Copyright

Latha Nair on 3 Idiots and Contractual Fairness


Latha Nair, who has already graced our blog several times in the past, now writes on the “3 Idiots” controversy, which has been debated extensively on this blog here, here and here. In particularly, she focuses on the “contractual” issues arising out of this highly sensational case.

I found her reference to Salman Rushdie particularly interesting, since newspapers are abuzz with Rushdie’s recent visit to India to oversee the adaptation of his magnum opus, “Midnight’s Children” by the legendary film maker, Deepa Mehta. I for one, would love to see the kind of contractual benefits that someone like Rushdie was able to negotiate.

She also discusses our poll (on the SpicyIP blog home page) which comes out heavily in favour of Bhagat. 74% of our viewers find that the movie 3 idiots copies substantially from Bhagat’s book “Five Point Someone”.

Here is her complete post:

3 Idiots: Not yet the last word….

[By Latha R Nair, Partner, K&S Partners Gurgaon]

Being an ardent fan of Chetan Bhagat, I have been following the blogs on SpicyIP on the controversy surrounding ‘3 Idiots’ and have been eager to blog on the same but for my preoccupation with certain personal and professional commitments.

Having settled down a bit and watched the movie (and of course, read the book ‘Five Point Someone’), the first thing that came to my mind was a comment made by Charles Dickens regarding certain law suits he had to pursue in asserting his rights as an author of his own works.

I quote him as follows: “My feeling is the feeling common, I suppose to three-fourths of the reflecting part of the community in our happiest of all possible countries, and that is, that it is better to suffer a great wrong than to have recourse to the much greater wrong of the law. I shall not easily forget the expense and anxiety, and horrible injustice of the Carol case, wherein, in asserting the plainest right on earth, I was really treated as if I were the robber, instead of the robbed”.

But for Bhagat’s story, characters and the theme revolving around today’s education and grading systems beautifully depicted in the book, ‘Five Point Someone’, the movie, ‘3 Idiots’, would not have been a roaring success as it has been today. Yet, Bhagat was accused of hankering after cheap publicity when he asserted his rights for credits and was treated by the producers as if he were “the robber instead of the robbed”.

Well, shall we then say that he is in the company of great people like Charles Dickens in more than one way!

Bhagat may have put the controversy behind him and may have moved on. However, one important aspect that authors like Bhagat and producers like Rajkumar Hirani may examine to steer clear of controversies such as this one is the manner in which copyright agreements are concluded in Bollywood. I am compelled to say that these agreements, besides often stepping beyond the four corners of the Copyright Act, 1957, also lack a basic fairness that they ought to reflect in favour of the owner/ author of the copyright.

No assignment or license could be concluded wherein rights beyond what is available to the owner of a copyrighted work under Section 14 of the Act can be assigned or licensed by an owner to an assignee. I had a difficult time relating Clause 2 of the agreement Bhagat signed with Vinod Chopra Films Limited (VCFL) to Section 14 (a) of the Act that deals with the rights of copyright owners in respect of literary works. To begin with, the agreement seems to grant everything under the sun when it says that “the rights shall mean and include to read, refer, interpret, adapt, title, create and produce the novel in any way or manner whatsoever….”.

Could Bhagat really have granted to VCFL more rights than what he had under Section 14(a) of the Act in respect of Five Point Someone? The rights granted under Section 14(a) to a copyright owner in respect of a literary work are as follows:
(i) to reproduce the work in any material form including 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;
(v) 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 above acts specified in relation to the work.

Under Section 19 of the Act, the assignment of copyright in any work shall identify the work and shall specify the rights assigned. If Bhagat had assigned only the rights to make an adaptation of the book in the form of a script or screen play and to make a cinematograph film based on the book to VCFL, the language of clause 2 does not seem to have captured it well except for the word ‘adapt’. Ideally, the rights should have been specified as per the language under Section 14(a). To add to the confusion, clause 5 of the agreement unqualifiedly states that Bhagat shall continue to be the sole exclusive and perpetual owner and holder of any or all copyrights, intellectual property rights and ownership rights in the novel!

It is also debatable whether VCFL could really have enforced those rights granted under clause (2) of the Agreement (namely, read, refer, interpret, title, create and produce the novel) which find no mention under Section 14(a). I am compelled to conclude that Bhagat unsuspectingly and without adequate legal advice walked into this deal and put himself in a vulnerable position much to the advantage of VCFL.

As for the consideration paid to Bhagat under clause 3, I only wonder if it was adequate?! If Salman Rushdie or Vikram Seth were to sign a similar agreement with VCFL, would VCFL have dared to offer them the same amount as was offered to Bhagat? VCFL chose to make a movie out of Five Point Someone because they believed that it would sell. In my opinion, VCFL could have been a little more of generous to Bhagat.

