unless the authors could demonstrate that they had entered into a contract to the contrary. B. THE PROBLEM OF WEAK NEGOTIATING POWER OF AUTHORS On the basis of the above mentioned discussion, one may question that if the authors were not satisfied with their contracts, why didn’t they simply remedy the situation by incorporating stronger ownership rights in their future contracts with producers? The Supreme Court judgment clearly gave them a right to opt out of such contracts. However, there is no clear answer to this question and there are probably multiple reasons for the same, the main being the lack of collective bargaining by the authors. Prior to Mr.Akhtar’s lobbying efforts, the authors of Bollywood were exceptionally unorganized and they have constantly lacked the political muscle to negotiate on a level playing field with the music labels. This is in complete contrast to the situation in Europe or the U.S., where authors Indian Performing Right Society v. Eastern India Motion Pictures Association, 1977 SCR (3) 206, 222 © Community for Creative Non-Violence v. Reid, 490 U.S. 730 (1989) © Indian Performing Right Society v. Eastern India Motion Pictures Association, 1977 SCR 3) 206, 222, 223, October - December, 2012 RIGHTS OF LYRICISTS AND COMPOSERS 485 are politically organized, with strong collective bargaining skills.@ It is well known that Hollywood is no stranger to strikes by script-writers and their col- leagues.® On the other hand, authors in Bolly wood have not even been able to form strong collectives, let alone call strikes. This is not to say that all Indian authors lack the negotiating power to enter into equitable and ‘fair’ contracts. As explained earlier, a few composers like A.R. Rahaman, who won an Oscar for his music in Slumdog Millionaire, did have the market power to negotiate royalty sharing arrange- ments with the producers and music labels, instead of acceding to the standard one-time payment formula which is accepted by other composers and lyricists of Bollywood. However, even Rahaman’s negotiating power has had limits, which is evident when he had to drop out of big banner films like Om Shanti Om because T-Series, the music label responsible for marketing and distribut- ing the music, refused to enter into a royalty sharing arrangement with him. T-Series is currently under investigation for alleged anti-competitive activities by the Competition Commission of India. C. UNFAIR CONTRACTS AND MOBILE RINGTONES As is always the case with copyright law, technology was to play the role of a game changer. In the late nineties and the following decade, Indians awoke to the miracle of mobile phones. The telecom industry was soon to be the poster child of a newly liberalized Indian economy and tele-density in India zoomed to incredibly high levels, mainly due to the deep penetration of cellular services in all classes and regions of India.” 2 See ASCAP, We Create Music, available at http://www.ascap.com/legislation/ (Last visited on June 20, 2013); See The Authors Guild, available at http://www.authorsguild.org/advocacy/ (Last visited on June 20, 2013) (Examples of associations that been successful in lobbying and protecting the interests of authors, composers and lyricists include-The American Society of Composers, Authors and Publishers (ASCAP), which is an association of more than 450,000 US. composers, songwriters, lyricists, and music publishers. ASCAP is the only U.S. per- forming rights organization created and controlled by composers, songwriters and music pub- lishers, with a Board of Directors elected by and from the membership. The main objective of ASCAP is to protect the rights of its members by licensing and distributing royalties for the non-dramatic public performances of their copyrighted works, Another such association is the Author's Guild. The Author's Guild, founded as the Authors League of America in 1912, works for the protection of writers’ interests in effective copyright protection, fair contracts and free expression) BBC News, Hollywood Writers’ Strike, February 13, 2008, available at http://news.bbe. co.uk/2/hi/entertainment/7092571.stm (Last visited on December 20, 2012). 6 Jha, supranote 23. Sangeeta Singh, T-Series Faces Probe on Royalty Payments, Mixt Oct 31 2011, available at hitp:/www.livemint.com/Politics/bK HiyX 4 YsRn8£G6xsQYhL/TSeries-faces-probe-on- royalty-payments html (Last visited on December 20, 2012) * Business Maps of India, Liberalization of Indian Telecom Sector, June 27, 2011, available at http://business, mapsofindia.com/communications-industry/lib eralization-india.html (Last visited on December 20, 2012). October - December, 2012 488 NUJS LAW REVIEW 5 NUJS L. Rev. 469 (2012) 2. The MoU with Public Performance Ltd (PPL) & Indian Music Industry (IMT) The story of misfortune at IPRS began with a tripartite Memorandum of Understanding (MoU) entered into between IPRS (headed by Naushad Ali and Sanjay Tandon), Public Performance Ltd. (‘PPL’) & the Indian Music Industry (‘IMI’), which at the time was called the Indian Phonographic Industry (‘IPI’). The membership of PPL and IMI, which were sister concerns, consisted of only music labels. PPL which was a copyright society, was tasked with collectively licensing the rights in ‘sound-recordings’, unlike IPRS, which was responsible for the underlying works of a ‘sound-recording’ i.e., the music and lyrics.” This MoU of 1993 laid down three main objectives: @ IPRS would derecognize and terminate all film producers from its membership and bring in the music labels from PPL & IMI to replace these film producers; Gi) After extending membership to the music labels from PPL & IMI, IPRS would ensure that its future earnings would be distributed in the follow- ing ratio: 50% of all revenue would go to the ‘music publisher’ members of IPRS (in this case the music labels from PPL) while 30% of all rev- enue would go to composers and the remaining 20% would go to author members of IPRS, who are mainly lyricists and composers. Gii) It would be ensured that the ‘Governing Council’ of IPRS had equal representation from composers, lyricists and music labels since at the time of signing the MoU, the Governing Council had 6 composers, 6 lyricists and only 2 music label members. In addition to the above terms, IPRS was also required to make a suicidal admission stating that it acknowledged that music labels owned the performing and mechanical rights in all the musical and literary works The Indian Performing Rights Society, Memorandum of Understanding between IPRS, PPL and IMI, November 12, 1993, available at http://spicyip.com/docs/IPRS%20MoU pdf (Last visited on December 20, 2012). ‘The Indian Music Industry (IMI) was established in 1936 as the Indian Phonographic Industry (IPI). Subsequently, IPI members decided to form a specialised body to administer their public performance and broadcasting rights, as a result Public Performance Ltd. (PPL) came into being in 1941. PPL has been functioning as the Copyright Society for Sound Recordings of its member music labels. See http:/Awww.pplindia.org/pplweb/aboutus.aspx and http:/www. indianmi.org/ (For more information about IMI and PPL)(Last visited on December 20, 2012). © MoU, supranote 81, § 2, 43, and 5. October - December, 2012 RIGHTS OF LYRICISTS AND COMPOSERS 489 incorporated in sound recordings and owned by the music labels, and that “the appropriation of 50% of the revenue for composers/authors (would be) in the interests of giving encouragement to the composers/authors”. With such an admission, the IPRS would have denuded its membership of their main rights. For its part, the MoU does not quite specify as to why IPRS would readily and willingly welcome outsiders into its fold. A calculated guess in this regard would be that the IPRS wanted to begin functioning on a larger scale and lacked the resources to do so, which led them to invite the music labels to invest in it for a share in future profits. This is a plausible explanation, since the Indian economy had just opened up to foreign investment in 1991 and the economy was generally on an upward trend. There was every indication that with a booming economy, the market for music would grow.®* However, given that administration of a copyright society is an expensive business, especially since it requires enforcement against infringers through the judicial system, it is possible that IPRS desperately needed capital to take its business plan ahead. Another factor which adds credence to this theory is the fact that amendments were afoot, and were in fact passed in 1994, to require all copyright societies to be registered in order to carry out the business of licensing copyrights, and the language of the amendments suggested that the government would not be open to more than one society per class of works.