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Rights, Camera and Royalty: The Emerging Law on Future Assignment of Copyrights under the Copyright (Amendment) Bill, 2012
The Copyright Amendment Bill, 2012 which was passed recently seeks to identify and reward the authors of the works and ensure that there is equitable distribution of royalties which are generated by commercial exploitation -
of works by the producers, who through an assignment of rights become the sole holder of the intellectual property rights observes Saurav Gupta.

We are living in the age of technology. Technology has not only changed the way we live, but it has also changed the way we entertain ourselves. Gone are the days when scores of people would crowd around a television set to see their favourite movie or enjoy performances from renowned artists. In the 21st Century irrespective of their economic capacity most people have easy access to a plethora of entertainment devices. These devices are capable of storing torrents of data which could include music, video clips, movies, etc. This sort of data is not merely a compilation of lyrics and tunes but it stands for the Intellectual Property of its owners, which include not only the big production houses, but also the authors and performers of the art. In India such rights are protected through copyrights which have been dealt with in the Copyright Act 1957 (hereinafter referred to as the ‘act’),. Although this act has been amended from time to time, these amendments have overlooked certain basic rights which fall due to the authors of the work and other performers.

The inadequacies of the act which have resulted in inequitable enjoyment of intellectual property rights was first brought to the notice of the Upper House of the Parliament. It was in the form of an appeal from the who’s who of the Indian Music Industry which included Oscar winner A.R. Rahman, Bharat Ratna awardee Pandit Ravi Shankar and others. The main point in contention was that loopholes in the act had resulted in diverting the profits generated through commercial exploitation of the works solely in the hands of the big production houses, which had left the authors of such work high and dry. This denial of intellectual property rights is achieved through creating contractual bars coupled with the provision relating to assignment of rights to producers contained in the act.

What the amendment seeks to rectify?

Section 13 (1) of the act talks about the works in which Copyright subsists and declares that all works in the nature of original dramatic, musical and artistic works would be provided protection under the act subject to the provisions contained in the act. Therefore this section recognises the Intellectual rights of the authors in relation to their works. Section 14 of the act provides exclusive rights for exploitation of the works to the owner which includes communication of the work to the public or reproducing the work in any material form. However, the provision under fire is section 17 of the act, which declares that the author of the work would be the first owner of the work, “subject to a contract to the contrary”. This means that if a cinematograph film is made for proper consideration at the instance of any person like a producer; such producer would become the first owner of the copyright, unless there is a contract which vests rights on the author of the work. The effect of this provision is that it results in assignment of author’s right to the producer. The earnings generated from the film are used to pay the author of the work as per the existing contractual terms between the author and the producer, while all the benefits of subsequent commercial exploitation of the works fall into the hands of the producers only.

The producers who become the ‘sole owners’ of the copyright sell them off to music companies, telecom providers, websites, other broadcasters and thus gain profits through royalty; no part of this royalty falls to the original authors of the work. The authors compensation is only limited to the returns which were provided to them in relation to the cinematograph film for which they agreed to provide their works, subsequent to assignment of their rights in relation to the film, they are barred from participating in any further share in the profits generated through other modes as have been highlighted above. The reason for this is that their share in such royalties also stand assigned to the producer along with their work under section 17. Section 19 of the Act deals with mode of assignment under the act, it provides that for a valid assignment of copyright it has to be in writing signed by the assignor or his duly authorised agent. The amendment seeks to modify the clause 3 of section 19 which reads:

"The assignment of copyright in any work shall also specify the amount of royalty payable, if any, to the author or his legal heirs during the currency of the assignment and the assignment shall be subject to revision, extension or termination on terms mutually agreed upon by the parties."

The mischief in this provision is that is uses the words, "amount of royalty payable, if any, to the author or his legal heirs" and "assignment shall be subject to revision, extension or termination on terms mutually agreed by the parties". These parts ensure that the producers would always have an upper hand over the authors who create the work. The payment of royalty after assignment has been made optional; also subsequent fate of the assignment has been left to mutual agreement between the parties. This provision puts all the powers in the hands of the producers. The authors are in no position to bargain regarding contractual terms with the large production houses, this is largely due to intense competition in the entertainment market whereby authors are forced to cling to whatever they get, or risk losing the project altogether. This situation is exploited by the producers by making inequitable contractual terms whereby the authors are stripped of their rights upon assignment of their work both unconditionally and permanently.

