Bombay HC rules on Copyright Infringement by ‘Over The Top’ Services

The Bombay High Court, by its decision passed on April 23, 2019[1] dealt with the issue of whether certain ‘over the top’ services provided by Wynk through its software platform amounted to copyright infringement of Tips Industries’ copyrights in certain sound recordings and also whether Wynk, was entitled to invoke the provisions of statutory licensing under Section 31D of the Copyright Act, 1957 (‘Copyright Act’) for internet broadcasting. Following services were provided through the Wynk App: (a) downloading of sound recordings by users on their devices upon payment of a monthly rental fee (and retaining access to the same without an internet connection during the rental period), (b) purchase of sound recordings of Tips Industries, for a flat fee (and retaining access to the same without an internet connection, in perpetuity), and (c) on demand streaming services where sound recordings were made available over the internet, which could be accessed through any device connected to the internet on the Wynk App.

Wynk continued to make Tips Industries’ sound recordings available to its users even after the authorization granted by Tips Industries for use of its sound recordings had lapsed. After analyzing Section 14(1)(e) of the Copyright Act in detail, the Bombay High Court held that Wynk’s actions amounted to copyright infringement. The Court held that the outright purchase/download services provided by Wynk amounted to a sale of the sound recording and also the temporary rental option amounted to commercial rental of the sound recording, thereby infringing the exclusive rights of Tips Industries. The Court also held that Wynk’s services were of a commercial nature and hence were not covered by the fair dealing exceptions. On the issue of statutory licensing, the Court held that since the right to sell and/or commercially rent sound recordings are distinct and separate rights which are different from the right to communicate the sound recording to the public, Wynk cannot exercise a statutory license right under Section 31D in relation to the download and purchase features of the services provided by them (which amount to sale and / or commercial rental). The Court clarified that the statutory license regime under the Copyright Act only applies to “broadcasting” rights that fall under the exclusive right to “communicate the work to the public”.

The Court thereafter held that Wynk would not fall within the purview of broadcast organizations that are eligible to be granted a statutory license since Wynk was an internet broadcasting organization. The Court observed that the statutory licensing scheme under the Copyright Act is only applicable for radio and television broadcasting organizations. This conclusion was reached based on the language of Section 31-D of the Copyright Act read with Rule 29 of the Copyright Rules, 2013, which specifically mention only radio and television broadcasting. Further, the provisions of the Copyright Act presuppose the fixing of royalty rates by the Intellectual Property Appellate Board before a statutory license can be granted. However, the Court noted that royalties for internet broadcasting have not yet been fixed and, therefore, a statutory license could in fact not be granted to internet broadcasting organizations.

[1] Tips Industries Limited v. Wynk Music Limited, Notice of Motion (L) No. 197 of 2018 in Commercial Suit IP (L) No. 114 of 2018 and Notice of Motion (L) No. 198 of 2018 in Commercial Suit IP (L) No. 113 of 2018.

Published In:Inter Alia - Quarterly Edition - July 2019 [ English
Date: July 31, 2019