Copyright Arbitration's Role in the Indian Film Industry: A Study

This report delves into the critical role of copyright arbitration within the dynamic landscape of the Indian film industry, often referred to as Bollywood. It highlights the industry's substantial growth, its frequent encounters with copyright disputes, and the limitations of traditional litigation in addressing these complex issues. The report emphasizes how arbitration provides a more efficient, cost-effective, and confidential alternative for resolving conflicts related to copyright, performance rights, and distribution. It explores the prevalence of copyright infringement, the challenges posed by existing copyright laws, and the advantages of incorporating arbitration clauses in contracts. The analysis covers the benefits of arbitration in preserving reputation, ensuring fairness, and promoting a win-win situation for creators and purchasers. Furthermore, the report examines the Indian Copyright Act, 1957, and its implications, while advocating for arbitration as a viable solution. It also addresses the importance of confidentiality and privacy in arbitral proceedings, making a case for its adoption in safeguarding the interests of filmmakers and music composers. The report concludes by investigating the legal discourse surrounding copyright issues, emphasizing the need for arbitration agreements to protect the rights of all parties involved.

Indian Journal of Arbitration Law
Volume I, Issue 1 1 | P a g e
THE SCOPE OF COPYRIGHT ARBITRATION IN THE INDIAN FILM I NDUSTRY
Meghna Agarwal & Nishtha Gupta
I. Introduction
With the advent of globalisation and merging borders, the scope of arbitration as a
resolution mechanism has increased manifold. Various industries are realising its significan
resolving disputes in a cheap, amicable, efficient and speedy manner. Indian film industry i
multi-million dollar industry, with the most expensive productions amounting to 100
rupees (approximately USD 20 million). Today, the Indian film industry is the highest produ
of movies, producing approximately one thousand movies annually1. It provides employment to
over two million people. By 2001, India’s entertainment industry had attained 30% growth i
economy.2 This gigantic industry faces a plethora of legal disputes each day. However, the ca
which involve complex issues of copyright, performance rights and distribution rights are ra
pursued as the Indian legal system cannot guarantee any efficacious remedy in suc
whereas arbitration, on the other hand, can play a crucial role in solving these disputes.
Bollywood is often accused of copying films, scripts, music or ideas from domestic as well a
international cinema. Some are inspired, some are copied, and some are adapted while oth
sheer replication of the original work. Few notable examples include "Mere Yaar Ki Shaadi H3
which can be termed as a cultural copy of “My Best Friend's Wedding”4, “Wanted”5, which copied
“Pokiri”,6 “Kaante”7, which was the Indian version of “Reservoir Dogs”8 or “Ghajini”9, which took
 Presently pursuing law as V year student in National Law Institute University, Bhopal.
 Presently pursuing law as V year student in National Law Institute University, Bhopal.
1Stefan Lovgren, Bollywood:Indian Films Splice Bom.bay, Hollywood(July 1, 2012),
http://news.nationalgeographic.com/news/2004/01/0121_040121_bollywoodfilms.html.
2UK Film Council, The Indian Media and EntertainmentIndustry(June 11, 2012),
http://www.ukfilmcouncil.org.uk/filmindustry/india/.
3 Mere Yaar Ki Shaadi Hai (Yashraj Movies 2002).
4 My Best Friend's Wedding (TriStar Pictures 1997).
5 Wanted (Eros International & Sohail Khan Productions 2009).
6 Pokiri (Vaishno Academy 2006).
7 Kaante (White Feather Films 2002).

THE SCOPE OF COPYRIGHT ARBITRATION IN THE INDIAN FILM INDUSTRY
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inspiration from “Memento”10
. The music industry is also not untouched by this phenomenon.
The evident examples include the copying of “Pungi” song by Pritam11 from a music composition
of an Iranian band and songs of film “Ashiq Banaya Apne” composed by Himesh Reshammi
Until now, the mainstream Indian film industry escaped litigation suits due to lack of awaren
amongst the Hollywood or foreign film or music industry and lack of profit in a suit institute
though Indian legal system. Bollywood is now being viewed as a lucrative market by the for
producers. They have started investing in the Indian film industry and are likely to pursue le
suits against the Indian film producers. Earlier, Hollywood, Bollywood and Kollywood
separate and distinct audience, one being unaware of the other. With merging bord
technological advancement, Bollywood and other industries have come closer now and Indi
audiences also acknowledge foreign movies and music.
The Hollywood producers are also aware of these copyright infringements; however,
choose not to initiate litigation as it would require great amount of time, money and energy12
Nevertheless, recently some Hollywood producers have pursued legal suits against Indian fi
makers. Fearing possible litigation, the Indian film producers have started purchasing music
film rights of the original work. These contracts deal mainly with copyright issues. I
contended that the breach of such contractual obligations will attract litigation and would c
time and money to the parties in dispute. Moreover, since the Indian Copyright Act
imitation over originality, it is difficult for this evolving law to do complete justice to the plea
A viable alternative would be to incorporate arbitration clauses in these contracts. This wou
not only save the parties time and money but would also ensure that their reputat
market remains unharmed, leading to a win-win situation for them. Thus, arbitration
effective solution to create a balance between the rights of the creator as well as the rights
purchaser. If drafted carefully, the agreement can protect the sanctity of the origina
creating a well-defined demarcation between imitation and inspiration in the industry.
8 Reservoir Dogs (Miramax Films 1992).
9 Ghajini (Geetha Arts (India) & Reliance Entertainment (Overseas) 2008).
10Memento (Summit Entertainment (USA) & Pathé (UK) 2000).
11Bansal Robin, Pritam To Take Legal Action Against Iranian Band (June 10, 2012),
http://www.hindustantimes.com/Entertainment/Bollywood/Pritam-to-take-legal-action-against-
Iranian-band/Article1-832141.aspx.
12Badam Ramola, Is Bollywood A Hollywood Clone? (July 3, 2012),
http://www.cbsnews.com/stories/2003/06/04/entertainment/main557012.shtml.

