The longstanding dispute between broadcasters and the authors of underlying works has reached a fair and equitable conclusion, with the latter celebrating the recognition of their rights. In this article, we look at the intricacies involved in the case and analyse the reasoning provided by the court in arriving at its decision.

Case Overview

The Indian Performing Rights Society (IPRS), a copyright society, and Music Broadcast Private Limited, a company which owns and operates the radio station “Radio City”, entered into a licence agreement in the year 2001 to employ IPRS’s library of literary and musical works for FM radio broadcast. Akin to this, Rajasthan Patrika Pvt. Ltd., which operates the radio station “Radio Tadka”, finalised a radio broadcasting deal with the IPRS in 2006. Subsequently, the Copyright Board of India set a mandatory licence price for radio broadcasting under Section 31(1)(b) of the Act. IPAB set the royalties rate while making decisions concerning applications submitted under Section 31D in 2010. The defendant companies and the IPRS were earlier involved in a legal battle over the rights of authors of original works in case the public becomes aware of sound recordings that consist of these original works. In Music Broadcast Pvt. Ltd. v. IPRS[2], it was held that authors of the original works or the underlying literary and musical works that were included in sound recordings did not have the authority to impede the rights of the owners of those sound recordings to share them with the public through radio broadcast, etc.

The issues raised in the matter include: –

• Whether the defendant companies are required to provide royalties to IPRS for transmitting musical works to the general public through their FM radio broadcast channels.
• Whether the modifications adopted in the Copyright Act, which took effect on June 21, 2012, have any bearing on the rights of the creators of original works when those original works are included in sound recordings that are shared with the public.

In Entertainment Network India Ltd. v. Phonographic Performance Limited India and Anr[3], and related matters, the Delhi High Court clarified that the IPAB order remains in effect even while an appeal is pending. The court held that no compensation for the underlying works had been provided since the IPAB order was issued and stated that the respondent is entitled to use any available remedies if the IPAB order is not followed. Afterwards, on October 6, 2021, the court released a notice in the public domain seeking feedback from parties interested in fixing royalty rates concerning the underlying works. In a request for an interim injunction, IPRS alleged that the defendants were broadcasting songs from its catalogue without permission. According to IPRS, the Copyright Act underwent significant revisions addressing the rights of the authors of underlying works after 2012.

Contentions of Parties

The IPRS made thorough arguments to convince the court that the 2012 amendment to the Copyright Act, which took effect on June 21, 2012, had fundamentally altered the Act’s structure and supported the claims made in the lawsuits and the requests for temporary relief. According to the argument, the IPRS, which is seeking interim relief in the current applications, cannot be hindered by the legal position established by the Supreme Court in its 1977 decision in the case of IPRS vs. Eastern Indian Motion Pictures Association and others[4], which the Supreme Court and several High Courts later upheld.

The IPRS drew the Court’s attention to the amendments to Sections 17, 18 and 19 of the Copyright Act. Furthermore, the revisions carried a by-product of overturning the legal precedent established by the unaltered Copyright Act, as determined by the Supreme Court in the case of IPRS vs. Eastern Indian Motion Pictures Association and others and subsequent decisions and that the provisions of the unamended Copyright Act had been incorrectly perused by the Supreme Court and erred against the rights of the authors of such underlying works.

On the other hand, the defendant companies asserted that while the Copyright Act has clearly undergone changes since 2012, most of the changes are merely clarifications. It was argued that even if it were true that the revisions were implemented to extend the rights of authors of original works, the objective that the IPRS professes to support had not been achieved. Moreover, the defendants contended that since the 2012 amendment was only clarifying in nature and that since Sections 13 and 14 had not been changed, the adjustment to the other provisions could not have conferred any new substantive rights.

The Verdict

Accepting the contentions of the IPRS, the court stated that the 2012 amendment does “have the effect of creating a substantive right in favour of authors of underlying literary and musical works”. It was pointed out that though Sections 13 and 14 weren’t amended when they were read in conjunction with the amended Sections 17, 18 and 19, it can be seen that there is a “change in position of law brought about in favour of such authors of works”.

In its joint order, the court also concurred with IPRS’s claims that, despite payments made by the broadcasters to the owners of the sound recordings, the broadcast of music by FM radio broadcasters necessitated the payment of royalties in respect of the utilisation of literary and musical works underpinning the sound recordings. In response to the defendants’ claim that sharing the sound recording with the public violates their exclusive right under Section 14(e)(iii) and cannot be interpreted as using the underlying works; the court ruled that sharing the sound recording with the public uses the underlying works because they are integral to the sound recording.

The court held that even though Section 14(e)(iii) does confer an exclusive right upon the defendants to communicate to the public, such exclusive rights are subject to the provisions of the Copyright Act, and on a joint reading of Sections 13(1)(a), Section 13(4), the proviso to Sections 17, third and fourth proviso to Sections 18, and Sections 19(9) and (10) it was interpreted that the exclusive right to communicate sound recordings to the public is dependent on the author’s right to collect royalties.

The court declined to agree that the right to earn royalties would be eliminated because the underlying works are included in the sound recordings because such an interpretation would eliminate the entitlement provided to the authors of the underlying work.

The Bombay High Court concluded that the amendments made to the Copyright Act, 1957 in 2012, which created a substantive right in favour of authors of the underlying literary and musical work, fundamentally altered the legal framework concerning ownership of authors and composers who create lyrics and musical compositions. The court ruled that IPRS is entitled to royalties for the use of literary and musical works included in sound recordings or motion pictures. The court has categorically determined that each time a sound recording is shared with the public through radio stations, it constitutes the utilisation of the underlying literary and musical works for which the authors are entitled to royalties. As a result, the authors of these literary and musical works are qualified to request royalties on each occasion that these sound recordings are shared with the public through radio stations.

Therefore, when a synchronised product (cinematographic film or sound recording) is made publicly available, the creators of those works are entitled to royalties, except for situations when a cinematograph film is shown in a theatre. The defendants have been granted six weeks to comply with the court’s directive and pay the royalties to IPRS in accordance with the order dated December 31, 2020, passed by the former Intellectual Property Appellate Board or else temporary injunctions prohibiting the broadcast of music would take effect.

Outcome

In the Indian copyright system, the problem of royalties faced by creators of the underlying work has been extensively discussed and is the subject of several litigations. There have, however, been undercurrents of a modern interpretation within these orders that held otherwise, disregarding the unanimous nature of these opinions of the law prior to the 2012 revision. The order, as originally intended by the amendment, expressly recognises the rights of the authors of the underlying works. The order underlines a huge incentive to the authors and has received a warm reception from the community. However, the order’s practical ramifications are yet to be determined. The order may be overturned if the appellate authority believes that the IPAB exceeded its power by setting the royalty rates for the underlying work while it is currently pending review.