Assignment & Royalty – Part II: Notes on Copyright Amendment, 2012
One of the primary purposes of the Copyright Amendment in 2012 was to ensure that authors get their well deserved consideration. The focus was primarily on authors, who create works for feature films. Other authors, unfortunately, received little or no attention. After making sure that producers do not take away ownership rights by signing ‘work for hire’ engagements, the amendment made changes to provisions with respect to assignment in Section 18.
The first provision in Section 18, the subject of this post, 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 important changes spring out from this amended provision:
a. Assignment of a work for any future medium or mode of exploitation will not be valid, unless the mode, or the medium is specifically mentioned; and
b. An author of a literary or musical work, incorporated in a film or sound recording, cannot assign or waive his right to receive an equal share of royalty with the assignee, to any person other than to his legal representative or copyright society.
The first change was to leave open a bargaining position for authors when new technologies for exploitation and distribution emerge. The authors’ lobby made no secret about the fact that they were extremely displeased with owners reaping benefits of their (the authors’) works through digital, mobile, internet and other modes and mediums of exploitation without sparing a thought to sharing the proceeds with their originators. This provision seeks to avoid said scenario in future, but leaves a small window open for attorneys who can foresee technological progress and are able to specify specific emerging exploitation possibilities.
The second change, however, comes with a much more complex bag of problems for parties on both sides. Despite a meeting of the minds, attorneys have been struggling to find the right approach toward handling problems. Some of the problems the provision throws up are:
a. What is meant by ‘right to equal share of royalty with the assignee’? What is royalty, anyway – does it include all the revenue from exploitation of a work, or is it limited to something that is defined as royalty in the assignment agreement? If it is limited to said defined royalty, what would be an acceptable meaning of royalty under the law?
b. Would the phrase ‘along with a cinematographic work’, mean the same as ‘part of the cinematographic work’? In other words, if a literary or musical work is embedded, for lack of a better word, in the cinematographic work, would that be considered along with the film?
c. What is the meaning of the phrase ‘cinema hall’? Can parties to an agreement define this? The meaning of cinema hall in today’s digital environment has a very broad connotation; does it include the same?
d. The provision states that the right to receive royalty may be assigned to a copyright society, one of which is the Indian Performing Rights Society (IPRS). As per its current membership agreement, IPRS takes assignment of all copyrights for current and future works, and the assignment is not limited to royalty collection. How can a producer or a record label pay for assignment of works, when there are encumbrances, owing to prior assignment to IPRS?
When a rule is clearly laid down, business dynamics will normally find a way around the same and arrive at a mutually beneficial agreement. Here, the law is ambiguous to say the least, where a consensus on the matter seems like a far fetched thought, and economic homeostasis seems as elusive as the will-o’-the-wisp.