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The arbitration mechanism comes as a blessing in disguise for the Indian filmmakers who p
safe bet on successful works in the field. They usually defend their lack of creativity by shie
financial uncertainty, insecurity of success and adaption of western values in the Indian soc
Arbitration, in general terms, is a settlement presided by a third party on a dispute between
or more conflicting parties. The resolution is based on a case by case approach with many t
of relief accessible suchas monetary compensation,specificperformanceand restitution,
injunctions and declaratory suits. To support the international economic development and a
to the emerging global scenario, the Arbitration and Conciliation Act, 1996 was enacted. Th
provides a cheap, efficient and speedy alternative to litigation. The present Act applies both
international and domestic arbitrations, unlike the UNCITRAL Model Law. It, further, g
beyond the UNCITRAL Model Law in the area of minimizing judicial intervention13
.
The arbitration mechanism helps in reducing the risk of transactional commerce and improv
international economic relations. While entering into a business relationship, the business h
do not foresee its failure. However, no agreement is perfect and unforeseen contingencies m
occur anytime. To deal with such circumstances, it is important to enter into arbitra
agreements. These agreements ensure reliability, pragmatism, promptness and fairne
process of dispute resolution.
A process like arbitration assumes special importance for a developing country like
India could develop a strong arbitration base, then it would take care of the speedy disposa
copyright cases, thus allowing filmmakers or music composers to efficiently protect the
over the original work. It would also provide them with an easy recourse at their disposal.
Choosing litigation as a settlement process is a complex and tedious procedure follo
courts that requires signing and registering numerous documents, even for instituting a sim
suit.14 In a country like India, where the courts are filled with backlog cases, proceed
time-consuming and matters go on for years, with the film-making industry involving million
dollars, pursuing copyright litigation would be a daunting task. The copyright law in
liberal in its construction of the definition of ‘copyright’ itself ; ADR in such situation comes
an efficacious remedy for the parties that cannot afford to lose time in ‘avoidable litigation’
13 S K Dholakia, Analytical. Appraisal of the Arbitration and Conciliation (Amendment) Bill, 2003, 39CA’s ARB.
QUAT. 3 (2005).
14 Law Commission of India REP. NO. 131, at 7 (1988).

THE SCOPE OF COPYRIGHT ARBITRATION IN THE INDIAN FILM INDUSTRY
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are eager to settle the matter, forget it and move forward in their respective pursuits witho
waste of time.15
Another key point in the copyright issues is confidentiality. Since Indian filmmakers are alle
with charges of copying the plots, ideas and music from their original creator, it can be a m
of goodwill and market reputation for the maker and can place work, worth millions of dolla
at stake. The claim could make or break one’s professional existence in the industr
confidentialityand privacyare the biggestadvantagesof arbitration,togetherwith party
autonomy, speed and informality that makes it a better alternative dispute resolution mech
for Indian filmmakers. Privacy is a deeply established custom in arbitral proceedings
concerns the right of the parties to not divulge confidential facts or any other informat
third parties and not to make the dispute public which is a legal obligation on the part of th
representativesand the arbitrator.Arbitrationis essentiallya privatedisputesettlement
mechanism that does not attract media attention or hurt the feelings or reputation of the p
The paper makes an attempt to investigate the possible legal discourse in the current scen
settle the dispute wisely by opting for an arbitration agreement for buying rights of the mov
music. It further observes the effect of litigation in the light of recent legal controv
surrounding Bollywood. It also analyzes how arbitration can rescue the producers, di
writers and music composers of Indian film industry, if they choose to incorporate arbitratio
clauses in the contracts entered by them to buy the rights in the original work.
II. Copyright Laws in Indian Film Industry
Bollywoodhas timeand againcopied and imitated filmscriptsfrom both nationaland
international cinema. The recent controversy between Kollywood and Bollywood surroun
Ladies v. Ricky Bahl is yet another example.16 In cases involving copyright issues, the producers
can take benefit of various legal provisions under the Indian Copyright Act, 1957 to
liability.
15G Gandotra, “Arbitration and Conciliation Act, 1996: Need for a few Amendments”, 51(1) SEBI & CORPORATE
LAWS 188 (2004).
16“Naan Avan Illai”, a hit Tamil movie in 2007; a lawsuit was filed in Madras High Court on 8 Decemb
2011.

