AI Artworks: Copyright Infringement or Creative Innovation in India?

By L. Anisha

Anisha is a student at Hidayatullah National Law University, Raipur.  This piece is one of the winning entries from the Copyright Law Blog Writing Competition, 2023.

“One of the most inspiring aspects of AI art generation is that the software can learn from old images and breathe new life into classics.”

Electra Nandu[1]

“AI image generators are 21st-century collage tools that violate the rights of millions of artists.”

Class Action Complaint against Stability Diffusion[2]

Artificial Intelligence (“AI”) image generators are experiencing a remarkable boom with their ability to create stunning and realistic visuals. These models generate artworks after receiving training from millions of pictures gathered from the web. Sometimes, the developers do not obtain proper consent from the copyright owners.[3] Recently, a class-action lawsuit was filed by a trio of artists against popular AI Image Generators like Midjourney, DeviantArt and Stability AI for infringing their copyright.[4]

AI is constantly evolving and pushing the boundaries of Copyright Law. From the Indian copyright infringement perspective, two major questions arise with respect to AI Image Generators: (1) Whether images generated by AI infringe on existing copyrights? (2) Whether accessing, analysing, reading and mining of data to train AI constitute copyright infringement?

AI Artworks: Navigating the Copyright Minefield

Popular AI generators like DALL E, Midjourney etc., use the diffusion model for creating images. These models take an image and corrupt it by adding noise such that it is no longer  recognisable. The learning process takes place when the AI figures out how to reconstruct the original image by reversing the corruption process.[5] (Exhibit I).

Establishing infringement is complex when AI is involved as it generates art which is similar, but not identical to the copyrighted work. However, just similarity is not enough to prove infringement as it might be mere coincidence or works being derived from common sources.[6]

In order to establish copyright infringement in AI artworks, three ingredients need to be established as per Indian law:

1. The existence of similar work protected under copyright
2. The infringing act is touching upon the exclusivity granted by copyright
3. The act is “actually infringing” in nature[7]

If the defendant makes use of a substantial portion of the features in a copyrighted work, he is unlawfully exercising the sole right conferred only upon the plaintiff.[8] To satisfy the substantial similarity test, some part of the output should resemble the input. However, with billions of input data, chances are that there might not even be a trace of copyrighted work in the output. AI Image Generators do not merely ‘cut and paste’ existing images to create artwork. Exact replication of input data is rare considering the huge amounts of training datasets fed to AI.  The odds of such an occurrence are merely 1.88%, as reported by a study.[9]

AI Image Generators have also become adept at producing artwork “in the style of” a certain artist. However, as per the Supreme Court in R.G. Anand v. M/S Deluxe Films[10], copyright owner has no locus standi to sue the defendant in such instances as artistic styles are not copyrightable. Only expressions of ideas are copyrightable.

Although AI outputs can escape infringement to some extent, the same cannot be assured for data mining activities to train AI.

AI Training Data: Walking The Tightrope of Copyright Infringement

Admittedly, when large amount of data is accessed, analysed and mined for the purposes of training AI, some amount of copyright infringement is bound to occur. In India, Section 14 of the Copyright Act, 1957 grants exclusive rights to copyright owners to reproduce, issue copies, make translations, adaptations etc. of the work. Section 14 is compromised unless such use of data is covered by exceptions to escape infringement allegations.

At the same time, Section 52 of the Copyright Act, 1957 lists out certain acts that do not constitute infringement. If the work is used for “private or personal use, criticism or reporting of current events,” it comes under fair dealing and there is no infringement. The Delhi High Court, in a case, analysed both fair use as prevalent in the US and fair dealing doctrine in India. Ultimately, both the doctrines were used interchangeably in the judgement as they were conceptually similar.  So, in case of AI art, the legal validity of training data is judged using fair use parameters which constitutes:

1. “The purpose and character of Use
2. The nature of the copyrighted work
3. The substantiality of the portion used in relation to the copyrighted work as a whole
4. The effect on the potential market for or value of the copyrighted work”

The Delhi High court emphasised on the first factor. If the character of the work is transformative i.e., the work is not merely a substitute but materially different from the original work, then it is fair use and it is immaterial if the copying is substantial.[11]

The character of human generated art is fundamentally different from AI generated art. Art is a medium of communication for artists. While humans create art to express, AI uses digitized art to train its algorithm. The character is certainly transformative in nature.

Similarly, the fourth parameter i.e., the effect on potential market is minimized if the work is transformative and not merely a substitute. Most buyers will prefer the original artwork of a renowned artist instead of opting for a computer-generated version. In this scenario, market is not affected.

But, the fourth factor is likely to be against AI as it has potential to create market disruptions especially if the buyers are price sensitive. Art created by humans will be priced comparatively higher to account for the time and effort consumed by the process. In such an event, buyers will prefer AI artworks due to cheap prices. Moreover, AI has become an expert in replicating the style of artists in an inexpensive manner. While popular artists might escape the danger, small scale artists are at risk of substitution. The legal loophole that styles are not copyrightable will certainly cause disruptions in the market in the future.[12]

Final Thoughts: Harmonizing the Pros and Cons

Technological revolutions have always been met with legal strife. It pushes the law to constantly evolve. The current legal position regarding AI outputs is in technology’s favour. It is difficult to identify copyright infringement when the AI generates an entirely new image based on billions of training data. Although replication rates are low, they are not zero. Therefore, it is imperative for developers to take steps to thwart copyright infringement. They must consider using reverse image tools on outputs to determine substantial similarity to existing works. In such a scenario, alternative images must be generated.

Regarding AI inputs, developers are using various arguments to satisfy the four-factor test in the fair use doctrine. Some of these arguments seem valid only because AI Image Generators are at their infancy. While they are transformative, their nature of use might be non-commercial only in the initial stages. Platforms like Dall-E and Midjourney have already begun rolling out subscription models.[13] If these businesses choose to commercialise their platforms in the future, it will weigh against fair use. It is also too early to determine AI’s effect in the potential market. It is currently not disruptive but, in the future, it might undermine the jobs of millions of artists.

So, to answer the question whether AI Artworks are copyright infringement or creative innovation – they are both. While AI outputs fall in the realm of creative innovation, AI inputs are walking a tightrope bordering on copyright infringement.

India’s 1957 legislation is doing a remarkable job in applying traditional copyright concepts to AI developments. However, it is time for the law to evolve. AI is here to stay. The law must seek innovative solutions to legitimise Text and Data Mining (TDM) activities to train AI and balance the rights of copyright holders instead of holding TDM activities as infringing altogether.

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[1] Electra Nanou, The Ethical Pros and Cons of AI Art Generation, MakeUseOf (Jan. 18, 2023) https://www.makeuseof.com/ai-art-generation-ethical-pros-cons/. (last visited June 27, 2023).

[2] Stable Diffusion Litigation, https://stablediffusionlitigation.com/ (last visited June 20, 2023).

[3] Gil Appel and others, Generative AI Has an Intellectual Property Problem, Harvard Business Review (Apr. 7, 2023), https://hbr.org/2023/04/generative-ai-has-an-intellectual-property-problem (last visited June 23, 2023).

[4] Supra note 2,

[5] Andres Guadamuz, A Scanner Darkly: Copyright Liability and Exceptions in Artificial Intelligence Inputs and Outputs, SSRN (Feb. 26, 2023), https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4371204 (last visited July 3, 2023).

[6] R.G. Anand v. M/S Deluxe Films, 1978 AIR 1613.

[7] Adarsh Ramanujan and others, Infringement Analysis in Copyright Law, Lakshmikumaran & Sridharan Newsroom (Aug. 10, 2011), https://www.lakshmisri.com/newsroom/archives/Infringement-Analysis-in-Copyright-Law# (last visited July 1, 2023).

[8] Mohini Mohan Singh v. Sita Nath Basakm, AIR 1931 Cal 233.

[9] Supra note 7.

[10] 1978 AIR 1613.

[11] The Chancellor Masters and Scholars of the University of Oxford v. Narendra Publishing House, CS(OS) 2439/2012.

[12] Jessica Gillotte, Copyright Infringement in AI-Generated Artworks, 53(5) UC Davis Law Review (Aug. 20, 2020), https://lawreview.law.ucdavis.edu/issues/53/5/notes/files/53-5_Gillotte.pdf.

[13] Cala Coffman, Does the Use of Copyrighted Works to Train AI Qualify as Fair Use?, Copyright Alliance (Apr. 11, 2023), https://copyrightalliance.org/copyrighted-works-training-ai-fair-use/ (last visited July 2, 2023).

Dynamic Injunctions: Confronting Copyright Infringement with Evolving Legal Fortresses

By Tarang Arora

Tarang is a student at Maharashtra National Law University Nagpur.  This piece is one of the winning entries from the Copyright Law Blog Writing Competition, 2023.

