India: Determination Of Terms Of Broadcasting Licence: Music Choice Ordered To Approach Copyright Board

Last Updated: 18 May 2009

Royalty and Remuneration to be paid to a Copyright Society can often come under the spotlight of contention. Deciding upon the jurisdiction of a Civil Court to decide upon such a dispute in view of the authority vested in the Copyright Board is the case of Music Choice India Pvt. Ltd. v. Phonographic Performance Ltd. [2009 (39) PTC 597 (Bom.)]

The present suit was filed by Music Choice India Pvt. Ltd., a broadcaster of music on television and operating through local operators of Satellite, cable and Internet platform against Phonographic Performance Ltd. (PPL), a society registered as a Copyright society under the Copyright Act. Music Choice in order to broadcast music had sought governmental clearances and licenses, as also from the owner(s) of the Copyright in sound recordings to broadcast their music. PPL, an assignee of rights of several owners who are the record publishing companies, was also approached for a license to broadcast their sound records. Music Choice made an offer that it considered reasonable; however, the same was not acceptable to PPL. Music Choice claims that PPL demanded an unreasonable royalty from broadcasters, such itself Plaintiff, which compelled them to approach the Copyright Board and the Civil Court. Music Choice' case was that the royalty claimed by PPL was excessive and arbitrary which, as a creation of the Statute (the Act), were not at liberty to claim.

Music Choice averred that the purpose and object of the statutory provision was to disallow the owner of the Copyright or his assignee to refuse the allowance of its communication to the public by broadcast and must do so on reasonable terms. Music Choice contended that those reasonable terms were essentially what they considered reasonable and not what PPL might seem reasonable.

The Counsel for Music Choice clarified that they had not sought any order and direction from this Court as to the extent of the royalty to be paid or the rate of the royalty to be fixed by this Court, which they conceded to be in the exclusive jurisdiction of the Copyright Board. They clarified that their suit was for an order and declaration that they were entitled to a licence to broadcast the present and future sound recordings of PPL on payment of royalty and compensation subject to the terms and conditions determined by the Copyright Board on their application already filed on 4 July 2007 for compulsory licence under Section 31(1)(b) of the Act. Music Choice's suit also prayed for an injunction against PPL restraining them from interfering with the broadcast of the sound recordings of PPL upon the payment of royalty or compensation fixed by the Copyright Board and upon the terms and conditions determined by the Board.

PPL contended that only the Copyright Board could determine the amount of reasonable royalty or compensation, if it is not agreed between the parties upon following the procedure laid down in Section 31(1)(b) of the Act. In this view, PPL contended that Music Choice's suit for declaration and injunction was not maintainable in a Civil Court, falling outside the purview of Section 9 of the C.P.C. However, the counsel for Music Choice asserted that they had not sought relief to grant them the licence to republish or broadcast the sound recordings assigned to PPL or to decide the extent of the fee as compensation, or royalty payable therefore. Hence, they contended that the Court's inherent jurisdiction was not barred and the jurisdiction of the Copyright Board under Section 31(1) (b) is preserved. In regard to these arguments, the Court contemplated that if it would pass a declaration in favour of Music Choice, pending the decree of the Copyright Board, the same would amount to allowing a party to commence business without obtaining a licence because he has applied for one. The Court also took note of the fact that Music Choice had obtained an ad interim order to broadcast the sound recordings assigned to PPL pending the suit without determination of the merits of its offer.

The Court taking view of the procedure laid down in the Act, noted that the Copyright Board was free to accept or decline the terms of the complainant as reasonable as also impose further terms and conditions if necessary including a direction to make such payment of fee as royalty or compensation, as it considered reasonable. Taking note of the fact that relief had been claimed from two fora, the Court took note of Section 9 of the Civil Procedure Code to determine if it was vested with the jurisdiction to adjudicate upon the present matter.

Music Choice relying upon an ad interim injunction passed earlier in a similar suit in the year 2001 on the premise that the Copyright Board met only once or twice a year and that Music Choice would not be able to start their radio station to broadcast the sound recordings since they would not be able to get their application decided expeditiously. It was noted that therein, a Copyright Board was directed to be moved at an early date so that the dispute could be resolved in accordance with the Act. The Court expressed its hope and trust that if such an application was moved, the Board would consider it sympathetically. The Court noted that herein the Copyright Board had already been moved and that they would decide the matter.

The Court took note of the judgments placed before them, pertinently the case of Entertainment Network (India) Ltd. Vs. Super Cassette Industries, in which the Supreme Court has held that the provisions of Section 31 were deliberated upon, which stated that an implied bar of the jurisdiction of Civil Courts in such cases existed. The Court opined that Music Choice could have enforced the rights under the Act before the Copyright Board by following the procedure prescribed by that law.

In the presence of the entire procedure for redressal laid out, the Court opined that the Civil Court had no jurisdiction to grant the final relief in the Suit by trying it, but could not also grant any injunction to prevent interference of Music Choice's broadcast under the agreement or the licence which becomes enforceable under the Copyright Act itself. In view of the prayers made, the Court concluded that while the defendant opposes the remedy of injunction, it was outlandish as it is ill-conceived to try that prayer for want of the Court's inherent jurisdiction. The Court also mentioned that there is nothing in the Act to prevent the Copyright Board from passing any interim order of determination of reasonable fee by way of royalty or compensation payable by Music Choice, if an application in that behalf is made and a prima facie case is made out. In this pursuance, the ad interim order already passed in this Suit was allowed to continue for 4 weeks following the present order, while Music Choice was directed to approach the Copyright Board to avail of a relief in the matter.

© Lex Orbis 2009

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