* Therefore, if recognised by the Government, IPRS would have a monopoly in its class of works which included music and lyrics. In such a case, it would have been important for IPRS to have the means to assert its rights. However, the MoU could not be implemented until it was ap- proved by the members since some of the requirements of the MoU, such as a change in the governing structure of IPRS, to increase representation of music companies on the Governing Council, required an amendment to the Articles of Association (‘Articles’) of the IPRS. * 1d, 4 8 See Asia Kaspexar, Por Cutture Inpia! : Mepia, Arts ND Liresrve 7, 8 (2006); Arvind Panagariya, India’s Economic Reforms What Has Been Accomplished? What Remains to Be Done?, (Edre Policy Brief No. 2, November 2011). % Copyright (Amendment) Act, 1994, proviso to § 33 (3): The Central Government may, having regard to the interests of the authors and other owners or rights under this Act, the interest and convenience of the public and in particular of the groups of persons who are most likely to seek licenses in respect of the relevant rights and the ability and professional competence of the applicants, register such association of persons as a copyright society subject to such conditions as may be prescribed: Provided that the Central Government shall not ordinarily register more than one copy- right society to do business in respect of the same class of works. October - December, 2012 490 NUJS LAW REVIEW 5 NUJS L. Rev. 469 (2012) 3. The registration process with the Copyright Office Prior to the 1994 amendments, copyright societies in India were referred to as ‘performing rights societies’. The pre-1994 law defined these so- cieties as follows: “A society, association or other body, whether incorporated or not, which carries on business in India of issuing or grant- ing licences for the performance in India of any works in which copyright subsists.”*” Although pre-1994, these performing rights societies were not required to register themselves with the Copyright Office, they were required to file with the Registrar of Copyrights, a statement of all fees or royalties pro- posed to be charged for different licences, failing which they could not avail of any of the civil or criminal remedies under the law. This information was then published in the official gazette and any person could object to the fees or royalties being charged by the performing society.® Objections to the rate of royalty being charged by the performing society were required to be heard by the Copyright Board.” The Board would then give both parties a hearing after which it could fix the rate of royalties.’ The pre-1994 law therefore allowed the Copyright Board to fix the royalty rate. The Copyright (Amendment), Act 1994, which was passed just three years after the Indian government enacted free-market reforms in the Indian economy, did away with the mechanism of price-fixation by the Copyright Board.°? This amendment, however, brought in a tougher regula- tory regime for the administration of ‘performing societies’ which were now referred to as ‘copyright societies’. As per the 1994 amendments, copyright so- cieties would have to be registered with the Registrar of Copyrights and in ordi- nary circumstances, the Registrar of Copyrights would register only copyright society in each class of works.” In order to be registered, a copyright society would have to comply with the various requirements introduced by the amend- ments, such as the mandatory requirement that copyright societies be man- aged by the owners of copyrights and that such societies must not spend more than 15% of their revenues on administration.’ In case a copyright society ® The Copyright Act, 1957, § 2@) (as originally passed). 8 Id, §33 © Id, § 34, Copyright Rules, 1958, Rule 12 (as originally passed). The Copyright Act, 1957, § 35 (as originally passed) Id. § 35(4) §35 of the original Copyright Act was deleted and replaced with a new version in 1994. This new version only requires copyright societies to be under the control of owners of copyright. > The Copyright Act, 1957, § 33 (after the 1994 amendment), The Copyright Act, 1957, § 34, § 35 (after the 1994 amendment); Copyright Rules, 1958, Rule 14H (after the 1994 amendment but prior to the 2012 amendment), eee 4 October - December, 2012 RIGHTS OF LYRICISTS AND COMPOSERS 493 4. The efforts at IPRS to accommodate PPL’s members as per the terms of the MoU After being registered as a ‘copyright society’ by the Registrar of Copyrights, on March 27, 1996, IPRS carried out a few amendments to its Articles in order to incorporate the concerns of the member companies of IPI and PPL with whom it had signed an MoU." The first set of amendments to its Articles was carried out on September 2, 1996.3 They amended the definition of ‘full-members’ to include ‘publishers’ of musical works.'°* With the above amendment to the Articles, music labels could finally vote in IPRS, since the governing law of IPRS allowed only ‘full-mem- bers’ to vote at ‘Annual General Meetings’ (AGMs’) and to also be elected to the Governing Council of IPRS, provided they were the owners of the copy- right.’ This, however, did not make much of a difference to the larger quest for control by the music labels, since the voting rights were not linked to the num- ber of works owned by each member. Therefore, even if a music label claimed ownership of around 1000 works, it would still have the same vote as an author who had only authored 100 works. Further, to the frustration of the music la- bels, the existing cap of only two music labels being elected to the Governing Council, was undisturbed by this amendment. As a result, IPRS continued to be controlled, at the executive level, by persons who were not necessarily the owners of the copyright in the works that they had authored. On September 21, 2000, the AGM of IPRS passed a special reso- lution amending the governing law once again.'°*Amongst other amendments, this resolution amended the structure of the 24 member Governing Council to ensure equal representation among the four categories of full members, namely, composers, lyricists, publishers and audio-visual publishers. This ful- filled one of the important preconditions of the MoU by giving music labels 2 Government of India-Copyright Office (Department of Education), Certificate of Registration under Section 33(3) of The Copyright Act, 1957, March 27, 1996, available at http://iprs.org/ copyright_cert.pdf (Last visited on May 1, 2013). © ‘The Indian Performing Right Society, Special Resolution passed at the Annual General Meeting, September 2, 1996, available at http://spicyip.com/docs/Board%20Resolution2. pdf (Last visited on December 20, 2012). IPRS (AoA), supra note 73, Article 1@): “publisher” is defined as a publisher of any music or works and or of any words which or may be associated with any music or works; See The Indian Performing Right Society, Special Resolution passed at the Annual General Meeting, September 2, 1996, available at http://spicyip.com/docs/Board%20Resolution2.pdf (Last visited on December 20, 2012) (For the Amendment , the reader may look at §5(¢) of the document). 15 See IPRS (AoA), supranote 73, Arts. 28, 38, 35. "6 ‘The Indian Performing Right Society, Special Resolution passed at the Annual General Meeting, September 21, 2000, available at http://spicyip.com/docs/Board%20R esolution3. pdf (Last visited on December 20, 2012). October - December, 2012 494 NUJS LAW REVIEW 5 NUJS L. Rev. 469 (2012) greater representation on the Governing Council of IPRS.!” However, the core problem of voting rights being independent of the ownership of the works per- sisted even after this resolution.'°* Therefore, even ifthe music labels did claim ownership of a majority of the works, they still couldn’t gather the required number of votes since the number of authors who had voting rights, irrespec- tive of the works that they owned, far outstripped the number of music labels. Going by the subsequent actions of the music labels, it appears that they were frustrated by the fact that they were unable to take control of IPRS despite the two special resolutions of 1996 and 2000. Obviously the com- posers and lyricists who had founded IPRS were not going to hand over IPRS to the music labels without a fight, especially when the revenues of IPRS were providing them with a steady source of income. The stage was thus set for a clash. In October, 2004, the music labels launched the first salvo ina 5 year long battle to gain control of IPRS. 5. The final battle before the Civil Court, Barasat District The first shot in the battle to takeover IPRS was fired soon after its 34 AGM, which was held on September 29, 2004.!° In this AGM, Javed Akhtar, amongst others, had been elected to the ‘Governing Council’. As Akhtar recounted in a later interview, he had been asked to stand for the elec- tions to the ‘Governing Council’ by a group of composers and lyricists who were completely dissatisfied with the manner in which IPRS was being ad- ministered."° At the same AGM, two music publishers, perceived by the music labels to be very closely allied with the authors’ lobby, were elected to 2 of the 6 positions normally kept for publishers." The term ‘publisher’ was defined in a circular manner in Article 1@), of the pre-2008 Articles of Association of IPRS. The definition stated that, “Publisher means a publisher of any music or works and or of any words which are or may be associated with any music or works”. Given the usage of the term 7 Id., Art 30(@ (This Article was amended by the Resolution of 2000 to ensure equal representa- tion of composers, lyricists, publishers & audio-visual publishers); This ensured compliance with 5 of the MoU, supra note 81 8 ‘The Copyright Act, 1957, § 35 (after the 1994 amendment); IPRS, AoA, supra note 73, Art.28 "© ‘The Indian Performing Right Society Limited, Annual Report 2008-09, available at http:// www. iprs.org/agm0809.asp (Last visited on May 30, 2013). Joshi, supra note 35 (As Akhtar recounts —“I was quite ignorant about copyright issues, and had never in my life contested an election. A group of composers and lyricists came to me saying that I should be their representative on the Indian Performing Right Society (known as IPRS) that supposedly collects performance rights royalty for them. They seemed to be very unhappy with the work done by the society and wanted me on the governing board. I resisted as much as I could, but they were really persuasive. So I contested and won that election!”). Saregama India Ltd. v, Indian Performing Right Society, Plaint (filed by Saregama India Ltd.), T.S. 114 of 2004, Before the Court of the Second Civil Judge (Sr.