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Continuing from Shamnad’s earlier post, we now have confirmation, that all three writ petitions challenging the constitutionality of the copyright amendments are listed for today, before Justice Sanjay Kishan Kaul & Justice Kaur of the Delhi High Court. I think the petitions should be admitted without any difficulty.
The three petitions have been filed by Super Cassettes or T-Series, Venus Entertainment and Bharat Anand. The first two are represented by Advocate Neel Mason and I’m guessing Amit Sibal will be leading the arguments. The third is being represented by Advocate Jagdish Sagar, who was a bureaucrat involved in drafting the 1994 amendments to the Copyright Act.
We have some details about the challenge filed by T-Series. From what I understand, and this is subject to correction, the following provisions have been challenged by T-Series:
(i) Section 31(1)(b) along with the corresponding rules, which are Rules 6 to 10 under Chapter IV of the Copyright Rules, 2013.
(ii) Section 31(D) along with the corresponding rules, which are Rules 29 to 31 under Chapter VIII.
Both sets of provisions have been challenged as being in violation of Articles 14, 19(1)(g), 21 and 300A of the Constitution. While Section 31(1)(b) deals with compulsory licences for works being withheld from the public domain, Section 31(D) permits a statutory licensing regime for musical works that are being used by the broadcast industry. The crux of T-Series petition is that these provisions are unreasonable, in violation of its fundamental right to trade and carry out its business, along with the fact that these provisions suffer from the vice of excessive delegation since they provide the Copyright Board with too much unregulated discretionary power.
T-Series has also challenged Rule 3(2) of the Copyright Rules, 2013 on the grounds that it is in violation of the Supreme Court’s precedent in the NCLT case. We had predicted such a challenge earlier and the Copyright Office has nobody but itself to blame for this challenge. The challenge against the Copyright Board is quite significant because it is a strong case and without the Copyright Board, several of the amendments are rendered toothless.
I wish we could cover these challenges in more detail but we are running short on manpower and the only way I can find time to do this by myself is if I drop out of law school and that’s not happening, at least not for another couple of months.
The challenge in writ petitions would fail in view of the law laid down by a 5 judge bench of the Supreme court in the case of K.T. Plantation Pvt. Ltd. & Anr. vs State Of Karnataka dated 9 August, 2011.
As per the information received from sources, Association of Radio Operators for India (AROI) and Indian Broadcasting Foundation (IBF) have intervened in the petition. The status of the intervention is yet not clear. The Delhi High Court has directed the respondents to file their reply by 29th May, 2013.
Briefly summarizing the challenges in the petition filed by Super Cassettes Industries Ltd [“SCIL”] vs Union of India and Ors [WP (C) 2316/2013]:
Summary of challenges:
Section 11 read with Rule 3(2) –
Violative of the rule of fair trial, permits appointment of bureaucrats, serving government employees and other persons as members of the Copyright Board without there being any requirement for such member to have prior industry knowledge or experience, thereby being contrary to the provisions of Article 14 and 19(1) (g). The requirement that the Chairman shall be a person who has been a Judge of a High Court or is qualified for appointment as a Judge of a High Court, the qualifications prescribed under Rule 3(2) for appointment of ‘member’ go contrary to the letter and spirit of the Hon’ble Supreme Court’s judgment dated 11th May, 2010 in the matter of Union of India vs R. Gandhi, Civil Appeal No. 3067 of 2004 and 3717 of 2005.
Section 31 (1) (b) r/w Rules 6 to 10
Section 31 (l)(b), as amended, provides for a system of a non-voluntary/compulsory licensing in respect of copyrighted works whereby upon a complaint made to the Copyright Board by a complainant, the Copyright Board may impose, without the consent of the owner, a license not only in favour of the person making the complaint, but also to any number of other persons that in the opinion of the Copyright Board are “qualified” to get such a license without giving any opportunity of being heard or even notice to the owner of the copyrighted work qua the grant of a license to such other persons.
Section 31-D r/w Rules 29 to 31
• Imposes a system of non-voluntary/statutory licensing in respect of three classes of copyrightable works, i.e. literary works, musical works and sound recordings (and not others) under which any broadcasting organization has a right to a statutory license to communicate to the public or publicly perform the said works without needing the consent of the owner of such works and without offering the owner any hearing at any stage or for any purpose whatsoever.
