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Copyright Industry Intellectual Property Media Piracy

IPRMENTLAW WEEKLY HIGHLIGHTS (September 21st to September 26th)

Twitter appoints personnel in compliance of with new IT Rules

Twitter has appointed Chief Compliance Officer, Nodal Contact Person and Resident Grievance Officer in compliance of IT Rules, 2021. Twitter has appointed these individuals as employees and not ‘contingent workers’ and has also provided names of the said appointed personnel and their respective positions.

This development comes in a petition filed by Amit Acharya stating that Twitter being a ‘significant social media intermediary’ as laid down under the IT Rules, 2021, must ensure compliance with statutory duties imposed upon it by the provision of these rules.

The matter is now fixed for hearing on October 5, 2021.

Bengaluru e-gaming companies plan to challenge ban decision

An amendment to the Karnataka Police Act shall outlaw online gambling and ‘games of chance’. The key concern of various governments with regards to gaming comes through the apprehension that it promotes gambling, however, in the past, there have been judgements that approve ‘skill based gaming’ against ‘chance based games’.

The ban will affect approximately 100 gaming companies operating from Bengaluru.

ASCI dismisses advertisement plagiarism complaint by Amul

A complaint was lodged by Amul Macho alleging that the Lux Cozi advertisement starring Varun Dhawan was a ‘complete copy’ of Amul’s advertisement released in 2007. Amul sought immediate action against Lux on the grounds that the advertisement unfairly took advantage of the brand equity, reputation and goodwill generated by Amul Macho brand.

In response, Lux contended that the complaint seemed to have been initiated with an intention to malign Lux’s reputation in the eyes of public and waste the time of the Consumer Complaints Council (CCC), adjudicatory body of the ASCI. It also pointed out a list of dissimilarities to show how the concept, theme and expression of both advertisements were in complete contrast to each other and hence, there can be no scope of similarity whatsoever.

Lux also informed the CCC that Amul’s advertisement had been a subject of controversy soon after it was released in 2007 on account of its “objectionable and indecent content”, and was banned by the Ministry of Information & Broadcast across all mediums.

Observing that both advertisements barely had any similarities between them, the CCC held that Lux’s advertisement was not in contravention of the ASCI code and rejected Amul’s complaint.

Google moves Delhi High Court against confidential report leak

A writ petition was filed by Google before the Delhi High Court alleging leak of an interim fact finding report relating to an ongoing investigation into Google’s Android smartphone agreements.

The report does not reflect the final decision of the CCI.

Marvel sues to keep rights to Avengers character from copyright termination

Under the termination provisions of copyright law, authors or their heirs can reclaim rights once granted to publishers after waiting a statutory set period of time.

The litigation figures to focus on the “Marvel Method,” a loose collaborative working atmosphere where initial ideas were briefly discussed with artists responsible for taking care of the details. The Marvel Method has been the subject of prior litigation, almost a decade ago, in August 2013, the 2nd Circuit Court of Appeals affirmed a lower court’s ruling that determined Kirby’s heirs couldn’t wrest back his share of rights to the characters because the former Marvel freelancer had contributed his materials as a work made for hire.

The Kirby case was then petitioned up to the Supreme Court, with the late Ruth Bader Ginsburg signaling some interest in taking up the case. Marvel at the time fought hard against any high court review, and before the justices decided, the case was settled.

If the plaintiffs win, Disney expects to at least hold on to at least a share of character rights as co-owners. The studio would have to share profits with the others. Additionally, the termination provisions of copyright law only apply in the United States, allowing Disney to continue to control and profit from foreign exploitation.

Criminal complaint filed against Javed Akhtar

The complaint is against Javed Akhtar’s statement linking RSS to Taliban. Joshi, the Mumbai lawyer, heard Akhtar on a talk show and felt that the alleged statement were meant to defame and vilify the Hindu community.

Joshi’s statement read, “Statements made by the accused is well planned, thought and calculated defamatory statements to defame RSS and discourage, disparage and misguide the people who have joined RSS or who would like to join the RSS and belittle the RSS in the eyes of common public. There was a well planned motive of the accused to defame RSS.”

Joshi has even prayed for investigation for offences of defamation which are punishable under the IPC Sections 499 and 500. The complaint will be heard on October 30.

Plagiarism claim against song titled ‘Teri Mitti’

Writer Manoj Muntashir has refuted all allegations of him having copied the Teri Mitti song from ‘Kesari’ from a Pakistani song.

Muntashir claims that issues have cropped up against him due to a video made by him on the Mughals where he has used strong words against them, referring to them as glorified dacoits.

Plea moved in Delhi High Court seeking withholding of ‘The Conversion’ release

The Petitioner body has submitted that it had sent a representation to the Ministry of Information and Broadcasting and also to YouTube complaining about the biased and communal content shown in the trailer of the film and had also requested to remove the trailer and withhold the release of the of the film, but it didn’t receive any response.

The matter was heard today by a Bench of Chief Justice DN Patel and Justice Jyoti Singh however, it was adjourned as the counsel for Petitioner, appearing through video conference, was inaudible.

The Court has now adjourned the matter for hearing on October 1, 2021.

De Minimis Defense Doesn’t Protect Minimal Use of Concededly Infringing Material

Richard Bell took a photo of the Indianapolis skyline and published it on various websites. Eleven years later, he registered the photo with the US Copyright Office. Bell later conducted an online reverse image search of his photo to identify potential infringers and subsequently filed more than 100 copyright infringement lawsuits.

Bell sued Wilmott for copyright infringement in 2018, asserting that Wilmott infringed his right to “display the copyrighted work publicly” by making it accessible to the public on Wilmott’s server. The district court granted summary judgment to Wilmott on the de minimis use defense.

The Ninth Circuit rejected the district court’s finding that Wilmott’s infringement was a “technical violation” because Wilmott did not know the photo was still on its website. The Ninth Circuit also found that there was no place for an inquiry into whether there was de minimis copying because the “degree of copying” was total since the infringing work was an identical copy of the copyrighted photo.

This article was originally published on IPRMENTLAW.

