TWITTER LOCKOUTS AND COPYRIGHT CONUNDRUMS

Twitter Lockouts and Copyright Conundrums

Recently we wrote about the new rules for social media in India, that caused uproar. Well, this seems to be the theme of the season. Twitter found itself mired in yet another controversy for suspending accounts of IT Minister Ravi Shankar Prasad and Chairman of the Parliamentary Standing Committee on IT, Shashi Tharoor. Whether it is coincidence or some sort of irony, we will never know.

On the 25th of this month, IT minister Ravi Shanker Prasad’s Twitter account was blocked for an hour. Soon after, Shashi Tharoor found he had been locked out of his account (again) in trying to explain why he was locked out the first time. Both lock outs were a consequence of DMCA notices received by Twitter for A.R. Rahman’s Maa Tujhe Salaam and Boney M’s Rasputin respectively. Had this happened a few months ago, it may not have made headlines. But now, considering the riot that the new IT rules have caused, even a one hour lock out has caused controversy.

Ethics That Call For ‘Due Diligence’ and Notices

The IT Minister accused Twitter of violating Rule 4(8) of the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules 2021 where they failed to provide him any prior notice before denying him access to his own account. Here’s how Rule 4(8) reads:

  1. Additional due diligence to be observed by significant social media intermediary.—(1) In addition to the due diligence observed under rule 3, a significant social media intermediary shall, within three months from the date of notification of the threshold under clause (v) of sub-rule (1) of rule 2, observe the following additional due diligence while discharging its duties, namely:—

(8) Where a significant social media intermediary removes or disables access to any information, data or communication link, under clause (b) of sub-rule (1) of rule 3 on its own accord, such intermediary shall,—

(a) ensure that prior to the time at which such intermediary removes or disables access, it has provided the user who has created, uploaded, shared, disseminated, or modified information, data or communication link using its services with a notification explaining the action being taken and the grounds or reasons for such action;

(b) ensure that the user who has created, uploaded, shared, disseminated, or modified information using its services is provided with an adequate and reasonable opportunity to dispute the action being taken by such intermediary and request for the reinstatement of access to such information, data or communication link, which may be decided within a reasonable time;

The Rule addresses removal and disabling of information, data or communication link (essentially hyperlinks) and is silent on the disabling of an account. In these cases, it wasn’t the content that was removed or made inaccessible, users were shut out of their accounts. The Rule in its present form doesn’t seem to cover a situation such as this. That said, Twitter in its Copyright Policy states that a ‘good faith attempt’ will be made to contact the user whose content was removed based on a copyright notice.

The Balancing Act

Weighing the right of a user to have uninhibited access to his/her social media account against copyright is a precarious balance that needs to be first understood and then struck. Copyright laws are in place to ensure a healthy environment for creativity. While access to social media accounts is an important part of life (especially in today’s digital age), honouring copyright is even more so (for most of use, it’s content that’s kept us sane through lockdowns).

While most of us don’t want to intentionally flout copyright laws, not knowing the extent of ‘fair use’ can sometimes get us into trouble. This Twitter lockout being case in point. This was a classic case of copyright infringement for a musical work for which Sony Music (Maa Tujhe Salaam) owned copyright. In the event that the music was used after permission for use was sought, or if the song used was in the public domain (like Happy Birthday To You), or the platform it was being used on had a license from the rights holder, this wouldn’t have amounted to a copyright violation.

The general principle applicable to the use of copyright protected content on all social media posts is that all pictures, songs, media used without consent of the copyright holder amounts to infringement. Many social media sites today like Instagram and TikTok have a repository of IP protected content that has been licensed to them. As users of these apps, you and I can use this content without worry of being slapped with a copyright infringement claim. You’ll notice you cannot (legally) use this music outside of the platform though, for their licenses are limited to use on the specific platform alone. For instance, when you save a reel off Instagram, the music you’ve used to make it disappears. This is the social media app honouring the terms of its license.

Now you know what you shouldn’t do. Here’s a quick checklist to run through before you use copyright protected content on your social media posts:

  • Check to see if the content is licensed. If you hold a valid license, by all means, use it!
  • Not sure if the content you’re using is copyright protected and don’t know how to check for a license? Avoid using it as is. Look to see if you find a paid version of it, download it and then use it in your post.
  • Always give the author of the work credit for it. Remember, the idea of copyright law is to prevent the unauthorized use of copyright protected work. If creators are not given their fair due, why will they create?

More than the light this controversy has shed on the tension between the Government and social media platforms, it’s given us all a reason to learn the ethics of content use on the internet. Artists create content not only because of a deep need to, but to make a living. Let’s always remember that and do our bit by sharing it right.

COPYRIGHT AMENDMENT

THE IMPACT OF THE COPYRIGHT AMENDMENT ACT OF 2012 ON THE RIGHT OF ROYALTY OF PERFORMERS

Who is a Performer?