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An inspired creation is not an infringement of the copyrighted work.17 Neither the Act of 1911,
nor the Act of 1957, defines, whether inclusively or otherwise, what a copy is. According to
courts in India, the expression ‘to make a copy of the film’ would mean to make a physical
of the film itself and not another film which merely resembles the film.18
Moreover, it is believed that ‘a copy is that which comes so near to the original as to give to
every person seeing it the idea created by the original’.19 Cultural copy20 of regional cinema is
considered a valid excuse to justify the acts of plagiarism by the Indian filmmakers.
The presence of songs, dramatic sequences, language and varying situations definitely alte
originalconceptto a greatextend.Thus, it createslegaldifficultiesfor Kollywood21 or
Hollywood studios to initiate copyright infringement proceeding against a Bollywood
producer.
The Bollywood film producers are acquainted with these prevailing copyright standards and
often regard it as an excuse to copy and culturally imitate regional and international films.
Plagiarism is a well accepted norm in Bollywood; they add comic scenes, songs, fight seque
to stretch a two hour script to one that lasts around three hours.22 Thus, this evades evading their
liability for copyright infringement, as it can be easily argued that the film is no more a repl
the regional work and the very expression in which the copyright subsists has been change
In India, the copyright protection that is accorded to film23
or sound recordings24 is narrower
than that for literary25
, dramatic26 or artistic work27
. The reason, perhaps, could be that they have
17See TIMM NEU, Bollywood is Coming! Copyright and Film Industry Issues Regarding Internatio
Productions Involving India, 8 San Diego INT'L L.J. 123 (2006).
18Refer S. 14 (d) (i), Copyright Act 1957.
19See Bayley, J., West v. Francies, [1969] (1) Queen's Bench 349 referred in Barbara Taylor Bradfor
Sahara, TV I.L.R. 1 (Cal.) 15.
20Cultural copy of regional film would mean to adapt or change the original work by adding
substituting certain scenes, fight sequences, songs, comic situations, characters amongst others i
to make the remake acceptable to prevalent conditions in the Indian Society.
21 Kollywood is the name used for Tamil film industry.
22See Vikramdeep Johal, Plagiarism as an Art-form (June 25, 2012),
http://www.tribuneindia.com/1998/98nov08/sunday/bolywood.htm.
23 Refer S. 2(f), the Copyright Act.
24 Refer S. 2(xx), the Copyright Act.
25 Refer S. 2(o), the Copyright Act.

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to be original to satisfy the test of copyright ability, whereas the requirement of orig
absent for claiming copyright in cinematograph films or sound recordings.28
‘Original' is the independent input of author from which others are derived.29 It is one of the key
determinantsof copyrightabilty30
. Originalityis not a keyrequirement forsubsistenceof
copyright in a cinematograph film or a sound recording.31 It is a combination of one’s skill,
labour and judgment.
The courts have enumerated the substantial and material similarity tests. R.G. Anand
Films32 was the first casein India wherethe SupremeCourt dealtwith the issueof
copyrightability in an idea. In this case, the author of the play Hum Hindusthani sued a prod
company for making a movie that was allegedly an “exact copy” of his play. However, the c
held that copyright doesn’t exist in an idea but in an expression. Therefore to determine wh
or not there has been a violation of copyright, one has to see if the reader, spectator or view
after having read or seen both the works, is clearly of the opinion and gets an unm
impression that the subsequent work appears to be a copy of the original.33 The court would
look into both the quantitative and qualitative similarities before determining the vio
copyright infringement.
The above tests have guarded the interests of the Indian producers who tested scripts in lie
negligible payments to their script-writers. The Copyright Act does not protect any th
idea. It only gives protection to the expression of such idea or theme. In Barbara Taylor Bra
Sahara TV34
, the complaint was filed against a serial called “Karishma -The Miracle of Destiny”
had been financed by a public limited company, ‘Sahara’. The plaintiff, Barbara Tayl
26 Refer S. 2(h), the Copyright Act.
27 Refer S. 2(c), the Copyright Act.
28 Star India Private Limited v. Leo Burnett (India) Private Limited, 2003 (2) Bom.CR 655.
29See Hariani Krishna & Hariani Anirudh, Analyzing "Originality" In Copyright Law: Transcending Juris
Disparity, 51 IDEA 491 (2011).
30 Id.
31 See S. 13 (b) and (c), the Copyright Act.
32 [1978] 4 S.C.C. 118.
33 R.G. Anand v. Delux Films and Ors., A.I.R. 1978 S.C. 1613.
34 (2004) I.L.R. 1 Cal. 15.

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renowned author, claimed that the said serial infringed her copyright in her authore
named "A Woman of Substance". However, the Calcutta High Court, relying on the judgmen
laid down in R.G. Anand v. Delux Films35
, held that there was no infringement of copyright as a
theme is not protected under the copyright law. The theme does not sell by itself; it r
significant amount of money and then it starts selling36
. If the two works have the same theme,
but are developed differently, then there is no copyright infringement because the second w
constitutes a new work. Since the theme was adapted and developed for an Indian
there was no substantial and material similarity between the book and the television serial.
The industry also faces similar issues when dealing with music compositions. Origina
musical composition consists not just of melody or harmony, but also the combination of th
two, in addition to any other elements, such as rhythm or orchestration.37 A copyright subsists
only in original works. Thus, even using a relatively small portion of an original work is enou
to constitute substantial similarity for copyright infringement actions38
.
A derivative work, on the other hand, is a work based upon one or more pre-existing works.
may include abridgement, musical arrangement, dramatization, translation, fictionalization
recording, amongst others. A work consisting of editorial revisions, annotations, elaboration
other modifications, which, as a whole, represent an original work of authorship, is a deriva
work.39
Under the Indian Copyright Act the derivative works are referred as “adaptations”40
. The Indian
music industry clearly is in an advantageous position as the Act protects the adapta
musical works.41 Thus, if a song noticeably borrows a harmony from an earlier song it can be
termed as a “derivative work”; however, it would be considered harmful by the soc
when its material similarity to the original adversely affects the demand for the original.42 But, “to
35 [1978] 4 S.C.C 118.
36 See Timm supra note 17.
37 Tempo Music, Inc. v. Famous Music Corp., 838 F. Supp. 162, 168 (S.D.N.Y. 1993).
38 See Bridgeport Music v. UMG Recordings 585 F.3d 267, 272 (6th Cir. 2009).
39 See Jishnu Guha, Time for India's Intellectual Property Regime to Grow Up, 13 CARDOZO J. INT'L & COMP. L.
225 (2005).
40 Refer S. 2(a) (iv), the Indian Copyright Act of 1957.
41 S. 14(a)(vi) and (e).
42 Refer Hariani supra note 29.

