Compulsory licensing dispute between PPL and radio stations lands up before the Madras High Court

The mega compulsory licensing dispute between the Copyright Society – Public Performance Licence (PPL) & radio stations like ENIL etc. that was decided by the Copyright Board on the 25th of August, 2010, has now ended up in a mega-appeal before the Madras High Court. As reported by us earlier the Copyright Board had ordered all music owners in the country to compulsorily licence all of their music to the radio station/applicants at a 2% royalty. In pertinent part the Copyright Board held “2% of net advertisement earnings of each FM radio station accruing from the radio business only for that radio station shall be set apart by each complainant for pro rata distribution of compensation to all music providers including the respondent herein in proportion to the music provided by the respective music providers and broadcast by the complainant.”

As of now I am aware of three appeals filed against this Order of the Copyright Board. One before the Delhi High Court by T-Series and two appeals before the Madras High Court, one by PPL and the other by the South Indian Music Companies Association (SIMCA), an association of 85 South Indian Music Companies.

Both T-Series and SIMCA have filed similar appeals praying that the Order of the Copyright Board not be enforced against them since they were not made parties by the radio stations in the compulsory licencing applications filed before the Copyright Board. It would seem quite obvious to anybody that the Copyright Board could not have made the final judgment applicable against even those parties which had not been heard by them. The Copyright Board however obviously thought differently when it held its order to be applicable against even those music owners who were not party to the dispute before the Board.

In an order dated 15th September, 2010 Justice Murlidhar of the Delhi High Court ruled that the Order of the Copyright Board could not be applicable against T-series. In pertinent part the Delhi High Court held the following:

8. It appears to this Court that Section 31 (1) of the Copyright Act, 1957 (?Act?) mandates that the owner of the copyright should be given a reasonable opportunity of being heard before deciding on whether refusal by such owner to grant licence to the complainant was unreasonable and if held unreasonable, determining the compensation to be paid to such owner. This procedure which
encapsulates the principles of natural justice is non-negotiable. Since admittedly, the Petitioner was not a party to the proceedings in which the impugned order came to be passed, prima facie it appears that the impugned order cannot be relied upon by any of the Respondents herein or any other to insist on the issuance of the compulsory licence vis-?-vis the copyrighted works of the Petitioner or to even rely upon the impugned order as regards the rates fixed for the purpose of grant of compulsory licence.

SIMCA is essentially petitioning the Madras High Court for a similar order.

Unfortunately SIMCA has run into some rough weather with the radio stations challenging its locus standi to file the appeal. Apparently it was argued by the radio stations yesterday that since SIMCA is not a registered Copyright Society under the Copyright Act it cannot represent a collective action on behalf of all of its members. It is however undisputed that SIMCA is a registered society under the relevant laws of Tamil Nadu and whether or not the society has a right to represent its members in a legal action is dependent on the bye-laws of the Society. If the Madras High Court were to accept the contention that SIMCA does not have the locus standi to file an appeal on behalf of its members it would mean that all 85 members of SIMCA would have to file separate appeals before the Madras High Court. The next hearing on SIMCA’s locus is on Friday of this week and we will keep you updated on the issue.