A “Performer” under the Copyright Act (Act) includes an actor, singer, musician, dancer, acrobat, juggler, conjurer, snake charmer, a person delivering a lecture or any other person who makes a performance. While inherently, the law provides for ownership of all copyright to vest in the author of the work, the title is also transferrable under the law.

Transferability of Copyright

The Act lays down a mode and method of transferring copyright by way of assignment or license. Section 18 of the Act provides for the right to transfer of title of the copyright and mandates that the Assignee be treated as the owner of the same.  Section 19 lays out guidelines for modes of assignment and the requirements for a valid assignment. It also provides for interpretation of period of assignment and territorial extent of assignment in case an assignment does not explicitly lay it down. Section 30A extends the applicability of these provisions to licenses as well. Section 38 of the Act provides an exclusive right to Performers for their performance and Section 38A lays down all the ways in which a Performer can utilise their act of performance. The proviso to section 38A provides for the Performer’s right to royalty in case of commercial use of the same.

Section 18 – Introduction of new provisos via the Copyright Act of 2012

Before the introduction of the Amendment Act of 2012, there was only one proviso to section 18 which laid down a limitation/qualification to the assignment title being effective only after the realisation of a future work. After the amendment act of 2012, three additional provisos have been inserted.

Exploitation only in the mode and media assigned: The first restricts assignment only to the extent of exploitation via media or modes that exist or are in commercial use at the time of assignment, unless the assignment specifically provides for a source other than those. Assignment does not automatically extend to future modes and media or a medium or mode of dissemination made commercial after the assignment.

No Assignment or Waiver of Royalties: The second and third prohibit an author of a literary or musical work from assigning or waiving the right to receive royalties on an equal basis with the assignee whether included in a cinematograph film or not.

The Playing Field of Royalty and Waiver

Royalty waiver capped at 50%

The amendments use the words “right to receive royalties to be shared on an equal basis with the assignee”. This means two things:

  1. Every author has the right to royalty which CANNOT be waived.
  2. In case of assignment, these rights are to be shared on an EQUAL basis with the assignee.

The act provides for a waiver. But the maximum waiver permissible is 50%. Any agreement entered into to the contrary will be void.

To illustrate, let’s say an owner of a musical work enters into an agreement with a broadcasting agency with a royalty assignment in a ratio 30:70 in favour of the broadcasting agency. Such agreement would be rendered void. If the royalty assignment was made inversely, it would be permissible under the Act.

Exceptions

There are three exceptions which allow for assignment of royalties of more than 50%, even entirely. This can happen in the following cases:

  1. assignment of the right to communicate the literary/musical works to the public, along with the cinematograph film in a cinema hall;
  2. assignment made to a legal heir of the author; or
  3. assignment made to a copyright society for collection and distribution of royalties.

Introduction of sub-sections (8), (9), (10) to section 19

Section 19 provides for mode of assignment. Here’s a round-up of the major changes:

  1. Assignment of copyright to a third party contrary to the terms and conditions of the rights assigned to a copyright society which the author is a member of shall be void. [Section 19(8)]

This insertion has been made to protect Copyright Societies and to streamline royalties by establishing these as a distinct channel for royalty distribution. By virtue of the amendment, the title transfers from an author to the copyright society of which (s)he is a member. Consequently, if an author wants to grant a third person an assignment or a license, (s)he will have to renounce membership from the copyright society before doing so.

  1. When an author assigns or licenses copyright in in his/her work, including sound recordings for a cinematograph film, his/her right to claim equal share in royalties remains unaffected. An exception is made for “communication to the public of the work, along with the cinematograph film in a cinema hall”. [Section 19(9) and Section 19(10)]

Application of amendments – Prospective, Retrospective or Retroactive?

The Act does not throw light on the applicability of these amendments. So, we’re applying the golden rule to reading the provisions.

First, Section 18 – “shall not assign or waive”

From a plain reading, it indicates a prospective application. The usage of “shall” indicates that it is a mandate on the author that can be applicable only once the provisions come into force.

Second, the S 19(9) and 19(10) – “no assignment..shall effect the right”

The subsection merely says “no assignment”. It does not specify “no future assignment”. So, it seems the intention is to protect the right against every assignment, whether made before or after the amendment came into force. This may not necessarily imply that the subsections are applicable retrospectively, however, it makes it amply clear that no assignment, whether future or past shall take away the ability of the author to claim an equal share of royalties and considerations payable. Therefore, the sub sections could be said to operate ‘retroactively’.

It also supports a logical conclusion that past assignments, where all royalties may have been assigned, would not be rendered void, but would no longer affect the author’s claim to equal royalties.

The jurisprudence and precedents on this subject are limited, therefore the interpretation of the courts may vary. This is the personal opinion of the author : Jashandeep Kaur

 

What’s the Whatsapp Controversy?

Social media has helped us build bridges in a time we couldn’t traverse real ones. Then came along these new IT rules threatening a shutdown of what had become life savers in a pandemic. Panic and pandemonium was a natural consequence.

