By Sidharth Chopra and Nandita Saikia

Public Interest and Private Property

There has never been any credible argument against the proposition that public interest should triumph over private interest, private rights, and private property. The only problem is that the term ‘public interest’ does not lend itself to easy, incontestable definition. Like ‘the greater good’, almost everyone agrees that ‘public interest’ is desirable but few people agree about what constitutes ‘public interest’ or how to achieve it.

Since the time our Constitution came into force, the right to property has been at the heart of many disputes. This private right was once an inalienable fundamental right but, as its potential to conflict with public interest became increasingly clear, so too did the voices demanding that it be stripped of its status as a fundamental right.

The right to property, rightly, is no longer a fundamental right. Instead, it is a ‘mere’ constitutional right guaranteed by Article 300A and supported by Article 31 of the Constitution of India which prohibits people from being deprived of their property except by the authority of law. What is interesting about the transformation of the status of the right to property is not so much the right itself but what it reveals about the contours of public interest.

What is Public Interest?

In November last year, the National Pharmaceutical Pricing Authority set a ceiling price of Rs. 10/- for a life-saving drug named ‘Furoped’ or ‘Furosemide’ (commonly known as ‘Lasix’) which was being sold between Rs. 100/- and 110/- in the market, and which could be prescribed to babies with heart ailments.

At first glance, capping the price of a life-saving drug certainly seems to be a laudable move in public interest. Unfortunately, in this case, the drug soon effectively disappeared from the market and parents were left searching for alternatives, adding to their misery and risking the lives of their children. This was because the drug was priced so low that grave concerns arose about its commercial viability.

The point to be noted here is that what appears to be in the public interest in theory can diverge from what is actually in public interest in practice. Ultimately, exercises in advancing the public interest cannot be divorced from capitalism where commercially available products are involved in the equation. Supply and demand chains are often impervious to utopian conceptions of public interest.

Public Interest and the Statutory Regime

Trademarks help the public to identify the origin and originators of products. Many other intellectual property rights such as copyrights and patents, however, are embedded in products like books, films, music, and medicines. In essence, they allow rights owners the sole right to deal with their own intellectual property for a limited period of time.

There is a widely-held belief that intellectual property rights best serve the interests of rights holders and that diluting the rights serves the public interest.

However, intellectual property has traditionally been granted legal protection so as to encourage creativity and invention: advancements in science, technology and art for the betterment of society at large. Almost across the board, intellectual rights are meant to reward creators and inventors so that society at large benefits from individual talent and hard work in the long run. The assumption, of course, is that well-rewarded individuals would be keen to devote time and energy to create everything from original works of art to new pharmaceuticals.

With this rationale underlying the statutory regime, all intellectual property laws have, from their inception, created a delicate balance between the rights of creators on one hand and the rights of the general public on the other hand. They also have inbuilt mechanisms to limit the monopoly of rights owners: fair dealing allows some rights to be exercised by third parties without the permission of rights owners, for example, and compulsory licensing mechanisms can be invoked if rights owners unfairly withhold products from the public.

Thus, the statutory regime protects both the public and creators (who are often the first owners of rights). Living in a time of capitalism has obviously ensured that creators, whether they are scientists or poets, cannot sustain themselves or their work without adequate reward. And, so, risking the dilution of the reward by limiting intellectual property rights is almost certain to adversely affect their work. It is therefore critical that the balance of rights envisaged by the statute be respected.

The Trajectory of Judicial Interpretation and Legislative Action

Indian courts appear to have subscribed to the belief, at least in part, that the dilution of intellectual property rights serves the public interest. This suspicion arises because they seem to have occasionally limited the ability of rights owners to deal with their own intellectual property citing public interest.

In 2008, the Supreme Court restricted the ability of copyright owners to refuse to grant licences to FM radio channels whose stations intended to communicate their sound recordings to the public. This was despite the Court’s acknowledging that copyright owners have property rights in their works and even holding that copyright is a human right. Although one cannot quarrel with the proposition that copyright owners should not be able to impose unreasonable conditions, the rights of copyright owners to negotiate pricing in contracts were practically superseded by this decision which was based on a liberal interpretation of a compulsory licensing provision.

