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Analysis of remuneration contracts in film industry in the light of Bollywood amendments

What are the Bollywood Amendments?

The “Bollywood Amendments” refer to those amendments that were enacted to modify the Copyright Act, 1957. These Amendments can be noted vide the Copyright (Amendment) Bill, 2010 and the enactment of Copyright (Amendment) Act, 2012. The Bollywood Amendments were enacted primarily to strengthen the position of music composers and lyricists who were normally given enough recognition for the work that they would put in to creating music. Their position in the Bollywood industry was quite unfortunate and these Bollywood Amendments were a great step forward in the right direction. Even the leaders of the opposition gave spirited support to the Copyright (Amendment) Bill, 2010 because of its progressive nature.


Through this amendment, there were changes made to the understanding of the words “author” and “owner” of a work especially in the film and music industry. For instance, the producer was termed to be the author of a work and consequently the first owner of the copyright in the film that was being produced. Due to the 1977 judgment, and the consequent 1994 amendment, the producers were able to exclusively claim all the rights in the film and did not pay any royalties to lyricists, composers, etc. 

Through contractual agreements with everybody involved in the making of the film and the music, the producer used to assume all the rights. This position has been changed after the 2012 amendment and although authors of underlying works can assign their rights to the producer, they cannot assign the right to receive royalties to anybody except their legal heirs or copyright societies. They would therefore, have a continuing right to receive royalties for out-film use and they would be duly credited for their work.

The Parliamentary Standing Committee also stated that it was a shame that is took 30 years for this step to be taken and that authors of underlying works were left in the cold for so long. Further, the amendment has incorporated the term “commercial rental” instead of “hire” and this made the Doctrine of Exhaustion applicable to cinematograph films and sound recordings. The Doctrine of Exhaustion refers to the international principle wherein a copyright owner’s right to control copies of their work “exhausts” on the first sale by the copyright owner or by someone else with the former’s consent.

Further, in addition to amendments made to Section 17, Section 18 was also amended and 3 provisos were added to it with the intention of protecting authors of underlying works from future modes of exploitation that may arise due to technological advancements. Further, Section 19 was amended to include that the assignment of copyright in any work must include the royalty and the consideration payable. It must also be noted that as per the insertion of Section 19(9) and Section 19(10), no assignment of copyright in any work to make a cinematograph film or sound recording (which does not form part of a cinematograph film) shall affect the right of the author to claim an equal share of the royalties and consideration payable for any utilization of such work, respectively. 


Remuneration Contracts

Despite a progressive amendment, there remains lack of clarity on the definitions of “fair” and “appropriate” collection of royalties. As per the Copyright Board Order in 2010, the royalty rate was set at 2% in the current compulsory licensing dispute for the broadcast of sound recordings and there is an ongoing controversy before the Intellectual Property Appellate Board wherein recording giants and radio stations have challenged such a low rate. This is most commonly known as the “IPRS PPL controversy” or the “31D matter” and involves huge stakeholders like Sony, Eros, etc.

The remuneration contracts without doubt however, have become “fairer” because the authors of underlying works fought for their rights and attained an amendment in their favour. Their awareness regarding their ability to assign their rights to receive continuing royalties to copyright societies and/or legal heirs changed the Bollywood scenario because producers could no longer high handedly take advantage of their “inferior” positions. Further, this also increased the role of copyright societies and their stake in it. This is because the newly inserted proviso to Section 33, states that the business of issuing or granting licenses in respect of literary, dramatic, musical and artistic works incorporated in a cinematograph film or sound recordings shall be carried out only through a registered copyright society. 

In order to understand the position of remuneration contracts in the Bollywood industry post the “Bollywood Amendments”, it is pertinent to note that the authors of underlying works would get the royalties they deserve through Copyright Societies. The Amendment also included another proviso, wherein the Registered Copyright Societies are required to publish their tariff scheme with respect to the payments that will be made and anybody who is aggrieved by the said tariff scheme can appeal to the Copyright Board. This allows the authors of underlying works to have “true consent” wherein they would not be forced into agreeing any rate or tariff for the work that they have created. 

To conclude, the Bollywood Amendments are largely welcomed with their progressive steps and attempt at conforming Indian Copyright law with the larger dynamic discourse of digitalization. However, there are two sides to every coin and it is pertinent that the ambiguities are solved so that there are no loopholes or grey areas left to exploit. For instance, the 2010 Copyright Board Order remains in dispute till date, i.e., 10 years later and there seems to be no immediate conclusion to the matter either. This could result in leaving the authors of underlying works hanging, unequal royalty rates, incompatible tariff schemes, etc. 

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