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invoke copyright protection in a derivative work, variation must be substantive in nature th
merely trivial.”43 This interpretation of law acts as a shieldto protectBollywood which
shamelessly borrows tunes from famous songs of South-Indian film industry. The abs
penalties for copycats in the music industry has encouraged them to copy existing music w
The public is mostly unaware of these acts and these infringements often go unnot44
Eminent music directors have been seen to observe these unethical practices.
For instance, when one of the rights holders of “Naan Avan Illai”, sued the producers of “La
v. Ricky Bahl” in the Madras High Court, the court would first apply the lay observer test. Th
complainant would have to show that there is enough of a similarity between the two films
an ordinary person would recognize as a copy. Would people watching “Ladies v. Ricky Bah
“Naan Avan Illai” feel that one was a copy of the other? Although there might be s
differences and the inclusion of several song and dance numbers, “Ladies v. Ricky Bahl” co
unmistakably based on the latter. The plots may be largely parallel with nearly identical sce
characters, and even dialogues.
A work “inspired” by another copyrighted work is not necessarily a copyright infringe45
.
Thus, the courts may ignore the presence of imitation and regard such work as another form
expression. As a result, such cases mostly end up in out of court settlement. Thus, e
litigate may not be worthwhile. However, if a similar case is submitted for arbitratio
arbitrators may judge all the equities concerned and allow the balance of such equ
administering their decisions.
Distribution rights are also similarly exploited. When the agreements for distribution rights
signed and contracted for, issues relating to the collection of total revenue and the
distributor’s rights often come into picture. Sometimes, distributors are not given their due
in the profits and sometimes distributors stay the release of the project causing damage to
production-houses46
. The industry consists of individuals dealing with the distribution of prints
and films. The executors, producers and distributors can make a film financially successful
43 Eastern Book Company and Ors. v. D.B. Modak and Anr., A.I.R. 2008 S.C. 809.
44 See Harini Ganesh, The Need For Originality: Music Infringement In India, 11 J. MARSHALL REV. INTELL.
PROP. L. 170 (2011).
45 See Tim supra note 17.
46 Eric Ervin, Arbitration in the Independent Film Distribution Contract: An Independent Filmmaker's
Large Litigation Budgets, 3 CARDOZO ONLINE J. CONFL. RESOL. 5 (2002).

Indian Journal of Arbitration Law
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after collaborating with each other. The “exclusivity clause”47 in the distribution contracts plays a
crucial role in determining the rights of the film in the commercial market. Issues re
professional marketing, distribution of materials, holding of exhibitions or fests are co
pertaining to distribution rights. In the recent judgment of Moserbaer India Limited v. Movie48
,
the Hon’ble Delhi High Court discussed the significance of possession of copyright w
distributors in cinematograph films. In order to avoid long delays and maintain the
revenue through a project’s profit in market, arbitration provides a great opportunity to set
dispute as soon and as amicably as possible49
. Arbitration assists the Indian film-maker in
protecting their rights in distribution processes and protects them from incurring major loss
the valuable market, if the project loses its audience50
.
In Star India Private Limited v. Leo Burnett (India) Private Limited51
, the Court held that “contrasting
Sections 14(d) and (e) on the one hand and Sections 14(a), (b) and (c) on the other, in the l
case the owner of the copyright has exclusive right to reproduce the work in any material fo
This is absent and excluded in so far as the former case (cinematograph film or so
recording)”. There is an exclusive right in the former to copy the recording of a particular fi
sound recording. It is only when actual copy is made of a film by a process of duplication. T
expression ‘to make a copy of the film’ would mean to make a physical copy of the film itse
not another film which merely resembles the film52
. The production of another film is not
included under Section 14(d)(i) and such other film, even though it resembles comple
copyrighted film, does not fall within the expression 'to make a copy of the film'. Therefore,
the film has been filmed or shot separately by a person and it resembles the earlier
subsequent film is not a copy of the first film and, therefore, does not amount to infringeme
whole of the copyright of the first film.53
47JAY K ENOFF, ENTERTAINMENT INDUSTRY CONTRACTS: NEGOTIATING AND DRAFTING GUIDE, 2
(Donald Farber ed., Matthew Bender & Co., Inc., 1999).
48 IA Nos.10052/2007 and 10722/2007 in CS(OS) No. 1625/2007.
49 Gerald F. Phillips, Survey, The Entertainment Industry is Accepting ADR, 21 LEGAL AFFAIRS 1 (1999).
50 Shawn K. Judge, Giving Credit Where Credit is Due: The Unusual Use of Arbitration in Det
Writing Credits, 13 OHIO ST. J. on DISP. RESOL. 221, 231-232 (1997).
51 2003 (2) Bom. CR 655.
52 Id.
53 Id.