- Div), Barasat, 18. October - December, 2012 RIGHTS OF LYRICISTS AND COMPOSERS 495 ‘publisher’ in the rest of the Articles? it can be safely assumed that it was meant to cover the music label or the record company. The elections at the 34" AGM appeared to have un-nerved the music label cartel, which had by then, managed to increase its influence over the Governing Council of IPRS. According to confidential interviews con- ducted by the author, the music labels managed to increase their influence by having their ‘friends’ voted into a majority of the 6 positions on the Governing Council reserved for publishers and also in the other categories of composers and lyricists. An influential, not to mention outspoken, person like Mr. Akhtar had the potential to disrupt the cosy arrangement at the Governing Council of the IPRS especially since publishers allied with Mr. Akhtar, had defeated two of the big music labels like Sony and Universal in their bid to get re-elected in the publisher’s quota.!? The preferred mode of attack was an injunction from the High Court of Calcutta on a writ petition made by Asha Studios, soon after the 34" AGM." This injunction, which stayed all decisions taken at the 34 AGM, in- cluding Mr. Akhtar’s election, was soon vacated and the petition was dismissed by the High Court on procedural grounds on April 13, 2005."5 However, before the first injunction was vacated by the High Court, IPRS had been sued once again on November 24, 2004, by Saregama, a leading music label (formerly known as HMV) which was already on the Governing Council of IPRS." This time, Saregama had sued IPRS by filing a shareholder’s derivative action before the Civil Court at Barasat, located on the outskirts of Kolkata. It had named 13 defendants in this lawsuit, including Mr. Akhtar and music publishers such as Deep Emotion and Ultra Movies, both of which had defeated Universal and Sony. The decision to sue before the 2 Civil Judge (Senior Division) at Barasat was a strategic choice by Saregama, since this Court was at least 1,662 kilometres from the city of Mumbai, where Akhtar and his allies were residing. Also, the registered office of IPRS is located in Mumbai and ideally the share- holder’s derivative lawsuit should have been filed in Mumbai itself. Saregama, 42 See e.g. IPRS (AoA), supra note 73, Article 4 (@) : “Each and every member shall, on elec- tion, and/or at any time thereafter on request by the society, assign or cause to be assigned to the Society @j) the Performing Right and the Mechanical Right in all or any works or parts of works, present and future of which he is the composer, author, publisher and/or owner and/or Gi) the whole or any part of the Performing Right and Mechanical Right in any work or part of awork to the extent that any such right or part of right is or shall during his membership be or become vested in him [...)”. 43 Plaint of 2004, supra note 111, 418. 44 Saregama India Ltd. v. Indian Performing Right Society, Plaint (filed by Saregama India Ltd.), T.S. 101 of 2005, Before the Court of the Second Civil Judge (Sr.- Div.), Barasat, § 21. us Tg. us Td, 422. October - December, 2012 498 NUJS LAW REVIEW 5 NUJS L. Rev. 469 (2012) b. The subsequent lawsuits filed in 2005 & 2006 The lawsuit filed in 2004 was only the first of the three lawsuits against IPRS. Saregama filed two more law suits, one in the 2005 and the other subsequently, in 2006.’ In both these lawsuits, Saregama named only IPRS, its Chairperson Hasan Kamaal and another executive director of IPRS as defend- ants. These suits sought a stay on the holding of the AGM in both those years, in order to prevent Akhtar & Co. from being re-elected and consequently retaking control of IPRS. The Barasat Court granted Saregama an ex-parte interim in- junction against the holding of the AGM in both lawsuits, in successive years.'" As evident from these orders, it appears that IPRS, which was Defendant No. 1 and its Chairperson Kamaal who was Defendant No. 2, did not contest both the suits filed by Saregama, most probably because the music labels, which were on the Governing Council, were quite satisfied with not holding an AGM that could threaten their position in IPRS. The manner in which all three suits proceeded before the Civil Court at Barasat speaks poorly of the Indian judicial system. In the first lawsuit filed in 2004, the first interim injunction was extended 3/ times before it was made absolute on October 4, 2007.'7 In the sec- ond lawsuit, filed in 2005, the first interim injunction was extended at least 67 times between November 22, 2005 and January 4, 2011." In the third lawsuit, filed in 2006, the first interim injunction was extended at least 7 times between August 25, 2005 and May 30, 2012.'54 Cumulatively, in all three lawsuits, the Civil Judge at Barasat has granted, so far, a total of 169 extensions/adjourn- ments to either Saregama or IPRS. It is important to note that the suits are still pending in this court and more adjournments have been granted. As per Order XVII of the Civil Procedure Code, 1908, a civil court can grant a maximum of 3 adjournments in a single lawsuit.** While a few of the adjournments were unavoidable due to ‘bandhs’ or strikes in Bengal, most of the adjournments were granted on the request of either Saregama or IPRS.'* The sheer number of adjournments raises eyebrows about the entire 80 Saregama India Ltd. v. Indian Performing Right Society, Plaint (filed by Saregama India Ltd.), TS. 101 of 2005, Before the Court of the Second Civil Judge (r- Div.), Barasat; Saregama India Ltd. v. Indian Performing Right Society, Plaint (filed by Saregama India Ltd), T.S. 124 of 2006, Before the Second Civil Judge (r-Div)) 13) Saregama India Ltd. v. Indian Performing Right Society, (Interim Order), T.S. 101 of 2005, Before the Court of the Second Civil Judge (Sr.- Div.), Barasat, September 22, 2005; Saregama India Ltd. v. Indian Performing Right Society, (Interim Order), TS. 124 of 2006, Before the Court of the Second Civil Judge (Sr.- Div), Barasat, September 25, 2006 Order Sheets of Saregama v. IPRS T.S. 114 of 2004. 1 Order Sheets of Saregama v. IPRS T.S. 101 of 2005 1 Order Sheets of Saregama v. IPRS T.S. 124 of 2006, © Civil Procedure Code, 1908, Order XVII Rule 1 1% Refer to the case dockets of Saregama v, IPRS in TS. 114 of 2004, TS. 101 of 2005 and 7. 124 of 2006. October - December, 2012 RIGHTS OF LYRICISTS AND COMPOSERS 499 process because it is almost impossible for a Court to have granted so many adjournments if IPRS had vigorously contested the matter. Given that AGMs are critical events for any company, IPRS should have at least tried to argue the matter on merits. Before explaining the manner in which the Barasat Court passed orders allowing the music labels to takeover IPRS and the manner in which the music labels executed those orders, it is necessary to make a small but neces- sary deviation to a proceeding started by Universal India before the Company Law Board. 6. The proceedings by Universal before the Company Law Board In 2005, one of the music labels — Universal India (‘Universal’), which at that time, was under the management of one Mr. Rajat Kakkar, had filed a petition against IPRS before the Company Law Board (‘CLB’) alleging amongst other issues, mismanagement of IPRS.!7 This was one of the three pe- titions filed before different CLBs by the other music labels, including Sony and Tips. Unlike the shareholder derivative lawsuit filed by Saregama at Barasat, a petition alleging mismanagement of a company before the CLB required the assent of at least 20% of the membership of the company, to be admitted. Universal apparently did not have the support of 1/5" of all IPRS members to get the petition heard before the CLB and had sought a waiver of this minimum requirement.” In this context, IPRS’s reply to Universal’s petition before the CLB was simply astounding.“ As a copyright society with a majority of its membership consisting of composers and lyricists, the management at IPRS had a fiduciary duty to its majority membership to strongly contest the petition filed by Universal. However, the reply filed by IPRS, instead of aggressively seeking for a summary dismissal of Universal’s petition, made several state- ments which caused grave and extreme prejudice to a majority of the IPRS members. This shouldn’t be surprising considering IPRS had adopted a similar stance before the Barasat Court, where instead of defending the interests of its majority members, who were composers and lyricists, it sought to defend the interests of music labels who were minorities in the overall scheme of IPRS. 17 See Universal Music India Ltd. v. Indian Performing Right Society (IPRS), Reply filed by IPRS, CP No. 124 of 2005, Before the Company Law Board, New Delhi. 