Statutory Licensing Scheme under Copyright Act Made Applicable to Online Broadcasting

In a significant development, the Department of Industrial Policy and Promotion (DIPP) issued an office memorandum (OM) earlier this week, bringing online broadcasting within the purview of the Copyright Act.

To understand the full import of this development, it would be instructive to examine how broadcasting organizations are legally permitted to communicate a work to the public.

Section 31D, added to the Copyright Act by the 2012 Amendment, allows any broadcasting organization that is desirous of communicating a work to the public by a broadcast or a performance, to do so after giving a prior notice of its intention so to do and paying to the copyright owner royalties at the rate fixed by the Copyright Board. While the text of the Section does not confine its scope only to television or radio broadcasting, a closer scrutiny of the Section reveals that the legislature intended to cover only television and radio broadcasting within the ambit of the Section.

This is clear from Section 31D(3) which reads as follows: “The rates of royalty for radio broadcasting shall be different from television broadcasting and the Copyright Board shall fix separate rates for radio broadcasting and television broadcasting.”

As a bare perusal of this sub-section makes clear, the issuance of statutory licenses by the Copyright Board for the online broadcasting of copyrighted works was not within the contemplation of the legislature when this section was statutorily engrafted into the Copyright Act.

Nonetheless, the DIPP, in light of the representations that it has received from various stakeholders since the Section came into force, has decided to widen the scope of the Section to include Internet broadcasts within its ambit. As the OM makes clear, the DIPP is doing so on two main grounds.

First, Section 31D, DIPP contends, refers to the issuance of a statutory license to “Any broadcasting organization desirous of communicating to the public….”. Since the language does not contain any embargos as to which organizations are eligible to obtain such licenses, DIPP believes, there is no statutory impediment to the inclusion of Internet broadcasters within its ambit.

Second, Section 2(ff) defines ‘communication to the public’, in pertinent part, as follows: “making any work or performance available for being seen or heard or otherwise enjoyed by the public directly or by any means of display or diffusion…” Since the Act defines ‘communication to the public’ in such a capacious way, DIPP contends, the amplitude of the language cannot be cut down by interpreting it in a narrow and restricted sense.

It would be interesting to see how music right holders react to this development which significantly impairs their contractual freedom under the guise of capaciously interpreting Section 31D. More specifically, as the Livemint, quoting Saikrishna Rajagopal, notes, this development, by making it mandatory for broadcasters to obtain statutory licenses from right holders through the interposition of the Copyright Board, takes away the right of copyright owners to enter into voluntary licensing arrangements with Internet broadcasters on mutually agreeable terms.

That being said, this development is likely to pave the way for the dissemination of more musical content in cyberspace, inasmuch as right holders will no longer be able to refuse to share their music with Internet broadcasters which are willing to comply with the statutorily prescribed preconditions under Section 31D for broadcasting music on the web. Further, since the Copyright Board has now been vested with the power to determine the terms in accordance with which such licensing arrangements have to be worked out, the copyright owners of the musical creations will be compelled to share the royalties flowing from the use of these works by Internet broadcasters with artists in a fair and transparent fashion.

However, the transformative potential of this OM is unlikely to be realized anytime soon, with the Copyright Board currently being dysfunctional on account of the absence of a chairman or any other members. I am sure this doesn’t come as news to our readers – we have complained multiple times in the past about the dysfunctional character of the Copyright Board on this blog, most notably here and here.

In conclusion, I would only reiterate Prashant’s eloquently voiced question about the Copyright Board: What use is having rights if you do not have an adjudicatory body to enforce those rights?

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3 thoughts on “Statutory Licensing Scheme under Copyright Act Made Applicable to Online Broadcasting”

  1. Leaving aside all other aspects of the question, why is an OM from DIPP being treated as if it were legislation, and how is DIPP in effect arrogating legislative power to itself? That said, i do agree that the legislature clearly did not have the internet in contemplation when it enacted Section 31D.

  2. Dear Jagdish,

    Thank you very much for your thoughtful comment. In my view, the DIPP, as the chief nodal agency responsible for enforcing the Copyright Act, believes that it is empowered to interpret and apply the law in a certain way and all that it is doing here is making public its interpretation of Section 31D. That said, I agree with you that, under the guise of interpreting the law, what the DIPP is essentially doing is modifying the language of the Section in such a way as to bring within its ambit something that was clearly not contemplated by the legislature when amending the Act and statutorily engrafting Section 31D.

    1. Thanks Rahul. Such OMs/Circulars are commonly issued to guide statutory authorities in the interests of consistency, e.g. in the Patent Office, or Income Tax or Customs Officers etc etc, though not Tribunals. There is no statutory authority charged with determining eligibility to enjoy the statutory licence under Section 31D; it is available by operation of law. Disputes as to eligibility for, or the scope, of a statutory licence have to be determined by the Courts. (And anyway the Copyright Board, which merely determines tariffs, is in my opinion a Tribunal.) For these reasons, it is my submission that this OM which is merely addressed to the world at large is wholly inappropriate and beyond the Government’s proper functions; it amounts to legislation by administrative fiat (and is actually being treated in the media as if it had the authority of legislation).

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