Introduction

In the realm of legal battles against copyright infringement, the concept of “whack-a-mole” emerges from the depths of arcade nostalgia, where players wield a mallet to thwart toy moles that capriciously emerge from various holes. Metaphorically, it symbolizes the ceaseless and wearisome struggle against a persistent problem that resurfaces with shapeshifting resilience. This becomes especially pertinent when injunction orders are issued, attempting to quell the infringement. Yet, like elusive phantoms, targeted websites evade the court’s grasp by employing cunning strategies—redirecting, exploiting mirror sites, or adopting enigmatic alphanumeric URLs. Frustratingly, the initial injunction order applies solely to the original site, leaving the mirror reflections and transformed digital paths untouched. This creates an exasperating cycle of copyright infringement suit, wasting valuable resources.[1]

To confront this maddening conundrum, the Indian judiciary has pioneered a groundbreaking solution: dynamic injunctions.[2] Empowering rights-holders, dynamic injunctions enable them to seek swift judicial intervention, expanding the scope of the primary injunction to encompass all mirror websites facilitating access to the same infringing online domains. This measure ensures that when the initial website resurfaces promptly after being subjected to an injunction, it confronts an extended fortress of legal shield. Henceforth, the author endeavours to expound upon the evolutionary trajectory of dynamic injunctions, shedding light on their inherent limitations, while simultaneously charting a course towards progress and innovation. Finally, the narrative will converge towards a compelling denouement, crafting a conclusion that encapsulates the core essence of the subject matter at hand.

Trajectory of dynamic injunctions

In the annals of legal jurisprudence, the concept of dynamic injunctions found its genesis in the seminal pronouncement of the esteemed Court of Justice for the European Union (CJEU) in the consequential case of L ‘Ordal v. eBay.[3] With resolute determination, the CJEU elucidated the hallowed authority of Member State courts, mandating them not only to curb ongoing infringements but also to vigilantly forestall future transgressions within the realm of online marketplaces. This resounding judicial decree resonated with the venerable Delhi High Court, which, in its pursuit of justice and the safeguarding of innocent victims, took inspiration from the illustrious decision rendered by the esteemed Singapore Court in Disney Enterprise v. M1 Ltd.[4] Building upon this strong judicial foundation, the Delhi High Court unveiled a transformative remedy: the dynamic injunction.

Under the mantle of this revolutionary legal recourse, the aggrieved plaintiffs were accorded an extraordinary prerogative—a direct approach to the Joint Registrar to extend an extant injunction against the websites. This unique provision assumed utmost significance when perpetrators, resorting to artifice and subterfuge, erected mirror, alphanumeric, or redirect websites in a brazen attempt to elude the grip of justice.[5] Importantly, the High Court explicitly delineated the purview of dynamic injunctions, restricting their application solely to the sinister breed of “hydra-headed” or “rogue” websites that materialized with the sole purpose of circumventing legal restraints. To fortify the process (under Order 1 Rule 10 of the Code of Civil Procedure, 1908) the Court mandated the submission of a compelling affidavit, replete with substantive evidentiary proof, convincingly establishing the impleaded website’s nature as a mirror, redirect, or alphanumeric entity.[6] Once satisfied with the veracity of the evidence, the registrar swiftly issued directions to Internet Service Providers (ISPs), commanding the expeditious removal of access to such nefarious domains.[7]

The statutory authority empowering the courts to dispense dynamic injunctions emanates from the hallowed precincts of Section 151[8] of the Code of Civil Procedure, 1908, which confers upon them the plenary power to issue necessary orders for the just administration of justice and the prevention of the abuse of court processes.[9] Nevertheless, it is incumbent upon the discerning legal fraternity to acknowledge the lacuna in specific legislative provisions regulating the terrain of dynamic injunctions. As the age-old adage cautions, “Every coin has two sides,” and the advent of dynamic injunctions brings forth a confluence of opportunities and challenges, necessitating profound ruminations and meticulous deliberations within the labyrinthine corridors of the legal domain.

Challenges of Dynamic Injunctions

In the UTV Software case[10], defendant websites were branded “rogue” for omitting authentic contact details, impeding their legal recognition. Yet, this judgment rested solely on the copyright owner’s claim, lacking fair verification. These circumstances stir apprehension of bias against website operators and the erosion of principles of justice. Relying solely on the copyright owner’s claim can cripple a law-abiding website, even with new domains. The Joint Registrar’s authority to disable access creates this quandary. Website operators are left with no option but arduous court appeals, burdened by the high costs of legal representation.[11]

Another challenge stems from the absence of an effective mechanism to communicate blocking orders to affected parties. In the absence of proper channels for dissemination, affected parties may remain unaware of the blocking order within a reasonable timeframe, potentially compromising their rights. This concern is further amplified by the limited 15-day period allocated for appeals against such orders.[12]

Furthermore, in the recent Applause Entertainment Pvt. Ltd. v. Meta Platforms Inc.[13] case, heard by the Bombay High Court, a dynamic injunction order was issued against a social media handle. However, the Delhi High Court’s concept of a “rogue website” and its corresponding indicators, as delineated in the UTV v. 1337x. to case, did not explicitly address their applicability to social media handles. Similarly, the Bombay High Court’s concerns regarding the emergence of other “rogue handles” raise significant questions about the consistent and equitable application of indicators pertaining to rogue websites to social media platforms.[14]

Way forward

In response to the intrinsic imbalances that pervade website blocking injunctions, a compelling solution emerges: the establishment of a neutral verification agency and ombudsman (NVAO) or Check and Verification Method (CVM), enjoying esteemed backing from influential voices such as Prof. Shamnad Basheer and Kian Ganz.[15] Operating as an impartial third-party entity, the NVAO would consist of a diverse assembly of stakeholders, wholeheartedly dedicated to assisting courts in the resolution of disputes involving copyright owners, online intermediaries, and website operators.[16]

At the heart of the NVAO’s mandate lies the validation of copyright ownership and the scrupulous scrutiny of alleged instances of copyright infringement. Furthermore, the NVAO assumes a pivotal role in verifying the plaintiff’s assertions pertaining to the identity of website operators, thus ensuring that website blocking injunctions exclusively target the rogue websites. In order to engender transparency across the entire process, the NVAO could actively disclose an all-inclusive roster of blocked websites in public forums.[17]

Notably, the universal implementation of the Bombay High Court’s ruling in Eros International[18] holds great promise. This ruling mandates Internet Service Providers (ISPs) to present “special default error pages” incorporating pivotal provisions of the Copyright Act, comprehensive details of the lawsuit and blocking order, and elucidative information pertaining to avenues of recourse against the blocking order. By effectively addressing the challenges associated with disseminating precise particulars of website blocking orders to the public, this measure serves as a significant stride forward.[19]

Conclusion

In the enthralling saga of combating copyright infringement, the emergence of dynamic injunctions has injected a potent force. Yet, challenges loom, demanding ingenious solutions. Enter the captivating prospect of a neutral verification agency, an impartial arbiter wielding the sword of transparency. Coupled with the transformative power of the Eros International ruling, this harmonious symphony of fairness and efficiency orchestrates a harmonious resolution. With the scales finely balanced between the rights of creators and the operators of digital domains, this captivating narrative unveils a captivating chapter of innovation and progress. Together, we unlock the doors to a future where resurfacing infringement meets its match.

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[1] David Lindsay, Website Blocking Injunctions to Prevent Copyright Infringement: Proportionality and Effectiveness, 40 U.N.S.W. L.J. 1507 (2017).

[2] Pratik P. Dixit, Dynamic Injunctions against Internet Intermediaries: An Overview of Emerging Trends in India and Singapore, 23 J. WORLD INTELL. PROP. 65 (2020).

[3] L’Oreal SA Ltd. v. eBay International AG, Case C-324/09, EU:C:2011:474.

[4] Disney Enters. v. M1 Ltd., [2018] SGHC 206.

[5] David Tan & Susanna Hs Leong, Intellectual Property Law, in 19 SAL Ann. Rev. 586 (2018).

[6] Ibid.

[7] Supra 2.

[8] Code of Civil Procedure, § 151 (1908).

[9] Pranay Bali & Nayantara Malhotra, To Block or Not to Block? Analysing the Efficacy of Website Blocking Orders and Dynamic Injunctions in Combating Digital Piracy, 11 INDIAN J. INTELL. PROP. L. 179 (2020).

[10] UTV Software Commc’ns Ltd. v. 1337x.to, 2019 SCC OnLine Del 8002.

[11] Ibid.

[12] Supra 1.

[13] Applause Entm’t Pvt. Ltd. v. Meta Platforms Inc., 2023 SCC OnLine Bom 1034.

