Copyright Amendment:- The fate of Broadcasting Statutory License in the hands of IPAB

Now with the functioning of IPAB, it is highly likely that either the Broadcaster or the music labels will approach IPAB for invoking Section 31D of the Copyright Act for fixation of statutory license rates as the Compulsory license issued in year 2010 is expiring...

Copyright is a right in an original work of authorship (such as literary, musical, artistic, photographic, a film work or computer programme) fixed in any tangible medium of expression, giving the holder the exclusive right to reproduce, distribute , adapt, display and perform the work.

The Hon'ble Supreme Court in ENIL vs. Super Cassette Industries Ltd (2008 13 SCC 30) observed that the copyright is a property right parallel to the right to property under Article 300-A of the Constitution and is subject to reasonable restrictions. It is also a natural extension of the freedom of speech and expression protected under Article 19(1)(a) of the Constitution.

It is necessary to identify the owner of copyright in order to know who has the right to license use of the copyright, whose rights are to be protected and who has the power to take action for infringement. The author of the work is the first owner of the copyright exception when author is an employee or author has contract of service.

In IPRS vs. Eastern Indian Motion Pictures Assn (1977) 2 SCC 820 held that once the author of a lyric or musical work parts with a portion of his copyright by authorizing a film producer to make a cinematograph film in respect of his work and thereby have his work incorporated or recorded on the sound track of a film, the latter acquires by virtue of section 14(1) (c) on completion of the film, a copyright which gives him the exclusive right of performing the work in public.

Under Section 30 of the Copyright Act, the owner of a copyright in any existing work or the prospect owner of the copyright may grant license in writing of any interest in the copyright. But where the owner of a copyright has refused to allow a public performance of his work and the work is, thereby withheld from the public, the Intellectual Property Appellate Board (IPAB) which was earlier the Copyright Board), on a complaint by any aggrieved party, direct that the complainant be granted a license to republish the work or perform the work in public or broadcast the work on payment of compensation as determined by IPAB. Compulsory licenses are an exception to the general freedom of the copyright owner to contract. In fact, the Supreme Court in one of the matters has held that unreasonable terms could be construed as implied refusal on the part of copyright owners as the parties are in an unequal bargaining power.

It is imperative to mention that non-functioning of IPAB post amendment of 2012 in copyright law has given rise to litigation between music labels, copyright holder and Broadcasting organizations, especially the Radio.

The institution of the Copyright Board has a chequered history. With the notification of the Copyright Amendment Act, 2012 (Act) and the Copyright Rules, 2013 the Copyright Board became operational as a permanent tribunal for the first time. Post notification, the Act faced multiple challenges across High Courts. Petitions challenging Section 31D of the Copyright Amendment Act, 2012 were filed before various High Courts including the High Court of Delhi, Calcutta and Madras, as well as the Supreme Court. Later, writ petitions were filed, challenging the constitutional validity in the composition of the Copyright Board as the Act did little to streamline the appointment and functioning of the Copyright Board.

Thereafter, in 2016, the Government of India shifted the Copyright Office from the reigns of the nodal Ministry of Human Resources Development (HRD) to the Department of Industrial Policy & Promotion (DIPP) which functions under the Ministry of Industry and Commerce (now known as Department for Promotion of Industry and Internal Trade (DPIT)). In 2017, with the enactment of the Finance Act, 2017, the jurisdiction of Copyright Board was vested with IPAB. For a brief period of time, there was lack of clarity with respect to the ability of IPAB to hear copyright matters, in the absence of the necessary technical members with expertise in copyright matters.

The judgment and order dated 29.09.2018, passed by the Delhi High Court in W.P. (C) No. 5893/2018 titled Radio Next Webcasting Private Limited v. Union of India & Anr clarified the confusion regarding IPAB's jurisdiction to a certain extent. Further clarity was brought by the judgment and order dated 20.08.2019 of the Delhi High Court in W.P. (C) No. 5571/2019 titled Mylan Laboratories Ltd. v. Union of India and Ors; wherein the Court held that the IPAB could hear matters pertaining to all category of intellectual property rights even in the absence of requisite technical member for the relevant subject. The clarification had barely provided respite to stakeholders when the retirement of the then Chairman of IPAB, Retd. Justice Manmohan Singh brought the next roadblock in the way of implementation. The possibility of extending the tenure of chairmanship of Justice Manmohan Singh was rejected by the Division Bench of the Delhi High Court. Supreme Court vide order dated 18.12.2019, in the matter of International Association for Protection of Intellectual Property v. Union of India, Writ Petition(s)(Civil) No(s). 1431/2019 extended the tenure of Mr. Justice Manmohan Singh by one year from the date of his retirement i.e., 23.09.2019, and Retd. Justice Manmohan Singh is now continuing to hear matters pertaining to Copyright.

The Copyright Act was amended in 2012, which also inducted Section 31D in the Copyright Act that provides for a statutory license to broadcasting organizations to broadcast and perform literary and musical compositions, and sound recordings but has still not been enforced for one reason or another.

The scope of the license available under the section is to eliminate the cumbersome process of obtaining private licenses individually from a number of music labels. The provision of statutory licensing does exist. The first part of the section does not refer to the nature of broadcasting organizations eligibility for the license. A subsequent clause (clause 3) mentions that royalty rates for radio and television broadcasting must be different. Significantly, the constitutional validity of Section 31D has been challenged by Lahari Music in the Supreme Court and Radio Broadcaster has intervened in the writ petition which is kept in abeyance due to pending challenge of Section 31D in Calcutta High Court in another matter.

Tips Industries Ltd. vs. Wynk Music Ltd. & Anr.

Dealt with question that whether Section 31D of the Copyright Act read with Rules 29 and 30 of the Copyright Rules 2013 applies to Internet Broadcasting.

Section 31D of the Act read with Rules 29 and 30 of the Copyright Rules 2013 enables broadcasting companies/service providers to broadcast or perform any literary or musical works and sound recordings by issuing a prior notice of such intention to broadcast the said works to the rights holder and by paying royalty to the rights holder as fixed by the Intellectual Property Appellate Board (IPAB).

Similar question was raised in the case of Warner Chappell Music Limited v. Spotify AB where the court found that "… the provisions of Section 31D read with Rules 29 to 31 coupled with the legislative history preceding the passage of Copyright Amendment Act, 2012 clearly support the submission that Section 31D contemplates only television and radio broadcasting and not internet broadcasting."

It was further categorically held that upon a strict interpretation of Section 31D(3), as well as the rules framed there under, the statutory license was intended to cover only 'radio' and 'television' broadcasting, and not internet broadcasting.

The Court held that Wynk cannot claim statutory licence as Section 31D does not cover 'downloading of copyright work and Internet Broadcasting and Tips was entitled for interim injunction.

Now with the functioning of IPAB, it is highly likely that either the Broadcaster or the music labels will approach IPAB for invoking 31D for fixation of statutory license rates as the Compulsory license issued in year 2010 is expiring. It will be very interesting to see the approach of IPAB while dealing with these issues, in view of the fact that 31D is under challenge. One thing is settled that new round of litigation is on the cards.

Please Note: The views expressed in the article are personal.