Web Analytics Made Easy - StatCounter
Home

Internet Broadcasting Organization and Statutory License under Section 31D of Copyright Act

April 2, 2020

By Vikrant Rana and Meril Mathew Joy

For past few months, one of the major debates and conflicts under the copyright laws of India, is with respect to the question “Whether online-internet platforms are covered under the scope of Section 31D of the Copyright Act 1957 ?.” This issue which appears to have a very simple answer, is however very complicated if Section 31D is carefully analyzed.

The Regulatory Framework

Under Section 31D of the Copyright Act, 1957 (hereinafter referred to as the “Act”) any broadcasting association desirous to communicate a work to the public by a broadcast or a performance, can acquire a statutory license to do so by giving a prior notice and paying royalties to the copyright owner at the rate fixed by the Intellectual Property Appellate Board (IPAB) .

Further, the Copyright Rules (Rule 29-31) clarifies the methodology by which one can get the statutory license. At present, the Act just covers radio broadcasting and television broadcasting.

The Section 31D Conundrum

Initially TV and Radio were the only broadcasting organizations which provided services of communicating work to the public however with advancement of technology public started relying on online internet platforms to obtain services of music and movies. With this paradigm shift witnessed in the mode of broadcasting, the online internet platform felt the need to make a representation before the Government of India, seeking a clarification if the online internet platforms are covered under term “broadcasting organizations” as mentioned under Section 31D of the Copyright Act 1957?

The Ministry of Commerce and Industry Government of India, vide an office Memorandum dated September 05, 2016 provided a clarification confirming that online platforms are covered under the term “broadcasting organizations”. However, in a subsequent development the verdict of Hon’ble Bombay High Court in the case of Tips Industries Ltd. vs. Wynk Music Ltd. & Anr.,[1] changed the entire perspective of the intrinsic issue by holding that the term “Any broadcasting organisation” does not include “internet broadcasting organization” under Section 31D of the Copyright Act, 1957; and the Office Memorandum issued lack ‘statutory flavour’ and therefore has no bearing on the issue.

The aforesaid dichotomy between the Ministry’s memorandum and the High Court’s judgment has thus opened the Pandora’s box and the issue whether online internet platforms are covered under the term “broadcasting organizations” as mentioned under Section 31D of the Copyright Act 1957, is still obscure and uncertain. The impugned judgment passed by the Single Judge of the Bombay High Court in Tips case is now under appeal before a Division Bench of the Bombay High Court. Even though the judgment is thorough and detailed, but it appears that the decision by the Hon’ble Bombay High Court was too harsh on the online platforms.

Do online platforms fall within the purview of broadcasting organization: An analysis

Communicating Work To Public

The online internet platform perfectly fits within the ambit of broadcasting organization as it is involved in the business of communicating the work to public. The service of making the work available to the public through various portals including but not limited to YouTube, Netflix, Gaana, Jio Spotify, Wynk etc., is in the nature of communicating the work to public. However, at the very instance, when these online platforms allow the user/public to purchase/ download the content provided, then the nature of service extends beyond the service of communication of work to public. It is therefore, important to understand that the essence of Section 31D of the Copyright Act 1957 is that it offers statutory protection only to the broadcasting organisation which offers service only to the extent of communicating work 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. Therefore, when the internet platforms offer services to sell/ rent the content, the nature of service provided by them extends beyond the scope of “communicating the work to public. Let us further look into the definition of the term “communication to the public” as provided under Section 2(ff) of the Copyright Act 1957:

“communication to the public” means making any work or performance available for being seen or heard or otherwise enjoyed by the public directly or by any means of display or diffusion other than by issuing physical copies of it, whether simultaneously or at places and times chosen individually, regardless of whether any member of the public actually sees, hears or otherwise enjoys the work or performance so made available.

Explanation.— For the purposes of this clause, communication through satellite or cable or any other means of simultaneous communication to more than one household or place of residence including residential rooms of any hotel or hostel shall be deemed to be communication to the public;

The definition helps us to understand that internet platforms offer the same services as covered under the above definition however, the only restriction will apply once the internet platform also provide services beyond making content seen or heard or otherwise enjoyed by public. At the outset, the very nature of services offered by internet platform, is well within the scope of Section 31D of the Copyright Act 1957 and further when internet platform offers services beyond the scope of communicating the work, only then at that point can internet platform be said to extend services beyond the scope of Section 31D.

Intention of the Legislature

The Hon’ble Bombay High Court held that “The internet broadcasting organizations cannot enjoy the benefits of a Statutory License under Section 31-D. The intention of the Legislature while enacting the amending legislation viz. the Copyright (Amendment) Act, 2012, was to restrict the grant of Statutory License under Section 31-D to radio and television broadcasting organisation. The facts of the matter do not occasion the application of the doctrine of contemporaneo expositio.”