Categories
Blog Industry Intellectual Property

Conflict of Artificial Intelligence with IPR

PART I

INTRODUCTION

The impact of Artificial Intelligence and Machine Learning tools on our daily lives has long been a part of academic discussions. Image recognition, search engine optimization was brought way back in the late 20th century but major breakthroughs with respect to A.I. are contemporary these significant developments and acceptance in the consumer market has increased its involvement in every walk of life. Various big-ticket companies have incorporated machine learning tools in their operations. Amazon’s recent virtual assistant Alexa, has given a brief idea of what an A.I. system can offer us in future. Technologists and Jurists have raised their eyebrows over its influence and incorporation in legal regimes. However, the transformation from human-based skilled activities to A.I. based activities would be gradual and require legal transformation at the same pace (given the unpredictable behaviour, it is not wise to be ahead in the particular case). Tesla’s autopilot, Google’s Deepdream is just tip of the iceberg. There are concerns over the requisite changes in the current IPR regimes. The AI-IP interface is bewildering specifically with the advancement of AI not only in the context of authorship and ownership (copyrights and patents) but also for liability (counterfeit products).

Artificial Intelligence has totally changed the paradigm of window shopping and in future is expected to revolutionize it further. The current only system of buying is suspected to shift to a much personalised system where chatbots will be addressing the issues and helping the consumer fit best possible products based on a given set of data. However, what set of data is to be provided would always be a question? It can be earlier purchases or preferences opted by the consumer or a mix of both but the current system of suggestive products would undergo various changes in the coming time.

It predicted by a study from Gartner that by 2020, 85% of customer service interactions in retail will be powered or influenced by some form of AI technology. AI global revenue is predicted by market intelligence firm Tractica to skyrocket from $643.7 million in 2016 to $36.8 billion in 2025.

CONTEMPORARY DEVELOPMENTS IN A.I. VIS-À-VIS TRADEMARK

There are several examples of AI operating in retail and e-commerce shopping environments. The most basic form of A.I. one can observe today in the form of suggestions placed by the websites or its “recommendations based on your order” or general product suggestion featuring consumers’ various preferences and earlier purchases on that website or the data available to it. These websites provide suggestions based on various parameters which may include customers’ browsing history, purchase history, preferences marked on the website etc. These targeted product recommendations are made through AI. This system at the very least has substituted the human shop assistant of old with AI.

Amazon Echo and Google Home devices are other examples of big changes in the e-commerce and trademark world as these systems help in identification of various products based on their brands. Thus one major interface of AI and trademarks happen when there is a brand war based on the listings provided by the AI on certain websites, say Amazon. For example Amazon’s Echo product functions through a voice recognition system which is software called Alexa and is an AI. Further the current settings of Alexa are such that it cannot place order on itself but it removes a crucial part of the product selection process frequently considered in trade mark law. Alexa is the one analysing the market, it has all the market and branding information, not the consumer. Automatic purchasing is still a new concept but in time to come it will rather be used more frequently by the consumers. Here the AI would completely take over the purchasing decision. Another product of AI and shopbot is Amazon Dash which is a replenishment service which runs on the concept of automated ordering. The current system of it is a WI-FI linked button which replenishes consumable products like coffee, sugar etc which takes the current stock into consideration and places order accordingly before the stock of the consumer runs out. Fashion industry is also one such arena where AI and branding takes place at a larger level with respect to personal stylists and assistants which helps in sorting out apparels for the consumers. There are various things that the assistant takes into consideration before suggesting an item which may include stitching type, body fit of the cloth, fabric etc. One such assistant is Mona which is self learning AI and operates on customer feedback which helps you make your own wardrobe based on their personalised styles and it enhances its services the more a customer uses it. Another example of AI is Pepper the robot which identifies purchases earlier made and compares it with style and price preferences. It is also capable of reading customers’ mood, and in the future this can replace shop assistants.

CURRENT LEGAL SCENARIO VIS-À-VIS MACHINE LEARNING OPERATIONS

Absence of uniform definition and standards leads to difficulty in incorporation within domestic and international laws. Douglas Hofstadter states “AI is whatever hasn’t been done yet.” To draw a conjecture, this is probably the reason for not capturing A.I. in definitive terms. However “Intelligence demonstrated by machines” can provide an appropriate and simplistic overview for analysing its implications of various IPR regimes specially trademark law. It is a well settled fact that social media platforms and search engines use machine learning tools to generate outputs from their data matrix with the help hashtag optimization, relevancy, freshness and various other parameters. For example the e-commerce platform Amazon displays results based on an individuals’ previous search history, preferences and may also use scrolling timer (a new age concept which analyses time spent on screen comparing it with number of clicks on similar topics).

The advent of A.I. has totally changed the scenario of online B2C platforms and the consumer market therein. It has taken the parameters of preferences in brand, colour, size etc out of the hands of shopkeepers and will soon lead to virtual shopping centres providing a list of options matching consumers’ preferences. One can always argue about the size of population it will cover, given the priorities of an average Indian buyer and the internet penetration of our country. Initial resistance is inevitable but gradually people will shift, as in the case of online shopping. Ultimately the current legal framework will have to accommodate A.I. systems’ operations and various liabilities associated with it specifically in the e-commerce and trademark parlance. Traditionally, trademarks were differentiating indicators in a homogenous market, basically used to create a brand name highlighting the trust, value, quality and standards of the product sold by the proprietor. The online retailing business changed the utility of trademarks and brand names by providing a thrust to counterfeit businesses. The current trademark regime renders a vacuum vis-à-vis the liability of an A.I in cases of counterfeit products.

The online retail platforms are provided with a safe harbour protection in cases of counterfeit products (section 79 Information and Technology Act). The courts however stand for dilution of the safe harbour defence; the Delhi High Court in Christian Louboutin SAS v. Nakul Bajaj & Ors. stated the liability of online platforms under section 79 (3)(a) which does not exempt platforms having active participation or contribution in sale of counterfeit products from safe harbour provision. The test examines the involvement and manner of business which the platform operates in. Rule 3 of the Information Technology rules, 2011 provides mandatory agreement between the intermediary and sellers prohibition on hosting or uploading and displaying any infringed product.

This article was originally published on IPTSE.

Categories
Intellectual Property

PPL Moves Delhi High Court Against Government Order That Rejected Its Re- Registration Application

Phonographic Performance Limited (PPL) (petitioner) is a collective rights organization licensing its members’ sound recordings for communication to public in the areas of public performance and radio broadcast. PPL owns and/or controls the Public Performance rights of some of the largest record labels including Sony Music Entertainment, Speed Records, T-Series, Universal Music, Times Music. In an order dated 25.05.2021, passed by the Government, PPL’s application for re-registration as a copyright society under Rule 47 of the Copyright Rules, 2013 was rejected. Rule 47 of the Copyright Rules, 2013 deals with Application and conditions for re-registration or renewal of existing copyright societies.