Whatsapp was the knight in shining armour and sued the the Indian Government. The extent and the validity of the new IT Rules, 2021 were questioned. Under the rules, Whatsapp must disclose the origin of messages sent using the app. Whatsapp has a problem with this rule because:

  1. It is in violation of their Privacy Policy promising end to end encryption.
  2. They believe if to be a violation of every human being’s fundamental right to privacy.

The Government justified the rules citing reasons of national security, law and order. They believe that controlling the spread of fake news is the need of the hour. And these rules are a way to do so.

The balance of these interests is what needs to be achieved harmoniously.

The Government gave social networking sites three months to abide by the new Rules. That deadline ended on 25th May, 2021. The Rules call for the appointment of a Chief Compliance Officer, a Nodal Contact and a Resident Grievance Officer. The Government cites reasons of creating a robust mechanism to prevent the spread of hate speech and misinformation.

THE PRESS RELEASE –

On 26th May 2021, the Ministry of Electronics and IT issued a press release. It listed the following:

1) The Right to Privacy is a fundamental right and it shall not be infringed. However, no fundamental right is absolute. They all come with reasonable restrictions attached. None of the new reforms would impact the functioning of WhatsApp.

 

2) Disclosing the source of messages will be the last resort. Rule 4(2) of Intermediary Guidelines will apply. The extent of disclosure is when matters concern the sovereignty, integrity and security of India or heinous crimes. Disclosure is mandated only for investigative purposes.

3) In 2018 the Government had proposed to amend section 79 of the IT Act. This amendment was for tracing of origin of information for legal compliance. No objections were raised by WhatsApp then. It was noted that WhatsApp already shares encrypted information with its parent company, Facebook. This is an infringement of the law and a gross violation of the Right to privacy.

4) International precedent was also cited. Many countries including Canada, U.S.A, Australia and U.K. have passed legislation to the same effect. Brazilian law calls for provision of IP Addresses, customer information and geo-location data under certain circumstances.

EFFECT ON BUSINESS –

Revenue for social networking platforms comes largely from advertising and promotions. India holds the second largest market for social media use. It stood at 326.1 million in 2018 and is expected to grow to 448 million by 2023.

Facebook India’s revenues grew by 43 percent year-on-year to about Rs 1,277.3 crore in 2019-20. Its net profit more than doubled to Rs 135.7 crore.

WhatsApp has 400 million users in India and has reported revenues of Rs 6.84 crore.

Understandably, no social network wants to lose the Indian market.

Compliance will also mean modifications of present versions of programming. This would lead to resource drain that ma not have been part of company budgets. Imagine having to programme the same app for the same purpose, but around specific laws.

IN SUM

The Government believes that WhatsApp owes a certain responsibility to India for the business it does here. Especially since it allows for free dissemination of information.

 

The Government insists that the Rules are being implemented to safeguard national interests, and the people at large. The IT Act and Telegraph Act allow retrieval of information by enforcement agencies. But advanced technology and end to end encryption is making this more and more difficult.

The only way for WhatsApp to identify the source of a message is to do away with end-to-end encryption. This is a loss of its USP an is bad for business. Also, it’s an attack on the right to privacy of its users. End-to-end encryption doesn’t allow for retrieval of content. For compliance, Whatsapp will now store this as as “hashed” data. This means more server space and no regard for data minimization polices.

An adverse decision resulting in a ban in the WhatsApp matter means India will be in tyrannical company. India will join the elite list of China, North Korea, Syria and Iran.

Let’s call this the first wave. The second one is coming. The Personal Data Protection Bill, 2019 is almost ratified.

 

Who owns a song?

Who owns a song?

Music has always remained an integral part of Bollywood and the music industry has seen an incremental rise in the last ten-fifteen years of relative digital-democratization of filmmaking as a result of the proliferation of YouTube, rise in the number of OTT platforms and various other factors.

This rise in the music streaming applications such as Spotify, Wynk music and etc. has given the artists additional platforms to earn revenue from their intellectual property i.e., their music. Making songs is not really a ‘one-person job’ as it is essentially intertwining of melody and lyrics which means more people are involved behind the making of one soundtrack like lyricist, composers, music director, producer etc. This confluence of people, playing various roles to bring together a soundtrack also raises the question of who actually owns the song as his own intellectual property. The answer is rather complex and can be answered through the prism of the Copyright (Amendment) Act, 2012 and various judgments pronounced by the Supreme Court.

Meaning of copyright-

Copyright means an exclusive right over one’s own creation of the mind, that is, their intellectual property. Having attained copyright over a song or movie prevents the ‘work’ from being-

  • Reproduced by someone else,
  • Performed in public i.e., performance rights,
  • Communicated to the public in the form of uploading it on streaming platforms like YouTube,
  • Distributing copies of ‘original work’ to the public,
  • Renting or licensing the ‘work’ to others.

It is important to note that the term ‘song’ is not defined anywhere in the act, so to answer the question of who actually owns a particular musical work, the song would be divided into two categories i.e., one being a part of a cinematograph film and the other being not part of a cinematograph film.

