Thursday, 10 January 2019

India: IP Licensing Trends in India: Special Reference to Indian Music Industry and Sushila V. Hungama Digital Entertainment Decision

In the span of the last 50 years, the music industry has become largely commercialized, with entertainment companies spearheading the transition. With the expansion of the industry to the internet and the so called ‘on demand online platforms’, new questions have arisen regarding licensing rights and payment of royalties, mainly with regard to rights of the artist.

Rights conferred over audio works under the Copyright Act

The rights that an artist enjoys over his/her musical work are two-fold. One is with regards to the ‘musical work’ defined under Section 2 (p) of the Copyright Act as a work consisting of music and includes and graphical notation of such work. The royalties for assignment of the work can be claimed under Section 18(1) of the Copyright Act which provides for assignment of a work.
The other right which the artist enjoys is the performance right, which is provided for under Section 38A of the Copyright Act, inserted vide the 2012 Copyright Amendment Act. This section provides a performer, in addition to the rights given by the author of a work to reproduce, issue copies, sell or rent, and broadcast any right over a live performance. This section further provides the right of a performer to claim royalties over the commercial use of the performance.
The distinction between the two was a matter of contention in the matter of Sushila vs Hungama Digital Media Entertainment Pvt Ltd & Super Cassettes Industries Pvt. Ltd[1]

Sushila vs Hungama Digital Media Entertainment Pvt Ltd & Super Cassettes Industries Pvt. Ltd.

This matter pertained whether an artist can claim a violation of performance rights over an audio recording, when the license over the musical work have already been licensed via agreements. The Plaintiff, a singer brought an action against Hungama Entertainment, which was a subsidiary of T-Series, and ran an online platform which streamed music on demand. The Plaintiff alleged that the Defendant had streamed a studio recorded song of the Plaintiff on their online platform without her permission, thereby violating the performance rights of the Plaintiff. The Defendant here contended that they had the legal authority to stream the recording, as the right over the same had already been licensed vide agreements dated 2015 to T Series, Hungama’s parent company.
The Court here decided to distinguish between the right over a musical work and a performance right and held that performance right exists only over ‘live performances’. Interpreting the literal wording of Section 2(q) and 2(qq) which defined ‘performance’ and ‘performer’ respectively, the Court stated that the word ‘performance’ is qualified by the term ‘live’, and the same studio recordings cannot be equated to the same. The Court further held that the right over the musical work is a primary right, and the right over a live performance is only a secondary right.
The judgment is significant in the sense that it laid down the scope of each of the rights conferred to an artist. Therefore, right over studio recording cannot be equated to a live performance, and royalties under Section 38A cannot be claimed if the right over musical work has already been conferred by a license.

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