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Published : July 07, 2014 | Author : deepikazaweria
Category : Intellectual Property | Total Views : 6941 | Rating :

Deepika Zaweria I'm a student at NLSIU, Bangalore

Intellectual Property Rights
Statutory Licensing In India – Critical Analysis


The research aims at critically analyzing the existing recently amended Copyright laws relating to the statutory licensing and to determine how far these amended laws have been successful in balancing the rights of the broadcasters and Copyright owners. The research tries to find out the need of such amendment and how does it affecting the rights of the people. The research also tries to find out the solution of the existing problems related to the same.

Research Design
Aim And Objectives

To critically analyse the existing Copyright laws with regard to the Statutory Licensing and to determine the need to the same and how is it affecting the rights of the Copyright owners and existing Broadcaster’s. And to analyse the reasons for the existence of such problem and to find out the relevant solutions.

Statement For Problem
There is recent amendment happened in existing Copyright Laws regarding to the statutory licensing with respect to the cover versions and literary or musical work and sound recording. This right has given the right to the broadcaster to directly apply to the government for the license which gives Copyright Board the power to decide the royalties reading the copyright work. This gives the rise to misbalancing of rights between the copyright owner and the broadcasters. Thus this misbalance is the matter of concern which directly or indirectly giving rise to various problems.

Scope And Limitation
The research has confined to the problems related to the recent amendment of Statutory licensing in the present Copyright laws and the brief comparison with the other countries specifically to the US.

There is a great need to limit the existing provisions related to the statutory licensing, this is indirectly cause the misbalance between the rights of Copyright owners and broadcasters.

Research Questions
1) Concept of Copyright.
2) What is license? What is the significance of non-voluntary licensing under copyright law?
3) What is the difference between statutory licensing and compulsory licensing?
4) What are the procedural requirement for statutory licensing in India?
5) How the statutory licensing regime in India different from other countries specifically US copyright regime?
6) How does the present amended laws merge with the international scenario of the Copyright?
7) What are the short comings under the statutory licensing in India?
8) What are the steps to be taken to overcome the same?

Research Methodology
The researcher has adopted analytical method of research in proceeding with the project.

Copyright is the exclusive right which is given by the government to the owner of the original work. It’s a legal concept, and given normally for a limited period. The purpose of giving such kind of rights to the creator is basically to compensate for their in return of their intellectual wealth. Copyright is given to the expression of an idea or information. Laws and applicable rules related to the Copyright under the India has been governed under the Copyright Act, 1957.

Latest, few amendments has been made under the Copyright Act, 1957 through the Copyright Amendment Act 2012 which has been the topic of discussion nowadays.
The general rule in copyright law is that the copyright owner holds all the rights subsisting in his or her copyrighted work exclusively. Someone who wants to exercise one of those exclusive rights must obtain the owner's permission, which the owner has an absolute right to refuse.

Need For Licensing
The owner of the work may grant any interest in his copyrighted work to some other person though the way of licensing. It should be duly signed by the owner or by his authorized agent. Licensing allows copyright holders to choose the rights a licensee may exploit without passing title. A copyright owner can choose to grant a license for one or all exclusive rights or grant more limited licenses based on geographic territories or other criteria. Each license can enumerate an array of terms, conditions, limitations, and royalty arrangements as agreed upon in a licensing contract . Licenses, therefore, can produce significant financial income for copyright owners

Non voluntary licenses are necessary in India for public interest. If the owner of the copyright holder denies to republish or if he denies to communicate the same to the public without any reasonable grounds then the complaint can be made against the same in public interest.

In voluntary licensing, the problem which arises is regarding to the unreasonable terms and conditions set by the owner of the copyright work or the copyright societies. This pulls the attention of the courts towards the compulsory and statutory licensing. For the hassle free work or for the reduction in the litigation and negotiation the concept of non- voluntarily license has been introduced. Earlier it was just compulsory licensing now it is extended to the statutory licensing as well.

