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Wynk v. TIPS | Internet Based Music Streaming Platforms Not Eligible For Compulsory Music Licences Available For TV, Radio: Bombay HC
Sharmeen Hakim
2 Oct 2023 11:00 AM IST
In a huge win for record labels like Tips Industries Limited (Tips), the Bombay High Court has held that online music streaming and downloading platforms would not be eligible for discounted compulsory licenses to their music under Section 31D of the Copyrights Act.This means that internet-based platforms will have to negotiate contracts with big record companies to use their repertoire of...
In a huge win for record labels like Tips Industries Limited (Tips), the Bombay High Court has held that online music streaming and downloading platforms would not be eligible for discounted compulsory licenses to their music under Section 31D of the Copyrights Act.
This means that internet-based platforms will have to negotiate contracts with big record companies to use their repertoire of music unlike radio and television networks.
“We affirm the finding of Justice Kathawalla that statutory licenses under Section 31D are restricted to traditional non-internet-based radio and television broadcasting and performances alone. Section 31D has no application to any internet-based offering.”
A division bench comprising Justices Gautam Patel and Gauri Godse upheld an order passed by Justice SJ Kathawalla, now retired, in a dispute between Bharati Airtel Ltd’s WYNK Ltd and Tips.
Section 31D of the Copyrights Act was introduced in 2012 allowing ‘statutory licences’ for TV and Radio which means no negotiation is required with the owner for procurement.
Under the amendment, any broadcasting organisation wanting to broadcast a literary or musical work, sound recording etc can do so after it gives prior notice of its intention to do so and pay royalties to the owner at a rate fixed by the commercial court.
The section specifies separate rates to be assigned for television and radio but doesn’t specifically mention internet-based platforms.
The dispute between WYNK and Tips began in 2017 with WYNK calling Tips' demand of nearly 4.5 crore as ‘extortionate’ for using record labels over 25,000 song repertoire for 2 years. Subsequently, WYNK invoked its right as a broadcaster under Section 31D of the Copyright Act. It acknowledged that no royalty was fixed by the Board, and decided to pay royalty at 10 paise per download.
Tips didn’t accept this and file two copyright suits wherein WYNK invoked 31D Section. However, Justice Kathawalla refused interim relief and WYNK approached the division bench in the present petition.
At the outset the court distinguished between internet and non-internet based services like television and radio. The bench noted that while the consumer is forced to hear whatever appears on TV or Radio, streaming platform like WYNK allowed subscribers to download and make playlists for a fee.
Senior Advocate Dr. Birendra Saraf for WYNK argued that “broadcast” under Section 31D covers all kinds of dissemination and does not bar internet-based non-radio-like services. Moreover, the requirements under Section 31 were that WYNK had to be make out a case the owner of the copyright had refused to part with it for dissemination to the public. Moreover, Section 31D was enacted in public interest began because companies like Tips began to exercise a stranglehold over licenses for their copyright protected repertoire.
In the end it was the listener who would suffer, Saraf pointed out. So the medium was really immaterial.
Tips, through Senior Advocate Ravi Kadam and Advocate Rohan Kadam maintained that Section 31D is limited and confined to traditional radio and television only as it’s a forced restriction on owner of the copyright. Moreover, internet services were also in existence when Section 31D was enacted, but it was purposely left out.
The court agreed with Kadam. It observed that the sub sections of 31D mention only radio and television. Moreover, if the petitioner’s contention was held to be true “no party will ever need to enter into any kind of contract with any holder of copyright. He can simply take it.” This would result in “catastrophic damage” to the copyright holder.
Significantly the court held that arguments about ‘public interest’ “pale into insignificance” because WYNK is not a charitable organization. It has a profit motive but simply doesn’t want to pay the license fees that Tips demands.
“WYNK is not a service that is available to the public. It is available to those who sign up for it. There is simply no public interest dimension to WYNK’s private profit goals. WYNK has paid subscribers… There is, therefore, no question of WYNK attempting to obtain a statutory licence for its private profit motives in this fashion.”
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