India: OLA Cabs Arraigned For "Prirated Music"

Last Updated: 25 July 2017
Article by Vikrant Rana and Tulip De

Recently, on May 20, 2017, a criminal complaint for copyright infringement was filed by a Bengaluru-based music label company, Lahari Recording Co., against ANI Technologies Pvt. Ltd. and its founders for allegedly downloading and streaming songs from popular Telugu and Kannada movies, without owning the rights, that is, using pirated music on OLA Play.

Brief Background

ANI Technologies Pvt. Ltd. operates under the popular trade name OLA, and is an Indian online transportation network company having its registered office at Bengaluru, India. OLA was founded as an online cab aggregator by Mr. Bhavish Aggarwal, presently Chief Executive Officer of the Company, and Mr. Ankit Bhati, presently Chief Technical Officer of the Company.

Last year, on November 22, 2016, OLA had launched their connected car platform for ridesharing called 'OLA Play' in their "OLA Prime" segment, claiming it to be a global first and aimed at "transforming the in-car experience for users on the go like never before". OLA Play provides customizable experience to premium members of OLA to view content of their choice and play music including radio while they take their ride. The in-car entertainment system uses custom user preferences and ride information, such as time and destination, to offer recommendations. OLA Play is stated to be the world's first such technology and collaboration for a cab-aggregator. The company partnered with notable companies like Qualcomm, Mahindra and Mahindra, Apple Music, Sony LIV, Audio Compass and Fynd to build an interactive experience for users through listening to music and watching videos at their option, on the go. OLA Play is currently available in four cities in India – Mumbai, Delhi, Bengaluru and Hyderabad.

Issue in brief

The issue came to light in May 2017 after the director of music label company Lahari Recording Co., Mr. Tulsiram Naidu, booked a cab in the Indian city of Bengaluru and realized that the songs from the Tollywood* movies, 'Baahubali' and 'Khaidi No 150' and from the Kannada** movie 'Sundaranga Jaana' were being played in the cab without taking any prior permission or license from the company by OLA. The songs from the said movies are claimed to be owned by Lahari Recording Co. Reportedly, Mr. Tulsiram Naidu stated that nobody had come from ANI Technologies Pvt. Ltd. for licensing the songs and a loss of INR 6 crores i.e. INR 60 million (Approx. USD 928,857 @ 1 USD= 64.6 INR) is estimated in the future.

Pursuant to the complaint filed by Mr. Tulsiram Naidu/ Lahari Recording Co. with the concerned police station i.e. Jeevan Bima Nagar Police Station in Bengaluru, the police officials searched the offices of the cab aggregator, ANI Technologies Pvt. Ltd. and reportedly seized the hard disks and other electronic devices which were suspected to store songs that had been illegally downloaded and were being played in the company's taxis without the requisite permission. The police also reportedly conducted surprise checks on OLA cabs and seized some of the electronic devices and hard disks wherein such songs were alleged to have been illegally downloaded and stored.

As per the media statements made by the concerned Police, notice was issued to both the founders of OLA, namely Mr. Bhavish Aggarwal and Mr. Ankit Bhati, to show their valid copyright/ license on each song. However, they reportedly failed to appear before the police. Following the developments, both the founders have reportedly secured an anticipatory bail from the concerned magistrate's court.

In the meanwhile, OLA's legal counsel has released a media statement that the company has been conducting its business legally and ethically and its management has been dragged into this issue with a mala fide intention. Also, they have taken appropriate legal steps to protect the interest of their client and the matter is before the concerned court now.

Interestingly, OLA has recently received funding from Tekne Capital Management of about INR 5 crores i.e. INR 50 million (Approx. USD 774,047 @ 1 USD=64.6 INR), only a few days before the allegations of copyright infringement.

This is not the first time that OLA has been in the limelight for piracy or copyright infringement. Earlier this year, in February 2017, ANI Technologies Pvt. Ltd. was embroiled in a copyright infringement case over an image, when a Bengaluru-based designer's creatives were used by it. Mr. Ramakrishna V. is an Indian graphic designer who has worked with popular technology company, Zoho Corporation and is currently positioned as an UI/UX Designer in a real estate agency called Housing. On February 17, 2015 he posted the image of Vidhana Soudha at Dribbble.com, an online community for showcasing user-made artwork, for commercial purposes under the creative commons license terms of the website. Vidhana Soudha is a prominent landmark located in Bengaluru and is the seat of the state legislature of Karnataka and also an imposing building, constructed in a style sometimes described as Mysore Neo- Dravidian, and incorporates elements of Indo-Saracenic and Dravidian styles. ANI Technologies Pvt. Ltd. was accused by Mr. Ramakrishna V. of copying his design on hoardings used in advertisements for promoting OLA's INR 29 Campaign, without his express permission. Later, the creative agency associated with OLA resolved the matter of copyright infringement amicably between the designer and the agency which had made the hoardings in the first place and the designer was adequately compensated.

Relevant Provision of Law

Section 30, Copyright Act, 1957 (as amended in 2012)

Licences by owners of copyright.—The owner of the copyright in any existing work or the prospective owner of the copyright in any future work may grant any interest in the right by licence in writing signed by him or by his duly authorised agent: Provided that in the case of a licence relating to copyright in any future work, the licence shall take effect only when the work comes into existence. Explanation—Where a person to whom a licence relating to copyright in any future work is granted under this section dies before the work comes into existence, his legal representatives shall, in the absence of any provision to the contrary in the licence, be entitled to the benefit of the licence.

Concluding remarks

Start-ups in India are witnessing age old talent for entrepreneurship being unleashed like never before. New ideas are exploding into business models and investors are all lining up to provide the requisite finance and mentoring taking the start-up to the next round of funding and higher valuations. Today, India is replete with examples of successful start-ups that have seen valuations ballooning within the first five years of operations, notable names being Flipkart, Snapdeal, Zomato, Make My Trip, Naukri.com, , Make My Trip, Naukri.com, Shaadi.com, Just Dial etc., which are all success stories that have survived and grown from the last internet boom. Start-ups in India are although noticing an increase in facilities provided by the Indian Government like Startup India campaign launched by Indian Prime Minister, Narendra Modi, there are still day to day issues, prominently Intellectual Property (IP) issues that are being faced by them in their regular business decisions. It will be interesting to see how OLA tackles this fresh IP complaint against it- whether it will walk away without a scratch or succumb to the IP demands of an established organization, only time will tell.

*The Indian Telugu-language film industry based in the city of Hyderabad, Telangana

** colloquially referred to as Sandalwood, the Indian Kannada language film industry based in the state of Karnataka.

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