Performing Wrongs

As promised, we bring you a wonderfully incisive post from regular guest blogger, Nikhil Krishnamurthy who, in his inimitable style, exposes the jurisprudential fallacy underlying recent copyright decisions that have been blogged about here and here.

More importantly, we have his take on the 1977 SC case and why it is fundamentally flawed. In short, a must read for anyone interested in the nuances of music copyright law in India.

In the light of the judgments of the Bombay High Court in Music Broadcast Pvt. Ltd. v Indian Performing Right Society (judgment dated 25th July 2011) and Delhi High Court in Indian Performing Right Society v Aditya Pandey (judgment dated 28th July 2011), it has become necessary to point out some important provisions of the Copyright Act 1957 which appear to have been missed completely from the analysis and to add some quick thoughts for discussion.

As readers may be aware, both judgments effectively say that IPRS does not have any right to collect royalty when recorded music is played in public or broadcast and I will deal specifically with the judgment of the Delhi High Court in this post.

One of the questions framed for consideration was whether a song-writer’s copyright extends to excluding the communication to the public without authorization, of the musical work embodied in a sound recording.

The Court held that once a license is obtained in respect of the sound recording for communicating the same to the public, a separate authorization or license is not necessary from the owner of copyright in the musical/ literary work. In reaching this conclusion, the Delhi High Court rested its decision on, inter-alia, three factors outlined below: –

1. A finding that copyright in sound recordings was recognized under Indian copyright law post the 1994 amendments.

2. The ruling in the 1977 decision of the Supreme Court in IPRS v EIMPPA.

3. A finding that when a sound recording is communicated to the public, the underlying musical or literary work is not communicated.

Each of the factors above deserves to be examined in some detail and consequently the reader is warned that this is a longish post.

Factor 1:

Like the Bathla Cassettes decision a few years ago which held that a version recording could not be made using different performers from the original recording, this judgment once again demonstrates a poor grasp of copyright law to other developed copyright jurisdictions. It is incredible that while the sound recording has been protected by copyright under Indian law, since the 1911 UK Act was extended in its application to India (See Section 19 of the 1911 Act) and later called “record” under the 1957 Act, the judgment in no less than five (5) places, finds without hesitation that sound recordings were accorded copyright protection only after the 1994 Amendments to the Copyright Act. This finding, if nothing else, causes this judgment to suffer from an incurable defect and cannot be relied on as binding precedent.

Even the Supreme Court has recognized copyright in records in 1984. The case concerned infringing copies of recordings in which the Gramophone Co. owned copyright which were being illegally imported (See Gramophone Co. v Birendra Bahadur Pandey, AIR 1984 667). For a court to come to the conclusion today that India only started recognising copyright in sound recordings post the 1994 Amendments is simply too shocking, let alone the rewriting of copyright law that has been done when it comes to the rights of owners of copyright in music and lyrics.

In case of any doubt, one may refer to the definition of “record”, the definition of “work” which includes a record, the definition of “author” in relation to a record, Section 13 which accords copyright protection to records (also noticed in the 1977 judgment) and the copyrights accorded to the owner of copyright in a record under Section 14 (1) (d) (analogous to today’s Section 14 (1) (e)) of the Copyright Act) as it existed in 1977.

The reason why the expression record was changed to “sound recording” in 1994 (with effect from 10th May 1995) was, according to the Notes on Clauses, because the term record had “…become outdated through association with an obsolescent technology of sound reproduction. The proposed definition of sound recording will not be tied to any technology.” The idea was to make the copyright work “record” technology neutral, not introduce a new work altogether for copyright protection into our Act which the Delhi High Court judgment seems to have missed entirely.

I am sure if one goes back and examines one’s record collection of old Hindi movies released by Gramophone Co./ HMV and Polydor (much prior to 1994), one will find clear notices on the records and their accompanying sleeves asserting copyright in these sound recordings.

In a lighter vein, one will still find copies of Bare Acts published by private parties where the expression “record” appearing anywhere has been indiscriminately replaced with “sound recording”. One example is Commercial’s Copyright Act 1957 (2001 edition) where the expression “requisitioning any public record” appearing in Section 74 (e) has been meticulously replaced with the expression “requisitioning any public sound recording”, clearly without any application of mind.

Factor 2

The second point requires a short but illuminating examination of the defence under Section 52 (1) (y).

Section 52 (1) (y): The following act[s] shall not constitute an infringement of copyright, namely, – in relation to a literary, dramatic or musical work recorded or reproduced in any cinematograph film, the exhibition of such film after the expiration of the term of copyright therein.

