Did the Supreme Court miss a step?

Did the Supreme Court miss a step?

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The 2012 Amendments to the Copyright Act envisages an equal share in the royalties to the lyric writers and music composers. While there are issues that need clarity, such as whether the body of works covered are all works or only works created post the amendments, or equal share in relation to what and whom, the issue of whether a separate license is required when a sound recording is communicated to the public is, unfortunately, still not clear.

The Indian Performing Rights Society (IPRS) have twice been unsuccessful in its attempt at a decision in its favour by the Supreme Court. While these decisions were four decades apart, and arguably the latter decision relied on the former, the difference in the constitution of membership of IPRS in this time period was not enough and IPRS was snaked back to the start much like in the popular board game. While the IPRS has been embroiled in numerous litigations to uphold its rights, there are two streams of litigation that made it to the Supreme Court for interpretation of the rights vested in IPRS. The first originated from the Calcutta High Court in the 1970’s and second from the Delhi High Court which started in the year 2006 (before the 2012 amendments took effect and hence the law interpreted was pre-amendment). The present article will review these two streams of cases and attempt to demonstrate how the reliance on the earlier case was not relevant for the latter. The Bombay High Court in Music Broadcast Private Limited vs. Indian Performing Rights Society MANU/MH/0923/2011and the Madras High Court Muthoot Finance Limited vs. Indian Performing Rights Society MANU/TN/2625/2009 pronounced judgements whose rational did contradict each other but I am not dealing with these cases in the present article.

Eastern India Motion Pictures Association & Ors. Vs. Indian Performing Rights Society Limited & Ors. MANU/WB/0056/1974

The matter arose from an appeal from an order of the Copyright Board. The IPRS had, in the year 1969, published a tariff of charges that it proposed to collect for the grant of licenses, for the performance in public of works in which it has rights. The Appellants, EIMPA consisted of producers (thereby owners) of the respective films including the sound track and objected to the imposition of the tariff. The dispute was confined to the sound track in a cinematographic film. IPRS, whose constitution consisted of lyricists and music composers, took the view that the copyright in the musical works incorporated in the sound track of a cinematographic film’s vests with the composers of lyrics and musical composition and IPRS has the right to collect basis the assignment from the lyricist and composer.

The main question, as framed by the Court was “…whether the composers of lyric and music, in fact, have a copyright in the musical works incorporated in the sound track of a cinematographic film.” The Copyright Board, by an order of 16th May 1973 held that in the absence of proof the composers of lyric and music retained their copyright in their musical works provided they were written or printed and that IPRS had the right to grant a license that it sought. While interpreting Section 17 of the Copyright Act the Calcutta High Court held “A composer of music for valuable consideration who composes for the first time for a cinematographic film does not acquire any copyright in the music unless there is a contract to the contrary. Section 17 of the Copyright Act is the only section that speaks of the first owner and under proviso (b) in a cinematographic film the first owner is the person at whose instance the film is made.” “In our opinion, therefore, when a composer of lyric or music composes for the first time for valuable consideration for the purposes of a cinematographic film, the owner of the film at whose instance the composition is made, becomes the first owner of the Copyright in the composition. The composer acquires no copyright at all either in respect of the film or its sound track which he is capable of assigning…..The composer can claim a copyright only on the basis of an express agreement reserving his copyright between him and the owner of the cinematographic film.” 

In my reading of this Judgement, the Hon’ble Court while interpreting Section 17 held that the Producer is the first owner of Copyright in the film including by way of being an author under Section 2 {d} and was of the view that the sound track was part of the cinematographic film and thus the Producer was the first owner. The second element is that this was essentially a battle between a Producer and Composer in relation to ownership of rights. This was not a dispute as to whether a separate right exists in an underlying work when a sound recording is communicated. This is more a case of ownership of the right rather than its existence, devolution and not destruction. This Judgement denied the author composer of its claim and not the claim itself.  In my view this issue was not considered by the Supreme Court when it next looked at this issue.

IPRS filed an SLP against the order of the Calcutta High Court. Indian Performing Rights Society vs Eastern India Motion Pictures Association & Ors. MANU/SC/0220/1977  the Supreme Court identified the question as “Whether in view of the provisions of the Copyright Act, 1957, an existing and future right of music composer, lyricist is capable of assignment and whether the producer of a cinematographic film can defeat the same by engaging the same person.”

