Curious Case of Ilaiyaraja: Elixir For Creators Right

OVERVIEW: 

When a music composer creates a composition, the Copyright Act, 1957 automatically creates a copyright in the music without the requirement for any formalities such as registration with the Copyright Office. As Per Section 17 of the Copyright Act, 1957 the copyright will vest either in the music composer or alternatively, if the composer is an employee of a music label or production house, the ownership of the copyright vest in the employer, depending on the terms of the contract. The Ilaiyaraja judgment which was pronounced last year is undoubtedly a modern milestone in IP regime in India. It addresses in depth the rights of composers and producers, especially in the light of the much hyped Copyright (Amendment) Act, 2012. The Copyright (Amendment) Act, 2012, was to bring structural changes to the existing Copyright regime. The structural changes include mandate for royalty-sharing, statutory licensing for broadcasters, creation of scheme for copyright societies, few positives for internet intermediaries, etc. The most striking part of the judgment is that it upheld the age old labour theory at the helm while deciding the matter. The jurisprudence behind the intellectual property is rich and it is really important that the labour theory retains its importance. 

BRIEF FACTS OF THE CASE: 

• On 24thNov’2007 Mr. Ilaiyaraaja executed an Assignment Agreement in the name of his wife, Mrs. Jeevaraja, assigning to her absolute rights in his musical works/compositions. Subsequently, Mrs. Jeevaraja licensed these rights of exploitation to Agi Music vide a Sound Recording Licensing Agreement (hereafter SRLA) upon the premise that royalties will be paid to Mr. Ilaiyaraja. 
• Further, a Sub-Publishing Agreement (hereafter SPA) was entered into that same day by and between Raja Music Universals, represented by Mrs. Jeevaraja as its owner, and Agi Music, as sub-publisher, to the effect that the latter was granted rights to print, publish and vend the compositions listed in the Schedule of the SPA throughout the world for a period of 10 years basis payment of royalty. 
• In 2013, Agi Music took Mr. Ilaiyaraaja and M/s Modern Cinema to Court claiming that the assignment of rights made by his deceased wife in 2007 was valid for a period of 10 years. Agi Music also claimed that an addendum to the SRLA and SPA had been executed on 6thJan’2010, which made some additions to the main agreements. 
• Agi Music accused Mr. Ilaiyaraaja of having breached the negative covenant of their 2007 Agreement, by way of licensing copyright to Modern Cinema, which stated that Agi Music was the exclusive licensee of Mr. Ilaiyaraaja. Mr. Ilaiyaraaja rejected this addendum and accused Agi Music of forging his and his wife’s signatures/initials. 
• In 2014, Mr. Ilaiyaraaja filed a second suit against Echo and the other music labels seeking an injunction against them for using his music and songs for commercial purposes without his prior permission. The Court granted an ex parte injunction qua order dated 25th Sept’2014 restraining Echo from exploiting the original music composed by Mr. Ilaiyaraja. Subsequently, the injunction was made absolute and the applications of the plaintiff allowed on 3rdMar’2015. 
• On 18thAug’2015, a Division Bench consolidated both these suits and ordered a joint trial by a single judge of the court. 

EVALUATION OF THE JUDGMENT: 

The Court decided to answer the issues framed by dividing them into 3 heads, these are as follows: 

MR. ILAIYARAJA AND ECHO 

The first group of issues deals with the allocation of rights under the Copyright Act to the various stakeholders engaged in the creation and production of a cinematograph film, particularly, the producer and the music composer. The Court had to decide as to who can be said to be the owner of the sound recordings and did Echo obtain any right in respect of the sound recordings from the producers of the schedule films though written contract or otherwise. To decide this, the Court undertook the scrutiny of the agreement between Echo and a production company with respect to the film ‘Paasapparavaigal’. As per the agreement, it was made clear that the producer of the film had assigned the entire rights related to the musical work and various songs in the cinematograph film to Echo. Mr. Ilaiyaraja contended that since he is the owner and author of the works and he never assigned any copyrights to the producer, the producer has no right to assign or transfer the copyrights to Echo. The Court was of the view that Sec. 13(4) specifically states that a cinematograph film and a sound recording inherently contain separate copyrights in themselves and each component of a cinematograph film is entitled to a copyright of its own including the entire cinematograph film itself. The Court also noted that there was no agreement between Mr. Ilaiyaraja and producer which could establish an employment or apprenticeship or any retention of rights in the composition, which lead to the Court deciding that an employer/employee relationship never existed between Mr. Ilaiyaraja and Echo. However, the fact that Mr. Ilaiyaraja didn’t take any action to stop any potential infringement by Echo, or even send a cease and desist, the Court held that Mr. Ilaiyaraja has acquiesced to the actions of Echo by means of his conduct. However, he can continue to claim the authorship of his musical works despite the assignment of the same for the purposes of sound recording. 

