Tracing the Spotify litigation Journey in India

By

Sakshi Shairwal

Tejal Tapaswani Nagauri

The Swedish music- streaming application Spotify was launched in India on February 26th, 2019 following a severe legal encounter with Warner Chappel Music Group, a music publisher Warner Chappell signed a new multi-territory licensing deal for its Anglo - American repertoire with Spotify, & one of the territories covered was India. There were no recordings present to the users in the central market. And there was no license to stream works published by WCM, which decided to do direct deals with the music application in India. Here the major problem was the lack of license for a song.

Even though there are statutory licenses that cover both broadcastings of songs and mechanical copying as per the Indian copyright structure, WMC contended that those definitely do not cover on-demand streaming, and the music app was hence deliberately misapprehending the law given under Indian copyright to argue that they did. The Warner Music Group, one of the most renowned record labels in the industry, had approached the High Court of Mumbai to avert Spotify from exploiting its music, arguing in a statement that the streaming service had “fallaciously asserted a statutory license” in India. By the end of February 2019, Spotify announced that it was going to cite the statutory licensing provision stated under section 31D of the Copyright Act, 1957 to televise Warner’s musical work. The court, later on, passed an interim order asking Spotify to deposit 6.5 crores with the High Court and also to not go ahead with its statutory licensing application before the Intellectual Property Appellate Board for 4 weeks from the date of the interim order.

With regards to Spotify being precise or not in obtaining a license under section 31D of Copyright Act, 1957 the section provides right to any broadcasting institute desirous of conversing to the public musical sound, literary that has been published before or which already subsists to broadcast the work subsequent to notice signifying the territorial scope and duration of the broadcast. The institution shall pay royalties to the holder of the copyright at the rate decided by the copyright board. In 2016, the Indian Copyright Office expanded the definition of “broadcast” in section 31D, mentioning that “the provisions of section 31D are not limited to television and radio broadcasting groups only, but also cover internet broadcasting groups as well. In addition, the relevant rules of the Copyright Rules 2013 also lay down the process for attaining a statutory license for TV and radio broadcasters via the internet. The High Court of Bombay in Tips Industries v. Wynk Music had also highlighted the scope of section 31D of the Act and stated that it covers only TV and radio broadcasting. It was also noted in the case that Section 31-D worked as a statutory exception to the rule that a work which is copyrighted is the exclusive property of its holder, and should consequently be interpreted narrowly in “conformity with the particular intention for which it was passed”. Section 31-D, its extent cannot be increased to include internet broadcasting. Rule 29 and 31 of the Copyright Rules also substructured that section 31-D is meant for “television” and “radio” broadcasting.

It should be noted that, not like the Patents Act in India, there is no need for the licensee to initially try to get a voluntary license over the subject matter from the copyright owner.

Within two months of the app launching itself in India, as per a court document, Saregama India Ltd. filed a petition with the High Court of Delhi requesting an injunction against the application to prohibit it from using its songs. The company told the HC that Spotify is involved in the transactions of acquirement of copyrights in the songs and sound recordings and in dramatic and musical content. The company also explained to the court that it has an extensive history in the music industry and Saregama India Ltd, is the greatest existing worldwide owner of both publishing copyrights and sound recording across 14 various languages. In February 2019, subsequent to the launch Spotify had requested Saregama to get a license for streaming their music on its platform. Responding to a copyright violation matter filed by the RP Sanjiv Goenka Group Company, the legal representatives for Spotify informed the Delhi HC saying that the streaming giant had already removed 3000 songs by Saregama and the streaming service would eliminate all songs associated with Saregama from the app within 10 days. In 2020, both the companies following a legal battle successfully secured a deal with the oldest music label subsequent to their legal battle by permitting the music label to bring in their complete catalog- “the largest library of films and non-film songs in over 25 languages” varying from old classics to millennial music- to listeners in India.

A study has been carried out for Spotify in association with their online copyright violation issues in the music production and they have been flooded by all kinds of lawsuits internationally as well as in India due to their neglect to compensate the artists in a precise way. Songwriters are given mechanical royalty by Spotify for the implementation of their work- more accurately the imitation and allocation of their work; the Swedish company has been blamed for administering songs without accurate licensing and compensation. In 2018, they were sued for $1.6 billion by Wixen Music Publishing, stating that the streaming company had been wrongly making use of 10,000 of their songs. In 2017, Spotify paid a sum of $43.5 million to maneuver its non-paid mechanical royalties in a settlement initiated to them by David and Melissa. To deal with various copyright issues, Spotify associated itself with blockchain startups in an attempt to locate proper identity right proprietors. In addition, recently the Music Modernization Act was signed into law and one of the provisions under it was to generate the Mechanical Licensing Collective, a centralized database of right owners maintained by publishers which aims exclusively to deal statutory mechanical licenses. A strategic balance needs to be accomplished between public interest and the interest of the copyright holders. The very objective of providing copyright protection must not be conquered and statutory licenses must be construed in a constricted form and their extent has to be restricted to endorse creativity and motivate artists and to not commercially exploit the economic condition of the country.

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