Music Choice India Private Limited v. Phonographic Performance Limited, Appeal No. 150 of 2009 in Suit No. 2124 of 2007 (High Court at Bombay 2010)
Music Choice India wanted to launch a 24 hour music channel in India that would only play music and static graphics. The broadcaster entered into negotiations with Phonographic Performance, a royalty collection society, for the necessary rights. The negotiations stalled (with Music Choice offering 4-7% of prorated net profits and Phonographic Performance demanding 50% of end user price), and in March 2007 Music Choice filed an application for a compulsory license under section 31(1)(b) of the Indian Copyright Act to the Copyright Board at New Dehli.
It can take over two years for the Copyright Board to rule on an application. So in August 2007, Music Choice also filed suit in a trial court in Bombay seeking, inter alia, a declaratory judgment that it had a license to begin broadcasting immediately on the condition that it pay the compulsory royalty rate set by the Copyright Board, when the Board was able to rule on its application; or in the alternative, that the Court allow for it to pay the 4-7% of prorated net profits it proposed in negotiations or another amount set by the court until the Board had a chance to rule on its application. The trial court dismissed for lack of jurisdiction.
On appeal, the Bombay High Court affirmed, holding that the district court did not have jurisdiction to hear the suit. The High Court found that, although it could hear appeals from the Copyright Board on compulsory license applications, it did not have jurisdiction to hear a similar suit brought from a Bombay trial court. Section 9 of the Code of Civil Procedure states that “[c]ourts shall have jurisdiction to try all suits of civil nature excepting suits of which cognizance is either expressly or impliedly barred.” The Bombay High Court found that the legislation enabling the compulsory licensing regime was a special statute and a self-sufficient piece of legislation, which barred general civil trial courts from hearing applications.
(h/t Prashant Reddy at Spicy IP)