Royalties and Rights Sharing in Film Industry in India Post Copyright Amendment Act 2012 Impact on Contractual Freedom: A Comparative Study with the US and the UK Copyright Regimes

Abstract

The Indian Copyright Act, 1957 (the Act) governs copyright law in India. It finds its roots in its colonial past, being heavily influenced by the Copyright Act of the United Kingdom of 1956. The Act has served well for long, but with technological developments and increasing discontent among creators/authors (mainly singers, lyricists, writers) of works, who felt exploited by the rights and royalty sharing mechanism that existed, the Copyright Amendment Act, 2012 (“Amendment”) was introduced on 21 June 2012. Prior to its formal notification and ratification by both Houses of the Parliament, the Amendment was debated upon for almost two years. The Amendment has been enforced in order to provide legal protection to the authors of the work, remove operational difficulties, and to address the newer issues that have emerged. The Amendment further aims to be in consonance with the World Intellectual Property Organization (WIPO) Internet Treaties, namely the WIPO Copyright Treaty (WCT) and the WIPO Performances and Phonograms Treaty (WPPT) which have set the international standards post technological advancements. The Amendment, at its heart is “pro-author” and attempts to create a level playing field between the authors of the work and producers in contractual arrangements by setting forth certain conditions that contracting parties cannot supersede. The film industry in particular was fairly divided on its support for these changes. The Amendment perhaps earmarked a new era for the media industry as it seeks to protect the rights of authors of literary works like lyrics or scripts and musical works, and grant them an equal right in the royalties earned from exploitation of their creations. The Amendment has already shown signs of changing the media and entertainment industry dynamics, and transactional and contractual framework surrounding the same. While the Amendment has received widespread support from various corners including the International Confederation of Authors and Composers, the producers and record labels have expressed unhappiness and alleged that the Amendment is a restraint to trade and restrictive of free market mechanism where parties have the freedom to agreement. The paper is an attempt to analyse the possible impact of the Amendment on the freedom to agreement, examine its validity under international legal framework and compare “pro-author” provisions in the US and the UK that affect the rights and royalty sharing mechanism. The paper will also compare the effects with the pre-Amendment scenario. The paper shall further focus on the copyright regimes of USA and UK with regard to their rights and royalty sharing mechanism in contractual arrangements. The objective of the paper is to understand whether the Amendment should be seen as the genie’s lamp gifted to the creators of the work, or as opening of a Pandora’s Box, creating business paradoxes and complicating the market dynamics.