18 See Hasan Kamaal, Annual Report 2008-09, August 31, 2009, available at http://www.iprs. org/agm0809.asp (Last visited on May 30, 2013), 1% ‘The Companies Act, 1956, § 399. 40 As obvious from the order in Universal Music India Ltd. v. Union of India, 2006 (9) TMI 293 Universal Music India Ltd. v. Indian Performing Right Society (IPRS), Reply filed by IPRS, CP No. 124 of 2005, Before the Company Law Board, New Delhi. October - December, 2012 500 NUJS LAW REVIEW 5 NUJS L. Rev. 469 (2012) One such incriminating statement before the CLB was to the effect that, “It can thus be said that the said lyricists and/or composers do not hold any copyright or cannot be termed as the owners of copyright unless of course they have a contract to the contrary.” This was a damaging statement for a majority of the IPRS mem- bership since its consequence would be the disqualification of almost 99% of its members who were composers and lyricists. In this context, one would also question the veracity of the statement. It is possible that after the 1977 judgment of the Supreme Court in the IPRS case, the music labels did own most of the rights in music and lyrics. However if that was the case, the music labels could have simply got the registration of IPRS as a copyright society cancelled, and they could have registered their own copyright society for the purposes of col- lecting royalties for underlying works. The fact that music labels didn’t pursue such an obvious remedy indicates that they most probably did not own a major- ity of the rights in the music of the time. As if the above statement were not enough, IPRS also made the following damaging statement in its reply, while explaining the terms of the 1993 MoU: “Tt was agreed that 50% of the income therefrom would go to the music publishers, 30% to the composer members and 20% to the author members (lyricists in this case) of the Respondent No. 1. The composers and authors were given the aforesaid share in the income not because they had aright to it but just to encourage them." In other words, the then management of IPRS was informing the tribunal that any payments being made to composers and authors was in the nature of gratis and that they could not claim such royalties as a matter of right. This statement by the IPRS management, in reply before the CLB, makes no sense because if the music labels did in fact own all the rights they would have simply setup their own copyright society. It is difficult to understand why would any right thinking company part with 50% of its revenue as a matter of gratis? IPRS then concluded its reply by requesting the CLB to pass di- rections against its own members, ordering them to prepare a list of musical works in which they had the copyright.“ IPRS further informed the CLB that Id, 4. 8 1d,45 “4 Id, Gl October - December, 2012 RIGHTS OF LYRICISTS AND COMPOSERS 503 the manner in which this AGM was convened and amendments were voted on, was illegal since it was not in keeping with the old governing laws of IPRS under which this AGM was conducted. As per the ‘minutes’ of this AGM, as recorded by the court ap- pointed ‘receiver’, only representatives of the following seven music labels were present at this 37" AGM, which was conducted on January 5, 2008 at Mumbai: (i) Saregama India Ltd. (ii) Tips Industries Ltd. (iii) Universal Music India Ltd. (iv) Venus Records and Tapes Ltd. (v) Sony Music Entertainment Ltd. (vi) Virgin India Ltd. (vii) Krunal Music Ltd.'s” In other words, only the music labels were present at this AGM and not a single composer or author was present at the meeting despite the fact that IPRS had more than 1500 composers/lyricists as members of IPRS. Even the composers and lyricists on the Governing Council did not turn up for the meeting. Obviously this raises serious questions as to the manner in which the court appointed ‘receiver’ conducted this 37" AGM. One may question whether the ‘notice’ of the impending AGM was properly served on all IPRS members as claimed by the receiver or to only those members in the recently created ‘Register of Owners’, which as already described, was not prepared in accordance with the law.!°s If so, then how is it possible that only seven music labels, four of whom were suing IPRS, turned up for the meeting?! An even more troubling question was whether the ‘receiver’ even conducted the AGM under the appropriate governing laws of IPRS. As per the minutes, the court appointed ‘receiver’ notes that only ‘owner-members’ were present at that meeting. The use of the phrase ‘owner-members’ was surpris- ing because this class of membership was introduced only by the new amend- ments which were put to vote at the 37" AGM. The AGM, however, had to be conducted under the existing governing law and the existing governing laws of IPRS, especially the Articles, did not make use of the term ‘owner-member’. Minutes of the 37 Annual General Meeting of the Owner Members of The Indian Performing Right Society, recorded by Tarun Jyoti Banerjee (Receiver cum Chairman), February 4, 2008 18 See Tarun Banerjee (Receiver), Final Report regarding the 37 Annual General Meeting of IPRS, T.8. No. 124 of 2006, February 4, 2008. 1 See The Indian Performing Right Society, Annual Report 2009-10, available at http://iprs.org/ agm0910.asp (Last visited on December 22, 2012) (Under the sub-head “Copyright and Legal Matters’ points A, B and E, show that IPRS has cases filed against it by Saregama, Universal Music India Ltd, Sony BMG Music Entertainment (India) Ltd and Tips Industries Limited). © See Tarun Banerjee, Final Report regarding the 37 Annual General Meeting of IPRS, T.S. No. 124 of 2006, February 4, 2008, §] 1.2. October - December, 2012 504 NUJS LAW REVIEW 5 NUJS L. Rev. 469 (2012) In fact the existing governing laws did not even require ownership as a pre-requisite to membership of IPRS.’ One would then question the us- age of the term ‘owner-member’ by the court appointed ‘receiver’ in his report. Regardless of this and other unanswered questions, the new governing law of IPRS ensured that the music labels were now firmly in control of IPRS. This was the turning point and the financial woes of the composers and lyricists at IPRS would begin henceforth. 8. The end of royalty payments to Akhtar & Co. Shortly after the 37" AGM, the management at IPRS, controlled by music labels, required all composers and lyricists to sign a standard-format letter’? This letter not only required the lyricist and composers to acknowledge that the music labels owned the copyright in all their works but also wanted them to accept the terms of the 1993 MoU.'® The letter also required them to accept the new governing laws of IPRS despite the fact that not a single author was present at the 37" AGM. 64 The authors, who did not sign the letter, not agreeing to the con- tents therein, were not paid any of the annual royalties that they had been re- ceiving from IPRS every year.'® Given that the royalties from IPRS counted towards a substantial portion of income for most of the smaller composers and authors, it came as no surprise that most of them signed the letter under duress. As per IPRS, at least 1473 composers/authors had signed the letter in order to receive royalties from IPRS.1° 4 See supra, Section TV (D)(1) (The misdeeds at IPRS: The Final Catalyst ~ 1) The origins and role of IPRS). 1 Letter addressed to The Indian Performing Rights Society and all its publisher members, signed by the Authors/Composers/Legal Heirs, September 23, 2009. 18 Id, 42. 44 Id, 4 3.(The relevant extract from this standard form letter is as follows I would like to place on record that we the creative fraternity of Authors and Composers have shared a very healthy and cordial relation with the Publishers (Music Companies). It has come to our notice that some of the authors/ composers have raised unnecessary disputes with regards the rights of the Publishers. I the undersigned, hereby affirm that I am in total agreement with the MOU reached between the Indian Performing Rights Society (IPRS) and Indian Music Industry (Formerly Indian Phonographic Industry-IPI) on 12" November, 1993, which confirmed that the ownership in the literary and mu- sical works rested with the publishers, unless their (sic.) was contract to the contrary. We also acknowledge and accept the present (new) Memorandum, and Articles of Association which is in line with the Copyright Act, 1957 and gives the correct recognition and governance to the owners of the rights. We are pleased to understand and accept the distribution of the performing royalty as per the MOU stated above). 1 See Three letters addressed to The Director and Registrar of Copyrights, signed by The Indian Performing Right Society, February 18, 2011, February 11, 2011 and February 3, 2011 “ Id October - December, 2012 RIGHTS OF LYRICISTS AND COMPOSERS 505 This letter and the scheme contained in the letter, was justified by IPRS on the basis of a positive legal opinion that it had sought from Justice Phukan, a retired Supreme Court Judge, on the issue of payment of royalties as per the formula prescribed by the 1993 MoU.” Even a simple perusal of the opinion rendered by Justice Phukan indicates that he was either misinformed or he misunderstood certain crucial facts. For instance, Justice Phukan’s opin- ion repeats the assertion that the 1993 MoU agreed to share 50% of the royal- ties with the composers and authors solely to encourage them.'