Facts of the Case:

  • Pursuant to an amendment in the Copyright Act, 1957 and the Rules thereunder, in the year 2012 and 2013, registered copyright societies such as the petitioner, were required to apply for re-registration within a stipulated time frame.
  • The petitioner applied for such re-registration on 09.05.2013. However, by a communication dated 20.05.2014, the petitioner informed the respondent that it was not desirous of carrying on business as a registered copyright society, and that it ceased to be a “copyright society” under Chapter VII of the Act. It therefore stated that its application dated 09.05.2013 stood withdrawn by it.
  • The respondent did not accept the aforesaid position and, informed the petitioner that its application for re-registration was still under consideration of the Central Government, and no final decision had been taken so far. The respondent took the position that, pending a final decision on the petitioner’s application, the petitioner was not entitled to take a unilateral decision not to continue as a copyright society, as the interests of several rights owners were involved.
  • However, by a communication dated 25.05.2021, the respondent contended that the petitioner had withdrawn its application on 20.05.2014, and that it had made a subsequent application on 11.01.2018, which was belated. The respondent therefore communicated its decision that re- registration cannot be granted to the petitioner.

The Delhi High Court was of the view that since the petitioner’s communication dated 20.05.2014 was expressly rejected by the respondent, and the subsequent correspondence between the parties treated the petitioner’s application as a live application, therefore, an ad interim order was passed, and the petitioner’s application was directed to be considered on its own merits. The Hon’ble Court further clarified that if PPL finally succeeds in the present matter, its application for re-registration would stand revived. Further, the Hon’ble Court also directed the Government to keep the aforesaid in mind and till the pendency of this petition not to take any action inconsistent to the above-mentioned position.

PPL further sought an interim order directing the respondent not to process any other application for registration as a copyright society in respect of sound recordings, being the works in which the petitioner’s members are right holders. The court relied on Section 33(3) of the Act and Rule 49 of the Rules, which provide that an application for registration may be rejected inter alia on the ground of existence of another copyright society registered under the Act for administering the same right or set of rights in the specific categories of works and clarified that the respondent shall not take any action inconsistent with the present position during its pendency. However, the Court was of the view that an order restraining the respondent from processing any other application would not be appropriate at this stage, particularly as no other applicant is even a party before this Court.

The matter is now listed on 25.08.2021. Read order here.

In the Annual Report of PPL for 2019-20, it is recorded that:

“Pursuant to the 2012 Amendment to the Copyright Act with effect from June 21, 2012, more specifically in Chapter VII and the newly inserted second proviso to Section 33 (3A) read with the new Copyright Rules 2013, seeking Copyright Societies to re-register, the Company, had within the one year period available to apply for re-registration, applied for the same on May 09, 2013. Since the Company did not get any response from the Central Government and in view of the legal implication arising therefrom, the Company, vide its letter to the Central Government dated May 20, 2014 has, inter alia, withdrawn its application for re-registration and has declared to have ceased to be a ‘copyright society’ under Chapter VII and Section 33 of the Copyright Act, as amended.

The Central Government (Ministry of Human Resource Development) in its letter dated November 20, 2014 stated that the Company’s application for registration, dated May 09, 2013, is still under consideration and hence the Company cannot take a decision not to continue as Copyright Society.

In terms of Section 18 (2) of the Copyright Act, where the assignee of a copyright becomes entitled to any right comprised in the copyright, the assignee with respect to the rights so assigned, shall be treated for the purposes of this Act as the owner of copyright and the provisions of this Copyright Act shall have effect accordingly. On the strength of the provisions of Section 18 (2), the Company, backed by a written legal opinion, believes that the ownership by assignment will be exempt from the provisions of Section 33 (1) and had completed procedures to obtain such assignment of the copyrights by the members to the Company and continues to engage in the business of issuing/granting licences.

 As per the Board Meeting held on November 21, 2017, it was resolved that subject to the approval of the members of the Company, the Company should pursue its application for re-registration as a copyright society with the Central Government under Section 33 of the Copyright Society Act, for sound recording and, to this end, also review its existing Articles of Association under guidance from experts or advisers. Subsequently the Company has changed its Articles of Association with the approval of its members”.

Readers may recollect that the Government has been calling for stakeholder meetings to discuss the various aspects pertaining to registration of multiple copyright societies as opposed to single copyright society in a single class of work. The rejection of PPL as a copyright society therefore comes as a surprise.

Read our posts on this topic herehere,  here and here.

As covered in our post here, the Copyright Office had issued a public notice on May 22, 2018 inviting attention of general public and stakeholders to the fact that Recorded Music Performance Limited (RMPL) has vide their application dated March 26, 2018 applied through the Registrar of Copyrights, before the Central Government for its registration as a copyright society under Section 33 of the Copyright Act, 1957 in respect of Sound Recording Works.

There have been several applications filed for registration of different copyright societies, status of which is yet not known. For instance, Cinefil Producers Performance Limited had also filed its application in 2018 (see our post here). In November, 2020, the Government had called for comments on registration of Screenwriters Rights Association of India (see our post here) to an application filed by SRAI in 2017.

As covered in our post here, Rule 49 of the Copyright Rules, 2013 require that when an application   for registration   is submitted to the Central Government through the Registrar of Copyrights, Government may, within a period of sixty days from the date of its receipt by the Registrar of Copyrights either register the applicant as a copyright society or, if- (i)  the applicant   has no professional   competence   to carry on    its business   or has no sufficient funds to manage its affairs; or (ii)  there exists another copyright   society registered   under the Act for administering the same right or set of rights in the specific   categories   of works   and it is well functioning; or (iii)  the Central Government   has reason to believe that the members   of the applicant are not bona fide copyright authors or other owners or they have not voluntarily signed the instrument setting up the applicant and the application   for registration; or (iv) the application   is found to be incomplete in any respect, reject the application

Provided that no such application shall be rejected without giving an opportunity of being heard to the applicant…..”

Whether the 60 day period mentioned in Rule 49 has any significance is yet to be tested. Regardless, there ought to be more transparency in providing updates on the status of the registrations of different societies and the reason behind their rejection.

