6 June 2019

The Draft Copyright Rules (May 2019)

First Impressions
(unedited, of course)

A set of Draft Rules were published on the Copyright Office website at the end of May 2019. They have been opened for public comment for a few weeks. What is perhaps particularly striking about the them is how completely a few seemingly innocuous lines buried in the proposals could, if they were to be introduced into the Rules themselves, have the potential to change the copyright landscape of the country.

There's some amount of reading between the lines to be done in the case of a few clauses which are metaphorically stuffed with dynamite but, other than that, the amendments seem to be intended to bring the Rules into consonance with the 1957 Copyright Act as it now stands, to upgrade them to be more in tune with a digitised world, to amend the mechanisms of copyright enforcement, and to make changes to the management of copyright through copyright societies and the Board.

The current rules themselves were introduced in 2013 after the coming into force of the 2012 amendment to the copyright statute notable for the so-called Bollywood Amendments which tried to balance the power dynamics in the film & music industry.

Game Changers

In large measure, the 2012 amendments tried to ensure that individual eligible authors and performers, whose work was embedded in films and sound recordings, got a fair financial deal by granting them continuing royalties which they could not waive. The eligibility of authors was fairly clear and incontestable without engaging in interpretative legerdemain although that was not the case with performers.

The copyright statute defined performances as those performances which were live prior to the 2012 Amendments, and the amendments themselves did not strike out the word 'live' which resulted in its being easy to deny performers in pre-recorded films and music continuing royalties as their performances would generally not be considered to be 'live' with reference to the popular understanding of the word.

This technical glitch was addressed through an Explanation in the Copyright Rules stating that a ‘performance includes recording of visual or acoustic presentation of a performer in the sound and visual records in the studio or otherwise’ in order, it would seem, to help performers to claim continuing royalties under the Copyright Act even if their performances were not live.

Whatever one's feelings about the rightness or wrongness of denying performers continuing royalties, the fact of the matter is that the Copyright Rules are subordinate legislation under the 1957 Copyright Act. They must remain within the bounds of the statute and cannot modify it, which is exactly what the effect of the broadened understanding of a performance has been under the 2013 Rules.

It has now, rightly in terms of legal validity, been proposed to delete the Explanation in the 2013 Rules which effectively widened the legal understanding of what constitutes a performance under copyright law. Rules purporting to effect a change in law beyond the scope of their parent statute are not legitimate; effecting change of that nature requires statutory amendment. Whether the proposed deletion is right in moral terms is, however, an entirely different discussion, and the proposal is likely to be controversial.

What is not controversial although it, too, is potentially a game-changer, is a suggestion that only a limited quantum of software code be required to be submitted for the software to be granted copyright registration . This completely changes the copyright landscape when it comes to registering software since, if the proposal were adopted, it would not require the confidentiality of commercially-viable to be compromised (by making available the entire source and object code) in order to obtain a copyright registration. [See Draft Rule: 33]

All of this is, however, some time in the future.

Immediate Concerns: Typographical and Clerical Errors

The existent Rules came into force on March 14, 2013. They were not entirely free of error and were amended in 2016 to correct a few typographical errors and clerical omissions which were largely non-controversial. Not all the errors in the Rules were corrected in 2016 though, and the Draft Rules contain proposals to correct typographical which have not yet been corrected, and to make amendments which appear to have been overlooked in 2016. [See Draft Rules: 6(i), 20, 32(ii), 38(iv), 39(i), 40(i) and 39(ii), 40(ii) respectively]

Additionally, there is the isolated case where the a proposal has been made without its intent being clear, and the anomalous case of the 31A compulsory licence issued in national interest. The existent Rules refer to the making of a 'request' while the proposed change speaks of a 'requirement' despite neither option echoing the copyright statute which effectively limits itself to the formation of an opinion that the publication of a work would be in national interest. [See Draft Rules: 14(iv) and 7, respectively]

The Draft Rules are not entirely error-free, and require some proof-reading themselves. For example, it appears that the proposal contained in Draft Rule 17(ii) cannot be effected due to, well, a drafting error. These are minor issues though which it should be possible to easily address. Far more important are the substantial substantive and procedural issues which the Draft Rules involve themselves with.

Ironing Out Creases in Procedure and Consolidating IP Governance

Following 2016 amendment to the 2013 Copyright Rules, the Copyright Act was once again amended through the instrumentality of the 2017 Finance Act which, for all practical purposes, transferred the jurisdiction of the existent Copyright Board to the Intellectual Property Appellate Board under the 1999 Trade Marks Act .

