In the digital age, the value of intellectual property has skyrocketed, with global creative industries generating over $2.25 trillion annually. Copyright, which protects the rights of creators, has become more significant as businesses, artists, and content creators increasingly rely on monetizing their work in the global marketplace. As the demand for digital assets rises, understanding the concept of assignment of copyright is crucial for creators.
Ownership in Copyrights can be transferred through assignment, the provisions governing which are covered in Sections 18, 19 and 19A of The Copyright Act 1957. Copyright can be transferred, either partially or fully, to a person or entity. This blog aims to explore the assignment of copyright in detail, covering the legal implications, methods of assignment, and few relevant case laws.
Understanding Copyright Ownership and Transfer
Understanding copyright ownership is crucial for creators and rights holders, as it empowers them to safeguard their intellectual property and leverage its commercial potential. Copyright ownership gives the creator or copyright holder the exclusive rights to use, exploit, adapt, translate, reproduce, distribute, and publicly display or perform the work. These rights can be financially valuable, allowing the holder of copyright to control how the work is used, including granting permission to others through licensing or transfer agreements.
Ownership in copyright can take many forms:
- The author of a work is typically the first owner of all copyrights in the work.
- If multiple persons have created a unitary work in which the contribution of one person is not distinct from that of the others, such creators together become the joint owners of copyright in the work.
- When an employee creates work as part of their job, the employer holds the copyright in such work unless the parties agree otherwise.
- Different individuals may hold separate copyrights in a single work. For example A may hold printing rights in a book while B may own film and television rights over it.
- A single item may contain multiple independent copyrighted elements, each with different owners, for example, a film may have distinct copyrights for elements like the screenplay, soundtrack, and visual content, each owned by different parties.
Legal Framework for Assignment of Copyright
Section 18: Assignment of Copyright
Section 181 provides for the assignment of copyright. Section 18(1) allows for the owner of the copyright in an existing work or the prospective owner of the copyright in a future work to assign to any person the copyright in the work. Such assignment can be either wholly or partially and either generally or subject to limitations. Further the assignment can be either for the whole term of the copyright or any part thereof.
The agreement must specify the rights being transferred, the duration of the transfer, and the territorial extent.
Section 19: Mode of Assignment
Section 192 outlines the legal requirements for a valid copyright assignment, which are:
In writing: Section 19(1) lays down that for an assignment of the copyright in any work to be valid it must be in writing and signed by the assignor or by his duly authorized agent. It emphasizes the need for a written document that clearly outlines the terms of the assignment, including the work and rights assigned, and details the duration, territorial extent, and consideration payable.
Specify the work and terms: Section 19(2) mandates that the assignment of copyright in any work shall identify such work and shall specify the rights assigned and the duration and territorial extent of such assignment.
Royalty: Section 19(3) The assignment of copyright shall specify the details of royalty or consideration mutually agreed upon by the parties.
Lapse automatically: Section 19(4) states that the assignment will lapse if the assignee fails to exercise the rights assigned to him within one year from the date of assignment unless the assignment specifically states otherwise.
Term: Section 19(5) – If the period of assignment is not specified, the assignment is deemed to be for a period of five years from the date of assignment;
Territorial Extent- Section 19(6) If the territorial extent of assignment of the rights is not specified, it shall be presumed to extend within India.
In addition to the above, Section 19(8) states that in cases where the author of the work is a member of copyright society, the assignment of copyright in any work contrary to the rights already assigned to such society shall be void.
A copyright transfer agreement should mainly include the following:
- Identify the work/subject of the copyright
- The rights being transferred.
- The duration and geographical extent of the transfer.
- Any payment or royalties conditions.
- Obligations of both parties.
- A dispute resolution mechanism.
Potential Risks of Copyright Transfer
Transferring copyright can involve risks, especially if the transfer agreement is not well-drafted. For example, the original owner may lose control over their work, and disputes may arise over the interpretation of the agreement. It is highly recommended that both parties consult a lawyer before finalizing any transfer agreement.
Mrs. M. Padmini vs Raj Television Network Limited (2015)3
This case dealt with the question of assignment of future rights. The brief facts were that the copyrights in the negatives (negative rights) of a Tamil feature film were assigned by the producer of the film to one Kumar Pictures in 1981, and subsequently, the Defendant got the assignment from the said Kumar Pictures by way of assignment deed dated 15.05.2000. In about July 2013, the Plaintiffs, who were the legal heirs of the producer/assignor (who had passed away in 2004), became aware that the Defendant is attempting to release the said film as a digital cinema.
