INDIA: Court Reinforces Royalty Mandate on Literary and Musical Works Underlying Sound Recordings

The Calcutta High Court addressed royalty rights for authors of underlying music and literary works used in caller tunes in the case of Indian Performing Right Society Ltd v. Vodafone Idea Ltd. (CS-COM/140/2024). It handed down its decision on May 17, 2024.

Vodafone launched caller ring-back tones through a partnership with Saregama, the owner of the sound recordings. This prompted the Indian Performing Right Society (IPRS) to claim that, under the Copyright Act, 1957, Vodafone should have a separate license from IPRS and pay royalties to authors of underlying works.

The litigation led to the Court considering three related cases:

• IPRS’s suit against Vodafone for royalties on underlying literary and musical works in sound recordings and a separate license from IPRS;
• Vodafone’s suit against IPRS to nullify payment obligations; and
• Saregama’s suit against Vodafone for an injunction against copyright exploitation of sound recordings via value-added services (VAS).

IPRS argued that Saregama, having assigned royalty collection rights to them, could not grant rights to underlying works, making its license to Vodafone invalid. It also maintained that Vodafone’s expired agreements with Saregama still required licenses from IPRS for commercial use, which it had not obtained.

Vodafone, in defense, stated that Saregama owned the rights to the underlying literary and musical works in sound recordings. It argued that authors forfeited their rights upon entering into agreements and clarified that Saregama’s assignment of rights to IPRS did not transfer ownership, eliminating the need for additional licenses or royalties.

The Court stated that the Copyright Amendment Act, 2012 mandates royalties for authors when their sound recordings are publicly used, so authors, alongside the copyright owner Saregama, are entitled to royalties.

The Court held Vodafone responsible for paying royalties to IPRS for using the authors’ works, irrespective of a license from Saregama.

The Court ruled that Saregama lacked authority to grant Vodafone rights to use IPRS’s works, making the license void. It also prohibited Vodafone from using IPRS’s repertoire for VAS and ordered payment of royalties to IPRS.

The judgment reinforces the 2012 Copyright Act amendment’s goal to protect authors’ rights and underscores the strict enforcement of royalty and licensing rules to safeguard authors and copyright societies.

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