Why Are Copyright Societies Necessary?
Copyright societies in general are saviors of copyright owners. Copyright owners are the people having ownership over an art piece, music, book, or in legal terms, a work, where the rights extend to a number of rights over the work which form a bundle. This bundle of rights can be distributed according to the wish of the copyright owner, you can give one right (the right to distribute) to one person, and give another right (the right to reproduce) to one organization. Here every receivers has ownership, but that ownership is only limited to the specific parts that they received.
Collective administration of copyright by societies is a necessary part of the whole structure that copyright economy is made of, no single author or owner can reasonably keep track of the uses that are made of their bundle of rights by other people, and this requires a collective effort to regulate the use of respective copyrights. The concept of collective administration of copyright by societies is that the management and protection of copyright in works are undertaken by a society of authors and other owners of these works. This creates an organizational strength to regulate and collect royalties from any work that is used all over the country.
The Legal Definition of a Copyright Society
Under section 33 of the Copyright Act, a Copyright Society is a performing rights society “registered within a period of one year from the date of commencement of the Copyright (Amendment) Act, 1994”.
A copyright society can issue or grant licenses in respect of any work in which copyright subsists or in respect of any other right given by the Copyright Act. However this section does not bar but, instead, promotes the right of the owner in his individual capacity to grant licenses in respect of his own work, by barring any other institution without a copyright society registration from entering into burdensome licenses for the author.
What does a Copyright Society do?
A copyright society in its essence performs the function of issuing and granting licenses in a regulated way such that it is for the benefit of the author. Ordinarily, there is only one copyright society for a certain class of work. There are three main functions of a copyright society as given under the Copyright Act, 1994:
- Grant or issue licenses – Only of such works as given permission by the authors or owners
- Collect the relevant fees – According to the Scheme of Tariffs
- Distribution of such fees– The societies can take an administration fee of up to 15 percent out of the collection
And in the case of sound recordings and cinematograph films, these roles need to be performed for the author by the society mandatorily, as stated in the statute. Artists need to
Issues under the Copyright Act, 1994
There is a provisio under Section 33 that bars any other organization or individual other than a copyright society from “issuing or granting licence in respect of literary, dramatic, musical and artistic works incorporated in a cinematograph films or sound recordings”. Essentially this created a question as to whether an individual would still be able to grant licenses if they were the owner of the copyrighted sound recording or work in question. Section 18 further stipulates that a copyright owner/author of creative works has the right to assign copyright to any “person”. This created another question as once a license has been given by the owner to an entity such as a production company, such entity could then, logically, do the business of issuing licenses thereby not having to deal with a copyright society. But Section 33 created a specific bar on any other entity that may be assigned such rights.
The reason for this complicated situation is that the business of entertainment (which rely on copyrights) involves a lot of licenses that need to be entered into by production companies which have already heavily invested into artists and owners of such copyrights. Therefore they need the ability to enter into licenses so that they can ensure the best use of the copyright they possess.
An accurate example of the limitations of production companies is the recent case of Novex Communications Pvt. Ltd. v. DXC Technology Private Limiteddelivered on 8th December, 2021. It was held that
“The first proviso to Section 33 makes it clear that the right of an owner to issue licenses, in his individual capacity, remains unimpacted, subject to the rider that such a right must be consistent with his obligations as a member of any copyright society. However, once the grant of license moves from the owner in his individual capacity, and transcends into the realm of a business, Section 33(1) and/or the second proviso applies. The legislative intent is manifestly clear that the business of licensing must be routed only through a copyright society.”
The Court was of the view that the legislative intent is clear by the fact that “only” is used in the second proviso to Section 33(1) i.e. the business of granting licenses can be carried out only through the copyright societies.
This judgement held against Novex Communications dismissed their petition as they were not within the definition of a copyright society. The judgement made it clear that in order to conduct business for any work that is to be incorporated in a cinematographic film or a sound recording, which makes up a huge part of the entertainment industry, the individual owner or artist has to go through a Copyright Society.
This mandatory requirement would sometimes not be for the benefit of the authors and owners, for whose benefit Copyright societies are made in the first place, as unhappy members would not be able to leave the society and still be able to do business. This in my opinion is a very unfair restriction that has been placed by the legislature, as it should be the choice of a copyright owner to handle their copyrights either through production companies or through Copyrights Societies.
Author: Savan Dhameliya, Legal Intern at PA Legal.
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