As we had blogged earlier, the constitutionality of several provisions of the Copyright (Amendment) Act, 2012 is being challenged by music labels and film producers. We earlier had a guest post by Chaitanya, who explained in detail the petitions filed by T-Series before the Delhi High Court challenging the constitutionality of the statutory and compulsory licensing scheme of the copyrights in the music owned by music labels.
In this post, I will (very) briefly explain the constitutional challenges mounted by film producers (Bharat Anand & Sir JVM Movies Ltd.) against the amendments to Section 17, 18, 19 & 33 of the Copyright Act. I’ve already dealt with the petitions challenges to the Copyright Board over here.
|(i) The second proviso to Section 17: The amendments to the second proviso of Section 17 were aimed at over-ruling the Supreme Court’s judgment in the 1977 IPRS case where it was held that the producer of a cinematograph film would be the first owner of the music and lyrics that were commissioned for incorporation in the soundtrack of a movie.|
Section 17 in general, deals with the concept of first ownership and identifies a number of situations where the person who commissions a work owns a copyright in the work. The purpose of such a provision is to make business simpler and reduce the transaction costs for several scenarios. As detailed in Bharat Anand’s petition, the production of a cinematograph film is complicated business with thousands of people involved and a provision like Section 17 makes it easier for the producer to claim a copyright in the movie to the exclusion of everybody else.
The amendments however, waive the principles of first ownership enshrined in Section 17, for all original literary, dramatic, musical and artistic works. Prior to this amendment, an author of the works mentioned above could claim ownership of the copyright in the case of a commissioned work only in a case where he had entered into a contract expressly stating the same. However the amendment, exempts the above mentioned works, from the principles of first ownership laid down in Section 17. In my understanding (and I’m not sure whether the Bharat Anand petition says the same thing) this means that now onwards in order to claim first ownership of a contract, the producer of a film will expressly have to enter into a contract with the authors of the original literary, dramatic, musical and artistic works.
There has been some talk, by people in the industry, including in Bharat Anand’s petition that Section 17 prohibits the producer from first ownership of a copyright in entirety. I don’t think such an interpretation of the law is correct. Section 17 does not expressly prohibit or void such contracts which would mean that producers can enter into contracts of employment with the staff on their rolls expressly claiming copyright in all works created by the staff. Of course this involves transactions costs of negotiating with employees.
The Bharat Anand petition challenges the constitutionality of this provision alleging that the amendments violate their right to equal protection under Article 14, since they discriminate unfairly against only the producers of cinematograph films, while maintaining the status quo for other copyright owners. This is a weak argument since Article 14 does allow Parliament to create special classes or categories which can be treated separately from others, provided that such classification has a rational nexus to the overall objectives of the legislation. In the present case, Section 17 already creates special classes and provides them with special treatment and Parliament has complete liberty to amend this classification further to provide for a more level playing field between producers and authors of certain works. The petition also mentions Article 21 (Right to Life and Liberty) as a ground of challenge but I think it was more of a formality than a focussed challenge.
(ii) The provisos to Section 18 & 19: These provisions basically create a right which allows lyricists and composers to receive equal share of all royalties earned by the producer through the exploitation of their works. This amendment was the most contentious point of debate since it changed the practice wherein the composer or lyricists would assign away their copyrights for a one-time lump-sum payment. I have to agree with the producers, that these particular amendments are delightfully vague and are likely to lead to a lot of litigation.
The core constitutional challenge against this provision, by the film producers, is that such provisions create special rights for only lyricists and composers and unreasonably discriminates against other classes of authors.
Once again this is a weak ground for challenging the amendments, since the classification of lyricists and composers of works incorporated in cinematograph films, is based on intelligible criteria and more importantly, such a classification bears nexus to the final aims of the amendments, which is to protect the interests of composers and lyricists who were being exploited by producers. Moreover, the entire idea of copyright is a creation of Parliament and Parliament has a considerable leeway in deciding how to structure these rights. If Parliament wants, it can even do away with copyright law completely. Unlike the U.S., there is no provision in the Constitution requiring Parliament to protect the copyrights of authors.
The petition also complains that these amendments place all composers and lyricists on an equal footing regardless of their track record or status in the industry instead of allowing the petitioners to exercise their fundamental rights in Article 19(1)(g) to conduct their business. However all fundamental rights are subject to reasonable restrictions and in the circumstances, these amendments would be considered as reasonable restrictions.
(iii) Section 33: The amendments to the proviso of Section 33(1) required that the entire business of issuing copyright licences for soundtracks incorporated in cinematograph works, be administered only through a copyright society. The aim of this amendment was to force all music labels into copyright societies to ensure that they could be regulated under a stricter regime of transparency.
The film producers argue that such a provision violates their fundamental right under Article 19(1)(c) to form associations and unions since the Supreme Court has held that the right to form association, includes the right to not join an association. I think that this is a strong argument, since it makes intuitive sense, to forbid the state from forcing a company into business with a bunch of other companies with which it may not want to conduct business. In the context of copyright societies, royalty distribution can be an exceptionally tricky business, especially with unlogged royalties where the formula for distribution depends on a vote of the majority. In the circumstances it is simply unfair to force a company into copyright society where it does not trust the majority of members.
This argument presupposes that the Registrar of Copyrights allows the creation of only one copyright society. If this is the case, the High Court is almost certain to strike down the amendment as unconstitutional but it is also possible that the High Court may just interpret the provision to conclude that the Registrar will have to register multiple copyright societies. Of course, having multiple copyright societies can destroy the very purpose of creating copyright societies, which is to create a one stop shop for all licensing. The advantage however is that we have more transparency and more competition between the different copyright societies.