Recently, the Finance Act, 2017, the Annual Money Bill for the Financial Proposals by the Revenue Department, Ministry of Finance, Government of India was passed by the Parliament and came into force on April 01, 2017. The Finance Act as a part of its stride to reduce the number of Tribunals, merged the Copyright Board (“the Board”) with the Intellectual Property Appellate Board (“IPAB” or “Appellate Board”). Thence, the process of transferring the same to the IPAB has begun with the latest news on July 21, 2017 that the office was currently fast-tracking the approvals for Copyright approvals before the merger takes shape.
This sudden amendment begs discussion on the original idea behind setting up a Copyright Board in the first place and an insight into what the Copyright Board exactly is, or rather soon to be, was.
As per the Statement of Objects and Reasons of the Copyright Act, 1957, Copyright Board was set up with an object to determine reasonableness of rates or royalties, consider applications for general licenses and assessment of compensation. Section 11 of the Copyright Act, until amended by the Finance Act 2017, provided for the constitution of the Copyright Board with a Chairman and prescribed number of members. As per pre-amendment Section 11, the Central Government was to appoint a Secretary and other officers ‘as may be considered necessary for the efficient discharge of the functions of the Copyright Board’. Section 72(1) of the Copyright Act, provided for an appeal against any order/decision of Registrar of Copyrights to be preferred before the Copyright Board.
The Copyright Amendment Act of 2012 brought in amendments to Section 11 of the Copyright Act as well. After the 2012 amendment, the Copyright Board was to consist of a Chairman and 2 members as against a range of 2 to 14 members prescribed prior to the amendment. Although the provision for constitution of a Copyright Board has been since the enactment of the 1957 statute, a permanent constitution of the Board was only announced in February 2014.
In fact, the constitution of the Board and other formalities was seeing commendable progress as the Copyright Board Salaries and Allowances and other terms and conditions of service of the Chairman and other Members Rules, 2014 were notified on March 24, 2014 pursuant to Section 11(2) of the Copyright Act, 1957. As per the said rules, allowance payable to the Board members were fixed along with other employment benefits.
Following this, an advertisement for the posts of Members of the Copyright Board was published in ‘Employment News’ in the 20-26 September, 2014 edition which was later cancelled by another advertisement for the same posts. Yet the constitution of the Board remained far from reality. Further on November 21, 2016, Press Information Bureau of Government of India released a statement by the Hon’ble Commerce Minister that the Copyright Board was likely to be established by the financial year 2017-18.
However, with the recent amendment to the Copyright Act by the Finance Act and the merger of the Board with IPAB underway, it can be said that the Copyright Board has died without its ultimate actual constitution.
Anomalies created by the Amendment
The IPAB is the Appellate Authority for matters arising out of the Trade Marks Act, Patents Act and the Geographical Indications Act (“GI Act”). The other statutes governing different IP namely Copyright (until Finance Act, 2017), Industrial Design, Plant Variety and Semiconductor Integrated Circuit Layout-Design, have their own respective Appellate authorities prescribed in the respective Acts. The IPAB is constituted under the Trade Marks Act, 1999 under Section 83. The GI Act originally conferred the Appellate jurisdiction with the IPAB. The Amendment of 2002 to the Patent Act, 1970 brought the patent matters under the jurisdiction of the IPAB while providing for additional provisions regarding the IPAB as per the objects of Patents Act, although the same was made effective only in 2007.
As per the objects and reasons of the Trade Marks Act, the Appellate Board was constituted for speedy disposal of appeals and rectification applications which prior to the Act lied before the High Courts. Further, when the Appellate Jurisdiction for matters arising out of the Patents Act was transferred from High Courts to the IPAB vide the 2002 Amendment, it was a change made along with provisions to address the peculiar needs the specific legislation could require. In other words, it was not an absolute transfer of jurisdiction without keeping in view the specific requirements of the differing subject matter of Patents from Trade Marks.
