Sony Music Entertainment India Private Limited             …Applicant/ Plaintiff


KAL Radio Limited & Anr                                                                 …Defendants

Since the 2012 Amendment introduced statutory licensing into the Copyright Act, there has been a lot of discussion about it.

In exchange for royalties to the copyright owner, Section 31-D of the Act grants broadcasting rights to organisations for published literary, musical, or sound works.

The music industry, it appears, has taken a strong stance against the inclusion of this provision. With the Draft Copyright Amendment Rules, 2019 contradicting the conventional interpretation of the provision, it appears unlikely that disputes over this provision will be resolved anytime soon.

The need for legislative intervention arose due to the music industry’s unfair licensing practices, which hampered public access. However, it appears that the proposed statutory solution may have had the opposite effect.

In Sony Music Entertainment India Pvt. Ltd. v. KAL Radio Ltd., the Bombay High Court had to resolve a statutory licensing dispute. Sony India filed a copyright infringement suit against KAL Radio for broadcasting its protected work without complying with Section 31-D of the Act and Rule 29.

The case looked at whether KAL Radio’s notice and royalty payments to Sony India were sufficient. It’s worth noting that the IPAB decision last year upholding IPRS’ rights drew a lot of attention to the issue of determining royalty rates. The Bombay High Court flatly rejected the respondents’ defence in granting an ad-interim injunction to Sony India. It was established that the benefits of Section 31-D could only be obtained after strict adherence to all of the requirements set forth therein and under Rule 29.

The Court went over the requirements under Rule 29 in great detail to show that KAL Radio’s statutory license was insufficient. The relevant rule was the requirement on the part of the licensee to provide details about the protected works to be used, such as the name of the programme, duration, time slot, and so on. The Court also considered accounting the lack of a basis for calculating the royalty rate.

The Court also looked into the purpose of strict adherence to Section 31-D, stating that because statutory licenses allow legislators to override a copyright holder’s licensing autonomy, there must be “rigid control of the statute.” The Court found that I KAL radio’s notice was deficient, (ii) the basis for computation was not disclosed, and (iii) the broadcast was conducted without a valid license. As a result, the Court granted an ad-interim injunction.

Even though the decision appears to be straightforward, it raises some intriguing questions about the overall scheme of legislative intervention in copyright licensing.

To begin with, intellectual property transactions account for a sizable portion of all market interactions. The strictness of the Copyright Act when it comes to statutory licensing could be a hindrance to doing business in the country. The existence of collective management systems, which allow private organisations to spearhead licensing, collection, and distribution of fees and tariff negotiation, raises this possibility.

The implementation of this system would undoubtedly restore copyright holders’ traditional freedom to license at will. As a result, enacting legislation to improve transparency and fairness in voluntary licensing models could have been a viable option.

This approach could have been in line with India’s copyright policy, which aims to strike a balance between the owners’ rights to their original work and the public’s interest. Second, the calculation of royalty rates is an important part of the decision. Radio royalties were recently set at 2% of ad revenue by the IPAB. Those figures, however, were not taken into account in the current decision. As a result of the IPAB’s request for input from stakeholders, a clear figure has yet to be implemented. It’s important to strike a balance between licensors’ rights and radio companies’ survival. It will be interesting to see if this judgment’s ratio is backed up by sister High Courts across the country where similar cases are pending.

Disclaimer: The present article intends to provide general guidance on the subject, and you can also consult us in your specific case.