COPYRIGHT AMENDMENT RULES, 2021

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I. Introduction

On March 30th, 2021, the Central Government notified the Copyright (Amendment) Rules, 2021. A draft of these rules were released two years ago for public comments (you may read our article covering the 2019 draft here).

II. Key Changes

1. The 2021 amendment replaces ‘Copyright Board’ with ‘Appellate Board’ (reproduced hereunder). However, this seems to be in contrast to the recent plans of the government as per The Tribunals Reforms (Rationalisation and Conditions of Service) Bill, 2021 which is set to abolish the Appellate Board (along with other tribunals and authorities).

Appellate Board– The Chairman and other members of the Board shall be appointed as per the provisions of the Trade Marks Act, 1999; Provided that the Technical Member of the Board for the purposes of the Act shall have the qualifications as specified in the Tribunal, Appellate Tribunal and other Authorities (Qualifications, Experience and other Conditions of Service of Members) Rules, 2020”. Terms and conditions of the office of the Chairman or members of the Board.— The Chairman and other members of the Board shall be appointed for such period not exceeding five years as the Central Government may in each case deems fit:.

2. The 2021 amendment modifies Rule 55 (reproduced hereunder), requiring the copyright society to create a system of payment through electronic modes through which payments are traceable.

Conditions subject to which a copyright society may issue licences, collect royalties and distribute such royalties.— (1) A copyright society may issue licences and collect royalties in accordance with Tariff Scheme in relation to the right or the set of rights in the specific categories of works for which the copyright society is registered as it has been authorised to administer in writing by the members for the period for which it has been so authorised.

(2) The royalty so collected shall be distributed in accordance with the Distribution Scheme subject to a deduction not exceeding fifteen per cent. of the annual total collection on account of administrative expenses incurred by the copyright society and a further deduction not exceeding five per cent. for the Welfare Scheme under rule 7167:

Provided that a copyright society may during the initial period of two years of its registration deduct up to twenty percent of the annual total collection on account of administrative expenses incurred by the society.

(3) The copyright society in relation to collection of royalty under sub-rule (1) and distribution of royalty under sub-rule (2) of this rule, shall create a system of payment through electronic modes and shall establish a system through which the payments so made are traceable.”

3. The 2021 amendment modifies Rule 58 (reproduced hereunder) requiring the copyright society to (i) keep separate royalties of those authors who could not be identified or located; (ii) take all necessary measures to locate the authors and owners; (iii) at the end of three years transfer undistributed royalty of such unidentified persons to the welfare fund of the copyright society.

Distribution Schemes –

(11) A copyright society must ensure that where the royalty cannot be distributed within the time specified in sub-rule (8) as the relevant author or other owner could not be identified or located; such royalties are kept separate in the accounts of the copyright society.

(12) A copyright society must take all necessary measures to identify and locate the authors and other owners and must publish on its website, at the end of every quarter, the following information:

(a) the title of the work;

(b) the name of the author and other right owners of the work, as available; and

(c) any other relevant information available which could assist in identifying the right holder.

(13) In case the royalty due to author and other owners remains undistributed at the end of the period of three years from the end of the financial year in which collection of the royalty occurred, the copyright society shall transfer such amount to the welfare fund of the copyright society.

4. Addition of Rule 65A (reproduced hereunder) which requires the copyright society to make an annual transparency report for each financial year within 6 months following the end of that financial year. Some of the information (along with other information) the report must contain are: (i) number of refusals to grant license; (ii) financial information on total royalties collected; (iii) total royalties paid to author and other owners; (iv) total royalties collected but not yet attributed to author and other owners.

65A. Annual transparency report.— (1) The copyright society must draw up and make public a special report to be referred to as the annual transparency report for each financial year within six months following the end of that financial year. The copyright society shall publish on its website the annual transparency report and ensure that the annual transparency report remains available on its website for at least three years.

(2) The annual transparency report must contain the following information, namely:— (a) report on the activities in the financial year;

(b) number of refusals to grant a licence;

(c) financial information on total royalties collected;

(d) the total royalties paid to author and other owners;

(e) the total royalties collected but not yet attributed to author and other owners;

(f) the total administrative deductions made from royalty collected;

(g) the details and use of the amounts deducted for the activities conducted under the welfare scheme as provided under rule 67; and

(h) Information on amounts received from and paid to the foreign societies or organisation”.

5. The 2021 amendment modifies Rule 70 (reproduced hereunder) requiring every application for registration of a computer programme to be accompanied with the first 10 and the last 10 pages of the source code or the entire source code (if less than 20 pages), with no blocked out or redacted portions.

(5) Every application for registration of a computer programme shall be accompanied by at least first 10 and last 10 pages of source code, or the entire source code if less than 20 pages, with no blocked out or redacted portions the source and object code.

III. What is missing from the proposed rules circulated in 2019?

The proposed rules in 2019 which had created an uproar in the industry and which seem to be missing in the notified 2021 Rules are:

1. Inclusion of ‘each mode of broadcast’ for the words ‘radio broadcast or television broadcast’ in Rule 29 to 31. Rules 29 to 31 deals with statutory licenses for broadcasting of literary and musical works and sound recordings. Readers may recollect that this proposed amendment would have extended the statutory licensing provisions to internet broadcasting in contradiction with the ruling in Tips vs Wynk judgement and beyond the scope of Section 31D i.e. the parent provision. Read about it at length in our older post here.

2. The proposed rules of 2019, provided for Explanation 3 under sub-rule 4 of Rule 68 to be omitted, however, the amendment of 2021 does not touch upon the same. Read about it at length in our older post here.

3. The proposed rules in 2019 had also attempted to add certain parameters to be considered by the copyright society while fixing the tariff scheme, which have been omitted in the 2021 Rules.

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