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Copyrighted Songs: Pass Code to Deposit Ad-hoc License Fee

In a decision aimed at balancing equities, the Delhi High Court directed that an ad hoc license fee be deposited by the Defendant, Pass Code Hospitality Private Limited, for the use in its restaurants and outlets of copyrighted sound recordings from the Plaintiff, Phonographic Performance Limited’s repertoire.[1]

After a civil suit was filed by the Plaintiff two years ago, alleging the exploitation of sound recordings owned by it, the matter came to be settled, with the Defendant agreeing to use the Plaintiff’s work after taking the appropriate license. The one-year license later obtained by the Defendant expired in November of last year, after which the Defendant did not renew the same, refusing to accept the new tariff rates and insisting on continuing with the previous license fee. This led the Plaintiff to file the present suit.

The Defendant, on the other hand, called for legitimate rates, highlighting that there was more than a twofold increase in the rates set by the Plaintiff as opposed to what was agreed for the previous year. It was contended that the Plaintiff monopolised the sound recording market, which gave it free rein to set tariff rates as per its “own wishes, whims and fancies”. Additionally, the Defendant made reference to the Court’s power to determine rates and the Plaintiff not being registered as a copyright society under provisions of the Copyright Act, 1957.

Considering the circumstances, the Court adjudged it appropriate to direct the deposit of an ad hoc license fee. It was made clear that the Plaintiff could withdraw only a portion of the said amount, which was approximately the sum equivalent to the previous license fee agreed upon in the settlement agreement; the balance was to be kept in a fixed deposit. It was held that this arrangement was subject to further orders of the Court.

While the abovementioned matter was listed on July 19, the petition[2] filed by the Defendant seeking revision, determination of licence rates for utilisation of sound recordings and granting of compulsory licence will be heard later this month.

[1] Phonographic Performance Limited v. Pass Code Hospitality Private Limited & Ors. [IA 7255/2024 in CS(COMM) 267/2024]

[2] CO (COMM.IPD-CR) 4/2024