The Statutory Mechanical License in India

Whose Version [of the Law] is Correct ?1

To remain ignorant of things that happened before you were born, is to remain a child. - Cicero Nikhil Krishnamurthy* Introduction There has been a spate of litigation in India involving the provision allowing version recordings2 of musical works.3 The principal players in these lawsuits are Saregama India Ltd. (formerly known as the Gramophone Company of India), Super Cassette Industries Ltd., Mars Recording Co. Ltd. and Bathla Cassettes. videos of their compositions are debasing the compositions. In this article, I will attempt to answer some of the questions surrounding this controversy. A Brief Note on the Music Industry in India

The Indian Music Industry, unlike the rest of the world, is largely driven by film music. It has been the genThe issue in question is simply:- eral practice for film producers to whether Section 52 (1) (j) of the Copy- acquire ownership of copyright in right Act, 1957 requires a recording musical works from company to take conthe music composer, sent from the owner whether Section 52 (1) produce sound reof copyright in the cordings for incorpo(j) of the Copyright musical work to ration into the film Act, 1957 requires a make a second or (generally in song subsequent recordrecord company to take and dance seing of that work, if consent from the quences) and then such owner has alassign the copyright owner of copyright in ready authorized a in the sound recordthe musical work to previous recording of ings and underlying make a second or that musical work. musical works of the subsequent recording songs to a record laThere are also sevof that work, if such bel. The record label eral concerns on the would typically repart of the original owner has already lease the sound remusic composers authorized a previous cordings in the form that companies makrecording of that musi- of an album (coming cover versions, cal work. monly known as the remixes and music

1 2 3

This article is dedicated to my childhood friend Calvin Valentine Sequeira (19742006), who introduced me to good music. May he rest in peace. Section 52 (1) (j), Indian Copyright Act, 1957; Section 19 (2) Copyright Act, 1911. References to musical works in this article include reference to any associated lyrics.

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OST or Original Sound Track abroad). The record label, in its arrangement with the film producer may either buy out the copyrights in the musical works and sound recordings for a one time royalty amount, or pay royalties for the exploitation of the mechanical right in the musical work, and the master right in the sound recording, on each unit of the album sold. In effect, the record label would attempt to control, as far as possible, not only the copyright in the sound recordings, but also the copyright in the underlying works, i.e., musical works and associated lyrics.

From the early 1900s one company, namely, the Gramophone Company of India (which started off as the branch office of the Gramophone Company Ltd., London) had a virtual monopoly over the record market till about the late 1960s when Polydor India Ltd. (now Universal Music India Ltd.), became a serious rival.5 Let us contrast this position with the position in other parts of the world, such as in UK and USA.

The three key players are the music composer/ songwriter, the music publisher and the record label/ other music user. The music composer generally assigns his rights in his musiThe primary focus of the record label cal works to a music publisher. The would naturally be to sell as many music publishers job is to ensure copies of the album in the market.4 that the musical works are exploited Therefore, anything that could in all possible ways, so as to ensure threaten their market for the album that he and the music composer would be viewed unfavourably, such earns as much as they can from such as the statutory mechanical licens- works. Therefore, for example, the music publisher may approach a film ing provisions. studio and license the right to incorWhat emerges from the above is that porate the musical work in a film, the music composer has been largely under a synchronization license; or, marginalized, and the only key play- he may approach various record laers in the Indian bels to make sound music industry are recordings of the muthe film producers The three key players sical work, using difand the record laare the music comferent performers; or, bels, which is indeed poser/ songwriter, the he may license ring a sad state of affairs music publisher and tones of the musical since copyright was the record label/ other works to a cellular meant to protect the music user. operator. The ownercreators of original ship of copyright in works. This is why the musical work would not pass to the duration of copyright in original the film studio or record label or other works is tied in with the lifetime and user, but would merely be licensed. death of the author, not the owner of It is common to see the same song percopyright. formed by different performers, and
4 Although the Indian labels have woken upto the fact that they possibly control a vast repertoire of music publishing rights and are now aggressively licensing, inter alia, ring tones, ring back tones, true tones etc. For an interesting discussion, see http://www.bajakhana.com.au/Sound-rec-Ind3D.htm

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in many different cases, in their own individual styles, in foreign jurisdictions. So for example, the song Knocking on Heavens Door has been performed by Bob Dylan, Eric Clapton and Guns N Roses. It appears that there may well exist over 70 different versions of this song!6 Each performance results in a sound recording, copyright in which is owned by the record label that produced it. However, each record label has to pay what is known in industry parlance as a mechanical royalty to the music publisher of this song on the sale of each unit, who will then split such amount, usually in the ratio of 50:50, with the music composer, who in this case is Bob Dylan. It is interesting to note that the song Knocking on Heavens Door was originally composed by Bob Dylan for the movie Pat Garrett and Billy The Kid. What emerges from the above discussion is that the music composer continues to earn royalties from his composition throughout his lifetime (and after) through the efforts of his music publisher, which is quite a contrast to the Indian position. A music publishers commercial interests are vastly different from that of a record label. A music publisher will want to commercially exploit the musical work as much as possible, and in as many ways as possible, while the record label will want to protect its investment in the sound recording produced/acquired by it. In India, till now, there has never been a clear delineation between a music publisher and a record label, and the record label wore both hats, without properly exploiting their music publishing rights. That situation has changed in recent times.
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You will remember that a record labels main interest is to protect the recording it has acquired from the film producer. Naturally, if a competing sound-alike version of an OST is released by a different record label utilizing the statutory mechanical license provisions under the Act, it affects the sales of the first sound recording. Since they claim to own the underlying rights in the musical works, they are in a position to approach the Courts with the argument that their consent is required for making a cover version. Historical Background of The Statutory Mechanical License It must be remembered that the audio CD that we take for granted today is merely the latest form in which musical works are reproduced. The first type of device which reproduced a musical work was possibly the music box. It comprised a metal cylinder with small protrusions arranged all over the drum. When the device was primed by winding it, the cylinder would turn and each metal protrusion would come in contact with a metal strip and twang it, and these strips produced a different sound. A combination of all these sounds would be a mechanical reproduction of the musical composition which could be heard. Music boxes, commonly, would have the figure of a ballerina doll or some such doll which would turn round and round, when the composition was mechanically reproduced in this manner. As the market for such music boxes was small, most composers did not feel that such manufacture unduly disturbed their exclusive right to reproduce their compositions. The manufacturers of such music boxes did not enjoy any copyright in

