Reading Section 31 D of Copyright Act 1957 - Statutory Licensing

INTRODUCTION

Copyright in its simplest words means the legal right of any individual over its work. To protect the writers and authors from exploitation of their material the Copyright Act was introduced. The main intent to enactment of this act is to protect the original work of a person.

Section 31D was introduced by the amendment in Indian Copyright Act, 1957 in the year 2012. Rules 29 and 30 of the Copyright Rules 2013 enables all broadcasting organisations to broadcast or perform any literary or musical works and sound recordings by issuing a prior notice of such intention to broadcast the said works and by paying royalty to the rights holder, as fixed by the Intellectual Property Appellate Board (IPAB).

Section 2(dd) of the Copyright Act 1987 defines broadcast as :

“communication to the public by any means of wireless diffusion , whether in any one or more of forms of signs ,sounds or visual image or by wire and includes a re-broadcast.”

31D. Statutory licence for broadcasting of literary and musical works and sound recording.— (1) Any broadcasting organisation desirous of communicating to the public by way of a broadcast or by way of performance of a literary or musical work and sound recording which has already been published may do so subject to the provisions of this section.

(2) The broadcasting organisation shall give prior notice, in such manner as may be prescribed, of its intention to broadcast the work stating the duration and territorial coverage of the broadcast, and shall pay to the owner of rights in each work royalties in the manner and at the rate fixed by the Appellate Board.

(3) The rates of royalties for radio broadcasting shall be different from television broadcasting and the Appellate Board shall fix separate rates for radio broadcasting and television broadcasting.

(4) In fixing the manner and the rate of royalty under sub-section (2), the Appellate Board may require the broadcasting organisation to pay an advance to the owners of rights.

(5) The names of the authors and the principal performers of the work shall, except in case of the broadcasting organisation communicating such work by way of performance, be announced with the broadcast.

(6) No fresh alteration to any literary or musical work, which is not technically necessary for the purpose of broadcasting, other than shortening the work for convenience of broadcast, shall be made without the consent of the owners of rights.

(7) The broadcasting organisation shall—

(a) maintain such records and books of account, and render to the owners of rights such reports and accounts; and

(b) allow the owner of rights or his duly authorised agent or representative to inspect all records and books of account relating to such broadcast,

in such manner as may be prescribed.

(8) Nothing in this section shall affect the operation of any licence issued or any agreement entered into before the commencement of the Copyright (Amendment) Act, 2012.

It is to be noted that under the provisions of Section 31D read with Rules 29 and 30 of the Copyright Rules 2013 does not explicitly include internet broadcasting in context of statutory licensing.

What is statutory licencing?

Section 31 C of the Copyright Act deals with statutory licensing to make cover versions (sound recordings) .A person who desires to make sound recording of any literary, dramatic or musical work, where the sound recording of that work has been made by or with the license or with the consent of the owner, he can do so in accordance with the provisions of the Copyright Act along with rules 23 – 28 of the Copyright Rules, 2013 . The rules talks about the procedure which needs to be followed to get the license.

[31C. Statutory licence for cover versions.— (1) Any person desirous of making a cover version, being a sound recording in respect of any literary, dramatic or musical work, where sound recordings of that work have been made by or with the licence or consent of the owner of the right in the work, may do so subject to the provisions of this section: Provided that such sound recordings shall be in the same medium as the last recording, unless the medium of the last recording is no longer in current commercial use.

(2) The person making the sound recordings shall give prior notice of his intention to make the sound recordings in the manner as may be prescribed, and provide in advance copies of all covers or labels with which the sound recordings are to be sold, and pay in advance, to the owner of rights in each work royalties in respect of all copies to be made by him, at the rate fixed by the 1 [Appellate Board] in this behalf: Provided that such sound recordings shall not be sold or issued in any form of packaging or with any cover or label which is likely to mislead or confuse the public as to their identity, and in particular shall not contain the name or depict in any way any performer of an earlier sound recording of the same work or any cinematograph film in which such sound recording was incorporated and, further, shall state on the cover that it is a cover version made under this section.

(3) The person making such sound recordings shall not make any alteration in the literary or musical work which has not been made previously by or with the consent of the owner of rights, or which is not technically necessary for the purpose of making the sound recordings: Provided that such sound recordings shall not be made until the expiration of five calendar years after the end of the year in which the first sound recordings of the work was made.

