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Written by Keerthana M, Lawyer, and Verified by Sunil Jose, Managing Attorney, Suns Legal.
On my last visit to a nearby clothing store, they had ‘Sajni’ from Laapata Ladies on loop, which made me wonder whether they had obtained a license for broadcasting the song. The Copyright Act, 1957 (the Act) mandates that one must obtain a public performance license to play pre-recorded tracks or conduct live performances of copyrighted songs in commercial establishments like cafés, restaurants, shopping malls, etc. This requirement was reiterated in a recent interim order by the Bombay High Court in Phonographic Performance Ltd. v. Lulu International Shopping Malls Pvt Ltd. & Ors, COM IPR SUIT (L) NO. 35708 OF 2024.
Section 14 of the Act guarantees a bundle of rights to the copyright holder, or any person duly authorized by him. These rights include the ability to reproduce the work, perform and communicate it to the public, and make adaptations of it, among others. These rights can be wholly or partially ‘assigned’ to another person (Section 18). Assignment can also be done for future works, but it takes effect only when the work comes into existence. However, assignment is different from licensing.
Section 30 of the Act deals with licensing. It means that an interest in the copyright can be granted to another person in writing without the ownership of the copyright being transferred. This empowers the licensee to use the work in a way that would otherwise be deemed infringement. Licensing is categorized into two types: voluntary and compulsory licensing. In voluntary licensing, the copyright owner willingly grants another person the right to either exclusively or non-exclusively use the work. In exclusive licensing, the licensee is allowed exclusive use of the copyrighted work during the licensing period, preventing others, including the copyright owner, from using it. Non-exclusive licensing permits multiple licensees, along with the copyright owner, to use the work simultaneously. Compulsory licenses, as stipulated in Section 31 of the Act, are issued for copyrighted works withheld from the public. When granting these licenses, the licensor charges a fee, and sometimes ‘royalty’ as well. Royalty is a payment based on usage and is generally a percentage of the net profit earned from the work.
Referring back to the interim order by the Bombay High Court in Phonographic Performance Ltd. v. Lulu International Shopping Malls Pvt Ltd. & Ors, Lulu Shopping Malls Pvt Ltd undertook to obtain a prior license from Phonographic Performance Ltd. (“plaintiff”) while conducting events on their premises, that broadcast songs in which the plaintiff claims copyright. They also agreed to ensure that their customers who organize such events on the premises obtain the required license.
Organizations like the plaintiff and Novex Communications Pvt Ltd. (another music rights-holding entity) have acquired the authority to grant licenses for the use of their extensive repertoire of copyrighted songs. Production giants such as T-series, Universal Music, Zee Music Company, and other independent musicians assign the exclusive right to grant licenses to these organizations, which have the resources to commercialize the music. This results in enhanced economic benefits and extended protection from the unauthorized use of the musical work.
But do PPL and Novex have the authority to grant licenses? According to Section 33 of the Act, only registered societies can issue licenses for any work in which copyright exists. However, PPL and Novex are not registered copyright societies, and this was the defendant’s argument in Novex Communications Pvt Ltd. v. Trade Wings Hotels Limited, COMMERCIAL IP SUIT NO. 264 OF 2022 (Bombay High Court). The honourable court held that they could continue the licensing business under Sections 18 and 30 of the Act; otherwise, it would irrationally restrict the ownership rights of the copyright owner. The Bombay High Court thus dissented from the opinion of the Madras High Court in Novex Communications v. DXC Technology Pvt. Ltd., C.S Nos. 407 & 413 of 2020, and emphasized that the latter had overlooked the supremacy of Section 30, which grants the owner the authority to confer interests in the copyright through licensing.
Another important point of discussion is why it is essential to obtain licenses to use a copyrighted sound recording or any other copyrighted work. Firstly, a person using the sound recording without a valid license can be sued for copyright infringement. This is a cognizable and non-bailable offense, with penalties including a jail term ranging from 6 months to 3 years and fine, at a minimum of fifty thousand to two lakh rupees. Secondly, licensing protects the creative work from unauthorized use. Lastly, it validates and rewards the artists both morally and economically. Therefore, obtaining a valid license to use any copyrighted music or work is crucial.
Providing legal protection to intellectual creations inspires creators to push their boundaries, fostering the development of novel ideas and superior innovations. Hence, it is necessary to give due recognition to artists and safeguard their work from unauthorized use. Licensing plays a crucial role in this context. The true spirit of the Copyright Act, 1957 is to protect the interests of creators. Therefore, the requirement to obtain a license for the lawful use of copyrighted work is a step towards a law-abiding society that values and respects the intellectual creativity of its citizens.