In an unexpected judgment, the Bombay High Court and more recently the Delhi High Court ruled that FM Radio Stations need not pay royalty separately to IPRS (Indian Performing Rights Society) which represents music composers and authors and music publishers, as they have already paid a licensing fee to PPL (Phonographic Performance Ltd), which represents music companies and producers who are owners of the copyright, for the broadcasting rights of the songs played on FM channels. Authors and composers protested that the ruling goes against all international copyright right laws, because it contended that no additional royalties need to be paid for the underlying rights of authors and composers in the sound recording.
FM radio stations are obviously very happy over the ruling as they have been battling rights owners over licensing fees, which they felt was exorbitant, which in turn was making their business unviable. They got some relief last year when the Indian Copyright Board passed an order finally settling their long standing royalty dispute with music companies. The Board passed a landmark order fixing the royalty rate for broadcast of sound recording on FM radio by providing a revenue-sharing model that fixed 2% of net advertisement earnings of each FM radio station to be distributed on a pro rata basis to all music providers. The above order was passed in the matter of Music Broadcast Pvt. Ltd & Ors. (“Applicants”) vs. Phonographic Performance Ltd (“PPL”)1, where the Board granted a compulsory license under Section 31(b) of the Copyright Act, 1957 to nine applicants for the repertoire managed by PPL2 for a royalty calculated as stated above. But exorbitant charges should not be confused with copyright which include the copyright of the owners of the recording who are the music companies and producers and the copyright of authors, composers and music publishers.
In an effort to clear the confusion we arranged to meet with the CEO of IPRS, Mr Rakesh Nigam, but due to unavoidable circumstances we were delayed and Mr Nigam was not too happy about it but after our profuse apologies, he relented. When we asked him for his reactions to the high court ruling, Mr Nigam was not very forthcoming and said, “at the moment we would not like to make any comments, we would rather keep a low profile…but we will certainly appeal the judgment”. However on being pressed further for his views, he stated, “this is a ruling that is unprecedented in the history of copyright law, nowhere in the world has a judgment of this kind been passed…from the time of the birth of copyright law in the UK and from which our laws are copied… where a court has said that there is no right for underlying works, there has never been a judgment of this kind in the world, the judge probably misunderstood the law and he has given, according to us, a totally incorrect interpretation and in the process overturned the entire copyright issue on its head”.
The issue actually goes back to the 1977 Supreme Court judgment which ruled that the ownership of all underlying works that were incorporated into a movie vested with the film producer (the commissioner of the work), unless a contract provided otherwise. It has long been a practice in the Indian film industry to engage authors and composers on a work for hire basis where film producers paid a one-time fee to the authors and composers, who thereby signed away all their rights to the producer for the music and songs.
But Mr Nigam begged to differ stating, “the rights get transferred to the producer, the rights don’t get extinguished, so you understand there is a clear distinction between the right and the ownership… even in the 1977 judgment, when IPRS went to ask for royalty for films shown in cinema theatres, the judge didn’t say that the rights per se doesn’t exist, he said that authors and composers who are the members of the Society are not the owners, the owners are the producers, so you are not representing the owners so you cannot come and ask for royalties”. He also pointed out that, “if the music is exploited beyond the film for which the rights have been assigned, then the right reverts back to the author and composer”. This implies that when the film songs are broadcast of FM radio or any other media, authors and composers have a right to receive royalty.
The issue appears to be why royalties should be paid to two collection societies, since PPL is already collecting license fee from FM radio stations for the performing rights of music companies repertoire. If it is IPRS as a performance rights society that should be collecting fees for public performance of sound recordings then PPL should not be collecting for the same right.
According to Mr Nigam however, “whenever a radio station plays recorded music, there are two different rights that are to be considered according to copyright law, one is the right in the sound recording and the other is the right in the underlying literary musical works. For sound recording it is collected by the owner or by PPL on behalf of the owner and for the literary musical works by IPRS, on behalf of authors, composers and publishers, so you have to pay for two rights”.
It is seems quite apparent that this surprising ruling by the Bombay and Delhi High Courts, is in contravention of copyright law as it exists today. Naturally authors and composers are very concerned because this misinterpretation of a law that was in existence and being practiced, was a serious threat to their livelihood. Led by noted lyricist Javed Akhtar, Ravi Shankar Sharma (Chairman, Music Composers Association of India), Vishal Bharadwaj, Loy Mendonca, Anand Shrivastav, Wajid Khan and many others, they recently held a press conference to protest against this unfair judgment and vowed to challenge it in the supreme Court.
So it is hoped that the appeal will return a judgment that will set right this wrong, which otherwise is bound to have serious repercussions not only for music publishers, authors and composers but for the entire music business in India.
~ C P Joseph & Stanley Paul