22 May 2019

Statutory licensing under Section 31D of Copyright Act not covers internet broadcasting

15th May 2019

The Bombay High Court has held that statutory licencing under Section 31D of the Copyright Act is meant only for radio and television broadcast and excludes internet broadcasting. The Court was of the view that Defendants’ on demand streaming services offered through internet as an “internet broadcasting organisation” do not fall within the purview of Section 31-D of the Act.
It also held that Section 31D is applicable to only broadcasting organizations which are desirous of communicating to the public by way of ‘broadcast’, and not covers commercial rental. 227th Report of the Rajya Sabha Parliamentary Standing Committee on the Copyright (Amendment) Bill, 2010 was relied for the purpose.
It may also be noted that Court in the case of Tips Industries Ltd. v. Wync Music Ltd. also held that prior determination of royalty rates is a necessary precondition for the exercise of rights in respect of a statutory license under Section 31-D.
It was also held that commercial renting and storing of plaintiff’s song violates exclusive rights of plaintiff under Section 14(1)(e)(ii). It observed that feature of permanent download subscription option offered by the Defendants to their customers to permanently download sound recordings and have a permanent access to the same once paid for, amounts to sale of the sound recordings and thereby violates the exclusive right of the Plaintiff to sell or offer for sale its sound recordings as provided in Section 14(1)(e)(ii). 
In respect of commercial renting, the Court was of the view that activities of the Defendants enabling their customers to download sound recordings and access them offline in lieu of a monthly subscription fee amounted to ‘commercial rental’.
Defence of fair use under Section 52(1)(a)(i) was rejected by the Court observing that activities of the Defendants cannot be termed as ‘private’ or ‘personal use’ or ‘research’. Similarly, the benefit under Section 52(1)(b) was also held as not available to the defendant. The Court in this regard noted that storage of the sound recordings was not incidental or transient to services of the Defendants.
It was also held that provisions of Section 52(1)(b) would generally apply in case of Internet Service Providers and not to the activities of the Defendants. The Court hence granted interim injunction restraining the defendant from using songs of the plaintiff over its platform.

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