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III. Litigation v. Arbitration
There have been numerous conflicts in the past pertaining to copying of plots, scenes, song
ideas between Hollywood producers and Indian film makers. In October, 2010, Centu
filed a suit for the stay of release of “Knock Out” as it was believed to be based on the mov
“Phone Booth”. The division bench of the Bombay High Court reversed the stay, differentiat
between “ideas” and concept of “expression of ideas”.54 In 2009, American Studio, Twentieth
Century Fox, filed Rs. 70 million suit against the Mumbai-based, B.R. Films, for copying “My
Cousin Vinny” in “Banda Ye Bindass Hai” which was settled out of court to release the film o
time.55 Warner Bros. filed a suit against the makers of “Hari Puttar” claiming it to be a copy o
“Harry Potter” franchise which it lost, though it’s a rare case for a claim to succeed. Makers
Will Smith starrer “Hitch” also started talking about a 30 million dollar law suit against prod
of “Partner”.56
Fearing million dollar suits, shutting down of projects mid-production and stay order that m
prevent the movie or song release, many producers and composers have started complying
the copyright laws by buying the rights of re-producing original work. Examples include sec
rights to remake Hollywood movie “Wedding Crashers” in “Jodi Breakers” by Orion P
2008, Vidhu Vinod Chopra signing a contract to adapt Chetan Bhagat’s novel into a film57 and
Karan Johar buying rights of “The Immortals of Meluha” for adapting it into a film.
The controversy surrounding “3 Idiots” for curbing due credit of its author demonstr
current Indian situation where a copyright issue is governed by loose copyright laws, ineffic
judicial system, backlogged courts and time consuming procedure. It is this picture o
legal system that prevents one from bringing an action against the film-makers who infring
rights of others. If, on the other hand, the work is borrowed with a legal sanction, it can sav
54Janwalkar Mayura, Judge watchesfilms to decideif rip-off slur valid (July 1, 2012),
http://www.dnaindia.com/mumbai/report_judge-watches-films-to-decide-if-rip-off-slur-
valid_1452255.
55Blakely,Rhys, Plagiarismcasecouldstop Bollywoodborrowingfrom Hollywood(July 5, 2012),
www.thetimes.co.uk/tto/arts/film/article1865287.ece
56Krishna Sonali, Partner may face $30 Hitch (July 13, 2012)
http://articles.economictimes.indiatimes.com/2007-08-08/news/27673674_1_hitch-indian-films-
bollywood.
57Upset Aamir Khan hits out at novelist Chetan Bhagat (July 15, 2012),
http://www.dnaindia.com/entertainment/report_upset-aamir-khan-hits-out-at-novelist-chetan-
bhagat_1329677.

Indian Journal of Arbitration Law
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film-maker the loss of reputation and the monetary loss in market when a film is hit with su
allegations.
Copying or borrowing ideas from other original works is nothing new and may not be
phenomenon if proper authorization is sanctioned from the owner. Rich Taylor, the V
Presidentof Public Affairs for the Motion PictureAssociationof America,concedes,
“borrowing ideas, scriptsand remaking them in different cultural contexts are a part of
international cinema” but the right way to obtain the work and rights over it is through a lic
or an assignment.58 An arbitration agreement in such conditions can make the task easier to a
great extent.
Arbitration has certain advantages over litigation59 that makes it the preferred mechanism for
solving dispute concerning matters of copyright infringement in films or albums whic
goodwill at risk and involves high monetary stakes.
1. Mutualrelationshipremainsintact:Sincein arbitration, partiesare encouragedto
participate and determine the structure and process of resolution, they are more likel
work amicably towards the same rather than being hostile towards each other, as in t
case of litigation. Bollywood is a market of competition. Success of the project is very
crucial but if the successful project is revealed to be based on unethical pract
would definitely taint the relationship between the owner of the original work and the
Indian filmmaker who derived profit from it.60 Arbitration tries to settle this angst of the
parties and assists them in reaching an acceptable solution.
2. Cheap: Arbitration is a cheaper mechanism than litigation, not because the arb
charge less but because the process is quicker and less complicated than litig
proceedings, leading to the total expense being less61
. When millions of dollars are
already at stake and suits claiming approximately the total profit claimed by the proje
58Aseem Chhabra, How Original is Bollywood? (June 23, 2012),
http://www.rediff.com/entertai/2002/oct/31bolly.htm.
59Julia A. Martin, Arbitrating in the Alps Rather Than Litigating in Los Angeles: The Advantages of In
Intellectual Property-Specific Alternative Dispute Resolution, 49 STAN. L. REV. 917 (1997).
60 Like in the case of ‘3 Idiots.’
61 Anita Stork, Note, The Use of Arbitration in Copyright Disputes: IBM v. Fujitsu, 3 HIGH TECH. L.J. 241, 254
(1988).

