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Defacto Copyright Societies – Is their business illegal?

BananaIP Counsels > Copyrights  > Defacto Copyright Societies – Is their business illegal?

Defacto Copyright Societies – Is their business illegal?

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Prashant’s recent post on Copyright Societies in India is lucid and instructive like many of his other writings. You may read his post and those related to it on Spicy IP, and may also consider going through the chapter in the book he references. The phrase “Defacto Copyright Societies” he uses in his post caught my attention, and therefore, this quick note.

In my opinion, the Copyright Amendment is more discriminatory than revolutionary. It gives undue importance and rights to lyricists and music composers at the cost of other authors such as story writers, scriptwriters, artists, playwrights, etc. The Amendment would have truly been revolutionary if all authors were given the importance they deserve and statutory recognition of royalties is extended to everyone. To make matters worse, the Amendment has been poorly drafted, probably intentionally, leaving the door open for a multitude of interpretations and practices. As it stands today, the law grants some bargaining position to a small group of authors, and the difference it has made so far is limited, and the numbers cited by Prashanth is one facet of the limited effect of the Amendment.

Since the beginning of the 18th century, copyright law underwent numerous changes, many of which related to new forms of expression, technological developments and business practices. With the evolution of expression and perception beyond known and recognized senses, traditional copyright principles were modified to accommodate the said expressions and perceptions. The tussle between traditional principles to protect traditional forms of expression and those to protect new forms resulted in several amalgamations, which unfortunately distanced themselves from logic and reason. In addition, legislative attempts to incorporate the interests of powerful persons and groups over the years made the copyright law we are dealing with today very complex and non-articulate.

The ambiguities and uncertainties in the complex copyright law provide the most favorable medium and environment for several conflicting thoughts, interpretations and arguments to survive and even thrive. The interplay between Section 33 of the Copyright Act, which provides that only copyright societies can be in the business of licensing, and Section 30, which provides that copyright owners and agents may license their works, has been debated since the amendment and will continue to be debated for a long time. Though Section 33 existed before the 2012 Amendment, no one gave any importance to it or its enforcement. Prashant and other scholars started discussing the provision after the proviso with respect to works incorporated in films was inserted in 2012, but there has been very little or no change in business models or practices relating to the said provision. Several Defacto Copyright Societies existed earlier, and continue to exist and generate substantial revenue and profits even today despite their non-compliance with Section 33.

Defacto Copyright Societies as I understand are those that function like copyright societies without being registered as such. In other words, these organisations or persons are in the business of licensing copyrighted works. They take licenses from owners or other licensees and re-license or sub-license them. Prashant’s post talks about IPRS and ISRA, which are registered copyright societies. It also talks about PPL and Novex, which function under Section 30 as owners and agents, which in my opinion do not qualify as Defacto Copyright societies as they have the right to be in the business of licensing as copyright owners or by acting as agents of owners. This I fully understand is debatable, and I will not go any further as that is not the purpose of this note.

The purpose of this note is to talk about several other organisations and businesses that call themselves aggregators, intermediaries, etc., which license copyrighted works of all types and re-license or sub-license them, and generate revenue from the said activity. They exist and carry out the business of licensing of different types of works on various platforms, modes and means. Some illustrations of such general and specialized businesses are:

Google, which deals with sound recordings, cinematographic works, books, etc.;
Amazon, which deals with literary works, sound recordings, cinematographic works, etc.;
Apple, which deals with literary works, sound recordings, cinematographic works, etc.;
Hungama, which deals with musical works, sound recordings, etc.;
Unisys, which deals with musical works, sound recordings, etc.; …

Hundreds of such small and large businesses exist, and between them, they cover all works that are copyrightable including artistic works, photographs, and so on. These businesses operate online as well as offline. Aren’t these businesses in the business of licensing, which is prohibited under Section 33 of the Copyright Act? If they are not prohibited to conduct the business under Section 33, on what are they operating. Is there a legal or business exception that has been created for them to operate. Where does the scope of Section 33 start, and where does it end? Should the scope of Section 33 be limited to literary and musical works incorporated in films irrespective of what the statutory provision states?

Defacto Copyright Societies are many and exist in many forms. On a literal interpretation of Section 33, they are all illegal businesses, operating outside the scope of boundaries permitted by the copyright law. Is this a case of poorly implemented law, or are we reading more than what the legislature meant into the law. Did the legislature intend to create a mandatory copyright society regime? The revenues of copyright societies are dismal, and will continue to be dismal as long as the business of licensing is not their exclusive business terrain.

Note: This note was not meant to be legally nice.

Image source: Public Domain

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  • Vijay Kumar Makyam
    Monday, October 1st, 2018 at 12:07 PM

    I completely agree with you Dr.Kalyan, in fact the 2012 Amendment Act excludes operating any such Defacto Copyright Societies against the legislative intent under Section 33. A combined reading of section 17, 18 and 19; more specifically proviso to section 17, Proviso to section 18 and section 19(9) and 19(10) makes it clear except recognized copyright societies no one else can collect royalities from users on behalf of owners of copyright and no license or assignment is valid even assuming such agreements exists between owners and so called defacto copyright societies.

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