The Indian media and entertainment industry is expected to grow at a compounded annual growth rate (CAGR) of 14.3% to touch Rs.2.26 trillion by 2020. This industry is truly a success story attracting steady FDI. Recently released ‘National IPR policy’ recognizes and gives a reasonable prominence to the creative industry. All the major US studios are present either or both in broadcasting and film production sectors. Sony, Viacom, Fox, Disney and Turner have already invested a great deal and continue to do so. Recent Foreign Direct investment (FDI) changes that allows 100% investment into this industry via automatic route is likely to bring other global media giants into India.
At the core of this industry lies the creativity which is the fulcrum of content production. The governing statute for protecting the content is the copyrights – Copyright Act, 1957. The 2012 amendments to this Act is an attempt to make this statute catch up with technological advancements in the digital space and to bring the law at par with the rest of the world. In this regard the Amendment Act of 2012 has made sweeping changes, some of which remain controversial.
Piracy, however, remains one of the biggest problems that this industry continues to battle with. It is estimated that the Indian broadcasting and film industry is losing several tens of millions of Dollars in piracy. And so is the Government in taxes. To understand piracy, it is important to understand the contours of content exploitation. Content can be broadly classified into films, sports and GEC (General Entertainment Content). Pirates have different business models and platforms for pirating the said content types. The exploitation window for each of these content types varies. Sports has an ephemeral exploitation window and its exploitation value lies mostly when it is watched live. So it’s the live streaming of sports on unauthorized media platforms which hurts the broadcasters. The theatrical exploitation window of a film is marred if the film is pirated before or during its theatrical window. Piracy at this stage can considerably reduce the expected revenues from this all-important exploitation window of a film. Motion pictures is one genre of content which holds a great deal of commercial value even after theatrical release. TV and digital exploitation windows are aggressively contributing to the revenues of the film producers. The piracy at these subsequent stages instead hurts the broadcasters and digital media owners. For producers, they see an erosion in their assets if they do not take measures alongside the broadcasters to curb piracy. GEC on the contrary follows a slightly different pattern. When a series is broadcast on TV, the piracy for such series is rampant on unauthorized digital platforms. When such series is taken off from TV broadcast, the demand still persists but not as much as for a motion picture. Say if someone who missed watching the series or any particular episode of ‘Indian Idol’, they will look up for it on other digital platforms.
The legal measures that are taken to curb piracy can be broadly categorised as “pre-emptive/proactive” measures and “reactive measures”. The pre-emptive legal measures, as against the reactive measures, have increasingly over the last decade become popular amongst the rights holders to protect their rights. These measures include John Doe orders, website blocking suits and sending notices under the DMCA. Particularly Indian jurisprudence has developed a great deal for John Doe and website blocking orders in the recent years. The High Courts of India, particularly the Delhi and Bombay High Courts, have upheld the need of the rights holders to protect their rights before they first publish their invaluable content on any media platform. John Doe orders are routinely given by the High Courts. While there may be a variance in the degree of test applied by the various Judges in granting the John Doe orders, it is safe to say that this relief is mostly available for the rights holders in the Indian courts provided the rights holders are able to prove the “impending inevitable harm’ to the Court.
From 2014, the website blocking actions have gained momentum after the Delhi High Court in a landmark judgment blocked access of 218 rogue and pirated websites on a suit brought by Sony Pictures Networks Private Limited (erstwhile MSM) for impending digital piracy threat during the FIFA World Cup 2014. After this seminal development in Indian jurisprudence on website blocking orders, a number of similar orders have been passed by various High Courts to protect the valuable rights of the rights holders. However, there were bottlenecks in the enforcement of these orders and the industry initially witnessed resistance from ISPs because of their vested interests. Streaming of pirated websites and apps put together contribute more than 50% of the internet traffic and it is not difficult to decipher why ISPs were irked! There was some resistance from DOT and DEIT too but mostly I guess because of the ingenious nature of these orders which nonplussed them.
The substratum of litigation strategy resulting into successful website blocking orders was to make DOT/DEIT and ISPs as proforma defendants. These Government bodies (DOT and DEIT) are responsible for issuing telecom licenses to the ISPs. One of the conditions of the telecom license (broadly speaking) is that the licensee shall not allow infringement/piracy of the content. The court orders procured by the rights holders were essentially to direct the DOT and DEIT to further direct the ISPs to block the access to the websites even before a sports event or a movie is released. These instrumentalities had apparently never issued notices to the ISPs to block access to the websites on the ‘possibility of certain identified websites’ indulging in piracy. Eventually DOT and DEIT challenged the situs of these orders stating that they are not capable of enforcing these kind of court orders citing various reasons. Recently, the Division Bench of the Delhi High Court in an another landmark judgment said, “On the issue of whether the appellant could be directed to ensure compliance with the blocking order directed against the service providers, suffice it to state that it is the duty of the Government, its instrumentalities and agencies to assist in the enforcement of orders passed by the Courts.”