This 2017 amendment to the 1957 Copyright Act immediately made the Rules which had been promulgated under it inconsistent with their parent statute. The Draft Rules seek to address these inconsistencies, and to ensure that the Technical Member of the Board possesses copyright expertise although it is unclear how the proposal would interact with the demands of other intellectual property rights laws. [See Draft Rules: 2, 3, 4, 9, 38(i) to (iii)]

The transfer of jurisdiction effected in 2017 appears to be in consonance with a general move towards consolidating the management and governance of intellectual property rights. Within the Draft Rules themselves are provisions which seek to streamline the mechanisms to deal with the importation of infringing copies, and to reconsider the payment of fees required by the copyright statute. However, here too, it isn't entirely clear whether these proposals would smoothly deal with the statutory requirements of the various non-copyright intellectual property statutes. [See Draft Rules: 35, 41 and 37 respectively]

Non-copyright-statutory instruments aside, the proposals in relation to the copyright governance often seem to belong to different streams. For example, it is proposed not to require the Board to determine 31D royalties immediately after its constitution. While that in itself isn’t especially problematic, what is a matter of concern is that, if the proposal were adopted, there would no longer be a time limit within which the Board would be required to begin the process. Similarly, the Draft Rules, if they were adopted, could allow the decision of whether or not to register a Copyright Society to be postponed indefinitely. Further, should the Draft Rules be adopted as-is and should a Copyright Society run into trouble, it would emerge that the qualifications, so to speak, of key persons such as the administrator had be diluted which, obviously, isn't ideal. [See Draft Rules: 14(i), 18, 19(i) and (ii)]

With regard to Copyright Societies themselves, if the Draft Rules were adopted in their current form, they could help turn Copyright Societies into virtual oligopolies between proposals that could facilitate Chairmen and Governing Council members enjoy uninterrupted, lifelong terms, and proposals that could stop every member from being granted equal voting rights in General Body meetings. [See Draft Rules: 24, 25] That said, the Draft Rules also include proposals which could rein in capricious conduct by Copyright Societies. These proposals deal with fair tariff fixation and determination mechanisms; payment collection, disbursal, and reimbursement mechanisms particularly for orphan works; and transparency in the functioning of Copyright Societies not least through the introduction of an annual transparency report which must be shared. [See Draft Rules: 21(i) to (iii), 22, 23, 26, 28, 29, 30] These proposals aren’t perfect but they seem well intentioned enough, and are, with any luck, a step towards having Societies under the 1957 Copyright statute function more smoothly and fairly.

The Future

Of course, no-one knows what the future holds. In the case of the Section 31D statutory licence for broadcasting, which was introduced into the Copyright Act through the 2012 amendment, the scope of the licence has never been crystal clear. There have been times when it's been limited to radio broadcasting, times when it's covered both radio and TV broadcasting, and times when it's been said to include Internet broadcasting. In its latest avatar, brought into being by an interim judicial order, it's said to cover only radio and television broadcasting.

The Draft Copyright Rules appear to be taking no chances, and trying to avoid the possibility of suddenly finding themselves inconsistent with the latest interpretation of the law. They suggest that the Rules talk about 'each mode of broadcast' instead of specifying particular modes of broadcast, refer to ‘modes of communication to the public’ instead of 'formats', and replace mention of a radio-specific authority with a generic provision.

While one can't fault the seeming rationale, it might perhaps be prudent to qualify 'each mode of broadcast' by the insertion of a word so that the phrase reads 'each permitted mode of broadcast' so that, regardless of which 31D interpretation was in vogue at any particular time, the provision would not turn into a free-for-all. After all, no interpretation is likely to be entirely free of conditions or parameters limiting technologies which may be used in the exercise of the 31D licence. [See Draft Rules: 12(ii)-(iv), 13, 14(ii), 14(v) - 14(viii)]

Planning for the future isn’t really the forte of the Draft Copyright Rules though. One of their primary aims appears to be to effect upgradation consistent with the digital age. In achieving its aim, however, the Draft Rules seem to fail, being all but oblivious not only to the dynamics of electronic and online communications but also to the fact that India does not have adequate data protection and confidentiality laws.

Presumably, to lay the foundations of digital dealings in and governance of copyright, the Draft Rules propose to allow communications which have hitherto been sent by registered post to be sent electronically, to water down notification requirements sometimes going so far as to say that publication on the website without corresponding publication in the Official Gazette would suffice, and to change the record maintenance requirements pertaining to Copyright Societies and the Register of Copyright effectively often allowing records to be kept in either digital or physical form. [See Draft Rules: 5(i), 8(i), 17(i), 36; and 5(ii), 6(ii), 8(ii), 10, 11, 12(i) , 14(iii), 15, 16(i), 16(iii), 17(ii); and 27, 30, 32(i), 34(i) & (ii)]

Through all of this, there is the removal of guidance on how to maintain physical records of Register Indexes, there is no mention of data protection, and there is absolutely no exploration of how these proposals would interact with other proposed modifications to the Rules such as the proposed mandatory search facility for certain Copyright Society records. There appears to be no plan to gradually digitize existing physical records, and no system to ensure that digital and physical records are compatible. In fact, there are too many instances for comfort were the Draft Rules have removed the requirement that records be maintained in physical and digital form only to say that records may be maintained in only one form or the other.

There is very little doubt that the Draft Rules mean well although given that they occasionally evince a tenuous understanding of technology and the demands it makes, particularly in terms of measures to protect persons, it isn’t obvious that it would be prudent to adopt them without significant amendment.

(This post is by Nandita Saikia and was first published at IN Content Law.)


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