• The rates and terms for such statutory license are fixed by the Copyright Board.
• Bypasses the scheme of providing a hearing, much less a fair hearing, to the owner of a copyrighted work before granting private persons/entities a statutory license to use the same.
• Copyright Board has been provided with uncanalised, unreasonably overbroad and excessive power to micro-manage the commercial exploitation of an owner’s copyright insofar as the Copyright Board can under both the aforesaid provisions set the terms and conditions of such a mandatory license including the terms of royalty payable to the owner as per its sole discretion.
[DUE TO WORD LIMIT CONTINUING THE KEY GROUNDS AND PRAYERS IN THE NEXT COMMENT]
Key Grounds:
(i) The ostensible purpose of both the impugned amendments i.e. Section 31(l)(b) and Section 31D appears to be to safeguard the public’s access to a copyrighted work, however, there is no rational nexus between the object sought to be achieved and the mechanism which has been provided to achieve the same. The impugned amendments are antithetical to the object and purpose of the Copyright Act.
(ii) The provisions selectively discriminate between various classes of works provided under the Copyright Act as well as between different categories of rights provided in respect of a copyright work without any intelligible differentia.
(iii) 31(l)(b) and Section 31D, cause inconsistencies in the provisions of the Copyright Act, 1957 and take away the exclusivity from the exclusive rights granted to the owners of copyrighted works.
(iv) Under Part IV Directive Principles of State Policy of the Constitution, there is no onus at all on the State to provide for or promote “entertainment”. There is therefore no rationale behind providing for the compulsory licensing or statutory licensing of popular film music.
(v) The provisions take away the incentive from a copyright owner to create original works and to commercially exploit them to his liking and put fetters on an owner’s right to refuse exploitation, right to negotiate a suitable rate of royalty for exploitation of his works, right to choose a licensee and most importantly the right to decide the terms and conditions of exploitation of his works.
(vi) Literary or musical works and sound recordings are not essential commodities and ought not to be subject to price regulation by the Government. This being the case, strict safeguards and clear and reasonable objective policy ought to have been put in place before divesting an owner of his valuable rights.
Violation of Article 14:
(i) 31(l)(b) and Section 31D are in clear violation of the right to equality enshrined in Article 14 of the Constitution as they result in unequal treatment of equally placed individuals.
(ii) The said provisions treat equals unequally and violate Article 14 by imposing price regulation upon one business group being the owner and supplier of the copyrighted works while leaving the second business group (broadcasters) free to exploit the same purely for a commercial purpose without imposing any price regulation upon the latter in their exploitation of the copyrighted works i.e. the broadcasters pay a price regulated by the Copyright Board for the copyrighted works, but in their exploitation of the said works, are at full liberty to fix their own advertising rates, free from any legislative supervision or regulation.
(iii) The practical effect of both the said licensing related provisions is extra benefit to private entities and not the benefit of the public at large who already have access to the copyrighted works through multiple sources.
Violation of Article 19 (1) (g) – The said provisions besides being highly arbitrary, excessive in nature, substantially and unreasonably abrogate the fundamental rights of SCIL to enter into contract and/or to carry on trade/business in a free and fair manner and take away a principal source of income and livelihood for SCIL thus being violative of Article 19(1 )(g) as well as Article 21 of the Constitution of India. The said provisions cannot be contemplated as ‘reasonable restrictions’ of the nature as envisaged under Article 19(6).
Violation of Article 300 A- The said provisions fail to consider that a copyright owner has a right to property in his copyrighted work, both under the general scheme of Article 300A of the Constitution as well as under the specific provisions of the Copyright Act. Such a right cannot be taken away from the owner except for an urgent and primary public necessity and without prescribing a reasonable mechanism for compensating the owner of the right.
[cont…]
Grievance of SCIL: if the impugned provisions are not struck down, the long standing mutually negotiated voluntary license agreements with multiple broadcasters including with All India Radio which are getting unhindered access to the works of SCIL and through them the public is getting easy access to the said works, and with the coming of the impugned provisions, such broadcasters would have no incentive to enter into and/or continue with the voluntary license agreements with SCIL and instead would attempt to terminate or wriggle out of their agreements with SCIL in order to approach the Copyright Board to have terms convenient to them fixed and imposed upon the copyright owner.
