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SC ruling gives more teeth to Copyright Board for deciding on royalty rates

SC ruling gives more teeth to Copyright Board for deciding on royalty rates

Author | Pallavi Goorha | Monday, May 26,2008 9:16 AM

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SC ruling gives more teeth to Copyright Board for deciding on royalty rates

The Supreme Court in its judgement dated May 16, 2008 has stated that the Copyright Board is a constitutional authority to decide on royalty rates for the industry for automatic licencing. Thus, once the Copyright Board has taken its decision, there would be no need for the music and radio industry to negotiate on the royalty rates.

With the ball now in the Copyright Board’s court, the coming days are expected to witness intense lobbying by the music and radio operators with the Board.

The core questions that arose for consideration before the Supreme Court in these appeals were – firstly, whether the Copyright Board has jurisdiction under Section 31 of the Copyright Act, 1957, to direct the owner of a copyright in any Indian work or a registered copyright society to issue compulsory licences to broadcast such works, where such work is available to the public through radio broadcast.

Secondly, whether in any event such a compulsory license can be issued to more than one complainant in the light of Section 31(2)? The third question was what would be the relevant considerations which the Copyright Board must keep in view while deciding on whether to issue a compulsory license to a particular person; and the terms on which the compulsory license may be issued, including the compensation?

Several radio operators had filed complaints under Section 31 (1) (b) of the Copyright Act, 1957, before the Copyright Board praying for a compulsory license in relation to the works of Phonographic Performance Ltd (PPL) as they were unable to negotiate a rate with PPL.

PPL had given set revised tariff rates of Rs 1,500 per needle hour or 20 per cent of net advertising revenue, whichever is higher. This revision increased PPL’s tariff rate published in 1996 from Rs 500 per needle hour. The matters were heard by the Copyright Board in Hyderabad on August 18, 19 and 20, 2002. The Copyright Board by its order dated November 19, 2002 directed Registrar of Copyrights to issue compulsory licenses to radio operators upon furnishing of a one-time bank guarantee of Rs 20 lakh per radio station. The radio operators were also directed to pay a license fee of Rs 1,200 per needle hour for playing music during the four-hour period of prime time. The 12 hours of standard time were discounted to 60 per cent of this rate, that is, Rs 720 per needle hour and eight hours of night time were discounted to 25 per cent of the prime time rate, that is, Rs 300 per needle hour. On a day basis, it worked out to Rs 660 per needle hour.

Against the order of the Copyright Board, some radio operators as well as PPL had filed appeals in the Bombay High Court. The Bombay High Court in appeal Nos. 279 and 294 of 2003 had set aside the order of the Copyright Board on April 13, 2004, and remanded the case back to the Copyright Board for reconsideration on the basis of the material available. Similarly, PPL had filed a Special Leave Petition (SLP) in the Supreme Court on July 19, 2004.

The decision of the Supreme Court now puts the ball back in Copyright Board’s court. It is now likely that the Copyright Board would re-examine the royalty rate and consider those applicable internationally, where most royalty rates are about 2-4 per cent of revenue.

The implications are that the Copyright Board is the final deciding authority. The battle now shifts to the Copyright Board. What they finally decide no one can predict, but intense lobbying has already started. The Copyright Board’s decision would be final.

The Copyright Board was reconstituted under the Chairmanship of Dr Raghbir Singh for a period of five years with effect from April 5, 2006 till the year 2011. The Board held six sittings in North, South and West Zones during 2007 and disposed of 38 cases. The Board is part of the Ministry of Human Resource Development.

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