Professional Documents
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Compulsory License
Compulsory License
enjoys exclusivity over such creation for a specified period of time or as mentioned in
the respective laws under which such product falls. The laws that govern IPR in India
are as follows: (i) Trade Marks Act, 1999 (ii) The Patents Act, 1970 (iii) The
Copyright Act, 1957 (iv) The Designs Act, 2000 (v) The Geographical Indication of
Goods (Registration and Protection) Act, 1999 (vi) The Protection of Plant Varieties
and Farmers Rights Act, 2001 (vii) The Information Technology Act, 2000 and the
Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement which is
administered by World Trade Organization (WTO).
Copyright Act was enacted with the intention to protect the original works of a
person. Such original work shall relate to literary, artistic, dramatic, musical works,
sound recording & cinematographic films. To motivate creation and make use of such
creativity, Copyright Act gave rights in toto to the owner/ author of the work.
These rights are transferable and assignable. Once the owner/ author assigns, transfers
or license his right to any person, such person is deemed to have rights to make copies
of the original work, reproduce the work in any material form, perform the work in
public/ communicate to the public, to make any translation or adaptation of the work
and so on.
However, with the growth of Intellectual Property Rights, the complexities also tend
to increase. When a default takes place, we not only look into the law that governs the
defaulting issue but also other related laws from where we can either sue or get relief
from. One such topic that has been making news nowadays is with regards to the
Constitutionality of the provisions relating to Compulsory and Statutory Licensing in
the Copyright Act, 1957.
Constitution is the supreme law in India and all the Acts (Central or State) falls under
the purview of the Constitution.
Copyright an introduction
Copyright is an Intellectual Property Rights law that insures the protection to the
creator on literary, dramatic, producer or reproducer or artistic work also to the
producer of the filmography of the work and sound recordings. It also gives the
protection on the field of software and information practices. Under Section 13 of
the Copyright Act 1957, it talks about the protection of the works by providing the
privilege to the creators by preserving their work for his life. It saves the creators
originality of expression and provides the space and platform to the person to publish
it in the safe and secured environment.
Copyright falls under the three basic elements which are following
Originality
Creativity
Fixation
Creativity defines the theory of “modicum of creativity” which defines the state of
minimalistic work or trying to setting the bar low in copyright. It supports the
minimal creativity which is not tend to be copyrighted in the public domain.
Fixation means work which is done both verbally and theoretically are said to be
“fixed” and verified in the court. The work has to be done in an ephemeral way.
Originality of any work serves the basic and the reasoning behind which any work has
been introduced. It gives the knowledge to the viewers that the work is new and well-
incorporated for the faith and progress of the society. Any invention which has been
invented it always starts with an idea which has not been copied or should be copied
in near future. It is basically a work which adapted and invented through the new
process and idea.
Distinguishing Compulsory Licensing from Statutory Licensing
Licensing a work means the Licensor (owner) giving rights to the Licensee to use his
work by following a procedure and paying a statutorily prescribed fee.
Chapter VI of the Copyright Act covers the provisions relating to Licensing. Let us
discuss the provisions in order to understand the difference between statutory and
compulsory licensing.
The owner of any existing or future work may grant any interest to another person by
way of licensing, made in writing by him or his duly assigned agent.
If the license related to future work then the interest is deemed to be granted only
when the work comes into existence.
Further, if the licensee dies before the interest is granted to him (in case of future
works), then his legal representative shall, in absence of any provision contrary in the
license, be entitled to any benefit arising out of the license. For example: A, the
Licensor contracts with B, the Licensee for a future work i.e. B can commercially
exploit A’s work for a specified period and give a certain amount of royalty to A as
agreed between them after A’s work has been in public for a period of 2 years. After 1
year of the contract, B dies. The work will then be taken care by the legal
representative and the contract shall be performed in the same way as it would be
performed by B if would be alive.
Compulsory Licenses
Section 31 deals with compulsory license in works withheld from public
Meaning – Compulsory license means that the use of owner’s rights against
payment is either set by law or determined through some form of adjudication or
arbitration. In other words, prior permission from the right owner is not required
if the mandate provided by law is met with.