For the songs which do not form part of any cinematograph film, the Copyright (Amendment) Act, 2012 defines the various ownership that a person can claim within the song.

  • The composer of a musical work is an author by virtue of section 2(d)(ii),
  • The lyricist is an author in relation to the literary work, that is, lyrics by virtue of section 2(d)(i) and
  • The producer in relation to a sound recording is an author by virtue of section 2 (d)(v) of the Copyright (Amendment) Act, 2012.

For the songs that are a part of a cinematograph film, the ownership of that particular song boils down to the type of arrangement made in the contract. In most cases, the producer of the movie ends up being the owner of the song because the artists who play different types of role in making of the song assign their right of ownership in exchange of monetary consideration.

However, in cases where the contract is loosely drafted or the producer uses the particular song anywhere apart from the movie to attract audiences or to earn money with help of that song, Supreme Court judgments like that of Indian Performing Rights Society LTD V/s Eastern India Motion Pictures Association,[1] help getting the various artists their well-deserved royalties. Nonetheless there are a few rulings in which the courts have not awarded the right to royalties to everyone.

The term of copyright as prescribed in the Copyright (Amendment) Act, 2012 is sixty years, whereas the term of copyright for literary works and musical works lasts lifelong in addition to sixty years from the time of his death. This ruling essentially means that even the next generation of these people would be deprived of the well-deserved royalties due to a loosely drafted contract, which signifies the importance of proper legal guidance at the time of drafting a contract for any matter related to intellectual property.

 

Written by-

Bhuvan Malhotra

Protecting Architectural Designs

An Architectural Design is the conceptualization of the elements that comprise a building or a structure. It is the creativity of an architect whose intellectual property is protected by not one, but three IPR regimes. 

In India, Architectural Design is protected by the – 

 

  • Copyright Act, 2012

  • Design Act, 2000

  • Trademark Act, 1999

 

Interestingly, all the aforementioned acts have provisions of protecting an architectural design. However, the protection granted under these regimes depends on the facts and circumstances and varies from case to case. 

 

Copyright Act 

 

Under Section 13 of the Act, copyright is granted to various works, artistic work being one of them. By definition, Artistic Works under section 2 (c) (ii) of the act mean “any building or structure having an artistic character or design, or any model for such building structure.” Therefore, an architectural design being a ‘building, structure or the design of such model’ is granted copyright protection under artistic works. It must however be kept in mind that only original works can be granted copyright protection therefore the architectural design must not be plagiarized.

The author (architect) of the architectural design is also granted moral rights under section 57 of the act. Thus, he has the right to claim authorship of the work and also prevent its distortion. To this end, the author can in most copyright infringement cases ask for an injunction to stop the infringer from using his/her work, however, under section 59 of the act, a remedy for copyright infringement may not available to such artist when construction of the building or structure has commenced.  

Further, under section 52 of the act, architectural designs are subject to the fair use doctrine, therefore, there is no infringement when photos of the protected buildings are taken or when such buildings come in the background in a cinematograph film

In India, copyright protection is granted to works that are original since their inception, therefore Architects do not need to register their architectural design per se, however, they have the option to do the same as it may make their case stronger if there is an infringement. 

Following is a list of the Registration Fes for registering an Architectural Design-

Work Registration Fee
Literary, Dramatic, Musical or Artistic Work Rs.500/- per work

 

Designs Act

As mentioned earlier, an Architectural Design can also be registered with the Designs Act under section 2 (d). The protection granted under the Designs act is quite similar to the Copyright Act as it requires the architectural design to be original. Though unlike the Copyright Act makes it mandatory for the author to register his work.

An Architectural Design can be registered with the Designs Act under the following circumstances-

  1. If it has been registered under classes 25-03 and 25-99 of the Designs Act ;
  2. if it has been produced more than fifty times, and the Copyright Act is no longer applicable. 

Therefore, an architectural design that is either registered under the Designs Act or that has been produced for more than fifty times can only seek infringement protection under the Design Act.  

Fee for registration under the Design Act-

On what payable  Fees for Natural Person For other than Natural Persons either alone or jointly with a natural person
Application for registration under section 5 & 44 Rs.1000 Small entity- Rs. 2000

Other than a small entity- 

Rs.4000

 

Trademark Act 

 

The Trademark act permits for registration of Architectural Designs under section 2 (1) zb wherein a Trademark is defined as –

a mark capable of being represented graphically and which is capable of distinguishing the goods or services of one person from those of others..

The intention behind registering an architectural design as a trademark is to ensure that there are no replications of the structure. A building will be eligible for trademark protection as long as it can fulfill the test of graphical representation and an indication of the source.  ‘Graphical representation’ means that the mark must have a physical form whereas, ‘indication of the source’ means that the building should be associated with the trademark owner and the goods and services offered. Therefore, the architectural design seeking a trademark should be able to distinguish itself from others who offer similar goods and services.

