DEMONETISATION OF COPYRIGHT
GOLDEN RULE THAT BEING FOLLOWED WORLDWIDE WHILE DRAFTING COPYRIGHT LEGISLATION (INCLUDING INDIA BEING BERNE CONVENTION MEMBER) IS ON THE PRINCIPLE THAT ;
“Copyright is a Government granted monopoly for a limited period of time in which authors and owners are given “exclusive rights” (not absolute rights) with restrictions / fair use exemptions / compulsory and statutory licensing”.
On same lines as above , Demonetisation of Copyright happened in 1994 Amendment with crystallised statutory restriction but till date it’s in papers and statutes only. Refer to introductory sentence of Section 33 sub section (1) (Chapter VIII) of Copyright Act 1957.
(1) No person or association of persons shall, after coming into force of the Copyright (Amendment) Act, 1994 commence or, carry on the “business” of issuing or granting licences in respect of “ANY WORK” in which copyright subsists on respect or in respect of any other rights conferred by this Act except under or in accordance with the registration granted under sub-section (3).
WORK is defined u/s 2(y) of Copyright Act 1957 and Section 13 of the said Act in Chapter III refers to those WORKS IN WHICH COPYRIGHT SUBSISTS. Section 13 sub section (1) reproduced herein ;
- Subject to the provisions of this section and other provisions of this Act, Copyright shall subsist throughout India in the following classes of works, that is to say ,-
- Original literary, dramatic , musical and artistic works;
- Cinematographic Films and
- Sound recording
Please note carefully – the word ORIGINAL is used only for literary , dramatic , musical and artistic works and not in Cinematographic work or Sound recording. That’s why literary, dramatic , musical and artistic works are referred as “Primary Copyright” and the Cinematographic Films / Sound recordings are “Derivative rights”. Which means the symbol © is marked only for Primary rights and for derivative rights the symbol used is 🅿️ (Publishing) and the “P” can be in multiples but © cannot be in multiples because the ORIGINAL can be only one.
The term Copyright demonetisation being referred herein because Section 33 in Chapter VIII of Copyright Act 1957 has put restriction with effect from 10 May 1995 that “monetisation” by Copyright Owners to carry on the “business of issuing or granting licensing” in respect of ANY WORK in which Copyright subsists or in respect of any other rights conferred by this Act can be transacted ONLY through registered Copyright societies duly approved by the Central Government ( sub section (3) of Section 33 ) and not directly by the said owners. Please mark the restriction referred in the provision and it’s for ANY WORK.
Before 1994 , Chapter VII of the Copyright Act 1957 dealt with Performance Rights Societies only but after the Copyright Amendment in 1994 the scope of Chapter VII of Copyright Act 1957 enlarged to ANY WORK / ANY OTHER RIGHTS (without any exceptions) covering all the exclusive rights as given under section 14 of the Copyright Act 1957.
Further to make it more stringent in the “business of issuing or granting licensing” , Copyright Amendment 2012 inserted a new unqualified restrictive proviso in Section 33 which is straightforward and it clearly restricts that any issuance of license in respect of literary, dramatic, musical and artistic works incorporated in a cinematograph films or sound recording should be through registered Copyright Societies only. The relevant proviso of Section 33 reads as hereunder :
“Provided further that the business of issuing or granting license in respect of literary, dramatic, musical and artistic works incorporated in a cinematograph films or sound recordings shall be carried out only through a copyright society duly registered under this Act.”
Further please note that “business of issuing or granting licensing “in respect of any other rights conferred by this Act can also be transacted ONLY through registered Copyright societies duly approved by the Central Government. As per Copyright Act 1957 the “other rights conferred by this Act” are Performers Right and Broadcasting Right as given under Chapter VIII under Section 38 & 37 of Copyright Act 1957 respectively. These two rights are not Copyright but a special Right conferred by the Copyright statute. Not touching the subject of Performers and Broadcasting rights in this article and it will be addressed subsequently in length to clear the overlapping myths with Copyright works as defined under section 2 (y) read with section 13 of Chapter III of Copyright Act 1957.
More critically on further reading , pursuant to Section 18 & 19 of Copyright Act 1957 read with Section 30A ( application of Section 19 of Assignment in relation to a license under Section 30) for the first time in the history of Indian Copyright , “authors” have been specifically included to share the royalties statutorily on equal basis with the owners for utilisation in ANY FORM (other than for communication to the public of the work along with the Cinematographic films in Cinema Hall ) with stringent stipulation that right to receive the royalty by authors cannot be waived and any assignment to the contrary shall be void.
