Summary
This post examines the Copyright Amendment of 2012, highlighting its intent to secure fair remuneration for authors, especially those involved in feature films. The amendment modified Section 18, introducing significant changes to assignment and royalty provisions. It restricts blanket assignments for future modes of exploitation unless specifically stated and mandates that authors retain the right to share royalties, with limited exceptions. The analysis discusses the legal ambiguities and practical challenges these changes present for authors, producers, and copyright societies. The post critiques the effectiveness and clarity of these provisions in balancing author interests with industry practices.
One of the primary purposes of the Copyright (Amendment) Act, 2012 was to secure adequate consideration for authors, with particular focus on those who create works for feature films. Other authors, unfortunately, had received relatively little attention in earlier rounds of reform. The amendment made significant changes to the provisions on assignment under Section 18 of the Copyright Act, 1957.
The Amended Provision
The first proviso to Section 18, as amended, reads as follows:
“18. Assignment of copyright. (1) The owner of the copyright in an existing work or the prospective owner of the copyright in a future work may assign to any person the copyright either wholly or partially and either generally or subject to limitations and either for the whole term of the copyright or any part thereof: Provided that in the case of the assignment of copyright in any future work, the assignment shall take effect only when the work comes into existence.
Provided further that no such assignment shall be applied to any medium or mode of exploitation of the work which did not exist or was not in commercial use at the time when the assignment was made, unless the assignment specifically referred to such medium or mode of exploitation of the work:
Provided also that the author of the literary or musical work 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 legal heirs of the authors or to a copy right society for collection and distribution and any agreement to contrary shall be void:
Provided also that the author of the literary or musical work included in the sound recording but not forming part of any 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 any utilization of such work except to the legal heirs of the authors or to a collecting society for collection and distribution and any assignment to the contrary shall be void.”
Two Principal Changes
Two changes of practical significance emerge from the amended Section 18:
(a) An assignment of a work for any future medium or mode of exploitation will not be valid unless that mode or medium is specifically mentioned in the assignment.
(b) An author of a literary or musical work incorporated in a film or sound recording cannot assign or waive the right to receive an equal share of royalty with the assignee, to any person other than the author’s legal heirs or a copyright society.
Implications of the First Change
The first change was intended to preserve a bargaining position for authors when new technologies for exploitation and distribution emerge. Authors’ representatives had made clear their dissatisfaction with the practice of producers and record labels benefiting from digital, mobile, internet and other modes of exploitation without sharing the proceeds with the originators of the works. The amendment seeks to address this concern going forward, while leaving open a narrow avenue for well-advised parties who can identify and specifically enumerate emerging exploitation possibilities in the assignment deed.
Ambiguities in the Second Change
The second change raises a complex set of questions for practitioners on both sides of an assignment transaction. Among the difficulties that have been identified:
(a) What is meant by “right to equal share of royalty with the assignee”? The term “royalty” is not defined in the statute, raising the question of whether it extends to all revenue from exploitation of a work or is limited to what the parties define as royalty in the assignment agreement.
(b) Does the phrase “along with a cinematographic work” carry the same meaning as “part of the cinematographic work”? If a literary or musical work is embedded within a cinematographic work, does the exception for communication to the public in a cinema hall apply?
(c) What is the meaning of “cinema hall” in a digital environment? The traditional conception of a cinema hall may be too narrow to capture the full range of exhibition possibilities now available.
(d) The provision permits assignment of the royalty right to a copyright society. The Indian Performing Rights Society (IPRS), one such society, takes assignment of all copyrights for current and future works under its membership agreement, and that assignment is not limited to royalty collection. It is unclear how a producer or record label can pay for assignment of works when there may be encumbrances arising from a prior assignment to IPRS.
The provision, as enacted, leaves considerable room for dispute. Where the statutory rule is clear, commercial arrangements will ordinarily find a workable equilibrium. Where the rule is ambiguous, as it is here, consensus is difficult to achieve and uniform practice has yet to emerge.
Disclaimer: This article is for general information and does not constitute legal advice. Readers should consult a qualified attorney before acting on any matter discussed here.