® This was not true. The MoU had agreed to share royalties with the authors and composers without any caveat and in such a circumstance it is presumed that the MoU agreed to share royalties with composers and lyricists in consideration of the final object of the MoU. Authors and composers would never have agreed to the MoU without such a royalty sharing agreement. The composers and authors were entitled to the money as a matter of right and not a matter of gratis. It also appears that Justice Phukan was not made aware of the fact that the 50:30:20 revenue sharing formula for certain royalties in the MoU had been incorporated into Rule 4 of the ‘Rules of the Society’ via a special resolution passed by the AGM in 2001.!° Once the terms of the MoU were incorporated into the Rules, it would be binding on IPRS and all of its members. For authors like Akhtar & Co. who refused to sign the letter, the non-payment of royalties proved to be the ‘last straw’. Shortly thereafter, Akhtar & Co. filed complaints with the Central Government regarding the non- payment of royalties and when even those efforts did not yield any results, they began lobbying with the establishment for an amendment to the statute itself. 9. The quiet royalty heist between 2004 and 2009 As mentioned earlier, the IPRS was proving to be a goldmine in terms of royalties that could be earned through ringtones and public perfor- mance licences. However, starting in 2004, the then IPRS management began to inform its licensees via letters, that it was no longer going to administer ring- tone royalties and further instructed such licensees to contact IMI for licensing of such rights.!° This decision by IPRS made no financial sense since ringtone royalties, which totalled to Rs. 3,65,514,007.94 (3.65 crores) constituted 30% 4" See In re Indian Performing Right Society (ex parte querist), Legal Opinion by Justice S.N. Phukan (Former Judge, Supreme Court of India), July 31, 2008 168 Jd, 4 2(iv). % The Indian Performing Right Society, Special Resolution passed at the Annual General Meeting, September 21, 2000, 7. "0 See the two letters addressed to Mr-Taron Mohan (Country Head, M/s, Phoneytunes.com) and Mr.Mandar Thakur General Manager, Sound Buzz India Pvt. Ltd), signed by The Indian Performing Right Society, February 24, 2004, October - December, 2012 508 NUJS LAW REVIEW 5 NUJS L. Rev. 469 (2012) Mr.Akhtar, was to the Minister for Human Resources & Development, the late Mr. Arjun Singh. The complaint requested the Central Government to take over the administration of IPRS and ensure that royalty payments, which had been stopped by the new management of IPRS, were made to all the compos- ers and lyricists.’ While the main complaints related to the issues already discussed in this paper, this complaint flagged some new issues such as the sub-licensing of television rights to PPL through a MoU, which rights were then sub-licensed to another company by the name of Select Media Ltd.'s? Although this arrangement did make commercial sense, since the broadcast industry wanted a single window licence instead of negotiating with two different cop- yright societies, it was technically in violation of the law because copyright societies were supposed to be operating within the terms of their registration for a particular class of works. On the basis of this complaint, the Registrar of Copyrights initiated the first round of inquiry on June 24, 2008.8 While this inquiry was on-going, another complaint was filed by Ravi Shankar Sharma a.k.a. ‘Bombay Ravi’, the famous composer who com- posed brilliant music like — Pyar Kiya To Darna Kya (1963), Neel Kamal (1968), Ek Alag Mausam (2003) and many more foot tapping numbers that are prized jewels of Indian music and culture. ‘Bombay Ravi’ had filed his complaint with the Joint Secretary of the Ministry, on January 24, 2009, who in turn forwarded the complaint to the Registrar of Copyrights.'* Ravi’s complaint focussed on the fact that composers and lyricists of IPRS were being ‘harassed and tortured’ by the music labels of IPRS.!*5 His main allegation was with respect to the fact that the music labels were withholding from the composers and lyricists, the royalties that were rightly due to them.!* ‘Bombay Ravi’ would pass away three years later without receiving any royalties from IPRS.!®” The inquiries initiated by the Registrar of Copyright, on the basis of the above complaints, were largely ineffective, and for reasons which are not clear, the Registrar of Copyrights did not cancel IPRS’s registration as a copy- right society nor did he appoint an administrator to takeover IPRS, despite the fact that there was a good case for doing so. +80 See Letter addressed to Minister of Human Resource and Development (Mr. Arjun Singh), in the matter of illegalities in administration of IPRS, March 26, 2008 1d. © Jd, 49,410. © Complaint addressed to the Registrar of Copyrights, signed by The Indian Performing Right Society, in the matter regarding illegalities in administrating of IPRS, July 15, 2008 8 Letter addressed to Amit Khare Joint Secretary, Ministry of Human Resource Development, signed by Ravi Shankar Sharma (Music Director), in the matter regarding harassment of com- posers and authors by publishers, January 24, 2009. * 1d, 41, 93. 86 14,43 8" See Ajith Kumar, Bombay Ravi Dead, Tae Hoxpu (Kozikhode) March 8, 2012, available at http:/Avww.thehindu, com/arts/music/article2971806.ece (Last visited on December 24, 2012) October - December, 2012 RIGHTS OF LYRICISTS AND COMPOSERS 509 For its part, IPRS, under the control of music labels, did every- thing in its power to stall the inquiry by the Registrar of Copyrights. Its final attempt to derail the inquiry was the most audacious but it resulted in success. As a part of this strategy, Saregama (a member of the IPRS) impleaded the Registrar of Copyrights, who sits at New Delhi, in one of the existing lawsuits before the Civil Court at Barasat and sought an interim injunction against the Registrar from carrying out further inquiry and imposing any order on IPRS to repatriate money to the complainant authors and composers.!** Saregama had alleged that the inquiry and the order by the Registrar of Copyright to re- patriate royalties to the composers and authors were in violation of the earlier injunctions passed by the Civil Judge at Barasat.!®° Ordinarily, civil courts are prohibited by law from passing any orders against the Central Government without giving the government a chance to be heard, unless the plaintiff can demonstrate urgency for doing away with the requirement!” The Civil Judge at Barasat waived this statutory requirement and issued a ‘status-quo’ order against the Registrar, part of the reason being that the counsel of IPRS who was the defendant in the suit, informed the Court that it had no objection to Saregama’s request.!*! By joining the cause of action before the Barasat Court, both IPRS & Saregama managed to nix the Registrar’s attempt to inquire into the happenings at IPRS. The third complaint was filed on December 20, 2011 before the Minister for Human Resources, Mr. Kapil Sibal, by a group of four leading musicians — Jagjit Singh, Shanker Mahadevan, Vishal Bharadwaj and Javed Akhtar. This complaint was filed during the height of the lobbying efforts by composers and authors for amendments to India’s copyright law and when the Copyright (Amendment) Bill, 2012 had already been introduced into the Parliament. This complaint, specifically requested the Central Government once again to take-over IPRS by appointing an administrator to look into the affairs of IPRS.! This time round, the management of IPRS, which was under the spotlight, thanks to a scathing Parliamentary Report, co-operated with the Registrar and answered questions during the course of the inquiry. The re- 8 Saregama India Ltd. v. Indian Performing Right Society, (Application for Interim Injunction), TS. 124 of 2006, Before the Court of the Second Civil Judge (Sr.- Div), Barasat, § 49, © 1d, 941 1% Civil Procedure Code, 1908, § 80. 191 See Saregama India Ltd. v. Indian Performing Right Society, Order, T.S. 124 of 2006, Before the Court of the Second Civil Judge (Sr.- Div.), Barasat , 45-48, November 6, 2011, available at http://spicyip.com/docs/iprs4.pdf (Last visited on December 24, 2012). 1% See Letter addressed to the Minister for Human Resource Development, signed by Jagjit Singh, Shankar Mahadevan, Vishal Bhardwaj and Javed Akhtar, in the matter regarding il- legalities with respect to administration of IPRS (2), December 20, 2011 1% 1d,45 1% Standing Committee Report, Copyright Amendment Bill 2010, supra note 8, 421.4 to §| 21.6; See letters addressed to Mr. Raghavender (Director and Registrar of Copyrights), signed by October - December, 2012 510 NUJS LAW REVIEW 5 NUJS L. Rev. 469 (2012) plies by IPRS revealed several prima facie contradictions along with violations of the law. For example, the Chairperson of IPRS claimed in a pertinent part that IPRS was not collecting any ringtone related royalties and that it had not assigned the right to collect these royalties to anyone else.!