HRD / Labour / Health

The Copyright (Amendment) Bill 2010

This Bill amends the Copyright Act, 1957 and seeks to make the provisions of the law in conformity with

relevant international treaties. The Bill expands the definition of “copyright” and introduces a system of

statutory licensing to protect the owners of literary or musical works. It includes a system of compulsory

licensing of copyrighted works for the benefit of the disabled, with the prior approval of the Copyright Board.

It also protects performer’s rights, including, allowing them to make sound or visual recordings of their

performances and reproduce them in any medium, issue copies to the public or sell or rent a copy of the

recording.

Highlights of the Bill

• This Bill amends the Copyright Act, 1957.

• Copyright in a film currently rests with the producer for 60 years. The Bill extends copyright to a

director as well, but for 70 years. In some cases, this amendment also applies to films produced

before the Bill.

• The Bill makes special provisions for those whose work is used in films or sound recordings (e.g.

lyricists or composers). Rights to royalties from such works, when used in media other than films

or sound recordings, shall rest with the creator of the work and can only be assigned to heirs, or

copyright societies which act in their interests.

• The Bill allows for the production of copyrighted work in special formats (such as Braille), for use

by persons with disability, without infringing copyright. It also specifies a procedure by which work

can be produced in general formats, for use by such persons.

The Act gives authors, or their representatives, the right to claim damages against use of
their work (while under copyright), in a way which adversely affects their reputation.
The Bill allows such a right to be exercised indefinitely, as opposed to being restricted to
the term of copyright, as is the case currently.

Key Issues and Analysis

It is unclear why directors are allowed copyright in a film for 70 years, whereas
producers, and authors of other works, are allowed copyright only for 60 years.
The Bill gives a special set of rights to authors of work used in films and sound
recordings (such as scriptwriters and music composers). As these rights are not given to
creators of other works, the Bill discriminates between different types of authors.
The procedure prescribed for the issue of licences to reproduce work in non-specialised
formats, for persons with disability, is not time bound. This may make the process less
accessible.
Authors and their representatives may claim damages against the use of even those works
which are out of copyright, on grounds that they damage the author’s reputation. This
provision may affect creativity and artistic expression of others who build upon an
author’s work.

1) Request for more time: On the outset, we would request the standing committee on
Human Resource Development for more time to deliberate on suggestions. For a bill of
this nature and magnitude, wherein it influences all forms of public and personal
communication, especially on the Mobile and the Internet, it is important that we receive
more time to look into the digital implications of the proposed amendments. The digital
space is an evolving one, and the bill must also take into consideration possible changes
in the future. For the act in its current form, we have received only a short time period of
15 days to submit comments, and we would request for more time, particularly for public
debate on its implications, since it impacts not only music and film companies, but all
citizens.

2) Against Introduction of the ‘Hot News’ concept: We believe that there might be an
attempt in comments by vested Media conglomerates to introduce the concept of ‘Hot
News’. According to the Hot News doctrine, facts related to events that have occurred in
the public domain have value for a short duration, and it is only after a certain period of
time that it moves into the public realm. In this age of instant communication, it is
impossible to determine the time frame within which an important piece of information
no longer remains hot. Also, it is impossible to prevent citizens from communicating the
news via mobile and Internet websites, SMS and instant messaging. These would be
under unicast, narrowcast or broadcast, and we believe that it is in public interest that
news be made public and widespread as soon as it occurs. For citizens to be held liable
under the Hot News concept as violating a media entity’s copyright would restrict their
freedom of speech and expression. Particularly in case of emergencies, Hot News is not
the mandate of any specific media entity. We would request the committee to not accept
recommendations for the inclusion of the Hot News concept in the proposed amendments
to the Copyright Act.

. Works of Criticism, Parody: The Copyright (Amendment) Bill does not appear
specifically to take into account works of criticism and parody. Information and
knowledge once in the public domain should be available to be added to or built upon, or
critiqued for enhancing the knowledge of citizens on current affairs and developments.
These lead to wider debate and consultation on matters, and the usage of work under
copyright for purpose of critique and parody should explicitly not be deemed a case of
copyright violation. In it in the interest of free speech, and the interest of the nation, that
on digital platforms like the Internet and the Mobile Internet, news developments be free
for discussion, debate and even parody. Please take into account that according to figures
published by the Telecom Regulatory Authority of India, there were 149 million mobile
subscribers in India that were subscribed to data (Mobile Internet) services. With time,
this number will increase, and more and more citizens will share their views online. It is
important for a democracy to not curtain criticism and the freedom of speech: India is not
China, which Google had to quit because its search was forced to be “sanitized”. India is
also not Pakistan or Turkey, where Facebook, Twitter and YouTube were recently
banned. Free Speech and open debate are the backbone of a democracy.

