Underlying works hit the right note: Ensuring equitable remuneration for utilization of original works

In a watershed moment for creative artists, the Bombay High Court, in its recent decision in Indian Performing Right Society v. Rajasthan Patrika, held that the authors of original works are entitled to copyright protection in the form of royalties even after such works are embodied in sound recordings or cinematograph films and communicated to the public by broadcasters.

This decision has settled to a great extent the scope of copyright in original or underlying works vis-a-vis sound recordings and held that copyright subsists in underlying works due to the legislative scheme introduced by the Copyright (Amendment) Act, 2012 even after they are embodied in a sound recording.

Given the labyrinth that is copyright law and jurisprudence, this decision is expected to bring a great amount of clarity as numerous legal propositions and submissions have been advanced by both sides even though the dispute between the Indian Performing Right Society (IPRS) and broadcasters was at an interim stage. The High Court has dealt in great depth with the legislative history of copyright law and the numerous precedents interpreting it.

Briefly stated, the dispute in the instant suit was related to whether the authors of original artistic, literary, musical and dramatic works were entitled to claim royalty every time their work was utilized in the form of a sound recording and communicated to the public. It is pertinent to note here that sound recording is a separate category of work recognized under Section 2 (y)(iii) of the Copyright Act, 1957 and defined under Section 2 (xx) of the Act.

Plainly, a sound recording is a recording of sounds regardless of the medium on which it is created. Thus, a sound recording has certain underlying works, which may consist of lyrics (literary work) and rendition of music (musical work). So, de jure and de facto, there are layers of works in a sound recording. This overlapping of works in a sound recording produced in a studio gives rise to the issue of sharing of the economic return that may arise after such sound recording is communicated to the public by broadcasters.

The submissions of the plaintiffs pressing for interim relief, in brief, were that the changes brought to Sections 17, 18, and 19 of the Act by the Amendment Act were with a legislative intent to protect and reaffirm the exclusive rights of the authors of original or underlying works. A conjoint reading of Sections 13, 14, 17, 18 and 19 of the Act would demonstrate that the authors of the underlying works were entitled to royalties each time a sound recording was communicated to the public.

The plaintiffs, alluding to the Statement of Objects and Reasons of the Amendment Act, impressed upon the Court that the legislative intent behind enacting the amendments was to deal with the inherent inequity that existed between the producers and the artists as a result of which the artists or the authors of underlying works received an unequal bargain for their labour. Reference was also made to the observations of Justice Krishna Iyer in IPRS v. Eastern Indian Motion Pictures Association and Others, whereby he had opined that Parliament should legislatively deal with the infirmities in the law as to the inequity that exists between the authors of underlying works and producers.

Per contra, the defendants submitted that even after the introduction of changes brought by the Amendment Act, the essential nature of copyright did not undergo any change and that the provisos added to Sections 17, 18, and 19 of the Act were merely clarificatory in nature and did not introduce any new legislative scheme as no amendments were made to Sections 13 and 14 of the Act. The defendants contended that even though copyright subsists in underlying works, such copyright cannot affect the rights of the author of a sound recording to communicate a sound recording to the public. It was stated that reliance on the expression “subject to the provisions of this Act” in Sections 13 and 14 of the Act, which deal with the meaning and scope of copyright, essentially limits the scope of copyright vis-a-vis Section 52 of the Act, which deals with fair use limitation on copyright and the expression does not operate against works inter se.

The defendants’ arguments were based on the decision of the Supreme Court delivered before the coming into force of the Amendment Act in the case of IPRS v. Eastern Indian Motion Pictures Association and Others. In this case, it was held that once an underlying work like a literary or musical work is incorporated in a cinematograph film for valuable consideration, the producer of such a film acquires the exclusive right to exploit the work without securing any further permission of the author of the literary or musical work by virtue of Section 14 of the Act.

