The long-running saga between Tips Industries Limited ("Tips") and Wynk Ltd. ("Wynk"), which began in 2016, concluded with a settlement on June 18, 2024. This landmark decision, authored by Justice RI Chagla of the Bombay High Court, ends a significant legal battle in India's digital streaming landscape.
Central to the dispute was whether statutory licensing that enables certain users to use copyrighted works without seeking explicit permission from the copyright holder, provided they meet the statute's conditions, applies to streaming or internet broadcasting. The case has seen numerous pivotal rulings that have shaped the legal framework for OTT platforms in India and sparked wider debates about the future of digital content distribution.
The final order requires both parties to adhere to the Bombay High Court's April 23, 2019, judgment. Wynk will pay INR 12 crores for its use of Tips' music, setting a crucial precedent for statutory licensing in the digital age.
Background
The case revolves around the interpretation of Section 31D of the Copyright Act, 1957 ("Act"), which outlines statutory licenses permitting broadcasting organizations, such as radio and television broadcasters, to use copyrighted music upon payment of royalties determined by the Commercial Court. Wynk (now Xtelify Ltd.), an online music streaming service, claimed it qualified as a "broadcasting organization" under this provision, entitling it to statutory licenses. Wynk via Phonographic Performance Limited (PPL) was licensed over 25,000 sound recordings owned by Tips until August 2016. Despite negotiations and an interim agreement, the parties failed to renew the license, with Tips demanding Rs. 4.5 crores for two years, which Wynk rejected. Following failed negotiations and a cease and desist notice from Tips in November 2017, the Bombay High Court ruled that Wynk could not use Tips' music without consent.
The Court highlighted that removing Tips' 25,000 songs from Wynk's 2.6 million recordings would not significantly harm Wynk but would prevent unauthorized exploitation of Tips' music. The Court concluded that the balance of convenience favored Tips, as Wynk's business would not be significantly impacted by the injunction, whereas Tips' entire repertoire was being exploited without payment.
More importantly, the Bombay High Court in its 2023 judgment emphasized that statutory broadcasting rights under Section 31D of the Act did not extend to online music streaming, rendering Wynk ineligible for these licenses. The statute as mentioned hereunder, in conjunction with Copyright Rules 29 and 30 of 2013, does not cover internet-based streaming services or online broadcasters.
By doing so, the Court confined the ambit of Section 31D of the
Act to conventional radio and television broadcasters. This
judicial stance mirrors earlier judgments such as
Warner/Chappell Music Limited v. Spotify
AB and aligns with the legislative intent articulated
in the Rajya Sabha Standing Committee's 227th Report and the
Statement of Objects and Reasons accompanying the 2012 Amendment.
This exclusion positions statutory licensing within the realm of
linear broadcasting mediums.
Despite propositions in 2019 by the Ministry of Commerce and
Industry to broaden Rule 29's scope beyond traditional
broadcasts, and a 2016 memorandum by the Department of Industrial
Policy and Promotion advocating for the inclusion of internet-based
streaming, the appellate division, composed of Justices GS Patel
and Gauri Godse, reaffirmed a strict interpretation in 2023.
This doctrinal reinforcement resonates favorably among legal experts, who contend that it buttresses the bargaining power of copyright holders vis-à-vis internet streaming services, preempting potential Commercial Court intervention in setting licensing royalties.
Wynk's Landmark Settlement
The settlement of the Tips v. Wynk copyright dispute marks a critical juncture in the interpretation of Section 31D of the Act within the context of digital streaming. The dispute centered on whether online streaming services, like Wynk, could be classified as "broadcasting organizations" eligible for statutory licensing traditionally reserved for radio and television broadcasters.
The settlement requires Wynk to pay INR 12 crore plus applicable taxes for the use of Tips' music repertoire from September 1, 2016, to September 10, 2020. This resolution brings financial restitution and reinforces the judicial stance on the scope of statutory licensing. By adhering to the 2019 judgment, the parties implicitly acknowledge the court's delineation between traditional and digital broadcasting rights.
The message was clear: the doctrinal statutes of the Act were not to be carelessly stretched to accommodate the whims of technological progress. The court stood firm, confining the rights of statutory licensing to the traditional domains of radio and television, thereby excluding internet-based streaming services.
The settlement highlights the necessity for legislative clarity in the digital era, suggesting that amendments may be required to address the evolving landscape of digital streaming. Consequently, this case serves as a crucial reference point for future disputes, indicating to digital streaming platforms the importance of negotiating within the established legal framework and recognizing the limits of their statutory rights.
Conclusion
The settlement between Tips and Wynk is a seminal development in India's legal landscape concerning digital music streaming. It reaffirms the Bombay High Court's interpretation that statutory licensing rights under Section 31D of the Act are limited to traditional broadcasting mediums, excluding online streaming services.
The court's decision highlights the judiciary's stance that the existing legislative framework, crafted before the rise of digital media, is not equipped to address the complexities of the modern content distribution landscape. This rigidity has led to numerous disputes between content creators, copyright holders, and digital streaming services, stemming from a fundamental mismatch between the law and the technological realities of the digital age. As on-demand, non-linear streaming platforms have become ubiquitous, the applicability of statutory licensing provisions, originally designed for traditional linear broadcasts, has become contentious. Digital streaming services have sought to leverage these provisions, while content creators have resisted, leading to legal battles.
The Parliamentary Standing Committee's 161st Report recommendations advocate for the inclusion of digital broadcasters under statutory licensing to ensure a level playing field by making content accessible on similar terms to both traditional and internet broadcasters. However, the court seems to have drawn a clear line, signaling to the digital vanguard that the rules of the game have not been rewritten, at least not without the express consent of the lawmakers.
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