Section 31D’s Statutory Licensing Not Applicable to ‘Internet’ Broadcasting

On August 21, 2024, the Department for Promotion of Industry and Internal Trade (DPIIT) officially rescinded Office Memorandum No. 14-35/2015-CRB/LU (IPR-VII), dated September 5, 2016. This action followed the Division Bench of the Bombay High Court’s ruling in the case of Tips Industries Ltd. vs. Wynk Music Ltd. & Anr. (Commercial Appeal Nos. 424 and 425 of 2019).

The 2016 memorandum expanded the scope of Section 31D of the Indian Copyright Act, 1957, extending statutory licenses for the “broadcasting” of literary and musical works and sound recordings to include “internet” transmissions, beyond traditional TV and radio broadcasts. However, this expansion raised concerns regarding its legal validity, as many argued that the DPIIT lacked the constitutional authority to interpret statutory provisions, a role reserved for the courts.

The turning point came in 2019 when, during the interim injunction hearings in the Tips Industries case, the Bombay High Court ruled that Section 31D of the Copyright Act did not apply to internet broadcasting. The court referenced the 227th Report of the Rajya Sabha Parliamentary Standing Committee on the Copyright (Amendment) Bill, 2010, noting that despite the presence of digital technologies like streaming and downloads when the Copyright Act was amended in 2012, the Legislature intentionally did not include “internet broadcasting” in Section 31D.

It is worth noting that while the 161st Report of the Rajya Sabha Parliamentary Standing Committee indicated a legislative intention to include internet and online streaming platforms under Section 31D, and the Draft Copyright (Amendment) Rules, 2019 provided for the substitution of the words “by way of radio broadcast or television broadcast”, with the words “for each mode of broadcast”. This inclusion was ultimately omitted in the final Copyright Rules (Amendment) 2021, likely in consideration of the Tips Industries judgment.

In 2023, the Bombay High Court’s Division Bench reaffirmed this position, clarifying that Section 31D’s statutory licensing applied solely to linear broadcasting mediums, explicitly excluding non-linear, on-demand streaming services. The case concluded with a final settlement order on June 18, 2024, requiring Wynk to pay Tips Industries a full and final settlement of ₹12 crore.