Amending the Law of Copyright

The proposed amendments to the Copyright Act introduced in 2010 have provoked a lot of healthy discussion, but unfortunately also some acrimonious controversy. A law that is so important—both culturally and economically—should be amended participatively, involving all interest groups, in response to felt needs, new technologies and emerging international trends, discusses Jagdish Sagar.

The amendments till now

It is interesting to reflect that the 1994 amendments – which in their time were no less far-reaching – did not take any of the main interest groups by surprise. This time round, there was a strong feeling of having been taken by surprise: the widely representative Core Committee that had been set up earlier was never convened after 2005, and the Bill when introduced went far beyond the ground that had been covered in earlier discussions sponsored by the HRD Ministry. It is probably this—and the consequent deficiencies in the draft—rather than the Ministry’s wholly unexceptionable intent to protect author and consumer interests, that created such consternation. Not having been exposed to the brain-storming process that such legislation needs, the Bill bristled with ambiguities and apparently unintended consequences.

Both the Copyright Bill 1956 and the Copyright (Amendment Bill) 1992 were referred to Joint Select Committees. This time Parliament adopted the quicker expedient of referring the matter to the Parliamentary Standing Committee on Human Resource Development. In the short time available to it the Committee did give a hearing to the interest groups which had made representations (though it did not invite any of the expert witnesses nominated by the Ministry, leaving that gap in the inputs available to it).

To its credit the Committee recommended the removal of some of the seriously anomalous provisions in the Bill, including the well-intended but ill-conceived proposals to amend Sections 33, 34 and 35 pertaining to Copyright Societies, the proposed new definition of “author” in regard to films, and the like. In many cases, however, the Committee has merely given the Ministry a word of caution, and put the ball back entirely into the Ministry’s court. It is to be hoped that this time the Ministry will adopt a more participative approach before introducing a revised version of the Bill in Parliament.

The comments that follow are not exhaustive, but touch on a few important issues, starting with one that is of particular concern to the book publishing industry—though it also affects DVDs, CDs and the like.

Parallel Imports

The proposed insertion of a new proviso in Section 2 (m)/Copyright Act is difficult to understand: it has implications that surely could not have been intended.

There is no dispute about the permissibility in general of parallel imports of copyright works (except for some special exceptions in the case of software, films and sound recordings). It is a misconception that this proposed amendment introduces any new principle of exhaustion of rights in a work after first sale in the interests of consumers. The doctrine of exhaustion already applies to all literary, dramatic and musical works under Section 14(a)(ii) of the Copyright Act, and to artistic works under Section 14(c)(iii): for such works the copyright owner has no statutory rights in a copy that has already been sold once.

The issue here is, rather, that the proposed amendment is inconsistent with the contractual freedom which the same Act gives to copyright owners to assign their rights territorially, rather than globally. Under Section 18 of the Copyright Act, an assignment can be limited to any particular territory (or period of time, or particular rights only). Further, in the absence of specific contractual agreement to the contrary, it is even deemed to be limited to India under Section 19(6) of the Act. The problem with the proposed amendment is that it creates an anomalous situation which seriously affects the publishing industry.

The person in a foreign country who has a limited right to publish a work in that country, infringes copyright by exporting the work to India (see Section 51(1)(a)). The intention of the proposed amendments, apparently, is nevertheless to allow the free import of competing copies notwithstanding that the person exporting them to India has no right to do so, by creating the legal fiction that the copies imported into India are not “infringing copies” as they otherwise would be.

To sell a book in India, a foreign publisher often finds it advantageous to grant an assignment or an exclusive licence purely for a low priced Indian edition. The threat to the Indian publisher who publishes such a book at an appropriate price for the Indian market is that, despite being the sole copyright-owner of the book in India, he cannot stop anyone else from sending competing copies (not necessarily cheaper copies, let it be added) into India. Again and conversely an Indian publisher might license a foreign edition for sale only in one or more foreign countries, but won’t be able to keep copies made under such licence out of India.

The implications for consumers are by no means as rosy as intended. In the long term it does not help them to discourage Indian publishers from bringing out Indian editions of books under licence. And we need to remember that it is not only publishers but also authors who have been objecting to this proposed amendment.

Treaty Compliance and Compulsory Licensing

A more general problem with the Bill, which has not received the attention it needs, is the implications which it has for Treaty compliance. We cannot afford to make our legislation non-compliant with the Berne Convention, not only because of the loss of global protection for Indian works that it would entail, but also because the operative provisions of the Berne Conventin have been incorporated in the TRIPS Agreement. Hence, India might potentially be subjected to wider sanctions through the WTO merely because of a thoughtless amendment to the Copyright Act.

