IP Connect

India: DIPP makes Statutory Licensing Scheme Applicable to Online Broadcasting

In a recent paradigm shift regarding the status of internet broadcasting companies, the Department of Industrial Policy and Promotion (hereinafter referred to as “DIPP”) vide office memo dated September 5, 2016 gave directions to liberally interpret sections 31D and 2 (ff) of the Copyright Act 1957 (hereinafter referred to as the ‘Act’), so as to include internet broadcasting companies within the ambit of the aforesaid sections.

Section 31D of the Act is one of the most important provisions of the Act, as it deals with compulsory licensing. Even though the terminology used in the aforesaid section reads as “Any broadcasting organization desirous of communicating to the public...”, a close reading of the entirety of the section reveals that this provision (which was introduced by way of the 2012 amendment) is largely directed towards TV and radio broadcasting companies. This is reiterated by a reading of clause 3 of section 31D, which reads as – “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.”

This Office Memo issued by the DIPP is of considerable importance to the online broadcasting community. This is bound to have a significant impact on activities like online live streaming of various media, although the effect of the same is yet to be seen in action. One very clear cut inference that can be drawn from this memo is that now various rights holders of media, like music, might have to approach the Copyright Board for fixation of royalties. This represents a paradigm shift between music right holders and internet broadcasting companies, as it at least theoretically decreases the balance of power between the two sides mentioned herein.