Calcutta High Court Stays Ruling Against Vodafone Idea On Caller Tune Royalty Payment

Calcutta High Court Stays Ruling Against Vodafone Idea On Caller Tune Royalty Payment

A Division Bench of the Calcutta High Court has stayed a significant directive from a May 17 ruling against Vodafone Idea (VI). This directive restrained the telecommunications company from utilizing copyrighted music in caller tunes without acquiring a license from the Indian Performing Rights Society (IPRS) and paying the associated royalty.

The stay was granted by a bench comprising Justices IP Mukerji and Biswaroop Chowdhury in response to an appeal filed by VI. It will remain in effect until June 24 or until further orders, whichever occurs earlier.

"We direct a limited stay of the order of injunction granted by the impugned judgment and order dated May 17, 2024, in paragraph 32(iv) at internal page 29 thereof until June 24, 2024, or until further orders, whichever is earlier," the May 22 stay order stated.

Significantly, in the ruling delivered on May 17, Justice Ravi Krishan Kapur highlighted that, following the amendments to the Copyright Act in 2012, authors of literary or musical works have the right to receive royalties each time a sound recording is communicated to the public.

"The underlying object is that creative work ought to belong to the authors and that the author should have a share in all future commercial exploitation of their work (except cinema hall)," the judge explained.

The Court emphasized the importance of this measure in safeguarding the interests of original authors or individuals with less negotiating power, ensuring they are not coerced into relinquishing their rights through contractual agreements.

"To this extent, 'copyright is not seen merely as an economic tool, a property right, but as something like an extension of the personality of the author—something for his benefit and that of his heirs,'" the Court underlined.

According to the Court, the revised law seeks to curb the unauthorized commercial use of original works by mandating the acquisition of a license from the IPRS and the payment of royalties.

The Court further highlighted that authors are now restricted from waiving their entitlement to royalties for the utilization of their works in any format apart from cinematographic films screened in cinemas.

The single judge's decision (which VI has now appealed) was rendered during the adjudication of three lawsuits filed by Vodafone Idea Limited, Saregama India, and the IPRS.

The disagreement centered around the Value Added Service (VAS) offered by Vodafone through its Caller Ring Back Tone (CRBT) service, which included music recordings. While certain music recordings were owned by Saregama, others were protected by the IPRS, representing authors, publishers, and musicians.

IPRS argued that Vodafone required a distinct license and royalty payments to utilize these works. However, Vodafone disagreed, asserting that it solely needed permission from Saregama, the owner of the recordings.

The Court considered various lawsuits, including those brought by IPRS seeking royalties, Saregama seeking an injunction to prevent Vodafone from using its copyrighted recordings, and Vodafone's argument that no permission or license was necessary from IPRS for such actions. Additionally, the telco sought to involve prominent music labels such as Sony and Tips.

On May 17, the Court, in a ruling by a single judge, determined that the rights of an author to demand royalties under the amended law cannot be circumvented, even if there exists an agreement by which certain rights to utilize the sound recordings were transferred to VI.

Moreover, Saregama could not feasibly possess any authority to issue a license for the musical and literary works contained within the sound recordings to VI. This is because Saregama had already transferred these rights to IPRS as early as 1993 and again in 2017. The court added.

"Thus, Saregama could not have given anything that it had no right to give. Nobody can give a better title than that he or she possesses. Prima facie, Vodafone and Saregama also appear to be acting in concert with the ulterior aim of defeating the rights of IPRS. Saregama, despite being a member of the IPRS, has also failed to look after the interests of the authors of literary and musical works and has acted contrary thereto," the Court concluded on May 17.

The appeal is scheduled for the next hearing on June 12.