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Wynk Ltd v. Tips Industries Ltd

CORAM : G.S.Patel & Gauri Godse, JJ 

Decided on: 20th October 2022

Introduction

The Bombay High Court ruled down a major judgement in the case of Wynk vs. Tips, which has enormous consequences for the Indian music business. The court found in favour of Tips Industries Limited, a well-known record label, stating that online music streaming and downloading platforms are not eligible for reduced obligatory licences under Section 31D of the Copyrights Act. This blog will provide a description of this landmark decision and its potential implications for the music streaming business.

Facts of the case

Wynk filed a claim under Section 31D of the Copyright Act of 1957. Wynk acknowledged that the Copyright Board/Intellectual Property Appellate Board (which was still in existence at the time) had not yet established rates. Acknowledging this, Wynk consented to pay the first installment of royalties of Rs.10 lakhs. It appears to have concluded (on its own, by all accounts) that royalty should be paid at 10 paise per stream, totaling approximately Rs.1.41 crores from September 2016 to November 2017. Wynk issued Tips an demand draft for this sum.

Courts analysis and Decision

The Wynk vs. Tips case revolved around accusations of copyright infringement filed by Tips Industries against Wynk Music, a famous music streaming network operated by Bharti Airtel. Tips Industries claimed that Wynk Music was selling copyrighted music without legal licencing and demanded monetary damages for copyright infringement. The court had to decide whether Wynk Music was entitled to the benefits of a discounted compulsory licence under Section 31D.

The Copyright Act’s Section 31D addresses the statutory licencing of audio recordings and musical compositions for broadcasting organisations. It enables broadcasting organisations to make sound recordings and musical works available to the public for a charge without the need for specific licences from copyright holders. This provision aims to make it simpler for broadcasting organisations to use copyrighted music and sound recordings while additionally guaranteeing that copyright holders are fairly compensated.

The following are the key findings and major impact to the industry:

• No Discounted obligatory Licences: The court ruled that online music streaming and downloading sites, such as Wynk Music, are not qualified for discounted obligatory licences under Section 31D of the Copyrights Act. Section 31D allows broadcasters to communicate copyrighted works to the public for a price without obtaining individual licences, but it excludes internet platforms from this benefit.
• The importance of licencing agreements between music streaming companies and copyright owners was emphasised by the court. It was noted that Wynk Music had not obtained the required licences for the music it was offering, and hence could not benefit from Section 31D.
• Copyright Protection for owners: The Bombay High Court’s decision strengthens the rights of copyright holders, such as record companies like Tips Industries. It states that online music platforms must secure adequate licences and are not permitted to use cheap compulsory licences to decrease their licencing expenses.
• Compliance with Licencing Agreements: This judgement emphasises the significance of strict compliance with licencing agreements for music streaming companies. It serves as a reminder that platforms must follow legal standards and get licences in order to prevent claims of copyright infringement.
• The decision may cause changes in the business models of streaming music services in India. Platforms may need to rethink their music acquisition and licencing policies, which could have an influence on their activities and price structures.

 

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Written by: Shivanshi Singh

 

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