Non voluntarily licensing is introduced mainly because of the two main reasons-

1) When it is difficult to locate the right owner of the copyright work and get the individual license from him.
2) To avoid the making of monopoly of the copyright owners.
Such licensing ensures public dissemination and authors' compensation and market failure-high transaction costs .

Distinguishing Compulsory Licensing From Statutory Licensing

Compulsory licenses provide for the right to use a copyrighted work if certain procedures are followed and a statutorily defined fee is paid . There is no specific difference as such between statutory licensing and compulsory licensing. In many jurisdictions both the terms are used interchangeably. However the Indian copyright law tries to make a distinction between the two in the sense that under compulsory licensing the rate of royalty is left to be negotiated by the parties but in statutory licensing the rate of royalty is decided by the Copyright Board . In this form of statutory licensing permission is not required before using someone else’s intellectual property, provided that a fee is paid. Licence is created by statute and not the copyright owner nor the user.

Statutory Licensing In India

Section 31C deals with the statutory licensing to make cover versions and rules 23 -28 of the Copyright Rules, 2013 talks about the procedure which need to be followed to get the license .
The recording can only be made after the expiration of the year after the publication of the copyrighted original work and for the person should need to disclose his intention to produce the same in a prescribed manner, copies are supposed to be provided and the royalty which is fixed by the copyright board need to be paid in advance and the royalty for the minimum of 50,000 copies are need to be pay during each calendar year.

Section 31D provides for statutory licensing with regard to the broadcasting of the literary, musical work and sound recording and Copyright Rules, 2013 (rules 29-31) has been disclosed the procedure by which one can get the statutory license.

It gives the right to the broadcasters. If any institution or organization wants to broadcast a work which might include sound recording can do the same but for that they are required to give the prior notice to the owner and need to pay royalty in advance which is fixed according to the copyright board. The announcement of the performers or authors name shall be done during the broadcasting. Records and book of account need to be maintained and shall be presented to the owner when required.

Compulsory Licensing And International Copyrights Regime
• Berne Convention
Article 9(2) of the Berne Convention it talks about the exclusive right granted to the authors for the reproduction of their work in any form. And also gives the authority to the legislation of the member country to provide reproduction in special case and provide equitable remuneration without doing any injustice to the author . Article 11bis (2) of the Convention provides that the legislation in the member country are to prescribe the conditions for the exercise of the broadcasting rights . It can be exercised only in the country recommended by them. Further the legislation in the member country are to prescribe the conditions under which sound recording rights to be exercised. It can be exercised only in the country recommend them .
Under Berne Convention - Article II and III of the Appendix talks about the limitations on the right of translation and reproduction of the work related to the compulsory licensing in certain cases. These are the special provision regarding the developing countries.

India has given the formal consent to the Berne Appendix and act according to the provisions relating to the compulsory licensing.
TRIPS Agreement Article 13 reiterates Article 9(2) of Berne Convention.
• WIPO Copyright Treaty:

Incorporates rights under Berne by reference. Article 10(1) provides for the 3 step test for all Berne works plus computer programs (Applied to the digital as well as physical environment).

Scenario in other countries:
• For international recordings China follows the procedure mentioned Berne Convention. There is no need of any license while making a domestic broadcasting on television and radio. But in commercial broadcasting license is required and for that broadcaster is supposed to give an undertaking of the payment of the royalty to the owner.
• Under the Australian Copyright Act, Section 109 talks about the right of broadcasting of a sound recording provided that the broadcaster is supposed to give an undertaking of the payment of the royalty to the owner or the copyright tribunal is there to determine in the event of dispute.

• In Japan the amount of compensation is determined by the Director General of the CCA (Cultural Affairs Agency). Exemption is granted for Non-profit communication of works which is earlier made public.
• Both statutory licensing and compulsory licensing is found in U.K.
• In United States there is not distinction between the statutory licensing and compulsory licensing. Both used as interchangeable terms. The term compulsory licensing is the creation of congress and the rates of royalty is set by the government. An international dimensions has been added to the Copyright law of the US, when it attached its strings to the Brene Convention in 1989.
A number of various compulsory licensing provisions are there in US law. To enjoy the copyrighted work, one need to notice and pay royalty and if it’s not possible to find the owner then apply to the copyright office. Three copyright royalty judges are there to set the royalty.in US also exact copying is not allowed, protection is the only given to the way of expressing the idea.