°* However, as high- lighted above, this was clearly contradicted by PPL’s claim in its annual report that it was collecting ringtone royalties on behalf of IPRS.!°° Similarly, other admissions by IPRS revealed serious infractions of the law. For example, the admission by IPRS that it had licensed all of its television rights to PPL which had in turn sub-licensed these rights to Select Media Ltd.,!"’ for licensing to the television industry was in violation of the Copyright Act as well as the terms of registration of IPRS as a copyright soci- ety because each copyright society was supposed to administer its own works. Sub-licensing the works defeated the entire purpose of registration and regula- tion of a copyright society. These replies filed by IPRS provided the Registrar of Copyrights with ample grounds to cancel the registration of IPRS or at the very least takeo- ver the administration of the IPRS. For reasons best known to the Registrar of Copyrights, no such action was taken against either IPRS or PPL. In a RTI reply, the Copyright Office informed the author that the official inquiry into the allegations of mismanagement of IPRS had not been continued due to the pend- ing Copyright (Amendment) Bill 2010 in the Indian Parliament.’ As of March, 2013 the Registrar has been sued once again by music labels before the Barasat Court.! The outcome of these proceedings is still awaited. V. THE COPYRIGHT (AMENDMENT) ACT, 2012 A, AN INTRODUCTION On March 30, 2010, the Minister for Human Resources and Development, Mr. Kapil Sibal, introduced the Copyright (Amendment) Bill, 2010 in the Rajya Sabha, the Upper House of Parliament.” The legislation was Hasan Kamal (Chairman, IPRS), February 3 and 11" , 2011. 195 Jd,, Standing Committee Report, Copyright Amendment Bill 2010, supra note 8, § 21.4 to § 216. 196 Prashant, supra note 70. 17 See Letters addressed to Mr. Raghavender (Director and Registrar of Copyrights), signed by Hasan Kamal (Chairman, IPRS), February 3 and February 11, 2011 1% See Prashant Reddy, Official Inquiry into Mismanagement of IPRS Given a Quiet Burial, February 12, 2012, available at http:/spicyipindiablogspot.com/201 2/02/official-inquiry- into-mismanagement-of html (Last visited on December 30, 2012). 1% Prashant Reddy, Déjé vu for Akhtar — Nightmare Before Barasat Courts Plays Out Once Again — With a Different Ending?, February 4, 2013, available at http://spicyipindia.blogsp ot com/2013/02/deja-vu-for-akhtar-nightmare-before html (Last visited on June 13, 2013). 2% HR Min Introduces Copyright Amendment in Rajya Sabha, April 20, 2010, available at http:/www.radioandmusic.com/content/editorial/news/ October - December, 2012 RIGHTS OF LYRICISTS AND COMPOSERS 513 owner of the copyright and authors and music composers do not have separate rights.” This amendment was retained in its original form in the final ver- sion of the law which was passed by the Parliament. As a result of this amend- ment, the authors would now own their rights in the music and lyrics even if they were created for the purpose of a cinematograph film. Once the synchroni- sation rights in the music have been licensed to the producers of the cinemato- graph film, the authors will continue to own the remaining rights such as the public performance rights in the music and lyrics. These remaining rights too could be licensed away by the authors under the new amendments but such contracts would now be subjected to the restrictions discussed below, where the authors would be entitled to certain minimum royalties. C. STRENGTHENING THE RIGHTS OF AUTHORS The amendments sought to remedy the problem of weak negotiat- ing powers of authors by three amendments. Firstly, it sought to provide the authors in the music industry, with a right to inalienable, mandatory royalty sharing. Secondly, it prohibited contracts which forced authors to licence away their rights for even future technologies. Thirdly, the amendments provided authors a right to retain inalienable mandatory royalty sharing even after the copyright is licensed away and fourthly, it sought to re-establish control of au- thors over the copyright societies. Each of these amendments is discussed in detail below. 1. Providing authors in the music industry with a right to inalienable, manda- tory royalty sharing In the quest to strengthen the author’s rights, the drafters of the Copyright Amendment moved away from the traditional Anglo-Saxon moor- ings of Indian copyright law, for the purpose of moving towards the European style of droit d’ auteur. The Anglo-Saxon model of copyright law, which origi- nated in the U.K. with the Statute of Anne in 1709, and followed by most com- mon law countries like India and the United States, always viewed copyright law as a property right which could be transferred between different parties for a certain consideration.2” The European system of copyright which is more often referred to as author’s right or droit d’ auteur has the same effect on the market as copyright law in India or the U.K.2 However, the jurisprudential underpinnings of both these models of copyright law are quite different. In the 2 Standing Committee Report, Copyright Amend Bill 2010, supra note 8, | 9.14. 20 See Pau GoLpsten, CopyRiGHt’s HicHWAY: FROM GUTENBERG TO THE CELESTIAL JUKEBOX (2003) (For an excellent history of copyright law). 40 Jean-Luc Piotraut, An Authors’ Rights-Based Copyright Law: The Fairness And Morality of French and American Law Compared, 24 Carpozo Arts & ENTERTAINMENT 549, 555 (2006). October - December, 2012 514 NUJS LAW REVIEW 5 NUJS L. Rev. 469 (2012) droit d’ auteur system, the creative work is viewed as an extension of an au- thor’s personality and is considered inalienable.*" As such, the droit d’ auteur model is grounded in human rights, where the author’s right to control his work is based upon a natural rights philosophy.” Critiquing the European model, described as the ‘romantic view’ of copyright, an American scholar states the following: “The Romantic view of copyright is one of the natural rights, a social contract approach to copyright: Authorship is attrib- utable only to individuals because association with the work is believed to be both personal and immutable (hence moral rights too). It is for this reason that the continental referent is droit a’ auteur, author’s right, and not ‘copyright’.”24 A good illustration of the droit d’ auteur system is Germany where the author can never waive ownership of the rights in his work, but in- stead only licence his economic rights. Describing German copyright law, a German scholar states that, “Copyright cannot be transferred (§ 29 (1) UrhG), waived, or renounced, either in whole or in part (uch as economic rights or moral rights)”.4 The author, however, does have the right to licence the right to use the work to other persons in exchange for royalties.2!5 More importantly, countries like Germany have a statutory provision entitling German authors to receive adequate remuneration.” As per this provision, if the author is of the view that he or she has not received ad- equate remuneration, the author can approach a court of law to make any such determination.” Normally, the standard of adequate remuneration for an indi- vidual author is pegged at the rates negotiated between authors associations and the industry, but courts have a significant role to play in this respect. Of course, these rights of the authors come with a string of conditions, but when compared to the Anglo-Saxon version of copyright law, the statutory protection offered under German law is quite strong with German courts having a substantial say in what constitutes adequate royalties for German authors.” In addition to this right of ‘adequate remuneration’, German copyright law also has several other safeguards such as the ‘bestseller provision’, which allows authors to claim a share of profits in case the exploitation of a work generates profits completely a Id 22 Jd; See generally Jack Donnelly, Human Rights as Natural Rights, 4 Human Rigits QUARTERLY 391-405 (1982) (For a comparison between human rights and natural rights). 28 Wituam F, Parry, Parry on Copyrici, Chap 3 § 3 :19 (2012). 24 Doories THum, CopyRict THROUGHOUT THE Wor Chap 16 6:29 (a) (Silke von Lewinski ed., 2011). 28 Td 46 Jd, Chap 16 16:32 (@). ™ Id x8 Id October - December, 2012 RIGHTS OF LYRICISTS AND COMPOSERS S15 disproportionate to initial expectations.2? Another safeguard for German au- thors is the right to claim a share of profits generated from exploiting the work in new forms which were not initially contracted upon.?