In India, the first building to be granted trademark protection is the Taj Mahal Hotel, Mumbai. It was registered under class 43 as “services providing food and drink; temporary accommodation. 

The benefit of registering under the Trademarks Act is that it increases the commercial revenue while also protecting the distinctiveness of the work. 

Fee Structure for Registration- 

Application for registration of a mark  Physical Filing  E-Filing 
Where the Applicant is an individual/Startup/Small Enterprise  Rs. 5,000 Rs. 4,500
In all other Cases (Note: Fee is for each class and for each mark) Rs. 10,000 Rs. 9,000

 

Conclusion 

The Copyright Act gives a universal umbrella protection to the architectural design regardless of whether or not it is registered. However, an author can step out this all-embracing protection by registering with the Design Act or the Trademarks Act. 

It is the author’s personal opinion that an architectural design should be registered with the Design Act, in situations where the production of more than 50 copies is anticipated. Registration with the Trademark Act is relatively difficult, as the architectural design will have to fulfil the test of graphical representation and an indication of a source, which is why trademark registration works best for heritage buildings or tourist spots like the Oprah House Sydney. 

The jurisprudence and precedents on this subject are limited therefore the interpretation of the courts may vary. This is the personal opinion of the author.

Coronavirus outbreak

COVID-19 & FORCE MAJEURE

The coronavirus causing COVID-19 has spread like wildfire, playing havoc with the global supply chains, bringing the world economy to an unprecedented standstill. These extraordinary times we find ourselves living in is certainly throwing light on some interesting issues in the realm of contract management.

How does COVID-19 affect contractual obligations?

While it has made it difficult for some parties to execute their contractual obligations, it has left others absolutely incapable of execution. 

In the thick of this scenario, parties are reviewing their contracts and hoping to rely on ‘force majeure’ clauses to temporarily suspend their performance obligations under the contract to protect themselves from failure to provide goods or services and in some cases to completely end their contractual arrangement. Luckily, the Department of Expenditure (Procurement Policy Division) of the Ministry of Finance vide an office memorandum dated 19.02.2020 has called the outbreak of COVID-19 a natural calamity and has clarified that ‘force majeure’ may be invoked whenever appropriate following ‘due process’. Though this interpretation by the government may not be binding it may still have persuasive strength in interpreting contracts with the Government of India.

What is Force Majeure?

‘Force Majeure’ is a contractual provision. According to Black Law’s Dictionary “it is an event or effect that can neither be anticipated nor controlled… that prevents someone from completing or doing something that he or she had agreed or officially planned to do”. This concept has neither been defined nor specifically mentioned in statues, so whether or not it can be invoked will depend on the general terms of the contract, the events that precede or succeed it and the facts of the case.

What legal provision govern the claim for Force Majeure in India?

Indian Contract Act does not specifically provide for Force Majeure. Some reference however has been made under Section 32 of the Indian Contract Act, 1970 to contracts that are contingent on the happening of a certain event, where if the event becomes impossible it renders the contract void. This means that there may be certain unanticipated events outside the control of parties that may render a contract unworkable for a limited time while the event lasts, leaving a window for normalcy once the event ceases to exist. It is during such circumstances that ‘force majeure’ comes into play.

What type of events qualify as Force Majeure? Is the outbreak of COVID-19 a force majeure situation?

Force Majeure provisions in contracts tend to be formulated in one of the two ways. 

  • The parties to the contract may mutually decide over the list of events to be categorized under this clause, which typically includes acts of war, riots, fire, flood, hurricane, earthquake, explosion, strikes, lockouts, slowdowns, prolonged shortage of supplies, governmental action etc.
  •  It is either a closed list of categories, such as “a finite list of force majeure is the following events ……” or it is an open list of categories, such as “force majeure is the following types of events; including …….” 

In India the closed list tends to be more favoured. The current outbreak of COVID-19 has been declared a pandemic by the World Health Organization and interestingly you will rarely see the word pandemic listed in force majeure clauses. If you do see it listed in the clause, then you know that you are within the force majeure territory and you can go on to test other elements of force majeure that might be available, and if not, then that makes navigating through the force majeure regime a lot more difficult. 

Alternatively, you may notice many contracts referring to the Act of God. This is an interesting one, because the Act of God traditionally tends to be ‘weather dependent’ and without human interference and in that sense a pandemic or epidemic, tends to not be considered as an Act of God. While some parties to a contract may term the disruption in the supply chain due to the pandemic – a natural calamity, or an Act of God, others may argue that forced quarantine or travel bans are the roots of such disruptions and are ‘acts of government’. Therefore, the sole inclusion of an ‘Act of God clause’ does not ensure the recovery of losses caused by COVID-19. 

To that end, the key factors to check for force majeure are-

– Do you have a closed or open list? 

– Do you see the word ‘pandemic’ mentioned under the provision?

– If not, you may want to look at other categories such as ‘disease,’ ‘epidemic,’ ‘quarantine,’ or ‘acts of government,’. 

