Bombay High Court Judgement: on Tips Industries vs. Wynk Label

This case is based on section 31D of Copyright Act, 1957 provides for a statutory licensing scheme, as per which any ‘broadcasting organisation’ desirous of ‘communicating to the public’ any sound recording, may obtain a statutory license to do so, provided they pay the royalty rates to the copyright owners, at rates fixed by the Intellectual Property Law Board.

The plaintiff is Tips Industries Ltd., a music label in India, which controls copyright over a significant repository of popular music. In 2016, this repository was licensed to the defendant, Wynk Music Ltd., an online music streaming service launched by Airtel. After expiry of the license in 2017, both parties attempted to renegotiate licensing terms for allowing Wynk offer downloading and streaming of musical works owned by Tips. And further the defendant didn’t stay on their words and result the both parties came to the Hon’ble Court.

Kumar Taurani, MD, Tips Industries Ltd, said in our case in particular; Wynk was very unfair. Wynk, as an internet music streaming service, has valuations in millions. Despite that, they still refuse to pay to music labels a few crores for the music content, which is the heart of Wynk’s OTT streaming service.

Further, the Court held that statutory scheme under Section 31D, including Rules 29, 30 and 31 of the Copyright Rules, clearly indicate that the prior fixation of royalty rates by the IPAB was essential for the invocation of a statutory license under Section 31D.

The defendant’s also attempted to argue that Rules 29, 30 and 31 were ultra vires the section as they provided for prior fixation of the royalty rate, but this contention was also rightly rejected by Justice Kathawalla, who noted that there is no inconsistency between the rules and the statute.

Finally, the Court held that the plaintiff was entitled to an interim injunction, considering that they had made a prima facie case, would suffer irreparable injury in the form of revenue lost, and that the balance of convenience was in the plaintiff’s favour.

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