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arbitration, being a cheaper mechanism, helps the producers rather than litigation wh
can entail liability of millions of dollars on the filmmakers, if found guilty62
.
3. Speedy:Unlike litigation, arbitration is a speedy process and does not involve ted
litigation procedures which consumes a lot of time before the dispute is finally settled
Most of the time the damage to the reputation or the project has been done already a
the parties are only left with a choice of monetary compensation that can be claimed63
.
The choice of the author or creator to allow or disallow the person to replicate the wo
is no longer vested with him. Situations where an agreement is made and arbitration
chosen as a settlement mechanism, speedy justice64 can be ensured and the creator can
claim royalty for the infringement done. He may also stay the release of the inf
product into the market. The arbitrator has the power to issue interim orders which m
give parties temporary relief.
4. Flexible:The process of arbitration is flexible and the parties can choose the man
law, procedure, time, date and the arbitrator itself. Choosing an experienced veteran
the field as an arbitratorcan assistthe filmmakersin provingtheir point and
understanding the issue of copying work65
. Unlike litigation, which works according to
calendar dates, rigid judges, complicated laws, legal formalities and documenta
arbitration is a smooth process which can be worked out according to the convenienc
and consent of the parties66
.
5. Confidential: Confidentiality clause is one of the most important features of arbitration
process. When a project’s profit depends majorly on market reputation and credibility
the producer and any harm or allegation on the project can sham the gross profit at b
office, no film-maker would want bad publicity for its product slated for release. In suc
situations, if a dispute arises, arbitration maintains the privacy of its parties along wit
62Gregg A. Paradise, Arbitration Of Patent Infringement Disputes: Encouraging The Use Of Arb
Evidence Rules Reform, 64 FORDHAM L. REV. 247 (1995).
63 Michael Pryles, Assessing Dispute Resolution Procedures, 7 AM. REV. INT'L ARB. 267 (1996).
64 Tom Arnold, Suggested Form of Contract to Arbitrate a Patent or Other Commercial Dispute, 2 TEX. INTELL.
PROP. L.J. 205, 208 (1994).
65 Kerr J., International Arbitration v. Litigation, J. Bus. L. 164 (1980).
66 DAVID W. PLANT, ALTERNATIVE DISPUTE RESOLUTION IN PATENT LITIGATION 197, 255 (PLI
Patents, Copyrights, Trademarks & Literary Property Course Handbook Series No. 258 (1988) (198

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settling the matter. It does not tamper with the public position of the parties either by
revealing the dispute or by divulging private information67
.
6. Quality of Judgement: The quality and fairness of court judgments can be questioned
the basis of bias or unreasonableness.68 Due to involvement of numerous technicalities in
these complex copyright matters, the judgments are often unpredictable becau
judges lack requisite technical experience in the field. In such cases, adjudicat
arbitral tribunals can ensure the higher quality of award because the arbitrator can be
the same specialized field with the knowledge of the relevant laws, language, conditio
and technology involved.
7. Neutrality: An issue involving copyright can take a graver form due to rapid increase
exploitation of the global technological advancement. Copyrights can be exploited fro
various locations simultaneously and the suit can be favouring one party over the oth
In such situations, arbitration provides a neutral mechanism69 for solving of the dispute
where both the parties are familiar and the institution is not biased towards one party
As such, arbitration and litigation are substitutes for each other70 but arbitration allows parties to
avoid the costliness and delays of litigation. It is a convenient way to amicably solve comm
disputes. The parties are free to choose an arbitrator of their own choice. They can also sele
the number of arbitrators, the venue for arbitration and the rules of arbitration. However, it
been observed that the arbitrators often overstep their authority. In a U.K. case, the arbitra
exceeded his jurisdiction and penalized a third party (who was not a signatory to th
agreement) after relying on an oral testimony.71 Thus, a producer who is not experienced in ADR
should preferably use the services of an arbitration institution72
. For instance, the arbitration
proceedings against the Yash Raj Films were quashed by the Bombay High Court73 when the
67 Bryan Niblett, Intellectual Property Disputes: Arbitrating the Creative, DISP. RESOL. J. 65 (1995)
68 supra note 62.
69ALAIN PLANTEY, INTERNATIONAL ARBITRATION IN A CHANGING WORLD, IN International
Commercial Arbitration, International Arbitration in a Changing World 67, 70 (Albert Jan van den B
ed., 1993)
70 25 OHIO ST. J. DISP. RESOL. 433.
71 Jonesfilm v. Lions Gate Films, et al., IFTA Arbitration No. 03-08 referred in Judicial Review of Arbitr
Awards After Cable Connection: Towards a Due Process MoDel. 17 UCLA Ent. L. Rev. 1
72 supra note 46.
73 Onyx Musicabsolute.com Pvt. Ltd. and Ors. v. Yash Raj Films Pvt. Ltd. and Ors., Onyx Mobile Pvt.
Ltd. and Virtual Marketing India P. Ltd., 2008 (5) ALL MR 26