[14] Kaleda, S. L. The Role of the Principle of Effective Judicial Protection in Relation to Website Blocking Injunctions, 8 J. Intell. Prop., Info. Tech. & E-Comm. L. (JIPITEC) 216 (2017).

[15] Lokesh Vyas & Anuj Bajaj, John Doe Order: A Cogent Jurisprudential Account of Judicial Endeavours, 3.1 J. Indian L. Stud. 29 (2020).v

[16] Izyumenko, E. The Freedom of Expression Contours of Copyright in the Digital Era: A European Perspective, 19 J. World Intell. Prop. 115 (2016).

[17] Ibid.

[18] Eros Int’l Media Ltd. v. Bharat Sanchar Nigam Ltd., 2016 SCC OnLine Bom 8199.

[19] Supra 14.

Moral-Economic Deficiency of Criminal Copyright Remedies

By Prachi Mathur

Prachi is a student at National Law School of India University (NLSIU).  This piece is one of the winning entries from the Copyright Law Blog Writing Competition, 2023.

Introduction

In India, criminal remedies for copyright infringement are primarily governed by Chapter XIII (Offences) of the Copyright Act, 1957 (“Act”). Specifically, Section 63 penalises anyone who ‘knowingly infringes’ a copyright. It provides for 6 months to 3 years of imprisonment, and a fine of Rs. 50 thousand to 2 lakhs. Although the Copyright (Amendment) Act, 1994 (“1994 Amendment”) created an exception for non-commercial infringement (“not…for gain in the course of trade or business”), I argue that the 1994 Amendment fails to address the elephant in the room, i.e., even after this amendment, Section 63 criminalises non-competitive and non-commercial infringement without adequate moral requirement and economic efficiency. To this end, I advance a two-pronged argument on the moral appropriateness and economic efficiency of Section 63 in two kinds of copyright infringement; and, conclude with suggestions for reform.

Moral Appropriateness

Usually, a crime is a moral wrong involving moral culpability.[1] A crime (or moral wrong) has two components: mens rea and actus reus. Under Section 63, the actus reus is the act of infringement; whereas, the mens rea is ‘knowing’ infringement, or mere knowledge. It does not require any malicious intention or motive underlying this knowledge.[2] This omission implies that even ‘knowing’ infringements for personal use or charitable (non-commercial and non-competitive) public dissemination are classified as criminal acts. Indeed, malice is not the only motive for infringement.[3]

However, such acts are not sufficiently immoral to justify criminal sanctions. This is because these acts are significantly different from malicious infringement for commercial gain or attaining competitive market advantage. The harm caused, the societal values compromised, and, most importantly, the mens rea are different.[4]

Although there are criminal offences which do not have a strict mens rea requirement, such offences usually have strong countervailing reasons to justify the deviation.[5] With Section 63, however, there are no such countervailing reasons. For copyright infringement, the legislators were mainly concerned with balancing two conflicting values – the interests of copyright owners (authors-publishers) in protecting their works,[6] and the interests of the public in accessing knowledge via such works.[7] In the case of competitive or commercial copyright infringement, the knowledge is guided by the malicious intention of reaping profits from pirated content or gaining a market advantage over your competitor. These acts are usually not guided with the intention of furthering public access to knowledge. Moreover, the economic harm caused to authors is greater than when used for personal use only because of the greater scale of infringement in the former. Criminalising the former type of infringement balances the interests of both copyright owners and society.

However, by criminalising non-commercial and non-competitive infringement (e.g., for personal use), the balance is skewed in favour of the owner’s interests.[8] One of the goals of the copyright law – to promote the development of new works – is emphasized others by using criminal punishment to discourage illicit copying. The balance between the two objectives of copyright law is threatened by the emphasis on the incentive to create, which suggests that ensuring public access is less vital. Moreover, community norms regarding copyright infringement indicate that society does not consider infringement for non-commercial purposes as morally wrong.[9]

Economic efficiency

Although criminal remedies tend to be more effective than civil (and administrative) remedies in deterring crime, such effectiveness does not guarantee an economically efficient outcome. As such, the economic efficiency of Section 63 needs to be evaluated using a cost-benefit analysis.

Costs

Regarding the criminalisation of copyright law, Landes & Posner have highlighted the paradox of stifling creativity.[10] By criminalising infringement, the ‘second-generation’ innovation is stifled – future creators may no longer be able to access previous works; thus, reducing the input available for producing creative outputs.[11] In a developing country with moderate levels of copyright literacy like India,[12] there might be unintended effects of criminalisation. For instance, users who are not sufficiently aware of the copyright law would avoid using copyright works for purposes that may be otherwise legal.

Besides deterrence, imprisonment also has unintended societal costs, including the opportunity cost of sacrificing the productivity of those who are behind bars as well as the direct expenses of constructing, operating, and staffing prisons. Here, the opportunity costs involve the worth of the convict’s lost income and the economic injury to their families. 

Moreover, criminal law can be used by resourceful copyright holders to enforce their rights through state resources rather than private civil litigation or settlement, which may be too expensive, time-consuming, or result in unsatisfactory results. Even though it can be helpful in some cases of IPR infringements where certain public interests are at, this may further encourage rent-seeking behaviour among resourceful copyright owners.[13]

Benefits 

By denying copyright owners their legal right to operate as the exclusive distributor of copyrighted content and, consequently, to profit from sales and licenses, infringement jeopardizes their financial interests. If they cannot make a profit, creative individuals are less likely to invest time and resources into producing goods, undermining the copyright and constitutional protections for intellectual property. Deterring infringement increases the likelihood that writers will receive money from their work, enhancing their desire to generate original expressive works and advancing one of the objectives of intellectual property legislation, which is to encourage the development of new products.

Analysis

Before reaching a conclusion, it is pertinent to note that the counter-argument to treat copyright on par with tangible property rights fails to take into account the special nature of copyright. Indian legislators specifically differentiated between the two.[14] In the case of tangible property, the goods are rivalrous – if one uses/consumes, another person (including the owner) cannot enjoy its benefits. On the other hand, in the case of copyright, since the copyright holder still has the option to sell the information product after the infringement, the economic harm to the owner is comparatively lesser. The value of employing criminal law is less than one might initially think. The expenses of applying the criminal code, however, can be more than anticipated.

Conclusion

Although the 1994 Amendment attempted to ‘deal more effectively’[15] with copyright infringement by adding another proviso to Section 63 to ‘suitably guide and limit the discretion of the court to impose penalties below the normal minimum’[16], I have two reservations regarding its appropriateness. Firstly, meting out sub-normal penalties in exceptional cases is merely discretionary. As per the proviso, a court has to provide ‘adequate and special reasons’ to circumvent the minimum penalties provided in this section. Secondly, and importantly, the classification is rather superficial because acts that are not sufficiently immoral are also classified as criminal. This contradicts the consensus that only moral wrongs must be criminalised. Relatedly, such classification also ignores the difference in relative mens rea of the two kinds of infringement.[17] Limiting criminal liability under Section 63 would help achieve the goal of free access to knowledge better, and provide a more favourable balance between the interests of owners and society. Additionally, international best practice guided by the TRIPS agreement requires criminal remedies only for wilful infringement on a commercial scale.[18] Therefore, India should reconsider limiting the liability for non-commercial and non-competitive infringement to civil remedies considering the comparative efficiency and other conflicting interests involved.

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[1] Heidi M. Hurd, ‘What in the World Is Wrong?’ (1994) 5 J Contemp Legal Issues 157; Peter Arenella, ‘Convicting the Morally Blameless: Reassessing the Relationship between Legal and Moral Accountability’ (1992) 39 UCLA L Rev 1511.

[2] J.N. Bagga v. All India Reporter Ltd., Nagpur, 1968 SCC Online Bom 14 [not liable under section 63 if no knowledge]; Bunny Reuben v. B. J. Panchal, 1999 SCC Online Bom 603 [knowledge an essential ingredient].

[3] Ting Ting Wu, ‘The New Criminal Copyright Sanctions: A Toothless Tiger’ (1999) 39 IDEA 527, 527.

[4] Moohr, Crime (n 5); I. Trotter Hardy, ‘Criminal Copyright Infringement’ (2002) 11 Wm & Mary Bill Rts J 305, 327-332.

[5] David Ormerod, Karl Laid, John Cyril Smith and Brian Hogan, Smith, Hogan, and Ormerod’s Criminal Law (16^th edn, OUP 2021), ch 5, 150.

[6] Although in some instances the rights of authors and publishers collided, regarding infringement, their interests overlapped. The former is irrelevant for our present discussion.

[7] Rajya Sabha Debates, Copyright Bill, 1955, 14-15 May 1957.

[8] Moohr, Crime (n 5) 755.

