How to draft an arbitration clause in a copyright agreement?

How to draft an arbitration clause in a copyright agreement?

Introduction:

The arbitration clause has terms and circumstances, they vary depending on the needs of the agreement and the comfort of the parties. In a franchise agreement, for example, the parties establish an arbitration clause based on the controlling law in effect at the time the dispute arose, the jurisdiction of a court close to both parties, and the common language used by both parties. Similarly, the arbitration clause in a copyright agreement should be crafted with care and consideration of the parties' circumstances and contractual duties.

The author (in connection to literary, musical, film, and other works) grants a ‘licence' to persons or companies (ex-publishing house) to exploit the work, such as publishing books, movies based on books, releasing music or adaptations of music, and so on. Because copyright material is so easily accessible these days, copyright agreements have become the most important component for partners in numerous businesses. Even after understanding the need of arbitration, arbitration clauses in copyright agreements remain uncommon.

Copyright agreements:

A copyright agreement is widely utilise in the literature, film, media, software, advertising, and music sectors. The author's representation and warranty, the transfer of rights, and the extent to which these rights can be used are all covered by this agreement. The author transferring these rights gets reimbursed accordingly.

Importance of a copyright agreement’s:

The copyright agreement is the legal instrument that allows the author to transfer rights and determine how much of the work can be used for fair use. For example, Company "A" creates a track to promote its product. It gained enormous support from the public. Company ‘B' exploited the music from the track that A created, which resulted in A filing a copyright infringement lawsuit against B. The dispute was settled in court, and B was forced to pay a substantial sum of money. B would not have had to pay this significant quantity of money if the parties had signed a copyright agreement or if firm B had requested to exploit the work.

Importance of Arbitration in Copyright Agreements:

When a work of art is placed in the public domain, people recognize it, comprehend its significance, and use it for pleasure, education, and other reasons. The author's copyright protects him or her from unauthorised use of his or her original work. This is the age of content, where copies of movies are made available shortly after their release, and copies of books are easily obtained from a local vendor without the author's knowledge or consent, all of which increases the potential for copyright infringement and, as a result, more copyright disputes. But why should copyright issues be decided by arbitration rather than the courts?

The author, publisher, or third party using the work without the approval of authenticated parties are usually the parties to copyright issues. Because of the high demand for content and the ease with which it can be accessed these days, copyright issues will be settled through arbitration.

Features of an effective arbitration clause:

  • Dispute resolution on multi-tiers:

Parties that do not want to proceed to arbitration at the outset must specify this in the arbitration clause. A platform for dispute settlement is provided by multi-tiered dispute resolution. It tries to give the parties time to resolve their differences through forums such as: Mediation, Negotiations, and conciliation are all options for resolving conflicts. While inserting this item in the agreement, the parties should be aware that it has the potential to delay and extend the dispute resolution process, which could be a disadvantage to either party.

  • Compulsory references:

It is required to specify the reference to arbitration once the time restriction for multi-tier conflict settlement has expired.

  • Arbitration's scope:

The circumstances under which the arbitration will be used are important to mention. It is preferable to establish a single dispute resolution procedure that applies to and covers all problems that may arise from a contract; otherwise, not stipulating such circumstances would lead to increased misunderstanding between the parties.

  • Arbitration on an ad hoc or institutional basis:

Parties to a copyright agreement should decide whether they want their arbitration managed and supervised by a recognised arbitral institution or an ad hoc approach. The parties are expected to make their own arrangements under ad-hoc, such as arbitrator selection, rule designation, applicable law and procedures, and administrative support. Parties in institutional arbitration do not have to worry about such an arrangement because the institution (for example, the London Court of International Arbitration, the Dubai International Arbitration Centre, and so on) has its own set of rules and regulations.

  • Arbitrator's appointment:

An arbitrator's appointment must always be unusual (one or three). The number of arbitrators can vary, but the parties must examine whether the number of arbitrators justifies the dispute's subject matter when negotiating. It's also important to specify how many arbitrators will be appointed, as this will aid in the resolution of disputes.

Rules of arbitration:

The choice of institution is accompanied by a set of institutional norms that serve as a fundamental procedural framework for the arbitration (subject to the parties' agreement on different rules in any circumstance). In most cases, the institution will be involved in arbitrator selection or confirmation, arbitration administration, and (in some cases) arbitral award scrutiny. The SIAC Rules, the ICC Rules, and the UNCITRAL Rules are some of the most commonly utilized arbitration rules.

Arbitration language:

If the parties and their respective witnesses speak different languages, or if the law of the country governing the arbitration specifies that in the absence of any agreement between the parties, the arbitration should be conducted in that country's national language, it is important for the parties to specify the language of arbitration. Failure to identify the arbitration's language may result in parties incurring costly and unnecessary expenditures for interpreting documents and witness testimony.

Governing legislation:

Given the international accessibility of copyright material, where one copyright work published in one country is exploited by users in another, the rules regulating copyright dispute arbitration must be specified in the agreement.

Conclusion:

Although an arbitration clause in a copyright agreement is uncommon, given the high frequency of copyright disputes, it is prudent and preferable to include one. In every circumstance, the parties to a copyright dispute would willingly safeguard the work's nobility; hence an arbitration clause is necessary in the agreement to protect the copyrighted work from injury. Furthermore, considering that the parties to the copyright could be from different areas of the world or as close as the same city, an arbitration clause should be inserted in consideration of the parties' comfort.

 

Abhaya Mohan

 

REFERENCES

https://blog.ipleaders.in/draft-arbitration-clause-copyright-agreement/amp/

https://legallyflawless.in/2021/07/how-to-draft-an-arbitration-clause-in-a-copyright-agreement.html