India: Singing A Different Tune? – Issues Pertaining To Collection Of Royalties By Copyright Licensing Societies In India

Last Updated: 30 July 2015
Article by Divya Srinivasan

Radios, Malls, Discotheques, Airports, Flights, Trains, Lifts and even the hold tunes of Offices have music playing. When a song is played by an FM channel on the Radio, or when a song is performed live at a concert or elsewhere, then a license ought to be obtained as well as requisite royalty to be paid to the 'Copyright Society' which is a legal entity registered under the Indian Copyright Act, 1957 (hereinafter as the "act").  Precisely Sections 33 to 36A of the Act provides for establishment, constitution and functions of copyright societies. One of the major functions of a Copyright Society is to protect the interests of copyright owners and their work so as to enable them with the commercial management of their works. A copyright society is authorized to do the following acts in continuance of supervision of rights:

  1. Issue licenses under Section 30 in respect of any rights under this act;
  2. Collect fees in pursuance of such licenses;
  3. Distribute such fees amongst right owners after making deductions for its own expenses;
  4. Perform any other roles steady with the provisions of Section 35.

The question of what's it?

Copyright Societies carry out their responsibilities as provided under the copyright law as well as the copyright rules with respect to Distribution, Tariff, Fees, etc. Emphasizing on the purpose and function of a copyright society the Supreme Court of India in Entertainment Network (India) Ltd vs. Super Cassette Industries Ltd & Ors [2008 (37) PTC 353 (SC)] held that the main idea behind incorporating the Copyright Society in the Copyright Act was to enable a copyright owner to commercially exploit his/her intellectual property by a widespread dispersal in a regulated manner. The society grants license on behalf of the copyright owner, files for litigation on their behalf not only for the purpose of enforcement but also protection to enforcement of the copyright owner's right. It not only pays royalty to the copyright owner but is authorized to dispense the amount collected by it amongst its members. But lately not only is this law being flouted for personal gain but is more so just another legal euphuism.

Two of the main Copyright Societies of the country are Indian Performing Rights Society (IPRS) and Phonographic Performance Ltd (PPL). IPRS manages the rights of lyricists and composers and issues licenses to perform publicly the essential works assigned to it either directly or indirectly or through its set up of associated foreign collecting societies, while PPL controls the rights of record labels and companies which create sound recordings and issues licenses for collaborative sound recordings allocated to it by the record companies to the public upon disbursement of valid license fees/royalty. There are other copyright societies existing in India like Society for Copyright Regulation of Indian Producers for Film & Television (SCRIPT), Indian Reproduction Rights Society (IRRO) and Indian Singers' Rights Association (ISRA), however these are not as famous as the IPRS and PPL.

The perplexed status

With the Copyright Act amendment of 2012 it was mandated that every copyright society including the ones already registered before the amendment had to get itself registered again within a period of 1 year from the amendment.

IPRS also submitted an application for renewal of its registration; however the same was subsequently withdrawn. In the interim, the Government of India passed an order appointing an Enquiry Officer as empowered under Section 33(5) of the Act to investigate and assess the irregularities in the functioning and administration of IPRS.

Aggrieved by Government's order of appointing such Enquiry Officer, IPRS filed a writ petition against the Government contending that it had ceased to be a Copyright Society since it withdrew the application for the renewal of registration as a Copyright Society and therefore no such enquiry could be held.

However the Bombay High Court dismissed the writ petition and held that IPRS was a copyright society when the alleged anomalies, illegalities and gross mismanagement were committed in violation of the Act and the corresponding rules, hence the Government of India had jurisdiction to conduct an enquiry against it in matters concerning purported flouting of the Act and Rules.

IPRS even filed a letter before the Registrar of Copyrights stating that it had ceased to be a copyright society.

Similar letter was also filed by the PPL contending that it had ceased to be a copyright society.

Nevertheless even after creating much hue and cry about their cessation as copyright societies, both IPRS and PPL continued to function as one by collecting license fees and other royalties. In pursuance to this, recently IPRS even sent a legal notice to IPL, BCCI and Encompass Events Pvt Ltd for organising the opening ceremony of IPL and using music for the performances without obtaining necessary licences from IPRS.

What could be done?

The copyright and performing societies are an amalgamation of the conglomeration of individuals/owners, fully authorised to claim the highest possible monetary benefit as the fruit borne from their intellect and labour. On the contrary both IPRS and PPL have been alleged for functional irregularities like levying high royalty and also not providing a detailed structure or layout of collection of fees/royalties from the requisite person. It's quite clear that both of these societies are surrounded by controversies and instead of being a friendly neighbour they have been demanding license fees and royalties despite non transparency and ill governance in their respective roles and individual capacity. One way to combat this may be by demarcating the repertoire of fees/royalty payment by both. The other way would be to increase transparency so as to avoid conflict of interest with third parties. The Indian Government needs to solidify the legal stand in this scenario and also accord better protection entitled to music artistes in our country, which ought to have been done way back in 1994.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Divya Srinivasan
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