Zanjeer decision of Bombay High Court

The decision of Justice Kanthawala in the much awaited Zanjeer case is long in text but to some extent falls short on expectations of those who are more interested in the core issues related to copyright and the various nuances surrounding the issues that have surfaced post amendments in June last year. This is so because, though the order rejecting the interim application for mandatory injunction, makes a good reading as to the pleading of some of leading counsels of Bombay High Court, it refrains from deciding on the core issue of copyright ownerrship itself. But what is more dissappointing is the fact that Justice Kanthawala after recording all the arguments, decided to reject injunction application because the authors of the script of the film Zanjeer, Salim and Javed, delayed action inspite of knowledge about the remake of the film. The brief facts of the case are that Salim Khan and Javed Akhtar alleged infringement of their copyright in the script of the film which they claimed they wrote and sold to Dharmendra and then were commissioned to write it by Prakash Mehra, the producer of the film in 1973. There claim was they wrote the script only for the purpose of incorporation in the film and nothing beyond, therefore producer’s rights were restricted only to the film made in the year 1973 and did not include the underlying “literary work” and therefore the successors to the producer's estate had no right to allow remake of the same film. Plaintiffs had quantified their claims in monetary terms at Rs. 6 crores, the court found that they were not entitled to a mandatory injunction because even if the Court would have come to the conclusion that the Plaintiffs are the owners of the copyright since the Plaintiffs’ claim falls within the provisions of Section 38 (3) (c) and not under Section 38 (3) (b) of the Specific Relief Act,1963, their claims would be satisfied by payment of monetary compensation and not by an injunction. This basically limited the scope of appeal itself because only point to be argued in appeal is 38 (3) (c) and (b) read with Sec. 10 and 14 of Specific Relief Act, 1963. The most important aspect of the entire are a few which are as follows: a) Whether the amendments will have retrospective or prospective effect on the copyright works prior to the amendments and their exploitation after the amendments? That is basically whether the authors of literary and musical works will get benefit of the amendment? b) Whether authors to be treated differently under Sec. 13 (4) and Sec. 17 (b) of the Copyright Act? Will this mean that given the added proviso to Sec. 17, there will not be any commissioning of literary and musical works and it will be only assignment? c) This also raises the question of taxability of these transactions if they are not service anymore and only assingment? Producers should not be paying the Service Tax and should only be paying VAT on the works assigned. This would atleast lessen the tax burden by 7% as Service Tax is 12.36% and VAT is 5% in Maharashtra. But these questions remain unanswered by Justice Kanthawala and we are left high and dry after reading a very interesting Court order taking note of all the arguments and will have to wait for the Courts to opine on these issues affecting the media and entertainment industry since the copyright amendments.

Copyright case against Yamla Pagla Deewana

A case has been filed against the producers of the Hindi feature film "Yamla Pagla Deewana" which was theatrically released in January this year for copyright violation in respect of three songs used in the film without permission from the copyright owners of such sound recordings, Tips Indsutries. The claim has been filed for Rs. 1 crore as per the article here.
The film was recently premiered in television by Sony Entertainment Television, who also have been impleaded in the case before Bombay High court alongwith Yash Raj Studios, who have acquired the Home video rights of the film.

Renewing the Blog

I regret my inability to keep updating this space for a long time now. From now on all my followers will be delighted to get all the Bollywood related legal updates much more scholarly, lively and frequently

Burden of Service Tax

The Union Budget has made the business of licensing of copyrights a taxing affair by making amendments to section 105 and applying service tax "to any person, by any other person, for—
(a) transferring temporarily; or
(b) permitting the use or enjoyment of,
any copyright defined in the Copyright Act, 1957, except the rights covered under subclause
(a) of clause (1) of section 13 of the said Act.”

This provision affects entertainment industry and film entertainment industry significantly. Exploitation of entertainment content is based on transfer of the copyright in such content to the exploiter either by way of license or assignment. Imposition of 10.3% service tax on all such transactions/transfers would mean than effectively Licensor/Assignor shall impose a service tax of 10.3% on the value of copyright transfer which would in turn make entertainment content more expensive for the end consumers i.e cine-goers.

