The latest instalment of the amendments to the Copyright Act, 1957, has been a mixed bag for the movie industry.
In particular, the amendments to Section 18 appear to be in favour of the authors of literary and musical works. The two provisos inserted state that the authors of literary and musical works included in a cinematograph film and in a sound recording (not forming part of a cinematograph film), respectively, should not waive their right to receive royalties for utilisation of the underlying work. The provisos, however, permit assignment to legal heirs or to a society for collection and distribution of the work.
The practice followed by the industry thus far is that, at the time of creation of the original work, the author/composer or lyricist enters into a contract surrendering all rights, title and interest in the original work to the producer for a fixed one-time payment.
By virtue of these newly inserted provisos, composers and lyricists have been given unlimited statutory protection to obtain royalties, irrespective of whether or not they enter into an assignment agreement with the producer. These overarching provisos have become the subject matter of a contentious debate in the industry.
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However, the provisos or the amendment do not indicate the quantum of royalty payable by the producer. No rules or guiding principles have also been provided in relation to the mechanism of payment of such royalty. Presuming that producers would have to bite the bullet and abide by the terms of these provisos, the amount of royalty payable to the author can be decided by the parties. One would imagine this leaves authors in a strong position. However, this may not be the case.
Since there are no guidelines or mechanisms laid down for payment of royalties to authors, a producer can strike a deal for a large one-time payment with the distributors and agree on a minimum amount of royalty, which he would have to share with the author. Therefore, although the provisos are intended to benefit authors and lyricists, lack of a mechanism has left the provisions open to interpretation .
Independent writers may settle for a smaller piece of the royalty pie, instead of hampering their relationship with producers by demanding an equal share. The handful of successful authors and lyricists may possibly still have better negotiating power with mighty producers.
In this scenario, the Indian Government should consider yet another amendment to the Copyright Act or at least provide guidelines for any kind of future remuneration, royalty or otherwise, in respect of the original work.
(The author is a Senior Associate at J. Sagar Associates. The views are personal)