Whereas, the transfer of jurisdiction over Patent matters was done through a legislative amendment to the Patents Act keeping it backed with additional provisions regarding the functioning of the Appellate Board independent of the parent Act i.e. the Trade Marks Act, the transfer of jurisdiction of Copyright Board to IPAB has been done by the Finance Act, 2017 which is nothing but a money bill, and hence does not require consideration of the Upper House of Parliament i.e. the Rajya Sabha. The same has come into challenge on the said ground before the Bombay High Court in a Public Interest Litigation filed by Tax Friends Association on July 12, 2017 which was listed before the Hon’ble Chief Justice Dr. Manjula Chellur and Hon’ble J. N.M. Jamdar The merger is not only ultra vires the Money Bill, it is weak in the sense that it does not take (at least not yet) into account the peculiar needs of the specialized legislation of Copyright Act, as opposed to the efficient transfer of jurisdiction of Patent matters discussed above.
Section 160 of the Finance Act reads as under:-
“160. In the Copy Right Act, 1957,—
- for the words “Copyright Board”, wherever they occur, the words “Appellate Board” shall be substituted;
- in section 2, after clause (a), the following clause shall be inserted, namely:—
‘(aa) “Appellate Board” means the Appellate Board referred to in section 11’;
- for section 11, the following section shall be substituted, namely:—
“11. The Appellate Board established under section 83 of the Trade Marks Act, 1999 shall, on and from the commencement of Part XIV of Chapter VI of the Finance Act, 2017, be the Appellate Board for the purposes of this Act and the said Appellate Board shall exercise the jurisdiction, powers and authority conferred on it by or under this Act.”;
- in section 12, sub-sections (3) and (4) shall be omitted;
- in section 78, in sub-section (2), clause (a) shall be omitted.”
Thus, it substitutes the existing Section 11, which, as discussed earlier, provided for the appointment of officers as required by the specialized legislation, the Copyright Act. Hence, it appears that the Finance Act transferred the Appellate Jurisdiction of Copyright matters to IPAB without gauging the competence that may be required in adjudging such matters which was cautiously done in the amendment to the Patents Act as discussed above.
In addition to the above amendment through Section 160, the Finance Act, 2017 vide Section 161 amends Section 83 of the Trade Marks Act, 1999 making the relevant part to read as under:-
“the Intellectual Property Appellate Board to exercise the jurisdiction, powers and authority conferred upon it by or under this Act and under the Copyright Act, 1957”.
Another anomaly is presented by the said amendment to the Copyright Act:-
“Section 72: Appeals against order of Registrar of Copyrights and Copyright Board.
(2)Any person aggrieved by the final decision or order of the Copyright Board, not being a decision or order made in an appeal under sub-section (1), may,…appeal to the High Court within whose jurisdiction the appellant actually and voluntarily resides or carries on business or personally works for gain. ”
The Copyright Act, 1957 under Section 72(2) provided for an appeal against an order by the Copyright Board to lie before the High Court, whereas no such appellate jurisdiction against orders by the IPAB has been granted in the Trade Marks Act. However, as the term “Copyright Board” in Copyright Act has now been substituted with “Appellate Board”, Section 72(2) of Copyright Act now confers Appellate jurisdiction on High Courts against the orders of IPAB, which is otherwise not provided under the Trade Marks Act (which is the statute constituting the IPAB). It is pertinent to note here that High Courts do take up cases against orders by IPAB, but that is under the Writ Jurisdiction of High Courts and not Appellate Jurisdiction.
After a long period of stagnancy, all the steps as discussed above clearly show the much required forward movement with regard to establishment of an Appellate Authority for Copyright matters. The proposal of consolidation of tribunals for increasing efficiency and reducing the financial burden of having different set-ups is a welcome move and it is hoped that the anomalies identified will be corrected, given that these questions have already been raised before the High Court of Bombay and the High Court of Madras.
Following is a tabulated timeline of the recent events that took place regarding the Copyright Board:
|1.||February 17, 2014||Announcement for Permanent
Copyright Office and permanent Copyright Board
|2.||March 24, 2014||Rules regarding terms of service of
Board Members notified
|3.||September 20, 2014||Advertisement for appointments to
the posts of Members of Copyright Board
|4.||Early 2015||The September 2014 advertisement
cancelled and the posts re-advertised for appointments
|5.||August 10, 2016||Term of office for members of Board
changed vide Copyright Amendment Rules, 2016
|6.||November 05, 2016||Advertisement for Appointment to
the posts of members of Board
|7.||April 01, 2017||Merger of Copyright Board with the
IPAB vide the Finance Act, 2017 (Union Budget 2017-18)
|8.||May 26, 2017||Sections 156-189 Finance Act came
|9.||July 21, 2017||Statement by CGPDTM about the
process of merger of Copyright Board with the IPAB under