Ambiguity of Section 31D of the Copyright Act, 1957: Broadcasting Rights in Digital Age
Why is this Relevant?
Not more than a year ago, the settlement between Tips Industries Limited (“Tips”) and Wynk Limited (now Xtelify Ltd) (“Wynk”) brought back the conversation of discussing the ambit or scope of Section 31D of the Copyright Act, 1957 (hereinafter, the “Act”) to the forefront. Section 31D provides for a statutory license to be given to a broadcasting organization that is “desirous of communicating to the public by way of a broadcast or by way of performance of a literary or musical work and sound recording which has already been published.” This section was introduced by way of an amendment in 2012, as a compliance requirement to Articles 11(2) and 134 of the Berne Convention, Article 9(1) of the TRIPS Agreement, and Article 15(2) of the Rome Convention (for sound recordings).
In the era of streaming, as online platforms garner mass attention and serve as a primary form of entertainment, the ambit of broadcasting organisations under Section 31D falls into ambiguity. In 2016, the Department of Industrial Policy and Promotion, via an office memorandum, issued a clarification that internet and online streaming platforms should be covered under the definition of 'broadcasting organisations'. However, neither Section 31D nor the Copyright Rules, 2013, refer to “internet broadcasting” in the context of statutory licensing.
Section 31D - Interpretation
Before delving into the cases and their interpretations, it is important to ascertain what “broadcasting organisations” and “broadcasting” mean and what license is given under Section 31D of the Copyright Act. Chapter VIII of the Act elucidates the rights of broadcasting organisations and performers' rights. Further, Section 37 of Chapter VIII expands on the “Broadcasting Reproduction Right”. Although "broadcasting organisation" is not defined in the Act, the term ‘broadcast’ is defined under Section 2(dd) as “communication to the public”. This communication can be done by various means, including rebroadcasts. Hence, a broadcasting organisation can be inferred as an organisation carrying out a broadcast. Section 37 also provides certain rights to such broadcasting organisations, including rebroadcasting and making recordings of the broadcast.
These rights are conferred upon a broadcasting organisation through a statutory license granted under Section 31D with respect to any literary or musical work and sound recordings that have already been published. In simpler terms, a radio or television network that desires to communicate a published piece of work covered under copyright to its audience may do so, provided it does not make any material changes to the work, informs the right holder about its intent, and pays royalties as applicable to the creator. Thus, under the provisions of Section 31D, a broadcasting organisation can hold a license that allows them to be a ‘broadcasting’ organisation, i.e., to broadcast. The legal intent behind this section was to ensure fair competition and wide dissemination of content.
This is relevant because the definition of a broadcasting organisation is based on judicial interpretation. More organisations would want this license to have a commercial place in the market. However, it is up to the court to define what falls under the ambit of a broadcasting organisation until the law provides more clarity.
Relevant Judicial Opinions
Primarily, two main cases have considered the present predicament:
Warner Chappell Music Limited v. Spotify AB. Spotify Technology S.A. (2019 SCC OnLine Bom 6469)
Spotify A.B launched its application ‘Spotify’ in India in February 2019 and wanted to negotiate with Warner Chappell Music Limited (WCM) for obtaining licenses over various music labels on which WCM holds licensing rights. WCM contended that Spotify lacked a license to stream its music in India. Spotify invoked Section 31D as a way to secure the streaming and broadcasting rights over the music owned by WCM. While there are statutory licenses covering broadcasting and mechanical copying under Indian copyright law, WCM argued that these did not apply to on-demand streaming. Consequently, the Bombay High Court asked Spotify not to proceed with the application for the license.
Wynk Ltd. and Ors. vs. Tips Industries Ltd. (2019 SCC OnLine Bom 13087)
Wynk invoked the provisions of Section 31D over works owned by Tips Industries Ltd. (“Tips”) when negotiations failed. Tips filed an infringement suit and challenged the applicability of Section 31D before the Court.
To understand the court’s perspective, consider the following excerpt from the judgment:
"Before we proceed to the merits of the controversy before us, we believe a closer look at the technology and services is required. A few things are apparent. Wynk does not provide services on a traditional radio or FM radio platform at all. Its services are entirely online, that is to say, internet-based. We will take the services as they exist generally in the industry (not as modified for the Tips case). The word 'streaming' is undefined and is used somewhat loosely. We think it would be more accurate for the purposes of this discussion to distinguish between services that are offered online, i.e., which are internet-based, and those that are not internet-based. The reason for this is an additional layer of complication for there exist today many services that are internet-based but are exactly identical to offline radio FM services. To explain this further, a traditional radio service plays music or other content. Listeners may tune in at any time. In a traditional FM broadcast (of the sort one might hear on a car radio or a radio set), there is no question of recurring monthly subscription. One simply tunes in to the station of choice. The user has no control over the content. He or she must listen to whatever is being played, including the somewhat annoying non-stop chatter of the radio jockeys and equally annoying but undoubtedly necessary advertisements. Online services sometimes do away with advertisements with a fee. Online radio, especially in the premium segment, also requires a fee (to eliminate those irritating advertisers), but the one thread common to all radio-type services is that the user has no control over the content. The user cannot go back to a previous song. The user cannot curate or put together a preferred playlist of choice. Some online radio-type services allow the user the choice of selecting a particular genre or sub-genre but even in that, the user must listen to whatever is being played. We believe this distinction is important. It is not one that was made in the impugned judgment, but the distinction becomes clear and occupied a fair part of the discussion before us in appeal."
This case is crucial as it addresses whether internet broadcasting and the rental and download option provided by Wynk in its platform come under the definition of “communication to the public” and whether the statutory licensing regime under Section 31D also covers internet streaming services. The Bombay High Court held that the services would not fall under the ambit of internet broadcasting, and therefore their application would not succeed.
However, as early as 23rd July 2021, the 161st Report of the Rajya Sabha Parliamentary Standing Committee on the Review of the Intellectual Property Rights Regime in India supported the stance that internet and online streaming platforms do come under the ambit of Broadcasting Organization under Section 31D. The reason given was that with the rise of digital or OTT platforms, which contribute significantly to the economy, there needs to be a “level playing field for both traditional and internet broadcasters alike”.
What Does This Mean for Music Fans?
For music fans, while this may hinder them from using their favorite applications for a while, Internet Streaming Companies will have to explore licensing music individually from statutory copyright societies and artists. This means more paperwork and security of royalty for artists and creators.
Takeaways for the Future
These two contrasting views have led to further confusion about the exact ambit of Section 31D, leaving it a still point in law. The current position of law, by way of judicial interpretation, is the interpretation in the Tips v. Wynk case. In the June 2024 order in this case, the court, after agreeing to the settlement terms given by the parties, reaffirmed its previous interpretation - that Section 31D was applicable only to traditional broadcasting organizations but hinted at the need for amendments to keep the law up with technological advancements.
The ambiguities surrounding the implication of Section 31D highlight a lacuna in the law, which if left unaddressed, could hinder fair competition within the industry. As digital media continues to evolve, there is an urgent need for a clear and comprehensive legal framework or guidelines that address the complexities introduced by internet-based broadcasting.
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