4) Inclusion of the concepts ‘Unicast’ and ‘Narrowcast’: With the advent of digital
technologies, the ability for copyright holders, licensees and individuals to communicate
and share content not only increases, but also allows content owners/licensees to service
the specific demands of individual customers. Digital technologies enable the sale and
sharing of content not just in a broadcast mode (from one source to many) but also in
a unicast (one to one) and narrowcast (one to a specific list of recipients).

Following the launch 3G and Broadband Wireless technologies, it will be possible for
digital transmission of copyright content to individual, and select individual customers
via TV over mobile networks (Mobile TV), Video on Demand, Internet Protocol
Television (IPTV). Communication or content delivery using Internet and Mobile
technologies (Webcasting, Interactive Voice Portals, SMS/Short Messaging Services,
email, Instant Messaging) are also forms of communication and content delivery between
two individuals or a service provider and an individual. In most cases, this may include
private and personal communication on email or Instant messaging between two
individuals, and is not the same as broadcast, which is communication to the public at
large.

The definition of Broadcast 2(dd)(i) and 2(dd)(ii) while encompassing narrowcast and
unicast, does not differentiate between a communication to the public in general (which
can be accessed by anyone), and communication to specific individual or set of
individuals (which may be private).

Currently, a broadcast can be treated as being synonymous to communication to the

public. A narrowcast, much less a unicast, would be considered to be on the same footing
given that they address much lower numbers of persons. In fact, a unicast is directed at
just one person. Therefore, neither a narrowcast nor a unicast should be treated in the
same manner a broadcast or as being communication to the public. This is, however, not
a difference which the law currently recognizes.

We would request the inclusion of the terms Unicast and Narrowcast in section 2 so as to
differentiate them from broadcast. This differentiation is likely to become more important
as usage of digital technologies becomes more widespread, with the advent of services
over 3G and Broadband Wireless networks, reaching 1 billion Indian citizens.

5) Introduction of Creative Commons, and for certain software to not be under

copyright in public interest: Content and computer software technologies created with
funding from the Government have been created with funding from the people of India.
Yet much of this content remains treated as being owned and for commercial exploitation
by the Government. The intellectual property created by the government is the
intellectual property of its people, and all citizens of India should have the right to access
it, having already paid for it. In many cases, especially research work done related to
digital technologies, the society at large would benefit if these would be available for
further development by citizens of the county, and are either open sourced or, at least,
made available for further development under licences such as Creative Commons.

Take, for specific example, work done by C-DAC on Indian language fonts, which are
still treated as proprietary, and are available only for purchase to citizens, and not for
creating improved software. There is a clear digital divide being created because the tools
and software for creating Indian language content on the Internet and mobile, whether for
education, communication or information, are not more widely available. There is also
precedence in the Linux Operating System, a collaborative community used as a base for
creating free and open source computer operating systems, thus creating an alternative to
expensive, proprietary software.

As we move towards 1 billion mobile customers, please keep in mind that a significant
majority of it will not be able to SMS or communicate in Indian language fonts. It is
pertinent to note that works created by the judiciary i.e. judgments are not subject to
copyright. We believe that ideally, works created by the government should not be
subject to copyright either. Such a provision would not make Indian law an aberration.
For example, it is the law in the US for works created by the employees of the federal
government in the course of employment not to be protected by copyright.

As a second best alternative, government works should at least be made easily available
to citizens to create (and use!) enhancements and other derivative works possibly through
licences such as share-alike Creative Commons licences. This would encourage the
collaborative development of tools which will benefit Indian society as digital
technologies become more pervasive.

5. Definition of Fair Dealing: We would request an explicit definition of Fair Dealing,

as opposed to Fair Use, which is applicable under the DMCA and US Copyright laws. At
the same time, we endorse allowing users to make backups of copyright material for
private and personal use.