(4) One royalty in respect of such sound recordings shall be paid for a minimum of fifty thousand copies of each work during each calendar year in which copies of it are made:

Provided that the [Appellate Board] may, by general order, fix a lower minimum in respect of works in a particular language or dialect having regard to the potential circulation of such works.

(5) The person making such sound recordings shall maintain such registers and books of account in respect thereof, including full details of existing stock as may be prescribed and shall allow the owner of rights or his duly authorised agent or representative to inspect all records and books of account relating to such sound recording: Provided that if on a complaint brought before the [Appellate Board] to the effect that the owner of rights has not been paid in full for any sound recordings purporting to be made in pursuance of this section, the [Appellate Board] is, prima facie, satisfied that the complaint is genuine, it may pass an order ex parte directing the person making the sound recording to cease from making further copies and, after holding such inquiry as it considers necessary, make such further order as it may deem fit, including an order for payment of royalty. Explanation.— For the purposes of this section “cover version” means a sound recording made in accordance with this section.]

COMPULSORY LICENSING V STATUTORY LICENSING

There is no proper distinction between them but Indian law has highlighted a thin line difference between them. under Statutory Licensing, the royalty is prescribed by the Copyright Board whereas under compulsory licensing the royalty is negotiated by the parties themselves.

In case of statutory licensing no permission is required to be taken from the owner to use his work as the permission is given by the Statute unlike in Compulsory Licensing.

SECTION 31-D IS NOT ULTRAVIRES THE CONSTITUION

Section 31 D has been alleged to be ultravires and against the constitution of India. It has been challenged especially under Article 14, 19(1)(g) ,21 and right to property under section 300 A of the Constitution.

The Madras High Court, after analysing and interpreting various factors such as principles governing the interpretation of statutes and its contextual interpretation, did not find any reason to hold section 31 D of Copyright Act as unconstitutional.

Whether statutory licensing applies to internet broadcasting?

The section does not apply to internet broadcasting. It has also been discussed in the recent case of Tips Industries Ltd v. Wynk Music Ltd & Others where S.J. Kathawalla, J. issued a permanent injunction against Wynk Music restraining it from infringing the copyright if Tips Industries held by it in over 25,000 songs. The Court held that Section 31D is an exception to copyright and it must be strictly interpreted. The court also opined that statutory licensing under Section 31D applies only to television and radio broadcasting and not internet broadcasting.

Wynk relied on Government of India’s Office Memorandum dated 5-9-2016 which stated: “… in view of the above, the words any broadcasting organization desirous of communicating to the public may not be restrictively interpreted to cover only radio and television broadcasting, as the definition of Broadcast read with communication to the public appears to include all kinds of broadcast including internet broadcasting. Thus, the provisions of Section 31-D of the Copyright Act, 1957 are not restricted to radio and television broadcasting only but cover internet broadcasting also.”

The court in this regard held that the said Memorandum lacks a ‘statutory flavour’ and it cannot prevail over an interpretation which is drawn under the Act and the Rules. The court is not bind by such memorandums. The rules which are ultra vires to the Act under which they are issued, are required to be quashed as void.

The court in the case also stated that Wyke allowed its users to download songs and store it which constitutes to “sale” and not to “communication to the public” and hence does not constitute “broadcast” under section 31 D of the Act. If the same is streamed without any option to download, only then it will be referred as broadcast. Therefore, the same cannot be constituted as broadcast.

The Copyright Act aims to provide a balance of interest between the rights of the owners to protect their original works and interest of the public at large to have access to those works.The freedom to contract is the an essential aspect of various Constitutional rights like The Freedom to Carry on Trade or Business (Art 19 (1)(g)) and Right to Property under Article 300 A of the Constitution of India. But it is to be noted that the said rights are not absolute rights and are subject to reasonable restriction.

CONCLUSION:

Since the amendment of this act in the year 2012, the provision of section 31 D is under controversy. There is a need to maintain a balance between the public interest and rights of the copyright owners. The case discussed above clearly shows that section 31 D do not cover internet broadcasting but only television and radio broadcasting. Nowhere in the provision it has been expressly indicated that the Section 31 D is also applicable to internet broadcasting.

This article has been authored by Ms Muskan Kapoor, (intern), student of National Law University, Shimla, under the guidance of our founder Adv Sakshi Shairwal.