Did the Copyright Office goof up when it recognized IPRS as a Copyright Society back in 1996?

I know it’s a little late to be asking such a fundamental ‘brick & mortar’ question but I’ve just noticed, during the fag end of a due diligence on IPRS’s documents, that the Copyright Office may have goofed up in registering IPRS as a Copyright Society, without first asking them to amend their Articles.
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As most of our readers may know IPRS was registered as a Copyright Society only on 27th March, 1996, two years after the 1994 Amendments to the Copyright Act, 1957, which for the first time recognized Copyright Societies. The Registration Certificate is available over here.
Normally when the Government is recognizing a certain institution under the law it is required to ensure that the institution in question is in compliance with the law. There are two glaring errors in IPRS’s Articles of Association:
(i) Did IPRS require its members to assign their copyrights to it?

As per Section 33 of the Copyright Act, 1957 one of the fundamental requirements, while registering a Copyright Society, is to ensure that the Copyright Society does not require its members to assign their copyrights to the Society in order to obtain membership of the Society. In pertinent part the proviso to Section 33 states the following:

Provided that an owner of copyright shall, in his individual capacity, continue to have the right to grant licences in respect of his own works consistent with his obligations as a member of the registered copyright society.

Section 34, however does allow the Copyright Society to accept an exclusive licence to administer the rights. The difference between as ‘assignment’ & an ‘exclusive licence’ is that while an ‘exclusive licence’ is usually revocable, an ‘assignment’ is irrevocable and is usually the equivalent of a ‘sale’.

At the time IPRS was recognized as a Copyright Society, Article 4 of the original AoA, as drafted in 1969, (full text available over here) required all members to assign their performing rights to the Society, after they were granted membership. In 1991 the Special Resolution passed in the Annual General Meeting, renumbered Article 4 as Article 7 (full text of the resolution is available over here) but the wording remained the same.

Article 7 was never amended to do away with the requirement of an ‘assignment’ of Copyright at the time the Registrar of Copyrights recognized IPRS as a Copyright Society.

Which bring us to the question – should the Registrar of Copyrights, now cancel the Society’s registration?

(ii) Did IPRS require members to assign even ‘mechanical rights’ to it?

A look at the Registration Certification available on the IPRS website (available over here) indicates that IPRS was recognized as a copyright society for performing rights in only ‘musical works and any words or any action intended to be sung, spoken or performed with the music’.

Now this is where things turn hazy. The original Article 4 of the AoA required the assignment of only performing rights. The 1991 Resolution renumbered this to Article 7 without suggesting any changes to the wording per se. However the Amended AoA submitted to the RoC (full text available over here) has been tweaked to add in the words ‘mechanical rights’. Assuming that this version is the correct version, there are three very interesting questions:

(i) Why was IPRS recognized as a Copyright Society for only performing rights when it was known that the Society was administering even ‘mechanical rights’?

(ii) How did PPL members, i.e. the big music companies, become members of IPRS if they didn’t assign their mechanical rights to IPRS?

(iii) And if they didn’t assign their mechanical rights to IPRS, then how did they qualify as the members who eventually replaced the Articles of Association in 2008?

(iv) And if they did assign their mechanical rights to IPRS, then how exactly is PPL functioning without these rights?

As usual, no answers over here but as Holmes would say, ‘The plot thickens my dear Watson’!

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3 thoughts on “Did the Copyright Office goof up when it recognized IPRS as a Copyright Society back in 1996?”

  1. prashant reddy has found out a goldmine of information but the posts are all scattered and the details are complicated. i request him to publish his findings in a journal article and explain everything nicely. it will greatly help everyone if there is a single organised document where all the details can be found.

  2. The trick here is that, since the same companies control both Societies, they have decided in 2005 that mechanicals should no more be administered by IPRS but by PPL (which has no right to administer them). Up to 2004, IPRS balance-sheet showed income from “digital”; after that, there has not been a single rupee income from digital for IPRS.

    A simple comparison between the Balance-sheets of both Societies between 2002-03 and 2009-2010 will tell the whole story.

    Hundreds of crores have been pick-pocketed by these companies. I think the Government is aware, hence the Amendments.

  3. Please correct me if I’m wrong, but I do not think the proviso to Section 33(1) prohibits a complete assignment of rights. The proviso states that the owner shall continue to have the right to grant licenses, IF consistent with his/ her obligations as a member of the copyright society. Since the IPRS has mandated a absolute assignment of all existing and future rights with respect to works handled by the society, the owner is obviously not allowed to grant licenses in respect of rights assigned.

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