When distributor would license a film to the exhibitors, they will collect a service tax of 10.3% on behalf of the government. The exhibitors in turn would pass on the tax so paid on the final ticket prices thereby raising the prices for tickets or any other entertainment product such DVDs by 10.3%. This would be in addition to the Entertainment tax of 25% (varying from state to state) on the gross receipts and further VAT of 4% on the transaction value as applicable in most of the states.

The Budget speech was a sugar coated knife that would bleed the entertainment industry. Finance Minister, in his speech said :

"India is a nation of movie-goers. The film industry has been experiencing difficulties in importing digital masters of films for duplication or distribution loaded on electronic medium vis-a-vis those imported on cinematographic film, owing to a differential customs duty structure. I propose to rationalise this by charging customs duty only on the value of the carrier medium. The same dispensation would apply to music and gaming software imported for duplication. In keeping with the tradition of Indian cinema, however, I shall provide a surprise ending. In all such cases the value representing the transfer of intellectual rights would be subjected to service tax."

This effectively means that Films imported on cinematograph films for exhibition or on digital media such as digital masters, stampers customs duty for duplication and distribution of CD/DVDs would now be charged only on the value of the carrier medium and the customs duty on the balance value will be exempt. Promotional material such as making of films etc. imported free of cost in the form of electronic promotion kits (EPK)/Betacams are being fully exempted from basic customs duty and CVD. Similar tax treatment, as provided to films above, is being extended to music and gaming software (other than pre-packaged form) for retail sale imported on digital media for duplication.

Pre-packaged Movies, Music and Games (meant for use with gaming consoles) will continue to be charged to import duties on value determined in terms of the provisions of the Customs
Act.

However, the importer would have to pay a service tax of 10.3% for licensing the copyright of the film on the transaction value of such licensing. Therefore, if say a blockbuster like Avatar is imported for DVDs to be sold ideally, Importer can do so in two ways-(a) by importing physical CDs/DVDs of the film to be sold in bulk or retail (b) Licensing the copyright in the film for vide rights exploitation in the territory of India and asking Copyright owner to send the master tape for replicating the same in India and then distributing the physical copies.

As per the Budget, importing physical DVDs/CDs remains taxable as earlier and for licensing the copyright, the service tax would be charged. The rationale behind such imposition is not clear as to how importation of copyrightable materials amount to 'services'.

This would affect the entertainment industry and particularly film industry adversely in more than one way. Apart from the fact that licensing of copyright in films and other entertainment product would be costly affair, for end consumer, increased cost for access to entertainment would indirectly fuel piracy in entertainment product as consumers would be driven towards pirated and cheaper access to such products.

Proposed Copyright amendments-the road ahead for entertainment industries

The amendments proposed by Ministry of Human Resource and Development has been approved by the Union Cabinet as per the press release.
The amendments are result of consistent lobbying by the entertainment industry particularly the artists to have a better bargaining ground based on the legislation.

The proposed amendments concerning the entertainment industry are in the following areas:

a) Introduction of anti-circumvention laws more in line with the World Copyright Treaty and World Performers and Phonograms Treaty of 1996

b) Version recording to be brought under compulsory licensing and interest of copyright holder to be protected while making a sound recording of any literary, dramatic or musical work.

c) Statutory licensing for musical works to allow public access to such over Radios and Televisions.

c) Producers and Directors to be joint Authors of a cinematograph Film and copyright term shall be 70 years for films provided Producers share the royalty with the Directors

d) Writers to retain their right to receive royalties in their contracts with producers through collective societies for any commercial exploitation of their work.

The amendments as proposed if introduced would have significant effect for all the stakeholders in the film business.
The introduction of anti-circumvention laws might be good for the production houses but would it be realistic to have these technological protection measures in the first place? In all probabilities, introduction of these technologies would shoot up the prices which in turn would effect the sale of DVDs and similar formats, the business of which are in any way in red in the present time. In a country where pirated DVDs of films are out in market from bootleg recording in cinema halls or the prints are itself copied due to logistical gaps, what purpose would introduction of Technological protection measures and anti-circumvention laws have to tackle piracy is something only time will tell.