How the Copyright Amendment Bill, 2012 seeks to rectify the problem?

The Copyright Amendment Bill, 2012 (hereinafter referred to as bill) has brought sweeping changes whereby the inadequacies of the erstwhile act are sought to be addressed. Under a broad policy, the bill seeks to ensure ownership rights to the authors and whereas under section 17 of the act the copyright in the work can be assigned to the producers who pay valid consideration for the same, the accompanying right to royalty earned from non-film related activity has been made non-assignable (except to the legal heirs of the authors or to a copy right society for collection and distribution) and non-waiveable . According to the bill such royalty which is earned through other mediums should be shared equally between the producers and the authors, this would lead to an ‘equitable distribution of royalty’. Under the proposed amendment irrespective of the fact that the economic risks have been taken by a person like a producer or the existence of a service contract the right of the author in respect of his original literary, musical or artistic work would remain unaffected.

Also, under the amended section 18, new modes of exploitation of work, which did not exist at the time of assignment, cannot be applied to copyrights which have already been assigned. Effectively, in case of such new modes of exploitation a new assignment would have to be taken from the author of the work, or a contract to that effect made at the time of original assignment, so that such new mode can be exploited by the producer. Therefore the earlier provision which allowed for blanket assignments which even covered future modes of exploitation have been done away with.

The amended section 19 makes the payment of royalty mandatory along with any other consideration to which the author is entitled in relation to utilization of the work in any form other than for the communication to the public of the work, along with the cinematograph film in a cinema hall. Any unauthorised use of an assigned work would be held void. The protection to share royalties equally has also been extended to ‘sound recordings’, which do not form part of any film. This has been done through introduction of a separate sub-clause.

Para 10.9 of the 227th Rajya Sabha Standing Committee report is relevant in this regard and has been set out below:

"Committee’s attention was also drawn to the fact that inclusion of the words ‘sound recording’ along with cinematograph film in sections 18 and 19 would mean that the ‘right to royalty’ would not arise when music and lyrics were exploited as part of sound recording. This would prove to be detrimental to the interests of authors. On a specific query in this regard, the Department informed that the inclusion of ‘sound recording’ was to cover non-film music also within the scope of the section. The definition of ‘cinematograph film’ given in section 2(f) included sound recording accompanying the visual recording. Accordingly, a clear term in the contract at the time of transferring the synchronizing right regarding the terms and conditions of the separate making of the sound records of the music included in the film could protect the interests of the author of the works."

Certain changes have also been introduced in the copyright societies like; the grant of licence in relation to various works can only be done through copyright societies, therefore the grant of licences by the producer would be through the channel of the copyright society which would ensure equitable distribution of royalties. The renewal of registration of the copyright societies would have to be done after every five years and such renewal "shall be subject to the continued collective control of the copyright society being shared with the authors of works in their capacity as owners of copyright or of the right to receive royalty". This provision will empower the authors/performers to keep vigil on the acts of the society as they would have a stake on its continued existence. The governing bodies of the copyright societies would now constitute of persons elected from among the members of the society which would include equal number of authors and owners of work for the purpose of the administration of the society . This provision would ensure that the copyright societies are not dominated by the wealthy and influential producers and a democratic process is followed in the management of the society.

It is noteworthy that ‘performers’ who include actors, singers, musicians, dancers or any other persons who make performances would also get all rights to royalty available to authors set out above under the new bill.

Provision relating to Cover Versions

A cover version or cover song is a new performance or recording of a contemporary or previously recorded, commercially released song. Cover Versions of well known songs and tunes are often recorded by new artists to achieve initial recognition, when their own unfamiliar and original material might draw lesser attention. In terms of the act, “it is a sound recording in respect of any literary, dramatic or musical work, where sound recordings of that work have been made by or with the licence or consent of the owner of the right in the work. ” The person who intends to make such sound recordings requires to give prior notice of his intention, also copies of the covers and labels in which the sound recordings are to sold are to be made available in advance so that they can be scrutinised to ensure that the packaging would not lead to any confusion in the minds of the customer/public with regards to the original work and is separately identifiable as a mere ‘cover version’.