In order to come to an understanding as to the legislative intent of the Section 31D, let us look in to the following reports:

  • The 227th Report of the Rajya Sabha Parliamentary Standing Committee on the Copyright (Amendment) Bill, 2010,[2] while defining the Clause 2: Definition of the term “Communication to the Public” as “making any work available for being seen or heard or otherwise enjoyed by the public directly or by any means of display or diffusion other than by issuing copies of such work regardless of whether any member of the public actually sees, hears or otherwise enjoys the work so made available.”; here attention was drawn to few adverse impact on music industry and radio operators, wherein one of the impact was read as “no rationale in exclusion of only physical copies from the purview of ‘communication to the public’ in an age where commercialization and sale of music is taking place extensively through the medium of internet and transfer of files through computers/blue tooth;[3]. To this the parliamentary committee noted that the reservations of the stakeholders are unfounded. Issuing physical copies or legitimate digital downloading music or video recording by payment cannot be considered a communication to the public. Further, while discussing the provision of Statutory License, the committee focused on FM operators only.
  • Lok Sabha records of Fifteenth Series[4], wherein the Hon’ble Minister while discussing the amendment to copyright, confined his argument to FM and Television only. While discussing the provision of Statutory Licensing, the following recommendation was made “There was a demand that broadcasters together should be subjected to a statutory licence. In other words, there will be no negotiation. The Copyright Board, as a matter of law, under the statute will actually decide on the quantum of money that will be required to be paid by the TV companies to the music companies who have bought over those rights. Therefore, there was some debate as to whether it should be limited only to radio, and TV should be kept out of it. But ultimately, we decided that TV should be included in it. So, broadcasters, in general, are now subjected to statutory rights. Therefore, the Copyright Board will alone have the jurisdiction to decide the quantum of money that will have to be paid by broadcasters to owners of music which of course, in turn, will include both the producers and the authors in different forms and they will share the profit. That is reflected in Section 31 (b) of the amendment.[5] Further, while addressing digital environment, the main focus was shifted to Performers right, which was included vide the Copyright (Amendment) Act, 2012.

In light of the above, an alternative interpretation as against the one made by the Hon’ble Bombay High Court can be stated. It may not be wrong to state that in view of the need of the hour at the time of proposing the 2012 Copyright Amendment, the Parliament only discussed the issue pertaining to FM and Television, as they were the dominant modes available for  “communicating work to public” at the relevant time. It may not be wrong to assume here that the Parliament (Rajya Sabha and Lok Sabha) was aware of the technological advancement and also the reach of online streaming / internet broadcasting, therefore the legislature did not specifically exclude the mode of online streaming from the purview of the Statutory Licensing regime. If the legislative intent was to exclude the online internet platforms then the same would have been expressly mentioned or discussed on the floor of the Houses.

Further, the objective of Section 31D, as clear from the text, is with respect to “communicating to the public” whereas the observation of Parliamentary Standing Committee states “Issuing physical copies or legitimate digital downloading music or video recording by payment cannot be considered a communication to the public”. Through this it may also be deduced that any online streaming platform which is only intended to make any work available for being seen or heard or otherwise enjoyed by the public directly or by any means of display or diffusion being devoid of the character enunciated in the observation of Parliamentary Standing Committee, such internet organizations providing streaming services may be considered as protected under Section 31D.

The swift technological advancement has phased out the traditional methods, such as FM and Television, for accessing information especially sound recordings and video streaming. The advent of online streaming services has rendered the existing traditional methods obsolete and antiquated, as most of the users have switched to modern platforms for their demands. In such a situation, where the majority of the public have transformed their mode of access of recordings (music, sound recording and other information) through online platforms, especially taking over the facilities provided by FMs and Televisions, it therefore appears to be fair to reconsider that the online streaming / internet broadcasting providing limited streaming, such as without download / purchase option and also limited to on demand limited access, be considered covered under “broadcasting organizations” for the purpose of Section 31D of Copyright Act 1957.

Broadcasting Organisation

It is relevant to note that the term “broadcasting organization” is not defined under the Copyright Act 1957, however, the term “broadcast” as defined means communication to the public—

  • by any means of wireless diffusion, whether in any one or more of the forms of signs, sounds or visual images; or
  • by wire

Therefore, it is accurate to observe that any organization providing services of broadcast as defined above will be considered as broadcasting organization. Since internet platforms broadcasting information, properly fits in the definition of broadcasting organizations, therefore it can be established that internet broadcasters / online platforms are covered under the definition of broadcasting organizations.

While addressing the issue of Section 31D, the Hon’ble Bombay High Court made the following observation “While Section 31-D(1) seems to be conducive to the Defendants’ case, suggesting that a Statutory License is available to any broadcasting organisation, it stipulates that such license is conditional upon its conformity with the remaining provisions of the Section. Section 31-D(1) cannot be read in isolation.”. While making this observation, the High Court delved into analysing all the provisions of Section 31D and Rule 29 and finally concluded that the intention of legislature was restricted to FM and televisions for the purpose of Section 31D. However, it is still a point of concern that the use of words “Any broadcasting organisation” in Section 31D(1), words “broadcasting organisation” in Section 31D(2), Section 31D(4), Section 31D(5) and Section 31D(7), shows the intention of the legislature to keep the scope of broadcasting organization open for further interpretation and not limited to FM and Television only. It is further pertinent to note that the legislature has used the terms “radio broadcasting” and “television broadcasting”, in Section 31D(3) where the provision is specific to the said traditional broadcasting, therefore if the legislative intent was to restrict the broadcasting organization to Radio and Television only, the statutory provision would have only included the terms “Radio” and “Television”, however, the term used is “broadcasting organizations” which means that the said term is open to interpretation and also available to organizations who can offer the services covered under the ambit of communication to Public.