[9] Moohr, Crime (n 5) 767-770. Bhattacharya A, ‘India Sucks at Protecting Intellectual Property, According to a New Ranking’ (Quartz, 9 February 2017) <https://qz.com/india/906776/india-sucks-at-protecting-intellectual-property-according-to-the-us-chamber-of-commerces-2017-ip-index&gt; accessed 6 July 2023; ‘A Pilot Study on the Intention to Engage in Digital Piracy of Movies in Kerala – Free Essay Example’ (Edubirdie, 26 April 2023) <https://edubirdie.com/examples/a-pilot-study-on-the-intention-to-engage-in-digital-piracy-of-movies-in-kerala/&gt; accessed 6 July 2023.

[10] William M. Landes & Richard A. Posner, ‘An Economic Analysis of Copyright Law’ (1989) 18 J Legal Stud 325, 332. See also Mobolaji Johnson Agboola, ‘Criminal Sanctions for Copyright Infringement: The Half of a Yellow Sun Copyright Piracy’ (2014) 31 JL Pol’y & Globalization 49.

[11] Moohr, Crime (n 5) 783-789.

[12] E.g., see Anjaneya Reddy NM. ‘The copyright trends in India, and the level of copyright awareness among academic Librarians’ (2021).

[13] Lanier Saperstein, ‘Copyrights, Criminal Sanctions and Economic Rents: Applying the Rent Seeking Model to the Criminal Law Formulation Process’ (1996) 87 J. Crim. L. & Criminology 1470.

[14] Lok Sabha & Rajya Sabha Debates, Copyright Bill, 1955 [prevalent themes of the debates].

[15] Statement of Objects and Reasons, Copyright (Amendment) Act, 1994.

[16] Notes on Clauses, Copyright (Amendment) Act, 1994.

[17] See [a similar argument on restricting penalties based on the three levels of blameworthiness – inadvertent, standard, and wilful infringements] Abraham Bell & Gideon Parchomovsky, ‘Restructuring Copyright Infringement’ (2020) 98 Tex L Rev 679.

[18] ‘WTO | Intellectual Property (TRIPS) — Enforcement of Intellectual Property Rights’ <https://www.wto.org/english/tratop_e/trips_e/ipenforcement_e.htm&gt; accessed 6 July 2023.

Royalty From Underlying Works in a Cinematography Film: Copyright Amendment Act, 2012 Came Out Short?

By Shubhankar Sharan

Shubhankar is a student at Gujarat National Law University.  This piece is one of the winning entries from the Copyright Law Blog Writing Competition, 2023.

Introduction

The battle for royalties in the entertainment industry goes a long way back into history. The infamous Supreme Court Order Indian Performing Right Society v. Eastern Indian Motion Pictures Association (“EIMPA”)[1] facilitated the same, vesting all the rights with the Producers of a cinematography film. Jumping several years forward, Mr. Javed Akhtar stepped forth and put the artists’ issues in the forefront, wanting legislative action to redress them. Consequently, the Copyright (Amendment) Act, 2012 (“Amendment Act”), was passed, evolving the Right to Royalty for the authors of underlying works. In light of the same, this piece attempts to delineate the current position concerning copyrights in underlying works and the Right to royalty juxtaposed with the Amendment Act. Lastly, it tries to shed some light on persisting issues and provide feasible solutions for remedying them.

Status of Copyrights in Underlying Works

Copyrights in underlying works have been vastly debated across scholarships owing to the hardships emanating from the Supreme Court order in EIMPA. Disappointingly, the Apex Court ruled unfavorably for the authors of underlying works, highlighting the loss of rights once the works become a part of the cinematograph film. Even though Section 13(4)[2] of the Indian Copyright Act, 1957 (“Copyright Act”) provides for the separate existence of copyright, the Bombay High Court[3] in 2011 specifically mentioned that once a cinematography film subsumes the underlying work, the independent existence of copyright in underlying works gets extinguished. Consequently, the producers tamed the authors for long because of overarching assignment contracts. However, the Law makers recognized the authors’ plight in the Copyright (Amendment) Bill 2010[4], later passed as the Amendment Act. The Amendment Act empowered the authors of underlying works by granting them a non-waivable “Right to Royalty” despite the assignment of copyright.

Interestingly, the Amendment Act implies retaining ownership of authors of underlying works. To further the argument, the Amendment Act acknowledged the seminal footnote of Justice V.R. Krishna Iyer[5] in the EIMPA judgement. Herein, it is pertinent to highlight that Justice Krishna Iyer underlined the possibility of harmonious coexistence of producers’ investment and the intellectual creation of underlying works’ authors. The Statement of Reasons and Objectives of the Copyright Amendment Bill, 2010, reflected the same.     

Sketching Right to Royalty with the Amendment Act

Section 2(f) of the Copyright Act[6] defines a cinematography film. Essentially, a cinematography film is a mix of artistic, dramatic, and literary works, to name a few. Of these, sound recordings sit atop the underlying works rankings. The Indian Music Industry relies heavily on the film industry for functioning. Hence, under this section, underlying works must be assumed synonymous with sound recordings unless specified otherwise. The changes in the current paradigm have significant parallels in other countries. For instance, Article 4 of the EU Rental Directive 1992[7] accords the author with the Right to “equitable remuneration” given the transfer of rental rights to the producer.

Nonetheless, by the wording of Section 19(9) of the Copyright Act[8], the usage of “share” expresses the nature of the obligation. Instead of “pay,” share contemplates the duty to be mandatory—elimination of “if any” from the Copyright Act post amendment further clarifies the nature.

Intriguingly, the ‘right’ in discussion has been provided distinctly from those granted under Section 14 of the Copyright Act[9]. To elaborate, Section 14 of the Copyright Act elucidates various rights while defining copyright. However, the “Right to Royalty” has been expressly excluded from the previous section. Besides, royalty is an incidental outcome of commercial exploitation of copyright, which Section 14 “authorizes.” Such conspicuous exclusion is sufficient to conclude that the ‘right’ is contractual in lieu of statutory Right.

Royalty Distribution: An Enigma

Various issues and uncertainty about royalty distribution have surfaced throughout the Acts implementation. Varied views in reference to the scope of applicability of the amendment provisions have arisen. For starters, it is unclear if the provisions would operate retrospectively or not. The Supreme Court[10] clarified by stating that the effect of the provisions would not be extended to agreements entered into before the incorporation of amendments. Thus, ruling out all the underlying works created prior to 21^st June 2012 from the scope of the provisions. In furtherance of the same, the usage of “shall” in Sections 17, 18, and 19 of the Copyright Act determines the prospective application of the amendments.

On the contrary, the Parliamentary Debates[11] pose differing views. The discussions framed an illustration to posit that the underlying works would not accrue royalty until passing the Amendment Act 2012. But the same work will bear royalty for the authors with the incorporation of the Amendment Act, thus indicating its retroactive application.

Another grey area can be attributed to the constrained purview of the underlying works. A cinematography film is a complex mix of varied elements, of which the Amendment Act recognizes only a few. One of the significant snubs is the scriptwriters[12]. Sections 18[13] and 19(9)[14] and (10)[15] missed the mark in including dramatic works. Thereby, the Amendment Act barred a vital slice of contributors to the film.

Adding to these problems, the Courts have adopted vastly different views on the issue of royalty. The Delhi High Court, in a clubbed Order[16], categorically denied royalty for underlying works, characterizing the amendments as clarificatory rather than substantive. The judgement has been appealed before the Division Bench of the High Court. Contrastingly, the Bombay High Court[17], in its interim injunction order, identified the Right of sharing of royalty with the authors of the underlying work concerning the communication of sound recordings to the public through radio stations. Along the same lines, it mentioned that most sound recordings are a part of the cinematography film. Hence, it imputed the Right to share royalty for the underlying work of the cinematography film.

On top of all, another challenge pertains to the ascertainment of royalty rates. There is ostensibly no statutory guidance vis-à-vis fixation of rates, apart from the recent Intellectual Property Appellate Board’s (“IPAB”) order[18] acknowledging the ‘needle per hour’ method. Unsurprisingly, the same has been challenged. While at the same time, considerable ambiguity[19] exists surrounding the interpretation of “equal share” as stated in the provision. Further, the Amendment Act stands silent on whose responsibility it would be to share the royalty with the author; it becomes all the more convoluted owing to the presence of multiple parties like the Copyright Societies, Assignee, and the Broadcaster. Bear in mind that Section 19 of the Copyright Act does not elucidate the aspect of continuing royalty, whose non-payment has been characterized as grave as a criminal offence under Section 63 of the Copyright Act[20]. Lastly, it must be mentioned that the Amendment Act overlooked redressing unfair bargaining arrangements.

