Back
Ringtones Ring in New Copyright Era: Calcutta HC Slaps Down Vodafone's VAS Defense
In a landmark ruling that could reshape how telecom giants monetize music, the 's Commercial Appellate Division Original Side dismissed appeals by . The bench, led by Justice Debangsu Basak and Justice Md. Shabbar Rashidi, affirmed that post- amendments require separate royalties to the for in sound recordings—even when telecoms like Vodafone license sound recordings from labels like . This stems from disputes over Vodafone's Value Added Services (VAS), where subscribers set film and non-film songs as caller tunes and ringtones.
From Interpleader to Injunction Tango
The saga unfolded in with three interconnected suits. Vodafone filed an (CS 23 of ), depositing Rs. 3.5 crore amid competing claims from IPRS and Saregama. Saregama sued (CS 155 of ) for injunctions against Vodafone's VAS exploitation of its sound recordings, while IPRS (CS 210 of ) sought restraints on of its musical/literary repertoire without royalties. Interim orders mandated deposits, including Rs. 2.5 crore in IPRS's suit. Vodafone settled with Saregama in via a memorandum and new agreement, but IPRS pressed on, arguing Vodafone lacked licenses for underlying works. A single judge's order protected IPRS rights independently, prompting Vodafone's appeals (AO(COM) 17/2024 and APOT 300/2024), heard analogously.
Vodafone's One-Stop License Play
Vodafone argued its deals with Saregama—starting with a Master Agreement, extended through —covered everything. Citing pre- and post- provisions (), it claimed sound recordings bundle underlying musical/literary works. Once licensed from producer Saregama, no separate IPRS nod needed for VAS. Pre-1995 law vested ownership in producers; amendments merely mandated royalty-sharing with authors, not dual licensing. Vodafone leaned on precedents like Eastern India Motion Pictures Assn. v. IPRS (Cal 1974, affirmed by SC 1977), where composers lost rights to film producers, and recent cases affirming single-license sufficiency for broadcasts.
IPRS Counters: Authors' Rights Unbundled
IPRS fired back: Vodafone's agreements (e.g., -2016 pacts explicitly noting potential IPRS licensing) never covered , owned via assignments from Saregama et al. Post- amendments (, ) void unauthorized , entitling authors (via IPRS as society under ) to equal royalties for any utilization beyond cinema halls. Saregama's licenses lapsed (e.g., under ), and interpleader suits bar plaintiffs denying defendants' rights. IPRS dismissed Vodafone's precedents as pre-amendment relics, citing 's ruling mandating IPRS licenses.
Saregama, having settled with Vodafone, washed its hands: no dues owed IPRS.
Amendments Rewrite the Score: Court's Symphony of Sections
The Division Bench dissected the , 1957's evolution—from roots to WIPO-aligned tweaks protecting digital dissemination. Key: Section 13 recognizes independent copyrights in literary/musical works (13(1)(a)) and sound recordings (13(1)(c)), preserved by 13(4). defines exclusive rights; ownership starts with authors (), but assignments mode-bound (Sections 18-19).
Crucial inserts— 3rd/4th provisos void non-society assignments of authors' royalty rights in film/sound-embedded works; ensures authors claim equal shares for any utilization. Precedents evolved too: SC's IPRS v. EIMPA (1977) ceded rights to producers pre-amendments; ICSAC v. Aditya Pandey (2017) distinguished assignments/licenses, affirming post- protections. 's Entertainment Network line clarified no blanket single-license rule for VAS-like exploits.
The court rejected Vodafone-Saregama pacts as surviving , noting some even acknowledged IPRS dues.
Key Observations from the Bench
"The Amendments to the Act of 1957 incorporated by the , have ushered in a paradigm shift in the rights of owners of literary and musical rights. They are now protected and entitled to receive royalties for the use of their literary and musical works incorporated in the sound recordings."
" of the Act of 1957 has specified that, no assignment of the copyright in work to make a sound recording which does not form part of the cinematograph film shall affect the right of the author of the work to claim an equal share of royalty and consideration payable for any utilization of such works in any form."
"The Act of 1957 has recognized the right of the author of literary and musical work in a sound recording to receive royalties and other consideration in the event, sound recording is used for commercial exploitation other than when, such sound recording is forming part of cinematograph film which is exhibited in a cinema hall."
No Encore for Vodafone: Deposits to IPRS, Stay Denied
Issues resolved: (i) Yes, amendments empower IPRS royalties claims; (ii)/(iii) No, Saregama can't license ; Vodafone lacks such license. Appeals dismissed sans costs; deposits (with Registrar/Joint Special Officers) transferred to IPRS on undertaking to refund if suits fail. Stay prayer refused.
Implications ripple: Telecoms must dual-license for VAS, boosting copyright societies like IPRS. Labels like Saregama offload liability; authors gain digital-era leverage. As news reports note, this clarifies Vodafone couldn't dodge IPRS via Saregama deals— demand their tune.