http://www.songfacts.com/detail.php?id=3002

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such music boxes, akin to copyright in the modern sound recording. The invention of the piano roll changed all that. The piano roll comprised a roll of paper with perforations on the paper. When this roll was inserted into a special type of piano called a player piano, the piano would automatically perform the music composition recorded on the piano roll by spooling the roll and passing air through the perforations, which mechanically reproduced the musical work. As this became a substantial market, music composers woke up to the fact that their exclusive rights to reproduce the musical compositions, in this manner, were being infringed. Surprisingly, however, in 1908, the United States Supreme Court held that piano rolls and gramophone records were not copies of musical compositions, and therefore not an infringement of copyright in musical composition.7 The Court of Appeal in the UK had also arrived at the same conclusion earlier in 1900 by holding that the piano roll was not a reproduction of the musical composition,
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reasoning that a perforated roll is not a copy of sheet music.8 The US Congress negated the decision in White-Smith, and specifically incorporated, in the Copyright Act of 1909, the right of the music composer to authorize the making of mechanical reproductions of music in the form of piano rolls and the like.

It was at this stage that US Copyright law also introduced the statutory mechanical recording license. The reason behind this was the Aeolian Company, a leading manufacturer of pithe US Congress proano rolls which had vided that if the copyacquired the excluright owner had permit- sive mechanical reproduction rights ted the mechanical from various music reproduction of his song, thereafter anyone publishers to make piano rolls of their else could make mecompositions. The chanical reproductions fear was that other of that song on payment smaller players would not be able to of a statutorily precompete with the scribed royalty per unit monopoly held by sold. This, in effect, is Aeolian. Therefore, the statutory mechani- the US Congress provided that if the copycal license to make right owner had persound recordings of mitted the mechanipreviously recorded cal reproduction of musical works which his song, thereafter appears in Section 52 anyone else could make mechanical re(1) (j) of the Indian productions of that Copyright Act, 1957. song on payment of a The US has continued statutorily prewith this provision in scribed royalty per their new copyright law unit sold.9 This, in effect, is the statuof 1976. tory mechanical li-

White-Smith Music Pub. Co. v Apollo Co., 209 US 1 (1908) Boosey v Whight, [1900] 1 Ch. 122 See Kohn on Music Licensing, 2nd Edition, Aspen Law & Business, at page 657

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cense to make sound recordings of previously recorded musical works which appears in Section 52 (1) (j) of the Indian Copyright Act, 1957. The US has continued with this provision in their new copyright law of 1976. In the UK too, the Copyright Act, 1911 recognized the right of the music composer to authorize mechanical reproduction of his composition and similarly negated the effect of the decision in Boosey v Whight. At the same time, like the USA, UK too introduced the statutory mechanical license in Section 19 (2) of the 1911 Act, with a view to encourage the growth of the infant recording industry and prevent the establishment of monopolies in the United Kingdom.10 This provision was continued in the 1956, Act in Section 8 and discontinued in the Copyright, Designs and Patents Act, 1988, despite the recommendation of the Whitford Committee Report.11 The UK now has a collecting society, MCPS, which licenses the mechanical rights in musical works.

reservations and conditions on the exclusive right granted to the author of a musical work and to the author of any words, the recording of which together with the musical work has already been authorised by the latter, to authorise the sound recording of that musical work, together with such words, if any; but all such reservations and conditions shall apply only in the countries which have imposed them and shall not, in any circumstances, be prejudicial to the rights of these authors to obtain equitable remuneration which, in the absence of agreement, shall be fixed by competent authority.

As will be evident from the foregoing discussion, the expression mechanical right meant the right to authorize a mechanical reproduction of a musical work onto a mechanical contrivance, such as a music box or perforated piano roll which would reproduce audibly the musical work by meThe genesis of the chanical means. The The genesis of the statutory mechaniexpression mechanistatutory mechanical cal license is Article cal right in respect of XIII of the 1908 Berne license is Article XIII of sound recordings Revision of the Berne the 1908 Berne Revihas stuck and conConvention in which sion of the Berne Continues to be used the Parties were even in the present vention in which the given the right to inday, when musical Parties were given the troduce limitations works are electroniand conditions. right to introduce limically/ digitally reprotations and conditions. duced onto audio Article XIII provides as follows: compact discs, and Each country of the are no longer mechanically reproUnion may impose for itself duced.
10 See Copinger and Skone James on Copyright, 14th Edition, 1999, Sweet & Maxwell, at page 1547, and the Report of the Law Reform Commission of Hong Kong, Reform of the Law Relating to Copyright, November 1993, at page 80 (www.hkreform.gov.hk/ en/docs/rcopyright-e.doc) Cmnd 6732, Report of the Committee to consider the Law on Copyright and Designs, March 1977, pp 86-87

