Copyright

Amending the Copyright Act to provide Justice for All….


Outlook in its last week edition carried a heart-rendering article on how so many Indian music composers and lyricists are living in near penury despite having several hits to their credit. The ultimate irony, as pointed out by the article, is the fact that these composers and lyricists have to take permission from the music companies to perform their own music.

The reason for this sorry state of affairs is simple, most music companies insist that the artists ‘assign’ all rights to the music companies for a single, one time renumeration with no say in future earnings. Since all assignments deeds are required by statute to be in writing it is not like these artists do not know what they are getting into. The real problem over here is most likely the weak bargaining capacity of the artist vis-a-vis the music company. As an artist becomes more popular his bargaining power vis-a-vis the music company increases and the terms of the assignment deed will ultimately balance out. For example A.R. Rahman in 2009 definitely has much more bargaining power than he would have 15 years ago. Unfortunately not every artist reaches the stature of A.R Rahman.

Should music composers and lyricists be left to the mercy of the market forces OR is it time for the law to ensure some modicum of justice to those not capable of bargaining from a position of strength? Countries like France and Germany offer several interesting lessons on how to address this imbalance in bargaining positions.

The first solution is rather simple and involves collective bargaining by a society of artists of performers. Such societies will provide artists and performers with standard form contracts that protect their rights in the face of any unreasonable demands from the producers or music companies. Given the collective bargaining power of such societies such contracts will in all probability be more equitable than any contract that an artist may try to enter into on his own. There however may be freelance artists or performers who may not be a part of a collective bargaining society. These freelance artists or performers are protected by some truly revolutionary clauses in German copyright law.
(Click here for an interesting article on the German law)

The second solution provided by the aforementioned revolutionary clauses in German copyright law can be found in the relatively recent 2002 legislation titled German Copyright Contract law. German law provides for atleast two provisions: (i) an equitable renumeration provision & (ii) a ‘best -seller provision’.

(i)The equitable renumeration provision starts of with stating the obvious i.e. the artist is entitled to an equitable renumeration contractually agreed upon. However if in case the renumeration agreed upon is not equitable the German statute requires the negotiations to be handled through mediation. For its part equitable renumeration is determined according to the prevalent fair business practices depending on the length, timing as well as all other circumstances.
(ii)The second revolutionary provision is the ‘best-seller’ provision. This provision provides the author/artist with the right to demand an equitable share of the profits if in case these profits are grossly disproportionate to the initial renumeration made to the author. Such a provision is not all that alien to the Indian Copyright Act. Section 53A of the Copyright Act provides for a statutory renumeration right to the artist or his heirs in cases of resale of certain works.

The above discussed provisions of German Law are revolutionary for the simple reason that is in a way these clauses run contrary to the fundamental principle of a free market economy – the freedom to contract. However the same requirements of social justice that drive minimum wages legislation also justify the presence of similar clauses in copyright law.

Prashant Reddy

Prashant Reddy

T. Prashant Reddy graduated from the National Law School of India University, Bangalore, with a B.A.LLB (Hons.) degree in 2008. He later graduated with a LLM degree (Law, Science & Technology) from the Stanford Law School in 2013. Prashant has worked with law firms in Delhi and in academia in India and Singapore. He is also co-author of the book Create, Copy, Disrupt: India's Intellectual Property Dilemmas (OUP).

10 comments.

  1. AvatarAnonymous

    I find this topic fascinating. Is part of the reason there is such a disparity in bargaining power due to the fact that film seems to play such an important role in the Indian music industry? That is, is the success of songs driven by their placement in popular films?

    Reply
  2. AvatarHenning Grosse Ruse - Khan

    Dear Prashant,

    indeed, legal protection of the weaker party is an important element in contract laws. Given its equivalent position on consumer protection, I would hope that any future harmonisation of European copyright (contract) law will adopt such a more interventionist approach for the benefit of creators.

    As to the German Copyright Act, the bestseller provision actually has a long history. You are however still correct in calling it revolutionary since its scope has only recently (as described in the article by Professor Grosheide you linked to) been expanded to give it any meaningful application in practice. Previously, the discrepancy between the renumeration initally paid to the author and the (unexpected) revenue of any subsequent rightholder needed to be so significant that most (unexpected) bestsellers would not fall under it.