From the mere existence of such a defence, certain logical conclusions may be drawn: –

(i) When a film is exhibited while it still enjoys copyright, the public performance/ communication to the public copyright in musical works under Section 14 (a) (iii) is infringed, unless a license for performing the musical works incorporated in the film through such exhibition has been obtained from the owner of copyright in such musical works.

(ii) As no corresponding defence is provided in the case of sound recordings, when a sound recording is communicated to the public during, or even after its copyright has expired, it would amount to an infringement of the public performance/ communication copyright vesting in the musical and literary works underlying the recording.

Had there been no impingement on the copyright in underlying works, there would have been absolutely no need to provide such a defence and in fact Section 52 (1) (y) complements and helps understand Section 13 (4).

Also, having incorporated such a provision, there seems no need for our Legislature to expressly incorporate a provision akin to Section 19 (2) (b) of the UK CDPA 1988, relied on heavily in the judgment of the Delhi High Court in an attempt to distinguish Indian copyright law from UK copyright law (which was the model for our copyright law in the first place). The Supreme Court never had to/ or neglected to consider this provision (which was in existence at the relevant time) in its 1977 judgement in IPRS v EIMPPA as what it was concerned with in the facts of that case was the question of ownership of copyright in musical and literary works incorporated in cinematograph films. And even in this analysis, it failed miserably.

The relevant fact noticed by the Supreme Court was that authors and composers were under “contracts of service” with film producers. One will immediately see that if this was in fact the case, the same would fall within the ambit of Section 17 (c) of the Copyright Act and there would be no problem in finding the producers to be the owners of copyright. However, the Copyright Board in the first instance found that in the absence of proof that such contracts of service existed, the composers retained copyright, which was, in my view an accurate finding.

When one comes to think of it, it seems highly unlikely that music composers and lyric writers would have an employer-employee relationship with any one producer as they would be writing music for various films produced by various banners. If some of them did however, and there was no contract to the contrary, then the producer would own the underlying rights.

The Supreme Court for some inexplicable reason however proceeded to analyse the matter under Section 17 (b) of the Act which deals with commissioned work. This is very significant because Section 17 (b) only deals with certain kinds of artistic works and cinematograph films generally, whereas Section 17 (c) (concerned with the employer-employee relationships) covers all works protected under copyright, including musical and literary works.

Musical and literary works are specifically excluded from the ambit of Section 17 (b) and therefore even if a composer is commissioned for valuable consideration to compose music for a film, let alone a sound recording, the copyright in the same will not automatically vest in the commissioner and he will need a specific assignment/ license of the copyright, the terms of which would spell out exactly what rights are granted and what royalties may be payable for various specified uses.

As a point of fact, there appear to be instances where films are released for exhibition at film festivals with certain music incorporated and later theatrically released or released for home video on DVDs etc. with different music because the rights could not be obtained in the first-used music for such later uses. In my humble view, the Supreme Court in 1977 committed a gross error by first bringing the situation within Section 17 (b) and then holding the producer to be the owner of copyright in music and lyrics commissioned for a film.

No matter how one looks at the Supreme Court judgment and how much one may find to criticize the same, while it held in that case that IPRS did not have the rights (as its constituent author-composer members had lost them to the producers) and that the producers had the underlying rights, by no stretch of analysis can it be said to have gone so far as to say the owner of copyright (whoever that may be) could not collect public performance/ communication to the public royalties for the music and lyrics, when the songs from a film in question (either live or in recorded form) were (for eg.) broadcast or performed in public. The judgment in my view, suggests otherwise. For those who care to read a more detailed analysis of this judgment, I refer you to my article here.

Factor 3

The fact that author-composers always enjoyed a performing right and were entitled to receive royalty no matter how such music is communicated (whether live or recorded) is practically a cornerstone of music copyright law. Even the USA, which does not accord a general public performance right for sound recordings (on the ground that radio airplay increases record sales and that therefore the owner of copyright in the sound recording need not be compensated further), recognizes that author-composers are entitled to royalty when records are publicly performed. For a more detailed discussion on the point, please see here. The Cawardine case referred to by both Bombay and Delhi really dealt with whether the copyright in a record (then called a mechanical contrivance), merely stopped at the reproduction right, or, like musical works, also included the performing right.