It is important to note that in cases where “epidemics” or “acts of Government” are mentioned apart from the force majeure clause, the courts would additionally subject you to show proof of cause, a harmonious construction with other provisions and compliance with the conditions contained in the force majeure clause.

What would an affected party do to claim relief in case the contract does not include an express force majeure clause? 

In case the contract does not include a force majeure clause, or the existing clause does not include a particular event, in such a situation the affected party may be able to discharge the contract using the ‘Doctrine of Frustration’. It is a common law doctrine enshrined under Section 56 of the Indian Contract Act, 1970, and it protects parties against circumstances where their contracts have become impossible to perform and such impossibility in performance may be due to the occurrence of an event which affected their ability to perform. It is however extremely important for the application of doctrine of frustration that such person could not have done anything in their power to prevent such an event from happening and that the impossibility is neither self-induced nor a result of negligence. Further, it is really important to bear in mind that the performance has to be impossible, not just difficult or more time consuming or expensive, IMPOSSIBILITY IS WHAT IS REQUIRED. 

How have the courts interpreted the word ‘impossible’ provided under section 56 of the Indian Contract Act, 1872?

In regard to the word ‘impossible’ the Supreme Court in Satyabrata Ghose v. Mugneeram Bangur and Co. & Anr. held that the word impossible under Section 56 of the Act to “not be used in the sense of physical or literal impossibility. The performance of an act may not be literally impossible but it may be impracticable and useless from the point of view of the object and purpose which the parties had in view; and if an untoward event or change of circumstances totally upsets the very foundation upon which the parties rested their bargain, it can very well be said that the promisor found it impossible to do the act which he promised to do.” 

There is a vast variety of Indian case laws on the doctrine of frustration and one must keep in mind that it is a very high bar to achieve. This can be evidenced by a recent landmark judgement titled Energy Watchdog Vs. Central Electricity Regulatory Commission where the Supreme Court held that force majeure clauses are to be narrowly construed. The court opined that in the force majeure clause contained in the contract in question, “hindrance” could mean an event wholly or partly preventing performance. However, a mere increase in prices would not amount to a hindrance. It was held that since the force majeure clause specifically excluded rise in fuel cost, the fundamental basis of the contract was never dislodged. In view of the fact that alternative modes of performance were available even though the same were at a higher price, a force majeure situation did not arise. The Court further held that since there was a specific clause addressing force majeure in the contract in question, Section 56 of the Contract Act would not have any application. 

The two things to note here are that 

  • the force majeure event must lead to an impossibility; mere hardship, inconvenience or material loss cannot be considered as a force majeure event AND
  •  in case there is a specific force majeure clause in the contract, then Section 56 would have no applicability because essentially the doctrine of frustration results in killing the contract and hence should not be lightly invoked.

How to protect yourself from the legal implications of COVID-19?

At present it is impossible to ascertain the exact damage caused by COVID-19, nonetheless it is advisable for businesses to equip themselves in case of any prospective dispute. Parties to the contract must abide by the terms of the agreement and requirements of force majeure clauses. The affected party must promptly notify the counterparty regarding the occurrence of a force majeure event and must collect all documents to produce as evidence in case of a dispute at a later stage. Most importantly, parties must get their contracts evaluated in detail by legal professionals. 

The jurisprudence and precedents on this subject are limited therefore the interpretation of the courts may vary. This is the personal opinion of the author.

Royalty Payment for Singers- An Adaptation of Necessity

The scope of copyright protection over the years has increased and it now includes a multitude of materials including songs. Producing a song is a long creative process which requires producers, composers, lyricist, singers among others. 

In the making of a song where there are so many people of different positions involved, there is always the question that who must receive the royalty for its commercial use? 

In case of songs, until recently singers did not receive any royalty, their contribution to the song was blatantly ignored. Fortunately, this changed in 2012 when the Copyright Act,1957 (Act) was amended to include “Performers Rights”. The act defines performers under section 2(qq) to include singers, musicians and actors inter alia, the basic intention was to include any person who makes a performance. The amendment granted the performers both economic and moral rights to their works. 

Section 38A of the Act focuses on the economic rights of the performers

    •  A performer can make sound and visual recordings of the performance;
    • A performer can reproduce the performance in any material form including the storing of it in any medium by electronic or any other means;
    • A performer can issue copies of the performance to the public not being copies already in circulation;
    • A performer can communicate the performance to the public;
    • A performer can sell or give the performance on commercial rental or offer for sale or commercial rental any copy of the recording and;
    • A performer can broadcast or communicate the performance to the public except where the performance is already a broadcast, and lastly,
    • A performer can receive a royalty for the commercial use of the performance. 

The economic rights subsist for 50 years from the date it was first performed. 

Similarly, moral rights have been granted under section 38 B of the Act. It explicitly mentions that the performer has the right to be identified for their work unless the contract states otherwise. The section also grants the performers the power to prevent the mutilation and distortion of their work. 