MR. ILAIYARAJA AND AGI MUSIC 

The second group of issues were related to assignment of copyright of Mr. Ilaiyaraja to his wife Mrs. Jeevaraja and subsequent licensing vide the SRLA & SPA in 2007, and the Addendum executed in Jan’2010. The Court also framed an additional issue to better address the contention –whether Mrs. Jeevaraja is an agent of Mr. Ilaiyaraja for the purpose of the transaction between herself and Agi Music? The SRLA and SPA were entered into by and between Mrs. Jeevaraja and Agi Music for a period of 10 years. In the present case, though the SRLA and the SPA were effective for a period of 10 years, the Assignment Agreement was silent with regard any timeline. The Court observed that the absence specific tenure in the Assignment Agreement cannot be due to omission or oversight but deliberate. If the assignor, Mr. Ilaiyaraja, intended to assign the rights to his wife for a period of 10 years, then the same would have been incorporated in the agreement. It was further observed that mere fact, the royalties were being received by Mr. Ilaiyaraja cannot be justification for bypassing the statutory provision of Sec. 19(5). Moreover, the payments of royalty have admittedly been only for the period 2007 to 2012. The provisions of Sec. 19(5) are mandatory and are applicable as a norm. Any deviation from this would be considered as an exception to the norm and such an exception must be proved to the satisfaction of the Court, mere implication will not suffice. This for reason that purpose of this prescription in Sec. 19 is the protection of rights of the assignor and protection is of utmost importance. On this group of issues, the Court observed that the term of the assignment agreement will be governed by Sec. 19(5) of the Act, hence it is for five years only. 

THIRD GROUP - RELIEF AGAINST ECHO & AGI MUSIC

The third group of issues is in the dispute regarding relief against Echo and Agi Music, the Court held that Mr. Ilaiyaraja is entitled to reserve his rights to claim damages for infringement of his copyright, accounting and any other relief under the copyright law and other provisions of applicable law. 

OBSERVATION & INSIGHT FOR THE JUDGMENT GIVEN BY MADRAS HIGH COURT: 

Under the Copyright Act, performers have a performer’s right and not a copyright. Section 38 of the Act states: “Where any performer appears or engages in any performance, he shall have a special right to be known as the performer’s right in relation to such performance.” 

The definition in the act means that any person who wants to record or broadcast a singer on stage requires the prior permission of the performer or the person to whom the performer has assigned this right. Nonetheless, this does not mean the performer can sing whichever song he wants to, he is required to take the permission of the person owning the copyright in the music and lyrics. The performer’s right to perform a particular song is therefore contingent on the person owning the copyright in the underlying music and lyrics. With Copyright (Amendment) Act 2012 the rights of composers were balanced via granting irrevocable entitlement to royalties for composers. Since this right is emanating from statute, it becomes a statutory right. The impact of this in the present matter was rather negligible, as the majority of his work has been done prior to the amendment. So the inference from the judgement is that the sound vests with the producer, which makes it a rather resounding reaffirmation of producer’s rights. The strategic upside of the ownership vesting with the producer is rather apparent, as the producer can pick and choose the means of exploitation and the composer merely receives the royalties thereof, if any. The saving grace for composers has only been the reiteration of their moral rights u/s 57 of the Copyright Act i.e. their right to prevent any mutilation or distortion. Auxiliary, an absolute entitlement, which evens the producer in the order doesn’t appear to have argued against. The other inference from the judgement is on interpretation of assignment and related deeds have been on a reading of Sec 19(5), which has been given a rather strict interpretation. In the absence of any specified period, the judgement makes it rather clear that the statutory period of 5 years for an assignment would apply. 

To summarize, this is one of the most revolutionary judgments in the realm of Intellectual Property Rights. Given the fact that we are living in the internet age where technology has advanced so much that creating copies of someone’s work is very easy. The judgment upheld the spirit of individual rights higher than contractual rights. It lays emphasis that, some rights are inherent, and they cannot be taken by virtue of a contract. The court also drew a distinction between a Copyright and Performer’s right which is a very important yet overlooked concept. It is great to see that the judiciary has started to realize the hyper technical view is required in the field of Intellectual Property.