These judgments authoritatively deal with the issue of digital piracy and measures to address such piracy. Before the Indian courts realised the need to issue website blocking orders, the John Doe orders would be given to block URLs, which was practically of no use. URLs can be changed in a matter of seconds to publish the very same infringing content. The DB of Delhi High Court applied the test of proportionality and concluded that the lesser measure to block the URL would not suffice where the offending activity by the rogue website was to carrying on hardly any lawful business and in its entirety or to a large extent, piracy was being resorted to.
On the contrary the “reactive legal measures”, which include mainly infringement suits for damages (civil action) and criminal actions, are considered by most of the relief seekers in general as impediment to effective justice. Some of the glaring things that I believe have contributed to this dismal state on the civil side of legal recourse are: (a) significant delays in fructification of copyright infringement suits; (b) punitive and statutory damages are a far cry in copyright infringement cases; (c) law of tort continues to remain underdeveloped; (d) compensatory damages are not awarded in proportion to the loss suffered by the rights holders; and (e) Judges below High Courts are not well versed with nuances of IPR.
On the criminal side, save for police departments of metropolitan cities, the police in general is not sensitised that content theft is a crime. One may say that as compared to heinous and gruesome crime cases that our police has to manage, piracy may not be a priority. Fair enough but the law provides that piracy is a crime and a criminal action is an option given to the rights holders. Therefore, it is just to say that there ought to be criminal enforcement machinery too which is informed and equipped to take action. Perhaps now is the time that Government must think of creating a special police cell, like EOW (Economic Offences Wing), which is empowered to deal with crimes like piracy. Piracy of entertainment may not sound that grave but if we look beneath it, we will find tens of millions of Dollars being looted by the pirates from Indian economy every year and swelling year on year!
Well that’s the landscape of legal recourse available in India. However, in the digital era, content can be made available from anywhere throughout the world using a website and app. In many cases the perpetrator of piracy is situated outside India and in jurisdictions which has IP laws ranging from negligible to complete absence. There are two predicaments for the rights holders to curb piracy outside India: (a) initiate cross-border litigation which can be expensive and therefore requires ‘cost versus benefit’ analysis. There is no tool which is developed which can accurately indicate the benefit (in terms of increase in views and ad revenues) if a pirated platform (or even for that matter of fact a cluster of pirated platforms) were to shut down owing to successful litigations; and (b) even where a rights holder decides to engage in cross border litigation, jurisdictions like Tanzania, Pakistan, Uzbekistan etc. have weak IP laws and therefore the enforcement mechanism is likely to be thwarted. This dissuades the rights holders to take an action even if they decide to spend hundreds of thousands of Dollars in litigation outside ‘cost versus benefit’ analysis. Criminal action is another option but that too involves the rigmarole and costs and most importantly, this is contingent on establishing that there are sufficient criminal laws against IP offences in jurisdictions where criminal actions are to be initiated.
The other way to curb piracy is to make available the content legitimately on digital platforms. In recent times, there are a number of OTT platforms that are launched by broadcasters and film studios. To name few big ones – Sony LIV and Hotstar for TV content, HOOQ for English content, Sony ESPN app for sports, Netflix and Amazon Prime for Hollywood and Indian content, Ditto TV for linear TV channels and Youtube channels of the respective broadcasters. This has helped to curb piracy to some extent, especially with free OTT services like Sony LIV, but subscription based services are yet to find their ground. Piracy breeds on free content even if the quality and experience of viewing is abysmal.
Further as seen, piracy of any content type invariably emanates from the platform where such content is first made available for exploitation. The first window for exploitation of movies is theatres. Someone illegally records a movie at a theatre (by the way this is a racket!) the production cost of which is in several crores and passes it on to organised pirates for a paltry amount. To curb this piracy, an amendment to the Indian Cinematograph Act is proposed (commonly known as ‘anti-camcording legislation’). Digitisation will help curb piracy of TV content to some extent as it will ensure, essentially, that everybody gets encrypted signal through a set top box and configured viewing card. It is a separate thing that pirates have invested in technologies which can reverse engineer these boxes and encryption technologies. It is a vicious cycle.
It is not that the industry is not doing anything about piracy and not fighting legal battles where possible. It is however the nuanced nature of piracy coupled with investment of intellect and resources by organised pirates to reverse engineer the technological advancements which has made piracy like a weed that grows alongside cash rich crop. If you don’t remove it, it will affect the crop. Piracy has become a continuous battle which is fought on a daily basis.
An edited version of this article is published by the magazine ‘Consultants Review’ in its August 2016 edition. Please visit the link – http://www.consultantsreview.com/digital-magazines/ip-special-august-2016/