After that, in 2012, Parliament substantially amended the Copyright Act primarily to protect and strengthen the rights of music composers, lyricists and other creative persons involved in creation of copyrighted material. At the same time, Parliament also introduced a statutory licence into the Copyright Act which took away the ability of copyright owners (often authors, composers, lyricists) to fix the price of their creations in some circumstances. This new provision empowered a statutory board constituted under the Copyright Act to determine pricing and other conditions under which radio and television broadcasters could exploit protected content. If that weren’t enough, a 2016 government circular clarified that the provision would also apply to internet streaming. Thus, the voluntary licensing regime was completely destroyed in lieu of a forced statutory licensing regime which, till date, severely limits the choice and freedom to contract of those who own the copyright in literary works, musical works and sound recordings.

Entertainment isn’t the only arena in which public interest arguments have made their presence felt. In 2016, a Division Bench of the Delhi High Court held that there cannot be any qualitative or quantitative restriction on photocopying textbooks for the purpose of educational instruction. The Court recognized that the Copyright Act balances the rights of copyright owners and the rights of those who use copyrighted works. Nonetheless, in the pursuit of public interest, it expansively interpreted the law so that every student, as a matter of right, is now entitled to photocopy textbooks used during the course of instruction without permission from copyright owners or payment to them.

While the intention to keep students from being burdened by having to purchase expensive textbooks is laudable, the judgment does not create any distinction between expensive reference books used during the course of instruction and regular textbooks which are targeted at a particular academic session or course.  It is reasonable to suspect that the incentive for content creation may have diminished drastically as a result since the law has now brought the financial viability of publishing content into question.

The tide in favour of apparent public interest has not ebbed. Recently, the Supreme Court issued a judgment in a matter involving the extent and scope of TRAI’s jurisdiction to regulate television channel pricing and the manner of offering content.  It granted a thumping victory to TRAI holding that even if TRAI were, at some time in the future, to pass regulations that would impinge upon the royalty or compensation payable to broadcasters for the utilization of their copyrighted content, TRAI would be perfectly justified in doing so considering that the TRAI Act is in public interest.  The Supreme Court further categorically held that the Copyright Act is concerned with the proprietary rights of copyright owners and not with the rights of consumers or viewers. This interpretation of the statute does not appear to appreciate the balance of rights embedded within the intellectual property statutory regime.

The Road Ahead

In 2008, when it dealt with radio broadcasts, the Supreme Court read public interest into the provisions of the Copyright Act, as did the Delhi High Court in the 2016 photocopying case. In both cases, the judiciary attempted to balance the rights of content creators, owners, and users.

In perplexing contrast to the earlier judicial understanding of the Copyright Act, in its 2018 decision dealing with TRAI, the  Supreme Court does not appear to recognise the balance of rights in copyright law. It effectively granted supremacy to the TRAI Act, a law it recognised as being in public interest, over the Copyright Act. Unfortunately, the basis on which it failed to adequately appreciate that the copyright law, too, is in public interest remained unclear in its judgment.

To all appearances, public interest is being increasingly broadly interpreted by the various arms of the State, one suspects, at times perhaps without a detailed investigation into market economics. Case law certainly appears to suggest that public interest concerns have led to the dilution of private proprietary rights,  and we cannot be certain of what the effect of such dilution will be in the long run.

In the real world, capping prices is almost certain to result in someone having to pay more and others being paid less.  Those who are in the business of engaging authors to create works in which there are intellectual property rights will likely find ways and means to squeeze authors to offset any losses they may themselves suffer as a result of the dilution of intellectual property rights.  Top players in various creative industries would hardly be impacted but, for everyone else, there are real risks in terms of being granted fair remuneration. Due to this, undermining intellectual property rights such as copyright, a powerful bargaining tool in the hands of authors, is not ideal. After all, it is the authors of works who are usually the first owners of copyright.

We now have to wait to understand the extent to which the dilution of intellectual property rights may impact not just creative persons alone but all of us: those of us who read books, or who watch films, or who listen to music, or, God forbid, who need medication that is not easily accessible. We may well end up being the unintended casualties of the enthusiasm to expand the meaning of the term ‘public interest’.

It is imperative that the balance created amongst the various symbiotic interests by Parliament, a balance we have all constantly struggled to maintain, is not lightly interfered with. As Justice Louis Brandeis once said of the US Supreme Court: “the most important thing we do is not doing”.  According an expansive meaning to ‘public interest’ may well turn out to impair the interest itself!

This article was first published by Medianama.

About the authors: Sidharth Chopra and Nandita Saikia are lawyers and colleagues. They deal with the commercial aspects of intellectual property & media law issues, and have been involved in two of the cases referred to in this article on behalf of Star India and the plaintiff publishers.