The new economic and moral rights policy for performers does not affect the royalty received by the others who were involved in making the song, so the performer’s right to receive his/her share of the royalties runs parallel. Further, to make it easier for the performers to collect these royalties, the Act provides for the establishment of the Copyright Societies under Section 33. The function of the societies is to collect royalties and assign licenses for the commercial use of different works. 

To this end, the Indian Singers Rights Association (ISRA) which is registered as a copyright society acts as the middleman who collects royalties on behalf of the singers. As a collecting society, it provides licenses for the commercial use of copyright-protected work of the performers and keeps an eye out for their work being used illegally. 

How much royalty will a Singer get paid? 

The royalty received by the ‘singer’ is dependent on the tariff scheme mentioned by the ISRA. This tariff scheme depends directly on the party that requests such license, for instance, if it is a restaurant/bar asking for a license, the tariff charged is dependent on the price of the least priced drink.

Therefore, the royalty received by the singers for the performance of their work varies from case to case. 

Does a singer receive a royalty from online streaming websites? 

Singers do receive a royalty from online streaming websites as it is their right under section 38A, it may, however, be different from radio and television broadcasting. 

Under section 31 D, the act provides for statutory license for broadcasting through radios and television. However, in the case of Tips v. Wynk, the Bombay High Court held that the provisions of statutory licensing do not apply to internet broadcasting, so different schemes apply to internet streaming. 

The royalty paid is dependent on whether the interactive or non-interactive streaming app charges the consumer for the services provided. If the website does not charge the user then the royalty per song is Rs.0.50 per song, and in instances where the user has to pay to avail for the services the royalty is Rs.1 per song.

Is it necessary to pay royalty and have a license? 

According to the Copyright Act, it is absolutely necessary to pay a royalty to the singers for commercial use of their songs. The same has been held time and again by the courts in multiple cases. In cases such as Indian Singers Right Association v. Night Fever Club & Lounge and Indian Singers’ Right Association v. Chapter 25 Bar and Restaurant, the court granted a permanent injunction restraining the defendant from playing the copyright-protected songs without a license from the ISRA. It further held that the defendant was violating the performers Right to Receive Royalty (R3).

The amendment regarding Performer’s Right was definitely a relief for many singers, but most importantly, it was a necessity. It brought the copyright regime of India in harmony with Article 14 of the TRIPS Agreement and also Articles 5 to 10 of the WPPT

The jurisprudence and precedents on this subject are limited therefore the interpretation of the courts may vary. This is the personal opinion of the author.

Author:

Mehr Sidhu

Intern, Talwar Advocates

KNOW YOUR RIGHTS!

KNOW YOUR RIGHTS!

Over the years, your advocates and the Copyright societies have worked on making your status as a singer, a composer, a lyricist and as a musician, STRONGER THAN EVER, and this is why we believe that you must Know Your Rights.

Are you Registered with the IPRS?

Over the years, your being registered with the IPRS has become very important. The Indian Performing Rights Society ensures that all the royalties collected from various sources are properly directed back to you. This is so that you dont lose out on the money you rightly deserve. 

  • IPRS collects royalties due to the artists if their work is used anywhere, from a wedding to a New Year function or on the radio or TV in other words, wherever music is played. 
  • It is responsible for collecting the 50% royalty that is due to artists involved in literary work accompanied with music meaning lyricists, music composers, and publishers of music.
  • It has a database of around 10 million songs, including Indian and international numbers, for which it collects royalty.
  • In the case of a big event, the IPRS generally approaches the organizers beforehand to inform them about the licensing required to play the songs of the artists who are registered with them.
  • Most online streaming platforms are registered with IPRS and are therefore licensed to use the artists songs and to this end the IPRS sends letters to all media platforms, asking them to ensure that the artists are paid 50% of the royalty as per the Act.

As members of IPRS, you have a better infrastructure at your disposal to press claims and collect the money due to you. 

Your old albums have made MORE MONEY than you know!

Yes, thats right, your old or even the new albums have probably made much more money than you know. The reason for this is that back in the 90s online streaming platforms like YouTube, Gaana, Sawaan or iTunes did not exist, And although you feel that you assigned all your Rights to the Music Company, the 2012 Amendment in the Copyright Act has given you more rights than you could have assigned. 

    • The 2012 amendment in The Copyright Act, 1957 laid down that artists would get 50% of royalties every time their work was used, even if the copyright remained with the production house or the music brand.
    • It meant that every time a song was played in, say, a large party in a hotel or by a radio station, or streamed or even used as a mobile phone ringtone, 50% of the royalty would go to the production house or music company.
    • The other 50% would be split between the lyricist and composer of the song.

The creation of these online platforms significantly reduced the production of Music Cassettes and CDs or DVDs. Your old contracts only fetch you royalties on the number of MCs and CDs sold, however, in todays time, your music is viewed, downloaded and used on platforms that are nothing like the previously existing physical mediums. 

This means, that you are supposed to get a lot more Royalties and money for your music than you could even imagine.

Does your contract contain confusing terms?

