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Payment of Royalty to the copyright holder for Value-Added Services (VAS) in relation to Musical Work

The ruling of Calcutta High Court mandates that Vodafone must obtain a license from IPRS and pay royalties before commercially exploiting musical and literary works in their Value-Added Services (VAS). This includes activities such as ringtones, caller tunes, and other music-related services offered to their customers.The court's decision is a pivotal affirmation of the rights of content creators and copyright holders, reinforcing the importance of intellectual property rights. By emphasizing the legal necessity of licensing and royalty payments under the amended Copyright Act, the judgment ensures that artists and creators are fairly compensated for their work.

In this case, Vodafone Idea Ltd. used musical and literary works in their VAS without obtaining the necessary licenses from IPRS, arguing that such use did not constitute a public performance or communication under the Copyright Act. IPRS, representing the rights of authors and creators, contended that Vodafone's activities required proper licensing and payment of royalties.

The court found in favor of IPRS, dismissing Vodafone's claim that their use of the works did not necessitate royalties. The judgment clarified that the use of musical and literary works in VAS indeed falls under activities that require licensing and royalty payments. The court underscored that the amendments to the Copyright Act, particularly those introduced by the Copyright (Amendment) Act of 2012, grant substantive rights to authors of original works, ensuring they receive compensation for the public performance or communication of their works.

Legal Implication:
The ruling has significant legal implications for the commercial use of copyrighted works in India. By affirming the necessity of licensing and royalty payments, the court reinforced the legal obligations of commercial entities to respect the rights of content creators. This decision underscores that:

Licensing and Royalty Obligations:
Commercial entities must obtain proper licenses and pay royalties for the use of copyrighted works in their services.

Protection of Authors' Rights:
The amendments to the Copyright Act provide robust protections for authors, ensuring they receive fair compensation.

Preventing Exploitation:
The judgment aims to prevent the exploitation of creators, particularly those with weaker bargaining power, by enforcing stringent licensing requirements.

The court's rationale was rooted in the provisions of the Copyright Act, especially the amendments introduced in 2012. These amendments were designed to enhance the rights of authors and ensure they are compensated for the use of their works. The court highlighted that any commercial use of copyrighted material without proper licensing and royalty payments is a violation of these rights. The decision emphasized the legal principle that the creators' rights are paramount and must be protected to maintain the integrity and fairness of the intellectual property system.

Concluding Note:
The Calcutta High Court's judgment in favor of IPRS against Vodafone Idea Ltd. is important decision that reinforces the rights of content creators and copyright holders. By mandating licensing and royalty payments, the court has set a crucial precedent for the commercial use of copyrighted works in India.

Case Title: Vodafone Idea Limited Vs Saregama India Limited and another
Order Date: 17.05.2024
Case No. CS/23/2018
Neutral Citation:NA
Name of Court: Calcutta High Court
Name of Hon'ble Judge: Ravi Krishan Kapoor, H.J.

Ideas, thoughts, views, information, discussions and interpretation expressed herein are being shared in the public Interest. Readers' discretion is advised as these are subject to my subjectivity and may contain human errors in perception, interpretation and presentation of the fact and issue involved herein.

Written By: Advocate Ajay Amitabh Suman, IP Adjutor - Patent and Trademark Attorney
Email: [email protected], Ph no: 9990389539

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