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plaintiffs (who provided software solutions for the film “Tashan”) filed for both litigation and
arbitration. Filmmakers should emphasis on formulating uniform rules of arbitration, specifi
the film industry.
In Tandav Films Entertainment P. Ltd. v. Four Frames Pictures and Ors.74
, an exclusive license
agreement was entered into between the parties. The scripts of certain songs and the write
rights for the film ‘Khosala ka Ghosla’ were exclusively licensed to Tandav Films. Th
Tandav Films signed several license agreements for the underlying works including d
screenplay, music etc. All rights excluding the music rights were further licensed to
Software by Tandav Films for a period of fifteen years. The agreement contained an arbitra
clause. Consequently, UTV Software assigned the musical rights of the film to Big Music, for
Tamil film. The plaintiff contended copyright infringement and argued that since the
(over music rights) was unrelated to the agreement signed by the parties, they wou
governed by arbitration. However, the court held that the parties must appoint arbit
settle the dispute in question.
The abovedecisioncan be attributedto the popularconceptionthat whereever two
contradictoryconstructionsare possible,constructionthat giveseffectto the arbitration
agreement should be preferred.75
In Nasir Husain Films Pvt. Ltd. v. Saregama India Pvt. Ltd. and Anr.,the petitioner was a well-
renowned producer of Hindi cinematograph films and film songs76
. The petitioner owned all
copyrights in certain films, film songs and sound recordings.77 An assignment deed was signed
between the petitioner and the respondent for assignment and exploitation of the w
question.
The petitioner'ssongs,music,lyricsand soundrecordingswerebeingcirculatedby the
respondent through various modes, including ring tones, though they were not authorized t
so under any previous agreements. The petitioner alleged that such unauthorized exploitat
only amounted to breach of the terms of the previous agreements but also was in violation
petitioner's copyrights in the songs and the music. The petitioners claimed all outsta
74 2009 (41) P.T.C. 515(Del.)
75 Oil & Natural Gas Commission v. Sohanlal Sharma I.L.R. 1969 (2) Cal. 392.
76 (2010) 2 Comp. L.J. 412 (Bom..).
77 Id.

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amount or royalties under the previous agreement and demanded further to cease
from making use of the petitioner's works/songs/music/lyrics, inter alia, through or by way o
ringtones downloadings thereof. The court observed that “the settlement of draft itself cann
be treated as valid and binding agreement”78
. Unless accepted in writing or communicated, the
draft of agreement cannot be treated as final and agreed agreement of arbitration.
IV. How to draft an effective arbitration clause?
The arbitration clause in a contract is separate from the other clauses in the contract
have held that repudiation of the contract, ipso facto, does not put an end to the arb
clause contained therein.79 Therefore, drafting an arbitration agreement which clearly reflects the
intention of the parties is considered a herculean task. Since an arbitration clause is an agre
in itself, the contract survives even when all the further performances undertaken by the pa
have ceased. The arbitration agreement is often regarded as a collateral and ancillary contr
relation to the main contract, of which it forms a part.
The arbitration clause should reveal the intention of the parties to arbitrate. The us
permissive language allows the parties with an option to choose arbitration. The Ontario Co
of Appeal held that a clause which provided that the parties may refer any dispute to arbitr
was a binding arbitration agreement.80 However, in India, the Supreme Court took a different
position, observing that an agreement which states that the parties may go to suit
arbitration, does not amount to arbitration agreement.81 Therefore, a contract signed between a
foreign production house and an Indian film maker must clearly state that the parti
agreed to arbitration in case of any disputes.
While interpreting the correspondence between the parties, the court has to examine
there was an agreement to arbitrate and whether there was meeting of the mind be
parties which could spell out a binding contract between them, but the court is not empowe
to create a contract by going outside the language.82 It is suggested that the parties must clearly
78 (2010) 2 Comp. L.J. 412 (Bom..).
79 Damodar Valley Corporation v. K.K. Kar, A.I.R. 1974 S.C. 158.
80 Canadian National Railway Co. v. Lovat Tunnel Equipment Inc., 3 Int ALR N-5 (2000), 174 DLR (4th)
385 (Ontario Court of Appeal, 8th July 1999)
81 Wellington Associated Ltd. v. Kirit Mehta, A.I.R. 2000 S.C. 1379.
82 M/s. Rickmers Verwaltung GMB H v. A.P. Industrial Infrastructure Corporation Ltd. A.I.R. 19
S.C.W. 3672.

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mention the venue and rules of arbitration to be followed in case of any possible disputes. T
partiesbeing free to appointtheir own arbitrators,can appointarbitratorsfrom the
entertainment industry, thereby, giving them the advantage to effectively deal with
issues involved in the disputes.
The film makers must be aware of the basic concepts of arbitration in India. “A lice
respect of any copyright has to be in writing and the document should reflect the intention
grant the license or assign the particular copyright”.83 A mere understanding that the dispute
would be referred to the arbitrator does not suffice to be an arbitration agreement
agreement is not in writing.84 The agreement must be written to ensure predictability and
accountability.
The courts have generally held that an arbitration agreement must be in writing85 but need not be
signed86
. But the Maharashtra High Court87 took a contrary view, stating that the arbitration
agreement in writing must be signed by both the parties to have a binding force. Preferabl
agreements must be signed by the parties to avoid any ambiguity.
The arbitration clause may be incorporated either inthe main contract or in a separate
agreement.88 The conduct of the parties is vital in determining the nature of the arbitr
agreement. A bill containing arbitration clause, even though not signed by either party, bin
parties for arbitration.89 Even the acceptance of invoices containing an arbitration clause a
making payments thereunderconstitutes an arbitration agreement.90 Similarly, exchange of
letters, emails and tele-fax can also constitute a valid arbitration agreement. It is not neces
that the terms of the agreement must find place in one document only. The arbitra
83 PVR Pictures Ltd. Vs. Studio 18 2009(41)P.T.C.70(Del.)
84 Jayant N. Sheth, Proprietor Struet Mast Engineers v. Gnaneshwar Apartment Co-op. Housing Socie
Ltd, 1999 (2) Arb. L.R. 115 (Bom.).
85 Section 7(3) of the Arbitration and Conciliation Act, 1996 requires that the arbitration agreement
be in writing. An oral agreement of arbitration is not legally recognized.
86 Satish Chandra v. State of UP, A.I.R. 1983 S.C. 347.
87 Pramod Chimanbhai Patel v. Lalit Constructions and Anr., 2002(6) Bom. CR 72.
88 Bihar State Mineral Development Corpn. v. Encon Builders (P) Ltd, (2003) 7 S.C.C 418.
89 M/s. Oriental Fire and General Insurance Co. Ltd v. M/s. New Suraj Transport Co. (P) Ltd, A.I.R.
1985 All 136.
90 Asia Soft (India) Pvt. Ltd v. Globesyn Technologies Ltd, 2005 (2) RAJ 163 (Del.).