The section states that if the owner of the rights has refused to republish or allow
republication or allow performance or allow communication by way of broadcast
to the public, the aggrieved person may reach out to the Appellate Board. The
Appellate Board, after giving reasonable opportunity of being heard to the owner,
may hold an inquiry. If the Board is satisfied that the grounds put by the owner
are not reasonable then it shall direct the Registrar of Copyrights to grant the
license to the complainant upon payment of such fees to the owner.
Section 31 A deals with compulsory license in unpublished or published works
In case any (i) unpublished work, (ii) published work or (iii) work communicated
to the public is withheld from public in India and; the author/ owner is (i) dead,
(ii) unknown or (iii) cannot be traced, any person shall approach the Appellate
Board for a license to publish or communicate to the public such work or a
translation in any language.
Section 31 B deals with compulsory license for benefit of disabled
Any person working for the benefit of disabled persons on a profit basis or for
business may apply to the Appellate Board in such form and manner as
prescribed in the Act and rules, for a compulsory license to publish any work in
which copyright subsists for the benefit of such persons.
Statutory Licenses
For example: If S is desirous of making cover version of a musical work with the
license of the owner, he may do so by following the procedure. He has to first
serve a notice mentioning the intention of his work, provide copies of all the
covers and labels with which such sound recording will be sold, shall pay in
advance to the owner(s) of the copyright the fee as prescribed by the Appellate
Board. The cover version shall not be changed to such an extent where the
original meaning or composition is lost in entirety. S has to also follow all such
procedures as mentioned in the Act and Rules.
Section 31 D deals with broadcasting of literary, musical works and sound
recording
Any broadcasting organization desirous of communicating to the public by way
of broadcast or by way of performance of sound recording, musical or literary
works, which has already been published may do so by giving prior notice of its
intention to broadcast such work and by paying royalty fee to the copyright
owners at the rate fixed by the Intellectual Property Appellate Board (IPAB).
Case Studies
Judgement
Justice Kathawalla systematically knocked down defendant’s defenses to the
claim for infringement and prima facie found Wynk to be guilty of direct
infringement on two counts –
for ‘selling’ works under Section 14(1)(e)(ii), for allowing downloading and
offline listening of the plaintiff’s works; and
under Section 14(1)(e)(iii) for communicating the plaintiff’s works to the public
through their streaming service.
The Bombay High Court clarified certain ambiguities pertaining to online
streaming and statutory licensing under section 31 D. They are as under:
Section 31 D does not cover ‘downloading/ purchase’ of works – The court stated
that Wnyk’s feature of allowing users to download songs and store it for
unlimited period constitutes “sale” and not “communication to the public” and
hence does not constitute “broadcast” under section 31 D of the Act. If it is
streamed without an option to download, only then it will refer to be as broadcast.
Section 31 D does not cover internet broadcasting – Wynk contended that
Wynk’s streaming services get subsumed under ‘radio broadcasting’ and very
confidently stated that internet broadcasting is included under section 31 D upon
relying on Department of Industrial Policy and Promotion (DIPP) Memorandum
of 2016.
The court rejected the above contention and stated that section 31 D was an
exception to copyright and must be strictly interpreted. Section 31 D (3) and the
rules framed thereunder specifically covers statutory licensing for radio and
television broadcasting and not internet broadcasting. The court further relied on
Rajya Sabha Parliamentary Committee on Copyright Amendment Act, 2012 and
stated that the committee was well aware of internet streaming but it intentionally
chose to cover only radio and television broadcasting under the scope of section
31 D.
Section 31 D cannot be invoked without prior fixation of royalty rates by IPAB –
the Court firstly negated the powers of IPAB in fixing royalty rates for internet
broadcasting as the section provides for only radio and television broadcasting.
Secondly, the court indicated that according to section 31 D and the rules 29 – 31,
fixation of rates by IPAB is necessary before invoking this section. Hence, the
defendants don’t have a substantial case.
Justice Kathawalla awarded Injunction to Tips Industries Ltd and ascertained that
Section 31 D does not cover internet broadcasting.
Case law – Feist Publication Inc vs Rural Telephone Service Co. 499 U.S. 340
FACTS
The Plaintiff/Respondent [Rural Telephone Service Company] is a Telephone service
company obligated to issue an annual telephone directory as per the state regulation.