Therefore on careful perusal of restricted provisions as given under Section 33 , Copyright Amendment Act 2012 read with Section 33A is a paradigm shift in regulatory regime governing the grant of “business licenses” in respect to literary or musical work included in a Cinematographic film / sound recording.
On comprehensive reading of Section 33 and it’s provisions , before the Copyright Amendment , all the Royalty from business of licensing belonged to “Owners” only and after the Amendment in 2012 the sharing equation among owners , authors and other owner(s) , as the case may be, got introduced AND important point that to be observed is that; in both the cases (before or after the Copyright Amendment in 2012) the “business of issuing or granting licenses” for ANY WORK could have been done and should be done through registered Copyright Societies only
It’s amply clear that from Copyright Amendment 1994 the issuing or granting business license for ANY WORK can only be through registered copyright societies duly approved by the Central Government as per sub section (3) of Section 33 of Copyright Act 1957.
Hence Demonitisation of Copyright.
Ironically , despite of stringent provisions under the Copyright legislation with clear prohibitive language (referred herein as Demonetisation of Copyright) that effectuates a complete ban from Copyright Amendment 1994 onwards on the business of issuing or granting licenses in ANY WORK, the owners have been “monetising” the business of issuing or granting Licenses in India on their own by charging whimsical and arbitrary Tariff rates without routing through the registered Copyright Societies duly approved by the Central Government. This requires explicit Judicial probe because it has straight bearing on both Direct / Indirect Tax incidences and accounting treatments that have been done all these years besides continuous incurring of statutory liabilities from 2012 Copyright Amendment.
From Copyright Amendment 2012, collection of license fees directly by the owners and not through registered copyright societies as provided under the statute is more grave because by not sharing the proceeds with the Authors (which is statutory) has stepped up the nature of licensing transactions across the country as “Public Fund” and this could perhaps attract criminal prosecution / winding up proceedings of body corporates to recover the statutory liability from the owners, as the case may be.
For revision , students are advised to read the following articles as per the link given herein below for fundamental understanding on the aspects that have been used as side kick to circumvent the provisions of Section 33 which helped the owners to remain outside the registered Copyright Societies all these years and essentially there are four defense that have been used which conceivably appears to be contrary to the Copyright provisions.
No: 1. To issue business license on individual capacity. MW 1.04 point 4.
No:2. Using Section 30 of licensing as standalone section MS 1.05
No: 3. Collection of license fee and issuing of license by authorised agents MW 1.07
No:4. Misinterpretation of 1977 Supreme Court Judgement by Producers.
MW 1.01 & 1.02
Notwithstanding as above, the next pertinent question arises, who is responsible to form the Copyright societies?
As per the Copyright provisions are concerned, prime-facie it is the responsibility of the “Owners” before the Copyright Amendment 2012 and post Copyright Amendment 2012 with effect from 20 June 2012 the answerability is of the “Authors & Owners” of different Work(s) [emphasised again on ANY WORK] in which the Copyright subsist to form the copyright society and to get it registered pursuant to Section 33 of Copyright Act 1957 read with Copyright Rules 2013.
Certainly it’s NOT THE RESPONSIBILITY OF THE CENTRAL GOVERNMENT to make the application on behalf of authors and owners across the country for all the Copyright Work(s) in which Copyright subsist.
Central Government has enormous power to invoke Section 78 (2)(b) & (g) of Copyright Act 1957 to issue Statutory Licenses to USERS as interim measure till the licensing mechanism in India are streamlined by forming registered Copyright societies / constituting the Copyright Board . The justified reason for issuing Statutory license by CG will be on the ground that, it squarely hits the fundamental rights of the USERS to do legitimate business as enshrined in Article 14 to 19 of the Constitution of India.
Therefore in the given situation when owners and authors are given the statutory way out for “monetising” their copyright works through registered copyright societies, can the owners and authors claim that their contents have been infringed by the public / users like hotel, restaurants, television / radio broadcasters, Advertisement industry etc ???
That means can the owners have the legal protection from the Honourable Courts for their own wrong doing by purposely not forming the registered copyright societies as provided under the statute because it is convenient for them to remain outside the registered copyright societies and to intimidate the “legitimate users” to obtain business license directly without adhering to the provisions of Tariff schemes as given under section 33A read with other administrative statutory requirement provided under the Copyright Act 1957 !!!!!
This issue will be explained in detail , in next article
MW 1.09 ………. to be continued.