News & Updates

July 2, 2019

Online Streaming Services Cannot Avail of Statutory Licenses Under the Copyright Act

In the matter of Tips Industries Ltd. vs. Wynk Music Ltd. and Ors. on April 23, 2019 the Bombay High Court granted temporary injunction against Wynk Music, restraining it from infringing the copyright of Tips Industries, held by it in over 25,000 songs. The Court comprehensively rejected the claim that online music streaming services are eligible for being granted statutory licenses for “broadcasting” under Section 31D of the Copyright Act.

The plaintiff, Tips Industries Ltd., owns copyright over a repository of music/sound recordings, which had been licensed to the defendant, Wynk Music Ltd. (an online streaming service provider), by Phonographic Performance Ltd. Upon expiry of the said license, Tips and Wynk entered into negotiations for a new license. However, negotiations broke down when Wynk stated that it is entitled to a statutory license under Section 31D, being a “broadcasting organization”. Tips challenged Wynk’s invocation of Section 31D, and sued Wynk for infringement of their exclusive copyright in sound recordings, under Section 14(1)(e) of the Act.

The issue central to the case was the applicability of Section 31D to online broadcasting services, wherein Wynk argued that its streaming services are subsumed within “radio broadcasting”. The Court rejected this interpretation and held that Section 31D as well as the rules framed thereunder make it clear that statutory licensing was intended to cover only “radio” and “television” broadcasting, and not internet broadcasting. The Court observed the legislative history of Section 31D and inferred that though the legislature was aware of internet streaming services at the time of drafting the provision, they intentionally chose not to include the same within the scheme of Section 31D. It was held that “…the provisions of Section 31-D 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 31-D contemplates only television and radio broadcasting and not internet broadcasting.”

Notably, it was also held by the Court that Wynk’s services of enabling downloads in lieu of a subscription fee fell within the scope of “commercial rental” which was not included under the “fair use” exceptions and amounted to Copyright infringement. While finally deciding the matter, the Court held that “Considering the fact that I have come to a conclusion that in so far as the download and purchase feature of the Defendants’ activities are concerned the same amount to infringement of the Plaintiff’s rights…and that the provisions of Section 31-D of the Act are not applicable to internet broadcasting, it is necessary to grant reliefs in favour of the Plaintiff.”

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