Guest Interview: In conversation with Mr. Jagdish Sagar- Independent practitioner- IPR, Copyright and Entertainment

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I am pleased to bring to you our next guest interview with noted IPR practitioner Mr. Jagdish Sagar.

Mr. Jagdish Sagar is a practicing IPR attorney in the Delhi High Court since 2006; initially in Anand and Anand, first as Consultant, then as Partner. Since December 2011, Mr. Sagar has been practicing independently in intellectual property, writ jurisdiction, appellate criminal matters and general legal practice.

Mr. Sagar was originally a senior civil servant (member of the Indian Administrative Service) from July 1966 to February 2004, acquiring varied legal and managerial experience including criminal and writ litigation, and extensive exposure to copyright law as Joint Secretary in the Government of India in the late 1980’s and early 1990’s. He was the sole copyright law representative from India at the TRIPS negotiations and was closely involved in the amendments that became the Copyright (Amendment) Act 1994.

1. Mr. Sagar, could you tell us a bit about yourself and your journey as a copyright lawyer?

A strange journey.  As a civil servant, in the early 1990s, I was required to represent India as the sole delegate on copyright in the negotiations that led up to the TRIPS Agreement.  I had to learn fast. It is actually a USP that I cut my teeth on international copyright; the subject fascinated me, though I went on to do all sorts of other things during the rest of my career.  I began evening law classes before I retired and eventually got my LLB a couple of years later, in 2006, when I joined Anand and Anand where, after some time, I became a partner; I am eternally grateful to Pravin Anand for giving on old man a break—not everybody would. I left the firm in end 2011 and have a modest independent practice; not restricted to IP, but largely copyright and entertainment.

2. (At the cost of repetition from my previous guest interviews ) What is your take on the Copyright Amendment Act, 2012. Do you feel the Amendment has been able to achieve the objective with which it was enacted? 

The original objective down to about 2006, after which nothing happened for some years, was to make Indian law compliant with WCT and WPPT.  The amending Bill that was introduced in 2010 shifted the focus to the interests of composers, lyricists and performers in the entertainment business, but did also contain provisions that were meant to be WCT/WPPT compliant.

I don’t think some of the amendments really meet the object of treaty compliance, but nevertheless it should be possible now for the Government to accede to WCT/WPPT and I have no idea why it hasn’t.

As for authors and performers, I feel the amendments are confusing; I don’t know how much the amendments have actually achieved for the intended beneficiaries.

3. You have been involved in some of the constitutional challenges to the Copyright Amendment Act, 2012 on behalf of the producers. Could you talk to us about the grounds on which some of the key amendments could be challenged?

A long story, but here are some of the key issues as I see them; I am not putting them necessarily in terms of the pending constitutional challenges, which I have not been professionally involved in for a while now.

Firstly, what do the third and fourth provisos to section 18 actually mean, if anything at all?  What is the nature of the “right” to royalty that they refer to?  Clearly, it is not copyright, not being one of the exclusive rights under Section 14, which the owner of copyright remains free to exercise; nor is an owner of copyright (whether author or assignee) barred from assigning copyright. This “right” to royalty appears out of the blue. It is referred to but not defined.

Clearly, however, there is no compulsion on the author to assign this special right to royalty to a copyright society, merely a fetter preventing him from assigning it to anyone else. Nothing stops the author from directly entering into a royalty agreement with the assignee, and the assignee might administer his rights simply as owner, without joining a copyright society.

So far so good. But the definition and quantification of this special royalty is puzzling:

(a). Under the said provisos to section 18 the authors of literary and musical works, who are free to assign copyright, are barred from assigning or waiving “the right to receive royalties to be shared on an equal basis with the assignee of copyright” in a film or sound recording for the utilisation of the work in any form except theatrical exploitation of a film.

Now what, pray tell, is “an equal basis with the assignee of copyright”?  Does this mean that the authors of a few lyrics (literary works) and composers of song and background music are entitled to half the income of the film? What about the authors of dramatic works and artistic works? (screenplay, dialogue, choreography, sets? or costume designs if registered?). What about performers?  Does the legislature really intend that, after the producer has borne the entire cost and risk of production, he must share half the profits from a film or sound recording with some of the authors of a few underlying works, which in the case of a film are not even the most important underlying works? That would be discriminatory and ultra vires Article 14 for treating unequals as equals.