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The Statutory License/Compulsory License Distinction At this stage, it is important to understand the distinction between a statutory license and a compulsory license. Where an exclusive right is granted, but the statute allows a user, without the prior permission of the right owner, to carry out the acts covered by the right upon completion of certain procedures, possibly including payment of royalties, a compulsory or statutory license is said to exist. Thus, the law may grant the author the right to authorize the making of sound recordings of his work, but at the same time may provide that such recording can be made without the prior permission of the author, where the author has previously agreed to the making of a sound recording of the work, and provided that the user pays royalties as prescribed by law. Sometime the term compulsory license is applied to provisions requiring application to the court, whereas a statutory license may be available merely on fulfillment of conditions such as notice and payment.12 Therefore, anyone intending to make a subsequent sound recording of a previously recorded musical work may simply comply with the notice and payment provisions of the Copyright Act, 1957, and will not require the consent or license of the owner of copyright in the musical work. The legislative intent in requiring a notice to be sent to the copyright owner is to provide the copyright owner a chance to dispute that any

previous recording of his work was authorized by him. It is possible that someone has made and published an unauthorized first recording of a musical work, in which case the copyright owner can refuse a second recording of that work because the first had never been authorized by him.13 In this regard the following passage from the Irish Parliamentary Debates is particularly illuminating: The point about copyright in musical works is best explained in this way. The author has copyright in the actual musical air. There is also further copyright in gramophone reproductions. The original composer can control the reproduction in the first instance. He can refuse to have records made of the air, but if the law is that a right is given to any one person, on particular terms to reproduce, the same right must be given to all comers on the same terms. This deals with the particular limitation upon the acquiring of copyright by the owner of the air. Sub-section 2 of Section 169 says: It shall not be deemed to be an infringement of copyright in any musical work for any person to make within Saorstt Eireann records, perforated rolls, or other contrivances by means of which the work may be mechanically performed if such person proves (a) that such contrivances have previously been made by, or with the consent or acquiescence of, the owner

12 13

World Copyright Law, J.A.L. Sterling, Sweet & Maxwell, 1998 See for eg. Regulation 9, Indian Copyright Regulations, 1914 and Halsburys Laws of England, 4th Edition, Volume 9 at page 564, Note 5

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of the copyright in the work, and has given certain notice. All that is intended to be established is that any person within the Free State, on proving that he is merely taking to himself rights which have previously been granted by the owner of the copyright to somebody else, is kept outside infringement of copyright. A similar point about notice applies, but this section means merely that at the point where the first owner of the copyright has allowed records to be made he cannot prevent all and sundry records from being made on payment and acceding to the conditions, but the conditions are not to be given to one or two or three but must be assigned to all.14

gramophone companies to record copyright material which the composer has already authorized for recording, shall continue.17 It must be remembered that when the Section 52 (1) (j) provision was first drafted, it appeared as Clause 30 of the Copyright Act, 1955 (Bill XV of 1955), with the marginal notation: Compulsory licence to make mechanical contrivances. The Notes on Clauses with respect to this provision states that the clause is based upon Section 19 (2) of the UK Act [1911] It was called a compulsory licence under that Bill as one had to make an application to the Copyright Board to determine the rate of royalty payable, as opposed to a predetermined rate applicable to all in the case of a statutory license.

The Preface to the Commentary on the Indian Copyright Act, 1957 by T. R. Srinivasa Iyengar 15 states that the scheme of the Once the 1957, Act came Indian Copyright into force, the Copyright Act, 1957 (XIV of Board in an Order dated 1957) in India is 28th April, 1959 deterderived from the mined the rates of royalreport of the C o p y r i g h t ties payable at 5% of the Committee in 1952 ordinary retail selling which formed the price of the record at the basis of the latest market, or catalogue English Copyright selling price of single Act of 1956.

records The 1952 Report, or 16 the Gregory Report as it is known, concluded that Our second recommendation, namely, that the right of the
14

Once the 1957 Act came into force, the Copyright Board in an order dated 28 th April, 1959 determined the rates of royalties payable at 5% of the ordinary retail selling price of the record at the market, or catalogue selling price of single records to the public. to the public. By Order dated 8 th January, 1997 the Copyright Board continued the same rate of 5% and

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Seanad Eireann, Volume 8-23, March 1927, Industrial and Commercial Property (Protection) Bill, 1926Report Stage, pp. 647-648 (http://historicaldebates.oireachtas.ie/S/0008/S.0008.192703230006.html) 1959, Law Book Company Supra n. 20 at page 32

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saw no reason to increase it. In the present day scenario, there is good reason to see an upward revision of statutory rate. Copyright In Sound Recordings While providing musical composers to prevent or authorize the first recording of their musical works, UK law recognized for the first time, that makers of such records, contrivances, perforated rolls etc. had a copyright in such records, though for a shorter period of time. As this right was neighbouring to the copyright in original musical, literary, dramatic and artistic works, the said copyright in sound recordings became known as a neighbouring right.18 This right is meant to protect the investment made by a record company in producing a sound recording of a musical work.

same time, several recordings of Ive Got You Under My Skin have been recorded by numerous recording artists over the years. A completely separate copyright exists for each individual recording the sequence of sounds that make up the performance of the song by a singer and orchestra. These recordings are owned by the respective record companies that commissioned their creation. For eg., Frank Sinatras 1956 recording of Ive Got You Under My Skin is owned by Capitol Records; his 1963 recording of the same song is owned by Reprise Records.19

Sound recording technology developed rapidly after the music box and piano roll and morphed into the [Edisons] wax cylinder, the An extract from Kohn on Music Li- [Berliners] gramophone record, the censing will better illustrate this reel-to-reel (or spools), the compact point: audio cassette and finally, in the The copyright in a sound present day, the compact disc, mini recording is completely separate disc and so on and so forth. With the from the copyright in the emergence of legal digital distribution underlying song of sound recordings featured in the over the Internet, insound recording. With the emergence of dustry experts preFor example, there legal digital distribution dict the death of the exists a valid compact disc in the of sound recordings copyright in the next 3-4 years. Digisong Ive Got You over the Internet, indus- tal distribution will try experts predict the Under My Skin by be a boon for artists Cole Porter and death of the compact and composers, the copyright is since that will do disc in the next 3-4 owned by Warner away with publishyears. Chappell Music, ing costs commonly Inc., a music deducted by record publishing company. At the labels from royalties payable, such as
18 Other examples of neighbouring rights are performers rights, broadcast reproduction rights and copyright in films. The term of protection for such rights are much lower than that for original works. Kohn on Music Licensing, 2nd Edition, 2000 Supplement, Aspen Law & Business, at page 269.