This is necessary to protect the reputation of the original work and also ensure that the goodwill of the original work is not misused. The person who brings out cover versions shall be required to pay in advance royalties to the owners of the copyright at rates fixed by the Copyright Board. The amendment provides for prevention of mutilation of original work in the garb of cover version by prohibiting any unnecessary alteration in the original work, without prior consent of the owner. Cover copies would be allowed only after the expiration of five years from the date when first sound recording of the work was made. A continuous source of income has been insured for the authors of the works, as royalty would have to be paid on a yearly basis depending on the number of cover copies produced; this step was taken keeping in mind the poor conditions of some authors who after initial success fail to perform due to lack of opportunity or physical inability, in such a situation they were left to heed for themselves, although the works created by them continue to be exploited by assignors and their licensees.

All disputes in relation to payment of royalties for cover copies would be handled by the Copyright Board. Despite of all these changes certain loopholes would include:

  1. No provision exists for dealing with digital formats of cover songs, in case of a physical form the packaging can help do decipher between the original and the cover versions, however in case of a digital format the customer can easily misunderstand a cover version to be an original version.
  2. No alterations are allowed from the original song, which means no re-mixes are allowed. Nor are imaginative covers allowed in which the lyrics are changed or the music is reworked, no alteration is allowed without the copyright owner’s permission . This move may go against popular music culture which has relied on cover versions to spread the popularity of the songs, due to such provision the music companies and film makers would be barred from publicising their work by use of cover versions.

Judicial Pronouncements: Assignment of Future Rights

The Copyright Bill has been passed in furtherance of the thirty old directive of the Supreme Court in Indian Performing Rights Society vs. Eastern India Motion Pictures Association where it held that film producer is the first owner of the copyright and the authors and music composers do not have separate right. However, it also said that, the right of a producer in a film as set out in s.14 (1) (c) cannot entrench upon the composer’s right under s. 14 (1) (a), when music is separately played in places like radio station/aeroplane/restaurant etc. If a producer enjoys synchronisation rights the authors/composers should enjoy performing right. A film may be caused to be exhibited as a film but the pieces of music cannot be picked out of the sound track and played in the cinema or the theatre. To do that is the privilege of the composer and that right of his is not drowned in the film's copyright except where there is special provision such as section 17, proviso (b) and (c) which result in assignment of all rights to the producer unless there is a contract to the contrary. Justice Krishna Aiyar, made certain suggestions keeping in mind the provisions relating to assignment and called for a legislative scheme in which the twin rights could co-exist, each fulfilling itself in its palatable distinctiveness, the relevant extract is provided below:

"…the authors and music composers who are left in the cold in the penumbral area of policy should be given justice by recognizing their rights when their works are used commercially separately from cinematograph film and the legislature should do something to help them".

One of the prominent issues which has been dealt under the bill is the assignment of future rights, due to constant technological developments new modes of commercial exploitation of a work come up very often, when this happens the question arises as to whether the assignment which was originally made would cover the new development or whether fresh assignment would be required. The judicial opinion in this regard is divided. In the case of Raj Videovision v. K. Mohanakrishnan : Here the court held that the assignor would be held to have transferred all rights in relation to which assignment was done as on the date of assignment in favour of the assignee. And when the assignor himself is unaware of his future rights accrued due to scientific advancements, it cannot be contended that such rights which are yet to come into existence have been transferred. The assignee cannot claim a right which was not contemplated at the time of original assignment.

In Maganlal Savany Vs. Rupam Pictures , the plaintiff was given wide rights for the exploitation of a film by the producer. This was done through an agreement which undertook that the assigned work would not be commercially or non-commercially exploited by the producer in any way whatsoever in the contracted territory. The defendant (Producer) subsequently, assigned satellite rights to the third party, which was not contemplated at the time of assignment to the plaintiff. The plaintiff sought to restrain the defendant through injunction. The court gave a wide meaning to the term exploitation and included in it all scientific and technological devices that may be invented in the future also and the plaintiff was entitled to make use of those inventions also. Given such wide interpretation of word exploitation satellite telecast of assigned work would be violative of the provisions of the agreement to the plaintiff. The decision of the court in this case can be said to have been influenced to large extent on the basis of strong terms contained in the contract.

