Citation
AIR 1977 SC 1443, (1977) 2 SCC 820, [1977] 3 SCR 206
Background
This dispute concerned the ownership of copyright in Indian literary and musical works incorporated in cinematograph films. The principal parties were the Indian Performing Rights Society (IPRS) and the Cinematograph Exhibitors Association of India.
IPRS was incorporated on 23/08/1969 in the state of Maharashtra and is governed by the Copyright Act 1957. Its stated purpose is to issue licences for the public performance of all existing and future Indian literary and musical works in which copyright subsists, and it is a company limited by guarantee for that object. IPRS claimed entitlement to royalties when literary works used in cinematograph films were broadcast on radio stations, on the basis that it was the assignee of those literary works, and accordingly published a tariff for such use.
The Cinematograph Exhibitors Association opposed IPRS’s claim, contending that IPRS held no rights over such works and that the production house was the true owner of copyright in the literary works in question, given that composers lose their rights under a contract of service entered into with the production house for valuable consideration. An appeal was preferred after the High Court allowed the claim of the cinematographers’ association and held that the assignment of future works had no effect.
Issues Before the Court
- Whether an existing or future right of a music composer or lyricist is capable of assignment.
- Whether the producer of a cinematograph film may become the copyright owner by engaging the composer under a contract of service.
Holdings
- Yes. Copyright in both existing and future works is capable of assignment. In the case of a licence relating to future work, the assignment takes effect after the work comes into existence.
- Yes. A cinematograph film producer becomes the first owner of copyright where the composer is engaged under a contract of service for reward or valuable consideration to compose music to be incorporated in the film.
Statutory Framework
Issue 1
Section 30 of the Copyright Act 1957 provides that the owner of copyright in an existing work, or the prospective owner of copyright in a future work, may assign the copyright to any person either wholly or partially. In the case of a future work, the assignment takes effect only when the work comes into existence.
Issue 2
Section 17(c) of the Copyright Act 1957 provides that where a work is made by an author in the course of the author’s employment under a contract of service or apprenticeship for a valuable consideration, the proprietor shall, in the absence of any agreement to the contrary, be the first owner of the copyright in the work.
Analysis
Issue 1
A composer may assign rights over future work. The assignment takes effect once the composition comes into existence. Section 30 of the Copyright Act 1957 provides that assignment is possible by issuing a licence in favour of the prospective owner. The rights may be transferred by a document duly signed by the owner or the assignee. Both present and future works of a composer may be assigned, though the assignment takes effect only after the work comes into existence.
Once an agreement is entered into between the production house and the composer for incorporating the composer’s composition into a film, the composer loses rights over the composition and the production house becomes the owner of the copyright. Such an agreement may be for a present or future composition. In either case, IPRS cannot claim royalties, as it holds no rights over the relevant work. The position is, however, different where no agreement exists.
Issue 2
The court held that the composer loses rights over the composition automatically upon entering into an agreement with a cinematograph producer to compose songs for incorporation into the film for consideration. Section 17(c) of the Copyright Act 1957 provides that the producer becomes the owner of the composition in such circumstances, and that the composition automatically becomes part of the cinematograph film, extinguishing the composer’s rights entirely. Works falling within this category cannot be assigned further. IPRS cannot claim royalties, as the production house acquires rights over the composition as soon as it comes into existence. The contract of service between the composer and the production house renders the producer the absolute owner, and that authority is not open to question.
Significance
The decision is a foundational authority on the ownership of copyright in musical works incorporated in Indian films. It establishes that, where a composer is engaged for consideration under a contract of service with a film producer, the producer acquires first ownership of the copyright in the resulting composition under Section 17(c) of the Copyright Act 1957. Performing rights societies claiming assignment from composers have no standing to collect royalties in such circumstances. The ruling also affirms the assignability of future copyright under Section 30, provided the assignment document is duly executed and the assignment takes effect only upon the work’s coming into existence.
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.