The enactment of Copyright amendment Act in 2012 is considered to be one of the major milestones in the Indian copyright regime, as it addressed one of the legal lacunae regarding the rights of lyricists and composers after their literary and musical works are incorporated into cinematograph films and sound recordings. Even after the amendment, there were uncertainties regarding the interpretation of these provisions. It was against this backdrop that Vodafone Idea Limited v. The Indian Performing Right Society Limited & Anr came up for consideration before the Calcutta High Court.

Before delving into the issue, it is important to understand how copyright functions in the music industry. A song has multiple copyrights subsisting within it, including copyright in literary work (lyrics), musical work (composition) and sound recording. Rights in the lyrics vest with lyricist, rights in the musical composition vest in the composer, and copyright in the sound recording generally vests in the producer or music label. Thus, multiple rights may subsist in a single song, and the use of the song may require permission from more than one rights holder, which was what lacking in the present case.

Dispute so far:

The case revolves around Vodafone, Saregama music label and the Indian Performing Right Society Limited (IPRS). Vodafone, the appellant, had licensing agreements with Saregama to commercially exploit songs under VAT i.e. Value-Added Services in order to provide services to its customers relating to caller tunes, ringtones etc. However, IPRS contended that Vodafone ought to have had a licensing agreement with it and paid royalties, as the exploitation of the music includes not only sound recordings but also lyrics and musical composition. Because of these competing claims, Vodafone instituted an interpleader suit before the Single bench of Calcutta High Court. The Court held in favour of IPRS, holding that IPRS had rights independent of Saregama’s rights. Aggrieved by this, Vodafone appealed before the Division Bench of the Calcutta High Court.

Contentions of Vodafone:

  • Vodafone had a valid licensing agreement with Saregama to exploit the songs and had paid royalties.
  • Dispute regarding the sharing of royalties should be resolved between Saregama and IPRS, as Vodafone obligations extended only to Saregama.
  • A sound recording constitutes a separate copyright and that the producer, as the owner of the sound recording, can license it for commercial exploitation without the need for a separate license from the owners of the underlying musical and literary works.
  • Royalties need to be shared only in instances where the musical and literary works are exploited separately or when such works are used to create another sound recording.
  • Agreements between Saregama and IPRS were of such a nature that IPRS merely acted as a collecting agent and did not have any copyright in the sound recording.
  • Dispute between Vodafone and Saregama had already been settled by way of Settlement Agreement.

Contentions of IPRS:

  • Vodafone did not have a licensing agreement to exploit the underlying literary and musical works but only had agreements to exploit sound recordings.
  • Saregama had already assigned the musical and literary works incorporated in the sound recordings to IPRS in 1993 and in 2017.
  • Neither Saregama nor any other musical company had the right to license such literary and musical works to third parties for commercial exploitation.
  • Master Agreement between Vodafone and Saregama executed in 2014 had expired in 2019
  • Terms of the subsequent agreements established that Vodafone had not been granted a licence by Saregama to exploit the underlying literary and musical works
  • Saregama had never claimed before the Court that it had assigned the literary and musical works to Vodafone.

Contentions of Saregama:

  • Saregama and Vodafone is settled and that Saregama does not have any duty to pay IPRS.

Decision

The Court dealt the issue in a threefold manner. Firstly, with respect to whether IPRS could claim royalties, the Court gave an affirmative answer and held that IPRS was entitled to claim royalties from Vodafone. Secondly, Court held that Saregama did not have the authority to grant permission to Vodafone to commercially exploit the underlying literary and musical works, which need to be assigned individually. Finally, with regards to Vodafone’s right to exploit the literary and musical works, Court held that that Vodafone could not do so without obtaining permission from IPRS. Accordingly, the Court upheld the decision of the Single Bench.

The outcome of the case would surely help provide much-needed clarity on the licensing and royalty obligations arising from the commercial exploitation of music in India. At the same time, it highlights the importance of conducting proper copyright audits and ensuring that the necessary licences are obtained not only from music labels but also from the owners of the underlying literary and musical works wherever required.

Written by Meghana SS