Introduction
Over the years, radio broadcasters and copyright owners i.e., music producers have been in a tussle before various courts and tribunals on various issues pertaining to music licensing. In the past year, radio broadcasters and music producers have been at crossroads with each other regarding compliance with certain rules prescribed for obtaining a statutory licence. In this regard, a radio broadcaster i.e., Next Radio Limited approached the Madras High Court challenging the constitutionality of Rule 29(4) of the Copyright Rules, 2013 (‘Copyright Rules’). The said rule specifically pertains to the implementation of Section 31D of the Copyright Act, 1957 (‘Copyright Act’) which states that the broadcaster is required to send a prior notice of intention to the copyright owner for obtaining a statutory licence for broadcast of copyright protected musical works.
The Rule 29(1) of the Copyright Rules further provides an exception whereby the broadcaster has a window of twenty-four hours after the broadcast for sending the said notice in unforeseen circumstances. The radio broadcaster also contested that the time frame given by Rule 29(1) of the Copyright Rules is onerous, particularly for ‘on-demand’ music programmes which are unplanned. In an interim order[1] dated 2 August 2021 the Division Bench of the Madras High Court relaxed the said time period to fifteen days from the prescribed twenty-four hours. Further, this interim order was confined to the instant radio broadcaster and the specific copyright works intended to be exploited. On appeal the Supreme Court on 27 September 2021[2] set aside the said interim order passed by the Madras High Court on the basis that that timeline extension by the Madras High Court was an exercise of judicial re-drafting which was unwarranted, at the interlocutory stage. Soon after, the Delhi High Court was also faced with adjudicating various copyright infringement suits wherein the copyright owners alleged non-compliance to Rule 29(4)(i),(j) and (k) by the radio broadcasters while applying for the statutory licence and thus sought injunction against the radio broadcasters seeking to restrain them from broadcasting/communicating to the public and otherwise exploiting the copyright works through the FM radio channels/stations and infringing the copyright works. The Delhi High Court in its interim order[3] dated 9 November 2021 followed a literal interpretation of Rule 29 in the light of the Supreme Court ruling and held that it was necessary for the radio broadcasters to send the prior notice of intent to the copyright owner within twenty-four hours of the broadcast along with fulfilment of other conditions given under various sub-clauses of Rule 29. Accordingly, the Delhi High Court held that a prima facie case of infringement is made out and accordingly temporarily restrained the radio broadcaster from broadcasting/communicating to the public and/or otherwise exploiting the copyright works through the FM radio channels/stations without complying with Rule 29, especially, with Rule 29(4)(i)(j) and (k) of the Copyright Rules.
Recently, the Division Bench of the Madras High Court delivered the final judgement[4] dated 20 April 2022 in the Next Radio case wherein the Court upheld the constitutionality of the Rule 29(4). The present article examines the final judgment of the Madras High Court and traces its implications for statutory licensing regime in India.
Statutory licence for broadcast of musical works and sound recordings
Broadly the Copyright Act provides for two kinds of licensing arrangements: (i) voluntary licence and (ii) involuntary licence. While the voluntary licence is a mutually agreed arrangement between the parties, the involuntary licence is sanctioned to a licensee in certain specific situations where the statute does not envisage the licensee to be engaged in a tedious negotiation with the licensor. The Copyright Act further classifies involuntary licences into compulsory licence and statutory licence. A compulsory licence is issued by the Commercial Court when it is satisfied that the copyright owner is withholding communication of the copyrighted work from the public. Whereas the statutory licence is obtained by the licensee based on the fulfilment of certain conditions laid down under Section 31D of the Copyright Act.
Section 31D of the Copyright Act specifically deals with statutory licence for broadcasting of literary and musical works and sound recordings. The said provision provides five mandatory requirements to be fulfilled by the broadcaster before communicating the copyright protected work to the public, by way of broadcasting. These requirements include: i) A prior notice to be sent by the broadcaster to the copyright owner stating its intention to broadcast the copyright protected work, mentioning the duration and territorial coverage of the broadcast; ii) A royalty payment to be paid by the broadcaster to the copyright owner as decided by the Commercial Court; iii) The names of the authors and the principal performers of the work must be communicated to the public with the broadcast; iv) No fresh alteration to any literary or musical work to be done, which is not technical in nature and necessary for purpose of broadcasting, other than shortening the work for convenience of broadcast; and v) The broadcaster shall maintain all such records, books of account, and render to the Copyright Owner such reports and accounts for inspection. Further, Section 78 of the Copyright Act provides for rule-making power of the Central Government whereby clause (1) of Section 78, provides for a general rule making power of the Central Government and clause (2) of Section 78, provides for specific rule making power of the Central Government. Clause (2)(c) of Section 78 further includes a sub-clause (CD) which deals with the Central Government’s power to make rules for implementing statutory licensing under Section 31D of the Copyright Act. The said sub-clause (CD) specifies that the rules may be made only to prescribe the ‘manner’ in which prior notice may be given. Hence, Section 31D and Section 78 together act as enabling provisions for implementation of Rule 29 of the Copyright Rules.
