KAL Radio out of tune on copyright

By Manisha Singh and Simran Bhullar, LexOrbis.
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The relatively new provisions of the statutory licensing of copyrights have often caused confusion with respect to their interpretation. The courts have repeatedly faced the dilemma of whether to interpret those provisions narrowly or liberally. Recently, a dispute arose over the applicability of statutory licensing to the songs played on FM radio. Copyright law allows organisations to use copyrighted materials in exchange for the royalty fees, which are paid to the owners of the copyright. However, these particular provisions create obligations on such organisations to obtain licences in a prescribed format to allow them to broadcast the copyrighted material, in addition to paying the royalty fees to the owners.

Manisha-Singh,-Partner,-LexOrbis
Manisha Singh
Partner
LexOrbis

In the case of Sony Music Entertainment India Pvt Ltd v KAL Radio Ltd & Anor, the Bombay High Court heard the application of Sony for interim relief. Sony alleged that KAL was broadcasting its copyrighted songs on its FM radio stations without obtaining a statutory licence. The court granted temporary relief to Sony, which will be in force until the next hearing in the matter. KAL Radio was restrained from broadcasting any copyrighted musical work owned by Sony Music.

Sony Music India is a Japanese record label company with an extensive international presence and is one of the largest music production companies in the Indian market. Apart from music, the company also offers a range of products and services including film and television content. The defendant, KAL Radio, is a subsidiary of Sun TV Network, an Indian company. The company owns FM radio channels that are broadcast in the southern region of India.

Prior to this lawsuit, KAL Radio had obtained a statutory licence to use Sony’s music from Phonographic Performance Limited India, an organisation that provides public performance and broadcast licences for the use of its members’ sound recordings by third parties.

Simran-Bhullar-is-an-associate-at-LexOrbis
Simran Bhullar
Associate
LexOrbis

The cause of action for this suit arose when Sony urged the defendants to comply with the rules for the grant of statutory licences. Through their email correspondence, the defendants requested details of Sony’s copyright owned music and then sent what purported to be the royalty fee of an arbitrary sum by means of a cheque, together with a notice to claim the statutory licence. Sony returned the cheque due to the inaccurate amount for which it was made out. The question of the amount of the royalty fee was previously decided by the Intellectual Property Appellate Board (IPAB), but this body had been dissolved.

The court was of the view that KAL Radio had not complied with the mechanism and procedure as laid down in the Copyright Act, 1957 (act). By that failure, therefore, the defendants did not have a statutory licence. Rule 29 of the Copyright Rules, 2013, sets out the format of the notice, which is to be communicated to the owner of copyrighted materials by the broadcasting organisation. This rule stipulates that the notice must be served on the owner and the Copyright Registrar along with the royalty fee as decided by the IPAB five days before the scheduled use. The notice must contain information such as the name of the programme in which the works are to be included, details of the time slots, the duration and period of the programmes in which the works are to be included, and details of the payment of royalties at the rates fixed by the IPAB. These conditions were not satisfied by the defendant.

Next, the court weighed in on the pros and cons of section 31D of the act, which creates the way in which a statutory licence is granted, and how it deprives a copyright owner of the freedom of choice in licensing. The court stated that this provision is rigidly controlled by the statute and it must receive a strict construction with no room for a liberal interpretation. In these circumstances, the court held that Sony did not deny a licence to KAL Radio; the company merely directed the defendants to comply with the law. The defendants could not therefore use the plaintiff’s copyrighted works.

As the case progresses, it will be interesting to see how the court addresses the calculation of royalty fees, which used to be decided by the IPAB. This decision saw a narrow interpretation of the statute. It remains to be seen whether other courts will follow suit.

Manisha Singh is a partner and Simran Bhullar is an associate at LexOrbis.

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