6. Protection of Technological Measures:

The committee must take into consideration that when purchasing a song or a music
album, he purchases the song, not the medium it is delivered in. Given the advent of the
digital medium, music companies often limit content under a digital rights management
(DRM) system which doesn’t allow users who have purchased a song on a mobile phone
or an MP3 device, to also listen to it on a computer, or a CD player, since it cannot be
transferred without removing the DRM. The inclusion of DRM is thus harmful for the
consumer, and allows music companies to limit the rights of the consumer who has
lawfully purchased the copyright work.

The amendments proposed in the Copyright (Amendment) Bill 2010 also appear to make
it criminal for a user to remove the rights management information of a song that he has
purchased. We would request you to allow users to remove DRM for personal or private
use, and explicitly allow format changes i.e. changes from, say, .wav to MP3. On the
whole, we consider the inclusion of section 65A to be unnecessary, and request that it be
removed.

8. Criminal vs Civil Offence: According to the Bill, copyright violatin appears to still be
treated as a criminal offence. We would request that only copyright violation on a
commercial scale be treated as a criminal offence, and individual instances be treated as
civil offences. For example, on mobile and the Internet, there will be cases of sharing
with their friends and family, videos of themselves singing songs, not realizing that it is
an act of copyright violation. From their perspective, this is a case of personally singing a
song to their friends or family, and is a case of narrowcast or unicast (explained earlier),
and not necessarily communication to the public. Ideally citizens should not be held
liable in these cases, or in the least, this should not be considered a criminal offence.

9. User Generated Content and Intermediary Liability: With the advent of digital
technologies, it is possible for copyright infringement to take place on a mass scale.
Often, Mobile and Internet websites or portals do not have control over users uploading
copyright content on their domain, in the same way that a marketplace does not have
control over what is being sold or shared in the market. Thus storage is not transient and
incidental, but not in the control of the intermediary.

We would request that Section 52(c) be modified to state ‘transient or incidental’ instead
of ‘transient and incidental’.

Secondly, the same clause also makes it necessary for a complainant to procure an order
from the competent court within 14 days. Please take into account that on Internet and
mobile platforms such as these, copyright violation can take place on a mass scale, and at
a very fast pace. For a copyright holder to procure a court order for each instance or each
complaint becomes tedious and expensive, because several more instances of copyright
violation might arise within those 14 days. This would end up punishing the copyright
holder with expensive legal costs, and discourage legitimate complaints, while at the
same time, allowing copyright violation to proliferate. We would request that there be an
opportunity for complaints to be acted upon on the basis of take-down notices, and for
illegitimate complaints to be deemed perjury, if proven otherwise by the publisher of the
content. This will take care of both concerns – of copyright owners and infringement.

As we’ve mentioned previously, instances of copyright violation by individuals on the

digital space should be deemed illegal, but not a criminal offence.

MediaNama thanks the Center

Direct taxes code bill

The Finance Minister tabled the Direct Taxes Code Bill, 2010 (DTC 2010) in the Parliament on 30
August 2010 which is proposed to come into force on 1 April 2012. Some of the salient features
are outlined below:
General
o The Code proposes that every person shall be liable to pay income-tax in respect of the
total income for the financial year. The concepts of “previous year” and “assessment year” are
proposed to be done away with.
o Rates of tax as applicable to the persons are proposed under a schedule; for companies,
individuals etc the maximum rate of tax is proposed at 30%. Additionally a domestic company
would be required to pay a dividend distribution tax (DDT) of 15% on dividends declared,
distributed or paid. Minimum Alternate tax (MAT) of 20% would be applicable on a company in
case the tax based on the book profits is higher than the tax based on the profits as per the
normal tax computation. A foreign company is required to pay an additional branch profits tax
of 15% in respect of the branch profits.
o Levy of surcharge and education cess is proposed to be done away with.
Residence
o In the case of a company, it is proposed that the company shall be resident in India if it is
an Indian company or if the place of effective management (POEM) is in India. POEM has
been defined to mean the place where the board of directors or executive directors make their
decisions or the place where such executive directors or officers of the company perform their
functions and the board of directors routinely approves the commercial and strategic decisions
taken by such executive directors or officers.
o In all cases, other than an individual, the persons would be a resident in India, if the place
of control and management of the affairs, at any time of the year is situated wholly, or partly,
in India.
Source rules
o Additional source rules for income arising to a non- resident are proposed to be
introduced as income deemed to accrue in India; for e.g. insurance premium including
reinsurance covering any risk in India, from the transfer of any share or interest in a foreign
company, where the fair market value of the assets in India

owned by the company represent at least 50% of the fair market value of all the assets owned by
the company etc.
Computation of total income