The radio broadcaster’s grievance
In this case, the Radio Broadcaster argued that the scope of Section 31D of the Copyright Act is limited to intimating the copyright owners about their intention to broadcast the copyright protected work, along with the duration and territorial coverage of the broadcast. Whereas the Rule 29(4) of the Copyright Rules goes beyond the scope of Section 31D of the Copyright Act, as it puts an onus on the broadcasters to provide additional details of the work. The radio broadcaster specifically resisted the strict application of Rule 29(4)(c), (d), (e), (f) and (j) which requires the Broadcaster to mention in the prior notice the work proposed to be communicated by broadcasting; the details of year of publication of such works; name, address and nationality of the owner of the copyright in such works; names of authors and principal performers of such works, and details of time slots, duration and period of the programme in which such works are included. The radio broadcaster further expressed difficulty in supplying specific time details in the prior notice for songs played/performed ‘on-demand of the viewer’ within period of twenty-four hours of the broadcast. The radio broadcaster sought relaxation in the time period of twenty-four hours for sending the notice of intention to the copyright owners subsequent to the broadcast. The radio broadcaster placed reliance on existing voluntary licence arrangements whereby as a matter of practice broadcasting details were being shared with the copyright owners on monthly basis. Further, it was argued by the radio broadcaster that the rule making power of the Central Government is limited to the ‘manner’ in which the notice is to be sent and does not extend to prescribe the ‘conditions’ such as specific time details.
Analysis by the Court
The Court rejected the challenge raised by the Radio Broadcaster with regards to conflict between the Copyright Rules and the Copyright Act noting that the scheme of the statutory licence envisioned by the Copyright Act and the Copyright Rules aims to strike a balance between rights of copyright owners and the broadcasters. The Court observed that Section 31D requires mandatory requirement of prior notice to be sent to the copyright owners and the Copyright Rules prescribe the manner in which the notice is to be given. With regards to Rule 29(4) of the Copyright Rules, the Court noted that the said rule requires certain details to be furnished in the notice. For example, sub-clause (c) and (d) of the said rules require identification of the work and year of publication of the work which are merely basic information and cannot be said to be contrary to Section 31D. On the same lines, sub-clause (e) and (f) of Rule 29 of the Copyright Rules relate to details of the copyright owner and authors respectively which are again consequential information to governing provision and thus it was held that there is no conflict between the Rule 29(4) of the Copyright Rules and Section 31D of the Copyright Act. Further, with respect to Rule 29(4)(j) of the Copyright Rules, the Court noted that the said provision requires details of the time slots, duration and period of the propagation which are capable of being shared for pre-planned programmes. However, for unplanned programmes, the Broadcasters may rely upon Rule 29(1) which provides a compliance window of twenty-four hours after the broadcast. The Division Bench held that clause (2) of Section 78 which provides specific rule making power for Section 31D does not limit the general rule making power of the Central Government under clause (1) of the Section 78. Contrary to the arguments of the radio broadcaster, it was held by the Court that the Central Government can make any rule for the purposes of the Act and the said rule cannot be held as ultra vires when the rule making power was exercised as per the bounds of Section 78. Lastly, the Court observed that the radio broadcaster made no case for violation of any of their fundamental rights due to the Rule 29(4) of the Copyright Rules, rather the compliance of the said rules ensures that they could broadcast the copyrighted works.
Implications for statutory licensing
The provision of statutory licence under the Copyright Act has opened an avenue for the broadcasters desirous to broadcast copyright protected works without being compelled to enter into tedious negotiations with the copyright owners. The statutory licence ensures a win-win situation for the copyright owners and the broadcasters whereby the broadcasters can secure a licence by fulfilling five-fold conditions stipulated under the Section 31D of the Copyright Act. Thus, the strict compliance to Rule 29 of the Copyright Rules as prescribed by the Delhi High Court in Super Cassettes case[5], has now been reemphasised by the Madras High Court in Next Radio case[6]. The judgement of the Madras High Court imparts clarity on implementation of the statutory licences in India.
[The authors are Associate and Senior Associate, respectively, in IPR practice team at Lakshmikumaran & Sridharan Attorneys, New Delhi]
[1] Next Radio Limited v. Union of India - 2021 SCC OnLine Mad 5607
[2] Saregama India Limited v. Next Radio Limited and Others - (2022) 1 SCC 701.
[3] Super Cassettes Industries Pvt. Ltd. v. Music Broadcast Limited & Ors. - 2021 SCC OnLine Del 4900.
[4] Next Radio Limited v. Union of India Through the Secretary Department for Promotion of Industry and Internal Trade & Ors. - 2022 SCC OnLine Mad 1758.
[5] Supra 3.
[6] Supra 4.