This article was originally published in IPRMENTLAW.

Categories
Copyright Industry Intellectual Property

Setting the Stage: What It Takes to Support a Thriving Creative Economy

Throughout April 2021, the Global Innovation Policy Center hosted a series of events focused on ecosystems for innovation, creativity, and craftsmanship.

During the final keynote discussion of the series, MPA Senior Executive Vice President and Global General Counsel Karyn A. Temple talked with RIAA Chairman and CEO Mitch Glazier about how policymakers can help artists — especially in the wake of the COVID-19 crisis.

The full video of their conversation can be viewed below.

Categories
Blog Copyright Industry Intellectual Property Piracy

Charles Rivkin Remarks at the Federation of Indian Chambers of Commerce and Industry (FICCI) Frames

Thank you, Uday, and thank you, FICCI, for inviting me to Frames. It’s an honor to speak before such a vibrant forum about timely issues and challenges affecting our industry.

Before I go on, I want to acknowledge that we meet at a very important moment. Very important. The beginning of the Indian Premier League season. And I know there are some big questions playing on the minds of many here: Like: Can the Chennai Super Kings successfully defend their title?

Now, I grew up in the United States with baseball, where we “pitch” the ball instead of “bowling” it. Where we hit “home runs” instead of “Sixes.” And while many far smarter people have discussed the similarities and differences of these two great sports, the former diplomat in me knows better than to talk cricket with this audience.

But I will say this: the IPL is the most exciting and most-attended cricket league in the world. That’s why Star is banking on this passion and has paid substantially for the broadcasting rights for five years.

Now that’s the kind of smart media business that all of us can understand. And it’s what I have come to talk about today.

Because if there’s one thing that unites Indians as passionately, and across as many religions and socioeconomic strata as cricket, it’s movies.

Movies in all their diversity of cultures and language. The pure richness of spectacle, whether they’re on jumbo screens or pocket-sized mobiles. And in recent years, it has been so exciting to see Indian filmmakers no longer only creating stories for local audiences but sharing dramas with universal themes for global audiences, here and in markets around the world.

More and more people are learning about India primarily through its films and television.

You only need to look at the successes of Dangal and Sacred Games to see the global impact of what we do and – just as importantly – what we do together. Dangal brought UTV Motion Pictures and Walt Disney Pictures India together.  And Sacred Games, Netflix’s first Indian language movie, brought our newest member studio together with Phantom Films.

On a personal note, this is my third trip to India over the past few years. And in my previous capacity as U.S. Assistant Secretary of State for Economic and Business Affairs, I saw the country from many perspectives: from the economic to the political; and from the business to the cultural.

I also saw the vibrancy of the Indian film and television industry. The film industry, which makes between 1,500 and 2,000 films a year, contributed US$33.3 billion to the Indian economy, and supported 2.36 million jobs in 2017. India is also the largest television market in the world, with more than US$10 billion in revenue in Fiscal Year 2018.

When I visited, I knew that Bollywood was – and still remains – the world’s largest producer of films, contributing more than 40 per cent of India’s box office revenue. So I decided to see it for myself.

I visited a Bollywood film set which turned out to be one of the memorable highlights of my trip. Watching the day to day production activity was extraordinary. You couldn’t take your eyes away from the spectacle and sheer enormity of these scenes. A marvel of creativity!

So, India, I’m one of your film and TV industry’s biggest fans! And I am proud to return to this extraordinary country as Chairman and CEO of the MPAA, to represent the interest of our member studios.

They are so deeply invested in India: Disney/Fox’s Star TV India … Sony … Viacom … and Netflix, our newest member, which has emphasized its strong commitment to India.

And because of our presence, and our deep investment in India’s future, we want to be your partners in many mutually beneficial ways.

And we share a deep interest in incentivizing the Indian media and entertainment industry to grow even bigger.

As we meet, for example, Indians live in a country that is the world’s largest producer of movies with the least number of screens available to enjoy them. And a report that we are releasing with the Producers Guild of India here at Frames underscores this challenge with a telling example.

Dangal is the highest grossing film in Indian history. And as Prime Minister Modi has reported, China’s President Xi even made a point of telling him how much he enjoyed it!

India’s population is second only to that of China. Yet the movie made more at the Chinese box office than it did in its own country. As much as five times more by some estimates.

Numbers tell the story. China boasts 50,000 screens, compared to India’s total, which is approximately 9,500.

Clearly, as our report concludes, building more screens would bring much more revenue to India, and that would be a game-changer for the national box office and the entire entertainment industry.

Unfortunately, there are at least as many state laws governing the construction of new theaters as there are states. Some laws even date back to the British Empire, a time when they were imposed to restrict the gathering of large crowds.

Incentivizing our industry is so much more effective than hampering it. Which is why, we are urging the states to reduce those barriers, by shortening the time it takes to get approval and build those screens.

On the production side, we are pleased that Government is contemplating a Federal tax incentive for filming that our member studios could find attractive.

We have also urged state governments to step up their incentives not only for local films but also to encourage foreign investors. We are pleased that the Film Facilitation Office India, created in part at the industry’s urging, regularly engages with the states to open doors and create more opportunities.

We must build on – and support – Prime Minister Modi’s historic one nation, one tax idea, so that creators are not so overcome with additional local taxes that they change their minds on starting productions. We have encouraged state governments not to levy additional taxes that discourage filmmakers; and we have asked three states that have introduced Local Body entertainment taxes to roll them back.

Of course, there is so much more that we can do together – not only to protect our creativity but to actively incentivize the market and build on the kind of growth that India enjoys today in its OTT industry.

Thanks to the affordability of mobile phones in recent years, young people and old … rich and poor …. From remote villages to bustling towns … 95 per cent of this nation … are watching movies, TV shows – and of course cricket … in the palms of their hands.

Around the world, people spend an average of 6 hours 45 minutes a week on the internet.

In India, it’s 8 hours and 28 minutes.

According to a recent study by the Boston Consulting Group, the OTT market here is going to reach US$5 billion by the year 2023.

We know that, together, we can build an even bigger entertainment market … A market that can generate millions, even billions, of rupees in revenue to the Exchequer.

A market that can create jobs and opportunities across the economy.

At the producer end of the equation, filmmakers and other creators are often beset by cumbersome regulations that slow down the shooting permit process, or by state taxes that threaten to engulf their production budgets.

In our conversations with the federal and the State governments, we have advocated a simple formula: to simplify, incentivize, promote, and measure return on investments on any incentive that takes India forward.

For example, the MPA shared an Economic Contribution Report last year that underscored the importance of the movie and entertainment sector to the Indian economy. And we were pleased that the Government of India subsequently identified the Indian media and entertainment industry as one of 12 designated “Champion” sectors to help raise its export services to more than four percent of GDP by 2022.

We have seen in many other countries the positive impact of rewarding creativity, instead of harnessing it into submission. And wherever appropriate, we have tried to show the economic rewards – the return on investment – of these and similar initiatives.

On that point, creativity, I’d like to talk about piracy and copyright protection.

Creativity is the heartbeat of our industries. Piracy cuts into that vibrancy. It robs incomes from creators and craftsmen. Our creative output starts to drop off. And little by little, an entire ecosystem breaks down. Our economies lose. And a rising number of consumers – here and across the world – are deprived of great stories.

When I came here as Secretary of State John F. Kerry’s top economic and business advocate,   one of the issues before the Indian Parliament was camcorder legislation. And I was among those who strongly advocated for legislation to address in-theater camcorder piracy.

I am pleased to see that the Cinematograph Act Amendment is now inching closer to the finishing line… And not only that, it contains many of the provisions that we proposed.

This is one important step. But it’s essential to address online piracy problems in a comprehensive manner.

In Maharashtra, for example, the very heart of Bollywood, we are fighting to reduce piracy in a very direct way.

The Maharashtra Cyber Digital Crime Unit – or the MCDCU – is a great example of multiple stakeholders partnering on a successful endeavor to honor and protect the sanctity of Indian creativity.

Our studios support the MCDCU, while the Motion Picture Association has helped to coordinate their efforts with law enforcement.

It is our hope that this example can be adopted across India, and even internationally with cooperation from similar agencies.

It’s as important to protect India’s incredible creative assets as it is to introduce the incentives that will not only produce more cinema screens but build a greater infrastructure across all platforms that makes India the ever more robust media and entertainment market that we all want to see.

That is an outcome – and a future – that I anticipate with great excitement, and one that I look forward to working with you to realize in the years ahead.

The great cricket journalist Peter Roebuck once told a story that says a lot about India’s passion for cricket. But I believe there’s a message in there for all of us too.

A train that was going from Shimla to Delhi stopped at a station for a few minutes longer than usual. The reason was simple. At that moment, Sachin Tendulker was batting 98 runs. Everyone on that train and on the platform – from the passengers to the conductor – waited to watch him complete his century.

I think both our industries always feel a little like that. We are batting 98. We are powerful, strong. We’re achieving. But we are always looking to get to that century.

Like the crowd that waited so patiently and confidently for Sachin to score his ton, we know it’s going to happen.

Together, here in India, I know that we can get there.

We have the shared interests.

We have the desire.

We have the partnerships.

We have the capacity.

And we certainly have the creativity.

Thank you.

 

Categories
Intellectual Property

Copyright Amendment Rules, 2021

I. Introduction

On March 30th, 2021, the Central Government notified the Copyright (Amendment) Rules, 2021. A draft of these rules were released two years ago for public comments (you may read our article covering the 2019 draft here).

II. Key Changes

1. The 2021 amendment replaces ‘Copyright Board’ with ‘Appellate Board’ (reproduced hereunder). However, this seems to be in contrast to the recent plans of the government as per The Tribunals Reforms (Rationalisation and Conditions of Service) Bill, 2021 which is set to abolish the Appellate Board (along with other tribunals and authorities).

Appellate Board– The Chairman and other members of the Board shall be appointed as per the provisions of the Trade Marks Act, 1999; Provided that the Technical Member of the Board for the purposes of the Act shall have the qualifications as specified in the Tribunal, Appellate Tribunal and other Authorities (Qualifications, Experience and other Conditions of Service of Members) Rules, 2020”. Terms and conditions of the office of the Chairman or members of the Board.— The Chairman and other members of the Board shall be appointed for such period not exceeding five years as the Central Government may in each case deems fit:.

2. The 2021 amendment modifies Rule 55 (reproduced hereunder), requiring the copyright society to create a system of payment through electronic modes through which payments are traceable.

Conditions subject to which a copyright society may issue licences, collect royalties and distribute such royalties.— (1) A copyright society may issue licences and collect royalties in accordance with Tariff Scheme in relation to the right or the set of rights in the specific categories of works for which the copyright society is registered as it has been authorised to administer in writing by the members for the period for which it has been so authorised.

(2) The royalty so collected shall be distributed in accordance with the Distribution Scheme subject to a deduction not exceeding fifteen per cent. of the annual total collection on account of administrative expenses incurred by the copyright society and a further deduction not exceeding five per cent. for the Welfare Scheme under rule 7167:

Provided that a copyright society may during the initial period of two years of its registration deduct up to twenty percent of the annual total collection on account of administrative expenses incurred by the society.

(3) The copyright society in relation to collection of royalty under sub-rule (1) and distribution of royalty under sub-rule (2) of this rule, shall create a system of payment through electronic modes and shall establish a system through which the payments so made are traceable.”

3. The 2021 amendment modifies Rule 58 (reproduced hereunder) requiring the copyright society to (i) keep separate royalties of those authors who could not be identified or located; (ii) take all necessary measures to locate the authors and owners; (iii) at the end of three years transfer undistributed royalty of such unidentified persons to the welfare fund of the copyright society.

Distribution Schemes –

(11) A copyright society must ensure that where the royalty cannot be distributed within the time specified in sub-rule (8) as the relevant author or other owner could not be identified or located; such royalties are kept separate in the accounts of the copyright society.

(12) A copyright society must take all necessary measures to identify and locate the authors and other owners and must publish on its website, at the end of every quarter, the following information:

(a) the title of the work;

(b) the name of the author and other right owners of the work, as available; and

(c) any other relevant information available which could assist in identifying the right holder.

(13) In case the royalty due to author and other owners remains undistributed at the end of the period of three years from the end of the financial year in which collection of the royalty occurred, the copyright society shall transfer such amount to the welfare fund of the copyright society.

4. Addition of Rule 65A (reproduced hereunder) which requires the copyright society to make an annual transparency report for each financial year within 6 months following the end of that financial year. Some of the information (along with other information) the report must contain are: (i) number of refusals to grant license; (ii) financial information on total royalties collected; (iii) total royalties paid to author and other owners; (iv) total royalties collected but not yet attributed to author and other owners.

65A. Annual transparency report.— (1) The copyright society must draw up and make public a special report to be referred to as the annual transparency report for each financial year within six months following the end of that financial year. The copyright society shall publish on its website the annual transparency report and ensure that the annual transparency report remains available on its website for at least three years.

(2) The annual transparency report must contain the following information, namely:— (a) report on the activities in the financial year;

(b) number of refusals to grant a licence;

(c) financial information on total royalties collected;

(d) the total royalties paid to author and other owners;

(e) the total royalties collected but not yet attributed to author and other owners;

(f) the total administrative deductions made from royalty collected;

(g) the details and use of the amounts deducted for the activities conducted under the welfare scheme as provided under rule 67; and

(h) Information on amounts received from and paid to the foreign societies or organisation”.

5. The 2021 amendment modifies Rule 70 (reproduced hereunder) requiring every application for registration of a computer programme to be accompanied with the first 10 and the last 10 pages of the source code or the entire source code (if less than 20 pages), with no blocked out or redacted portions.

(5) Every application for registration of a computer programme shall be accompanied by at least first 10 and last 10 pages of source code, or the entire source code if less than 20 pages, with no blocked out or redacted portions the source and object code.

III. What is missing from the proposed rules circulated in 2019?

The proposed rules in 2019 which had created an uproar in the industry and which seem to be missing in the notified 2021 Rules are:

1. Inclusion of ‘each mode of broadcast’ for the words ‘radio broadcast or television broadcast’ in Rule 29 to 31. Rules 29 to 31 deals with statutory licenses for broadcasting of literary and musical works and sound recordings. Readers may recollect that this proposed amendment would have extended the statutory licensing provisions to internet broadcasting in contradiction with the ruling in Tips vs Wynk judgement and beyond the scope of Section 31D i.e. the parent provision. Read about it at length in our older post here.

2. The proposed rules of 2019, provided for Explanation 3 under sub-rule 4 of Rule 68 to be omitted, however, the amendment of 2021 does not touch upon the same. Read about it at length in our older post here.

3. The proposed rules in 2019 had also attempted to add certain parameters to be considered by the copyright society while fixing the tariff scheme, which have been omitted in the 2021 Rules.

 

This article was originally published in IPRMENTLAW.

Categories
Intellectual Property

NFTs & Copyright

The English language is constantly being transformed by the addition of new words, meanings, terms and acronyms. It is hard to keep up sometimes. The latest to crowd into my consciousness is “NFT”. While the expression NFW (you can look it up and no, it doesn’t stand for Nashville Flower Week) is quite familiar to me, WTF is NFT? And does it have anything to do with copyright? Of course it does, you say, or else he wouldn’t be blogging about it.

An NFT is a “non-fungible token”, the digital phenomenon that has taken off in recent weeks as wealthy investors purchase, often at art auctions, digital representations of “something”. Rather than try to explain it, I will crib from someone who undoubtedly knows more about NFTs than I do. As explained by Luke Heemsbergen, a Ph.D candidate at Deakin University in Melbourne, in his blog “NFTs Explained: What They Are and Why They Are Selling for Millions of Dollars”;

“NFTs are digital certificates that authenticate a claim of ownership to an asset and allow it to be transferred or sold. The certificates are secured with blockchain technology similar to what underpins Bitcoin and other cryptocurrencies…  (Unlike Bitcoin) NFTs are by definition non-fungible, and thus, are deployed as individual chains of ownership to track a specific asset….   NFTs are designed to uniquely restrict and represent a unique claim on an asset. And that is precisely where things get weird: often, NFTs are used to claim “ownership” of a digital asset that is otherwise completely copiable, paste-able and shareable, such as a movie, JPEG, or other digital file”.

NFTs can be bought and sold (for a lot of money—usually cryptocurrency), as shown by the example of the token created by digital artist Beeple (Mike Winkelmann) and sold to an anonymous buyer for $69 million through auction house Christie’s in early March. They exist only digitally but unlike most digital images they cannot be duplicated as each has a unique digital signature, although a semblance of the NFT can certainly be reproduced. Basketball fans can buy unique NFTs of video game highlights of NBA games, a collectible that can be traded or sold, even though the same video clip can be viewed for free on Youtube. But the NFT owned by the fan is identified and unique. I guess it is a bit like anyone being able to see Monet’s Artist’s Garden at Giverney in an art magazine or even on the internet, but the one and only original is in the Musée d’Orsay in Paris.

An NFT can be made out of just about anything digital—images, text (Jack Dorsey’s first Tweet), videos, music, etc. and just like the famous Dutch tulip bulb is a product of scarcity. It has value because someone will pay something for it, in the expectation that in future it can be sold to someone else who will be willing to pay even more for it.

How about the role of copyright with respect to NFTs?

One thing is certain. It is the creator of the artwork or music in an NFT who owns the copyright to the underlying work, not the purchaser unless the sale includes the sale of certain rights.  In many cases, even though the buyer is the sole owner of a particular NFT, the artist who created the work to which the NFT is linked could continue to produce copies of the work. One legal blog illustrates the limits of an NFT owner’s copyright by using the following example;

“Unless the NFT owner has received explicit permission from the seller, the NFT owner does not automatically acquire the legal right to take pictures of the creative work attached to the NFT and make T-shirts or postcards for sale.”

Can the NFT itself be copyrighted? The answer is unclear but it is unlikely because the NFT itself (i.e. the certificate of ownership) is not a creative work. Some people have compared it to a deed to a house, but not the actual house. The NFT gives title to the underlying work but normally is not the work itself. (There are some exceptions when an original piece of art is uploaded directly into the blockchain but this is unusual because, as explained here, the cost of writing data into the blockchain is often prohibitive).

What about NFTs based on works created by a team, or by employees in the course of employment or by AI machines?  The answer to these questions is the same with respect to other tangible works, it depends on the circumstances, except that a machine cannot hold a copyright. There has to be a human creator behind the AI.

This raises an intriguing question with regard to the NFT created by the humanoid robot “Sophia” that was put up for sale in an online auction at the end of March. The underlying art is based on a collaboration between Sophia and Italian digital artist Andrea Boneceto, with Sophia shown manipulating Boneceto’s original creations to produce something new. The NFT of the work will not include the copyright which pershaps will belong jointly to Boneceto and David Hanson, the owner and founder of Hanson Robotics, Sophia’s creator. It will be interesting to find out.