Secondly, what is the basis for extension of copyright of films to 70 years if directors are co-authors? How does making Directors, the co-authors in a film, justify the extension of the term of copyright to 70 years? If a director can be an author in a film why cannot a script-writer, a cinematographer or a screenplay writer not a author? By making Director alone a co-author, the roles of other contributors in the making of a film is undermined. Hopefully, the legislation would only have a prospective effect. Any retrospective effect to extend copyright term to the existing films would have a counter-productive effect in terms of cultural creativity.

Again extension of the term of copyright to 70 years has no reasonable basis. why 70 years and why not 80/90 or 100 years? Afterall there is no restriction for the upper limit for the copyright term in the international conventions

The proposal giving the authors or literary and musical works right to royalty for any commercial exploitation of their work would be seriously prejudicing the interests of the producers as this would change the one-time payment commercial model that is presently followed as it would require a complicated system to be in place where every commercial exploitation has to be traced, accounted for and revenue collected. This would also require revamping the various trade bodies and collective copyright societies that exists whose functioning has to be made more transparent and systematic for such a complicated system to be in place.

Lastly, the proposal for statutory licesnsing of musical works to be available for radio and television broadcast intends to provide a legislative wording for "public interest" aspect opined by Justice S. B. Sinha of the Supreme Court in the case of Entertainment Network (India) Ltd. Vs M/s Super Cassette Industries Ltd. Although the decision deliberated upon the need for public access to musical works and underlined a theme of public interest in such access, the decision itself did not provide any hint or guideline to determine the rates at which such licesning should be allowed by the music companies, which was primarily the moot question of the dispute between the music companies and Radio companies. The decision left it to the Copyright Board to decide the rates which till date remains unsettled.

Hopefully before being legislated and implemented, the wording are reviwed to avoid the confusions as raised in the present post.

Script Plagiarism-Agyaat

The upcoming Hindi film by Ram Gopal Varma, "Agyaat" has been surrounded with controversy of plagiarism pertaining to its script as reported in Times of India reported here

It has been alleged by film writer, Sajid Warrier that his script has been plariarised by Varma for the above film. Sajjid went to Film Writer's Association with his allegation, which after scrutiny of the script has held in favour of Sajjid and has asked Varma to compensate Sajjid to the extent of Rs.8 Lakhs. Varma has moved Bombay High Court against this decision which has asked FWA to file its reply.

This case brings to light too many issues surrounding film scripts and their alleged plagiarism by producers or directors in films, such as “Om Shanti Om” reported here and also recently with “13B-the New Address of Fear”as reported here.

While Indian Copyright Act provides for registration of any work [sec.44-45] and copyright registered work to be prima facie evidence of ownership in the work [sec.48], the question remains whether in absence of such registration, how the priority of ownership in the work can be determined. Also, whether trade bodies such as FWA can sit upon the judgment on the question of plagiarism and consequently, priority of ownership.

It is worthwhile to mention that FWA was established as a trade union body in 1954 and FWA Bye-Laws provides for registration of work such as story, synopsis, concept, screenplay, scenario, dialogue and lyrics for feature films, video films, teleplays, serials and audio cassettes, for its members who have to be employed in the film industry. The bye laws also categorically provide that the registration shall not be construed as ‘Copyright Registration’. The bye-laws provide for Dispute Settlement Committee where only a member may file claim against his employer or another member. This Committee can hear the parties, record their statement, scrutinize their documents and record evidences and then ‘settle the dispute’. There is a provision for appeal as well and party may also approach regular Court in which case FWA shall defend its decision.

FWA being a trade body was formed to ensure minimum wages to the screen writers and has evolved as a strong body representing the rights of Film writers over the years but their locus standi to decide the question of ownership of a script which basically dwells on the question of copyright ownership, even if the same is limited to its members, is doubtful as no such provision is there in Copyright Act. Copyright Act does provide for Copyright Societies [sec. 33] but FWA is no such Copyright society. Secondly, by deciding on the question of ownership within FWA, the powers of civil court as provided in the Copyright Act [sec.55] is undermined.