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on blank media, packaging and distribution. Such costs will become virtually non-existent when it comes to legal distribution of music on the Internet. Coming back, makers of such sound recordings began to enjoy copyright in them from 1911 in the UK. So for example, the Copyright Act, 1911 provided the maker of a mechanical contrivance, a copyright in such contrivance in like manner as if such contrivances were musical works.20 While the 1911 Act (which was also extended to India) gave the maker of a record a copyright, the extent of the copyrights was not clearly specified. So while a music composer copyrights included the right to authorize the public performance of his musical work by any means, whether live, or on a record, it was not clear whether the maker of the record had a similar copyright to authorize a public performance of his record. That position was clarified, first in Australia in 1929, and in 1934 subsequently in the UK.21 It is most unfortunate that it has been urged, before various courts in India, to the detriment of the poor composer, that a music composers right of public performance in his musical work applies only in the case of a live performance while when the same composition is publicly performed using a sound recording, the music composer will have no right to receive a royalty and that the only royalty payable is to the record label who
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owns the sound recording. As can be seen from the decisions in Cawardine and 3 DB, the question, historically speaking, was never whether the composer had this right, but whether the record company had this right in addition to the composer. The composer/ owner of copyright in a musical work has always had this right, regardless of the method of public performance, whether live or recorded.22 It is important to remember that the sound recording would not even exist, but for the music composition, and any public performance of the recording must necessarily mean payment of royalty to the composer of the tune incorporated in such sound recording, if she or he is also the owner of copyright in the musical work. In order to understand this more clearly, one may take the analogy of the statutory mechanical licensing provisions themselves. A statutory licensee is expected to pay a statutory royalty on each sound recording made, for exercising the right of reproducing the musical work in the form of a sound recording. By the same logic, a licensee publicly performing a sound recording would also necessarily have to pay royalty for exercising the public performance copyright of the musical work contained in such sound recording. To take another example, if another record label in a foreign country wants to reproduce a sound recording made in India and sell it in such

22

Section 19 (1), Copyright Act, 1911, See also Cmnd. 8662, the Report of the Copyright Committee, October 1952, at page 31 Australasian Performing Rights Association v 3 DB Broadcasting Co. Pty.Ltd., 1929 VLR 107 (Supreme Court of Victoria); Gramophone Co. v Stephen Cawardine (1934) Ch. 450 However, US and Singapore law still do not recognize a public performance right in sound recordings. In the US such a right exists for the limited purpose of digital performances such as Internet, radio etc.

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foreign territory, it would have to pay the Indian record label a master license royalty to reproduce the master sound recording produced by the Indian label, and also pay the owner of copyright in the musical work contained in such recording a mechanical license royalty as each time the master is duplicated, the original underlying musical work is also being duplicated.

Therefore, after some lobbying, certain additional provisions were inserted into Section 52 (1) (j) to address the concerns of the recording industry. The salient amendments are summarized as under: -

First, no record label could bring out a version/ cover recording under the provisions of Section 52 (1) (j) until the expiry of two years from the pubIt must be noted that copyright is en- lication of the first recording. Of joyed by the maker of a record, course, nothing prevents a record whether his is the first recording or company from seeking a voluntary lithe second or subsequent recording cense from the copyright owner unmade under the provisions of the der Section 30 and bringing out a verstatutory mechanical license provi- sion recording within this period of sions. The unfortunate 2003 ruling of two years. This restriction, therefore, the Delhi High Court23 holding that does not inhibit the right of the copycopyright does not subsist in sound right owner to voluntarily license his recordings made under the statutory musical work during this period or mechanical licensing provisions of give any exclusive license to the Section 52 (1) (j) of the Copyright Act, record company publishing the first is therefore clearly per incuriam and recording for a period of two years. contrary to copyright law. That mat- Of course, since the music industry ter is in appeal and it is hoped that is mainly driven by the Honble Division film music, ideally, Bench will reverse the copyright owner The unfortunate 2003 that finding.24 ruling of the Delhi High ought not to allow The 1994 AmendCourt holding that copy- sound-alike recordment To Section 52 ings, as this will afright does not subsist in fect the economic in(1) (j) sound recordings made terests of the record In 1994, extensive company bringing under the statutory amendments were out the first recordmechanical licensing made to Section 52 25 (1) (j). You will recall provisions of Section 52 ing. There is now a proposal to increase that I have earlier (1) (j) of the Copyright this incubation pementioned that a Act, is therefore clearly riod to five (5) years. record label will look In other countries per incuriam and conunfavourably upon where similar provitrary to copyright law. any act that reduces sions exist, a version the market for its may be released on first recording.
23 24 25 Super Cassette Industries Ltd. v Bathla Cassettes, 2003 (27) PTC 280 (Del) FAO (OS) 27 of 2004 To see the version of Section 52 (1) (j) prior to the amendment please see http:// www.ircc.iitb.ac.in/webnew/Indian%20Copyright%20Act%201957.html. For the present version, see http://www.indialawinfo.com/bareacts/cpr.html

