We’re pleased to bring to you a guest post by Simrat Kaur. Simrat is a New Delhi based IP lawyer. She pursued her undergraduate law course from Rajiv Gandhi National University of Law, Punjab and masters law course from National University of Singapore. After having worked with leading Indian law firms (Anand & Anand and Luthra & Luthra Law Offices), she has recently started independent practice under the banner “The Endretta”.
Registration of RMPL as a Copyright Society – Will It Set the Stage for New Repertoire of Problems?
The system of collective management of copyright, through state recognised copyright societies, has been in place for a long time. These societies administer the rights of the authors / copyright owners by licensing their works to commercial users and collecting royalties on behalf of them. Since this regime provides for a practical, relatively efficient, convenient and cost effective solution for copyright licensing, its central idea has always appealed to all the stakeholders. However, the model and execution thereof has been widely criticised to be flawed. The primary ground of criticism has been and continues to be the value deprivation suffered by authors / original creators of works, on account of subjective functioning of the copyright societies (“CSs”) and the arbitrary control of big music companies who legally own and exploit their works.
To combat dominant position of music biggies in the CSs, the regulatory framework which was already oriented against abuse of power was further sharpened; vide significant amendments to the Copyright Act in 2012. Firstly, the author’s right to receive royalty was made non-assignable. Secondly, the authors were provided with the administrative control in the CSs, at par with the copyright owners. Authors now possess an equal right to be members of the CSs and their governing bodies. Thirdly, for public interest, publication of fixed tariff scheme for each type of commercial exploitation of works was also mandated in order to save small users from losing out due to weak bargaining power. Users were further enabled to contest those tariffs, by making a complaint to Copyright Board, if they feel that tariffs are arbitrary. This put big companies and small users at the same footing. Apart from these crucial changes, the amendment also mandated that existing copyright societies shall get themselves re-registered within a period of one year from the date of amendment.
Despite these major alterations in law to enhance social welfare and put authors / creators of works at par with those who own the works legally, stakeholders continue to voice their concerns over the working of the copyright societies, implementation of law and sometimes even the current model of collective management.
Recently, an application has been made by The Recorded Music Performance Ltd. (“RMPL”) for its registration as a copyright society which has again sparked the longstanding debate. While Phonographic Performance Limited (“PPL”) has been operating to administer the public performance and broadcasting rights for decades, in the capacity of a copyright society, RMPL’s registration is being objected to by many, as the Copyright Act, recognises the principle of one copyright society in respect of one category of works. But the catch here is – PPL is currently not a registered copyright society as it has not obtained re-registration from Copyright Office, as mandated by the amended Copyright Act. Though, the Indian Performing Right Society Limited (“IPRS”) which works for and on behalf of the lyricists, the composers of music and the publishers of music was re-registered as a copyright society, in 2017, the application of PPL is still pending. Now, the question is out of PPL and RMPL, which society should be granted registration and whether both could be registered? Another question which needs to be addressed is that should there be an initiative to encourage an improved functioning of a society which has been working for decades or would it be better to replace it with a new one?
At the outset, it is important to make it clear that although law does recognise the principle of a single society for each sector of activity, however, there is no specific bar on the registration of more than one society. The proviso to Section 33(3) of the Copyright Act goes as follows: “that the Central Government shall not ordinarily register more than one copyright society to do business in respect of the same class of works”. It implies that the Copyright Office does not lack the power to register both PPL and RMPL, if it deems fit. But would it be sensible to allow plurality of copyright societies in the same category of works?
Allowing plurality of copyright societies for the same class of works will have some detrimental and impractical consequences. It will place a substantial burden on the users and could lead to irrelevant competition and confusion. As opposed to a convenient arrangement where users have a single access point to seek licenses, they will have to undertake research as to which copyright society controls a particular work. Multiple licenses will be required from different societies in order to gain access to a broader repertoire with more variety. Large intermediaries may manage, but this will be too much of a hassle for small users like hotel / cafe owners etc. who will need to invest a lot of time and labour to research on representation. Such complexity in the process and consequent confusion will put off people from seeking licenses, which will in turn contribute to piracy.
Some would defend plurality on the ground that it would create a competitive environment, in terms of pricing and services, benefiting all. However, considering the fact that the statutory framework confers the final power to determine the tariff rates on the Copyright Board and not the societies, the critical question is – how will it actually create competition in pricing?
Moreover, the traditional argument that copyright societies operate on economies of scale still holds good – broader the repertoire, lesser the costs, as the administrative cost per work decreases with increase in the number of works. This is another reason monopoly mandate works best in the case of copyright societies. The nature of the work is such that even if there is no statutory monopoly, natural monopoly is bound to exist. If multiple societies are allowed in each segment of works, big copyright societies will emerge stronger as they will attract more users owing to their good distribution service and a broader / more valuable repertoire. Smaller societies will lack users and therefore, further cut down on their administrative costs to survive, which will affect their quality of service. Apparently, disadvantages far outweigh the advantages; making exclusivity of CSs for a given form of copyright, the most apposite option. As far as the abuse of monopoly position is concerned, it could be checked by imposing statutory limits on the power of copyright societies, in relation to user engagement, pricing, membership and governance. The amendments in law, as mentioned above, abundantly take care of these aspects and provide for enough regulation.
Opting for RMPL over PPL too does not, apparently, seem to be a prudent move as PPL is a society which has been working since 1941, has a wide membership and has collected / delivered huge royalties in the past. The collective management of copyright requires administration competence; ability to deal with digital environment; wide networks for tracking down infringement and the knowledge of basic tariffs, licensing conditions, model contracts, distribution criteria and documentation. It requires staff with expertise in accounting, copyright law etc. Moreover, with the explosive growth of online content in past few years, copyright management has become a very costly affair. World class technology platforms are required for the same. It would not be wrong to say that RMPL, being a beginner, is no more than an amateur when compared to PPL. Additionally, the application of RMPL reflects that all the seven members of its governing body are record label owners which is, anyway, in contravention of Section 35 of the amended Copyright Act, that mandates equal share of authors and owners in the governance. Therefore, there seems to be no rational basis for choosing RMPL over PPL. Rather, the focus should be on the improvement of the functioning of PPL in terms of transparency and efficiency. It is time to explore new technologies to meet the requirements of digitalisation and deploy tools like incorruptible block chain systems for controlling royalties and reducing the processing costs.
Since the law is interventionist in nature, the Central Government has all the power to exercise control over the societies and enforce compliances. It can make enquiries into societies, put pre-conditions to their registration, suspend the registration and even cancel it if there are compelling reasons. The regulatory framework is very much in good shape as it provides for a system of permanent supervision and not just an ad-hoc control. Therefore, the solution lies in an honest, pro-active and corrective approach by the Government coupled with a solution oriented perspective, to achieve democratic functioning and transparency in the existing societies. Looking for alternatives such as replacing old societies with new ones or recognising plurality of societies will not offer a solution but worsen the problems in many areas.
Image from here