    Another issue is that of conflict of laws: Under the general freedom to choose the applicable contract law (party autonomy), publishers could attempt to avoid the application of these author friendly provisions in German law by merely choosing another lex causae (e.g. US law, or indeed Indian law) to govern the contractual relationship. To preempt such circumvention, the German Act (in sec.32b) however makes the application of the key author protection provisions (adequate renumeration, bestseller) mandatory in the sense that contracting parties cannot opt out in case there is, generally speaking, a significant territorial link to Germany. The latter is the case under sec.32b if:
    – German law would apply in absence of the choice of another law; or
    – the exploitation regulated under the contract occurs within Germany.

    This private international law element is in my opinion one of the most important features of the author protection mechanism which otherwise is prone to being circumvented by the application of foreign law.

    In more general terms, I would arguie that if copyright has a role to play in facilitating creativity and cultural advancements, laws must focus on the protection of creators and artist – not on publishers and other right holders whose market position enables them very well to secure a sufficient piece of the cake.
    Instead of increasing the terms of protection or introducing particularly strong exclusive rights in the digital, internet context, developing (and developed) countries can do much more for their creators by safeguarding them against the forces of the market.

    All the best,
    Henning

    Reply
  3. Avatarmnbvcxzaq1

    dear Henning Grosse Ruse,
    the points raised in your comment quite right, esp. regarding (i)the pre-existence of such law in germany for a long time, but only recently enforced with its expanded interpretation and (ii)’conflict of laws’ n pvt intl law n ‘forum shopping’ & (iii)proposed shifting of focus of copyrights law from right-holders/assignees/publishers to authors/creators/artists.
    however, i ve a small comment to make on the above-mentioned (i)&(ii). as i ve commented earlier (in response to some other post) also, its more a matter of “will to enforce” n less a matter of ‘need for new laws’. many laws r already there in place in almost all areas of law, but the true expansion n implementation thereof is what is required, e.g. the cited instance of the relevant german law. but my additional comment is that even if this german law were not in existence, if one (courts) wanted, one could always have taken recourse to the various principles/tests of pvt intl law, esp. those under the prescriptive jurisdiction (some such principles/tests r territoriality principle, nationality principle, passive personality principle, ‘most significant relationship test’ n ‘governmental interest test’) to prevent ‘forum shopping’ kinda thing. what i lament is the lack of real ‘will’ (for various geo-politico-economic reasons, which i am not going to discuss here).
    -aditya kant

    Reply
  4. AvatarPrashant Reddy

    Dear Anonymous,

    I’m not too qualified to comment on the point you make. Over the last few years there seems to be an independent market for Hindi music i.e. not connected to films in anyway but yes you’re right in a way the main revenue earner seems to be the movie industry.

    In my view it all comes down to collective bargaining. Unless artists begin to organize themselves they have no hope.

    Prashant

    Reply
  5. AvatarPrashant Reddy

    Dear Henning,

    Thank you for your comments which are insightful as ever.

    I agree with you – Indian law must begin to focus on the artist and the author.

    From what little I could find about the state in France and Germany, the key to such success is the presence of collective bargaining power. I tried researching more on this point but it turned out to be incredibly difficult to find some good open source literature on German copyright law.

    Prashant

    Reply
  6. AvatarAnonymous

    Prashant:

    Our very own Lata Mangeshkar has already gathered a few artist and filed for the registration of a Society for the protection of Performer Rights. It would be interesting to see how the society is able to churn out license fee.

    Reply
  7. AvatarPrashant Reddy

    Dear Anonymous,

    That’s an interesting piece of information. What’s it called?

    I also think the proposed Copyright Amendment Act has a clause to help out artists. However given the confidential nature of the proposed amendment I haven’t had a chance to look at the amendment.

    Prashant

    Reply
  8. AvatarhAr$h

    Prashant(or for that matter, all)

    Isnt it that after the IPR Society case of 1970s, the copyright in a work (by contract of service) rests with the producer only (by virtue of sec 17(2))?

    Reply
  9. AvatarPrashant Reddy

    @ Harsh – you’re right in saying that the copyright in the work rests with the producer. The only point that we’re trying to make is that the terms of such a deed should be more equitable.

    Prashant

    Reply

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