Moving on to clause 4 of the Agreement which deals with the credits, there is nothing in there that binds VCFL to grant credits to Bhagat in the title sequence. If I were to draft that clause, I would use the following language:

“In accordance with Section 57 of the Copyright Act, the Assignor shall have the right of integrity and the right to claim paternity of the work being assigned. The Assignee, therefore, undertakes to give appropriate credit to the Assignor on the screen through appropriate display of the words ‘Based on the Novel “FIVE POINT SOMEONE” By Chetan Bhagat’. Such display on the screen shall be on a single card in the main title sequence of the film and the font and style of such display shall be no less favorable than the display used for other information on the main title sequence.”

I would draft it so irrespective of whether I am representing the assignor or the assignee as I would not want the assignor to later raise a controversy on the credits to the detriment of the assignee nor would I want the assignor to be deprived of his moral rights which the assignee is obliged to respect under the Act.

Also, as the author of the work, in my opinion, Bhagat had right to see the final script / screenplay to ensure that his right of integrity in the work (a right against mutilation of the work) granted under Section 57 of the Act was not violated. Having not ensured that such a clause was inserted in the contract, it is futile to lament now that he was never shown the final script.

Also, I am baffled as to how Bhagat agreed to a general warranty like the one under Clause 10(d)? It does not even refer to the work in question. Even assuming that the clause was referring to the novel, could anyone give a general warranty in an agreement that he would not be sued by third parties in future? How could such a clause be enforced in the event of a breach caused by an unanticipated law suit filed by an unknown entity against Bhagat? By clause 10(e) of the agreement, VCFL binds Bhagat not to alter or change the novel without informing VCFL. Leaving aside the absurdity of that clause (that Bhagat might alter or change an already published book), why did Bhagat not insist on a reciprocal clause vis-à-vis the script/ screenplay that any deviation from the book in the script would be made only after informing him?

After watching the movie, I could sympathise with Bhagat because I did get the ‘unmistakable impression’ that the movie was indeed a copy of the book! The concluded poll on Spicy IP is also a testimony to this. While the sub-plots by way of the speech and other bits were thrown in by the script writer, it is nothing but a white lie to say that the movie only has 2-3% of the book.

Was there any need for clause 10(e) if the producer meant to take only 2-3% of the book? Bhagat should have also negotiated a clause to include him in the publicity and promotion of the film which could have ensured that he was not kept out of the picture by the producers. After all, the movie is based on his work! The rest of the clauses also seem to be pro-producer and have not been of much help to Bhagat.

I also feel that the agreement could have been more explicit about the provisions of Section 19 of the Act regarding the term of the assignment and the territory of the assignment, which, incidentally is missing and has to be, therefore, presumed to extend only to the whole of India! Even from a producer’s angle, it pays to look more closely at the legal issues involved in assignment of copyright in the underlying works used in films while entering into such contracts because there is a recent trend to file law suits against producers on the eve of the release of a movie.

Very often huge sums are paid to compromise these controversies to ensure that the movie gets released on time. To avoid such last minute controversies, it would be helpful to scrutinize and make sure that the contractual clauses concerning the assignment of the underlying works are unambiguous and in conformity with the Copyright Act, 1957.

I don’t believe that this is the last word on the controversy. But I do hope that Mr. Bhagat would not be as innocent as he has been while parting with the rights in respect of his prized creations in the future.

Shamnad Basheer

Shamnad Basheer

Prof. (Dr.) Shamnad Basheer founded SpicyIP in 2005. He's also the Founder of IDIA, a project to train underprivileged students for admissions to the leading law schools. He served for two years as an expert on the IP global advisory council (GAC) of the World Economic Forum (WEF). In 2015, he received the Infosys Prize in Humanities in 2015 for his work on legal education and on democratising the discourse around intellectual property law and policy. The jury was headed by Nobel laureate, Prof. Amartya Sen. Professional History: After graduating from the NLS, Bangalore Prof. Basheer joined Anand and Anand, one of India’s leading IP firms. He went on to head their telecommunication and technology practice and was rated by the IFLR as a leading technology lawyer. He left for the University of Oxford to pursue post-graduate studies, completing the BCL, MPhil and DPhil as a Wellcome Trust scholar. His first academic appointment was at the George Washington University Law School, where he served as the Frank H Marks Visiting Associate Professor of IP Law. He then relocated to India in 2008 to take up the MHRD Chaired Professorship in IP Law at WB NUJS, a leading Indian law school. Later, he was the Honorary Research Chair of IP Law at Nirma University and also a visiting professor of law at the National Law School (NLS), Bangalore. Prof. Basheer has published widely and his articles have won awards, including those instituted by ATRIP, the Stanford Technology Law Review and CREATe. He was consulted widely by the government, industry, international organisations and civil society on a variety of IP issues. He also served on several government committees.

6 comments.

  1. AvatarAnonymous

    Just had a few short point/ disagreements with the “consideration” part on this post:

    As per the Indian Contracts Act the consideration has to be real and not adequate — thus to that extent i do not see any flaw in the agreement between Chetan Bhagat and the Producer.

    Further, I am sure that neither Chetan, nor the producer nor anyone else could have at the time of entering into this contract could have predicted the earning which this movie would have made — for moment assuming that this movie would have been a big flop – would the issue of consideration being adequate been raised then?? I doubt!!