You may be surprised to know that your contracts are not as confusing as they may seem on the first look. Usually, music companies try to befool us with difficult terms and twisted clauses, but this does not have to mean that you lose out on your Rights as a musician. Always be informed of what is owed to you. Get your contract reviewed by us, and you will be surprised to see the underlying rewards.

When was the last time you got your Royalties?

As a musician your life can be busy, its easy to forget that certain Royalties due to you ARE STILL UNPAID !! 

Do not become a victim, you ALWAYS have some royalties due to you from the music you have made. Your Royalties are recurring, and may not know, but you are actually sitting on a lot of MONEY.

Remix and Reprise of your Songs

It is very important for you to know that even if have allowed a remix or reprise of your song and have been paid a certain amount for that remix or reprise, you will still get ROYALTIES. Always remember, you were the original composer of that music, and you will always get royalties for your work.

KNOW YOUR RIGHTS, and be informed. You as a singer have a lot of money due to you which you may not even know about, get your CONTRACT REVIEWED and take back home the money due to you from the Music Companies and others.

Performer Rights Royalties

Performer Rights Royalties

With an increase in the re-runs and on-demand streaming options of TV Series, the failure to recognize the performers efforts in the success of the show, is bringing about concerns. It is for this reason that there is a desperate need, especially in this time of a nationwide lockdown, where existing productions have stopped and new productions seem bleak, that actors must receive residual royalties from the reruns of their shows/films in order to recognise their contribution to the popularity of the production, along with ensuring that the economic benefits of such popularity are not amassed by the few. 

To begin with, we must know the position of ‘TV Serials’ in the Copyright Act. Now according to Section 2(f) of the Copyright Act, a “cinematograph film” means any work of visual recording, therefore a Tv series being a work of visual recording would fall under this definition. So, when a tv series is shown on the television or on a platform other than cinema, the producers of such a show tend to make monetary gain, which in return implies that the TV actors are also entitled for royalty from such commercial exploitation of the show. 

We are familiar with the concept of each actor getting paid ‘Xamount of money for his role in the show,  however, what most us do not know is that after an amendment to the Copyright Act in 2012  , certain provisions were added which provided for entitlement of royalties by performers in case of making performances for commercial use. 

For clarity,  section 38 reads as follows –

(1) Where any performer appears or engages in any performance, he shall have a special right to be known as the “performer’s right” in relation to such performance.

(2) The performer’s right shall subsist until fifty years from the beginning of the calendar year next following the year in which the performance is made.

Further, the introduction of Section 38A granted performers certain specific economic and moral rights and sub-section 2 of  Section 38A provides that ‘notwithstanding anything contained in this sub-section, the performer shall be entitled for royalties in case of making of the performances for commercial use.’

Therefore, irrespective of whether or not you gave up your copyright in the actual work, you should ideally for a period of 50 years from the release of the show be entitled to ‘Royalties’

It is also pertinent to note that ‘any one performer’ from a TV series can claim their share of ‘residual royalties’ irrespective of whether or not his accompanying actors decide to do so.  Section 56 of the Act provides for Protection of separate rights

where the several rights comprising the copyright in any work are owned by different persons, the owner of any such right shall, to the extent of that right, been titled to the remedies provided by this Act and may individually enforce such right by means of any suit, action or other proceedings without making the owner of any other right a party to such suit, action or proceeding.

The 2012 amendment indicated that the industry has to come out of the old system and decide to implement the royalty sharing mechanism provided under the law with the actors. This is a boon for retired or marginalized actors or producers.

The jurisprudence and precedents on this subject are limited therefore the interpretation of the courts may vary. This is the personal opinion of the author.

Do start-ups need lawyers?

India has an ever growing startup ecosystem. It is a common misconception that it is ok to work on available legal templates or take legal advice from CAs, and lawyers should be engaged only for complex deals. CAs can effectively advise a start-up on tax aspects but more than often do not take into consideration the applicability of other laws leading to start-ups being legally non-compliant. Accordingly, when lawyers do get involved, there is a vast backlog of things to do to rectify the legal mess that is created (not every mistake can be fixed!!), which is expensive, time consuming and inconvenient. Certain wrongful actions, inactions or non-compliances can be deal breakers or lead to a major drop in a start-up’s valuation.

Involving lawyers at an early stage helps one in availing the advantages of beneficial laws that have been enacted in favour of start-ups, making an organisation better structured, organised and legally strong, and dealing with legal risks more effectively. Further, the longer a lawyer is involved in a business, the better the lawyer understands the business enabling him to deliver practical, reliable and result oriented advice that is more aligned with a business’ goals and objectives. Lawyers can help a start-up in various matters such as company formation, IP creation, shareholders’ agreement, employee agreements, funding and regulatory compliance, to name a few.

As start-up entrepreneurs, one needs to focus on growing the business in the right direction.  Hiring the right corporate lawyer at an early stage of a business can do wonders for a start-up, and increase the chances of its success.

BY

Divya Jyoti Mehra

Partner – Corporate Law – Talwar Advocates