Plausible Solutions

Articles 18-22 of the Digital Single Market Direction of the European Union[21] presuppose adequate protections for the authors. For instance, Article 20 establishes a contract adjusting mechanism while Article 18(1) ensures ‘appropriate and proportionate’ remuneration for authors. Moreover, Article 46 of the Italian Law for Protection of Copyright and Neighbouring Rights[22] gives the authors of musical work utilized in the film, separate remuneration collectable from the entities making the communication. In the same Act, Article L.132-28[23] mandates the producer to annually furnish revenue records to the author vis-à-vis exploitation of the sound recording. Overlooking the validity of the IPAB Order for a moment, the Legislature must take the initiative to build up on the groundwork established by the Order and foreground royalty rates in statutory regulations. If not, the minimum expected is to clarify the context of “equal share” used in the Sections.

Conclusion

The efforts of the Legislature are nothing short of commendable in ensuring the Authors acquire royalty. Against the backdrop of the historical exploitation and instances highlighted of long-drawn battles for ownership and royalty, the Amendment Act was undoubtedly a step in the right direction. However, unintendedly so, the Amendment Act cuts both ways. To address the negative consequences, the Legislature must quickly step down the same pathway and plug the legal and ancillary shortcomings.

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[1] Indian Performing Right Society v. Eastern Indian Motion Pictures Association 1977 SCR (3) 206

[2] Indian Copyright Act 1957, s. 13(4)

[3] Music Broadcast Private Limited v. Indian Performing Right Society Limited Suit no. 2401 of 2006

[4] Copyright (Amendment) Bill 2010, para 3(viii)

[5] Indian Performing Right Society v. Eastern Indian Motion Pictures Association 1977 SCR (3) 206, para 21

[6] Indian Copyright Act 1957, s. 2(f)

[7] Council Directive 92/100/EEC of 19 November 1992 Rental Right and Lending Right and on Certain Rights related to Copyright in the Field of Intellectual Property O. J. L 346/61

[8] Indian Copyright Act 1957, s. 19(9)

[9] Indian Copyright Act 1957, s. 14

[10]International Confederation of Societies of Authors and Composers (ICSAC) v. Aditya Pandey and Ors (2017) 11 SCC 437

[11] Speech of Sri Javed Akhtar Parliamentary Debates Rajya Sabha (May 17, 2012)

[12] Rukma George, ‘Scriptwriters Copyright Conundrum: An Analysis’ (2021) Summer Issue ILI Law Review <https://ili.ac.in/pdf/6.pdf> accessed 6 July 2023

[13] Indian Copyright Act 1957, s. 18

[14] Indian Copyright Act 1957, s. 19(9)

[15] Indian Copyright Act 1957, s. 19(10)

[16] Adyasha Samal, ‘Delhi HC Order Cripples Authors’ Royalty Rights in Underlying Works’ (SpicyIP, 19 January, 2021) <https://spicyip.com/2021/01/delhi-hc-delivers-order-crippling-authors-royalty-rights-in-underlying-works.html&gt; accessed 6 July 2023

[17] Indian Performing Rights Society Limited v. Rajasthan Patrika Pvt Ltd. Commercial IP Suit No. 193 of 2022

[18] Music Broadcast Limited and Ors. V. Tips Industries Ltd. and Ors. The Intellectual Property Appellate Board (IPAB) OP (SEC 31-D)/3/2020/CR/NZ

[19] Renuka Meduri, ‘Continued Economic Benefit to the Author: Royalties in the Indian Film Industry – Historical Development, Current Status, and Practical Application’ in Kung-Chun Liu, Innovation, Economic Development, and Intellectual Property in India and China (Springer Singapore 2019)

[20] Indian Copyright Act 1957, s. 63

[21] Martina Lattacher, ‘Authorship Matters! Authorship in the EU with a Focus on Film’ (2021) 4(2) SIPLR < https://stockholmiplawreview.com/wp-content/uploads/2022/01/Authorship-matters_Tryck_IP_nr-2_2021_A4.pdf&gt; accessed 6 July 2023

[22] Legge 22 aprile 1941, n. 633 sulla protezione del diritto d’autore e di altri diritti connessi al suo esercizio (aggiornata con le modifiche introdotte dal decreto-legge 30 aprile 2010, n. 64) (It.) Article 46

[23] ibid

Exploring The Copyright Infringement Implications of AI-Generated Music

By Piyush Senapati

Piyush is a student at National Law University, Jodhpur. This piece is one of the winning entries from the Copyright Law Blog Writing Competition, 2023.

Introduction

Artificial Intelligence (AI) generated works are creating shockwaves all over the art and entertainment world due to their copyright implications- and the music industry is no stranger to this, as is evident by the concerns raised in this regard by musicians, both abroad and in India.[1] Through the lens of Indian jurisprudence, this article seeks to analyse in what circumstances can AI generated music infringe the copyright of musicians, and whether such music can qualify for the fair dealing defence against copyright infringement.

How AI creates Music

The prospect of computers generating music is nothing new, with Lady Ada Lovelace herself predicting that they “might compose elaborate and scientific pieces of music of any degree of complexity or extent.”[2] Understanding the exact mechanism by which AI creates music is necessary as the process itself raises copyright concerns- AI generated music is based on nothing but using already copyright music as ‘training material’ for the system.[3] AI applications use databases of pre-existing songs, and use inferences from them to generate new content. Once a user feeds a musician’s existing music into the AI system, the machine learns to detect their stylistic patterns and then produces new music in that artist’s voice and style;[4] but with lyrics, compositions, and other specifications of our choice. Thus, at the effort of only a few clicks, one can create an endless array of new music.

Testing AI-Generated Music on the Touchstone of the Average Listener’s Test

The case of R.G Anand v. Delux Films[5] (hereinafter, R.G Anand) and subsequent judgements[6] established that the test to determine copyright infringement is to see whether the viewer, having seen both the works gets an unmistakable impression that the subsequent work is a copy of the original. Therefore, the question of copyright infringement in cases of music generated through AI applications would ultimately boil down to whether an average listener would be under the impression that it is a copy of the music that’s used to generate it.

Before we test AI generated music based on the average listener’s test, it is important to note that music involves two copyrights[7]– copyright over the musical works (rhythm, composition, and lyrics) and secondly copyright over the sound recording itself, also called the master recording. Thus, our analysis of this question will have to be undertaken for both.

Where copyright infringement of the musical works is concerned, it is unlikely that an average listener would recognise a meaningful percentage of the original works in the AI song.[8] The reason for this boils down to the mechanism by which AI applications create music. Substantial portions of the musical works, do not manifest expressly in the final output as AI creates music by using the sound recording and mining the performative nuances therein, rather than using the musical works themselves.[9] However, AI generated songs will nonetheless have to be analysed on a case-to-case basis, as certain musical works portions could appear in the final output, leading to copyright infringement if recognisable to the average listener.[10]

Coming to copyright violations of the sound recording, there are two broad ways by which AI uses sound recordings to create music. The first is through independent fixation, i.e., recording an independent version of the song. The second is by manipulation of the actual copyrighted sound recording through encoding and decoding, wherein a portion of the same manifests in the final output.[11] The American case of Bridgeport Music, Inc. v. Dimension Films[12] held that independent fixation would not amount to copyright infringement, no matter how similar the new version is to the original recording, as one cannot violate sound recording copyright by creating an independent version of the recording. Similarly, the Court in Gramophone Company of India v. Super Cassette Industries[13] (hereinafter, Gramophone Company) held that creation of a different version of the sound recording does not amount to copyright infringement. However, in the second instance where the AI generated music involves a reproduction of the original copyrighted sound recording, there can be a case of infringement if a substantial portion of the same manifests in the output and is recognisable to the audience.[14]

Therefore, whether or not an AI generated song would violate copyright would depend on a number of factors ranging from the type of musical copyright involved, the method used by the AI to generate the song and recognisability of the original music manifesting in it.

AI Generated Music and The Defence of Fair Dealing

 The ‘Fair dealing’ exception to copyright infringement covers bona fide use of copyrighted works without any prior permission or remuneration to the copyright owner, as opposed to blatant copying with ulterior motives.[15] Some examples include using copyrighted works for research or review purposes. Supposing that an AI generated song fails the average listener’s test, it is pertinent to analyse whether it could fall under this exception. The Court in Civic Chandran v. Ammini Amma[16] (hereinafter, Civic Chandran) laid down the factors for determining whether a case falls under the fair dealing exception as- the quantum of the matter taken from another work, the purpose for which it is taken, and the likelihood of competition between the two works. More importantly, the allegedly infringing work must be transformative, i.e., different from the original work in character, expression, and meaning to fall under this exception.[17] Where AI generated music is concerned, depending on the facts and circumstances of the case, the factors mentioned in Civic Chandran could have either allowed or disallowed the same to qualify for the fair dealing exception. However, what is concerning is that the judiciary has allowed the transformative factor to override the other factors outlined in Civic Chandran– it has been held that if the work is transformative, it would be considered as fair dealing and the quantum of copying and potential competition between the works would be immaterial.[18] Given that AI generated music can fall under the abovementioned definition of transformative, this heightened emphasis on the transformative factor could provide leeway for AI based musicians to evade infringement claims even if they heavily copy and compete with original music they trained their systems with.

