MUMBAI SILICON VALLEY BANGALORE SINGAPORE MUMBAI-BKC NEW DELHI MUNICH Indian Film Industry Tackling Litigations September 2013 © Copyright 2013 Nishith Desai Associates www.nishithdesai.com Indian Film Industry: Tackling Litigations About NDA Nishith Desai Associates (NDA) is a financial services, IT and telecom, educa- research based international law firm with tion, pharma and life sciences, media and offices in Mumbai, Silicon Valley, Banga- entertainment, real estate and infrastruc- lore, Singapore, New Delhi and Munich. ture. We specialize in strategic legal, regula- Nishith Desai Associates has been awarded tory and tax advice coupled with industry the “Best Law Firm of the Year” (2013) by expertise in an integrated manner. We Legal Era, a reputed Legal Media Group. focus on niche areas in which we provide Chambers & Partners have ranked our significant value and are invariably firm as No.1 for Private Equity, Tax and involved in select highly complex, innova- Technology – Media - Telecom (‘TMT’) tive transactions. Our key clients include practices consecutively for years 2013, marquee repeat Fortune 500 clientele. 2012 and 2011. For the third consecutive year, International Financial Law Review Our experience with legal, regulatory and (a Euromoney publication) has recognized tax advice coupled with industry expertise us as the Indian “Firm of the Year” for our in an integrated manner allows us to pro- TMT practice (2012, 2011, 2010). We have vide the complete strategy from the onset also been named ASIAN-MENA COUNSEL through to the full set up of the business ‘IN-HOUSE COMMUNITY FIRM OF THE and until the exits. YEAR’ in India for Life Sciences Practice in year 2012. We have been ranked as the best We focus on niche areas in which we pro- performing Indian law firm of the year by vide significant value add and are involved the RSG India Consulting in its client satis- in select highly complex, innovative faction report (2011). In 2011 Chambers & transactions. Core practice areas include Partners also ranked us as No.1for our Real Mergers & Acquisitions, Competition Law, Estate-FDI practice. We have been named International Tax, International Tax Litiga- ASIAN-MENA COUNSEL ‘IN-HOUSE COM- tion, Litigation & Dispute Resolution, Fund MUNITY FIRM OF THE YEAR’ in India for Formation, Fund Investments, Capital International Arbitration (2011). We’ve Markets, Employment and HR, Intellectual received honorable mentions in Asian - Property, Corporate & Securities Law, JVs Counsel & Restructuring, General Commercial Law and Succession and Estate Planning. Magazine for Alternative Investment Funds, Inter-national Arbitration, Real Our specialized industry niches include Estate and Taxation for the year 2011. We © Nishith Desai Associates 2013 Provided upon request only have been consistently ranked in tier 1 by legal landscape of modern India (August Asia Pacific Legal 500 for our International 2011). Nishith Desai has been the recipient Tax, Investment Funds and TMT practices. of Prof. Yunus ‘Social Business Pioneer of We have won the prestigious “Asian- Coun- India’ – 2010 award. He has been voted sel’s Socially Responsible Deals of the Year ‘External Counsel of the Year 2009’ by 2009” by Pacific Business Press, in addition Asian Counsel and Pacific Business Press to being Asian-Counsel Firm of the Year and the ‘Most in Demand Practitioners’ 2009 for the practice areas of Private Equity by Chambers Asia 2009. He has also been and Taxation in India. Indian Business Law ranked No. 28 in a global Top 50 “Gold List” Journal listed our Tax, PE & VC and TMT by Tax Business, a UK-based journal for the practices in the India Law Firm Awards international tax community. 2009. We have been ranked the highest for ‘Quality’ in the Financial Times – RSG We believe strongly in constant knowledge Consulting ranking of Indian law firms in expansion and have developed dynamic 2009. The Tax Directors Handbook, 2009 Knowledge Management (‘KM’) and lauded us for our constant and innovative Continuing Education (‘CE’) programs, out-of-the-box ideas. In an Asia survey conducted both in-house and for select by International Tax Review (September invitees. KM and CE programs cover key 2003), we were voted as a top-ranking law events, global and national trends as they firm and recognized for our cross-border unfold and examine case studies, debate structuring work. Other past recognitions and analyze emerging legal, regulatory and include being named the Asian Law Firm tax issues, serving as an effective forum for of the Year (Pro Bono) 2001 and Indian Law cross pollination of ideas. Firm of the Year 2000 by the International Financial Law Review. Our trust-based, non-hierarchical, demo- cratically managed organization that Our