Background: The dispute centres around section 31D of the Copyright Act, 1957 which provides for statutory licensing scheme, as whereby any ‘broadcasting organization’ desirous of ‘communicating to the public’ any sound recording, can obtain a statutory license to do so, provided they pay royalty rates to the copyright owners at rates fixed by the Intellectual Property Law Board.
Facts: Tips Industries Ltd (Plaintiff) is an Indian music label that exercises copyright over a significant music repository that, in 2016, granted Wynk Music Ltd (Defendant) license to access this music repository. At the expiry of the said license both the parties attempted to renegotiate the licensing conditions but failed to do so and hence Wynk took refuge by invoking Section 31D of the Copyright Act. Tips challenged Wynk’s invocation of Section 31D, and prosecuted Wynk pursuant to Section 14(1)(e) for breach of their exclusive rights of sound recording
Judgement: After hearing the contentions of both the parties the Bombay High Court came to a conclusion finding Wynk to be guilty of direct infringement on two counts – 1. To offer the copyrighted work under section 14(1) (e) (ii) which allowed the users to download and listen to the plaintiff’s work offline and 2. Under section 14(1) (e) (iii) for communicating the plaintiff’s works to the users via their streaming service.
In addition to that the Bombay High Court sought this opportunity to clear out the air regarding the ambiguity that existed with respect to online streaming services falling within the scope of Section 31D:
- Under Section 31D of the Copyright Act, ‘ Download / Purchase ‘ of copyrighted works is not covered.
Wynk Music permitted the users to download and store copyrighted music for unlimited future use which instituted to be a ‘sale’ and not ‘communication made to public’ which constitutes as a ‘broadcast’ for the purposes of Section 31D and hence there exists no claim for statutory license for the use of such copyrighted work by Wynk Music.
- The application of Section 31D of the Copyright Act does not include Internet broadcasting.
The case of the defendant was based primarily on the presumption that Section 31D covered Internet streaming services under’ radio broadcasting’ as described in a 2016 DPIIT office circular, given that’ radio broadcasting’ included’ internet broadcasting’ under Section 31D.
The Court had an opposing view which resulted in the rejection of the interpretation put forth by the defendant.
The Court found Section 31D to be an exception to copyright which ought to only be strictly interpreted. Upon careful examination of the statutory scheme of 31D and the rules accompanying it, it becomes apparent that statutory licensing was intended to only cover radio and television broadcasting and not internet broadcasting. After examining the history associated with Section 31D, the court derived that, despite the global existence of internet streaming services when the Section was inserted through an Amendment Act of 2012, the legislation even though being aware of it omitted to include internet streaming services from the ambit of Section 31D. In addition to that, the memorandum presented by the defendant does not contain any additional weightage of their claim as a memorandum only acts as ‘guidelines’ and lacks statutory authority and therefore has no influence to the extent of their claim.
The judgement was passed in the favour of the plaintiff and the court held that the plaintiff was entitled to interim injunction, having regard to the reality that they had made a prima facie case, would suffer irreparable harm in the way of lost revenue.