Conclusion

While there is ample scope for AI music producers to evade copyright infringement, artists viewing AI generated music with suspicion and hostility is natural, particularly in a country like India having a poor track record of musical copyright protection.[19] While one side of the camp would hail AI for opening the floodgates for musical creativity, the other side would understandably fear its impact on musicians’ rights and livelihoods. To arrive at a balance between these two competing aspects, numerous solutions have been suggested, such as new licensing and royalty splitting arrangements.[20] While the feasibility of these solutions is to be tested, it can be expected that the Indian judiciary will soon be grappled with infringement claims against AI generated music. In adjudicating the same, Courts must similarly endeavour to arrive at a balance between fostering creativity and protecting musicians.

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[1] Samarth Goyal, ‘Can AI Replace Musicians on Stage?’ Hindustan Times (1 April 2023) https://www.hindustantimes.com/entertainment/music/can-ai-replace-musicians-on-stage-101680330849579.html accessed 17 June 2023.

[2] Emily Howard, ‘OK Computer: How Ada Lovelace is Being Bought to Musical Life’ The Gaurdian (2 November 2019) https://www.theguardian.com/music/2019/nov/02/ada-lovelace-emily-howard composer#:~:text=Lovelace%20valued%20music%20and%20mathematics,they%20might%20even%20compose%20music accessed 25 June 2023.

[3] Kaishik Pal, ‘How Can an AI Model Create Music?’ (Techopedia, 28 April 2023) How Can an AI Model Create Music? – Techopedia (accessed 20 June 2023).

[4] Khasim Lockhart, ‘AI-Generated Music: The Biggest Impact on the Music Industry Since Napster?’ (Lexology, 24 April 2023) AI-Generated Music: The Biggest Impact on the Music Industry Since Napster? – Lexology (accessed 19 June 2023).

[5] [1979] 1 SCR  218 (SC).

[6] MRF Limited v. Metro Tyres Limited [2019] 262 DLT 734 (Del), XYZ Films v. UTV Motion Pictures [2016] 67 PTC 81 (Bom).

[7] Kanika Raheja, ‘India: Copyright Protection in Musical Work’ (Mondaq, 2 August 2021) https://www.mondaq.com/india/trademark/1097778/copyright-protection-in-musical-work#:~:text=This%20property%20includes%20the%20exclusive,music%20copyright%3A%20master%20and%20composition (accessed 20 June 2023).

[8] Eric Sunray, ‘Sounds of Science: Copyright Infringement in AI Music Generator Outputs’, (2021) 29(2) Cath. U. J. L. & Tech 185.

[9] Ibid 208.

[10] Ibid 208.

[11] Ibid 209.

[12][2005] 410 F.3d 792 (6^th Circ.).

[13] [2010] 44 PTC 541 (Del).

[14] Sunray, ‘Sounds of Science’ (n 7) 209.

[15] Jai Vignesh K, ‘Doctrine of Fair Dealing in Indian Copyright Law’ (Surana & Surana, 2 September 2022) Doctrine of Fair Dealing in Indian Copyright Law – SURANA & SURANA (suranaandsurana.com) (accessed 21 June 2023).

[16] [1996] 16 PTC 329 (Ker).

[17] The Chancellor Masters and Scholars of the University of Oxford vs Narendra Publishing House &Ors [2008] 38 PTC 385 (Del).

[18] Syndicate of the Press of the University of Cambridge v B. D. Bhandari [2009] 39 PTC 642 (Del).

[19] Shrija Verma, ‘Indian Music Industry and the Copyright Controversy’ (The IP Press, 29 January 2021) Indian Music Industry and the Copyright Controversy – The IP Press (accessed 27 June 2023).

[20] Eammon Ford, ‘Intelligence Test: Techno-Plagiarism and The Battle for Music In a New Age of AI’ (Synchtank, 23 February 2023) AI Music and Copyright – Where Do We Go From Here? (synchtank.com) (accessed 25 June 2023).

What could have been the possible intentions behind Disney’s tweet? – Part 3

Karthik Subramaniam and Shrudula Murthy

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Disney is one of the largest media organisations in the world having companies such as Marvel, Pixar, Lucasfilm, National Geographic and ESPN under their umbrella. While they do ensure that they have the highest level of protection for the intellectual property for the assets that they own, they also need to ensure that they do not infringe on anyone else’s rights. In a cut-throat world where any slight mistake can lead to expensive repercussions, especially for large organisations such as Disney which have a reputation to protect, legal teams can often go on overdrive in an effort to protect the company from taking any wrong steps.

When any individual registers as a user on any social media platform, they assent to the Terms of Service (ToS) put forth to them. The assent is generally given while registering for a service, where the ToS is displayed for users to access and understand before assenting. The ToS clear out the legal aspects of various issues such as developer rights, redistribution of content and privacy conditions amongst various others. Agreeing to abide by the ToS while signing up for a service creates a contractual relationship between the user and the platform.  The ToS of Twitter clearly mentions that any content posted, displayed or submitted on Twitter are solely owned by the user putting them up, and Twitter is provided with a worldwide, non-exclusive, royalty-free license (with the right to sublicense) to use, copy, reproduce, process, adapt, modify, publish, transmit, display and distribute such Content in any and all media or distribution methods available. Through this, we get a clear understanding that the sole owner of any content uploaded would be the individual who uploads it and they would be providing Twitter with certain licensing rights. What is important to clarify however, is that a tweet can be considered as having a copyright only if it fits into the mold of what can be copyrighted by the applicable copyright laws. With Disney wanting to use the content of Twitter users across the globe, but with the fear of being held liable for possible infringement, Disney might have taken the step of putting forward a legal notice to protect themselves. The most perplexing question that arises after this is with respect to why Disney would have even needed to go ahead with putting forth legal notices on Twitter.

1. Applicability of fair use principles 

There are certain instances when an individual or entity can use content of other individuals. It is common practice for personalities and companies in the entertainment industry to often use content uploaded by people online on social media platforms. On the Jimmy Kimmel Live! TV Show for example, the Mean Tweets segment conducted uses tweets uploaded by various users. On this segment, celebrities starring on the show read out tweets uploaded by users that target the same celebrity, with the intention of humoring the audience. This however does not fall under infringement of copyright of any content or tweets. Copyright laws to a great extent look at protecting the commercial exploitation of protected content. They provide a few general exceptions through “fair use” policies. A general four point test is conducted to determine whether the use of any copyrighted material falls into “fair use” or not. The four-points used to do so (derived from Section. 107 of the Copyright Act of the United States of America) are as follows:

i. the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;

ii. the nature of the copyrighted work;

iii. the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and

iv. the effect of the use upon the potential market for or value of the copyrighted work.

In this scenario it would depend on the manner in which Disney used the content of the tweets put forward by people using the hashtag MayThe4th. The usage of the tweets by Disney would have to go through the four factor analysis. In the scenario that usage of these tweets did not fall under fair-use, then Twitter users in effect could sue Disney for violation of their copyrights. Thus, it could be interpreted that Disney flagged out the tweet with the terms and conditions as a precaution against future claims of infringement from Twitter users.

        2. Cross-platform implications

Another issue that would arise would be the implications of the situation occurring on an online platform that was not affiliated to Disney, which had its own Terms of Service (ToS). Since the platform on which Disney and other individuals present in was Twitter, the ToS of Twitter would be applicable to them. Twitter does not consider “re-tweeting” any content to be infringement. However, with Disney having a presence across multiple media platforms, the possibility of them sharing it on other platforms definitely does exist. In case sharing across platforms does occur, the Twitter ToS would be applicable with respect to sharing content in platforms apart from Twitter and its affiliates. Due to the ToS applicable on Disney, the following can be considered as the ways through which anyone could use copyrighted content, apart from usage for fair use, from Twitter:

i. Since content uploaded by each user is owned by them, and the license provided to twitter to use such content is non-exclusive in nature, Disney could obtain individual permission from each user. While the ToS of Twitter clearly states that Twitter has a royalty-free license with a right to sublicense any content uploaded on the platform, Disney could obtain a license from Twitter to access user content. However, the ToS also mentions that express and informed consent must be taken from users if someone’s Twitter content is used to promote a product or service. While this is what Disney attempted to do, the manner in which this was executed clearly had various failures.

ii. The Twitter ToS mentions this: “Twitter has an evolving set of rules for how ecosystem partners can interact with your Content on the Services. These rules exist to enable an open ecosystem with your rights in mind. You understand that we may modify or adapt your Content as it is distributed, syndicated, published, or broadcast by us and our partners and/or make changes to your Content in order to adapt the Content to different media. You represent and warrant that you have all the rights, power and authority necessary to grant the rights granted herein to any Content that you submit.”

