Music is essential in entertainment, branding and public events. It requires a straightforward and reasonable process to access copyright recordings. However, some licensors charge excessively for the right to play music in public. The recent case of Al Hamd Tradenation v Phonographic Performance Limited shows how copyright law balances artistic rights and public access, particularly in regard to public performance licensing.
Compulsory licensing prevents copyright owners from abusing their monopolies in copyright works. Such licensing is particularly relevant when fees are charged by copyright holders for music used in public settings, such as restaurants, weddings, concerts and corporate events. If such a fee is excessive or discriminatory, it will effectively restrict access to the music. This is where the legislature and courts step in.
Under section 31 of the Indian Copyright Act, 1957 (act), compulsory licences may be granted when any copyright work is withheld from the public without reasonable justification. A commercial court may grant such a licence, overriding a copyright owner’s refusal, if it deems the denial unreasonable or if the work is effectively made inaccessible because of stringent licensing terms. Although the provision originally focused on literary or musical works, courts have increasingly applied it to sound recordings, treating them as a form of creative expression essential to public enjoyment.
In Al Hamd Tradenation, the petitioner was hosting a private corporate event for 50 attendees and had to obtain a licence from PPL to play recorded music for which PPL managed IP rights. The cost was INR49,500 (USD580). After checking the PPL website, the petitioner discovered that the fee for a licence for gatherings of 1 to 150 people would soon go up to INR55,440.
Finding this blanket pricing unreasonable, the petitioner, after the increase, offered to pay INR16,500, a third of the fee proportional to the size of the event based on the original charge. PPL rejected this offer and brought a copyright infringement case against Al Hamd Tradenation. Al Hamd Tradenation petitioned for a compulsory licence on the grounds that the fee was arbitrary, unaffordable and effectively a refusal to allow a performance of the copyright works.
Delhi High Court decided in favour of Al Hamd Tradenation, holding that PPL’s licence fee structure was unreasonable. The court found that simply offering a licence does not shield a copyright holder from scrutiny. If the terms of that licence are unreasonable, they may amount to a refusal to allow public performances. Posting a tariff on a website is insufficient if its terms impose an unjust burden on those applying for access to copyright material.
The court held that copyright law not only protects the creator’s rights but also ensures that the public is not unfairly deprived of access to creative works. By charging only a flat fee that made no distinction between an event of 50 and 150 attendees, or between playing a single track against a full setlist, PPL was effectively withholding its content from reasonable public use.
The court rejected PPL’s claim that compulsory licensing did not apply to sound recordings. It ruled that “works” under the act include sound recordings. Public performances, such as playing music at a corporate event, are squarely within the scope of the statute. PPL’s refusal to grant a licence on equitable terms led to the statutory remedy of compulsory licensing.
It is significant that PPL is no longer a registered copyright society. The recent case of Azure Hospitality v Phonographic Performance Limited held that only registered societies or their members may license public performance rights. Recorded Music Performance Limited, a registered society, is currently authorised to manage such rights. Although the Supreme Court has stayed some decisions in the Azure case, the high court in Al Hamd wrote that its decision is independent and stands on its own legal reasoning.
This decision reflects a trend to curb monopolistic practices in music licensing. Copyright owners must justify their pricing structures and those seeking fair access to music may challenge exorbitant rates. The case empowers event organisers, broadcasters and businesses relying on music. It shows that IP law supports equitable access and protects consumers against unfair practices.
Authors: Manisha Singh and Shivi Gupta
First Published by: IBLJ here