Shortcomings Of The Statutory Licensing In India
According to the new amended law two specific sections 31Cand 31D has been added which attracts a lot of attention due to some shortcomings under the law. These two sections have been specifically added to look over the matter of “licensing”. But instead of solving the existing problem, the new amendment raises the eyebrows of many. There are still few problematic areas which has not been addressed, few of them has been discussed below –
To decide the royalty rates, the power has been given to company board, but on what principles the board will decide the royalties for statutory licensing has not been discussed. This will definitely reduce the expensive and lengthy conversation, negotiation or litigation with the copyright society or the rights owner. But still from a sensible point of view there should be some criteria which need to look over while deciding the royalties for statutory licensing. Will it be according to the nature of the work, according to the different territorial basis or suggestion from the stakeholders will be invited to decide the same.
Broadcaster will be more in the favor of the copyright board then the tariff scheme after the amendment as it gives more power to the copyright board, by not letting the parties to negotiate which in result neglecting the rights of the rights owner. Further to challenge the rate fixed by the board for statutory licensing, no procedure is expressly mentioned under the amended Act.

Another problem which has been faced by the Community Radio Rules stations in India is that there are different kinds of broadcasters are active but neither in Copyright Amendment Act,2012 nor in Copyrights Rules the distinction is mentioned. Which is becoming very crucial in present situation. There are basically two kinds of stations - Corporate owned FM radio stations and Community radio stations. Both work differently. No express distinction has been made between the commercial radio broadcasters and the community radio broadcasters. They both have different functions and motive behind broadcasting. Corporate owned station or commercial radio are basically profit oriented and the business is depends upon the paid programs and advertisement. Whereas the community radio stations are different in both ways, in terms of purpose and operating sense and provided only to nonprofit legal entities such as krishi vigyan kendras and educational institutions. The content is basically development. These stations normally struggles for financial sustainability and depends upon small donations from the state, communities and specific agencies. But this is not the same case with the commercial radio stations.

There are also complaints regarding the insufficient compensation/royalty provided to the copyright owner in exchange of their copyright work. The rights of the copyright owners has been denied. The term “exclusive right” which is the basis of the Copyright Act has lost its significance.

More difficult to get cover version
If talk about the cover version then it became more difficult to get a cover version, as now after the amendment the time period after which one can produce a cover version has been extended from 2years to 5 years. Also the restriction over the medium, should be the same as it was originally produced.

But instead of all the restrictions mentioned in the amendment, the applicability of the provisions are still in question. The recent example is the song “Kolavery Di”,which is recorded in many cover versions without the statutory permission and still in use. So only making of laws are not enough, the same need to be in use also.

The Department Related Parliamentary Standing Committee , observe the ground reality and the shortcomings of the laws specially related to the usefulness and practicability of the advance payment of royalties, practicability of taking the names of the artists and

Rights of the owners and the principle performers has been denied in a way by not giving them the exclusive right which they are supposed to entitle. Right to equality which is mentioned under Article -14 of the Constitution, Article -19(1) (g), Article – 21 and Article 300A has been denied to the owners. This particular aspect has been mentioned in the writ petition which has been filed by the Super Cassette or T-series and Venus Entertainment stating that these provisions are unreasonable and in violation of fundamental right to trade and carry out business. Noticeably gives the power of excessive delegation to the copyright board by deciding the royalty of the work which seems to be unregulated discretionary power and also against the natural justice. The writ petition firstly filed before the Supreme Court but later it was asked to file the same before the High Court.

The arguments which has been discussed are follow –
1) Natural Justice – before granting the statutory license the statute does not gives the reasonable opportunity fo being heard which is against the principles of natural justice.

