Entertainment Network (India) Ltd. v. Super Cassettes Industries Ltd.

Relevant Acts and provisions

Copyright Act, 1957

Section 31

Provisions considered: Section 31 of the Copyright Act, 1957, on compulsory licensing of broadcasting rights in sound recordings.

Brief facts

An FM radio broadcaster sought a compulsory licence from the Copyright Board under Section 31 to broadcast sound recordings owned by a major music label, after negotiations over royalty terms failed. The label contended that it had already voluntarily licensed its recordings to some broadcasters and that no further licence could be compelled once such licences existed. The Copyright Board granted a compulsory licence on terms it considered reasonable, and the resulting decision was brought in appeal before the Supreme Court.

Issues before the Court

1. Does an offer of a licence on unreasonable terms amount to a refusal under Section 31(1)(b)?
2. May the Board grant a compulsory licence once the owner has already granted a voluntary licence to another broadcaster?
3. On what basis should royalty for such a licence be fixed?

Court's findings

The Court held that the word refused in Section 31(1)(b) is not confined to an outright rejection, and that an offer to license on terms that are commercially unreasonable or designed to frustrate access also amounts to a refusal within the meaning of the provision, since a contrary reading would let owners defeat the compulsory licensing scheme merely by naming an unreasonable price.

The Court held that the grant of one voluntary licence to a broadcaster does not exhaust the Copyright Board's power to grant further compulsory licences to other applicants, since a copyright owner cannot use a single licence to monopolise access and prevent other broadcasters, each serving different markets and audiences, from being licensed on reasonable terms.

The Court directed the Copyright Board to fix royalty on a rational basis, having regard to the interests of the owner, the licensee and the public, and remitted certain terms for reconsideration while broadly upholding the grant of a compulsory licence.

Decision

Appeal disposed of; the compulsory licence was upheld, with directions to the Copyright Board to redetermine reasonable royalty terms under Section 31.

Keywords

Broadcasting Rights Compulsory Licence Copyright Board Music And Sound Recordings Public Interest