Prayers:
SCIL has prayed for striking down of Section 31(l)(b), Rules 6 to 10, Section 31D and Rules 29 to 31 as ultra vires Articles 14, 19(l)(g), 21 and 300-A of the Constitution of India and/or unconstitutional and/or null and void as well as striking down of Section 11 and Rule 3(2) as being violative of the judgment of the Hon’ble Supreme Court dated 11th May, 2010 in the matter of Union of India vs R. Gandhi, Civil Appeal No. 3067 of 2004 and 3717 of 2005 and therefore unconstitutional.
In my view the authors should consider challenging the amendment as well. Maybe the impact of the Amendment has not yet hit the authors as the societies are yet to be formed/ get themselves re-registered. But it won’t be long before they realize that the Amendment is just a camouflage to protect their rights. The object of the Amendment was not to increase the cost/ expenses of any particular section of the industry but to ensure a fair distribution of the money amongst the authors and owners/ assignees of works. However the legislature has failed to realize that except for a handful of authors who would have the capacity to bargain with the producers, majority of authors would suffer as a result of this Amendment, reason being, a lump sum consideration is a fixed consideration whereas royalty payment is a variable which would depend upon various factors such as utilization of the work on different mediums, success of the work, timely payments by the copyright societies, etc. I hope they realize the violation of their fundamental right under Article 19 (1) (g).
It would be interesting to see the challenge by Bharat Anand (producer). I hope that in addition to Sections 17,18,19 and 30, he would have challenged Section 33 and 38A as well.
Radio and television broadcasters, DTH operators, other end user operators too would have a good challenge with respect to Section 18 provisos and corresponding sub-sections under 19 as there appears to be no intelligible differentia which distinguishes the owner of cinema hall from other people who exploit the work and are required to pay royalties for exploitation of the work.
It is however surprising that no one has noticed the most benefited group in this Amendment. The explanations given under Rule 68 of the Copyright Rules make it clear that the performers are bound to derive huge benefits from the Amendment as and when the performers’ societies are formed. In any case they are highest paid lot. Fail to see here the nexus with the object of the Amendment. I believe these amendments were only carried out to make the Act in consonance with the Wipo Audiovisual Performances Treaty without even considering the necessity of it in the Indian scenario.
It is unfortunate that the Amendment has left scope for so many misinterpretations and ambiguities. Worst being the amendments under Section 17. The brunt of the legislative failure will be borne by all sectors in the industry.
Briefly summarizing the grounds of challenge in the case of Bharat Anand vs Union of India [WP (C) No 2321/ 2013]. I hope Prashant carries out a detailed post on this one as and when time permits him.
Sections challenged:
Sections 11, 12, 17, 18, 19 and 33 of the Copyright Act
The said sections and rules have been challenged as being ultra vires Article 14, 19(l) (c), 19 (1) (g), 21 and 3 00-A of the Constitution of India.
Key Grounds:
(1) Section 17 newly inserted proviso derogates without justification from the general rule in Section 17 (b) and (c) and unreasonably violates the fundamental freedom of contract of the Petitioner enshrined under Article 19. Also rendering Section 17 (b) and (c) redundant and nugatory. Section 17 further violates Petitioners right under Article 21 as they expose him to excessive risk so as to prejudice his business and occupation…
(2) Section 18- violative of Article 14 as it treats equals unequally i.e. assignees of copyright in literary and musical works in cinematograph films/ sound recordings not forming part of cinematograph films and other works.
Sections 18 and 19 read together are mutually contradictory and devoid of any meaning and liable to be struck down.
(3) Section 33 violates the Petitioner’s freedom under Article 19 (1) (c) which freedom carry with themselves the negative right not be compelled to join an association, by making Petitioner’s membership of a copyright society a compulsory condition for the Petitioner to exercise his powers to grant license in respect of his works. As well as violative of Article 19 (1) (g) as a result of preventing the Petitioner from licensing his works otherwise than through a copyright society.
(4) Violation of Article 300-A- Sections 18, 19 and 33 deprive the Petitioner of their copyright ownershiop which is his property protected under 300-A.
(5) Copyright Board as constituted by Sections 11 and 13 r/w Rule 3 do not meet the tests for such Tribunals as laid down by the Supreme Court in UOI vs R. Gandhi.