research oriented approach has also leverages research and knowledge to led to the team members being recognized deliver premium services, high value, and and felicitated for thought leadership. a unique employer proposition has now Consecutively for the fifth year in 2010, been developed into a global case study NDAites have won the global competition and published by John Wiley & Sons, USA for dissertations at the in a feature titled ‘Management by Trust International Bar Association. Nishith in a Democratic Enterprise: A Law Firm Desai, Founder of Nishith Desai Associates, Shapes Organizational Behavior to Create was awarded the “Best Tax Lawyer of the Competitive Advantage’ in the September Year” by Legal Era (2013). He was listed 2009 issue of Global Business and Organiza- in the Lex Witness ‘Hall of fame: Top 50’ tional Excellence (‘GBOE’). individuals who have helped shape the © Nishith Desai Associates 2013 Indian Film Industry: Tackling Litigations Please see the last page of this paper for the most recent research papers by our experts. Disclaimer This report is a copyright of Nishith Desai read this report, or otherwise, in respect of Associates. No reader should act on the anything, and of consequences of anything basis of any statement contained herein done, or omitted to be done by any such without seeking professional advice. The person in reliance upon the contents of authors and the firm expressly disclaim this report. all and any liability to any person who has Contact For any help or assistance please email us on [email protected] or visit us at www.nishithdesai.com © Nishith Desai Associates 2013 Indian Film Industry: Tackling Litigations Contents 1. INTRODUCTION 01 2. CONCEPTUALIZING THE PROJECT & AUTHORING THE SCRIPT 03 I. Theft of Idea, Story and Script (Infringement of Copyrights) 03 II. Disputes Arising out of Insufficient Documentation 05 III. Grant of Rights to Multiple Individuals 05 IV. Adaptation and Remake Rights 06 3. PROTECTING & SECURING THE TITLE OF THE FILM 08 I. Registration with Industry Associations 08 II. Protecting the Title under the Umbrella of Intellectual Property Laws 08 4. PROTECTING THE LYRICS, MUSIC AND RECORDINGS 11 I. Intellectual Property in a Song 11 II. Ownership of the Intellectual Property in the Melody 11 III. Litigious Strains of Music 13 IV. Remixes & Cover Versions - Are they Legal? 14 V. New Media 15 VI. Debate on the Right to Claim Royalty in Relation to Underlying Works / Publishing Rights 16 VII. Management of Rights Through Copyright Societies 17 VIII. Compulsory Licensing of Published and Unpublished Content 18 5. INFRINGEMENT OF COPYRIGHT AND PIRACY 20 I. Infringement of Copyright 20 II. Legal Framework for Countering Counterfeiting and Piracy 21 6. DISPUTES – VIA CONTRACTUAL RELATIONSHIPS & VIA DISTRIBUTION / EXPLOITATION RIGHTS 25 7. FILMS AND CENSORSHIP 27 I. Framework 27 II. What is a Cinematographic Film? 27 III. CBFC and Certification of Cinematograph Films 27 IV. Grounds on which Certificate has been Refused 28 © Nishith Desai Associates 2013 Indian Film Industry: Tackling Litigations V. Whether Certification is Required for Private Exhibition of Cinematograph Films 28 VI. Validity of Ban by State Authority Post CBFC Certification 29 VII. Broad Legal Principles Governing Censorship 29 VIII. Statutory Offences Connected with Public Exhibition or Broadcast of Films 30 © Nishith Desai Associates 2013 Indian Film Industry: Tackling Litigations 1. Introduction The Indian media and entertainment film industry witnessed a paradigm sector, particularly the film industry— shift in its structure in the last decade. popularly known as Bollywood, has Previously, the films where funded by experienced robust growth over the last private money lenders, often mafia money, few years and has become one of the primarily interested in the collections fastest growing sectors of the economy from distribution rights or the box-office despite the economic downturn.1 In last and ignored the residual income from few years, several Bollywood films have the repurposing of the IP. But after it was successively broken previous records accorded the “industry status” in 2000 by on box office collections, which have the Government of India, the following perhaps also prompted both multinational years saw the films receiving funding entertainment companies and Indian from the banks, and Indian corporates conglomerates to invest in Bollywood films. such as Sahara, Reliance group, Mahindra and foreign studios such as Warner Bros., Traditionally, the Indian film industry 20th Century Fox and the like. The banks, has been social relationship centric, under Indian corporations and foreign investors which the arrangements/agreements were insisted on written contracts with the