° The specific European law which appears to have influenced the Indian amendments the most is the European Community Rental Rights Directive of 1992.77! Although the model contained in this law was aimed at rental royalties, its author, Dr. Silke Von Lewinski, acknowledges that this model can be applied to other sectors. ? The five essential features of this Lewinski model are as follows: (1) The statutory basis for the remuneration right; (2) The unwaivable nature of the right; (3) The fact that it can be transferred only to a Collective Management Organisation (CMO); (4) Mandatory collective administration of the remuneration right, and the professional user being the debtor of the remuneration. The drafters of the Copyright Amendment appear to have been significantly influenced by this alternative narrative of copyright law since the final version of the amendments effectively modelled a section of the Indian copyright law on the Lewinski model described above, which in itself is rooted in the droit d’auteur system of law. The initial version of this Bill, which is the Copyright (Amendment) Bill, 2010, proposed two amendments to § 18 of the Copyright Act to strengthen author’s rights. These amendments, contained in Clause 6 of the Bill, prohib- ited the composer or lyricist of works incorporated in a cinematograph film, from assigning to any person, apart from a legal heir or a copyright society, his or her right to collect equal royalties that are eared by the assignee of the copyright by exploiting the said work outside a cinema hall. 2° Id., Chap 16 - 16:32 (b) 20 Id., Chap 16 - 16:32 (0). 21 Council Directive 92/100/EEC of 19 November, 1992 on Rental Right and Lending Right and on Certain Rights related to Copyright in the Field of Intellectual Property, O. J. L 346/61 of 27 November, 1992 2 Silke Von Lewinski, Collectivism and Individual Contracts in Isprvipvauism AND Cottecrivensss ny INTELLECTUAL Property Law 122-123 (Jan Rosen ed., 2012) 2 Td, ‘This was certainly not the first imp ort from Europe since Indian copyright lawhad already im- ported concepts like ‘moral rights’ and ‘resale royalties for art’ from Europe. See The Indian Copyright Act, 1957, § 57 and § 53A. October - December, 2012 518 NUJS LAW REVIEW 5 NUJS L. Rev. 469 (2012) case, the above recommendations of the Standing Committee were incorpo- rated in the final version of the Bill that was passed by the Parliament. The criticism of the above mandatory royalty sharing provisions are two fold, the first being the practical aspect of implementing the provision in contracts between the authors and producers and the second being the issue of legal interpretation of the provision. On the practical side, there have been concerns about the impact that the provisions will have on the authors who have been highly dependent on the one time lump-sum payments that they received earlier when they gave away their entire rights. The amendments will now force them to share the risk with the producer and wait for a period of time before the royalties start flowing in and if the music is not received well, the authors receive close to nothing. For authors used to a culture of receiving risk-free one-time lump-sum payments, it remains to be seen how they will adjust to participate in the risk of success or failure of their works. Not every author may have the financial wherewithal to assume such risk, especially the new entrants. The second criticism is based upon the interpretation of the provi- sion in question. There has been a particular critique by some scholars, on the wording of the amendments, especially the use of the phrase ‘right to receive royalties’** These commentators point out that the phraseology of the various rights provided for all protectable works under copyright law, under § 14 of the Copyright Act, is essentially a set of positive rights to carry out particular acts regarding the work created by the author. Some of these rights are the right to reproduce, the right to publicly perform and the right to make derivative rights. There is however no positive right under § 14 to ‘receive royalties’. The issue therefore is, how exactly can the amendment impose a bar on assigning away the right to ‘receive royalties’ when no such right is available under the law, especially § 14 of the Copyright Act? This remains unanswered and shall only be addressed through litigation before the courts. 2. Bar on contracting away rights in future technologies This section of the amendments sought to render void any contract for the assignment of copyright from an author in future technology, unless the technology in question was expressly referred to in the initial assignment. In a pertinent part, the provision read as follows: “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 re- ferred to such medium or mode of exploitation of the work”. 2 See generally ANANTH PADMANABHAN, INTELLECTUAL PropeRry Rights 319-322 (2012). »5 ‘The Copyright (Amendment) Bill, 2010, Clause 6 which sought to amend $18 October - December, 2012 RIGHTS OF LYRICISTS AND COMPOSERS 519 This provision was meant to prevent a re-play of those contracts where composers and lyricists in Bollywood had un-wittingly contracted away their rights to the future exploitation of their music, in the form of ringtones for mobile or cellular phones. As explained earlier, these were contracts which had a standard clause forcing authors to assign away their rights in all future technologies. As per the new proviso proposed in the Bill, the assignee of the copyright would have to renegotiate the contract with the authors every time they wished to exploit the copyright of a work in a new technology which did not exist at the time of the assignment of copyright. As expected, this new proviso was extremely controversial. The opponents to this provision were not only music labels but also the book pub- lishing industry. The Parliamentary Standing Committee Report recorded the opposition to this particular clause, made by the following parties: South Indian Music Companies Association, RPG-Saregama Enterprises, Film &Television Producers Guild of India, South Indian Film Chamber of Commerce, Indian Broadcasting Foundation, Federation of Indian Publishers, Association of Publishers in India, the Indian Reprographic Reproduction Organization & the Business Software Alliance.” All of these organizations objected to this amendment on the grounds that it would cause great uncertainty in the industry since technology was rapidly changing and an assignee who had contracted for only a particular technology could be completely upended by the emergence of anew technology.*” Despite the detailed recordings made of these grounds of opposi- tion, the Parliamentary Report is silent on the reasons for retaining this pro- vision. The final version of the law enacted by Parliament did not make any changes to this specific provision and it was retained as drafted. 3. Providing authors a right to retain inalienable mandatory royalty sharing even after the copyright is assigned away The text of the provision, as originally proposed in Clause 7 of the Bill to amend § 19, read as follows: “(9) No assignment of the copyright in any work to make a cinematograph film or sound recording shall affect the right of the author of the work to claim royalties or any other con- sideration payable in case of utilisation of the work in any form other than as part of the cinematograph film or sound recording.” 26 Standing Committee Report, Copyright Amend Bill 2010, supra note 8, = Id October - December, 2012 520 NUJS LAW REVIEW 5 NUJS L. Rev. 469 (2012) The Parliamentary Standing Committee recommended revision of the above provisions in order to ensure that they were in line with the revi- sions that it had proposed to § 18.48 The revised sub-clause (9) and the ad- ditional sub-clause (10), as proposed by the Committee’ and as enacted by Parliament in the final version of the legislation, are reproduced as follows: “(9) No assignment of copyright in any work to make a cine- matograph film shall affect the right of the author of the work to claim an equal share of royalties and consideration payable in case of utilisation of the work in any form other than for the communication to the public of the work, along with the cinematograph film in a cinema hall. (10) No assignment of the copyright in any work to make a sound recording which does not form part of any cinemato- graph film shall affect the right of the author of the work to claim an equal share of royalties and consideration payable for any utilisation of such work in any form.” The only purpose of the above clauses is to serve as a clarification that the ‘right to receive’ royalties is distinct from the copyright in the work itself and that the authors would retain the ‘right to receive’ royalties even after the copyright has been assigned. 4. Re-establishing control over copyright societies The last and final limb of Mr.Akhtar’s lobbying efforts was to change the manner in which copyright societies (@specially IPRS) were con- trolled by their members. The undoubted inspiration behind this particular move was the manner in which the music labels had taken over IPRS and the fact that they had subsequently stopped paying royalties to authors who were in control of IPRS.“ As noted by the Parliamentary Standing Committee Report, “Tt was further informed [by the Government] that in the background of the amendment was the functioning of the Indian Performing Rights Society, a copyright society founded by authors and music composers including music publishers.” Working towards the above mentioned goal, the amendments originally proposed that all future copyright societies be administered only by ‘authors’ and not ‘owners of copyrights’? As noted by the Parliamentary © Jd, 410.20. 