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Just before its launch in India on February 26, music streaming app Spotify was directed by the Bombay High Court to deposit Rs. 6.5 crore after a suit for infringement was filed by music publisher Warner/Chappell.
Warner/Chappell Music Limited filed a suit along with a motion seeking an interim injunction to restrain Spotify from publishing its songs on the app without a license.
After engaging in months of negotiations with Warner/Chappell to seek a licence, Spotify claimed that it could offer the songs on its platform pursuant to its application for obtaining a statutory licence under Section 31 D of the Indian Copyright Act.
However, it was contended by the counsel for Warner/Chappell that Section 31 D would apply only to broadcasting organisations. It was further argued that even assuming Spotify would be able to invoke the scope of Section 31 D, there are two rights involved in the streaming of music on the App – the right to communicate works to the public, and the right to reproduce the said works. A licence under Section 31 D would only allow Spotify to communicate the works, and not to reproduce them, it was contended.
It was further submitted that just because an application under Section 31 D has been filed, it does not mean that the statutory licence has been granted.
After filing the Section 31 D application before the Intellectual Property Appellate Tribunal (IPAB), Spotify had proceeded to remit an ad hoc sum of 528,000 Euro with one of Warner/Chappell’s partners, International Copyright Enterprises Services Limited (ICE). No explanation or rationale was provided by Spotify for arriving at this amount.
Warner/Chappell did not agree with this amount, prompting Justice SJ Kathawalla to eventually direct Spotify to deposit a sum of Rs. 6.5 crore with the Court, pending the adjudication of the dispute. The High Court also directed Warner/Chappell to instruct ICE to return the 528,000 Euro to Spotify so that the same could be brought into court immediately.
The order states,
“Upon receipt of the aforesaid amount of 5.28 Euro from the ICE, the Defendant shall forthwith bring the same in the Court and shall in addition thereto bring such amount as may be required to aggregate the deposited amount to be deposited in Court to the sum of Rs.6.5 Crores.”
The order was passed without prejudice to the claims of the parties regarding the jurisdiction of the IPAB with respect to Section 31 D of the Copyright Act.
However, Spotify has been restrained from approaching the IPAB for a period of four weeks.
It was further ordered,
“In the event of this Court at the hearing of the above Notice of Motion, coming to the conclusion that the Defendant’s Application under Section 31-D of the Copyright Act, 1957 is not maintainable or the Defendant do not have a statutory license, the Court will after hearing the parties, decide what order if any should be passed with regard to the exploitation of the Plaintiff’s musical works including the amount which the Defendant shall be required to pay to the Plaintiff or deposit the same in Court.”
Spotify has also been directed to keep a record of the use of Warner/Chappell’s musical works and all advertisement and subscription revenues.
Based on these conditions, Warner/Chappell decided not to press for ad interim relief, and Spotify was allowed to launch in India.
The matter will be taken up next on March 25.
Warner/Chappell was represented by Senior Counsel Janak Dwarkadas and Venkatesh Dhond, along with Advocates Astad Randeria and Rohan Kadam, briefed by Priyanka Khimani.
Senior Counsel Aspi Chinoy appeared for Spotify. He was briefed by a team from Singh & Singh Malhotra & Hegde.
Read the order: