Indian High Court Blocks Rent-Seeking Collection Societies From Seeking Any More Rent

from the laws-are-for-other-people dept

Ben Challis of the 1709 Blog reports that one of India's top courts has just cut a few performance royalty "collection societies" off at the knees.

In a blow to three Indian music copyright collection societies, the Delhi High Court has restrained them from granting any such licence till April 24th 2017. Justice Sanjeev Sachdeva, in an interim order, restrained the Indian Performing Right Society (IPRS), the Phonographic Performance Ltd (PPL) and Novex Communications Pvt Ltd from contravening section 33 of Copyright Act, which provides that only registered societies can grant licences in respect of copyrighted work(s).

None of the three collection societies are registered, which means they can no longer shake down everyone from doctors (for music played in waiting rooms) to concert venues for licensing fees and performance royalties. In the latter case, the societies were often instrumental in limiting the amount of live music available to Indians, even though they had no royalty claim on the live music itself.

PPL collects a fee if any recorded music is played at a concert. "Live concerts do not need our clearance. But who can ensure that no recorded music will be played in the time gap between different artists or before the concert begins? At times people responsible for giving out permissions take unfair advantage in charging money. We are taking note of that and strict measures will be taken," says Sowmya Chowdhury, country head and director of PPL.

Venue owners were so intimidated by the societies' per-seat royalty demands they'd often refuse to host a concert if the artist couldn't come up with all sorts of paperwork.

PPL happens to be Phonographic Performance Ltd and IPRS is Indian Performing Right Society, two pan-India autonomous bodies that report to the central HRD ministry and control the fate of live performances. Their roles are not even completely understood by musicians, which often leads to trouble before concerts. Pt Tejendranarayan Majumder was at a loss when he was asked for innumerable no-objection certificates before a recent concert at an auditorium.

[...]

Most auditoriums demand no-objection certificates from PPL and IPRS. Even police permission is given only after these are submitted.

Once again, we have an entity supposedly looking out for artists doing what it can to prevent artists from earning a living. This is what they won't be able to do now, thanks to a change in the nation's copyright law.

Blocking these societies from collecting performance royalties won't do much for the artists signed to them. But then again, the collection societies weren't doing much for artists in the first place. IPRS has been particularly shady. Many royalty collection societies are known for their extremely limited distribution of funds. Those that do pay out more regularly still tend to hand the bulk of it to charting artists, no matter who actually earned it.

IPRS, however, apparently didn't even bother with limited royalty dispersals.

The IPRS will be investigated under Prevention of Money Laundering Act (PMLA), 2002, after it was alleged that the company (which was once a society) has collected royalties on behalf of authors, composers and music publishers, and failed to distribute it among the rights holders.

Fourteen months later, the results of the investigation have yet to be made public, but chances that royalties will soon be flowing to artists remain slim. IPRS and PPL are no longer public societies. They are both private companies.

PPL's decision to go private followed IPRS's. Both moves appear to have been motivated by government scrutiny. The government is still looking into IPRS's royalty distributions, but the society's decision to go private appears to have been a failed attempt to prevent this investigation from taking place.

IPRS in its petition had submitted that it had ceased to be a ‘copyright society’ and therefore the Central Government had no power to investigate IPRS. The Bombay High Court in dismissing IPRS’ petition had observed that the allegations for which the inquiry had been instituted were committed when IPRS was still a ‘copyright society’.

This move has completely backfired on IPRS. It didn't manage to avoid the investigation of its current collections, and it's now being prevented from collecting anything else for the next few months. And it very much looks like any fees it obtained between its opting out of India's "copyright society" and now were collected illegally.

These societies claim to be in the copyright business, but apparently can't bothered to adhere to the nation's copyright laws. And if those in the copyright business don't respect the law, they can't really get too bent out of shape if no one else does either.

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Filed Under: collection societies, copyright, high court, india, performance rights, rent seeking