In the ever-evolving landscape of digital media and copyright law, the recent judgment of WYNK Ltd. and Another vs. TIPS Industries Ltd. by the Bombay High Court has reignited the debate on the interpretation of Section 31D of the Copyright Act, 1957. This ruling has significant implications for music streaming platforms, particularly in the context of statutory broadcasting rights, and their ability to obtain discounted compulsory licenses. Let’s dive into this critical analysis to understand the implications of this case.
In a nutshell, this case revolves around the interpretation of Section 31D of the Copyright Act, which is a provision that deals with statutory licenses, allowing broadcasting organizations, such as radio and television broadcasters, to use copyrighted music for a fee. WYNK Ltd., a popular online music streaming service, believed it could also enjoy these statutory licenses under the umbrella of being a “broadcasting organization”.
Bombay HC’s Verdict
The Bombay High Court, however, saw things differently. It ruled that Wynk could not access and use music owned by TIPS Industries Ltd. without explicit consent. The court emphasized that statutory broadcasting rights did not extend to online music streaming and downloading, rendering Wynk ineligible for these licenses. Wynk’s attempt to circumvent the need for commercial licenses was denied, highlighting the importance of negotiated agreements in the music industry.
This case set a precedent for internet-based platforms, making it clear that these platforms must engage in proper contract negotiations with record companies like Tips to access and distribute their music online. In essence, OTT (Over the Top) internet service providers, such as Wynk, cannot exploit copyrighted music without the necessary licenses from the copyright owners.
A pivotal aspect of this case revolved around the profitability of the entities involved. The court reasoned that profit-oriented platforms might not necessarily serve a public purpose and could fail to fulfil the objectives of the Copyright (Amendment) Act, 2012 which added Section 31D to the Act. This amendment aimed to grant broader public access to musical works.
One point of contention arose from the interpretation of Section 31D of the Act. The court’s interpretation appeared to limit the scope of Section 31D to traditional radio and television broadcasters. Earlier in the case of Warner/Chappell Music Limited v. Spotify AB as well, the High Court had reverted to the narrow interpretation of the provision of Section 31D according to the interpretation sought through the Rajya Sabha Standing Committee’s 227th Report and the Statement of Objects and Reasons of the 2012 Amendment which was that the objective of the 2012 Amendment is to “ensure that the authors of the works, in particular, the author of the songs included in the cinematograph films or sound recordings, receive royalty for the commercial exploitation of such works”.
In the judgment, the reasoning of Wynk to be regarded as a “broadcasting organisation” was denied as the Section 31D read with Rules 29 and 30 of the Copyright Rules, 2013 does not include internet-based streaming service providers or online broadcasters in its meaning as only radio and television broadcasters are talked of in the provisions.
However, it’s worth noting that the Ministry of Commerce and Industry back in 2019 proposed to amend the provisions in Rule 29 of the Rules to substitute the words “by way of radio broadcast or television broadcast”, with the words “for each mode of broadcast”.
Even the Department of Industrial Policy and Promotion attempted to clarify the intent of Section 31D in an office memorandum back in 2016, by asserting that the phrase “any broadcasting organisation desirous of communicating to the public” as it appears under Section 31D may not be strictly interpreted to cover only radio and television broadcasting and therefore also purported to include within its fold internet broadcasting and streaming.
This expansion of scope appears to diverge from the High Court’s strict interpretation of Section 31D. It underscores the need to adapt copyright laws to the evolving landscape of the broadcasting industry.
The original intent behind Section 31D as was deliberated in the Standing Committee Report as to enhance public access to musical works while safeguarding the interests of copyright owners. The idea was to strike a balance that benefited both users and private owners. This was seen as a solution to lengthy, expensive negotiations and access issues. The discrimination between the radio or television broadcasting organisations and internet streaming platforms has altogether not been discussed by the Parliament in the debates and nor has it been raised by the Parliament Standing Committee when considering the contentions of the stakeholders on the proposed amendments. However, this exclusion cannot be seen as deliberate even though online services existed, they were not as prevalent in the year 2010 when the discussions were on-going.
A point of contention that was raised by several organisations, as enumerated in the Standing Committee Report, was that the radio and television broadcasters are already “risk-free and solely profit-orientated” and that the established television industry “may also seek concessional licensing for their programmes as well” as a result of the inclusion of Section 31D to the Act. This was, however, dismissed by the Standing Committee considering the prospect that statutory or automatic licences would ensure a hassle-free process of access to works and reduce litigations.
The High Court in this case denied the licence to the streaming platform on the grounds of its profit-making motives but did not regard the dismissal of the above contention as the intention of the Parliament to disregard such goals if public access to the copyright works is prioritised. The Standing Committee while proposing Section 31D being included in the Act did recognise the importance of a seamless process for a “fast-growing industry like broadcasting industry”, and the High Court did not assess the importance of these changes in its decision to deny the statutory licence to Wynk.
The WYNK vs. TIPS case has ignited a crucial debate about the interpretation of Section 31D and the future of copyright laws in the digital age. The court’s decision underscores the need for a more comprehensive approach, taking into account the evolving broadcasting landscape and the diverse entities that operate within it. Amendments to the Act and Rules may be necessary to eliminate ambiguity and provide clarity in interpreting the term “broadcasting organizations” while balancing the interests of copyright owners and users.
The Court in the case should have also considered that the provision of Section 31D merely aims to create a simple process for using copyrighted works for commercial purposes which is also advantageous to the owner of the work, however, it doesn’t make any distinction between public or private entities and whether or not they provide their services for achieving their profit motives. There is a need existing for amendments to the Act and the Rules in this relation so that the ambiguity in the interpretation of “broadcasting organizations” is removed and clarity is also provided to the Courts for deciding on such disputes between copyright owners and users.