2» Td. 40 See generally supra Section IV(c) (The misdeeds at IPRS — the final catalyst), “| Standing Committee Report, Copyright Amendment Bill 2010, supra note 8, §| 16.3 2 ‘The Copyright (Amendment) Bill, 2010, Clause 22. October - December, 2012 RIGHTS OF LYRICISTS AND COMPOSERS 523 they need”. The danger of such collective licensing is that it gives rise to monopolies, therefore making regulation of such collective licensing one of the key challenges of copyright law in the 21* century. Globally there have been two models of regulation. Countries like UK., for instance, need copyright societies to register with the government, which usually allows for only one copyright society in a class of works, fol- lowed by an oversight of the society’s licensing schemes. In case of a dispute with regard to the tariffs, a Copyright Tribunal exists to resolve all disputes regarding the same. The other model of regulation is the one followed by the United States, where there is no requirement for registration of copyright societies. There are multiple copyright societies in the U.S. in the same class of works and rights , for example, the American Society of Composers, Authors and Publishers (ASCAP’), Broadcast Music, Inc. (BMI’) and SESAC.**! The first two, which are the biggest societies, have been functioning under anti-trust decrees enforced by the Department of Justice for the last 7 decades, after the copyright societies were found to be in violation of the competition laws. Additionally, there is a Copyright Royalty Board which fixes royalties for statu- tory licences.*3 Over the last 5 decades, India has oscillated between both the modes of regulation. Under the original Copyright Act, copyright societies, which were then known as performing rights societies, were not required to register themselves with the government and there were no restrictions on the number of copyright societies in each class of works. However, if a copyright society wanted to carry out the business of collective licensing, it was required to “publish and file with the Registrar of Copyrights, statements of all fees, charges or royalties which it proposes to collect for the grant of licences for performance in public of works”.** The statement of fees and royalties was also required to be published in both, newspapers and the gazette.” The right to sue for infringement of such rights was subject to the copyright society submitting 4° See generally Prof. Gervais, Collective Management of Copyright: Theory and Practise in the Digital Age in Cou.ective MANAGEMENT oF CopyRiGHT AND RELATED Riots 15 (Prof. Gervais ed., 2010), 280 See generallly Prof. Dr. Paul L.C. Torremans, Collective Management in the United Kingdom in CoLLecTIVE MANAGEMENT oF CopyRIGHT AND ReLarEp Ruauits 251 (Prof. Gervais ed., 2010). See generally Glynn Lunney, Copyright Collectives and Collecting Societies: The United States Experience in MANAGEMENT oF CopyRIGHT AND RELATED Riuts 339 (Prof.Gervais ed., 2010) ? See United States v. American Society of Composers Authors and Publishers, Equity No. 78- 388 (S.D.NY., filed 30 Aug, 1934); Broadcast Music Inc. v. Columbia Broadcasting System Inc., 441 US. 1 28 17 U.S.C, § 801-805 (2009), 24 The Copyright Act, 1957, § 33 (as originally passed). 25 Id, § 33(). 26 The Copyright Rules, 1958, Rule 12(1) (as originally passed). October - December, 2012 524 NUJS LAW REVIEW 5 NUJS L. Rev. 469 (2012) such statement of fees and royalties to the Copyright Office.**’ The published rate of royalties could be challenged by any person before the Copyright Board, a tribunal, whose decision on the rates would be considered final for all purposes.?>* The cumulative effect of these provisions was the creation of a rather stringent scheme to ensure transparency for copyright societies apart from ensuring price regulation. Such regulation was not surprising given that the Indian economy in the fifties was primarily a socialist economy where the Central Government kept a tight rein on every aspect of the economy. This, however, changed in the nineties (1990-91) when India went through a severe financial crisis. As a consequence of the crisis, India was forced to open its markets to foreign capital and lift a number of controls on the operation of free enterprise. The effects of a newly liberalized economy changed the mind-set of the government. This change was reflected in the Copyright (Amendment) Act, 1994. With this legislation, the Parliament renamed ‘performing socie- ties’ as ‘copyright societies’ and relieved them of several of the onerous obliga- tions discussed above. According to the new law, copyright societies only had to ensure that they were registered with the Copyright Office, that they were functioning under the control of the owners of copyright and complying with the statutory caps on administrative overheads.”° The law required the govern- ment to ordinarily register only one copyright society for each class of work.? The provisions regarding the right to challenge the royalty structure before the Copyright Board were deleted, which meant that copyright societies now had a stronger hand in negotiations with content users.2 There was of course, the possibility that a potential user could seek compulsory licences but such li- cences were granted in only limited circumstances where the work was not being made available to the general public. From 1994 onwards, copyright societies in India grew at a phe- nomenal pace. However, as it is always the case with monopoly rights in a free market, there were several allegations of abuse of monopoly powers bestowed on these copyright societies under the Copyright Act. The range of complain- ants varied from hotels, restaurants, radio broadcasters to event management companies. In the years leading up to the Copyright Amendment, IPRS & PPL were sued by the Event and Entertainment Management Association,*® the >” ‘The Copyright Act, 1957, § 33(2) (as originally passed), 28 Id,,§ 34. >© ‘The Copyright Act, 1957, § 33 (after the 1994 amendment). 2 Id 2 The Copyright (Amendment) Act, 1994. ‘The Copyright Act, 1957, §31 (after the 1994 amendment). ® Event and Entertainment Management Association v. Union of India, W. P. (C) 5422/2008 & CM APPL 10648/2010, May 25, 2011 (Del. H.C); See Prashant Reddy, Delhi High Court October - December, 2012 RIGHTS OF LYRICISTS AND COMPOSERS 525 Federation of Hotels & Restaurants Association of India’ and several radio broadcasters for unreasonable tariff rates. Petitions by the first two associa- tions were on a slippery legal footing and hence were subsequently dismissed by the Delhi High Court.7 IPRS & PPL have also been sued in various states by regional associations of hotels and restaurants.”°° The radio broadcasters on the other hand, managed to successfully secure compulsory licenses by suing the copyright societies before the Copyright Board.” While the high rate of tariffs was the primary complaint, there were also several complaints regarding the lack of transparency in the opera- tion of these copyright societies especially with respect to tariffs that were be- ing charged. For example, PPL would not even publish its tariffs on its website despite being required to file the same with the Registrar of Copyrights as a public document under the Copyright Rules, 1958.7Against this backdrop, it was not surprising that the government sought to amend the legislation in order to put the copyright societies back under intensive regulation. Therefore, as per the Copyright Amendment, all existing copyright societies would have to register once again with the Copyright Office and thereafter, they would have to renew their registrations every 5 years after demonstrating compliance with the terms of the legislation.*° In a move to further increase transparency, the copyright society would be required to publish its tariff scheme, instead of merely submitting it to the Registrar of Copyright.2” Most importantly, however, the amendments aimed to curb the bargaining powers of the copyright societies by allowing any person to challenge the tariff scheme of the copyright societies before the Copyright Board.?” Further, it was provided that, “the Board may, if satisfied Dismisses yet Another Petition against IPRS & PPL, June 2, 2011, available at http://spicy- ipindia.blogsp ot.com/2011/06/delhi-high-court-dismisses-yet-another.html (Last visited on December 26, 2012). 21 Federation of Hotels & Restaurants Association of India v. Union of India , WP(C) No.452/1999, WP(C) No.914-1040/2009 & CM No.17009/2008, April 7, 2011 (Del. H.C), See Prashant Reddy, Delhi HC Ejects Petitions against Copyright Societies & Copyright Act, April 8, 2011, available at_http://spicyipindia.blogspot.com/2011/04/delhi-he-ejects-petitions-against. html (Last visited on December 26, 2012). 265 See Id.; supra note 263. 266 See Phonographic Performance Ltd., Report of the Directors on the Working of the Company for the Year Ended March 31, 2007, 3, available at http://www:spicy ip.com/does/pp|5.pdf (Last visited on December 26, 2012). 26” Music Broadcast Pvt. Ltd.v. Phonographic Performance Ltd., Case No. 1, 2 and 6 of 2002 and Case No. 3/1 to 3/6 of 2008, Order passed on August 25, 2010, Before the Copyright Board, available at http:/wwwspicyip.com/docs/Copyrightboardorder.pdf (Last visited on December 26, 2012) 28 ‘The Copyright Rules, 1958, Rule 14J - Tariff Scheme (after the 1994 amendment). 2 ‘The Copyright (Amendment) Act, 2012, Clause 19 (this clause amended §33 of the Act). 2° ‘The Copyright (Amendment) Act, 2012, Clause 20 (this clause inserted a new § 33A to the Act). Id October - December, 2012