Bombay High Court directs strict observance to the statutory licensing provisions under Copyright Act, 1957

Smriti Yadav, Partner, Khaitan & Co

Shwetank Tripathi, Senior Associate, Khaitan & Co

Bhavik Shukla, Associate, Khaitan & Co

In the matter of Sony Music Entertainment India Private Limited v. KAL Radio Limited & Anr, I.A. (L) 8813 of 2021 in COMIP (L) 8829 of 2021 (Suit), Justice G S Patel, the Learned Single Judge of the Bombay High Court (Court) passed an order dated 18 June 2021 (Decision) granting an ad-interim injunction in favour of Sony Music Entertainment India Private Limited (Sony) restraining KAL Radio Limited (KAL Radio) from infringing Sony’s Music (defined hereinafter) by broadcasting the same under the guise of statutory licensing.

Factual background

Prior to 2010, Sony was a member of the copyright society, Phonographic Performance Limited (PPL).During this period, KAL Radio had sought license from PPL to broadcast copyright works owned by Sony (Sony’s Music).

On 5 February 2021, KAL Radio emailed Sony inquiring about Sony’s Music, which details were provided by Sony on 9 February 2021. Subsequently on 12 February 2021, KAL Radio sent another email to Sony, supposedly under Section 31D of the Copyright Act, 1957 (Act) read with Rule 29 of the Copyright Rules, 2013 (Rules) claiming entitlement to a statutory license (Notice) and forwarded a cheque for certain amount being the advance royalty payable under the Rules. On 24 February 2021, Sony replied to KAL Radio’s email stating inter alia that (i) the Notice was not in conformity with Section 31D of the Act and the relevant Rules; (ii) the cheque amount towards advance royalty had been computed without any basis; and (iii) the Notice did not contain the details required to be furnished under Section 31D of the Act. Sony returned the cheque and demanded KAL Radio to comply with the Rules. No further communication was sent by KAL Radio.

In early March 2021, Sony discovered that KAL Radio was broadcasting Sony’s Music on various FM radio stations. Around the same time, KAL Radio sent a revised royalty calculation, enclosing a royalty cheque along with log files evincing use of Sony’s Music on some of its radio channels for the month of January 2021.

Since Sony disputed the alleged compliance of statutory license claimed by KAL Radio, Sony filed the Suit against KAL Radio alleging copyright infringement in respect of Sony’s Music and seeking an injunction and damages. Along with the Suit, Sony filed an application for

Rival contentions

Sony contended that KAL Radio did not have any license or a statutory license to broadcast Sony’s Music and accordingly, the broadcast of Sony’s Music constitutes copyright infringement. 

In response, KAL Radio inter alia contended that Section 31D of the Act entitles a broadcasting organization to use the copyrighted to the copyright owner. KAL Radio further contended that the balance of convenience is tilted on its side and greater prejudice would be caused to it than Sony, if an interim injunction is passed, as Sony can always be compensated in terms of money. KAL Radio also contended that there is sufficient compliance with the statutory licensing provisions under the Act and the Rules and that certain parts of Rule 29 will need to be read down so that strict compliance is unnecessary.

The Court observed at the outset that KAL Radio did not have a statutory license, since it could not demonstrate that the Notice issued by KAL Radio was compliant with Section 31D of the Act and Rule 29 of the Rules, since inter alia (i) it did not contain the names of the programmes in which the Sony’s Music were to be used; (ii) the details of the time slots, durations, and period of programmes. The Court also observed that KAL Radio had failed to give details of the computation of advance royalty.

With respect to KAL Radio’s argument that Rule 29 of the Rules should be read down, the Court observed that KAL Radio cannot apply or interpret the Rules as it deems fit. The Court emphasized that Section 31D of the Act is a deviation from the general principles of copyright law, and hence, must receive a strict construction. Further, the Court observed that Section 31D of the Act and its related Rules are bidirectional, meaning thereby that it imposes mutual obligations on both, the copyright owner and the statutory licensee.

The Court further observed that Sony had not refused statutory license to KAL Radio but had merely pointed to the defects in the Notice and calculation of advance royalty. In view of the above, the Court restrained KAL Radio from broadcasting or communicating Sony’s Music to the public, which order was subsequently extended and continues to operate.

Comment

The Decision underlines that the statutory license regime is a deviation from the general principles of copyright law (wherein the parties enter into licenses on their volition and on an arm’s length price), and therefore, the requirements laid out in the Act and the Rules are to be adhered with stricto sensu. The Decision will act as a shield for copyright owners against unscrupulous users who may misuse the copyrighted works in the garb of a statutory license.


The views of the author(s) in this article are personal and do not constitute legal / professional advice of Khaitan & Co. For any further queries or follow up please contact us at editors@khaitanco.com.


 

 

 

 

 

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