The presence of this clause in the ToS allows anyone to quote a tweet without the user’s permission if the tweet is embedded. Thus, a tweet can be reused by another individual on a different platform but when it is viewed, it will be rendered through the original platform itself. Thus, one is essentially using Twitter’s services as it is one of the tools provided by them, and the information is directly pulled from the service they offer.

Conclusion

While this action of Disney has frustrated Star Wars fans across the world, no one could say that they were surprised. Over the years, Disney has garnered the reputation of going a step ahead of everyone else with respect to the protection of their intellectual property. As explained above, Disney may not own a trademark over #MayThe4th as the characteristics of this hashtag are not in keeping with the requirements of trademark laws and the possibility of them claiming it would be slim. Given that Disney did not own the trademark over #MayThe4th, there would be no binding contract on Twitter users who used the hashtag due to this leading to an absence of an offer from Disney. When users agree to certain terms of service, it is done with the intention of availing a certain service provided by the platform. In the absence of this, the users are not required to comply with the same.

Even if one assumes that Disney did have a Trademark or would acquire one in the future, it would still not form a binding contract on the users as the criterion of consensus ad idem was missing. The terms and conditions were not mentioned in the first tweet and there is a huge possibility of people using the popular hashtag even without the knowledge that such conditions existed.

When looking at why Disney would have chosen to go ahead with wanting to impose legal notices on users of a hashtag, a clear understanding that they would have done so to prevent any future copyright claims with respect to the content they put forward arises. However, a diversified multinational mass media and entertainment conglomerate, with a massive legal team clearly faltered in the way it chose to approach the situation. All Disney had to do was analyse whether the content they would be creating fall under the ambit of fair use or not, and if it did, they would have required to have taken consent from users in a more effective, legally established manner.

With the advancement of technology, situations like these are prone to arise more frequently. Organisations need to be prepared to tackle such circumstances in a better manner, so as to continue maintaining their relationship with their end customers, while also maintaining required legal compliance. While  protecting one’s intellectual property assets is definitely important, managing to do so without enraging the consumers and fans is imperative as well. It’s for Disney to bring balance in the Force and not leave it in darkness for the fans.

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Part 1 of the blog

Part 2 of the blog

This is part 3 of a 3-part blog written by Karthik Subramaniam and Shrudula Murthy, Second Year Undergraduate Students of Law at NALSAR University of Law, Hyderabad. They can be contacted at their respective email id at karthik.subramaniam.nalsar@gmail.com and shruanshu@gmail.com. The views expressed are personal and do not express views of the organisation.

Picture Courtesy: Lucasfilm LTD. – https://www.starwars.com/star-wars-day

(Image in Public Domain)

Did the tweet put forward by Disney lead to the creation of a binding contract between them and other twitter users who used the hashtag?: Part 2

Karthik Subramaniam and Shrudula Murthy

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A contract is an agreement between two parties, that might either be oral or in writing, which creates mutual legal obligations between each other. A contract is extremely important in any business transaction as it clearly sets out the legal relationship between the parties involved, the rights that they possess and the responsibilities that they have to one another. Since the effects of a valid contract are legally binding and therefore enforceable in a court of law, it is extremely necessary for there to exist certain prerequisites for a contract to be considered to be valid in the eyes of the law. There are various elements that create a valid contract.

The basic essentials of a contract consist of 3 elements:

1. An offer
2. Acceptance of the offer
3. Valid consideration for the transaction.

These 3 elements form the basic elements of a simple contract. Another important element of a valid contract is consensus ad idem, or the meeting of minds. It refers to the understanding or comprehension of the contract by both parties, and both of them being in mutual agreement of the same thing in the same sense.

The 3 elements of a contract, as well as the principle of consensus ad idem are essential in analysing the following 2 questions that arise in understanding whether Disney was successful in creating a contractual agreement between them and twitter users who used #MayThe4th.

A. Were the three basic essentials of a contract present?

To be able to use or access any content online, platforms provide certain terms and conditions that need to be accepted and adhered by the users. These platforms provide a plethora of services ranging from hosting user content to allowing advertisement presence for users and developers. In a “transaction” such as this, the service provided, would be considered as the offer, the Terms and Conditions that the user would have to abide by would be considered as the consideration, and the assent to follow these terms while using the service so provided would amount to acceptance.

Disney tried to create a contractual relationship with the users without having an existing offer in the first place. While the Terms and Conditions did exist, and a user could have assented to them, there was nothing present that could constitute  an offer. To offer a service or a good to any individual, one must have ownership over the same. In the case of Disney trying to create a contractual relationship with twitter users who used #MayThe4th, it has been clearly established that Disney did not have any actual ownership over the hashtag MayThe4th.

In this case, if Disney had ownership over the hashtag, them, allowing users to use the hashtag would be considered as the provision of a service. With Disney not having ownership over the hashtag, they essentially do not provide any service, thereby ensuring that Twitter users need not abide by any of the Terms and Conditions put forth by Disney over the usage of the hashtag.

The absence of one of the basic elements required for a contract to be valid clearly did not exist in the above case. Disney was thus unsuccessful in its attempt to create a contract.

B. Was there consensus ad idem between Disney and twitter users who used the hashtag?

While it was clearly established that Disney does not have any rights over the usage of #MayThe4th, let us consider a scenario where they do have trademark rights over the term, or had suggested the usage of a different hashtag that they did have complete rights over. In such a case, the three basic elements of a contract; an offer, consideration, and acceptance would be present. However, this still doesn’t amount to a valid contract.

Consensus ad idem implies that all the parties to the contract have a mutual understanding and comprehension of the contract that they are getting into. Disney’s first tweet did not include the terms and conditions, but they rather chose to put a follow up tweet which imposed a contractual obligation on twitter users based on the directions of the first tweet. It was due to this split nature of the tweet that a lot of confusion ensued. The first tweet did not give any indication of the fact that any terms and conditions would be applicable, or that there even existed a follow up tweet. It was only the second tweet that made the existence of a legal notice clear. Due to these reasons, any individual using #MayThe4th could have used the hashtag without reading the second tweet, consequently not having any knowledge of the existence of a legal notice. Due to the popularity of Twitter as a social media platform with a tremendous amount of content being uploaded on it constantly, coupled with the massive popularity of the hashtag MayThe4th, many users could have put forward a tweet containing the hashtag without any knowledge of the legal notice being imposed on them. Both these conditions indicate the absence of a mutual understanding between the parties implying that there was no consensus ad idem, thereby invalidating the contract.

In the last part of this series we try to dig into the possible intentions behind Disney putting forth the terms and conditions and what the future implications of that would entail.

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To read the first part of the blog, click here.

This is part 2 of the 3-part blog written by Karthik Subramaniam and Shrudula Murthy, Second Year Undergraduate students of Law at NALSAR University, Hyderabad. The authors can be reached at their respective email id karthik.subramaniam.nalsar@gmail.com and shruanshu@gmail.com.

 

Picture courtesy: Lucasfilm LTD. – https://www.starwars.com/star-wars-day (Image in Public domain)

The Disney Hashtag Saga: How did they cause a disturbance in the force? : Part 1

Karthik Subramaniam and Shrudula Murthy

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Disney has been caught up in a storm again. Star Wars fans across the world have been expressing their frustration against Disney with reference to a particular tweet floated out by them. What exactly was this tweet and why has it created a disturbance in the force?

The 4^th of May each year is a day of celebration for all Star Wars fans, using it to commemorate the iconic movie saga that captured the imagination of people of all ages through its wonderfully intricate creation of a fantasy world, in a galaxy far, far away. One of the most iconic lines of the movie series – “May the Force be with you”, which is used to wish one good luck, and goodwill, managed to find itself morphed into a pun “May the 4th be with you”. Through usage in popular culture, this pun led to the creation of 4th May as an unofficial Star Wars day, an eventful day that unites Star Wars fans all across the globe. With this phrase being something very close to the fans, what exactly made the people feel betrayed, as if Disney had turned to the Dark Side?

On 27th April, 2020, Disney put out a tweet asking people to post their favourite memories with the hashtag- “MayThe4th”, which would then be used by Disney to create something ‘special’. Disney followed up with another tweet stating that anyone who would be using #MayThe4th would be agreeing to allow Disney to use their message and their account name in all media, and would also be agreeing to Disney’s terms of use.

Disney was immediately subjected to immense backlash due to this not only on Twitter, but on other social media platforms, and news websites as well. Disney has had an unpleasant history with extreme overreach on its intellectual property; and the public perceived this incident on Twitter to be another of Disney’s attempts to overstretch its boundaries on Intellectual Property. The tweet led to Twitter users trying to understand why Disney would have wanted to do this, and how it would be affecting them.