Can the copyright of the underlying work be transferred to the owner of the NFT? That question has been pondered by legal experts; the conclusion seems to be yes, although the actual modalities of transferring a Blockchain-verified digital file written in software code might be complicated. A rights-holder might also choose to license certain, but not all, of their rights associated with an NFT. A key element in the process is ensuring the integrity of the link between the NFT and the underlying work in order to be certain that any given NFT actually represents the art on display.

NFTs offer some potentially exciting new advantages to artists in terms of copyright tracking, as well as greater returns from selling the copyright. As I wrote in a blog posting about a year ago (Blockchain and Copyright: How can this new Technology serve Creators?), blockchains can be a useful tool to enable tracking of authorship attribution, and thus attribution of royalties, as well as monitoring of use of copyrighted materials. They enable digital music distribution companies like Bluebox to flow royalties back to rights-holders more efficiently. With respect to NFTs, these are now being exchanged through the Bluebox platform. As reported by Bloomberg, one technique is to split each song into multiple NFTs, each representing a one percent split of the song’s copyright, half of which will be sold to the public. In this way, fans could purchase “bits” of recordings to help propel their favourite artists to the top of the charts, and then potentially resell their NFT for a profit.

However, it is not all smooth sailing. Artists have found their work appropriated by sellers of NFTs, without permission. It’s a bit like finding your art work adorning posters and T-shirts being sold on the internet, all without permission or licensing. NFTs have their downsides but still, they offer a new revenue-stream for some artists, as long as they can protect their copyright.

NFTs also raise ethical concerns for some artists because of the huge amounts of energy required to power blockchain transactions. Environmental responsibility is a big issue for some artists and consumers and, believe it or not, the way in which content is distributed and consumed can have a significant impact on one’s carbon footprint.

Coming back to copyright, it should be entirely possible for the laws and principles of copyright to be adaptable to works of art that have become digital tokens. However, there are still many unanswered legal questions related to NFTs, several of them involving copyright, others contractual terms. One US legal firm has outlined a number of them in the context of US law;

What rights and remedies does a creator have if their work is tokenized without their permission?
How can platforms, issuers, and IP owners enforce their rights and remedies against NFT owners in violation of license terms and contractual restrictions?
How do you clearly and conspicuously “attach” terms and conditions to an NFT and ensure that those terms follow the NFT and bind subsequent owners?
What right of publicity and SAG (Screen Actors Guild) issues are triggered by the tokenization of an asset that includes an individual’s image, likeness, voice, or performance?
How do moral rights impact NFTs in the U.S. and abroad? Does the Visual Artists Rights Act (VARA) apply, or should it? (Comment: VARA protects the moral rights of artists in the US).
What rights and remedies does an NFT owner have, and against whom, if the underlying asset disappears or changes? (Comment: This could happen if the entity hosting the NFT went out of business or dropped its internet registration).
How does the first sale doctrine (17 U.S.C. § 109) operate in the world of NFTs? (Comment: It probably doesn’t since the first sale doctrine does not apply to digital works).
How do copyright terminations work in a world of NFTs that is designed to last for eternity?
I certainly don’t know the answers to these questions and I am not sure that anyone does. However, the author of the blog that I have referenced above, Jeremy Goldman of Frankfurt, Furnit, Klein and Selz PC in New York would be more than happy to help you figure it all out. For a fee of course. There, Jeremy, some free publicity in return for providing such a thoughtful piece on the issue of NFTs and copyright. Thank you.

There are a host of challenging and as yet undefined issues when it comes to the sale and monetization of NFTs.  Will NFTs, like the Dutch tulip bulbs of the 17th century flame out, or are they here to stay as part of our digital world? Only time will tell. In the meantime, Beeple has cashed in “big-time” for his digital token “Everydays: The First 5000 Days”. Will his benefactor be so lucky in future? WTHDIK?

This article was originally published in Hugh Stephens Blog.

Categories
Blog Copyright Industry Intellectual Property

World IP Day: Time to Forge a Global Solution to a Global Problem (Blocking of Pirate Streaming Sites)

I am writing today to mark World IP Day, April 26 and, as part of this salute to the work being done in protecting IP rights around the world, to highlight a growing global problem affecting IP stakeholders, streaming piracy. While the World Intellectual Property Organization (WIPO) does a great job of promoting an awareness of IP and in moving forward (usually slowly) with international remedies, the technological revolution has been changing the landscape for IP rights-holders at break-neck speed, in the process often benefiting those who make a business model out of free-riding. A recent study in the US indicated that streaming piracy in 2019 cost Over the Top (OTT) providers (i.e. content platforms like Netflix that deliver content through the backbone of the internet) and pay-TV companies $9.1 billion (USD) in losses from piracy and illicit account sharing. The report appears to be limited to the US and it is not clear what percentage of the losses come from piracy and what is from account sharing (if you want to pay $7,500 to acquire the report, you can get this information), but there is no question that streaming piracy is a major source of income loss for content distributors and forms a significant part of the estimated cost of overall piracy and counterfeiting.

And the situation is not getting better.  A recent study by research firm Sandvine estimated that 6.5% of households in the US and Canada access subscription television piracy services, where the consumer either pays a subscription fee to an unlicensed video provider for access to illegal content or makes a one-time payment to purchase a box that comes fully loaded with software enabling access to pirated streams. This form of “subscription piracy” is estimated to cost legitimate providers over $4 billion annually. A study undertaken for the Global Innovation Policy Centre (GIPC) of the US Chamber of Commerce in 2019 estimates the cost of video piracy to the US economy alone at almost $30 billion annually (on the low end), and cost upwards of half a million jobs;

The study shows that all of the benefits that streaming brings to our economy have been artificially capped by digital piracy. Using macroeconomic modeling of digital piracy, the study estimates that global online piracy costs the U.S. economy at least $29.2 billion in lost revenue each year.”

The high-end estimate is over double this amount!

