Introduction
Business negotiations usually refer to an interactive process between two or more parties seeking to find common grounds on an issue or issues of mutual interest or dispute. In which the involved parties seek to make or find a mutually acceptable agreement that will be honoured by all the parties concerned. Negotiation is the process of two individuals or groups reaching joint agreement about differing needs. In business negotiations, negotiators jointly search for a multidimensional space and then agree to a single point in that space. Negotiation applies knowledge from the fields of communications, sales, marketing, psychology, sociology, politics, and conflict resolution. Negotiations related to tackling copyright infringement in cinematographic works are complex as there exists a variety of copyrights in a single work and many a times these are overlapping. Cinematographic work includes any work expressed by any process analogous to cinematography, whether or not accompanied by a soundtrack. Copyright infringement surged in the entertainment industry after the advent of the Video Home System (VHS), home video equipment. In numerous countries, the lack of a minimum regulatory framework for the sector does not foster the organisation of the professional and economic environment.
According to the Lex Orbis Intellectual Property Resource Center, copyright, is a bundle of rights, which grants protection to the unique expression of ideas. Copyright is a negative right and the owner of a copyright gets the right to prevent others from copying his or her work without his or her consent towards a commercial end. However, at the same time it gives to the author an exclusive right for the commercial exploitation of his work. Copyright infringement in cinematographic work occurs when anyone who sells, acquires, copies or distributes copyrighted materials without permission. Downloading a movie without paying for it is morally and ethically no different to walking into a store and stealing a DVD (Digital Video Disk) off the shelf. Sharing it through peer-to-peer applications or posting it on a forum for downloading is akin to giving illegal copies to thousands and millions of people for free. Piracy is committed in many ways, including via the internet by downloading and swapping movies, and on the streets, where illegally duplicated VCDs (Video Compact Disk) and DVDs are sold by shopowners and street vendors. Illegal downloads of popular films are nearly as numerous as box office visits. A French anti-piracy association, The Association against Audiovisual Piracy (ALPA) analysed peer to peer traffic in France between November 2007 and June 2008 and concluded that a number of popular films had been downloaded so many times that the phenomenon could endanger the entire film industry (Cheng, 2008).
Regarding the extent of piracy in India, Indian Film Industry estimated a loss of Rs. 1700 crore ($360 million) in revenue annually and the Indian government loses Rs. 750 crore in taxes because of piracy. A report by the US-India Business Council estimates a loss of $4 billion to the Indian Entertainment Industry due to piracy (Kapoor 2009). The main reasons behind copyright piracy are poor enforcement and lack of awareness on copyright matters. The copyright laws of India are as good as those of many advanced countries in Europe and America. To tackle the scourge of piracy, India is actively negotiating with United States to minimise the loss suffered by Indian Film Industry.
The Issue of Piracy and the strategies of anti-piracy
In the recent years, bollywood has attracted a great deal of international interest, in terms of revenue. Indian Film Industry is still a small but gradually expanding part of the international market which churns out the largest number of films every year (an average of 800 films per year) where the gate receipts for domestic sales are to the tune of US$ 869 million. Even, the government has realised the true potential of bollywood and has formally granted it the status of an ‘industry’ in 2001 (Timm Neu, 2007). Indian expatriates and the worldwide embrace of Indian cultural products (including food, music, spirituality, and exercise method-yoga) had created a strong new market for Indian films outside India. Indian artists have had a fair amount of success abroad. Indian music director, A. R. Rehman, for example, has joined hands with Andrew Llyod Webber in his musical production, Bombay Dreams, co-produced by Shekhar Kapur. The widespread success of movies with crossover appeal such as "Monsoon Wedding" has driven a spate of film co-production and film development deals and cross-border distribution agreements between India and the United States. The natural synergies between bollywood (the world's largest film industry by volume), and Hollywood (the world's largest film industry by revenue) are finally being realised.
