IPRMENTLAW WEEKLY HIGHLIGHTS (MAY 6-12)

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BOMBAY HC RULES THAT INTERNET BROADCASTING IS OUTSIDE THE PURVIEW OF SECTION 31D OF THE COPYRIGHT ACT

In the matter of Tips Industries Limited vs Wynk Music Ltd, Single bench of Justice S.J. Kathawalla in the Bombay High Court vide judgement dated April 23, 2019  ruled upon many issues with respect to internet streaming on OTT platforms and its implications on the statutory licensing provided under Section 31D of the Copyright Act.

The dispute arose between the parties when licensing renewal negotiations failed between Tips and Wynk and the latter took refuge of Section 31D of the Copyright Act. Section 31D of the Copyright provides for a statutory licensing scheme, as per which any ‘broadcasting organisation’ desirous of ‘communicating to the public’ any sound recording or its underlying works, may obtain a statutory license to do so, provided they pay the royalty rates to the copyright owners, at rates fixed by the IPAB.

Highlights of the judgement:

  • Commercial rental and sale as provided in Section 14(1)(e) (ii) of the Copyright Act is distinct from the right to communicate the work to the public provided in Section 14(1)(e)(iii) of the Act. The feature of permanent download subscription option offered by the Defendants to their customers to permanently download sound recordings and have a permanent access to the same once paid for, amounts to sale of the sound recordings and thereby violates the exclusive right of the Plaintiff to sell or offer for sale its sound recordings as provided in Section 14(1)(e)(ii) of the Act.
  • Activities of the defendants do not fall within the scope of fair dealing provisions under Section 52(1) (a)(i) of the Copyright Act as their activities cannot be termed as private or personal use or research.
  • The defence under Section 52(1)(b) of the Copyright Act is not available to the defendants since the offline storage either permanent or temporary of electronic copies of the sound recordings on the customer’s devices is the primary selling point / unique object of the Defendants’ business. The electronic storage of Plaintiff’s sound recording on the platforms of the Defendants can neither be termed as ‘transient’ nor ‘incidental’. Further, it is evident that the provisions of this Section 52(1)(b) would generally apply in case of Internet Service Providers and not to the activities of the Defendants.
  • The services rendered by the Defendants through their download and purchase features amount to commercial rental and / or sale of the Plaintiff’s copyrighted sound recordings. Since the right to commercially rent and / or sell a sound recording is a separate and distinct right as against the right to communicate the sound recording to the public, the Defendants cannot exercise a Statutory License under Section 31-D in respect of the download and purchase features provided by them.
  • Had the Legislature intended for a statutory license under the said Section 31-D to encompass sale and / or commercial rental as contemplated under Section 14(1)(e)(ii), the Legislature would have employed express language to that effect in Section 31-D of the Act. The absence of such language or even mention of sale and / or commercial rental in Section 31-D of the Act, makes the intention of the Legislature crystal clear to exclude commercial rental / sale of sound recordings from the purview of Section 31-D. It is therefore evident that Section 31-D contemplates communication to public by way of broadcast of sound recordings only, and not their commercial rental and / or sale.
  • The grant of Statutory License under Section 31-D is only restricted to radio and television broadcasting organisations and the Defendants’ on demand streaming services offered through internet as an “internet broadcasting organisation” do not fall within the purview of Section 31-D of the Act.
  • Appellate Board lacks jurisdiction to fix rate of royalty for internet broadcasting.
  • A joint reading of the Act and Rules elicits the interpretation that prior fixation of the rate of royalty is the fundamental and primary criteria for any statutory license to come into existence in the first place. Without prior fixation of rate of royalty, there is no question of existence of any statutory license. Hence, Statutory License under Section 31-D of the Act does not “automatically kick in” once notice is sent to the owner, without fixation of royalty rates by the Appellate Board.
  • As regards the DIPP Memorandum on interpreting Section 31D to include internet broadcasting, the Court held that executive instructions cannot prevail or override substantive provisions of the statute or Rules that have been framed pursuant to a rule making power granted under the statute.
  • Right to grant compulsory license is within the exclusive jurisdiction of the Copyright Board and not with the court. Therefore, permitting the Defendants to deposit money whilst permitting it to use the Plaintiff’s Repertoire for its commercial activities would amount to a grant of a Compulsory License, for which this Court being a Civil Court doesn’t have the jurisdiction.
  • Considering that the Defendants are knowingly infringing upon the Plaintiff’s copyrights, grant of temporary injunction restraining the Defendants is necessary and is the appropriate remedy.

