Statutory License for Cover Versions under the Copyright (Amendment) Act

In our post last week, we looked at statutory licensing for broadcast organizations specified under Section 31D of the Indian Copyright Act. As mentioned earlier, the objective of non-voluntary licensing is to overcome the difficulty of locating the original owner of the copyrighted work in order to obtain a license and to avoid the creation of monopoly of copyright owners.

The Copyright Act similarly contains provisions for statutory licensing for cover versions under Section 31C. While Section 31D which talks about statutory licensing for broadcast organizations was a new insertion into the Copyright Act, Section 31C is not completely a new provision, but a replacement of Section 52(1)(j) as it stood before the amendment. This development should be viewed with great importance as the creation of cover versions was earlier treated as fair use while the present position recognizes it as a statutory license provision. Furthermore, Section 31C specifies the various conditions that need to be complied with while securing a statutory license for cover versions.

Section 31C reads as follows:

Section 31C: Statutory licence for cover versions 

(1) Any person desirous of making a cover version, being 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, may do so subject to the provisions of this section:

Provided that such sound recordings shall be in the same medium as the last recording, unless the medium of the last recording is no longer in current commercial use.

(2) The person making the sound recordings shall give prior notice of his intention to make the sound recordings in the manner as may be prescribed, and provide in advance copies of all covers or labels with which the sound recordings are to be sold, and pay in advance, to the owner of rights in each work royalties in respect of all copies to be made by him, at the rate fixed by the CopyrightBoard in this behalf:

Provided that such sound recordings shall not be sold or issued in any form of packaging or with any cover or label which is likely to mislead or confuse the public as to their identity, and in particular shall not contain the name or depict in any way any performer of an earlier sound recording of the same work or any cinematograph film in which such sound recording was incorporated and, further, shall state on the cover that it is a cover version made under this section.

(3) The person making such sound recordings shall not make any alteration in the literary or musical work which has not been made previously by or with the consent of the owner of rights, or which is not technically necessary for the purpose of making the sound recordings:

Provided that such sound recordings shall not be made until the expiration of five calendar years after the end of the year in which the first sound recordings of the work was made.

(4) One royalty in respect of such sound recordings shall be paid for a minimum of fifty thousand copies of each work during each calendar year in which copies of it are made:

Provided that the CopyrightBoard may, by general order, fix a lower minimum in respect of works in a particular language or dialect having regard to the potential circulation of such works.

(5) The person making such sound recordings shall maintain such registers and books of account in respect thereof, including full details of existing stock as may be prescribed and shall allow the owner of rights or his duly authorised agent or representative to inspect all records and books of account relating to such sound recording:

Provided that if on a complaint brought before the Copyright Board to the effect that the owner of rights has not been paid in full for any sound recordings purporting to be made in pursuance of this section, the Copyright Board is, prima facie, satisfied that the complaint is genuine, it may pass an order ex parte directing the person making the sound recording to cease from making further copies and, after holding such inquiry as it considers necessary, make such further order as it may deem fit, including an order for payment of royalty.

Explanation.—For the purposes of this section “cover version” means a sound recording made in accordance with this section.”

On a perusal of the aforementioned provision, one can clearly see that a person desirous of making a cover version of a song, must first give to the owner a prior notice of his intention to create a sound recording in the manner prescribed above. The person creating the version recording is also required to share the copies of all covers or labels with which the sound recording shall be sold. This provides the original owner a chance to ensure that proper credits are provided to the owner and to further ensure that the labels distinguish the version recording from the original work. He shall also be required to pay in advance the royalty at the rate fixed by the Copyright Board. The provision also imposes an obligation on the creator of the version recording to pay a minimum royalty for 50,000 copies of the work during each calendar year.

It should also be noted that a statutory license for the creation of a cover version shall be granted only after the expiration of five years from the publication of the original song. Furthermore, a cover version can be made only in the same medium as that of the original song, unless such medium is no longer in commercial use. The provision also places restrictions on the creator of a cover version from making any alteration in the literary or musical work. It further imposes an obligation on the person making the cover version to maintain registers and books of account regarding the exploitation of the version recording.

While the said provision deals with statutory licensing for cover versions, it does not prevent a person from approaching the owner of the copyright in a sound recording to create a version recording after obtaining a license for the said purpose.

Authored by Sharada Kalamadi

Contributed by Entertainment Lawyer Group of BananaIP

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