However, increasing levels of counterfeiting and piracy threaten these partnerships. It's been estimated that the Indian entertainment industry is losing some 80% of its revenue to counterfeiting and piracy, and this directly threatens the very viability and existence of these industries. The true cost to the Indian economy is undoubtedly much greater than that. For every rupee or dollar lost, there is less revenue to hire people in the Indian industry, fewer Indians paid to distribute films, records, and entertainment software, and money lost by a whole host of Indian industries that support entertainment (Parekh and Parikh 2001).
To counter this growing menace of copyright infringement related to cinematographic works, India is negotiating with United States through various channels. One amongst them is United States- India Business Council. US-India Business Council has launched the "Bollywood-Hollywood Initiative" with the Federation of Indian Chambers of Commerce and Industry (FICCI). The initiative includes a groundbreaking survey financed by USIBC to determine the true cost of piracy and counterfeiting to the Indian entertainment industry; a push to ensure India's adoption of Optical Disc Legislation to combat piracy; a campaign to raise public awareness of the detrimental affects of piracy to India. It is also a drive to US-India governmental cooperation in combating international, cross-border piracy - particularly of Indian films in the US and other countries as well as US films in India. USIBC has laid out an aggressive agenda for 2009 to stem the scourge of DVD piracy and strengthen U.S.-India media and entertainment collaboration (USIBC, Piracy Report 2008).
India’s policy to counter copyright infringement focused on balancing developmental concerns with the need for promoting innovations. India viewed protection of innovative material as a tool for economic development and restricted the scope and term of patents. India’s negotiating history shows that while trade threats were important in leading India to initiate changes in its policy globally, domestic level policy change took place only with the mobilisation of a domestic constituency that favoured change. United States’ position was that India could object to any aspect of the treaty, but did not need to refuse discussing the issue of IPRs altogether. This appeared at the time to be rational to Indian leaders and India revised its patent policy to confirm to TRIPs (Trade Related Intellectual Property Rights) and agreed to include IPR in the WTO (World Trade Organisation). WTO Member states are, through TRIPS, obligated to comply with the Berne Convention of 1886 as amended in 1979, which protects literary and artistic works. India is pressing hard vis-a-vis United States to establish sound and productive business practices through India-United States Business Council (Rammanna, 2002).
So far, the response from Hollywood has been sympathetic because films from Hollywood too are facing the same problem of Illegal downloads and pirated CD, DVD business proliferation. Moreover, The USIBC-FICCI (Federation of Indian Chambers of Commerce and Industry) Bollywood-Hollywood Initiative has raised expectations that the very real concerns over counterfeiting and piracy will be addressed, leading directly to the generation of additional jobs and revenue.
According to a survey on National Cinematography undertaken by UNESCO in 2000, only about 60 of a total of 102 countries producing films have a legal framework or official structures regarding this sector. The survey showed that authors’ rights are least protected in Asia. The Motion Picture Association of America (MPAA), representing the US majors whose various movie production and distribution subsidiaries command approximately 90 percent of the United States and Canadian box office namely, 20th Century Fox, Warner Bros., Paramount, Sony Pictures, Walt Disney and Universal, loses US$2.5 billion yearly in potential copyright revenues due to film piracy, mainly in Asian countries, Mexico and the Russian Federation (UNESCO 2000). The global film industry is currently losing $3bn-$3.5bn per year due to illegal piracy operations (Frater 2003). To counter copyright infringement in cinematographic works, United States enacted The Family Entertainment and Copyright Act, a federal legislative act regarding copyright that became law in the United States in 2005. The Act consists of two subparts: the Artist's Rights and Theft Prevention Act of 2005, which increases penalties for copyright infringement and the Family Home Movie Act of 2005.
Reasons for Lack of Copyright Enforcement
The Indian Copyright Act, the first Indian legislation of its kind, was passed in 1914, and was mainly based on the U.K. Copyright Act of 1911. With the development of recording, broadcasting, television and other new technologies it became essential to update the copyright laws. As a result, the Copyright Act of 1957 ("the Act") was introduced in the Parliament. This law presently governs the copyright system in India. The Act has been amended in 1983, 1984, 1992, 1994 and 1999.