Rather, on settled principles, “equal basis” would have to be determined on some basis other than a merely arithmetical one. But in that case how to quantify the contributions of different authors with reference to the whole of a film?  Does the contribution of the author of the lyrics of one song entitle him, as his “share on equal basis”, to 0.5% or 1% or 2% or X% of the royalties from the film”? Who is to decide, and on what basis?  The only way to address this conundrum, in my view, is by contractual agreement: in which case, what was the point of these amendments?

(b) But that is not all. Section 19 is titled “mode of assignment” and the pre-2012 provisions of this section are just that. In this light we may, perhaps, read the newly inserted sub-sections (9) and (10) as referring back to the new provisions about authors of literary and musical works as in Section 18, though the former actually refer to works and authors in general.

Under sub-sections (9) and (10) of Section 19, the author is “entitled to claim”, not a “share on equal basis” but “an equal share of royalties and consideration”. There is a difference between a share on equal basis and an arithmetically equal share, as I have already said.  How do we reconcile the contradictory language of Sections 18 and 19, on this most basic issue? Do we again take section 18 to be the governing section?  That may be the only way out but it seems a stretch.

Further, the provisions of Section 18 that I have been discussing apply to any literary or musical work “included in” a film or sound recording, i.e. whether or not such work was expressly made for the film or sound recording; the work could have been created independently but later included in the film or sound recording. But Section 19 refers to works “to make a cinematograph film” or sound recording, which (forget the grammar) appears to mean works expressly made for the film or sound recording.

Finally (leaving aside the fact that entitlement to “claim” a right is not exactly the same thing as a fetter on assignment of the right) what is meant by the newly introduced word “consideration”, which does not figure in Section 18 but which might be an undefined something in addition to royalty (which itself is consideration)?

(c) Another problem with these amendments is that they put all authors of musical and literary works on the same footing: all get the same share (whatever it is) of royalties and “consideration”: neither the author nor the producer has any bargaining power. Again, treating unequals as equals.

These are by no means the only problems with the 2012 amendments, but I see these insertions in Sections 18 and 19, each imprecise and the two mutually contradictory, as the most important single problem.  This is, surely, in my view, one of those rare cases where the Court should strike down the impugned provisions as vague.

4. I had written a post titled ‘A Flawed Amendment’ where I had talked about why I feel the Copyright Amendment Act, 2012 is a grossly flawed amendment and the myriad issues media lawyers face in drafting and negotiating contracts with authors and performers. I have received mixed comments on my interpretation of Section 17 of the Act. In my view Section 17 new proviso does not take away the ability of producers to engage authors on a contract of service/ commissioned work basis and the proviso merely refers to the royalty rights of authors. What is your take on the Section 17 proviso?

There is an alternative interpretation.

The second proviso to Section 17 refers to the “right of the author in the work referred to in clause (a) of sub-section (1) of section 13” i.e. the “right of the author” in original literary, dramatic, musical and artistic works  (which in the case of a film are commonly referred to as its “underlying works”). It is by no means clear to me that this “right of the author” should (as you suggest) refer to the right to royalty provided in Sections 18 and 19; in context it would more likely refer to the “right of the author” as first owner of copyright under Section 17 itself.

The distinction between authorship and first ownership of copyright is no innovation.  But now, negating that distinction as generally applied to contracts of employment, the new second proviso to Section 17 provides that the producer the film is not the first owner of copyright in the underlying works under clause (c) of the first proviso notwithstanding that the underlying work in question was made under a contract of employment.

So far as sub-clause (b) in the first proviso is concerned, this provision was arguably misinterpreted in Indian Performing Rights Society Ltd. v. Eastern India Motion Pictures Association. The provision as I read it applies to a film made for valuable consideration at the instance of another person, not to an underlying work made for valuable consideration at the instance of a film producer, as the Court seems to have thought in that case.  The amendments apparently seek to address this question. As elsewhere, they could have been better drafted. A mere Explanation to sub-clause (b) would have sufficed and would have been clearer.

My real problem is regarding sub-clause (c) in the first proviso: the producers of films have been irrationally singled out and deprived of the right of first ownership of copyright in the case of contracts of employment. Even in those jurisdictions (France and other civil law countries) where the law provides for multiple authorship of films, there is usually some safeguard whereby the producer cannot be restrained from exploiting the film.  Now, in India, the film producer has under all circumstances to enter into an assignment agreement with each author of any underlying work with no protection against any of them obtaining an injunction against the exploitation of the film.

5. In one of my recent interviews with Mr. Sanjay Tandon (co-founder and CEO of ISRA), he has expressed his views on the provisions pertaining to performers rights. I would like to know whether you agree with the interpretation taken by Mr. Tandon particularly in questions 6 to 8 of my interview with him. 

