The Copyright Societies Act, 1957 was enacted by the legislature for the purpose of protecting the rights of the creators and to establish a structure to for the rightful administration of copyrighted works. The legislative intent is also to provide a revenue sharing platform for the original authors of the creative works vide the Act. Although, the Indian Copyright Act was in parity with the international standards, i.e. TRIPS the Act has been amended several times, and the latest amendment has been made in 2012. Pursuant to this amendment the Act became aligned to the Berne Convention for the protection of literary and artistic works. In this article, we will discuss about the “issuing of licenses” in respect of works as reflected in the Copyright Act and the recent judgment of Novex Communication in detail. In reference to the same, this article would also highlight the important aspects of the 2012 amendment as many changes were incorporated in this amendment pertaining to the issuing of licenses by the copyright societies.

What is a copyright society?

A copyright society is formed and registered under Section 33 of the Indian Copyright Act, 1957. The main purpose of the society is to manage and protect the works of the authors and reap optimum royalties for their creations vide licensing. It is not possible for authors or creators to keep a track of the usage of their works and for that purpose, a copyright society with an organizational framework has been formed at a national level. In this way, it is easier to keep a record of the works and provide the users who seek to use those works in lieu of royalties. India being a member of international conventions on copyright is also able to enter into different types of agreements with other copyright societies of other countries for the usage of Indian works.

Copyright Societies in India

The copyright societies are formed and managed by the authors and the owners of the creative works under the Section 33 of the Act. Under the Act the minimum number of the members required for the registration of the society is seven. The function of the copyright society is to grant license in respect of the all kinds of works in respect to copyright or any kind of works as mentioned under the Copyright Act, 1957. As per the Act, the copyright societies are granted registration for a period of five years and the continuation depends on the renewal only after the considering the reports of the society by the Registrar of copyright under Section 36 of the Act.

Copyright Societies vis-à-vis Section 33

The right of the copyright societies has been enumerated under the Section 33 of the Act. It is pertinent to mention here that Section 33 was incorporated as the part of the amendment made in the year 1994. According to Section 33 of the Act, the copyright societies are the authority to issue licenses in respect of the creative works of the authors. After the insertion of this Section only the copyright societies which are registered under the Section 33(3) of the Act can engage in the business of issuing license in any work wherein copyright subsists.

Further in the year 2012, Section 33(3-A) was inserted which stipulated all the pre-existing copyright societies must register themselves by virtue of Section 33. Moreover, only an entity which is registered should carry on the business of granting and issuing copyright licenses. However, registrations of copyright societies are not mandatory and Section 33 does not create a bar in their operation. Therefore by virtue of Section 33 only the entities that are registered under the Act as copyright societies can engage in the aforesaid business. This Section creates a bar on owners and individuals in engaging in the business of issuing copyright licenses. But as per Section 18 and Section 30 copyright owners or creators in individual capacity can assign and license their works to any person.

Interpretation by Madras High Court

The Government has done a commendable work by bringing the amendment in 2012 that provides for the equal share for the creators of the original work as well as clarified the position on the non-owners of the copyright or the businesses which are not registered as copyright societies but are only agents in terms of Section 18 of the Act. But it was still not clear whether Section 33 would have an overriding effect over Section 18 and Section 30 of the Act. Due to this ambiguity the matters related to licensing and assignment by individual creators to any third party go through enormous disputes.

In an attempt to regulate the business of issuing license and considering the various stakeholders of the industry the government tried to cease the free exploitation of the copyright. Thereby, the Section 33(1) of the Act starts with the phrase “no person or association of persons shall commence or, carry on the business of issuing or granting licenses in respect of any work in which copyright subsists, unless registered in accordance with Section 33(3)”.

In the case of Novex Communications Pvt Ltd., the plaintiff (Novex) claimed that the right to communicate a sound recording to the public does not belong to the defendants. According to the plaintiff, the recording companies have assigned the master rights to the plaintiff and the defendants have not obtained any license from plaintiff. Logically, it is not possible to license individually the works and therefore, the works are licensed and assigned as the case may be through agents which are involved in this business. The plaintiff being one of such agencies acts as owners of copyright or agency for right holders.

Before delving into the case, it is important to analyze the essence of Section 30 on which the plaintiff has relied on. Section 30 states that owner of copyright are allowed to issue license to use their work through agents and by virtue of this Section the plaintiff has been appointed by various music labels as their agent. Invoking the protection granted under Section 30 as well as Section 33(1) of the Act, plaintiff considered itself as individual and autonomous agent acting on behalf of various copyright owners.

Intent of the legislation

On the perusal of Section 33 of the Act, it becomes ample clear that the legislative intent to oversee the functions of the copyright societies by consolidating them under the statute. Also the manners in which the fees and tariffs are to be distributed are enumerated in the Act. Further, the intent to regularize the societies is made clear under the Act as Section 26 requires the copyright societies to submit reports and returns.  These provisions make it evident that the intent of the legislature is to supervise the administration of the copyright societies so that they conform to the statute.

Competency of Novex in terms of granting license

The Court in this case has determined and compared the rights of the copyright owners in their individual capacity with that of the enterprises engaged in the business of issuing license. As per the existing provision sunder the Copyright Act, 1957, there are only two ways of issuing license, one is through a registered copyright society or by an individual i.e. the one who is not holding any license or engaged in business of issuing license. Apart from these two routes if any other entity, which in this article is Novex communication is engaged in the business of issuing license- it would be considered illegal.

Conclusion: Therefore what Novex claimed is that the ownership rights granted to it by the authors of copyright are merely assignment rights under Section 18 and 19 of the Act. Even this statement should have been dealt by the Court in this case in terms of the requirement under the Section 19 of the Act. However, this judgment of the Madras High Court is not a settled law. There are various precedents in favor of Novex wherein it has been considered as a legal entity amongst the few cases, the most notable is the case of Novex v. Lemon Tree Hotels. In this case the Delhi High Court has held that the restriction on the business of issuing license via copyright societies is only true for the underlying works in a sound recording and not on sound recording itself. The Delhi High Court has relied on the proviso to Section 33 of the Act, as amended in 2012 to validate the business that Novex is engaged in.

Disclaimer: The present article intends to provide general guidance on the subject, and you can also consult us in your specific case.