Further, it can also contended that the observation of the Hon’ble Bombay High Court “internet broadcasting’ is not covered within the ambit of Section 31-D of the Act”, is unfounded as the term broadcasting organization includes internet broadcasters, and therefore, interpretation of the term under Section 31D should also include internet broadcasters/online internet platforms within it which are offering services of communication of work to public.

Amendment to the Copyright Rules

Another statutory hiccup that is encountered while arguing the issue of internet broadcasting being covered under Section 31D, is that even though the Copyright Act 1957 provides for a limited scope of interpretation to include “any broadcasting organisation”, the corresponding rules under the Copyright Rules, 2013 have been formulated keeping in mind Radio and TV broadcasting only as the modes of communicating work to public. Since the provisions of the Act and Rules, have to be read together for harmonious interpretation and applicability of the provision, therefore when Section 31D of the Copyright Act 1957 is read alongwith Rules 29 to 31 of the Copyright Rules 2013, then it becomes a bit challenging to include online internet platform under the ambit of broadcasting organisation.

In order to overcome the above discrepancy and considering the sensational changes achieved in content sharing and broadcasting through technological advancements in the digital era, the Department for Promotion of Industry and Internal Trade, Government of India (DPIIT) has proposed to Draft Copyright (Amendment) Rules, 2019,[6] which was open for public comment and now pending stakeholders meeting. The Draft Rules are the most recent in a long series of regulatory moves made by the government to address the passage of internet streaming services into the Indian market. One of the major changes that the amendment proposes is Copyright framework to replace “radio broadcast” and “television broadcast” with “each mode of broadcast”. 

In a significant amendment to the Rules, all modes of broadcasting are proposed to be covered under the ambit of statutory licenses, which thereby include internet and over-the top (OTT) media services, for example, Netflix, Hotstar, Amazon Prime, Gaana, Saavn, and the most recent contestant, Spotify. The intention of the legislature is to address the yawning gap in the Statutes experienced on account of technological advancement and incorporate or amend rules so that they appropriately address the dynamic nature of societal needs. The intention of Government, willing to take steps to make the Copyright law at par with the need / benefit of the society as per the present societal norms and practice, i.e. allowing online platforms/ internet broadcasting to take benefit of Statutory Licensing and providing services to the public, is good enough action to show that the Government believes in the role and service offered by online platforms/ internet broadcasting and is willing to provide them with the necessary assistance to continue with their services.

Conclusion

In light of the above read, it is safe to conclude that a simple interpretation of the term ‘Broadcasting Organisation’, may not be limited to just FM Radio and Television and would be able to include internet / online broadcasting platforms too within its purview. The blanket interpretation of dismissing online streaming / broadcasting platforms outside the purview of Section 31D limits the whole genera to a restricted interpretation done on account of a very specific segment of what online streaming / broadcasting platforms truly are.

The above review of the parameters specific to Section 31D shows that many services offered by online / internet streaming and broadcasting platforms can very well conform to the said parameters. The online platform in its basic service has the essence of service with respect to communicating the work to public. It is therefore, just and fair, to actually develop the guidelines under which an online platform/ internet broadcasting can be said to be allowed to take benefits from the provisions of Section 31D of the Copyright Act 1957. The guidelines will not only help the online internet platforms to serve the public better but will also give the public the opportunity to access the works easily and with convenience.

[1] COMMERCIAL SUIT IP (L) NO. 114 OF 2018 and COMMERCIAL SUIT IP (L) NO. 113 OF 2018.

[2] Dated November 23, 2010 available at https://www.prsindia.org/uploads/media/Copyright%20Act/SCR%20Copyright%20Bill%202010.pdf

[3]Available at:

http://164.100.47.5/newcommittee/reports/EnglishCommittees/Committee%20on%20HRD/227.pdf

[4] Vol. XXVI, Tenth Session, 2012/1934 (Saka) No. 34, Tuesday, May 22, 2012/Jyaistha 1, 1934 (Saka), dated May 22, 2012

[5] Available at: https://eparlib.nic.in/bitstream/123456789/758614/1/z2205_F_X.pdf

[6] G.S.R. 393(E). dated May 30, 2019 (F. No. P-24029/2/2019-IPR-VII) available at https://dipp.gov.in/sites/default/files/Draft_Copyright_Amendment_Rules_2019.pdf

Related Posts

Is Internet Broadcasting Organization covered under Section 31D of Copyright Act?

India: Scope of S.31D of the Copyright Act

For more information please contact us at : info@ssrana.com