The directory was termed as a ‘white and yellow pages’ to be distributed for free of
charge due to the monopoly held by the plaintiff in the market. While making a
directory that included the region of the Plaintiff’s monopoly market the defendant
was denied a license by the plaintiff to include enter from the plaintiff’s directory.
The defendant had copied the same without the consent. The plaintiff field a suit for
the copyright infringement.
The main issue that has been raised is whether the names, phone numbers and the
addresses from the directory can be copyrighted or not?
The new law explains that in the section 102 of the Copyright act 1976 was applied
which gives the credibility for the “original work of authorship.”
Copyrightability of compilation were mentioned as per section 101 and 103 where the
court emphasized on the fact that the final work of compilation inclusive of selection
and arrangement of facts is copyrightable to the certain extended limits.
The existing law regarding copyright protection in the U.S. followed the “Sweat of
the Brow” doctrine says that any work in which a substantial amount of time and
energy was invested would be considered as copyrightable.
Compulsory licensing is a statutory license that gives the liberty to the copyrighted
work without the permission from the copyright owner. It is an exclusive right to do
an act related to the copyrighted work. This is a practised whenever a copyrighted
work is withheld from the public domain. If the work has been done in the public
domain the proper licensing of the copyrighted work is must. The said copyrighted
work should be used when the proper licensing of the agreement has been done in a
way in which the duration or the time period of the license is mentioned the royalty
that is payable and the agreement should include the terms and the termination of the
license if aforesaid.
There are the three basic rules which shall be followed while taking the license.
License should be in the written format.
The license should be signed by the copyright owner or any other agent who is
authorised enough.
The compulsory license is come under the section of Indian Copyright Act that is
in Section 31 to 31 B talks about the compulsory licensing in India.
Compulsory licensing is necessary because some of the works which means to upheld
in the public domain are needs to be verified by the authority. So that the further
copyrighted work should be used in various academic and beneficiary works. It is said
that it allows various kinds of the license which includes orphan works as well as the
works from a disabled person.
It is also in some cases important for granting the compulsory licensing because what
if, any cases may form where the author may have died before the publishing of the
work and through this means of compulsory licensing the unpublished works of the
author will get delivered in the public domain.
It is also important to know that the fair use of compulsory licensing is needed, there
shall be no malpractices be entertained or continued in any way. Because when the
copyrighted works will be presented or available to all with certain limitations it will
usher for the betterment of the society.
The question that arose here was rather in such a particular situation granting of the
compulsory license was viable or not?
The Broadcasters, that is Radio Mirchi, has argued on which they claim That since a
license has already been granted to AIR and Radio City there were no grounds on
which a license to Radio Mirchi should be denied on anyway.
Now for more elaboration just make a question for better understanding the concept
by taking an example?
Gracy has what she thinks would be the great idea for a new business. She would like
to rent portable mp3 player at health clubs and golf resorts. The mp3 player would
pre-loaded with music, so that people who did not bring along their own players could
still listen to music while they were exercising or golfing. Each player would have
5000 songs on it, and the mp3 player do not allow further copying of the songs loaded
on the player. Gracy purchased the authorised copies of Compact Discs of all the
music she would like to play. Now she wanted to know whether she needs any further
copyright permissions to regulate her business in India, and if so? What are the
possible measures or permissions she can opt or go through for the ease of her
business?
Explanation
Gracy would need to obtain the permission from the copyright owners for each of the
songs she would like to play and also purchase for her business. She needs the
permission which would be likely in the form of license agreement and this agreement
would specifically be considering all the laws and permissions and on which
conditions she would be getting the access of all the songs she wanted. For her
business. The easiest way she can get the permission is via contacting the music
publishing companies who owns or administers the rights of the songs. In India the
said companies are T-series, Sony Music India. And then she needs to find which
company owns the rights of the songs which she wanted to use in her discs. After the
said agreement she needs to pay the reasonable amount to the copyright owners for
the usage of the songs. This could be the one-time payment or in the form of royalty
to the companies. Also, she needs the permission from the health clubs and golf
resorts where she is going to rent mp3 player. Because these premises have their own
policies and Gracy needs to find out how to negotiate with the said agreement.
