The Bombay High Court (the "Court") passed a landmark judgment and order dated 28 April 2023 ("Decision") in Indian Performing Right Society Limited (IPRS) v. Rajasthan Patrika Private Limited IA(L) 9452/2022 in COMIP(L) 193/2022 & IPRS v Music Broadcast Limited IA 1213/2022 in COMIP 84/2022 ("Suit"), directing that in case of use of sound recording, the authors of underlying lyrics and musical works ("Underlying Works") would be entitled to claim equal royalty share with the owner of sound recording itself.

Factual background

In 2012, the Copyright Act 1957 ("Act") was amended ("2012 Amendment"). Amongst others, the 2012 Amendment added provisos to sections 17 (which relates to ownership of copyright) and 18 (which relates to assignment of copyright). The 2012 Amendment also added sub-sections 9 and 10 in section 19 of the Act (which related to mode of assignment of copyright). The cumulative effect of these amendments was that the authors of Underlying Works shall not waive / assign their right to receive royalty share in case of utilization of the Underlying Works except as a part of a cinematograph film in a theatre.

In December 2020, the erstwhile Intellectual Property Appellate Board ("IPAB") vide order dated 31 December 2020 ("IPAB Order") analysed the effect of 2012 Amendment and observed that the authors of the Underlying Works are entitled to claim royalty share in case of use of sound recordings. IPAB also fixed separate royalty rates for sound recordings and Underlying Works. In January 2021, the Single Judge of the Delhi High Court ("DHC") vide order dated 4 January 2021 ("DHC Order") in the matter of IPRS v Entertainment Network (India) Limited observed that 2012 Amendment did not give any new rights to the authors of Underlying Works. Appeals are pending before the Division Bench of the DHC against both the IPAB Order and DHC Order. In April 2021, IPAB was abolished.

In September 2021, IPRS claims to have noticed that Rajasthan Patrika Private Limited & Music Broadcast Limited ("Defendants") who are owners of radio channels were using certain sound recordings without paying any royalties for the utilization of the Underlying Works of such sound recordings. Accordingly, IPRS filed the Suit before the Court along with an application seeking interim reliefs.

Rival Contentions

IPRS inter alia contended that: (i) 2012 Amendment carved out rights of the authors of Underlying Works to claim equal royalty share; (ii) 2012 Amendment negated the legal position espoused by the 1997 Supreme Court's ("SC") Judgment in the matter of IPRS v Eastern Indian Motion Pictures Association ("EIMPA Order") which held that the authors of Underlying Works have no right to claim any royalty in case of use of sound recordings; (iii) Copyright Rules 2013 ("2013 Rules") provides for a detailed scheme for determination of royalties payable to authors of Underlying Works which shows that the authors of Underlying Works are entitled to claim royalty; (iv) the Statement of Objects and Reasons and the report of Standing Committee of Parliament in relation to 2012 Amendment makes it clear that the purpose of 2012 Amendment was to ensure that the authors of the Underlying Works are appropriately compensated for their contribution; (v) in ICSAC v Aditya Pandey ("Aditya Pandey Order") although the issue related to a period prior to 2012, SC did recognise the effect of 2012 Amendment in its order dated 20 September 2016.

Defendants inter alia contended that: (i) the provisios and sub-sections added by 2012 Amendment were merely clarificatory in nature and it did not give any substantive rights to authors of Underlying Works; (ii) sections 13 and 14 of the Act which provides for substantive rights of various copyright owners, were not touched by the 2012 Amendment, and therefore, 2012 Amendment cannot be read to mean that it gave any additional rights to authors of Underlying Works; (iv) the Suit suffers from the vice of delay and acquiescence as it has been filed after 10 years of 2012 Amendment; (v) DHC order dealt with the same issue and observed that 2012 Amendment did not change the legal position qua the entitlement to claim royalty by the authors of the Underlying Works; (vi) identical issue is pending before Division Bench of DHC, and therefore, the Court ought to await the outcome thereof; and (vii) 2012 Amendment at the most gave right to the authors of Underlying Works to collect royalty, and not copyright ownership.

Findings and Decision

The moot question before the Court was to examine the effect of 2012 Amendment vis-à-vis the rights of the authors of Underlying Works to claim copyright ownership and royalty share when a sound recording is used.

The Court took into account the Statement of Objects and Reasons and the Report of Standing Committee of Parliament and observed that the same envisaged additional protection to the authors of the Underlying Works. With respect to the DHC Order, the Court observed that the matter pertained to a period prior to 2012 Amendment and the DHC did not examine the effect of 2012 Amendment in detail. With respect to the contention that 2012 Amendment merely added provisos and sub-sections, the Court took into account the judicial precedents and observed that even provisos and sub-sections can give rise to substantive rights.

With respect to the Defendants' contention that sections 13 and 14 of the Act which contained substantive rights and were not touched, the Court observed that these provisions were subject to other provisions of the Act which will include sections 17, 18 and 19. Thus, non-amendment in sections 13 and 14 does not in any manner affect the rights granted under amended sections 17, 18 and 19 of the Act.

The Court also referred to Copyright Rules 2013 which provides for mechanism for determining tariff for sound recordings and Underlying Works. The Court observed that the entire scheme of 2012 Amendment is towards ensuring that the authors of Underlying Works get their due. With respect to the Defendants' contention that the authors of Underlying Works may have a right to receive royalty but no copyright therein, the Court observed that the right to receive royalty arises from ownership of copyright, and therefore, the authors did own copyright. On the objection of delay and acquiescence, the Court observed that each act of infringement gives right to a separate cause of action and the fact that the Defendants took license from IPRS in the past defeats the argument of acquiescence.

In view of the above, the Court observed that there was a strong prima facie case in favour of IPRS. The Court observed that IPRS can raise demand for royalties and if the Defendants do not pay, then the Defendants would be barred from using such sound recordings wherein IPRS has rights in the Underlying Works.

Comment

The Decision is a long pending clarification on the effect of 2012 Amendment to the Act with respect to the rights of authors of Underlying Works when such works are used as a part of a sound recording and not in a standalone manner. The Decision has the potential to give closure to various disputes on this aspect for the past so many years. However, considering that the Court has observed that the observation made in the Decision is only for the purpose of deciding and disposing of the present application for interim reliefs and identical issue is pending before Division Bench of the DHC, it remains to be seen if the legal position on this issue would be crystallised.

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