One of India’s leading record labels has won a high court battle over the use of its repertoire online in a case that has potentially big repercussions for Spotify and Warner Music.
Warner Music Group filed an injunction in February to stop Spotify from illegitimately using its publishing rights as part of its long-awaited launch in India. In the filing, Spotify claimed a statutory license typically meant for TV and radio broadcasters when it was unable to agree to licensing terms with the major.
The matter is currently before the Mumbai courts, with judges expected to announce the next stage in proceedings before the end of June.
A recently concluded legal action between Indian record label Tips Industries Limited and Indian music streaming service Wynk shows how the Warner-vs-Spotify struggle could possibly turn out.
Tips’ fallout with Wynk began when the two parties failed to agree to new licensing terms back in 2017. That led Tips to request that Wynk deactivate all its music content -- around 25,000 sound recordings, according to court documents.
In response, Wynk invoked Section 31-D of the Copyright Act, claiming themselves to be a broadcasting organization entitled to a statutory license to broadcast Tips' repertoire. It’s the same defense that Spotify is using in its fight against Warner.
Tips fired back by filing two suits in January 2018 against Wynk for infringing copyright and banning them from the use of their music.
Ruling in favor of the record label, Mumbai High Court judge S.J. Kathawalla -- the same judge overseeing the Warner/Spotify case -- said Wynk was not entitled to claim a statutory broadcast license for the use of Tips’ catalog and that the streaming service was “knowingly infringing upon the Plaintiff’s copyrights.”
As a result, the judge issued an injunction order against Wynk over the use of Tips’ music. He also dismissed Wynk’s argument that the label’s motivation for taking the streaming service to court was to secure better license rates.
In summing up, the judge referred to a rise in digital music services in India “who seek safe harbor” under Section 31-D of the country’s copyright legislation.
“In my view, such use of the copyrighted works... without obtaining a license from the owners of the copyright amounts to usurpation of the exclusive rights of the owners to commercially rent, sell or communicate to the public their sound recordings,” said Kathawalla. “This interpretation does not meet the legislative purpose behind enacting Section 31-D,” he added.
"This is true justice,” said Tips managing director Kumar Taurani in a statement following the court order. “I'm very happy that the Indian judiciary believed in not only Tips but the whole music industry and vindicated what was right.” Taurani went on to call Wynk’s actions “very unfair.”
Wynk, which claims to have 100 million users, did not respond to requests to comment when contacted by Billboard. The company can appeal the court’s ruling, as per video app TikTok’s successful appeal last month against a country-wide ban.
For the time being, however, Indian rights holders and labels are celebrating the court’s decision, with the Indian Music Industry (IMI) trade organization hailing it as a “significant boost” that “paves the way for the future of licensing to digital services.”