5 June, 2019
In a recent order, the Hon'ble Bombay High Court has clarified that entities providing services of streaming and/or broadcasting music on the Internet shall not be covered under the ambit of section 31-D of the Copyright Act, 1957 (“Act”) and accordingly, shall not be permitted to avail the statutory license for broadcasting of literary and musical works as contemplated under Section 31-D of the Act.
The suit before the Hon'ble Court has been instituted by Tips Industries Limited (“Plaintiff”) seeking an injunction against the Defendants, Wynk Music Limited. The case of the Plaintiff was that the Defendant, through its music platforms; upon receiving a subscription fee, provides its customers/ subscribers access to numerous sound recordings and audio-visual recordings which includes, inter alia, the Plaintiff's repertoire of about 25,000 sound recordings (“Repertoire”). The said Repertoire was previously licensed to the Defendants under a written license agreement dated August 22, 2016, however the said agreement expired by efflux of time on August 31, 2016. Thereafter, as the Parties failed to arrive at any mutually agreeable terms, no subsequent license agreement was executed and the Plaintiff issued a cease and desist notice to the Defendant sometime in November, 2017, calling upon them to deactivate / remove the Plaintiff's Repertoire from its platforms. In response thereto the Defendant invoked section 31-D of the Act, claiming themselves to be a broadcasting organization and that they are entitled to a statutory license under Section 31-D of the Act to communicate musical work and sound recordings to the public.
Consequently, the Plaintiff filled 2 suits before the Hon'ble Bombay High Court praying for permanent injunctions against the Defendant, restraining it from communicating/ renting/ selling the Plaintiff's Repertoire of songs, on account of infringement of the Plaintiff's copyrights and also disputed the Defendant's right to avail the statutory license under Section 31-D of the Act.
After hearing extensive submissions, six primary issues were framed for consideration by the Court. Without commenting on the significance of the issues framed by the Hon'ble Court, only the most contentious issue, having maximum practical implications has been elucidated upon herein below:
Whether the Defendants can invoke Section 31- D of the Act to exercise a statutory license in respect of the Plaintiff's Repertoire, for internet broadcasting?
Whilst submitting its arguments the Plaintiff's divided the aforesaid issue into a two pronged argument. In its first and main contention, the Plaintiff submitted that the statutory licence contemplated under section 31-D is only restricted to radio and television broadcasting and the Defendant's on-demand online music steaming services do not fall within the purview of section 31-D. The Defendant's contended that its services fall within the purview of a broadcasting organisation and supported this argument by referring to the words “any broadcasting organisation” that are found in the wordings of Section 31-D (1).
Further, the Defendants relied on the definitions of “Broadcast” and “Communication to the public” under Section 2 (dd) and 2 (ff) respectively, with an attempt to expand the purview of Section 31-D and thereby extend the same to internet broadcasting services. The Defendants also argued that the essence of law lies in spirit of the legislation and not in its letter, and therefore forwarded a liberal interpretation of the Section. Further, the Defendant, by citing Section 31-D (3), pointed that internet broadcasting is a type of “audio” broadcasting and hence falls within the scope of 'radio broadcasting'.
The Plaintiff, reputed the submissions of the Defendant by enumerating the rights granted and enjoyed by an owner of a sound recording under Section 14 (1) (e) and Section 30. They submitted that Section 31-D contemplates a statutory licence that permits broadcasting but subject to fulfilment of the conditions stipulated under sub sections 31-D (2) to 31-D (7). Moreover, they emphasised on strict interpretation of the statute to put least burden on the expropriated copyright owner. The Defendant raised a crucial argument that exclusion of internet broadcasting from 31-D was a delebrate and conscious legislative decision. Relying on Section 31-D read with Rules 29 and 31, they stressed that the Act only covers radio and television broadcasting under its ambit. The Hon'ble High Court held in favour of the Plaintiff, that Section 31-D must be construed strictly in conformity with the specific intention for which it was enacted (literal interpretation). Further, the Court referred to the Statements of Objects and Reasons of the Copyright (Amendment) Act, 2012, Section 52 (1) (b) and the 227th Rajya Sabha Parliamentary Standing Report and held that the amended Act was relatively recent and as such the legislature was fully aware and cognizant of digital technologies when the same was passed and purposely excluded internet broadcasting from the ambit of Section 31-D which only refers to radio and television broadcasting.
The Plaintiff in its second argument laid emphasis on the conditions under Section 31-D and contended that the statutory licence under the Section is contingent upon compliance of Sections 31 (2) to 31 (8) of the Act and Rules 29 to 30, whereby prior notice is to be given to the owner of the copyright along with payment of royalty, as determined by the Appellate Board.
The Plaintiff submitted that a bare perusal of Rules 29 (3) and 29 (4) reveals that the said Rules only contemplate the furnishing of details pertaining to 'radio' and / or 'television broadcasting. Further, the Plaintiff stressed that Rule 31 provides for the manner of determining royalties under Section 31-D only for 'radio' and 'television broadcasting' and as such there are no relevant provisions that may be relied upon whilst determination of royalty viz-a-viz internet broadcasting.
On a consideration of a plethora of precedents, the Rajya Sabha Standing Report and a holistic reading of various sections and rules, the Hon'ble Court categorically held that in terms of Section 31-D royalty needs to be determined by the Appellate Board prior to the grant of any statutory licences and clarified that that the provisions of Section 31-D of the Act are not applicable to internet broadcasting.
The Court further opined that the use of the copyrighted works (for internet broadcasting) without obtaining a license from the owners of the copyright amounts to usurpation of the exclusive rights of the owners to commercially rent, sell or communicate to the public its sound recordings and was therefore pleased to grant an interim injunction against the Defendants.
For further information, please contact:
Vineet Aneja, Partner, Clasis Law
vineet.aneja@clasislaw.com
