Intellectual Property & Media Law
When Licensing Becomes Leverage: The Quiet Misuse of Copyright by Music Licensing Entities
The story of copyright that most people know is a simple one: creators make work, others use it, and the law ensures they are paid for it. But that account leaves out the layer of intermediaries sitting between the artist and the venue — the licensing companies, the collection agencies, and the self-styled "societies" that have, in practice, turned a system meant to reward creators into one built on ambiguity, delayed enforcement and the threat of litigation.
A recent contempt application filed against a small gaming and entertainment lounge in Mumbai illustrates the pattern well. The venue was first accused of playing recorded music without a licence, then pursued again more than a year later through an application seeking to have a partner of the firm committed to civil prison, along with a demand exceeding sixty lakh rupees. A closer look at the paperwork told a different story: the notice had gone to the wrong address, part of the claimed repertoire belonged to a label whose agreement with the licensing company had already lapsed, and the "proof" amounted to a handful of personal phone recordings that did not even match the list of songs named in the application.
The aggression doesn't rely on the merits being good; it relies on the target lacking the resources, time and legal representation to challenge them.
None of this diminishes the underlying claim that music must be paid for — most venue operators accept that and budget accordingly. This is not confined to one company or one city. Across India, hotels, restaurants, banquet halls, wedding venues and lounges report the same sequence: a demand letter arrives, often years after the alleged use of music, quoting a per-song or per-event rate that was never published or negotiated. Frequently, it comes from an organisation that has not registered as a copyright society under Section 33 of the Copyright Act — a provision specifically designed to ensure that anyone collecting licence fees on behalf of authors and composers is registered, accountable and subject to regulatory oversight, including the tariff-setting powers of the bodies that succeeded the Copyright Board. Many such entities instead describe themselves as licensing agents or assignees, a label that exempts them from registration while allowing them to function, in substance, exactly like a society.
Part of the difficulty is structural: there is still no single reliable register from which a business can determine which entity actually holds the right to license a given song. It is not unusual for two or three different groups to claim overlapping rights to the same repertoire, each threatening its own action if unpaid. Paying one claimant offers no guarantee against being sued by another, and refusing all of them carries its own risk if a genuine rights-holder later comes forward. This is not a hypothetical problem — it is currently before the Supreme Court in a closely watched dispute involving a hospitality business, where one of the central questions is whether an unregistered licensing body can conduct this business at all, as opposed to acting strictly as a disclosed agent of an identified rights-owner.
Until that question is settled, the incentives favour exactly the pattern seen in Mumbai: sue late, claim broadly, serve loosely, and treat the injunction as a bargaining chip rather than a remedy. Using civil contempt to compel payment from a party that never had a fair opportunity to contest the claim is a misuse of that remedy. The problem is compounded by evidentiary shortcuts — recordings made on personal handsets, filed without the certification the Evidence Act requires for electronic material, are sometimes treated as sufficient to threaten someone's liberty, even though a contempt proceeding demands a higher threshold than an ordinary infringement claim.
None of this suggests that copyright enforcement is unjustified. When a work is used commercially, its creator should be paid, and collection is a legitimate business. What it calls for is a more honest accounting of what is actually happening in this space — the information asymmetry, the aggressive procedural shortcuts, and the deliberate blurring of the line between a rights-holder's agent and a regulated, accountable society. Courts weighing injunction applications and contempt enforcement in this area would do well to ask three questions at the outset that are not always asked: has the applicant established a subsisting right to the specific repertoire at issue; was that right asserted in a manner that could support a finding of knowledge if an order were made; and does the conduct in question amount to wilful defiance, or merely reflect the confusion of a licensing market where certain proof of rights is often unavailable.
Until the registration and transparency provisions of the Copyright Act are consistently enforced, and until the Supreme Court resolves the standing of unregistered licensing entities in the pending case, ordinary businesses will remain vulnerable — not to copyright law as written, but to copyright law as enforced by whoever sends the first notice.