The Supreme Court while upholding the Judgement of the Calcutta High court held “In other words, the author (composer) of a lyric or musical work who has authorized a cinematographic film producer to make a cinematographic film of his work and has thereby permitted him to appropriate his work by incorporating or recording it on the sound track of a cinematographic film cannot restrain the author (owner) of the film from causing the acoustic portion of the film to be performed or projected or screened in public….of from making any record embodying the recording in any part of the sound track associated with the film…..”. The Court further observed “..Any other construction would not only render the express provisions of Clauses (f), (m) and (y) of Clause 2, section 13 (1) (b) and Section 14 (1) (c) of the Act otiose but would also defeat the intention of the legislature, which is view of the growing importance of the cinematographic film as a powerful media of expression and the highly complex technical and scientific process and heavy capital outlay involved in its production has sought to recognize it as a separate entity and to treat a record embodying the recording in any part of the sound track associated with the film by utilizing such sound track as something distinct from a record as ordinarily understood.

This last quote seems to have weighed heavily with the Hon’ble Single Judge of the Delhi High Court as the definition of ‘records’ was replaced by the words ‘sound recordings’ in 1994 by way of an amendment to the Copyright Act.

The Hon’ble Supreme Court went on to hold that  when a composer of a film commissions a composer or lyricist by engaging him for reward or valuable consideration, for the purposes of the film, the producer becomes the first owner of Copyright and no copyright subsists with the lyricist of music composer. The same would be in the case of a contract of service or apprenticeship. Therefore the rights of a music composer or lyricist can be defeated by the producer of a cinematographic film.

 

The next significant round of battles for IPRS began in the year 2006 in the Delhi High Court when an event management company (CRI Events) as well as a FM Radio Station (Synergy Radio) refused to take a license fee from IPRS. Before we look into the Judgements of the Delhi High Court and the Supreme Court in this round of battles, there were two changes from that 1970’s that were significant. The first being a change in constitution of IPRS. In the decade after the Supreme Court Judgement in 1977 the constitution of IPRS changed and from being a Society solely comprising of lyricists and composers, the society now had music companies and producers (owners of the underlying works) as members. The entity that IPRS battled against was now a member of IPRS and fighting alongside the lyricists and composers (In my reading the Supreme Court perhaps missed this change of constitution while deciding the matter). The second was that in relation to class of works, the definition of ‘records’ was replaced by ‘Sound Recordings’, a fact that has helped the Hon’ble Delhi High Court in deciding this issue. The second round of litigation began sometime in 2006 when PPL and IPRS filed a suit as joint Plaintiffs against CRI Events and IPRS filed a suit against the FM Radio Station. The orders are from the interim orders in these matters.

Indian Performing Rights Society vs. Aditya Panday & Ors. MANU/DE/2834/2011:

The defence taken in these proceedings were primarily that the rights of IPRS has been denied by the Supreme Court in IPRS vs. EIMPA. It also relied on the fact that Sound Recordings are now a separate class of works and should be treated in the same manner as a cinematographic film. IPRS argued that the Supreme Court in IPRS vs. EIMPA did not deal with a merger doctrine and that the Supreme Court only decided that the Producer had rights and not the Author of the lyrics and musical composition. It further argued that the definition of performance was amended in 1994 to mean live acoustic perfomances with references to performers rights while the substance of the definition of performance was incorporated into communication to the public.

While the Court did analyse legislations in Australia, US and UK, the Hon’ble Court was bound by the dictum of the Supreme Court in IPRS vs. EIMPA. What also seemed to weigh with the Hon’ble Judge was the fact that cinematographic film being a separate class of works the owner has the exclusive right to communicate it to the public and hence IPRS could not claim a separate right which would encroach upon this independent right. Given that in 1994 the word ‘Records’ were replaced by ‘Sound Recordings’ equal treatment should be given to Sound Recordings in the same manner as they were for Cinematographic Films. Therefore given that the owner of Copyright of a Sound Recording had exclusive rights under section 14, a similar view was taken as was in the case of a cinematographic film. Given the decision of the Supreme Court on this aspect, the Delhi High Court was bound by that view.

An element that perhaps not considered was the fact that the owner was now a party and given that Copyright is a bundle of rights, an owner could separately bundle the rights to communicate to the public the underlying works. While this Judgement related to the position of law prior to the amendments of 2012, this aspect does become even more significant given the share that the lyricists and music composers are entitled to today. The other aspect that could require consideration is the legislative intent in granting rights in a Cinematographic Film and Sound Recording. While the reasons for a Cinematographic Film were the myriad rights involved and the sheer economic magnitude and risk in creating this class of work, this was deemed necessary to give it a status of a separate class of work even though it is a derivative work. The change from Records to Sound Recordings was essentially to respond to technological changes and I don’t believe the intention of the legislature was to equate the Sound Recording with a Cinematographic film though it did grant it a separate class of work. One wonders if the definition was Records (and say if the Courts interpreted it to mean sound recordings) then would be have a different Judgement?

The Hon’ble Single Judge held that for a Sound Recording to be communicated one only required a license from PPL and for live events made through and artiste, a license from IPRS was required.