Aggrieved by this, the Plaintiffs filed the present suit contending that the technology of digital cinematography came into vogue only from 1990 onwards and that since such a technology was not even in existence when the assignment took place (in 1981), the Defendant cannot release the film as a digital cinema without specific assignment of the digital cinematography right from the author or from his legal heirs.
The Plaintiffs here relied on the following provisions of the Copyrights Act 1957:
- Proviso 2 to Section 18(1) of the Copyright Act, 1957 which provided that no assignment shall be applied to any medium or mode of exploitation of the work which did not exist or was not in commercial use at the time when the assignment was made, unless specified.
- Section 19(2) of the Copyright Act, 1957 which provided that the assignment of copyright in any work shall identify such work, and shall specify the rights assigned and the duration and territorial extent of such assignment.
The Court after careful consideration of the facts and provisions held in favour of the Defendant by noting that Section 18 uses the term ‘owner’ and not ‘first owner’. If all the rights accruing due to advancement in scientific technology were to be conferred only on the producer of the film, then Section 18 would have to read as ‘first owner’ and not just ‘owner’.
The Court noted that since the entire copyright was assigned in favour of the assignee, if any right accrues in future due to advancement of science and technology, it will devolve only upon the owner and not on the first owner.
Section 20: Transmission of Copyright in Manuscript by Testamentary Disposition
Section 204 explains how copyright can be transmitted by operation of law.
Where a person is bequeathed with the manuscript of a work which was not published during the life-time of the testator, such person shall be considered as entitled to copyrights in the work to the same extent as the testator was the owner of the copyright immediately before his death, provided, no contrary intention is indicated in the testator’s will or any codicil thereto.
Differences Between Assignment, Licensing, and Transmission of Copyrights
Assignment
The copyright owner sells their rights to a third party, who then becomes the owner of the copyright. The assignee can use the copyright as they wish, including licensing it to others or transferring it to a third party.
Example: An author assigns the rights to a publishing company to publish and sell their book.
Licensing
The copyright owner retains ownership of the copyright but allows a third party to use some or all of the rights. The copyright owner can still use the rights they licensed and may also license others to use them, depending on the terms agreed between the parties. A license can be exclusive, giving the licensee sole rights, or non-exclusive, allowing the licensor to grant similar rights to multiple parties.
Example: A musician licenses their song for use in a commercial without transferring ownership of the song.
Transmission
Copyright ownership is automatically passed on to another party, usually due to specific circumstances like the death of the original copyright holder. This more passive process is often dictated by legal provisions or testamentary dispositions.
Example: Upon the death of a copyright owner, their rights are inherited by their legal heirs.
Deshmukh And Co. (Publishers) Pvt. Ltd. vs Avinash Vishnu Khandekar And Ors. (2005)5
The case addressed the distinction between copyright assignment and licensing. The court ruled that a written explicit agreement is necessary to establish a copyright assignment. In the absence of such an agreement, a document is generally construed as a mere license to perform specific acts.
In determining whether the agreement which formed the bed-rock of dispute between the parties in this case, was an agreement for assignment or licence of copyright, the Court relied, inter alia, on two propositions in respect of commercial contracts.
Firstly, that there is no presumption in favour of permanence of an agreement.
Secondly, if a contract involved mutual trust and confidence in its fulfilment, normally, Courts would not interpret its term to employ permanence.
In this case mutual reciprocal obligations between the parties were explicit from the terms of the agreement. The fact that the parties had agreed to payment of royalty instead of a fixed sum of money paid at once, weighed heavily to rule that the transaction was not an assignment but only a nonexclusive licence in favour of the Plaintiff. The Bombay High Court emphasized the importance of clear written documentation to validate copyright transfers.
Bibliography
- https://www.indiacode.nic.in/handle/123456789/1367?view_type=browse
- https://www.indiacode.nic.in/show-data?abv=CEN&statehandle=123456789/1362&actid=AC_CEN_9_30_00006_195714_1517807321712§ionId=14520§ionno=18&orderno=18&orgactid=AC_CEN_9_30_00006_195714_1517807321712
- https://www.indiacode.nic.in/show-data?abv=CEN&statehandle=123456789/1362&actid=AC_CEN_9_30_00006_195714_1517807321712§ionId=14521§ionno=19&orderno=19&orgactid=AC_CEN_9_30_00006_195714_1517807321712
- https://www.indiacode.nic.in/show-data?abv=CEN&statehandle=123456789/1362&actid=AC_CEN_9_30_00006_195714_1517807321712§ionId=14523§ionno=20&orderno=21&orgactid=AC_CEN_9_30_00006_195714_1517807321712
- https://indiankanoon.org/doc/1095212/
