In a significant judgment, the Delhi High Court addressed the licensing rights of Phonographic Performance Limited (PPL), a collective rights management organization in India. The court ruled that PPL cannot issue or grant licenses for sound recordings in its repertoire without registering itself as a copyright society or becoming a member of a registered copyright society. This decision has substantial implications for the music industry, particularly concerning the licensing and usage of sound recordings.
Background of the Case
The case originated from a legal dispute between PPL and Azure Hospitality Private Limited. Azure operates approximately 86 restaurants across India, including well-known establishments like 'Mamagoto', 'Dhaba', and 'Sly Granny'. PPL alleged that Azure was using its copyrighted sound recordings in these outlets without obtaining the necessary licenses. Upon discovering this unauthorized usage, PPL issued a cease and desist notice to Azure, which went unanswered. Consequently, PPL filed a suit seeking a permanent injunction to restrain Azure from infringing its copyrights and requested other ancillary reliefs.
Legal Framework and PPL's Licensing Authority
Under the Indian Copyright Act of 1957, specifically Section 33, any organization intending to carry out the business of issuing or granting licenses for literary, dramatic, musical, and artistic works incorporated in cinematograph films or sound recordings must register as a copyright society. This provision ensures that only authorized entities can manage and license copyrighted works, thereby protecting the rights of creators and copyright holders.
PPL was previously registered as a copyright society but had since ceased to maintain this status. Instead, it functioned as a company under the Companies Act 2013, claiming rights to license and transfer copyrights under Sections 18 and 30 of the Copyright Act. However, the court emphasized that without current registration as a copyright society or membership in a registered society, PPL lacks the legal authority to issue licenses for the sound recordings in its repertoire.
Court's Observations and Ruling
A division bench comprising Justice C Hari Shankar and Justice Ajay Digpaul examined the matter. The court observed that PPL, not being a registered copyright society at present, cannot independently issue licenses for its sound recordings. The bench stated:
"We, therefore, are unable to accept the principle that PPL was entitled, without either registering itself as a copyright society or becoming a member of any registered copyright society, to issue licenses in respect of the sound recordings assigned to it under Section 18(1) of the Copyright Act."
The court acknowledged that PPL could still license the subject sound recordings for public performance, but only in accordance with the terms of a registered copyright society. Currently, Recorded Music Performance Limited (RMPL) holds the registration for such activities. Therefore, PPL must either register itself or become a member of RMPL to legally issue licenses.
Interim Arrangement and Financial Implications
Pending the final adjudication of the civil suit, the court devised an interim arrangement to balance the interests of both parties. It directed Azure to make payments to PPL for playing the recordings, based on the tariff rates applicable to RMPL. This arrangement ensures that PPL receives compensation for the usage of its sound recordings, while Azure continues its business operations without legal hindrance. The court specified:
"We deem this to be an equitable arrangement as, following on our prima facie findings above, if PPL were to permit the sound recordings in its repertoire to be licensed to others for being communicated to the public, that can only be in terms of the registration granted to RMPL, of which PPL would have to be a member."
Both Azure and PPL are required to submit three-monthly statements of the payments made and received to the learned Single Judge. These payments are strictly subject to the outcome of the ongoing civil suit.
Implications for the Music Industry
This ruling has far-reaching consequences for the music industry in India. It reinforces the necessity for organizations like PPL to adhere to the legal requirements of registration under the Copyright Act to manage and license copyrighted works. The decision also underscores the importance of proper licensing for businesses that utilize copyrighted content, such as restaurants and entertainment venues.
By mandating that only registered copyright societies or their members can issue licenses, the court aims to ensure transparency and accountability in the management of copyrighted works. This approach protects the rights of creators and copyright holders while providing a clear legal framework for businesses to obtain the necessary permissions for using such works.
Conclusion
The Delhi High Court's judgment serves as a critical reminder of the legal obligations associated with the licensing of copyrighted sound recordings. Organizations like PPL must comply with the statutory requirements to maintain their authority to issue licenses. Simultaneously, businesses must ensure they obtain proper licenses to use copyrighted content, thereby respecting the rights of creators and avoiding legal disputes. This decision contributes to the establishment of a more structured and legally compliant environment within the Indian music industry.
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