The legislation which can be invoked to counter film piracy in India is the Copyright Act, 1994. India is also signatory to two major copyright conventions, namely, The Berne Convention for the Protection of Literary and Artistic Works adopted in 1886, since then revised seven times and the Universal Copyright Convention adopted in Geneva in 1952. The Omnibus Trade and Competitiveness Act of 1988 created the Special 301 mechanism, the United States Trade Representative (USTR) issues an annual Special 301 Report which "examines in detail the adequacy and effectiveness of intellectual property rights" in many countries around the world. India still remains on the Priority Watch List according to the (International Intellectual Property Alliance) IIPA Special 301 Report, 2009 (IIPA 2009). Even though the Indian Copyright Act 1994, which came into effect from May 10, 1995, provides strong enough provisions to convict a person or a group for copyright infringement but the procedural structure of the Indian system has always been a hurdle to deter piracy, because of poor policing and less number of suo moto raids. Moreover majority of police personnel and crime branch officials are not familiar with provisions of copyright act. The Police act only on a complaint by the witness in case and witness has to be available for all court hearings. This process is very time consuming as the court can take several years to decide a case. As a result the witness is not available for such a long time and the case gets dismissed. The Indian Judiciary has the onerous responsibility of interpreting the balance between private interests and public welfare. The judicial system is very slow and burdensome which makes copyright enforcement an even more difficult task. It takes a long time for the courts to bring cases to final judgment which affects not only the domestic copyright industry but also gives a reason to the international industry in not investing in India. Furthermore, public education and police education are pre-requisites for proper enforcement of copyright laws which will ultimately pave the way for healthy and innovative business strategies. Indian copyright act as amended in 1994 has now made copyright infringement a cognizable non-bailable offence (Kapoor 2009). And the situation has changed to an extent as the IIPA report, 2009 stated that, “The Indian Recording Industry, IMI, reports that relationships with the police have improved in 2008 and that 300 criminal cases were commenced. A study by the U.S.-India Business Council (USIBC), 2008 points out that India’s entertainment industry already generates more than $11 billion annually for the country, growing at a combined annual rate of over 18%. If piracy can be tackled, these industries will grow even faster and employ more Indian workers (ibid).
Effects of Piracy on Film Industry
Piracy threatens the very existence of film industry as millions of rupess are being siphoned off throgh illegal channels, by allowing thousands of people to view a film illegally, for free, at the click of a button, a pirates are damaging the revenue a film studio will receive from said film's ticket and DVD sales. By siphoning off millions of rupees piracy curbs the upcoming innovati9ons in film industry as increasingly less number of people opt for cinema as a medium of entertainment because everything is available on click of a button. Inherently the film industry, is a business and denying money to a business, therefore, amounts to its ultimate demise in the long run. Apart from physical piracy now a days stakes are especially high for entertainment companies as they sell more of their products online in the form of digital songs, movies and other intellectual property. Entertainment companies fear that internet piracy may be tougher for lawmakers to conceptualize. Movie piracy causes a total lost output for U.S. industries of $20.5 billion per year, thwarts the creation of about 140,000 jobs and accounts for more than $800 million in lost tax revenue (Ahrens 2006). Becoming a major issue for Hindi and English film industry, piracy is nowhere to stop. And to counter that, leading Bollywood studios such as Reliance Big Entertainment, Yash Raj Films, UTV Motion Pictures, Eros International and Studio 18 have joined hands with the Motion Picture Association of America (MPAA) to set up an anti-piracy coalition. It has been well recognised that Piracy is not a victimless crime, RAND report on Film Piracy, Organised Crime and Terrorism has clearly demonstrated that film piracy funds terrorist activity. There needs to be a strong legislative and enforcement response in tackling the issue of copyright theft. The enormity of the theft is perhaps not being understood and the current state of affairs of the film business is largely due to large scale consumption of pirated DVDs.
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