India – Analysing The Tips Vs Wynk Dispute Over Section 31D Of The Copyright Act.
Recently, the Bombay High Court case was presented with the matter of Tips Industries Limited vs Wynk Ltd. and Anr, where the plaintiff filed a suit against the defendant for the act of infringement of copyright. Tips Industries Ltd. is engaged in the production and distribution of motion pictures and the acquisition and exploitation of music rights. On the other hand, Wynk Music Ltd. is an Indian music streaming service and a digital distributor.
Previously, in the case Tips Industries Limited Vs Wynk Music Ltd. and Others before the Single Judge of the Bombay High Court, the petitioner filed a copyright infringement suit through Commercial Notice of Motion No. 72 of 2019 and Commercial Notice of Motion 95 of 2019 under section 14(1)(e) of the Copyrights Act 1957 (“the Act”) seeking a temporary injunction against the Respondent.
The court held that the act of the respondent pertaining to selling/commercially renting sound recordings of the petitioner could not be termed as ‘private’ or ‘personal’ or ‘research’. Hence, the respondent’s act does not amount to ‘fair use’. Also, the court clarified that internet broadcasting does not fall under the ambit of Section 31D of the Act. In this regard, the Hon’ble court dismissed the statutory license of the respondent. In the present case, the plaintiff sought an amendment to the cause title, which was allowed.
Both parties settled the matter vide the Consent terms dated June 17, 2024, as accepted by the Court, wherein the following were the highlights:
- In clause 3 of the consent terms, the parties agreed that their rights are governed by the judgment dated April 23, 2019, by the Single Judge in Commercial Notice of Motion No. 72 of 2019 and Commercial Notice of Motion 95 of 2019. The parties agreed that said judgment would be final on inter se rights of parties qua the plaintiff’s repertoire and with respect to section 31 D of the Copyright Act 1957.
- In clause 4 of the consent terms, Defendant No. 1 undertook to pay a total sum of Rs. 12 Cr plus applicable taxes as a full and final settlement, wherein Rs. 5 Cr was deposited by the defendants pursuant to an order dated June 25, 2019, in Commercial Appeal no. 424 of 2019 and 425 of 2019. As per this order, the division bench held that the order of injunction passed by the learned Single Judge shall not take effect until then on the condition that the defendant/appellant deposited a sum of Rs. 5 crores by July 2, 2019, in the court. The parties unconditionally agreed and consented to the plaintiff withdrawing a sum of Rs.5 Crs along with all accrued interest. Accordingly, it was directed to release the sum of Rs. 5 Crs to the plaintiff along with applicable interest.
- The remaining Rs. 3,50,00,000/- were to be paid by Defendant No. 1 to the plaintiff on or before July 31, 2024. The last balance amount of Rs. 3,50,00,000/- is to be paid by Defendant No. 1 to the plaintiff on or before September 30, 2024.
Interpretation of Section 31D of the Act
Under Section 31D of the Act, any broadcasting association desirous of communicating a work to the public by a broadcast or a performance can acquire a statutory license to do so by giving a prior notice and paying royalties to the copyright owner at the rate fixed by the Intellectual Property Appellate Board (IPAB). (The Act presently covers radio broadcasting and television broadcasting).
However, due to technological advancement, online platforms were necessary to be included in the list of broadcasting associations. As a result, the Department of Industrial Policy and Promotion (DIPP) clarified the scope of internet streaming via its office memorandum dated September 5, 2016, by stating that:
Section 31D, which refers to ‘any broadcasting organisation desirous of communicating to the public,’ may not be restrictively interpreted to cover radio and TV broadcasting but appears to include internet broadcasting as well.
To understand, the business of the broadcasting organisation is to communicate the work to the public. Further analysis shows that online platforms allow the user/public to purchase/ download the content provided. In such cases, the very nature of the service of the online platform extends beyond the service of communication of work to the public. Section 31D of the Act offers statutory protection only to the broadcasting organisation, which offers service only to the extent of communicating work to the public by way of a broadcast or the performance of a literary or musical work and sound recording that has already been published.
On the contrary, if internet platforms offer services to sell/ rent content, the nature of the service provided by them extends beyond communicating the work to the public. Therefore, the essence of Section 31D of the Act does not include online platforms as broadcasting organisations.