The existing provisions on compulsory licenses in Chapter VI of the Copyright Act have been very carefully designed in order not to conflict with our international obligations under the Berne Convention. Our obligations under the Berne Convention make it impossible for us to issue compulsory licenses against foreign works except where specifically permitted by the Convention, notably in the specific cases referred to in the Appendix to the 1971 Act of the Berne Convention. (In fact, because the Government of India failed to renew our declaration availing of the Appendix to the Berne Convention in the late 1990s, even those exceptions are no longer actually available to us and even in its present form the Act is no longer Berne compliant; since no compulsory licences have actually been issued under the relevant provisions, this problem remains quiescent.)

The implications of the proposed amendments of Sections 31, 31A and 31A(1) making compulsory licences which are currently available only against Indian works available against foreign works as well, are therefore, potentially serious. This was pointed out to the Committee but, disappointingly, the Ministry does not appear to have explained the position to them. The Committee has not reached any conclusion on this point but has rightly alerted the Ministry to possible implications.

WCT and WPPT

Again, the starting point and original first objective of the whole exercise to amend the Copyright Act was to make our law compliant with the WIPO Copyright Treaty (WCT) and WIPO Performers and Phonograms Treaty (WPPT), enabling us to ratify these treaties. Hence, among other things, the enhancement of performers’ rights. However, one of the main provisions of both these treaties is the requirement of remedies against the circumvention of technological measures (access control and/or use control of works on the Internet). Unfortunately, the proposed amendments do not achieve this objective; rather will create further penalties for infringement by means of circumventing technological measures, but they do not make such circumvention, or the provision of devices enabling such circumvention, into infringing acts per se. The amendments thus fall short of the requirements of these treaties.

Statutory Licences

Another concern for copyright owners is the implications of the proposed statutory licences for broadcasting. It is necessary to consider the need for such a provision (admittedly not contrary to the Berne Convention, but optional) with reference to the relevant industries in India and not merely because such licences exist abroad. Another problem with the draft is that, while the marginal headings seem to indicate an intention to limit the scope of this amendment to radio broadcasting, the proposed Section itself does not do so: there is certainly no apparent case for allowing such statutory licences for television broadcasting.

Assignment

The earlier proposed restrictions on the author’s right to transfer rights in the works included in a film have been modified considerably by the Committee. The Bill proposed to provide that an author of a literary (but not a dramatic) or a musical work should not be able to assign the “right to receive royalty” once the work had been included in a film. This was confusing, to say the least, since the “right to receive royalty” is not a statutory but a contractual right. Again, it subjected the author to commercial risk, depriving him of the possibility of a one-time up-front payment: beneficial if the film was a “hit,” harmful to author interests in the case of “flop” films—and surely the latter outnumber the former.

Now the Committee’s suggestion is that the author of literary or musical works included in a cinematograph film shall not assign or waive the right to receive royalties to be shared on an equal basis with the assignee of copyright for the utilization of such work in any form other than for the communication to the public of the work along with the cinematograph film in a cinema hall; except to the author’s legal heirs or to a copyright society for collection and distribution, and any agreement to contrary shall be void.

This means in effect that every author has a right to a 50% royalty from the film producer for non-theatrical exploitation once the work is included in a cinematographic film: but 50% of what? And what do we mean by sharing royalties on an equal basis with the copyright owner? And how can each author of every work included in a film get 50% (of whatever is meant by 50%)? No clearer than before, and even more difficult to enforce.

Further, this proposal does away with the usual variability of licence rates according to the nature of exploitation, e.g., there might be justification for higher royalty for internet exploitation, where the producer makes less investment, and lower royalty in other cases like the distribution of physical copies. Moreover the provision still creates various and unforeseeable anomalies: for example, in the case of a novel which was first published in book format and then included in a cinematographic film.

There is no denying that assignments once made by an author can prove onerous later: the provisions of Section 19A were introduced in 1994 precisely to address this problem, and perhaps the Copyright Board needs to be made more effective to discharge its duties by making this provision more effective. Another author-friendly amendment of the Act made in 1994, the introduction of a resale share right (commonly known as droit de suite) in Section 53A, has never taken effect because the Copyright Board has failed to perform its duty of fixing the author’s resale share. There is much that can be done for authors within the existing law, if the Copyright Board discharges its duties effectively. (Nor is the greater cultural or other importance of the authors of works included in films, as compared to other authors, immediately apparent.) But perceived problems, howsoever genuine, are not solved by unrealistic or unviable solutions.

On a concluding note

There is much more that could be said. As I stated, this article is not intended to be an exhaustive commentary on the Bill. But the question now is, how participative will the Government be in doing its homework on the Committee’s report before taking it back to Parliament with appropriate changes?