Similarly, in the recent case of Sholay Media & Entertainment Pvt vs Vodafone Esssar Mobile Services , the dispute related to the assignment of future rights, whereby the assignee had authorized a telecom company to use the sound track in relation to the film ‘Sholay’ to create ringtones, caller tunes and other digital rights, in return for which the assignee made profits. The assignor plaintiff’s contention was that absolute rights to use the soundtrack were not assigned under the assignment deed and therefore the authorization to use the same in digital platforms which neither existed nor could be contemplated by the parties on the date of assignment was invalid. The court scrutinised the assignment deed in great detail and came to the conclusion that both interpretations were possible. However it finally held that on the basis of the terms of the deed and facts of the case that the balance of convenience was in favour of allowing the Telecom Company (defendants) to continue to use the sound-recording through digital/mobile media while simultaneously safeguarding the financial interest of the plaintiff company (assignor), which would include payment of royalty on usage of the sound recording on digital media and telecom networks.

The decisions in these cases reflect that the producer’s right accrues in relation to future forms of exploitation of works despite of any prior assignment made by him, unless there exists a contract to the to the contrary. This same principle can be extended to protect the future rights to royalty of the artists who assign their works to the producers, also in light of the new bill this is facilitated by the fact that any contact which takes away right to royalty in relation non-film exploitation of the work would be considered void.


Any piece of new legislation cannot be considered to be a complete solution to the problem. Even if certain problems are successfully addressed chances are that new problems which owe their genesis to the new law may crop up. Some suggestions in regards to the loopholes in the new bill are set out below:

  1. If for example the producer sells the rights to a telecom company to use a particular song as ringtone, however on the date of assignment of the copyright from the artists to the producer such technology did not exist, question would arise as to who would be entitled to royalty under the new law. The producer would get royalty as he provides the copyright licence. The bill is silent as to whether the telecom company would pay royalty to the composers and lyricists directly or whether they would pay the sum to the producer who would in turn forward it to such artists. Also if a payment was made to one or more of the parties entitled to royalties, it is unclear whether the unpaid parties could ask (a) the paid parties for a share or (b) the telecom company for royalties or (c) both the telecom company and the paid parties by initiating legal proceedings for the recovery of money. Such uncertainty needs to be resolved by clearly laying down a proper scheme for distribution of royalties to various parties to avoid unnecessary litigation.
  2. A proviso to s. 2 (qq) has been added whereby the scope of the term performer has been restricted by the following words, "a person whose performance is casual or incidental in nature and, in the normal course of the practice of the industry, is not acknowledged anywhere including in the credits of the film shall not be treated as a performer", what amounts to a ‘casual or incidental’ is a question of fact and this can easily become a big target for future litigation. Therefore it is suggested that a more precise definition of performer should be adopted.
  3. Under s. 52 (zb) of the bill a special provision has been made to make copyrighted material available to people with disabilities, under this provision various welfare organisations which cater to the disabled persons can access copyrighted work which is meant only for the disabled. The legislature has vested the organisations with the responsibility of ensuring that copyrighted works in accessible formats are only used for the people with disabilities and not for purposes of business, this provision can be very easily misused, as is the case with most welfare schemes where the benefits are siphoned off to other channels. This will open up a new avenue for infringement. It is suggested that the government should take steps to ensure that such provision is not misused.


The Copyright (Amendment) Bill, 2012 has brought about many welcome changes. The need to cope up with the challenges posed by constant technological development was the reason for passing such amendment. The amendment seeks to bring the Indian Law in conformity with the WIPO Copyright Treaty and WIPO Performance and Phonograms Treaty 1996, this is necessary in a age where we are living in a digitally connected global society. The amendments can play a significant role in providing the authors/performers their dues, however since the responsibility of enforcing the new provisions of the act have been put on the Copyright Board; such boards would have to play an active role to ensure that there is equitable distribution of profits through timely and coordinated action. The boards need to constantly access the market to determine best practices. For achieving this Standing Committee has made the following recommendations:

"The heart and soul of copyrights depends on three mechanisms such as (i) Copyright Societies (ii)Registrar of Copyright and (iii) Copyright Board. If all the three are independent and dynamic then only the copyright justice will be perfect and reliable. The Committee, therefore, recommends that the Government should act emergently to revitalize these three institutions by formulating clear rules and appointing fulltime experts and professional with accountability clubbed with sufficient powers. More so all the three organizations are to be fully modernized with all e-management system and manned by professionals and technical experts."

If all directions are properly followed the historical injustice which was being done to the great authors of a culture-rich country like India can be corrected, and the materialistic practices which tend to sabotage creativity can be checked.

SAURAV GUPTA is a fourth year law student pursing B.A. LLB (Hons.) from Ram Manohar National Law University, Lucknow.
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