In question 6, I asked him about the controversies surrounding the right of performers to receive royalty. Particularly, whether performance is limited to ‘live performance’ as defined under Section 2(q) of the Act or extends to recorded performances as well, as explained under Rule 68 of the Copyright Rules, 2013.

Not a straightforward matter. I would advise a producer to mould his draft contracts cautiously: the producer can protect his interests adequately without injustice to the performer since performers’ rights are assignable, and neither party benefits from uncertainty.

In question 7, I questioned him about the ambiguities in Section 38(A)(2) which happens to be the most important section with regards to the right of performers to collect royalties. The section fails to refer to sound recordings not forming part of cinematograph films as well as does not make the right of performers to receive royalties non-assignable (analogous to Sec 18 of the Act). 

Section 39A makes performers’ rights assignable. However, the third and fourth provisos to Section 18(1) in terms apply only to the authors of literary and dramatic works and not to other persons: not even to the authors of other copyright works, obviously not to performers.

Section 38A(2) seems crystal clear to me: once the performer has consented in writing to the inclusion of his performance in a film, he loses the right to injunctive relief against the producer’s exploitation of the film.  However, this does not affect any contractual right to royalty that the performer may enjoy: he may if necessary seek relief by means other than an injunction against the producer (e.g. a recovery suit).

I understand your remaining question to be as follows: suppose the performer’s performance has been captured in a separate sound recording which is then included in a film, and there is no nexus between the performer and the film producer, then what happens?  To hold that in such a case the performer retained a right to injunctive relief against the producer would defeat the obvious legislative intention of Section 38A(2). Perhaps this is a case for the Court to devise an appropriate “interstitial” interpretation. Meanwhile, it might be prudent for the film producer to examine the performer’s agreement with the producer of the sound recording; it is not unlikely that the performer’s assignment of rights to the producer of the sound recording will actually have been wide enough to cover the incorporation of the recorded performance in a future film.

In question 8, I questioned him about the owners of performances missing from the constitution of ISRA, as required under Section 35 of the Act. 

How can a performer ask for royalties or licence fees unless he is entitled to grant licences? A copyright society can issue licences on behalf of “authors and other owners of right” (Sections 34 and 35 not on behalf of persons who are not owners of rights. Further, the performer is not, as I have said, at all entitled to the benefit (whatever it is) of the third and fourth provisos to Section 18(1) hence the question of ISRA collecting royalties or licence fees without ownership simply does not arise.

6. Speaking of performers rights, I have a follow up question. Section 39-A does not include Section 17 of the Copyright Act to apply mutatis mutandis to the provisions on performer’s rights. One could thus interpret that performer is the owner of his performance and the ownership can be transferred only by way of an assignment. Does this mean that the performers cannot be engaged on a commissioned basis/ contract of service?

It appears to me that performers can be engaged on a contract of service, under the law of contract, subject to the terms of the contract. The contract may or may not be for assignment.

7. There has been an utter chaos in the industry on the royalty provisions with each side trying to interpret the Amendment in its favour. We are probably looking at years of litigation and constitutional challenges to the Amendment. The Standing Committee on Copyright Bill, 2010 had taken into account the representations given by various stakeholders. In your view, where did the Government miss the bus and what is the best way forward now?

No answer, except that the parties in each production will have to proceed on a contractual basis, for reasons I have mentioned. If the Government had genuinely engaged with all stakeholders, a more author-friendly but still viable piece of legislation might have emerged.

8.In your view would Justice Manmohan Singh’s appointment to IPAB be affected by the recent Supreme Court order in Kudrat Sandhu vs/ Union of India

I haven’t studied the matter, including the question whether it affects appointments already made: on the face of it, it doesn’t appear to.

9. The whole IPRS investigation fiasco was a global embarrassment for India with regards to our copyright enactment. In your view what precautions should the copyright societies take to ensure that history does not repeat itself?

I am not conversant with the matters reportedly being investigated by ED or with the outcome of investigations for which the Government appointed a retired officer.  However, I have come to realise that the root of the problem was registration of the society after the 1994 amendments without clarity about ownership of rights.

10. Any parting thoughts for our readers?

Authors, at least songwriters and composers of film music, have asserted themselves and have been heard, but an opportunity to actually help creative people realistically with clear, unambiguous and implementable legislation has been lost.  Domain knowledge, exposure to the industry and care in drafting legislation amongst the persons handling the matter—in the Legislative Department no less than in the Ministry concerned—were needed.