A license is distinct from an assignment as the licensee gets certain rights of subject to
the conditions specified in the license agreement, but the ownership of those rights
entrusts solely in the owner of the copyright. On the other page, in case of an
assignment, the assignee becomes the owner of the interest assigned to him. The
original owner of the copyright transfers all the rights to the assignee and retains
none.
A license is of two types, it can be either voluntarily or compulsorily.
Voluntary Licensing
Voluntary licensing is defined under section 30 of the Indian Copyrights Act (ICA).
According to Section 30 of ICA:
The owner of the copyright in any existing work or the potential owner of the
copyright in any future work may grant an interest in the right by license in writing
signed by him or by one of his duly authorized agent.
Hence, the copyright owner of any existing work or the prospective owner of any
future work can grant any interest in the right by way of a license. Whereas, it has to
be kept in mind that in case of future works, the license will come into force only
when the work comes into existence.
Compulsory Licensing
A compulsory license is an expression generally applied to a statutory license to do an
act covered by an exclusive right without the prior authorization of the right owner.
Compulsory licensing also allows for the use of protected material (in this case,
copyrighted material) without the prior permission of the rightful owner.
A compulsory license is generally granted to an act but it does not mandate any prior
permission from the owner of that particular work. Thus, the person to whom the
compulsory license is granted can exclusively use the rights originating from the work
without the fear of violating or infringing the author's rights. Section 312 of Copyright
Act, 1957 deals with compulsory licenses in works that are withheld from the public.
It says that in case any complaint is made to the Appellate Board that the owner of
copyright of the work, during the term of the copyright, has either refused to republish
or allow the republication of the work or has refused the communication of such
work, either through broadcasting or through sound recording, then considering the
aforementioned circumstances the Appellate Board shall first give a reasonable
opportunity to the owner of the particular work to respond. After hearing the owner, if
the Appellate Board is not satisfied with the grounds of refusal that has been
mentioned by the owner, then the Board shall direct the Registrar of Copyright to
grant the complainant a license to republish the particular work or communicate the
particular work to the public. However, the person who received the license can only
be granted if he pays a certain amount of compensation to the actual owner of the
work and provided he follows the other guidelines determined by the Appellate
Board.
Section 31 of the Indian Copyright Act, 1957 (ICA, 1957) provides for the
compulsory licensing of the copyright in case of works that are kept hold of from the
public.
The Copyright Board can, after providing a rational opportunity for the owner of the
copyright to be heard and after conducting an enquiry and if satisfied, can direct the
Registrar of Copyrights to grant a compulsory license to the complainant to republish
the original work and broadcast the work or communicate it to the public as the case
may be taken. Upon such direction or order, the Registrar of Copyrights is entitled to
grant the license to the complainant.
There are times when copyright owners find it difficult or refuse to part from their
work. In such a case, in order to ensure the availability and accessibility of
copyrighted materials to the public and free flow of ideas and information without
infringing the rights of the copyright owner, compulsory licensing becomes a
necessity of the hour. Section 31 of the Indian Copyright Act, enables a complaint to
be filed before the Copyright Board, which jurisdictions is now vested with the
Intellectual Property Appellate Board, when such refusal has resulted in the work
being withheld from the public.
The broadcasters, that is, Radio Mirchi, argued that since a license had already been
granted to AIR and Radio City, there were no grounds on which a license to Radio
Mirchi should be denied. The Court held that since a scompulsory license can be
granted on grounds stated in Section 31A of the Indian Copyright Act, i.e., only when
access to the work has been denied to the public. In this case, the license had already
been granted to AIR and Radio City. Therefore, it was not barred or protected to the
public access. Thus, the argument of Radio Mirchi holds no water, and they were
liable for infringement of copyright of the same.
In the matter of Entertainment Ltd. v. Super Cassette Industries Ltd4, the importance
of section 31A comes into play. In this particular case, Radio Mirchi was playing the
song whose rights were held by Super Cassette industries. Super Cassette Industries
felt their rights to be infringed and hence they filed for a permanent injunction. In the
meantime, the FM station applied for the grant of compulsory license to the Copyright
Board under section 31(b) of the Copyright Act. Considering all these circumstances
the main issue that came up was whether this situation fulfils the criteria of being
granted a compulsory license.
