ILAYARAJA CASE- MADRAS HIGH COURT RULES THAT PRODUCER OF CINEMATOGRAPH FILMS HOLDS COPYRIGHT BY DEFAULT IN THE SOUND RECORDINGS UNLESS THERE IS A CONTRACT TO THE CONTRARY
The Madras High Court on June 4, 2019 put an end to a long-standing copyright infringement case between Ilayaraja, Agi Music Pvt. Ltd and Echo Recording Company Pvt. Ltd [Read judgement here]. The Court dealt with two cases in this judgement, one by Agi Music against Ilayaraja & Anr (CS 308/2013) and the other by Ilayaraja against Agi Music, Echo Recording & Ors (CS 625/2014)
Some of the highlights of this judgement are as under:
i) Moral rights- The special rights encompassed under Section 57 are thus of a nature that would protect the author beyond the contractual terms binding parties and no party could seek to negate or defeat such special rights relying on the terms of a contract of assignment (Para 52).
This para makes the special rights under Section 57 absolute i.e. a right which cannot be negated or defeated contractually.
Further, the court records that the 2012 Amendment to the Copyright Act has made the special rights of an author perpetual in nature.
The Court further extended the moral right argument and observed:
“It also entitles the author, Mr.Ilaiyaraja, to the exclusive right under Section 14 to do or engage in, all of the acts set out in the sub-clauses of Section 14, barring situations where such entitlement encroaches upon the making of a ‘sound recording’ based on the concerned ‘musical work’. I add this caveat for the reason that the ‘musical works’ in question have already found expression as ‘sound recordings’ and have been integrated in ‘sound recordings’ in various cinematograph films. It cannot hence be that further ‘sound recordings’ be made based on the same ‘musical works’. This would defeat the purpose of vesting the ‘sound recording’ right in a producer, in the first place. To sum up, what has been assigned is the ‘musical work’ qua the ‘sound recording’ and the author continues to retain the right in the ‘musical work’ for all other intents and purposes, both moral as well as economic. The special right to exploit such ‘musical work’ otherwise is unfettered. (Para 57)
ii) No relationship of contract of service under Section 17(c) of the Copyright Act: While holding that Section 17(c) does not apply to the engagement of Mr. Ilaiyaraja by the producer, the Court observed:
“The engagement of Mr.Ilaiyaraja, to my mind, is as a stand-alone professional, and his services, commissioned, as such. We have been privy to many situations where it is in fact, his music that has carried the movie. Otherwise eminently forgettable movies are made memorable by the outstanding musical scores that they contain. Though not a rule of thumb, the stature of the music composer before me dictates that that the arrangements as between himself and the producers are not one of service or apprenticeship but one of Principal to Principal. (Para 47)
Proviso (b) addresses a situation where an expert in his or her field has been engaged and certain ‘works’ commissioned. This proviso addresses the making of a cinematograph film that includes, by definition, a ‘sound recording’, of a ‘musical work’. The producer of the ‘cinematograph film’ will, in the absence of any agreement to the contrary, be the first owner of the copyright therein including such ‘sound recording’. (Para 48)
iii) Where agreement between producer and author has not been entered:
In summation, the 2012 amendment does take into account the interests of authors of ‘musical works’ by ensuring the payment of equal royalty to them and legal heirs, and not by shifting the basis of ownership of copy right as it exists presently. (Para 65)
In the light of the discussion as aforesaid and a concurrent reading of the statutory provisions, I answer the issues in this category stating that (i) it is the Producer of the cinematograph films who holds the copyright, by default, in respect of the ‘sound recordings’ that the film contains and an inference otherwise would arise only if the author of the ‘musical work’ produces evidence of reservation of his right to such ‘sound recording’ and (ii) Mr.Ilaiyaraja holds complete Special and Moral rights in regard to the ‘musical works’ composed/created by him entitling him to the protection afforded under Section 57 of the Act, being claim to authorship of his work, all measures necessary to preserve the integrity and purity of his work, honour and reputation and the right of exploitation of his ‘musical works’ in any manner as he may desire, only barring in the form of the ‘sound recordings’ that already stand integrated in the cinematograph films. This category of issues is answered accordingly. (Para 66)
With respect to agreements where Echo Recordings had obtained rights from producers but no agreements were in place between Producers and Mr. Ilaiyaraja the Court was of the view Echo Recordings has obtained rights in regard to the ‘sound recordings’ comprised in the films covered under their agreements with film producers. Echo is entitled to exploit the same, specifically and strictly in the form and manner as contained in the respective cinematograph films only.
In relation to the agreement between Agi Music with Mr. Ilaiyaraja’s wife, the case brought by Agi Music was dismissed in view of the expiration of their agreements concerning the use of Ilaiyaraja’s music since the assignment agreement between Mr. Ilaiyaraja and his wife did not have any term of assignment mentioned and therefore by virtue of Section 19(5) of the Copyright Act the term was only for 5 years.
(We would be carrying out a separate detailed post on this case)
I&B MINISTRY SETS UP FILM FACILITATION OFFICE IN NFDC AS THE SINGLE WINDOW CLEARANCE AND FACILITATION MECHANISM FOR FILM SHOOTINGS
The I&B Ministry vide letter dated 30th May, 2019 has informed the film fraternity members that the Ministry has set up the film facilitation office in the National Film Development Corporation (NFDC) as the single window clearance and facilitation mechanism, with a view to promote and facilitate film shootings by both domestic and foreign filmmakers in India and to enhance India’s positioning in the global market as an ideal filming destination.