    Reply
  2. AvatarLatha R Nair

    Dear Anonymous,

    Thank you for your comments.

    While I am not an expert in contract law, my understanding is that the consideration should be ‘lawful’ and ‘adequate’. Please see the language used under Section 23 and Explanation 2 to Section 25(3). I do not see the word ‘real’ anywhere in that section.

    I also agree with you that the clause on consideration is not flawed – I don’t think I say so in my blog. However, I do believe that it was rather unfair that he was paid a paltry sum of one lakh only as consideration for the assignment when his book itself would have fetched him manyfolds of that amount. I wonder if he ever considered it while signing the agreement. I suspect that it was the low bargaining platform that he was in at that time as a young and upcoming author having no prior experience in these matters that made him agree to the said amount. VCFL could have been fairer to him as they were in a more advantageous position with prior experience in these matters. It would have been a good move for the sake of their PR at least which I think is quite damaged after the controversy. My whole point is that contracts such as this one should not be concluded uni-dimensionally. In Bollywood or any film industry, there are multi-dimensions and both parties ought to consider all aspects while concluding such deals.

    Even assuming that the movie flopped, I think the sum of one lakh was absolutely inadequate when the whole theme and script stood on the legs of Bhagat’s story. True, no one would have raised the issue of consideration in that situation. And if I understand correctly, even now NO ONE HAS RAISED THE ISSUE OF CONSIDERATION except me in my blog! (All that Bhagat was upset about was credits, if I am right)!

    To be fair to him, VCFL could have at least spared him from allegations of hankering after cheap publicity, which I don’t think he needs [with fans like me! :-)]

    Bests, Latha

    Reply
  3. AvatarRenuka

    CB did a grave mistake by not having his own legal rep.

    Also Latha, a couple things that are relvant which seem to have missed out —

    1. CB was not new to this . He has sold a previous book which was made into the disaster called “Hello”.

    2. CB was paid 1 lac and then 10 lacs. Not much compared to 300+ crores but then he thought that was a suitable value for his book and signed the contract.

    Reply
  4. AvatarLatha R Nair

    Renuka – thank you for your comments.

    First of all, I don’t know if we are right in assuming that Bhagat did not have a legal representative in the matter. It is a different issue if the legal advice, if any, received by him was appropriate or adequate.

    As for the two points raised by you–

    1. Bhagat’s first book, FIVE POINT SOMEONE was published in 2004and he signed the contract with VCFL in September 2005. His second book ONE NIGHT AT THE CALL CENTER based on which Hello was produced was published in October 2005. I don’t believe that the contract to make Hello could have been entered into even before the book was published. So I disagree that he was not new to Bollywood contracts at the time of signing the 3 Idiots contract in September 2005.

    2. The consideration of one lakh paid to bhagat at the time of signing the contract was all the consideration for the assignment. The additional 10 lakh was paid to him only on December 16, 2009 as per the second paragraph of clause 3 of the contract. If you read that clause it says that Bhagat is entitled to an ex-gratia amount up to 10 lakhs at the discretion of the producer. To me it sounds like something like a dole (a) because it is at the discretion of the producer and (b) becuase it could be any amount up to 10 lakhs!

    Best regards, Latha

    Reply
  5. AvatarLatha R Nair

    Renuka – thank you for your comments.

    First of all, I don’t know if we are right in assuming that Bhagat did not have a legal representative in the matter. It is a different issue if the legal advice, if any, received by him was appropriate or adequate.

    As for the two points raised by you–

    1. Bhagat’s first book, FIVE POINT SOMEONE was published in 2004and he signed the contract with VCFL in September 2005. His second book ONE NIGHT AT THE CALL CENTER based on which Hello was produced was published in October 2005. I don’t believe that the contract to make Hello could have been entered into even before the book was published. So I disagree that he was not new to Bollywood contracts at the time of signing the 3 Idiots contract in September 2005.

    2. The consideration of one lakh paid to bhagat at the time of signing the contract was all the consideration for the assignment. The additional 10 lakh was paid to him only on December 16, 2009 as per the second paragraph of clause 3 of the contract. If you read that clause it says that Bhagat is entitled to an ex-gratia amount up to 10 lakhs at the discretion of the producer. To me it sounds like something like a dole (a) because it is at the discretion of the producer and (b) becuase it could be any amount up to 10 lakhs!

    Best regards, Latha

    Reply
  6. AvatarRakesh Prabhu

    Dear Latha,

    I agree with you. CB as an author should have been more careful with the terms and conditions of the contract. From what I can understand, the Agreement looks like a one-sided contract, with petty credentials and consideration to the Author. These practices are prevalent in the recent times in India. But what I fail to understand is, why do people (including authors) fail to take these Agreements as seriously as it has to be. I only hope this is a learning curve for all the authors and creative art developers. This brings us to the question of awareness of rights in the domain of IP in India.

    Rakesh Prabhu

    Reply

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