So what is to be done about it? Since there is no international treaty that deals with streaming piracy (unlike counterfeiting where there is an Anti-Counterfeiting Trade Agreement or ACTA, signed by 31 countries although never brought into effect because of popular opposition and lack of ratification), anti-piracy remedies have been developed on an ad hoc basis country-by-country. Some governments have been much more active than others, but a common approach has been to use what is often called “site blocking” legislation to combat the distribution of pirated content streamed from offshore sites. A more accurate description of the measure in my view would be “disabling access to pirate sites”, since the term “blocking” unfortunately has unwarranted negative connotations. “Site blocking” has been criticized by advocates of total internet freedom as being an infringement of free expression on the internet and a violation of the concept of net neutrality.

This is a smokescreen. Net neutrality has been trotted out by cyber-libertarians and anti-copyright advocates as an excuse to do nothing to stop piracy. There are various definitions of “net neutrality” but one posted by the Canadian broadcast and telecoms regulator, the CRTC states that “Net neutrality is the concept that all traffic on the Internet should be given equal treatment by Internet providers with little to no manipulation, interference, prioritization, discrimination or preference given.” Unfortunately that definition, and the definition used by many, fails to differentiate between legal and illegal traffic. In fact there are many precedents for limiting certain forms of internet traffic, such as content promoting criminal activity, child pornography, terrorism, racism and so on. It is clear that the concept of net neutrality has to be interpreted sensibly. While there are already limitations on content that are widely accepted as being in the public interest, there is also wide agreement that the decision as to what restrictions to impose should not be left to internet providers to decide unilaterally.

This brings me to the remedy increasingly being adopted in many countries around the world, namely “site blocking” (I will use this term since it is the common reference, even though I have my doubts about the message that it conveys). Site blocking orders are achieved either through the courts, or through administrative means that allow due process and appeal. As I noted in my submission on international site blocking to the Parliamentary Committee reviewing Canada’s Copyright Act, more than 40 countries world-wide now employ some form of site blocking and this has proven to be highly effective. Two countries with very similar legal systems to Canada, the UK and Australia, have both implemented site blocking mechanisms through the courts. In the case of Australia, specific legislation permitting site blocking was passed by Parliament while in the UK, the courts determined that they had inherent jurisdiction to issue blocking orders. The initial experiment has proven successful in changing consumer behaviour and in both Australia and the UK, the courts have permitted blocking orders to be “dynamic”, i.e. they can be modified to defeat the tactics of pirate operators who, once a site blocking order has been issued, change their internet identifiers slightly in order to create clone sites.

In Canada a coalition of content owners, coming together in the Fair Play Canada coalition, petitioned the CRTC to establish an administrative agency to review and recommend blocking orders for pirated offshore content. After a successful adjudication of a blocking request, it was proposed that the CRTC would issue an order to ISPs requiring them to take blocking action. However, it didn’t work out that way. The Commission decided it didn’t have the jurisdiction to issue orders, and instead referred the matter to the courts and to the ongoing Parliamentary review of the Copyright Act. It was in that context that I submitted my brief urging the Committee;

“to recommend the enactment of amendments to the Act that will permit rights-holders to obtain injunctive relief against internet intermediaries (platforms and internet service providers). Specifically the Act should be amended to allow copyright owners to be able to obtain injunctions, including site blocking and de-indexing orders, against internet intermediaries whose services are used by third parties to infringe copyright.”

I did so in the belief that absent specific authorization in legislation, the Federal Court would not issue a site blocking order. I was wrong. In November of last year, the Court issued Canada’s first site blocking order against two sites (GoldTV.biz and GoldTV.ca) that were providing pirated streaming content to Canadian households from offshore servers. None of Canada’s major ISPs opposed the order, the only exception being a small internet reseller based in Ontario, Teksavvy. Teksavvy has now launched an appeal of the order. Given the current COVID-19 crisis plus the usual court backlogs, that will no doubt take some time to resolve. In the meantime Canada has joined the international consensus of using its national laws to restrict access by domestic consumers to pirate streaming sites located offshore, beyond the reach of national jurisdiction.

So if more than 40 countries are either implementing transparent site blocking, or have the mechanisms to do so, who isn’tusing it? Surprisingly, it is the US, which is fast becoming an outlier on this issue. It’s not as if the country doesn’t have a streaming piracy problem; it does. Apart from the losses to the industry I mentioned earlier, as reported by the online publication TorrentFreak the US is the leading source of visits to pirate streaming sites globally. It thus has the dubious distinction of leading Russia, China and Brazil as the home of the largest number of pirate streaming site users, with 1.2 billion pirate site visits in December 2019 alone. So why isn’t the US doing something about it? It has long been a, if not the, leading advocate for better IP protection globally. In fact the rankings produced by the US Chamber of Commerce’s annual GIPC Report consistently score the US in first place as the leading IP-friendly country. But lack of any effective site blocking mechanism in the US is an anomaly and an obvious blind spot.

It’s not as if a site blocking provision doesn’t exist in US law. It is in that seminal piece of US legislation, the Digital Millenium Copyright Act (DMCA) of 1998 as Section 512 (j). If this sounds a bit arcane, blogger David Newhoff (The Illusion of More) has a good explanation here. He also offers some background as to why this provision has seldom if ever been used. Now that the US Senate Judiciary Committee’s IP Subcommittee has launched a year-long review of how the DMCA has been actually operating in practice, there is an opportunity for a reset—and for the US to join the growing global consensus on using site blocking injunctions to combat streaming piracy. Independent filmmaker Jonathan Yunger is advocating for a change to the DMCA, pointing out that Google (owner of YouTube) receives more than a billion take-down requests each year, imposing a huge burden on the platform but also on copyright holders who have to police the system and issue takedown notices. Much of this could be avoided with an effective site-blocking regime.

Will this totally stop streaming piracy? Of course not, but it will block a significant loophole. When copyright stakeholders find ways to incentivize consumers to patronize legitimate content, everyone (except the pirates) wins. Credible academic studieshave clearly documented the impact of site blocking in not only reducing access to pirated content but increasing uptake of legitimate content when site blocking measures are applied consistently.

So on this World IP day, let’s focus on how a global problem facing copyright stakeholders—offshore streaming piracy—can be curtailed and defeated by implementing a global solution. Site blocking works in Europe, it works in Asia and Australia, it now has a foothold in North America through Canada’s first successful case. The United States should be next. The review of the DMCA is an opportunity for the US to get on board and complete the picture. Let’s make this a global effort to combat a globalproblem (just like the coronavirus).

That seems like a very worthy goal on World IP day.

This article was originally published in Hugh Stephens blog.