In a significant order, delivered on 24 January 2024 by the Bombay High Court in Novex Communications Pvt Ltd. v. Trade Wings Hotels Limited, the Single Bench (SB) held that organizations such as Phonographic Performance Ltd (PPL) and Novex Communications can grant licenses for the musical works owned by them, even if they are not officially registered as copyright societies under Section 33(1) of the Copyright Act, 1957.
For some context: After the Copyright (Amendment) Act, 2012, it was understood that the right to collect royalties can only be assigned to a Copyright Society, under Section 34 (1)(a) (for instance see here). However, in the present case, Phonographic Performance Limited (PPL) and Novex, two entities that are not copyright societies, were assigned rights by some well-known producers such as Tips, Eros, T-Series, etc., and they act as exclusive licensees for these titles, specifically for on-ground performance rights. While Novex has never been registered as a copyright society (as evident from its stance in different cases (see here), PPL has an interesting history. It originally started as a copyright society in 1941, but later lost that designation and after a long period of running around seeking re-registration, finally in 2022 it was allowed to make an application to that regard. Presently, the application for re-registration is pending before the government for consideration. Coming back to the case, the issue here was can these entities which are not copyright societies exert these rights? Responding in the affirmative, the court read the rights of an assignee and a licensee under Sections 18 and 30 separately from the obligations imposed under Sections 33 and 34.
The Court’s Analysis: Striking the Right Chord?
The SB was adjudicating w.r.t. PPL and Novex’s pleas against various restaurants, hotels, and malls accused of copyright infringement for utilizing their sound recordings without obtaining a license. The defendants argued that these two bodies cannot send notices for collecting royalties since they are not Copyright Societies. The court dismissed these arguments, holding that the right of exclusive licensees and assignees to seek royalty is independent to that of the Copyright Society, finding these bodies to fall under the previous bracket.
The concept of a Copyright Society was introduced in Section 33(1) under the 1994 Copyright Amendment, to facilitate the collective administration of the rights of a copyright owner. In this context, the SB determined that section 33(1) does not limit the owner’s right to separately grant copyright interests through licensing under Section 30 of the Act.
Firstly, the SB dismissed the defendant’s claim that Section 33(1) prohibits any person, including a copyright owner, from issuing licenses without registering as a copyright society. Relying on Entertainment Network India Ltd. v. Super Cassette Industries Ltd. (discussed here), the SB emphasized that the concept of a Copyright Society is designed to aid, not diminish, the rights of the owner. It highlighted that the defendant’s interpretation would undermine the owner’s right under Section 30 to grant any interest in the copyright through licensing.
Secondly, the SB rejected the defendants’ argument that the term ‘business of issuing or granting license’ in Section 33(1) should broadly encompass the owners’ right to issue licenses. The court specifically held that accepting such an interpretation would drastically diminish ownership rights, leaving owners only the ability to license for philanthropy.
The court clarified that the functions of the copyright societies under Section 33(1) and the licensing rights of an owner under Section 30 operate in distinct realms, with no conflict between the provisions. Furthermore, the SB differed from the Madras High Court’s perspective in Novex Communications Vs. DXC Technology Pvt. Ltd. (discussed by Mathews here, here, and here), which made a distinction between issuing licenses individually and engaging in the business of licensing. The court emphasized that the Madras High Court had neglected the paramountcy of Section 30, which grants the owner the authority to confer interests in the copyright through licensing.Accordingly, the court dismissed the contention that the absence of registration for PPL and Novex as copyright societies renders their assignment agreements illegal and invalidates their cause of action. The court maintained that, for a limited purpose, assignees like Novex and PPL attain ownership of the copyright under Sections 18 and 30 of the Copyright Act.
Sweet Symphony of Judicial Soundness
The SB’s decision has significant implications as it upholds the supremacy of Section 30, emphasizing the owner’s authority to grant various interests in the copyright, including the communication of sound recordings to the public, which PPL and Novex, as owners/assignees, possess. Prashant has written much about the functioning of copyright societies before (here, here, and here) but when similar rights were being exercised by societies not registered under Section 33, the Madras HC judgment had come as a barrier by emphasizing that licensing of a work is to be done “only” (as used in the second proviso to Section 33(1)) by copyright societies. As also discussed by Mathews here, the Madras HC’s emphasis for “business” lay on the restrictive connotation given by ‘enterprise,’ leading to a flawed interpretation of Section 33, which the extant judgment heals. All in all, the SB’s decision rectifies a previously problematic precedent, aligning with the legislative intent of Section 33 more accurately.
