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

Preliminary

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

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

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

4. The third part contains two sections. In the first section, we discuss the legal validity of the Draft Rules 29,30,31. In the second part we discuss the general implications of extending the legal regime of broadcasting rights under the Indian Copyright Act, 1957 (“Act”) to works on the Internet.

About The Centre for Internet and Society

5. The Centre for Internet and Society (“CIS”) is a non-profit organisation that undertakes interdisciplinary research on internet and digital technologies from policy and academic perspectives. The areas of focus in respect of intellectual property rights include research on domestic copyright and patent laws, international trade agreements and treaties pertaining to these subjects, promotion of creators’ and users’ rights with a view to furthering access to knowledge and openness in the public interest. CIS has also been participating at WIPO-SCCR negotiations in the capacity of an Observer since 2009.

6. CIS values the fundamental principles of justice, equality, freedom and economic development. This submission is consistent with CIS' commitment to these values including the safeguarding of general public interest. Accordingly, the comments in this submission aim to further these principles.

Comments

7. Draft Rules 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 which notice for invoking statutory license under section 31D may be issued - which previously was restricted to only radio and TV modes of broadcasting; and the change in Rule 31 will permit the Appellate Board to determine royalties for all modes of broadcast.

8. In view of current state of technological advancement, it is safe to deduce that the new mode of broadcasting whose inclusion is being contemplated in relation to s. 31D via the changes is “internet broadcasting”. The changes will allow entities that operate over the Internet medium to apply for a statutory license under s. 31D of the Act. In the following part, we submit our specific comments in respect of Draft Rules 29,30,31.

a) Legal validity of the Rules: Vires vis á vis the Parent Act

As per s. 78(2)(cD), the power of the Central Government to make rules in respect of s. 31D expressly exists in respect of “the manner in which prior notice may be given by a broadcasting organisation under sub-section (2) of section 3ID.” Apart from this clause, a general rule-making power is conferred via s. 78(1) only for carrying out the purposes of the Act. We submit that this general power should be exercised within limits of rule-making in the nature of administrative and procedural detail, and should be in consonance with purposes of the Act. In respect of s. 31D especially, the purpose can be inferred from the legislative history 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 Sabha Parliamentary Standing Committee (on the Copyright Amendment Bill (2010)) related to radio and television industries only, and in the court’s opinion those two modes specifically were contemplated while introducing s. 31D.[2] Primarily basis this rationale, the court concluded that “internet broadcasters” offering on demand streaming services cannot avail of s. 31D. Further, s.31D(3) expressly permits the Appellate Board to fix royalty rates only in respect of radio broadcasting and television broadcasting.

Hence, we submit that there is no power under s.78 or any other provision in the Act afforded to the Central Government to expand the scope of s.31D, directly or indirectly. In State of Karnataka v. Ganesh Kamath[3] the Supreme Court held that “it is a well settled principle of interpretation of statutes that the conferment of rule-making power by an Act does not enable the rule-making authority to make a rule which travels beyond the scope of the enabling Act or which 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.31D clearly leaves them ultra vires the parent Act. Rules that are ultra vires the parent Act for exceeding the limits of subordinate executive power are void.[4] Hence, the proposed Draft Rules 29,30,31 are both ultra vires their parent Act and void.

 b) Implications of extending legal regime of broadcasting rights to works on the public Internet

The release of the Draft Rules 29,30,31 is another attempt to extend the statutory licensing to “internet broadcasters”. The first attempt was when the Central Government released an Office Memorandum[5] (dated 5^th September 2016) to extend statutory licensing under s.31D to “internet broadcasting” companies. We submit that this was based on an incorrect statutory construction by the Department of Industrial Policy and Promotion (“DIPP”) and was arbitrary in nature. Noted academics and scholars have highlighted several constitutional infirmities in respect of this memorandum.[6] Unfortunately, the current Draft Rules (29,30,31) raise similar concerns.

Separately, in the context of introducing a broadcasting right for works shared over the Internet – 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 taken to its logical conclusion, any person/ entity communicating to the general public via the public Internet can claim protection 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 be entitled to enjoyment of this right. This will lead to a dangerous accumulation of undeserved property rights in Internet giants; unlike traditional broadcasters these companies never put up initial upfront economic investment to distribute works to the public. They were launched on the public internet, and currently thrive primarily off user-generated content. Even in respect of protecting content that is actually created with their investment, copyright law will suffice with its remedies for infringement.  Hence, there is currently very little economic and legal basis for extending the legal regime of broadcasting rights for works on the Internet. Thus, we submit that in the domestic approach to modernising our copyright legislation, we must refrain from considering distribution of born-digital/ digitised works over the public Internet equivalent to the function of broadcasting works over cable/ satellite.

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