In this regard, under the Government’s policy of ‘Ease of doing business’ and ‘digital India’ the Film Facilitation Office (FFO) has set up the web portal www.ffo.gov.in which allows submission of online film shooting applications from both domestic and international filmmakers. The FFO is also in the process of integrating all the states/ union territories and the key central government departments / agencies viz- Animal Welfare Board of India, Archaeological Survey of India, Directorate General of Civil Aviation, Airports Authority of India, Ministry of Environment Forest and Climate Change, Ministry of Railways, Central Board of Indirect Taxes and Customs.
FILM PRODUCTION HOUSES RELIEVED FROM PAYING SERVICE TAX
A set of top film production houses secured major relief from payment of service tax, running up to several crores. Madras High Court set aside demand notices published for having allotted satellite rights of their films perpetually to various television channels prior to the implementation of Goods and Services Tax in July 2017. Nonetheless, Justice Anita Sumanth granted tax officials freedom to open fresh proceedings keeping in mind her verdict on questions of law. She pointed out that services provided by a holder of Intellectual Property Rights was taxable under Service Tax Law.
Until 15 May 2005 all kinds of transfer of IPR were subjected to service tax. After which though, it was clarified that only temporary assignments of IPR would be obligated to pay service tax.
In the present case of writ petitions filed by SuperGood Films, Wunderbar Films, Vendhar Movies and AGS Entertainment through their counsel Joseph Prabhakar, they paid service tax when copyrights of their films were allocated permanently but didn’t pay tax in instances of allocation of rights perpetually. They claimed that the word ‘perpetually’ had been added into the agreements relating to satellite services to avoid paying service tax.
Justice Anita Samanth rejected the contention completely with the rationale that it is an unreasonable argument which runs against the statutory provisions. Additionally, tax can’t be imposed due to fear of suspicion of attempt to evade.
DELHI HIGH COURT REJECTS PLEA SEEKING STAY ON THE RELEASE OF SALMAN KHAN’S LATEST MOVIE ‘BHARAT’
The Delhi High Court recently rejected a public interest litigation filed by Vikas Tyagi against ‘Bharat’ starring Salman Khan and Katrina Kaif. As per his contentions the name of the movie is in contravention to Section 3 of The Emblems and Names (Prevention of Improper Use) Act, 1950. He claimed that the movie can’t be released as the name ‘Bharat’ is being used for trade, business or professional purposes.
The petition condemned the usage of the name ‘Bharat’ since as per Article 1(1) of the Constitution of India, Bharat is the official name of our country. Petitioner stated that being a Bharatiya himself he is not comfortable with such a “flippant character” associating himself with such a name since the trailer displays “Salman’s typical flippancy and vulgarity”. He called the movie a “shameless cunning stratagem to encash the deep-rooted feeling for our country”. He requested that there be a change in any dialogues mentioning ‘Bharat’ and also alter any scenes depicting a comparison between the country and Salman’s character.
A vacation bench consisting of Justices JR Midha and Chander Shekhar criticized the move by the petitioner of circulating the petition with media houses prior to actually filing it before the court, as well as for filing such a case without watching the movie himself. The court viewed the trailer and found no merit in the petitioner’s plea and dismissed it.
DELHI HIGH COURT BARS ASUS FROM USING ‘ZEN’ AS A TRADEMARK
In a case filed by Telecare Network India Pvt Ltd against ASUS Technology Pvt Ltd. Telecare Network India Pvt Ltd contended it had been continuously using ‘ZEN and ‘ZEN MOBILE since 2008 for feature phones, smartphones, tablets etc. It contended that ASUS had adopted an identical trademark ‘ZENFONE’ for selling identical goods and both brands had similar prices.
ASUS Technology’s counsel contended Jonney Shih, ASUS Chairman, is true believer of the zen philosophy followed by Buddhists. And his company had been using the Zen Design Concept which are concentric circles on its gadget for a while now.
Consequently, the Justice Manmohan passed an interim order stating that Zen is a generic word but not a generic mark in association with mobile phones and tablets as they are not correlated. Hence restraining ASUS from directly or indirectly using the mark to sell, offer or advertise for sale of mobile phones, accessories or related products using the trademark deceptively similar to Telecare’s.
ENTHIRAN ROW : KALANITHI MARAN GETS RELIEF FROM MADRAS HIGH COURT
As per reports, Writer Aarur Tamilnadan had filed a legal suit ten years ago, accusing Enthiran director S Shankar and producer Kalanithi Maran of Sun Pictures for plagiarizing his content. He accused both of them of violating the Copyright Act and of cheating under Section 420 of the IPC.
The matter recently came up for hearing before the Madurai Bench of the Madras High Court, wherein Justice Pugazhendi absolved Kalanithi Maran of all charges as he was in no way connected with the story. However, the court refused to quash the proceedings against director Shankar.
The contention of the petitioner was that the story of Enthiran is similar to his short story Jugiba. The judge, in his order, stated that the case does not come under the purview of Section 420 IPC but will attract the provisions under the Copyright Act. The case has been transferred to the Egmore Court in Chennai for further proceedings.