Copyright

The Day the Music Died: In the “Company” of Collusive Collecting Societies


The Day the Music Died F

Much like the Diwali crackers bursting all around us, this IP news comes with a bang!

In a momentous development for copyright law in India, IPRS and PPL have declared that they are no longer “collecting societies” under the copyright act, but merely a “company”. As such, they claim that they cannot be regulated under the terms of the copyright act, but answer only to the terms of the Companies Act.

SpicyIP managed to scoop a letter from IPRS to the Central Government (Ministry of HRD) dated 2nd June 2014 stating thus:

“To our utter shock and surprise, we were informed by a letter dated 25th May 2014 from Office of Retd Justice Mukul Mudgal that an “inquiry officer” has been appointed in exercise of powers under Section 33 of the Copyright Act 1957…under the impression that we are still a copyright society within the meaning of the copyright act.

IPRS is a company under the Company’s Act limited by Guarantee and incorporated on 27th August 1969…..and later was additionally recognized as a registered copyright society in 1996 in light of amendments to the copyright act in 1994.

We have been directed to inform you by our Governing Council that we are not a copyright society within the meaning of Section 2 (ffd) of the Act. As you are aware under the second proviso to section 33A we were to be registered within a period of one year from the date of commencement of the Copyright (Amendment) Act 2012. In other words, we were to be registered on or before 21.06.2013. Since the Central Government failed to register IPRS as a copyright society, the old registration certificate granted to IPRS…is deemed to have lapsed.

Be that as it may, on 3rd September 2013, a civil court of Ludhiana ruled that IPRS is not a registered society under section 33 of the Copyright Act 1957. “

This is a spectacularly specious argument to say the least. The inquiry committee constituted by the government was tasked with investigating the alleged wrong doings of IPRS even prior to June 2013 (when it was still validly registered as a collecting society). Therefore, while IPRS may be correct in stating that absent a renewal of its registration, it is now no longer a collecting society under the terms of the copyright act, the acts complained of by several artists and others (that triggered the investigation) were committed during its time as a validly registered collecting society.

The Mudgal Inquiry Commission

But first a bit of background. Several months ago, the government appointed Justice Mukul Mudgal (a very renowned judge who retired sometime ago and is now in the news for his inquest into the BCCI cricketing scandal) to investigate the alleged wrong doings at IPRS and PPL. Justice Mudgal in turn appointed Justice Prabha Sridevan (again a  renowned judge who transformed the IPAB with her insightful jurisprudence and administrative acumen) as a consultant to assist him in the investigation.

It was in response to this inquiry committee that IPRS and PPL first claimed that they were not a collecting society! They then mounted a procedural attack claiming that the government could not have appointed Justice Mudgal, since the relevant copyright rule (Rule 49(2)) mandates that only an officer equivalent to “deputy secretary” can be appointed as the inquiry officer. Since the good judge is now retired, it is not clear if he matches up to the stature of an existing deputy secretary (though in his earlier capacity as Chief Justice of the Punjab and Haryana High Court, he would have ranked equal to a cabinet minister, as I understand it). Also on Justice Sridevan’s appointment as a consultant to the committee, I believe there may have been a challenge. For Rule 50(2) states that the inquiry officer can in turn appoint a person to assist him. However such person must be a “chartered accountant or an enquiry officer”.

In the light of these challenges, Justice Mudgal and Sridevan resigned their respective positions. The net result was that we lost out on a wonderful opportunity to take these two errant societies to task.

Correcting Coercion at the Collecting Societies

As noted on this blog in the past, PPL was notorious for its opacity and rather heavy handed attempt at extorting money from all establishments without making clear as to what music they held rights over. More egregiously, both IPRS and PPL colluded to fleece artists of their ringtone royalties, as documented in this superb investigative piece by Prashant Reddy.

Prashant then built on these investigations to document the heisty history of IPRS and PPL in a piece for a special copyright issue of the NUJS which I had the great privilege of guest editing. For those interested, this special issue is one of the very few to deal in-depth with the copyright amendments (2012) and I would urge you to read them.

In fact, the present set of copyright amendments (2012) owes itself in large part to this historical injustice meted out to poor artists by collecting societies acting in close concert music majors and Bollywood studios.

Can IPRS and PPL Enforce Copyrights?

And now, back to the claim by IPRS and PPL that they are only “companies” and can no longer be regulated as collecting societies under the copyright act. If this is indeed the case, can they continue to enforce copyrights on behalf of their members? As noted in the Leopald Café case by the wonderful Justice Gautam Patel (whose decisions on IP are a delight to read and far better than the ones coming out of the Delhi High Court these days), no person/entity can enforce copyrights for and on behalf of a copyright owner, unless it is registered as a collecting society.