Disney did put forward a clarificatory tweet almost 5 hours later by stating that only tweets that used the hashtag #MayThe4th and mentioned @DisneyPlus would be subject to the legal conditions put forward. However, this served too little in resolving the concerns that netizens had with Disney’s actions.

These set of events led to the formulation of several questions relating to Intellectual Property Rights and Fair Use, which this article will look at resolving, to understand the situation better. The analysis of the questions in this paper has been largely done from  the perspective of United States Intellectual Property Laws.  The three main, broad questions are as follows:

1. What is the extent of ownership that Disney must have over a hashtag to impose conditions on others for its usage?
2. Did the tweet put forward by Disney lead to the creation of a binding contract between them and other twitter users who used the hashtag?
3. What could have been the possible intentions behind Disney’s tweet?

1. WHAT ARE THE RIGHTS DISNEY MUST HAVE OVER A HASHTAG TO IMPOSE CONDITIONS ON OTHERS FOR ITS USAGE?

The main question which has put people in a frenzy is whether Disney had the right to impose such terms and conditions on the Twitter users who used the hashtag “MayThe4th”. For a company or an individual to have control over the use and dissemination of particular words or to bind people to their terms and conditions, they usually need to have  certain rights over it , primarily in the form of Intellectual Property rights. This section seeks to analyse what kind of ownership Disney could claim over “MayThe4th”, what the essential requirements or conditions are which need to be fulfilled to obtain these rights and whether Disney could be doing the same in this scenario.

                  A. What kind of ownership could Disney claim? 

A hashtag has come to be understood as a particular word or phrase preceding the symbol ‘#’. The use of the term hashtag has seeped into daily conversations, dictionaries and through contemporary use has managed to gain a meaning greater than a mere symbol. One of the primary purposes of a hashtag is not only to increase the popularity of a product but also to provide information about other related content to users. By using a hashtag, individuals attempt to create a community of similar and related content that can be easily accessed by merely clicking on the hashtag.

Hashtags have been used over the years to generate popularity for products and to conduct marketing campaigns and have thus received protection as intellectual property under trademark laws in the past. They have managed to garner a massive reputation in online marketing and companies have increasingly resorted to using a common hashtag as a mark of their company or product. Companies generally claim ownerships over hashtags under trademark laws.

The Lanham Act of the United States Patent and Trademarks office describes a trademark as something which includes distinctive signs, numbers, words and colours specifically meant to distinguish the good(s) or service(s).[1] In order for Disney to impose the terms and conditions on the users of the Tweet #MayThe4th, they need to have a trademark over the term. To obtain this trademark the term  has to fulfil two essential conditions. This section will analyse whether the hashtag fulfils the criterion in order for it to be trademarked.

                        B. Can ‘MayThe4th’ be trademarked by Disney?

There are certain conditions that need to be met in order for a phrase to get protection under trademark laws. Even though hashtags are a relatively new and emerging concept there have been numerous debates surrounding this area. Cases such as Eksouzian v. Albanese, under the central district of California  brought to picture why hashtags could not be trademarked The court in this case,highlighted how the characteristics of a hashtag were not in consonance with those of a trademark. A trademark serves two primary purposes. First off it aims at identifying the source of the product or service and secondly it seeks to protect consumers from duplicate or spurious products. The court held that a hashtag does not fulfil these criterions. It explained how a hashtag in most cases, cannot redirect a user towards a single source of a good or service and that hashtags on an online portal under usual circumstance do not create confusion among consumers over the product of a particular brand.  However, the United States Patent and Trademark Office (“USPTO”) began granting trademarks for hashtags that very year but the rationale put forward in the Eksouzian case becomes extremely important in understanding under what scenarios a hashtag could be trademarked.

Hashtags have been granted trademarks in the past if they complied with certain criterions of the trademark law. While there are clear precedents of hashtags having been trademarked in the past, the hashtag #MayThe4th cannot be trademarked. There are two primary conditions which a Trademark needs to fulfil in order to be granted protection under the Lanham Act. They are:

a. The trademark should be used commercially or with the intention of being used commercially in the future

b. It should be distinctive in nature.

Explained below are the reasons why the term #MayThe4th does not comply with the conditions mentioned above and cannot be granted a Trademark.

                           i. Commercial usage of #Maythe4th

While not much can be commented on this criterion, it has to be observed that the hashtag or the term MayThe4th has been used commonly to wish someone good luck and has come to become a phrase of encouragement. Disney does not link any product or commercial venture exclusively to the term MayThe4th. To this extent Disney would not be granted a trademark for the hashtag.

However, this is not set in stone and the possibility of Disney trademarking the date- MayThe4^th is not impossible. If it can link the date to a specific service or if it could be traced back to massive sales on a prime day, Disney could be granted a   trademark on “#MayThe4th”. However, with the phrase having been largely promoted and created by the fans of the franchise, such an act would be looked upon as an unfavourable practice.

                         ii. Distinctive nature of the term #MayThe4th

The USPTO put forward certain criterions to be complied with for companies claiming a trademark for their hashtags. In October 2013, the USPTO revised its Trademark Manual of Examining Procedure and inserted Section 1202.18 which dealt exclusively with hashtags. One of the first conditions put forward in the manual was that the word which followed the hashtag should fulfil the basic criterion of trademark laws. To this end, the primary question which needs to be answered is whether the date ‘MayThe4th’ could be trademarked. It needs to be analysed whether the term “Maythe4th” is distinctive in nature and if it has been used exclusively in relation to Star War products?

According to the USPTO a hashtag would be entitled to a trademark as long as it complies with the criterions all trademarks have to fulfil in order to be distinctive. It has been established that for a date ) in particular to be trademarked there has to be a direct association or linkage to the goods or service being provided. The famous chain of  departmental stores – ‘seven eleven’ has a trademark over its store name despite it being a name strictly associated with numbers. The name was adapted to indicate the extended hours and days of the functioning of the store. The name, ‘seven-eleven’ in this case directed the users to the departmental stores and the goods and services so provided by them and was thus able to get a trademark over its name. In the given scenario the phrase ‘MayThe4th’ does not direct the customers to an exclusive product or service and would thus not be able to get the right of Trademark over it.

Lucasfilm Ltd. LLC which was bought by Disney in 2012, does own the Trademark over the entire phrase “May the 4^th be with you”. As this phrase complied with the requirements of the Trademark laws, there is a possibility that Disney could trademark the hashtag. Previously, Disney had attempted to trademark the name of ‘Dies di los muerto’ or the day of the dead festival, a festival celebrated in Mexico, for their movie Coco. There was an outrage over Disney’s actions of claiming ownership over a festival and several termed it as a form of cultural appropriation. The term ‘Dies di los muerto’ is only descriptive of a certain event and further has been used as a popular term since ages. Similarly, MayThe4th does not fulfil the basic criterion required for it to be granted protection under trademark laws and consequently even the hashtag MayThe4th would not be granted any.

Assuming a scenario where Disney does own the trademark over #MayThe4th, or manages to attain one in the future, would the terms and conditions put forward by Disney on Twitter be binding on its users? In the next part of this series we seek to answer questions related to the nature and enforceability of the contract or the terms and conditions put forward by Disney.

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[1] U.S. Patents and Trademarks office, Lanham Act, 15 U.S.C § 1065 (2013).

 

Part 2 of the blog.

 

This is part 1 of a 3-part blog written by Karthik Subramaniam and Shrudula Murthy, Second Year Undergraduate Students of Law at NALSAR University of Law, Hyderabad. They can be contacted at their respective email id at karthik.subramaniam.nalsar@gmail.com and shruanshu@gmail.com.

The views expressed are personal and do not express views of the organisation.

Picture Courtesy: Lucasfilm LTD. – https://www.starwars.com/star-wars-day

(Image in Public Domain)

Presentation on Copyright as a Provocateur

Dr. Arul George Scaria, co-director, CIIPC, delivered a talk on ‘Copyright as a Provocateur’ on the occasion of World Book and Copyright Day, at an event jointly organised by the German Book Office, IRRO, and the German Embassy in India. The presentation may be accessed here.

Case Comment: Sanjay Kumar Gupta & Another v Sony Pictures

By Apoorv Chaudhary

In Sanjay Gupta v Sony Pictures, the Delhi High Court has held that a concept note is not protected under the Copyright Act, 1957 as it represents a mere idea rather than expression of such idea. This case is in conflict with an earlier ruling of Delhi High Court in Anil Gupta v. Kunal Dasgupta. The write up can be accessed through the following link:

https://academic.oup.com/jiplp/article-abstract/14/2/87/5232577