Delhi High Court Upholds Copyright Assignee's Right to License Despite Existing Copyright Society

March 3, 2025 - The Delhi High Court delivered a significant ruling in Phonographic Performance Limited v. Azure Hospitality Private Limited & Ors , CS(COMM) 714/2022, clarifying the licensing rights of copyright assignees even in the presence of a registered copyright society. Justice AmitBansal's judgment addressed the crucial question of whether a company holding assigned public performance rights in sound recordings can independently grant licenses, notwithstanding the existence of a registered copyright society under Section 33 of the Copyright Act, 1957.

Case Overview

Phonographic Performance Limited (PPL), an assignee of public performance rights in numerous sound recordings, sued Azure Hospitality Private Limited, a restaurant chain, for copyright infringement. PPL alleged that Azure played their copyrighted music without obtaining a license. Azure argued that only a registered copyright society could legally issue such licenses, citing Section 33 of the Copyright Act. A prior suit filed by PPL in the Bombay High Court, involving one Azure outlet and later withdrawn, was also a point of contention.

Key Arguments

PPL argued that as an assignee under Section 18 of the Copyright Act, it owns the relevant rights and, per Section 30, has the right to grant licenses independently. They cited the Delhi High Court's previous judgment in Novex Communication v. Lemon Tree Hotels and the Bombay High Court's decision in Novex Communications v. Trade Wings Hotel as precedents supporting their position. They emphasized that the second proviso to Section 33(1) doesn't bar their licensing rights as it applies to underlying works embedded within sound recordings, not the sound recordings themselves.

Azure , conversely, contended that PPL's actions constituted conducting the "business of granting licenses" as defined in Section 33(1), which, they argued, is exclusively the purview of registered copyright societies. They relied on the Madras High Court's judgment in Novex Communications v. DXC Technology to support their claim.

Court's Reasoning and Decision

Justice Bansal meticulously analyzed the relevant sections of the Copyright Act, focusing on the interplay between Sections 18 (assignment of copyright), 30 (owner's right to grant licenses), and 33 (provisions for copyright societies). The court highlighted the distinction between the owner's inherent right to license (Section 30) and the role of a copyright society as an agent (Section 34).

The judge distinguished the Bombay High Court suit, concluding it was based on a different cause of action (a quia timet action based on potential future infringement). The judge found no material suppression.

The court ultimately held that Section 33 does not override Section 30. The inherent licensing right of a copyright owner, including an assignee, persists irrespective of the existence of a registered copyright society. The court explicitly disagreed with the Madras High Court's interpretation in Novex Communications v. DXC Technology .

> "The inherent right of a copyright owner to grant licenses under Section 30 of the Copyright Act is not overridden by Section 33. The second proviso to Section 33(1) does not bar the owner from engaging in the ‘business of issuing or granting licences’ with respect to sound recordings themselves, but only in relation to underlying works."

The court granted PPL's application for an interim injunction, restraining Azure from using PPL's copyrighted works.

Implications

This judgment is a significant clarification of copyright law, particularly regarding the rights of copyright assignees. It emphasizes that the existence of a copyright society doesn't preclude the copyright owner (or assignee) from independently exercising their licensing rights. The decision is likely to have implications for numerous similar cases involving the licensing of sound recordings. The case will be further heard on July 15th, 2025.