2) Article -14- the provision is violation of the Article-14 of the constitution as it creates a distinction between the copyright owner and the broadcaster. Copyright owners are deprived of the right to contract while the broadcaster are free to trade without any problem.

3) Article 19(1)(g) and 21 of the constitution – the fundamentals of these articles has been denied by not letting the parties to contract. It has been also argued that the provision of compulsory licensing is just for price controlling and royalty subsidizing without any legal justification as there is not public purpose behind it. Copyright work is not an essential commodity. However the public purpose argument has been denied on the basis of inclusion of state’s interest ,the question of essential commodity is still unanswered.

4) Article 300A – according to the amended provision, it enables the deprivation of property which also affect the benefit of due process which is supposed to be given to the copyright owner.
However it is not exactly true that the opportunity has not been given to the copyright owner but nit given the opportunity to contract comes under this scope.

Suggestions To Overcome The Issues
• The provisions which are incorporated in our copyright system is insufficient to cop up with the society demand. As the provisions found in our system is different and incomplete in their own way. If we look around the other countries in the world, the laws and provisions are way more specific and cover a variety of situation.
• A distinction should be made between the Community Radio broadcaster and the commercial broadcaster. The community broadcaster should be allowed to broadcast the copyrighted work without any payment of royalty, or if there is need to impose any fees, the same should be the nominal.
• It affects the competition, to keep the competition in market, licensing should not be very liberal.

Copyright only protects the expression of an idea. Anyone can create a similar work only the exact copying is not allowed. The idea or expression should be different.
Copyright is intellectual property and should be protected like the real or personal property .
If the copyright owners have the exclusive right over the work they have done the why there is a need to intervene the govt. who didn’t even know the exact value or hard work done over the work. What can the owners are suppose to do if the copying of their work is beyond their control, although facilitated by the government itself. When the rate is fixed by the government there will be more chance to get the political influence over it and Because of the less reimbursement there is less inventiveness regarding with the new work and if the rate if fixed by the government then it takes another law to change it.
When the market rate comes out higher then what is expected, it can frustrate both the users and owner and to escape this situation negotiation is the best solution.
Another area which is need to take concern is the rates. Government use normally the national rates not area based. and if there rates are on fault then it would result in either overcompensation or under compensation which will definitely hit any of the parties.

There is a need to limit the principle lays down regarding to the statutory licensing and also need to protect the exclusive rights of the owner. The mandatory licensing should be an exception rather than making it a rule.it should not use to exploit the owner itself. There is a need to maintain the balance. The market game should be fair.
• ,Robert Cassler, COPYRIGHT COMPULSORY LICENSES-ARE THEY COMING OR GOING?, 37 J. Copyright Soc'y U.S.A. 231 1989-1990
• Jason S. Rooks, Constitutionality of Judicially Imposed Compulsory Licenses in Copyright Infringement Cases, 3 J. Intell. Prop. L. 255 1995-1996

• Gregory J. Battersby & Charles W. Grimes, Licensing Royalty Rates 2, (Aspen Law & Business 2006) (2000). See also Russell L. Parr, Royalty Rates For Licensing Intellectual Property,p. 35-51, 55, 124 (2007)

• Armen Boyajian,The Sound of Money: Securing Copyright, Royalties, and Creative "Progress" in the Digital Music Revolution, 62 Fed. Comm. L.J. 587 2010

• Donald F. Johnston, Copyright Handbook, 115 (1978); also see Midge M. Hyman, Note, The Socialization of Copyright: The Increased Use of Compulsory Licenses, 4 CARDOZO ARTS & ENT. L. J. 105, 107 “a compulsory license resembles an unwritten contract which gives the user unlimited use of the work or product in return for the promise that he will pay a fee or royalty at some later date”.


The  author can be reached at: deepikazaweria@legalserviceindia.com

Writing award This article has been Awarded Certificate of Excellence for Original Legal Research work by our Penal of Judges

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