( 1 ) THIS appeal is directed against the order dated 20th October, 2003 passed by the Copyright Board at New Delhi in Case No. 10/2003. Appellant s main grievance is against the direction of the Copyright Board directing the Registrar of Copyrights to grant a compulsory license under Section 31 (1) (b) of the Copyrights Act, 1957.

( 2 ) IT is alleged that the appellant is one of the leading music companies engaged in the production and/or acquisition of rights in sound recordings. According to the appellant, through keen perception of ever changing consumer practices, infrastructural investment, technological upgradations and a skilled, cohesive work force, and an aggressive commitment towards quality, companies such as the appellant play a vital role in creating the music which then become available for the mass consumption.

( 3 ) ACCORDING to the appellant its most valuable asset is the copyrights in cinematographic films and sound recordings. The music of the appellant is either produced by the appellant at its own studios, or is acquired by way of assignments. It is alleged by the appellant that the songs produced and/or acquired by the appellant are sound recordings within the meaning of Section 2 (xx) of the Copyright Act, 1957. It is alleged that the appellant being the owner of the copyright in the aforesaid sound recordings is entitled to all the exclusive rights flowing from such ownership as set out in Section 14 of the Copyright Act, inter alia

A) to make any other sound recordings embodying the original sound recording. b) to sell or hire, or offer for sale or hire, any copy of the sound recordings. c) to communicate the sound recordings to the public by any means including broadcast by radio, internet or any other medium whatsoever.

( 4 ) ACCORDING to the appellant under Section 51 (a) (i) of the Copyright Act, copyright in a work shall be deemed to be infringed, when any person, without a license from the owner of copyright,

I) does anything, the exclusive rights of which are granted to the owner of copyright, such as the ones enumerated above (the primary acts of infringement) ii) permits for profit any place to be used for the communication of the work to the public where such communication constitutes an infringement of copyright in the work. Under Section 51 (b) of the Act, copyright in a work also is infringed, when any person, without a license from the owner of copyright, i) makes for sale or hire, or sells or lets for hire, or by way of trade displays or offers for sale or hire any infringing copies of the work, or ii) distributes either for the purpose of trade or to such an extent as to affect prejudicially the owner of copyright, any infringing copies or the work, or iii) by way of trade exhibits in public, or iv) imports into India, any infringing copies of the work.

( 5 ) IT is alleged that the appellant has invested several crores of rupees in acquiring and developing technology and infrastructure, as well as recruiting musical talent, in order to produce sound recordings. They also spend significant amount of money in acquiring rights to sound recordings by assignment. They are, therefore, an indispensable part of the process whereby music reaches consumers. The primary asset of the appellant s music division is its copyright in sound recordings, and its only source of revenue is from the sales of sound recordings in which it owns the copyright, in the form of audio cassettes and CDs. In the absence of such revenue, the music business of the appellant would be wholly unviable, and music would not be produced in the first place. It is further averred that the appellant s substantial part of the investment in his music division is on producing or otherwise acquiring rights in new Indian film music, for which the bulk of revenues come from the sales generated in the three months prior to and six months following the release of the film.

( 6 ) THE respondent which broadcasts under