PPL takes legal action over royalty directive.

London-based collecting society Phonographic Performance Ltd. (PPL) has cleared the first hurdle in a legal case it launched against the British government.

PPL is accusing the government of failing to implement a European directive relating to the recovery of fees for publicly played sound recordings.

The collecting body claims that the government failed to implement European provisions that override license exemptions contained in the British 1988 Copyright Designs and Patents Act. The European directive in question set a deadline of July 1, 1994, for implementation.

During a July 7-8 preliminary hearing in the High Court, the government tried to have the case dismissed, claiming, among other things, that the PPL had waited too long to sue. The judge, however, allowed PPL to continue with the case.

If successful, the suit could result in a damages award totaling millions of pounds. The performing rights body has 3,000 label members and 30,000 registered performers.

However, the defense told the judge that the claim could have broad repercussions. "This has implications potentially across government," said counsel for the Department of Trade and Industry and the attorney general, who are fighting the claim.

"It's all very much at early stages," comments Peter Leathem, director of legal and business affairs at PPL. "We will continue our dialog with the government outside the proceedings themselves to see if we can resolve matters," he says.

No date for the full hearing has been set, but observers say it is unlikely to take place this year.