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agreement may be in the form of an arbitration clause in a contract or in the form of a sepa
agreement91
. They may also be ascertained from the correspondence consisting of a number o
letters.92 The intention of the parties in such cases is to be gathered only from the “expressio
used in the correspondence and the meaning it conveys and in case it shows that there had
meeting of mind between the parties and they had actually reached an agreement
material terms, then and then alone, can it be said that a binding contract was capable of b
spelt out from the correspondence”.93 Such specific arbitration provisions should be included in
all contracts of the film industries including employment agreements (between filmmakers
artists), license agreements and distributorship agreements.
It is noteworthy that such transactions often require the parties to enter into multiple contra
but it is well-settled law that “the arbitration clause in the original contract would not cover
dispute arisingfrom fresh orsubsidiary contract”94
. The parties mustformulateseparate
arbitration clauses for each fresh contract. They can also opt for arbitration by inse
reference clauses in the contract.
Ideally, clear words should be incorporated to demonstrate the intention of the part
contract95
. However, if any kind of ambiguity arises in the arbitration clause, it should
addressed by expert determination. In such cases, efficacy must be given to the contract ra
than to invalidate it96
. It is not necessary that the clause uses the term ‘arbitration’ or expressly
states that the decision rendered should be final and binding.97 The intention of the parties98 and
the essence of the clause should be made apparent by the words used in the agre
Incorporation of such clauses in the license agreements by the filmmakers would be signific
in protecting the interests of the investors.
V. Conclusion
91 Section 7(2) of the Arbitration Act, 1996.
92 Union of India v. A.L. Rallia Ram, A.I.R. 1963 S.C. 1685 (1690).
93 Dresser Rand S.A. v. Bindal Agro Chem Ltd., A.I.R.2006 S.C. 871.
94 M/s. Umrao Singh and Co. v. State of Madhya Pradesh, A.I.R. 1976 M.P. 126.
95 Refer J.K. Jain v. Del.hi Development Authority, A.I.R. 1996 S.C. 318.
96 Union of India v. M/s. D.N. Revri & Co., A.I.R. 1976 S.C. 2257.
97 Sushila Seth v. State of MP, A.I.R. 1980 Del.hi 244.
98 New India Erectors v. ONGC, 1997 A.I.R. S.C.W 941.

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Until recently, arbitration was only confined to traditional industries. As discussed ab
resorting to arbitration, the filmmakers can avoid unnecessary delay and costs to settle a d
Unlike litigation, arbitral proceedings can be scheduled as per the convenience of bo
parties. The parties can discontinue fulfilling their obligation under the contract after
initiation of the arbitral proceedings. In order to avoid exercise of excessive jurisdiction by t
arbitrator, the parties should incorporate rules of arbitration in the original contract.
suggested that parties should choose arbitrators within the film industry who possess requi
technical knowledge in the field. Since confidentiality and privacy are guaranteed in the arb
proceedings, the film-makers can protect their goodwill and market reputation, thus
millions of rupees that is at stake.
Since the Hollywood producers are now investing in Indian cinema, there is a possibility tha
numerous copyright law suits would be filed in future. To avoid such circumstances
filmmakers have started purchasing the film and music rights in foreign films. Since the sta
are high in such ventures, it is advised that the parties include the arbitration claus
contracts. Such clauses can also be incorporated in employment99 and distribution contracts.
These clauses are vital in securing the interest of the investors. Such an arbitration agreem
shouldonly coversubjectmatterswhich the partiescan settlein a privatesettlement
agreement.100 They should not defeat the laws currently prevailing in the country. The Ind
Copyright Act hardly provides any protection to the original author of the cinematographic
but with the help of a well-drafted arbitration agreement, the original author can easily secu
commercial interests. For example, the parties may by mutual agreement decide not to cha
the original name of the movie. Such a stipulation would have a binding effect in law. Thus,
parties can formulate their own contractual laws without crossing the boundaries of copyrig
law in India.
99There are various copyright issues which can arise between a film-maker and his employee
director, composers, script-writers, etc.).
100William Grantham, The Arbitrability of International Intellectual Property Disputes, 14 BERKELEY J. INT'L L.
173 (1996).