The Bombay High Court, after giving due consideration to the submissions of both the parties, was pleased to injunct the defendants from utilizing the underlying works without paying royalties as per the tariff of the plaintiffs. Even though the judgement dealt in detail with all the arguments and contentions of the litigants, it is expedient here to employ brevity and analyse the jurisprudence that has emerged from this decision.

The Court relied upon a literal and plain reading of the law to adjudicate whether the authors of underlying works were indeed entitled to royalties whenever a sound recording consisting of their work was communicated to the public. Sound recordings communicated to the public can be a part of a cinematograph film or otherwise. In both scenarios, apart from taking license from the authors of such cinematograph films or sound recordings, the broadcasters even need to remunerate the author of the underlying works forming part of such sound recordings. Section 18 of the Act, which deals with assignment of copyright, explicitly states in the provisos to the section that the author of a literary or musical work included in a cinematograph film or sound recording not forming part of a cinematograph film shall not assign or waive the right to receive royalties for the utilization of their work.

Thus, the legislature has created a provision which makes it impossible de jure for authors of underlying works to relinquish the right to receive royalties in the commercial exploitation of their work. Moreover, sub-sections (9) and (10) of Section 19 of the Act state that the assignment of copyright in a cinematograph film or a sound recording not forming part of a cinematograph film shall not affect the rights of the authors of underlying works to receive royalties for the utilization of their work. The quintessential terms in Sections 18 and 19 are “equal basis” and “equal share” respectively vis-a-vis the rights of authors to collect royalties. Even though the Court has not dealt in depth with these terms, it is a departure from the laissez faire towards a more socialist approach as the legislature is essentially trying to remedy the inequity that exists between the producers and artists and thus not leaving copyright in underlying works and its exploitation to contractual relationship between the two as it would be detrimental to the interests of the artists.

To reinforce this point of view, points (vii), (viii), (ix) and (x) of the Statement of Objects and Reasons of the Amendment Act require careful consideration. These points make it clear that one of the objectives to be achieved by the Amendment Act is to clarify the rights of the authors to receive royalties from the commercial exploitation of their works. Thus, both from a literal approach as well from a teleological approach, authors of underlying works are entitled to receive royalties for the commercial exploitation of their works.

However, since this substantive right to receive royalties was bestowed by the provisos to Sections 17 and 18, it was contended by the defendants that the provisos are only clarificatory in nature, and as such, they confer no separate right. It became expedient for the Court to thus deal with the nature and function of a proviso in a statute and its resultant interpretation.

The Court, while relying on the judgement of the Supreme Court in Ishverlal Thakorelal Almaula vs. Motibhai Nagjibhai, held that even though a proviso ordinarily qualifies a substantive clause it can be also be interpreted as a substantive provision, if the proviso is unrelated to the subject matter of the preceding section or contains matter extraneous to that section. Thus, it was held that even though Section 14 (e)(iii) of the Act gives the author of a sound recording the right to communicate the sound recording to the public it is subject to the provisions of the Act. So, Section 14 (e)(iii) is subject to the provisos vesting exclusive rights to authors of underlying works to receive royalties in the commercial exploitation of their works.

Thus, Section 13, which starts with “…Subject to the provisions of this section and the other provisions of this Act”, and Section 14, which starts with “...subject to the provisions of this Act”, reinforce and reaffirm the rights of the authors of underlying works to collect royalties in light of the changes brought to Copyright law by the Amendment Act.

In conclusion, the Court held that IPRS, being a statutory copyright society, is entitled to collect royalties from the defendants for the benefit of its members, who are the authors of literary and musical works.

Even though this judgment of the Court was delivered at an interim stage of the proceeding, it has recognized the rights of the authors of underlying works. Without any legal challenge to the same, it shall be used as a precedent to protect the interests of artists and is thus a watershed moment since the coming into force of the Act in 1958 as it has verily upheld the rights of the authors of underlying works to receive equitable remuneration for the commercial exploitation of their works embodied in sound recordings and cinematograph films. 

Amar Patil is a lawyer based in Mumbai.