The question therefore was not whether the underlying work enjoyed such a right, but whether the derivative work or recording also enjoyed this right. Once this right was recognized through Cawardine, PPL UK was set up to administer the right. PRS UK was already existing and collecting royalties when music was being performed. Today, the question posed for consideration is the exact opposite of what the Cawardine court had to consider.

Another aspect of the matter is the compulsory license provisions to broadcast under Section 31 (1) (b). It is useful to note the language which reads “…refused to allow communication to the public by broadcast of such work, or in the case of a sound recording, the ‘work recorded in such sound recording’.”

If there is no reason to seek a license for the underlying work when a sound recording containing the work is broadcast, then there would be no need to have a provision for a compulsory license for the same.

When one sees the statutory mechanical license provision under Section 52 (1) (j), also the subject of some execrable judgements till the same was finally and correctly decided by the Delhi High Court in July 2010, one will notice that payment has to be made on the number of copies of the version recordings sought to be made, and this payment is to be made to the owner of copyright in the music and lyrics. The statutory royalty is set at 5% of the ordinary retail selling price of the recording.

Here, it is the person who seeks to produce the version recording who must pay for each reproduction of the music and lyrics on each recording, calculated as a percentage of the selling price of such recording. For a more detailed analysis, please see here.

Similarly, each performance/ broadcast of such version recording or even the original recording, (which would not exist had the underlying words and music not been there in the first place), results in a performance of the underlying words and music and why is this so hard to grasp? The only difference is that in the case of version recordings where the version’s producer is reproducing the music and lyrics, it is his legal obligation to pay for each reproduction. In the case of public performance/ broadcast, it is some other user, not the producer, who is impinging this performing right and it therefore becomes such user’s legal obligation to pay the owner of copyright in the underlying rights.

To take the analysis a little further, a person who produces a version recording under a statutory license under Section 52 (1) (j), only pays for the right of reproduction of the music and lyrics on each recording. While he becomes entitled to the copyright in the resulting sound recording, any communication of that sound recording will entitle the owner of copyright in the underlying music and lyrics to separately receive public performance royalties, as what he has been paid for by the version producer is only for the right of reproduction of the music and lyrics.

There is no conflict between the right of the owner of copyright in the sound recording and the right of the owner of copyright in the music and lyrics. For example, if there is a pre-existing recording of some words and music and a film producer wants to use that same recording in a film, he will have to take a license from both the owner of copyright in the words and music, known as a “Sync License”, and a license from the owner of copyright in the recording, called the “Master Use License”.

If the underlying right vests with some other person other than the author-composer, say the film producer or music label, this simply means that such producer or label is entitled to receive royalty when the underlying words and music are communicated either through exhibition/ broadcast of films or recordings.

I refer anyone who is interested in seeing how the 1977 judgment ought to have been written, to the judgement of Hon’ble Mr. Justice Rajendran J. of the Singapore High Court in The Performing Right Society Ltd. v. United Artists Singapore Theatres Pvt. Ltd., [2001] 2 SLR 375. The said judgement displays a keen understanding of the nuances of music copyright law and practice. Quite shockingly, IPRS does not appear to be aware of this decision as the same was not cited in its support, either before Bombay or Delhi which may have helped the Courts reach the correct conclusion and perhaps appreciate the errors committed in the 1977 decision.

Another important factor that one finally needs to consider is the effect of the judgments of Bombay and Delhi High Courts on the rights of foreign copyright owners. If IPRS cannot collect royalties on behalf of foreign right owners, as seems to be the net result of the two judgments, users will be sued directly by such foreign right owners and it will be interesting to see if our courts uphold India’s reciprocal international obligations to protect foreign works, particularly music and lyrics in the present context. In 1978, the Calcutta High Court, relying on the Supreme Court’s decision, failed to do so. It is high time 1977 was revisited to stem the rot.

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3 thoughts on “Performing Wrongs”

  1. In the Delhi High Court judgment the attitude of court is very negative in a way because in some para although the judge has accepted that the arguments of the plaintiff were good but judge said that we cannot go against the previous judgments(IPRS V EIMPA) and interpret the act in different way. nd why is section 19 of UK act has been interpreted in that strict manner.?

  2. I am a business owner playing Music through CD. Now the fact is that why should I pay twice to both societies for a same song. Now I stopped playing music > now tell me who ultimately is the looser

  3. I am having a restaurant playing Music through CD. Now tell me why should I pay license to both the societies for plaing the same song. I stopped playing Music kicked off my music system from my restaurant. Now tell me who has lost the revenue.

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