This apart, the question also arises whether associations such as FWA, can set-up bye-laws based on a contractual arrangement between its members and can decide on the question of copyright ownership.

Hopefully, the case before High Court shall also decide the locus standi of FWA to decide such questions and if the answer is in affirmative then under what provisions FWA draws its authority; moreover, the role of various other similar trade bodies/associations in the film industry to decide questions of plagiarism or copyright violation may also come to light.

International Conference on the Future of Copyright-Bollywood represented

German Ministry of Justice, recently organised the International Conference on the Future of Copyright in Berlin where along side some of the stalwarts of the IP world such as Prof. Reto Hilty, Director of Max Planck Institute Munich, Dr. Francis Gurry, Director General at WIPO, Shira Perlmutter, Executive Vice President of IFPI, Mr. Supran Sen, Secretary General of Film Federation of India and also of Producer's Guild, attended the conference as a guest speaker representing the Indian Film fraternity wherein he presented a paper on the Future of Copyright in the Indian film Industry. The paper highlighted the existing provisions in the Indian Copyright law for films and also the various steps taken by the film industry towards stringent copyright enforcement. The paper also highlights the various proposed legislative measures by Copyright Office in direction of Technological protection measures and Digital Rights Management as a tool to protect copyright content along the lines of similar measures in World Copyright Treaty and WPPT.

No freedom of expression for National Anthem

Ram Gopal Varma, a well known film maker who has made some of the path breaking films in Bollywood, moved Supreme Court against a ruling by Central Board of Film Certification (CBFC) set up under the Cinematography Act, 1952 which had denied Varma the permission for release of the promo on the grounds that the song, Jana Gana Mana Rann, in his forthcoming film titled Rann, had distorted and tampered with the National Anthem and thus violative of the Cinematograph Act and the rules relating to the national anthem contained in the Prevention of Insult to National Honour Act, 1971.

As per the reports, the Supreme Court disapproved of said song saying that nobody has the right to tinker with the National Anthem.The Bench said, “We have read it (the script of the song). It gives a total negative sense. It appears that every line of the national anthem has been proved wrong.”
The Court refused to grant any urgent legal relief to the director and told him to first approach the appellate tribunal, set up under the Cinematography Act, 1952 to challenge the board's decision and also asked the tribunal to decide on Varma's claim the board's decision within a month.

The director challenged the board's decision under Article 19(1) (a) of Constitution of India which guarantees freedom of speech and expression. He has claimed that the song is an independant body of work and merely uses the national anthem in a respectful manner for the purpose of artistic expression. It was also contended on his behalf that Board's decision made television channels and mobile service providers averse to the promos for the fear of insulting the National Anthem.

It would be interesting to see how Varma's artistic expression violates the restriction to freedom of speech under Article 19(2) and section5B of the Indian Cinematograph Act and undermines 'the sovereignty and integrity of India, the security of the state, friendly relations with foreign states, public order, decency or morality, or in relation to contempt of court, defamation or incitement to an offence' and also how it violates section 3 of Prevention of Insult to National Honour Act.

The moot question would be whether adaptation of the lyrics of National Anthem amount to 'distortion' and whether such adaptation amount to violation of 'public order, decency or morality'. Section 292 of Indian Penal Code defines "obscenity" as 'a book, pamphlet, paper, writing, drawing, painting, representation, figure or any other object, shall be deemed to be obscene if it is lascivious or appeals to prurient interest or if its effect, or (where it comprises two or more distinct items) the effect of any one of its items, is if taken as a whole tend to deprave and corrupt persons who are likely, having regard to all relevant circumstances to read, see or hear the matter contained or embodied in it'.

