Phonographic Performance Limited India stumbles in a music licensing dispute

Phonographic Performance Limited India (PPL India), which owns and controls public performance rights of over 400 music labels with 45 lakh international and domestic sound recordings, issued a notice to Azure Hospitality Private Limited (Azure) on July 20, 2022, asking to cease exploiting the sound recordings in which PPL India held copyright without obtaining a license from PPL India.

Azure failed to comply, leading PPL India to file a suit (CS (COMM) 714/2022) seeking a decree of permanent injunction to restrain Azure from exploiting or using the copyrighted works. Azure owns 86 high-end restaurants with claims to have an overall turnover of ₹ 161 crores.

The learned Single Judge of the Delhi High Court issued an ad interim ex parte order of injunction on October 14, 2022, restraining Azure from exploiting PPL India’s copyrighted works. Azure responded by filing an application seeking vacation of the ex parte ad interim injunctive order, but the Single Judge dismissed Azure’s application and allowed PPL India’s application, confirming the injunction.

Azure has filed the present appeal against the judgment of the learned Single Judge.

The main issues before the court were:

1. Compliance with Copyright Act: The court had to determine whether PPL India, which was not a registered copyright society at the time, could issue licenses for the exploitation of sound recordings assigned to it under Section 18(1) of the Copyright Act. Azure argued that PPL India could not grant licenses without being a registered copyright society or a member of one.
2. Interpretation of Section 33(1) and proviso: The interpretation of Section 33(1) of the Copyright Act, which prohibits any person or association from carrying on the business of issuing or granting licenses in respect of copyrighted works without registration as a copyright society, was a key issue. The court had to decide whether the proviso to Section 33(1) allowed PPL India to grant licenses for its own works without being a registered copyright society.

The court ruled in favor of Azure, holding that:

1. Surrender of pre-existing registration: PPL India was previously registered as a copyright society from May 7, 1996, to June 21, 2014. However, following the Copyright (Amendment) Act 2012, which required all previously registered copyright societies to re-register under the new provisions, PPL India surrendered its pre-existing registration and applied for re-registration.
2. Re-registration rejected: PPL India’s application for re-registration as a copyright society was rejected. As a result, PPL India is not currently a registered copyright society.
3. Requirement of registration: Section 33(1) of the Copyright Act mandates that any person or association of persons carrying on the business of issuing or granting licenses in respect of copyrighted works must do so in accordance with the registration granted under Section 33(3). Since PPL India is not a registered copyright society, it cannot issue licenses for the sound recordings assigned to it.
4. Membership in registered copyright society: The court emphasized that PPL India, to issue licenses for its sound recordings, must either be a registered copyright society or a member of one. As PPL India is neither, it cannot grant licenses for the sound recordings in its repertoire.
5. Carrying on business: The court concluded that PPL India’s activities clearly fell within the scope of “carrying on business” as defined in Section 33(1) of the Copyright Act. The court found that PPL India was engaged in the business of issuing or granting licenses for the public performance of sound recordings. This was evident from the fact that PPL India was systematically and continuously granting licenses for the exploitation of sound recordings in which it held copyright.

The court, in its final direction, modified the judgment of the learned Single Judge. The court directed Azure to make payments to PPL India based on the Tariff of Recorded Music Performance Limited (RMPL) displayed on its website. RMPL was identified as an entity registered as a copyright society under Section 33(3) of the Copyright Act for dealing in sound recordings. The court directed Azure that the tariff would apply to all the sound recordings forming part of PPL India’s repertoire in any of its outlets. The payment arrangement was deemed equitable by the court (as opposed to a deposit offered by Azure as an interim arrangement) and was subject to the final outcome of the pending suit. The court emphasized that allowing Azure to exploit the sound recordings from PPL India’s repertoire without paying anything to PPL India would be unfair.

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