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Statutory licensing: Mumbai High Court rules in favour of labels, against music streamers

Internet music streaming and digital downloads are not covered under the statutory licensing provi

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MUMBAI: Music labels are rubbing their hands in glee. Reason: recently record label Tips Industries won a landmark judgement against Airtel’s music streaming service Wynk in the Mumbai High Court.

The court ruled that internet music streaming and digital downloads are not covered under the statutory licensing provision which is meant for TV and radio broadcasters of the Copyright Act, 1957.  This means that all streaming services will have to perforce conclude licensing agreements with record labels.

Says Indian Music Industry (IMI) president Blaise Fernandes: “This decision confirms IMI’s consistent stand that internet streaming services are not covered under Section 31D of the Copyright Act,1957. As an industry, we noted the intention of our parliament to provide involuntary licensing benefits under the Copyright Act, 1957 and are very encouraged that the honourable court has now clarified the intention of our lawmakers did not include streaming services under the statutory licensing scheme.“

Adds Tips Industries managing director Kumar Taurani: "This is true justice and I humbly bow in respect to the Indian judiciary. It’s been a long and trying process but we prevailed and justice was served. I'm very happy that the Indian judiciary believed in not only Tips but the whole music industry and vindicated what was right. We are not in business to arm twist or provoke unnecessary actions onto our partners in the OTT business; but in our case, in particular, Wynk was very unfair. Wynk as an internet music streaming service has valuations in millions, despite that they still refuse to pay to music labels a few crore rupees for the labels’ music content, which is at the heart of Wynk’s OTT streaming service. And without a heart, what good is a body? OTT players, until this judgement, continued to corner us.”

It was way back in 2017 that both Wynk – which has about 100 million subs - and Tips failed to agree on licensing terms for the latter’s music. Taurani had then asked the streamer to pull down its music catalogue from the service. Wynk sought the cover of section 31D claiming that it was a broadcasting organisation and hence was eligible for a statutory licence allowing it to broadcast Tips music. Taurani then filed suits against the streamer in January 2018.

The Mumbai High Court, which was hearing the case, finally ruled in favour of Tips saying that Wynk was not eligible to claim the statutory broadcasting licence provision. It issued an injunction forbidding it from streaming Tips music without getting a licence from it.

The court stated” “Such use of the copyrighted works... without obtaining a license from the owners of the copyright amounts to usurpation of the exclusive rights of the owners to commercially rent, sell or communicate to the public their sound recordings. This interpretation does not meet the legislative purpose behind enacting Section 31-D.”

Attempts to reach Wynk were not successful, but industry observers expect it to appeal against the order at higher courts.  Another case which is slated to come up for hearing in June  is the Warner Music group vs Spotify, which has also taken cover under section 31D provision for its India launch.

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