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the very next day after the first recording is published. Second, it was mandated that the version recording could not be issued with misleading packaging. This seems fair enough. The intention was to stop the makers of second and subsequent recordings from passing off those recordings as the first recording, which is a legitimate concern. Third, a provision for allowing the owner of copyright in the musical work to inspect the records and books of account of the makers of second and subsequent recordings, was incorporated. This was to protect the owner of copyright in the musical work from wrong accounting by the makers of second and subsequent recordings, and is also a legitimate concern. It is important to note that the provision itself was not removed. It still exists as a defence to infringement. Arguing that the provision requires consent from the owner of copyright in the musical work makes the provision nugatory. If consent was required, there would be no need to continue to place the provision in Section 52, which pertains to defences, and one could simply take a voluntary license contemplated under Section 30. Moreover, such an interpretation would be contrary to the meaning of Article XIII of the Berne Convention that we have seen earlier. Where there are two possible interpretations (and I submit that there is only one in this case, the one that requires no consent), the interpretation that conflicts with provisions of an international convention to which India is a member, must be rejected in favour of the one that is consistent.
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After the amendment, it was noticed that the pre-existing parts of the section which continued in the amended section was lacking a few words like previously and and and a few commas. It has been argued that this now means that the Section mandates the consent of the copyright owner. I submit that this must not be given any importance whatsoever and must be chalked down to sloppy draughtsmanship, nothing else. Several reasons support this point of view, such as (a) the fact that the Section continues to exist as a defence itself is evidence enough that the requirement of consent would make it redundant. (b) Moreover, neither the Statement of Objects and Reasons for the 1994 amendment, nor the Parliamentary Debates, throw any light for the reasons for amendment which must be taken to mean that the amendment did not intend to make any drastic change to the provision such as to require the consent of the copyright owner for making second or subsequent recordings, but merely meant to address issues of misleading packaging, accounting etc. (c) Of course, the requirement of consent would make it conflict with Article XIII of Berne as already stated above. With respect to point (c) above, it is relevant to quote from a judgment of the Honble Supreme Court26, as under ..international treaties have influenced interpretation of

Peoples Union for Civil Liberties v Union of India, (2005) 2 SCC 436

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Indian law in several ways. This Court has relied upon them for statutory interpretation, where the terms of any legislation are not clear or are reasonably capable of more than one meaning. In such cases, the courts have relied upon the meaning which is in consonance with the treaties, for there is a prima facie presumption that Parliament did not intend to act in breach of international law, including State treaty obligations. It is also well accepted that in construing any provision in domestic legislation which is ambiguous, in the sense that it is capable of more than one meaning, the meaning which conforms most closely to the provisions of any international instrument is to be preferred, in the absence of any domestic law to the contrary. The above principle has been reiterated in various earlier decisions of the Supreme Court27, including in the context of interpreting another provision of the Copyright Act, in Gramophone Co. v Birender Bahadur Pandey, AIR 1984 SC 667, extracted as under: it becomes clear that the word import in Section 53 of the Copyright Act cannot bear the narrow interpretation sought to be placed upon it to limit it to import for commerce. It must be interpreted in a sense which will fit the Copyright Act into the setting of the International Conventions We have, therefore, no hesitation in coming to the conclusion that
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the word import in Sections 51 and 53 of the Copyright Act means bringing into India from outside India, that it is not limited to importation for commerce only but includes importation for transit across the country. Our interpretation, far from being inconsistent with any principle of International Law, is entirely in accord with International Conventions and the Treaties between India and Nepal. And that we think is as it should be. It is rather ironic that the Appellant in the above case, is now actively seeking to institutionalize an interpretation of Section 52 (1) (j) in a manner that is not consistent with Article XIII of the Berne Convention. The genesis for this rule of interpretation is of course Article 51 (c) of the Constitution of India which states that the State shall endeavour to foster respect for international law and treaty obligations. Discussion of Case Law The fact that Section 52 (1) (j) is an involuntary license is abundantly clear. It is a worldwide industry practice, and it is surprising that the Courts have such a hard time interpreting this provision, as we will see below. An extract from the decision in CBS Records Australia Ltd. v Telmak, Federal Court of Australia, dated 8th May 1987 (Telmak)28 will amply demonstrate the worldwide practice of version recordings: 13. There is a practice in the industry of issuing compilations of songs by original artists. There is also now a practice of issuing

See for eg. V. O. T ractorexport v Tarapore & Co., AIR 1971 SC 1; The Chairman, Railway Board v Mrs. Chandrima Das, AIR 2000 SC 988 (1987) 8 IPR 473

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compilations of songs by artists other than the original artists including unknown artists or lesser known artists. These are frequently known as cover versions. Due to the operation of the compulsory licence provisions with respect to musical works in the Copyright Act, 1968 (Cth) and in the Copyright Acts of other countries which permit recording artists to record previously released songs without the permission of the songwriter, there is a vigorous market for cover version compilations. Some cover versions by much less well known artists are bought particularly for the melodies or songs chosen. Other cover versions are so recorded as to sound as alike as possible to the original recordings which have been issued. In order to achieve the sound alike, a singer with a voice as similar as possible to the original artist is used along with emulators and synthesizers in the studio to alter and govern the nature of the sound produced. The songs listed in the Chart Sounds 16 Hit Songs /-/ -1 are sound alike versions. To mention two of the songs which were in evidence, the song Walk Like An Eygptian achieves a very close similarity to the original. On the other hand, the song I Knew You Were Waiting (For Me) shows a greater range of differences. 14. It appears from the evidence that the production of sound

alikes in Australia has been a common feature in the industry for some years and apparently no action has previously been taken by the applicants in relation to sound alike versions of original songs belonging to them. There is a suggestion that the applicants have themselves issued sound alike records or cassettes and there is in evidence a catalogue which lists sound alikes available from them but the evidence does not show that they have ever sold sound alikes in Australia. The Honble Supreme Court of India29 had the opportunity to decide whether Section 52 (1) (j) required consent from the owner of copyright in the musical work. Unfortunately, after considering all the authority placed before it, the Honble Supreme Court remanded the matter back to the Trial Court at Bangalore without making any finding on the requirement or lack thereof, of consent. However, the Honble Supreme Court did not contradict the findings of the Honble Karnataka High Court 30 which correctly concluded that Section 52 (1) (j) did not require consent (but, unfortunately, for all the wrong reasons). The Honble Karnataka High Court did not fully appreciate or consider the conspectus and historical background of Section 52 (1) (j). The City Civil Court at Bangalore has ruled subsequently that once the statutorily prescribed notice period of 15 days under Rule 21 of the Copy-

