Comments on the Draft Copyright (Amendment) Rules, 2019 concerning Statutory Licensing

Preliminary

1. Thissubmission presents comments to the Department for Promotion of Industry andInternal Trade (“DPIIT”), Ministryof Commerce and Industry pertaining to the notification G.S.R 393(E) containingthe draft Copyright (Amendment) Rules, 2019 issued on 30^th May 2019.

2. Wecommend DPIIT on the release of the draft Copyright (Amendment) Rules, 2019 (“Draft Rules”) and are thankful for theopportunity to put forth its views via this public consultation.

3.Thissubmission is divided into three main parts. This part, ‘Preliminary’,introduces the document; the second part provides an overview of theorganization and its research in the field of intellectual property rights; andthe third part contains CIS’ comments on the Draft Rules 29, 30, 31.

4. Thethird part contains two sections. In the first section, we discuss the legalvalidity of the Draft Rules 29,30,31. In the second part we discuss the generalimplications of extending the legal regime of broadcasting rights under theIndian Copyright Act, 1957 (“Act”)to works on the Internet.

About The Centre forInternet and Society

5. TheCentre for Internet and Society (“CIS”)is a non-profit organisation that undertakes interdisciplinary research oninternet and digital technologies from policy and academic perspectives. Theareas of focus in respect of intellectual property rights include research on domesticcopyright and patent laws, international trade agreements and treatiespertaining to these subjects, promotion of creators’ and users’ rights with aview to furthering access to knowledge and openness in the public interest. CIShas also been participating at WIPO-SCCR negotiations in the capacity of anObserver since 2009.

6. CISvalues the fundamental principles of justice, equality, freedom and economicdevelopment. This submission is consistent with CIS commitment to these valuesincluding the safeguarding of general public interest. Accordingly, thecomments in this submission aim to further these principles.

Comments

7. DraftRules 29, 30 and 31 pertain to section 31D of the Indian Copyright Act, 1957.The proposed change in Rule 29 seeks to expand the modes of broadcast for whichnotice for invoking statutory license under section 31D may be issued – whichpreviously was restricted to only radio and TV modes of broadcasting; and thechange in Rule 31 will permit the Appellate Board to determine royalties for all modes of broadcast.

8. Inview of current state of technological advancement, it is safe to deduce thatthe new mode of broadcasting whoseinclusion is being contemplated in relation to s. 31D via the changes is“internet broadcasting”. The changes will allow entities that operate over theInternet medium to apply for a statutory license under s. 31D of the Act. Inthe following part, we submit our specific comments in respect of Draft Rules29,30,31.

a) Legalvalidity of the Rules: Vires vis á vis the Parent Act

Asper s. 78(2)(cD), the power of the Central Government to make rules in respectof s. 31D expressly exists in respect of “themanner in which prior notice may be given by a broadcasting organisation undersub-section (2) of section 3ID.” Apart from this clause, a general rule-makingpower is conferred via s. 78(1) only for carrying out the purposes of the Act. We submit that this general power should beexercised within limits of rule-making in the nature of administrative andprocedural detail, and should be in consonance with purposes of the Act. Inrespect of s. 31D especially, the purpose can be inferred from the legislativehistory of the provision. This was analysed by the Bombay High Court in Tips Industries v. Wynk Music,[1]where the court noted that the concerns raised before the Rajya SabhaParliamentary Standing Committee (on the Copyright Amendment Bill (2010))related to radio and television industries only, and in the court’s opinionthose two modes specifically were contemplated while introducing s. 31D.[2] Primarily basis thisrationale, the court concluded that “internet broadcasters” offering on demandstreaming services cannot avail of s. 31D. Further, s.31D(3) expressly permitsthe Appellate Board to fix royalty rates only in respect of radio broadcastingand television broadcasting.

Hence,we submit that there is no power under s.78 or any other provision in the Act affordedto the Central Government to expand the scope of s.31D, directly or indirectly.In State of Karnataka v. Ganesh Kamath[3] the Supreme Court heldthat “it is a well settled principle of interpretation of statutes that theconferment of rule-making power by an Act does not enable the rule-makingauthority to make a rule which travels beyond the scope of the enabling Act orwhich is inconsistent there with or repugnant thereto”.

Thus,the extent to which the Draft Rules 29,30,31 alter the intent and scope of s.31Dclearly leaves them ultra vires the parent Act. Rules that are ultra vires theparent Act for exceeding the limits of subordinate executive power are void.[4] Hence, the proposed DraftRules 29,30,31 are both ultra vires their parent Act and void.

b) Implicationsof extending legal regime of broadcasting rights to works on the publicInternet

Therelease of the Draft Rules 29,30,31 is another attempt to extend the statutorylicensing to “internet broadcasters”. The first attempt was when the CentralGovernment released an Office Memorandum[5] (dated 5^thSeptember 2016) to extend statutory licensing under s.31D to “internetbroadcasting” companies. We submit that this was based on an incorrectstatutory construction by the Department of Industrial Policy and Promotion (“DIPP”) and was arbitrary in nature. Notedacademics and scholars have highlighted several constitutional infirmities inrespect of this memorandum.[6] Unfortunately, the currentDraft Rules (29,30,31) raise similar concerns.

Separately,in the context of introducing a broadcasting right for works shared over theInternet – we submit that if the line of argument taken by DIPP that s. 2(dd)read with s. 2(ff) supports the inclusion of “internet broadcasting” is takento its logical conclusion, any person/entity communicating to the general public via the public Internet can claimprotection of their broadcasters’ reproduction right under our Copyright Act. This“broadcast” will happen via multiple platforms such as YouTube, Facebook Watch,live-streaming platforms, on-demand platforms, etc., and such entities will beentitled to enjoyment of this right. This will lead to a dangerous accumulationof undeserved property rights in Internet giants; unlike traditionalbroadcasters these companies never put up initial upfront economic investmentto distribute works to the public. They were launched on the public internet, andcurrently thrive primarily off user-generated content. Even in respect of protectingcontent that is actually created with their investment, copyright law willsuffice with its remedies for infringement.  Hence, there is currently very little economicand legal basis for extending the legal regime of broadcasting rights for workson the Internet. Thus, we submit that in the domestic approach to modernisingour copyright legislation, we must refrain from considering distribution of born-digital/digitised works over the public Internet equivalent to the function of broadcastingworks over cable/ satellite.

9. Weare thankful to DPIIT and the Ministry of Commerce and Industry for theopportunity to make these submissions. It would be our pleasure and privilegeto discuss these submissions and recommendations in detail with members ofDPIIT if the opportunity presents itself.