Passcode Hospitality Pvt. Ltd. Has Moved To Delhi High Court Seeking Compulsory License Over Sound Recordings Owned By Phonographic Performance Ltd.

Passcode Hospitality Pvt. Ltd. Has Moved To Delhi High Court Seeking Compulsory License Over Sound Recordings Owned By Phonographic Performance Ltd.

Passcode Hospitality Private Limited, a boutique hospitality firm, has approached the Delhi High Court seeking a compulsory license for the sound recordings purportedly owned by Phonographic Performance Limited (PPL) to utilize them in the national capital.

Justice Anish Dayal has issued a notice in response to the plea filed by Passcode Hospitality, the owner of popular bars and restaurant chains such as SAZ, PCO, Ping's Café Orient, and Jamun. The plea also seeks a revision and determination of license rates for the utilization of the sound recordings.

The court asked PPL to provide their response, which should include their published rates for all categories over the past five financial years. Additionally, PPL is required to provide specific reasons for any escalation in rates for the current year (2023-2024) compared to the previous year (2022-2023).

In September 2022, PPL initiated a lawsuit against Passcode Hospitality, accusing the latter of infringing upon the copyright of its sound recordings. However, the suit was subsequently settled between the parties.

Passcode Hospitality asserts that, according to the terms of the settlement, it obtained a copyright license to play the entire repertoire owned by PPL for a duration of one year, starting from November 4, 2022. Additionally, both parties agreed upon a license fee amounting to Rs.7,80,715.

Passcode Hospitality contends that PPL demanded an increased license fee of Rs.18,13,560 for the current year. Passcode argues that this demand is unreasonable and arbitrary, amounting to excessive appropriation by PPL.

Passcode Hospitality proposed that an interim arrangement could be reached between the parties. This arrangement would involve agreeing upon a reasonable fee that the firm could pay for the removal of the license, pending the determination of the plea.

PPL raised concerns regarding the maintainability of the petition, arguing that Passcode Hospitality's case falls under Section 31(a) and not Section 31(b) of the Copyright Act, as Passcode is not considered a broadcasting agency.

Passcode's petition asserts that PPL actions of unilaterally, unreasonably, and arbitrarily establishing and raising tariff rates for its sound recordings, without a clear basis, constitute a denial of permission for the communication and performance of the work. This results in the effective withholding of the work from the public.

The plea emphasizes that the actions of the respondent are in violation of the provisions of the Copyright Act, which aim to safeguard the public's rights to republish, perform, or access published works on fair and equitable terms. Therefore, the respondent's actions run counter to the public interest sought to be upheld by the Copyright Act.

The court has instructed both parties involved in the case to file their replies within four weeks. Additionally, they are directed to provide copies of their replies to the opposite party. If necessary, a rejoinder to be submitted before the next scheduled hearing on April 26th.