The radio station put forth in their argument that since a license has already been
granted to AIR and Radio City, there shall not be any hindrance from the Board's side
to provide the compulsory license to the radio station. After hearing the arguments
from both the sides, the Board came up with the conclusion that Sec 31A can only be
applied when the work is denied to be published. In this particular case, license has
already been obtained by the AIR and Radio City, hence it was never barred or
protected from being published. Thus, the Board decided that the arguments put forth
by the radio station held no particular ground. Also, the Board made the Radio station
liable for infringement of copyright of the music.
Compulsory Licensing:
Compulsory license is a statutory license that gives the liberty to use the copyrighted
work without permission from the copyright owner. It is an exclusive right to do an
act related to the copyrighted work. This is practiced whenever a copyrighted work is
withheld from the public domain.
There are few details that should be included in a license agreement, some of them are
the work and rights which are licensed needs to be identified, duration or the time
period of the license, the royalty that is payable and the agreement shall also include
the terms and conditions related to the license which includes the conditions for the
extension or termination of the license.
There are two important things that needs to keep in mind, one is that the license
should be in a written form and it should be signed by the copyright owner or any
other agent authorized by him.
At present, there are five types of compulsory licenses in India. These are the kinds
licenses of which include the works withheld from the public without the appropriate
reason, the second type of license is related to orphan works, the third type of license
is related to the differently abled, other types include the licenses related to
translations and the last one is licenses related to the reproduction and sale of works
which are not available in India.
Why it is Important?
Compulsory Licensing in the copyrighted work is important due to various reasons
such as, it provides access to the works that have been unreasonably withheld from
the public domain. It provides access to the public so that it can be used for various
academic and beneficial reasons. As it is well known that it gives license for various
kinds of the license which includes orphan works as well as the works from a disabled
person.
The main motive behind compulsory licensing is to give the availability of the work
to the public so that they can use and benefit from the work for various purposes. It is
also important to note that the work should be used in a fair manner and no
malpractices should be practiced. When the copyright works will be available to all
with certain limitations it will lead to better development of the country.
Case Studies
One of the most landmark judgments is the �Entertainment Network (India) Ltd. V.
Super Cassette Industries Ltd.�, in the present case while radio Mirchi was playing
songs, super cassette claimed the rights on it. It also filed for a permanent injuction at
the same time. At the time of the pending of the suit the FM operators also applied for
the grant of compulsory licensing under the copyright act.
The issue which was in question was whether the granting of the compulsory license
was viable at this time and the court said that compulsory licensing can only be
granted when denied to public access and in the present case the license was already
granted to the AIR and Radio City so Radio Mirchi was liable for the infringement of
copyright. It is a case from the year 2004.
Conclusion
The permission under the copyright act is an integral part of the copyright regime.
Copyrighted works should have the complete monopoly for their works in the society.
Through compulsory licensing in India, it is capturing and broadening the way for
which copyright regime and its application are still widening due to the ever-changing
circumstances.
Copyright is the platform granted in exchange or as a give and take for disclosure of
work. Disclosure of various works enriches and gives the society accessibility and
availability of the works by various authors, artists, writers, producers etc. and keeps
the march of mankind intact. This article briefly discusses what happens when the
owner of a work after its publication has refused to re-publish the work or allowed re-
publication of the work and the remedy for the same.
The Owners and the public, both have their own interests and rights because of which
the Copyright Act has been implemented but it won’t serve the purpose if the statutes
are not interpreted correctly. Different lawyers will have different view but food for
thought is that in the end, both the owner and the public get to such an understanding
whereby they both get to enjoy their interest. It’s not that the Owner does not get his
royalty or someone is not able to view certain works; it’s just the tendency of getting
more which has led to such a debate.
The previously mentioned case studies as well as provisions clearly defines the
importance of compulsory licensing in today's scenario. There are certain provisions
of compulsory licensing that very well protect the rights of the public of getting
access to a particular piece of work. Thus, the concept of compulsory licensing is an
interesting aspect of copyright law that is carefully dealt with by the copyright board
in order to protect the rights of the public in general.