Income has been proposed to be classified as income from ordinary sources and income from
special sources; Income from ordinary sources would comprise of income from employment,
house property, business, capital gains and residuary sources. Income from special sources
would refer to specified income of non –residents, winning from racehorses, lottery etc. However
where the income of a non resident is attributable to a PE, then the same would not be
considered as income from special sources.
Personal taxes
o Changes in income slabs which will result in incremental savings in tax.
 o The concept of „Not ordinarily resident? is removed. The condition of 729 days
has been retained to determine the taxability of overseas income of an individual
o A person not entitled to HRA is allowed a deduction of rent paid upto 10% of GTI
or INR 2000 per month & other conditions as may be prescribed
o Exemption for medical expenses has been increased to INR 50,000.
o Contribution to approved funds is deductible to the extent of INR 1 lacs.
o Deduction for insurance premium (not exceed five percent. of the capital sum
assured), Health Insurance covered & Tuition fees to the extent of INR 50,000.
o Wealth tax to be levied at 1% for wealth in excess of INR 10 million
Capital gains
o Income from all investment assets to be computed under the head „Capital gains?.
Investment asset to include any capital asset which is not a business capital asset, any
security held by a Foreign Institutional Investor and any undertaking or division of a business.
o Distinction between short-term investment asset and long-term investment asset on the
basis of the length of holding of the asset to be eliminated.
o No tax on gains on transfer of shares of a company or unit of equity oriented fund that are
held for more than one year and such transfer is chargeable to Securities Transaction Tax
(“STT”). STT would be chargeable on transfer of equity shares of a company or a unit of an
equity oriented fund.
o Fifty percent of the capital gains are allowed as deduction on transfer of shares of a
company or unit of equity oriented fund that are held for a period of one year or less and such
transfer is chargeable to STT.
o The base date for determining the cost of acquisition to be shifted from 1 April 1981 to 1
April 2000. Consequently, all unrealized capital gains on assets between 1 April 1981 and 31
March 2000 not to be liable to tax.
o Cost of acquisition to be Nil, if cannot be determined or ascertained for any reason.
o Capital loss to be allowed to set off only against capital gains. The capital loss can be
carried forward for indefinite period.
MAT
o Computation of book profits broadly similar to existing law
o Credit for tax paid under DTC 2010, would be available. The credit would be
allowed to be carried forward for 15 years.
o MAT now applicable to SEZ developers and units in an SEZ
Tax incentives

The DTC 2010 provides for expenditure based incentives wherein capital expenditure incurred by
the specified business would be allowed as a deduction. Specified businesses, amongst others
would include generation,

transmission or distribution of power, developing or operating and maintaining any infrastructure

facility, operating a maintaining a hospital in a specified area, SEZ developers and units
established in an SEZ, exploration and production of mineral oil or natural gas, setting up and
operating a cold chain facility, developing and building a housing project under a scheme of slum
redevelopment etc.
Grandfathering provisions for SEZ developers and SEZ Units

Grandfathering of profit linked incentives under the Income-tax act, 1961 to continue for SEZ
developers notified on or before 31 March 2012. In case of SEZ units, the deduction would be
permissible for units commencing operations on or before 31 March 2014
Anti- abuse provisions General anti-avoidance rules

The characteristics of the originally proposed rules have been retained. Additionally it is proposed
that an arrangement would be presumed for obtaining a tax benefit would include reduction in tax
base including increase in losses. The provisions would be applicable as per the guidelines to be
framed by the Central Government. Further the definition of lacking commercial substance has
been amended to clarify that obtaining tax benefit cannot be the only criteria for applicability of
GAAR.
Controlled foreign company (CFC) rules:

As indicated in the revised discussion draft, CFC rules have been incorporated to provide for the
taxation of income attributable to a CFC to be taxed in the hands of the resident. A foreign
company would be considered as a CFC which
o for the purposes of tax is a resident of a country or territory with a lower rate of tax
o the shares of the company are not traded on any stock exchange
o one or more persons individually or collectively exercise control over the company
o it is not engaged in any active trade or business
o the specified income exceed INR 2.5 million.