Indian Performing Rights Society vs. Aditya Panday & Ors. MANU/DE/1976/2012

The Division Bench of the Delhi High Court upheld the Judgement of the Hon’ble Single Judge. While it did hold that the reasoning of the Hon’ble Single Judge that a sound recording was carved out from the cinematographic film was not correct, it made no difference to the final analysis that the Sound Recording has to be given the same footing as a Cinematpgraphic Film and given the Judgement in IPRS vs. EIMPA was binding the same principle was applied. Two additional factors seemed to have weighed with the Hon’ble Division Bench, the first being a finding from the Supreme Court in Entertainment Network (India) Limited vs. Super Cassettes Industries Limited (MANU/SC/2179/2008) which held, inter alia, “….but as indicated hereinabove, the same not mean that the right of an owner of sound recording is in any way inferior to that of the right of an owner of copyright in an original literary work.” This perhaps helped with the reasoning that Sound Recordings need to be placed at the same level as original literary and musical works.

Further the Hon’ble Division Bench observed that the owner of a literary work and musical composition had both the right to perform the work in public as well as communicate it to the public, whereas in the case of Sound Recording, the owner only had the right to communicate it to the public.

The need to equate a Sound recording with the original literary and musical composition seemed to be the undoing of the claims of IPRS in this round of litigation. This was surely not the intention of the legislature when it replaced ‘Records’ with ‘Sound Recordings’.

Given the limitations that the Delhi High Court has in terms of being bound by the Supreme Court Judgement and the fact that the change of constitution of IPRS could make a difference, the IPRS filed an SLP against the Judgment of the Division Bench.

 

International Confederation of Societies of Authors and Composers vs. Aditya Panday
& Ors
.

While IPRS did file an SLP, the International Confederation of Societies of Authors and Composers (better known by its acronym CISAC) intervened in the matter. The Supreme Court framed the issue as “where lyrics written by ‘X’ (lyricist) and music composed by ‘Y’(musician) are used to make sound recordings by ‘z’ (Sound Recording Company),whether ‘A’ (Event Management company/Event Organiser) is required to seek license from ‘x’ and ‘y’ for subsequently playing the song in public even after ‘A’ has paid the for the broadcasting of the sing to ‘z’ (Sound recording Company)?”  

This is different from the issue framed in 1977 as the question there was that of ownership but here it is a question of whether the right exists. While describing the Appellant the Supreme Court referred to it as a Society of Authors of literary works and composers of musical works, no references to owners, I wonder if the battle was lost here! The Supreme Court held that each of the works are independent of one another, and reading the sub clauses independently cannot be interpreted to mean the right of the producer of the sound recording, who comes within the definition of author and has a right to communicate his work is lost. The Supreme Court stated that it was not the case of IPRS that the Sound Recording was made without authority, and therefore there can be no fetters on the exploitation of the Sound Recording. The Supreme Court upheld the interim arrangements made by the Delhi High Court while upholding the 1977 Judgement to the settled principle of law (though perhaps the context was different and needed to be looked at again).

By a concurring Judgement the Supreme Court expressed concern that the suit had made no headway for about a decade and while it upheld to interim arrangement it held that all observations, findings and views expressed by the High Court in both original and appellate proceedings have no legal effect. This completely decimated the hope of an answer that the parties to the litigation and the whole industry was awaiting.

In my view the question of whether it is a transfer of a right versus the extinguishment of the right still remains an open question. I am not sure about the need to equate the sound recording with a literary and musical work. A sound recording is a derivative work and perhaps one should bear in mind that the word original is not a pre requisite for a sound recording (or for that matter a cinematographic film).The need to ring fence a Sound Recording  from the underlying works is alien to most jurisdictions and does to some extent make the concept of a bundle of rights otiose. Going forward one wonders how this interpretation will sit with the 2012 amendment that deal with lyricists and composers getting a share of royalty. One wonders if the second round of litigation would have had a different result if “records” was not replaced by “Sound Recordings”. The legislature did make this change to take into account changes in technology and if they had the foresight about the impact of making a Sound Recording a separate class of work would do to underlying works, whether a carve out of clarity would have been in order. Further to equate a Sound Recording with a Cinematographic Film may not be correct. This has led to the IPRS’s defeat in the second round of litigations. The considerations for a cinematographic work which consists of myriad works of Authors and Performers at various levels besides the large economic risk is not the same as a Sound Recording.

To its credit IPRS has been licensing works of its members to most OTT players as they  agree to pay for underlying works given that this is the norm internationally. Certain sectors such as FM Radio steadfastly refuse to pay IPRS any amount and I wonder if IPRS will line up another set of battles to get everyone back in step.

 

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