Further, Government of India, Ministry of Information and broadcasting, on 6
December, 1991 has by order issued guidelines to the Board [44 S.O. 836(E)] for the purpose of film certification:
"(a) The objectives of film certification will be to ensure that :
- the medium of film remains responsible and sensitive to the values and standards of society;
- artistic expression and creative freedoms are not unduly curbed.
(b) In pursuance of the above objectives, the Board of Film Certification shall ensure that:
-- Scenes -
(c) showing involvement of children in violence as victims or as perpetrators or as forced witness to violence, or showing children as being subjected to any form of child abuse;
-human sensibilities are not offended by vulgarity, obscenity or depravity;
- scenes degrading or denigrating women in any manner are not presented.
- Visuals or words contemptuous of social, religious or other groups are not presented.
- Visuals or words involving defamation of an individual or a body of individual or contempt of court are not presented.
(d) The Board of Film Certification shall ensure that the film :
- is judged in the entirety from the point of view of its overall impact; and
- is examined in the light of the period depicted in the film and the contemporary standards of the country and the people to which the film relates, provided that the film does not
deprave the morality of the audience."

It would be interesting to see how the balance between artistic expression and restriction to the same is maintained by the Appellate Board for Film certification.

Copyright provisions for films

Under the Indian Copyright Act, films/movies are protected as 'cinematograph' works and relevant provisions pertaining to the same in the Copyright Act are as follows:

	Relevant Section	Provision
Definition	2 (f) 2 (y)	cinematograph film means any work of visual recording on any medium produced through a process from which a moving image may be produced by any means and includes a sound recording accompanying such visual recording and "cinematograph" shall be construed as including any work produced by any process analogous to cinematography including video films; "work" means any of the following works, namely:- (i) a literary, dramatic, musical or artistic work; (ii) a cinematograph film
Exclusions
Dramatic work	2 (h)	“dramatic work” includes any piece for recitation, choreographic work or entertainment in dumb show, the scenic arrangement or acting form of which is fixed in writing or otherwise but does not include a cinematograph film
Photograph	2 (s)	"photograph" includes photo-lithograph and any work produced by any process analogous to photography but does not include any part of a cinematograph film;
Work in which Copyright subsist	13 (1) (b)	copyright shall subsist throughout India in the following classes of works, that is to say, (a) original literary, dramatic, musical and artistic works; (b) cinematograph films
Work in which Copyright shall not subsist	13(3) (a)	in any cinematograph film a substantial part of the film is an infringement of the copyright in any other work;
Meaning of copyright for films	14 (d)	For the purposes of this Act, "copyright" means the exclusive right subject to the provisions of this Act, to do or authorise the doing of any of the following acts in respect of a work or any substantial part thereof, namely In the case of cinematograph film, - (i) to make a copy of the film, including a photograph of any image forming part thereof; (ii) to sell or give on hire, or offer for sale or hire, any copy of the film, regardless of whether such copy has been sold or given on hire on earlier occasions; (iii) to communicate the film to the public;
Ownership of Copyright in films	17 read with 2 (d) (v) 2 (uu)	The author of a work shall be the first owner of the copyright therein "author' means … in relation to a cinematograph film the producer "producer', in relation to a cinematograph film or sound recording, means a person who takes the initiative and responsibility for making the work;
Work on hire	17 (b) 38 (4)	Cinematograph film made, for valuable consideration at the instance of any person, such person shall, in the absence of any agreement to the contrary, be the first owner of the copyright therein. Once a performer has consented to the incorporation of his performance in a cinematograph film, the provisions of sub-sections (1), (2) and (3) shall have no further application to such performance.
Term of copyright in cinematograph films.	26	In the case of a cinematograph film, copyright shall subsist until sixty years from the beginning of the calendar year next following the year in which the film is published.

Films can be registered under the Copyright Act with the Indian Copyright office as per procedure set out here by paying a fee of Rs. 600 to the Copyright office.

Title and Script Registration

India Motion Pictures Producers Association [IMPPA], one of the oldest trade bodies of Bollywood, have started title registration for various Film titles for a certain fee but it is not clear under which legislation this registration would be done, except ofcourse, it continues to register the film titles with itself. Other than IMPAA, The Film & Television Producers Guild of India, also provides similar facility for film producers to register their film titles. This facility ensures against misappropriation of film titles by other members of such trade bodies, which also provides mediation and settlement procedures to settle such title related disputes amongst members but it is not known how such title related disputes can be mitigated between members of two different trade bodies.