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Gramophone Co. of India Ltd. v Mars Recording Pvt. Ltd. & Ors., 2001 PTC 681 (SC) Gramophone Co. of India Ltd. v Mars Recording Pvt. Ltd. & Ors., 2000 PTC 117 (Karnataka)

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right Rules, 1958, has expired, consent is deemed. It also held that if production of the sound recording commenced prior to the expiry of the 15-day notice period, it would be an infringement of copyright.31 While it is mildly heartening that the City Civil Court has held that there is deemed consent after the expiry of the 15-day notice period, the reasoning is clearly flawed. As discussed earlier, the object of the 15-day notice period was meant to give the copyright owner a chance to deny that any alleged first recording in the market was made with his consent, and therefore block the second recording. In my view, the provision would be adequately complied with if the second or subsequent recording is released in the market after a period of 15 days from the receipt of notice by the owner of copyright in the musical work. The Delhi High Court on the other hand has held that consent is required,32 which again, is a most unfortunate conclusion. However, in an earlier case, while it had the opportunity to examine this question, simply ordered that the version recordings not be issued in any misleading packaging, which would be a tacit acceptance that consent was not required.33 The Kolkata High Court, in an order dated 20th July 2006 in GA 2093 of 2006 in CS 119 of 2006 has stated that the issue of whether consent of the copyright owner is required under Section 52 (1) (j), is required to be examined upon filing of affidavits. More recently, in Order dated 21st December 2006 in Saregama India Ltd. v Super Cassettes (GA 3594 of 2006 in
31 32 33

CS 305 of 2006), the Honble Kolkata High Court relied upon the judgment of the Honble Karnataka High Court, referred to above where it was held that Section 52 (1) (j) does not require pre-requisite consent from the owner, and held that the judgment of the Karnataka High Court is a final judgment. It further held: In view of the judgment of the Karnataka High Court in the case of Mars Recording Pvt. Ltd. (supra), the prima facie case made out by the Plaintiff on the necessity of consent of the copyright owner is not strong enough to warrant the passing of interim orders, as prayed for in the petition, at this stage, without affidavits. Interim orders as prayed for in the petition would cause irreparable damage to the defendant/ respondent, if the suit ultimately fails. If, however, the suit ultimately succeeds the plaintiff/ petitioner can be monetarily compensated. I am of the view that the balance of convenience is against interim orders as prayed for by the plaintiff/ petitioners being passed at this stage without affidavits. The foregoing results clearly make the case for setting up specialized IP Courts in India even stronger. Some Final Considerations Synchronization Rights It is important to bear in mind that the statutory permission under the statutory mechanical license provisions extends only to the making of

Mars Recording v Gramophone Co., Judgment dated 28th February 2004 in OS No. 4792/98 1999 PTC 2 (Del) Gramophone Co. of India Ltd. v Super Cassette Industries Ltd. 1996 PTC (16) 252

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sound recordings (the mechanical right). These provisions do not extend to the incorporation/ reproduction of the musical work in a cinematographic film, such as a music video or full-length feature film. This right is retained by the owner of copyright in the musical work, and is known in industry parlance the world-over, as the synchronization right, i.e., the right to permit the synchronization of a musical work with a moving picture.

the copyright owner.35 If making of music videos were allowed under Section 52 (1) (j), then it may well be extended to argue that the musical works/ lyrics may be incorporated with other visual elements such as video games or karaoke discs as well, and the flaw in the argument becomes apparent. Ring Tones/ Ring Back Tones

The question of whether a true-tone ring tone/ ring back tone (as opposed This right exists even in India, as the to a monophonic or polyphonic ring copyright owner has the right to re- tone) may be made of a version reproduce his work in any material cording is also not difficult to answer, form, which would include inclusion since the owner of copyright in a of the work in a feature length film34, sound recording has the right to make and additionally has the right to make and sell another sound recording a cinematograph film in respect of the embodying the version recording. Alwork, which clearly covers music vid- though ring tones/ ring back tones eos. For example, one of the latest are not sold under covers or labels, English films Inside and the Section reMan uses the exquires such covers tremely popular This right is retained by and labels to be sent the owner of copyright Hindi song Chaiyya to the copyright Chaiyya in its openin the musical work, owner for inspection, ing credits, presum- and is known in industhis requirement is ably with an approonly to satisfy the try parlance the worldpriate license from copyright owner of the the copyright owner, over, as the synchroniprinted price, to enzation right, i.e., the which is an example sure that the packagof synchronized use. right to permit the ing is not misleading, synchronization of a Therefore the makand to see that the ing of music videos copyright particulars musical work with a incorporating musiare printed accumoving picture. cal works under the rately. As long as the shelter of Section 52 correct statutory me(1) (j) is clearly an infringing act as chanical royalty is paid on the ring the provision only applies to making tone, and proper accounts are mainof sound recordings. For making a tained, there should be no issue. music video, an express synchroni- Indian Courts have recognized the zation license would be required from principle of updating construction36
34 Huge royalties are payable for such uses depending on where the musical work is used. For example the opening credits and end credits of a film. Background use attracts a lower royalty. See for eg. Boosey v Thorn EMI Video Programmes Ltd, Order dated 6th May 1981, Chancery Division and Abkco Music, Inc. v. Stellar Records, Inc., 40 USPQ 2d 1052 State of Maharashtra Vs. Dr. Praful B. Desai, AIR 2003 SC 2053