I’m guessing that while IPRS has assignments in their favour (from members whose copyrights they are meant to administer), PPL is only a licensee. Therefore, at least as regards sound recordings, it would appear that PPL is incapacitated from  enforcing copyrights in their independent capacity as a collecting society. As for IPRS acting as a ‘company’ asserting the rights of its members (comprising authors and composers), one may argue that IPRS falls foul of the second proviso to Section 33(1), which bars all persons (except validly registered collecting societies) from “carrying on of a business in relation to literary and musical works incorporated in a cinematograph film or sound recording.”

Strangely enough, despite IPRS claiming that it is not a registered collecting society as of June 2013, it continued to file law suits in the Delhi and other high courts in that capacity. See these two law suits in Delhi in 2014 here and here.

Copyright Collusion: Remedies Against IPRS and PPL?

The bottom line is that IPRS and PPL are now no longer subject to the rigours of the copyright act; a rigour that anyway proved to be one in theory only as they managed to evade scrutiny through lethal legal strategies including using a highly compromised Barasat court time and again to effectuate their legal machinations.

They even sued the then copyright registrar (GR Raghavender) before this dodgy court upon learning that he had initiated an investigation against them and obtained a highly questionable stay from the court.

So what now? Can IPRS and PPL be taken to task for their past misdeeds? This depends on how serious the present government is about investigating them and redressing the various inequities unleashed on an unsuspecting group of artists that they fleeced mercilessly. First off, given that a number of investigations are typically handed over to retired impartial judges, the government must immediately amend  Rule 49 and 50 of the Copyright Act to make it clear that retired judges and others of integrity and acumen can be tasked with important investigations and enquiries. In the meantime, the government should immediately appoint a government official with impeccable integrity to investigate this society. Perhaps Madhukar Sinha or Zakir Thomas, who served as copyright registrars in the past? Or Professor NS Gopalakrishnan, a leading IP academic who played a significant role in shaping the 2012 copyright amendments? Provided of course their present designations qualify them as holding posts above the rank of a deputy secretary. 

The other option is to go after IPRS and PPL under the Companies Act (oppression, mismanagement etc). Unless they claim that they are not a company as well!

One might also think of having their books investigated by the Comptroller and Auditor General (CAG). This of course depends upon whether or not we could qualify them as a public authority or agency However, given that the Delhi government under the maverick Arvind Kerjriwal attempted to investigate private power corporations, one could mount an argument here as well.

Lastly, we still have our courts of law that are not shy of traversing into domains such as this. In fact, there are dozen of writ petitions and other cases pending before the high courts and the supreme court alleging wrong doing by IPRS and PPL. Funnily enough, the crafty collecting societies used these court proceedings to their advantage in arguing that the Justice Mudgal inquiry must be stayed, since the court was now tasked with investigating this issue. The Bombay High Court appears to have bit this argument and directed that status quo be maintained, with the result that the inquiry was effectively stayed. Soon thereafter, Justice Mudgal and Sridevan resigned their positions, rendering the issue moot.

Conclusion

So where do we go from here? The disembowelment of music composers and artists boasts a long and sordid history, beginning with 1977, when an otherwise progressive Supreme Court comprising Justice Krishna Iyer mysteriously ruled that they owned no rights.

This was sought to be redressed a good 35 years later through the path-breaking 2012 copyright amendments. Unfortunately, not much has changed. The letter and spirit of the law continues to be flouted through creative (and often underhand) lawyering. One hopes that justice will prevail in the end and the errant parties will be brought to book. Slowly, but surely, in much the same way that a popular leader was convicted after a long 18 year hiatus. The music (of justice) cannot die. Not just yet. And on that hopeful note, let me wish all our readers a wonderful Diwali! 

Shamnad Basheer

Shamnad Basheer

Prof (Dr) Shamnad Basheer founded SpicyIP in 2005. He is currently the Honorary Research Chair of IP Law at Nirma University and a visiting professor of law at the National Law School (NLS), Bangalore. He is 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 Professor Basheer joinedAnand 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. Prof Basheer has published widely and his articles have won awards, including those instituted by ATRIP and the Stanford Technology Law Review. He is consulted widely by the government, industry, international organisations and civil society on a variety of IP issues. He also serves on several government committees.

One comment.

  1. Shashank Mangal

    It is sad that IPRS and PPL become so evasive on compliance front. The stance taken by them is against the basic principle of the doctrine of estoppel that one cannot approbate and reprobate at the same time. On one hand they claim that they are not copyright societies and on the other they carry out the very functions contemplated under the act to be carried out by copyright societies.

    Reply

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