SUPREME COURT ISSUES NOTICE IN PLEA SEEKING REGULATION OF CONTENT ON ONLINE STREAMING PLATFORMS

The Supreme Court bench presided by CJI Ranjan Gogoi and Sanjiv Khanna has issued notice in a petition calling for regulation of content on online streaming platforms like Netflix, Hotstar and Amazon Prime etc.

The appeal was filed against the decision of Delhi HC, which had dismissed the PIL filed by the NGO Justice for Rights. The NGO claimed that online media streaming platforms show content which is “unregulated and uncertified” for public viewing.

The High Court bench of Chief Justice Rajendra Menon and Justice V K Rao rejected the petition after the Ministry of Information and Broadcasting informed it that online platforms are not required to obtain any licence from the ministry.

AWBI AND PRODUCERS GUILD TO GOVERN THE ANIMAL USE IN CINEMA, TV

The Producers Guild and the Animal Welfare Board of India have come together and decided the governance of the use of animal in Film, TV programs and web shows.

Workshop will be conducted to spread the awareness among animal owners of the country and also the workshop will tell them about the new online system for the purpose to obtain the necessary approvals. The first workshop was conducted on 8th May 2019. The officials of the AWBI will meet the owners and explain the revised process to seek pre-shoot permissions for providing animals for filming across platform.

“We are happy to launch the new online approval system, which we believe will address the industry’s concerns on approval, delays and transparency,” said Neelam Bala, secretary, Animal Welfare Board of India.

“This is a very significant move and we are grateful to the Animal Welfare Board of India for making the entire process of use of animals in films, television programs and web productions simpler, faster and transparent. Many of the producers faced various kinds of bottlenecks and harassment in the past while seeking permissions for filming with animals. We, therefore, believe that the online process launched by the Animal Welfare Board of India will eliminate unnecessary complexities and also the role of middlemen in seeking permissions,” said Kulmeet Makkar, chief executive officer, Producers Guild of India, in a statement.

DELHI HC ISSUES NOTICE TO CENTRE, PRASAR BHARTI, BCCI ON A PIL CHALLENGING SECTION 3(1) OF SPORTS ACT

As per reports, the Delhi High Court has issued notices to the Centre, Prasar Bharti and the Board of Control for Cricket in India (BCCI) following a PIL challenging the provision of the Sports Act that restricts the transmission of the live broadcast of sporting events of national importance to Prasar Bharti’s terrestrial and DTH networks.

The bench of Chief Justice Rajendra Menon and Justice A J Bhambhani, however, declined the request of the petitioner, Vaibhav Jain, for an early hearing and listed the matter on 22nd July, saying there was no urgency.

The PIL has contended that restriction on the airing of sporting events to Prasar Bharati’s terrestrial and DTH networks defeats the purpose of the Sports Act which is to enable everyone to access such sporting events free of cost. Further that section 3(1) of the Act prevents citizens from freely accessing sporting events of national importance on any other digital platform except the terrestrial and DTH networks of DD. Therefore, the petition has sought setting aside of section 3(1) of the Sports Act. The petitioner had sought an early hearing in view of the 2019 Cricket World Cup which will be held in England from 30th May to 14th July.

FILM PRODUCER ‘ANJUM RIZVI’ JAILED FOR FOUR MONTHS OVER CONTEMPT OF COURT

The Bombay HC has sentenced producer Anjum Rizvi to four months in prison for contempt of court for lying about his assets and making false assurance over paying dues to a company YT Capital Pvt. Ltd.

In 2015 YT Capital filed a case seeking repayment of Rs. 2 crore paid to Rizvi in September 2014. The court ordered Rizvi to pay Rs. 2.44 crore to YT capital along with interest, which he failed to pay. When YT Capital approached the court, the court had stayed the release on Rizvi’s film “Maatr”. The court also stopped Rizvi from selling or creating any rights in negative of seven previous films John Day, India Metro, A Flat, Fast Forward, A Wednesday, Ahista Ahista and Charges: A Joint Effort.

The stay was lifted after he paid Rs. 1.5 crores. Rizvi then filed an affidavit in May 2017 stating that he had only Rs. 17,500 in his account. He added that he did not have any immovable property.

 

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