Daily News Analysis

Copyright Act 1957

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The Indian government is undertaking a major reform of the Copyright Act, 1957 to address the challenges posed by Artificial Intelligence (AI) in the creation and use of copyrighted works. This reform is based on a hybrid model, balancing the needs of AI innovation with the rights of creators.

Hybrid Model Overview:

  • Introduces a mandatory blanket license allowing AI developers to use copyrighted works for training AI systems.

  • Grants creators a statutory right to remuneration for the use of their works.

  • Aims to balance innovation and creator rights, positioning India differently from the European Union, which emphasizes transparency, and the United Kingdom, which provides limited recognition to computer-generated works.

Proposed Changes to the Copyright Act, 1957

1. Blanket License for AI Developers

  • AI developers will receive a non-negotiable, universal license to use all lawfully accessed copyrighted works for AI training.

  • Rights holders cannot withhold their works from being used in AI training.

  • Eliminates the need for individual permissions currently required under Section 14, which grants the owner exclusive rights to reproduce, adapt, or communicate their works.

2. Statutory Remuneration Rights

  • Copyright holders will be entitled to royalties even without providing explicit consent.

  • Royalties will be calculated as a fixed percentage of revenue generated from AI systems trained on copyrighted content.

  • AI firms pay royalties only after commercialization, not during data collection or training.

3. Centralized Collection and Distribution Mechanism

  • The government will establish a centralized non-profit entity to collect royalty payments from AI developers.

  • This entity will include Copyright Societies and Collective Management Organizations (CMOs) as members.

4. Protection for Startups and MSMEs

  • The proposed reforms may include concessional provisions or differential royalty structures to support startups and MSMEs, ensuring a level playing field.

Need for Amendments

1. Absence of AI-Specific Definitions

  • The current Copyright Act does not define terms such as Artificial Intelligence, Generative AI, machine learning, or training data.

  • This creates legal uncertainty about how AI systems and text-and-data mining (TDM) activities fit under the existing law.

2. Ambiguity on AI Training as Copyright Use

  • It is unclear whether AI training constitutes reproduction, adaptation, or infringement under Section 14.

  • There is uncertainty about whether AI training qualifies as fair dealing under Section 52.

3. Unauthorized Use of Copyrighted Materials

  • AI systems currently rely on mass-scale scraping of copyrighted content without consent, bypassing the permission-based framework of the Act.

4. Copyrightability of AI-Generated Works

  • Section 2(d)(vi) defines an author as a human, leaving AI-generated content without clear ownership or copyright protection.

  • Section 2(ffc) treats computers as tools, adding further ambiguity over AI-created works.

5. Cross-Border and Jurisdictional Issues

  • Section 40 protects foreign works territorially but does not address AI systems trained abroad on Indian works or cloud-based AI models, creating enforcement challenges.

Key Sections of the Copyright Act, 1957

  • Section 2: Defines types of works covered, e.g., literary works (2(o)) and dramatic works (2(h)).

  • Section 13: Extends copyright protection to literary, musical, dramatic works, films, and sound recordings.

  • Section 14: Grants exclusive rights to reproduce, adapt, publish, translate, or communicate works, which cannot be exercised without the owner’s permission.

Judicial Interpretations

  • Mr. Dattatray Bapu Dighe v. State of Maharashtra (2024): Copyright exists automatically upon creation; registration is not mandatory.

  • Star India Pvt. Ltd v. Magicwin.Games (2024): Digital piracy websites hosting copyrighted content were permanently blocked.

  • India TV v. Yashraj Films (2012): Small usage of songs does not constitute copyright infringement.

  • Oxford v. Rameshwari Photocopy Services (2016): Photocopying book excerpts for educational purposes is fair dealing, promoting public access to knowledge.

Global Approaches to AI-Generated Content

Country

Approach

USA

Requires substantial human creativity; purely AI-generated works are not protected (Thaler v. Perlmutter, 2023).

European Union

AI Act (2024) mandates training data transparency; sui generis rights for AI outputs are under discussion.

China

AI-generated images are protected if human originality contributes.

UK

Section 9(3) of the Copyright, Designs and Patents Act, 1988 grants copyright to the person arranging computer-generated works; moral rights are excluded.

Conclusion

The proposed amendments to the Copyright Act, 1957 aim to:

  • Introduce a mandatory blanket license for AI training.

  • Ensure statutory royalties for creators.

  • Address gaps in AI-related definitions, training, and authorship.

  • Establish a centralized royalty collection mechanism, ensuring fair compensation while promoting AI innovation in India.


 

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