35 36

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as enunciated by the leading jurist Francis Bennion, which states that in construing an ongoing Act, the interpreter is to presume that Parliament intended the Act to be applied at any future time in such a way as to give effect to the original intention. Accordingly, the interpreter is to make allowances for any relevant changes that have occurred since the Acts passing, for example, any social condition, technology and so on. The Copyright Act may therefore be interpreted in a technology-neutral manner, where required. Sound-Alikes Some cases have arisen both in India and abroad where it has been contended that sound-alike recordings are an infringement of the original sound recording even though the same may have been validly made under the statutory mechanical licensing provisions.37 Thankfully, the Courts have rejected this absurd contention, as each sound recording constitutes the recording of a separate performance by a different set of performers and musicians and results in a new sound recording capable of being protected under copyright.

have seen in detail, the music composer only has the right to authorize the first recording. After that, anyone can re-record that musical work using different singers and musicians, and, will own the copyright in the resulting sound recording. If for example the original singer of a song died, then, by this ruling, no one will be able to record a version. So it would appear that all of the songs sung by Mohammed Rafis songs can never be sung and recorded again by another talented singer. We must remember the original legislative intent of the statutory mechanical licensing provisions, namely, to prevent recording monopolies, to encourage and build the record industry, which in turn will throw up talent by way of musicians and singers. Several countries still have the statutory mechanical licensing provisions such as the USA, Canada, Australia, Japan, Hong Kong, Singapore and so on. By ruling that only the original singer may perform the song again, the very object of the section would be defeated.

Exactly what constitutes an alteration to the musical work, which is disallowed by Section 52 (1) (j) is unAlterations/ Adaptations clear. If the record label making the An allied issue is what alterations to subsequent recording cannot alter the original musical work are permit- (unless reasonably required for makted. In a truly appalling decision,38 it ing the sound recording) then the rehas been held that changing the per- sult will sound like a sound-alike reformers and singers cording. That is to be while making a cover expected. This is two-year prohibition in what the owner of version, amounts to an unauthorized alreleasing a subsequent copyright in the first teration of the musirecording was brought recording objects to cal work and therein by the 1994 amend- in the first place, fore an infringement since such soundment. of copyright. As we alike recordings eat
37 38 See for eg., CBS Records Australia Ltd. v Telmak, 1987 (9) IPR 440 Infra n. 23

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into the market for his recording. Hence, the two-year prohibition in releasing a second or subsequent recording was brought in by the 1994 amendment. However, any alteration would require a license from the owner of copyright as it would amount to exercising the right of making an adaptation of the musical work, which is an exclusive right. It is submitted that the Courts must be liberal in interpreting this provision, because interpreting is what musicians do. When a musician renders a song in her or his own style, sometimes the result can be far better than the original recording. As mentioned earlier, there are more than seventy (70) versions of the song Knocking on Heavens Door, and there is a lively debate as to whose version is better ! Without the statutory license, it is doubtful if such variety and talent could ever come about or be discovered. The test for the alteration could be that used for determining a moral rights violation. If the version wont prejudicially affect the honour and reputation of the author, then the owner of copyright in the musical work ought not to be allowed to complain of an infringement of the adaptation copyright either.39 Remixes The next issue that falls for consideration concerns remixes. In the parlance of the music industry, a distinction is drawn between cover/ version recordings and remixes. In the case of the former, a brand new recording results and is permitted by law, while in the case of the latter, portions of a

pre-existing recording are used. This would constitute an infringement of copyright in such previous sound recording (what is known as the master right), and also in that of the musical work, as it would constitute an unauthorized mechanical reproduction and adaptation, for which the copyright owner must be approached for a license. In some cases the remix may also violate the moral right of integrity of the author, totally independent of who owns the copyright in the musical work, be it the author, or some other person. The very companies who now file suits alleging that their consent is required to make a cover version, would in all likelihood have grown and developed themselves by exercising the statutory mechanical licensing provisions in the past, and would have been aware of their affiliates doing so in other parts of the world.40 That is virtually certain, and very easy to ascertain. This would of course fly in the face of their present argument that their consent is required for making cover versions of musical works controlled by them. It is interesting to note that in the early twentieth century, when a notice of intention was sent, the copyright owner was required to provide the sender of the notice with adhesive labels representing the royalty amount for each mechanical contrivance, and the maker of the sound recording was required to sell affix such stickers on each gramophone records (or whatever form of sound recording) prior to sale, which indicated that the statutory mechanical royalty has been paid on that record.

39 40

For a truly fascinating discussion on this very point, please see Schott Musik v Colossal Records, 1997 AUST FEDCT LEXIS 475 See Gramophone Coy. Ltd v Leo Feist, 1928 VLR 420

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I would once again like to extract from the Telmak decision referred to earlier, as under: 54. Counsel for the respondent submitted that the interlocutory relief sought by the applicants should be refused upon the ground that Mr Robert, Director of Marketing and Sales for CBS Records and CBS Productions had known for years that there was a sound alike market. He further submitted that the Managing Director, Mr. Hanlon, was also aware of it although he had not been called to give any evidence. He submitted that the applicants had been sitting back with full knowledge for a considerable period and should be denied relief on this ground. It did not appear, however, that any damage or prejudice had been suffered by Telmak arising directly from any delay attributed to the applicant beyond the fact that Telmak might have been lulled into imagining that they would not be proceeded against in putting forward a sound alike compilation. 55. Counsel for the respondent also submitted that the applicants themselves dealt in sound alikes and, therefore came to the Court with unclean hands. As I have mentioned, although in evidence was a catalogue in which sound alikes were listed for sale by one of the applicants there was no evidence that any applicant had sold or dealt in sound alikes in Australia.41