Rules pertaining to the computation of the income attributable to the CFC which would be
required to be added to the income of the resident have been provided.
Tax treaty provisions

It has been proposed to revert to the provisions under the existing law, wherein the provisions of
the Code shall apply in relation to an assessee to whom the agreement applies, to the extent they
are more beneficial. However, the provisions relating to GAAR, CFC and Branch profit tax would
continue to apply irrespective of the beneficial provisions of the tax treaty provisions. It has also
been proposed that a person shall be entitled to claim relief under the provisions of the
agreement on production of a certificate in the prescribed form, from the tax authorities of the
country that such person is a resident of the country.

A resident in India would be entitled to claim credit of taxes paid or deducted at source in the
country in accordance with the provisions of the tax treaty against the income tax payable in
respect of the income for the financial year. Where tax has been paid or deducted in a country
with which there exists no agreement credit can be claimed only at the lower of the rate of tax
under the DTC 2010 and the tax rate levied in the other country. However, the credit cannot
exceed the tax payable under the DTC 2010.

criticism
The BJP has said the Bill had brought the cooperative sector in country into a
desperate situation and it would also have harmful effects on the poor and the
farmers.
Talking to the media here on Sunday, national convenor of the BJP Central
Cooperative Cell Dhananjay Kumar Singh said the Bill was a concerted bid by the big
business houses in India and multinational companies to target the rural framers
and the poor since 75 per cent of them counted under the cooperative sector lived in
villages and were unorganised.
Earlier, he also held a meeting on the issue with state leaders at the party office in
Shimla.
He pointed out that this would strangulate the cooperative societies and completely
destroy the rural economy. “Even nationalised banks are unable to reach out to the
poor with their micro-finance schemes, resulting in desperate farmers committing
suicides. The void left by nationalised banks will never be filled by MNCs,” he told
the media.

Whistleblower bill
The Public Interest Disclosure and Protection of Persons Making Disclosure Bill, 2010 (the Whistleblower
Bill) has been tabled in the Lok Sabha (Lower House of India's Parliament) yesterday (26th August 2010).
The Department of Personnel and Training (DoPT), Government of India, which piloted this Bill did very
little to consult with people on its contents. They refused to publicise the contents of the Bill while
formulating it despite being mandated to do so under Section 4(1)(c) of the Right to Information Act, 2005.
During a full bench hearing at the Central Information Commission in my complaint case, representatives of
the DoPT acknowledged that they had not disclosed anything about this Bill in the public domain. The
Commission's decision in this case is awaited.
Meanwhile the text of the Bill as introduced in the Lok Sabha is not available on the DoPT's website, nor
does the link to the text of the Bill on the Lok Sabha website work. The attached link for the Whistleblower
Bill has been sourced from the website of PRS-India. Congrats guys, you have proven again that civil society
puts information about public documents in the public domain faster than public authorities themselves.
The following issues have been highlighted CHRI's preliminary analysis of the Bill (see attachment):

1. Limited coverage of reportable actions

2. Only one authority prescribed for receiving public interest disclosure

3. CVC permitted to disclose the identity of whistleblowers to the Head of the Department

4. Whistleblower Bill does not apply to the private sector

5. Armed Forces have been left out

6. Vexatious complainants will be imprisoned but no policy for rewarding whistleblowers

7. No clarity on the kinds of protection that a whistleblower is entitled to receive

Advocacy Recommendations:

Given the several major lacunae in the Whistleblower Bill introduced in the Lok Sabha, there is an urgent
need to have this Bill referred to the Parliamentary Standing Committee on Personnel, Public
Grievances, Law and Justice for detailed deliberations and improvement.

The DoPT has recently uploaded the complete text of the Public Interest Disclosure and Protection of
Persons Making Dislcosure Bill, 2010 (Whistleblower Bill) on its website a short while ago. People have
been invited to make submissions on its contents by 30th September.

It is rare for Governments to table a Bill in Parliament and then invite people to comment on it. Nevertheless
this shows that the Government may be willing to consider amendments to the Bill. It is advisable to engage
with this process. I request readers to send their analysis of the Whistleblower Bill highlighting other
weaknesses. I am sure a more detailed examination will reveal more grey areas which need rectification.
For more email updates from CHRI on the Whistleblower's Bill click here.
Venkatesh Nayak is the RTI Programme Coordinator, Commonwealth Human Rights Initiative