Filing Of Pending Application For Compulsory License Does Not Entitle Applicant To Infringe Owner's Copyright: Delhi High Court

Phonographic Performance Limited is an Indian collective rights management organization which controls the Public Performance rights of 317 music labels.

Brief Facts:

Phonographic Performance Limited submitted that the suit was filed to restrain the defendant from infringing the plaintiff's copyright in its repertoire of sound recordings. There was an imminent threat that the defendant would use and exploit the copyrighted sound recordings of the plaintiff in its event, constituting copyright infringement.

Phonographic Performance Limited (“PPL”) owned and controlled the public performance rights of numerous music labels and had a vast repertoire of international and domestic sound recordings. It held copyright in the sound recordings through assignments from various owners, which granted it public performance and broadcasting rights. These assignments were executed under Section 18 of the Copyright Act, of 1957. The details of the sound recordings in which PPL held copyright were publicly available on its website.

Al-Hamd Tradenation (“Al-Hamd”), a company organizing an event at a restaurant called 'Lutyens' in Mehrauli Gurgaon Road, New Delhi, planned to use PPL's copyrighted sound recordings on 14th July 2024. PPL informed Al-Hamd through the restaurant that a license was required to use the sound recordings. Al-Hamd refused to take a license at the current tariff and offered to pay a lower amount, threatening to deposit the amount in court and seek a compulsory license under Section 31(1)(a) of the Copyright Act, 1957. PPL refused the offer and stated that the license fee was Rs. 55,440/-, while Al-Hamd was only willing to pay Rs. 16,500/-.

Feeling aggrieved, PPL filed a suit for an interim injunction against Al-Hamd before the Delhi High Court (“High Court”). It argued that the illegal use of the copyrighted works by Al-Hamd would harm PPL's licensing activities and allow Al-Hamd to benefit from PPL's investments. In response, Al-Hamd contended that it had also filed a petition for a compulsory license. Thus, it should not be forced to pay an unreasonable fee demanded by PPL.

Observations by the High Court:

The High Court held that if a prima facie case is established in favour of PPL, an interim relief must be granted to restrain Al-Hamd from exploiting or using any sound recordings or other works in which PPL held copyright. Referring to its own previous decisions, the High Court held that in order to avoid copyright infringement, the defendant or any other person acting on its behalf must be restrained from using the impugned sound recordings on any of their premises.

The High Court perused the evidence on record and held that PPL established a prima facie case against Al-Hamd and the balance of convenience was also in PPL's favour. It was further held that if PPL's copyright was not protected, it would suffer irreparable damage.

Therefore, the High Court held that if Al-Hamd wished to use the sound recordings owned by PPL, it should approach PPL for a license. Al-Hamd would be required to pay the license fees as demanded by PPL. In the absence of a valid license, Al-Hamd was restrained from using the sound recordings for its event.

Case Title: Phonographic Performance Limited vs Al-Hamd Tradenation

Case No.: CS(COMM) 564/2024, I.A. 33043/2024, I.A. 33040/2024, I.A. 33041/2024, I.A. 33040/2024 & I.A. 33039/2024

Advocate for the Plaintiff: Mr Chander M. Lall, Sr. Advocate with Mr Ankur Sangal, Ms Sucheta Roy, Mr Ankit Arvind, Mr Raghu Vinayak Sinha, Mr Shaurya Pandey and Mr Abhinav Bhalla

Advocate for the Defendant: Mr Aditya Ganju, Ms Pallavi Shali, Ms Honeyshya Raj and Ms Shambhavi Mishra

Date of Pronouncement: 12.07.2024

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