Transcription of Musical Notations A stand has also been taken by those opposed to version recordings made without consent, that the making of a version recording involves reproduction of the musical notations in writing for that purpose, and that such reproduction in writing, amounts to the infringement of copyright in such musical works. The argument is indeed novel, but in the opinion of this author, such an argument would render the very provisions of Section 52 (1) (j) nugatory. The act of reducing a musical composition into writing for the purpose of making a version recording under Section 52 (1) (j) must obviously be exempted from the purview of infringement, in order for the right given under the Section to be exercised, otherwise the object of the Section would stand defeated. Historically, music composers would earn music publishing royalties through various modes, including on sheet music. viz. the reproduction of their musical notations in printed form. This made it easy for third parties to make version recordings as the notations were easily available and could be seen and performed. This practice is not very prevalent in India and the notations are not disclosed. Therefore, a person wishing to make a version recording must have an implied license under Section 52 (1) (j) to reproduce the said notation to the best of his ability, in order to make his version recordings. In fact, the Copyright Act ought to be amended whereby the person issuing the notice of intention may demand a copy of the musical notation from the copyright owner. If the same is not supplied within a specified period, the

41

Infra n. 28

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requester may proceed to record his own version, and the copyright owner may not in such case be entitled to complain of alterations as the same would be inevitable without the original compositions being made available. This would of course be without prejudice to the authors moral rights. Film Producers Film producers in India woken up to the fact that the assignment of the master and music publishing copyrights made by them in favour of the record labels long ago, may have expired, and are suing for return of the original master recordings of OSTs. This is significant because if the rights with the label have expired, persons wishing to make version recordings would now have to approach the film producer rather than the record label that has traditionally reproduced and sold the original OST. In the case of Saregama India Ltd. v Suresh Jindal,42 the Honble Kolkata High Court interpreted various clauses of the copyright assignment deed and reached the conclusion that the period of assignment had expired. In a related case, the producers of the Hindi film DON have also sued on similar lines.43 In both cases it was argued by the producer, that under the principle of contra proferentum, since the record label was in a superior bargaining position and had drafted the assignment deed, any ambiguity in the interpretation of the deed must be in favour of the assignor, i. e., the producer.
42 43

Music Composers It is interesting to note that music composers have also challenged the rights of record labels to exploit the copyright in their compositions.44 In many instances there is no evidence to suggest that music composers were either under a contract of service/ for services, or had assigned their rights to the film producer/ record label in the first place.45 By way of an aside, in Market Investigation Ltd. v Minister of Special Security, (1969) 2 QBD 173, it was noted that: The fundamental test to be applied in determining whether a person is engaged in a contract of service or a contract for service is Is the person who has engaged himself to perform these services performing them as a person in business on his own account? If the answer to that question is Yes, then the contract is a contract for service; on the other hand, if the answer is `no then the contract is a contract of service. Works created under a contract for services are known as commissioned works, and that is the subject matter of another article altogether. If the film producer cannot establish that he is either the first owner or the assignee of the copyright in the musical works of his film, then the presumption should be that the music

44 45

Judgment dated 25th August 2006 in GA 1756 of 2005, CS No. 130 of 2005 See Judgment dated 21st October 2005 of the Delhi High Court in Nariman Films v Saregama India Ltd., 2005 (31) PTC 571 (Del), and related litigation before the Honble Kolkata High Court. Javed Akhtar v Magic Mantra & Saregama India Ltd., CS (OS) 1743 of 2005 before the Honble Delhi High Court. See for eg. Gee Pee Films Pvt. Ltd. v. Pratik Chowdhury and Others, 2002(1) CTMR 40 which concerned a relationship between a composer and a label.

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composer retains all his copyrights/ publishing rights in such musical works composed by him. In fact, if such is indeed the case, a composer could stop all version recordings claiming that the first recording itself was not licensed or consented to. Music composers ought to review all their arrangements with film producers in the past to identify their legal relationship with such producers. If it transpires that they never passed copyright in their compositions to the film producer, which is worth investigating, the producer could not have passed title in the compositions to the record label. In such instances, the assignment made by such film producers to the record labels, atleast qua the underlying compositions, would be void. The said situation is covered by the maxims Nemo Dat Quod Non Habet meaning, no one can give what he does not have, or Assignatus Utitur Jure Auctoris meaning that an assignee is clothed only with the right of his principal. Labels collecting statutory or other royalties on such compositions will be liable, inter alia, to account to the composer for all such royalties received. In effect, the composer, rather than the record label would now be able to collect royalties on the version recordings made under Section 52 (1) (j), which, as we have seen in much detail, was the whole object of the provision in the first place. As one would clearly see from the above discussion, it is not possible to merely look at a provision of law in isolation. One has to see the history behind a provision to truly understand its import.

Finally, a word of caution. The statutory mechanical licensing provisions must not be interpreted to conflict with: (a) the copyright owners exclusive right to authorize the reproduction of the musical work in a cinematograph film, (b) his right to make an adaptation, and (c) the authors moral rights. Keeping this in mind, the Plaintiffs alleging copyright violation by the exercise of the statutory mechanical licensing provisions by record labels, would do well to stop wasting their resources on this nature of litigation, which is going nowhere fast, and instead go after the cheesy remixes and related music videos, where they have legal remedies (always provided of course that they do in fact own the copyright in the musical works). Music composers, likewise, would be in a position to complaint of moral rights violations, even if they did not own copyright in their musical works. The Plaintiffs would also do well to exercise their rights to inspect the records and books of account of the record labels recording their works, which is a right given to them anyway under Section 52 (1) (j), and in case anything suspicious is found, use the procedure provided therein and initiate a complaint before the Copyright Board for an injunction and for payment of royalties. In conclusion, I hope I have been able to throw light on some of these issues, and hopefully, the answer to the question Whose version [of the law] is correct ? has become clear.

Nikhil Krishnamurthy Partner Krishnamurthy & Co.