U.K. music licensing organization PPL has lost its Copyright Tribunal case on tariffs for the hospitality sector, in a ruling that will also impact on its tariffs on offices and factories. It has announced that it will appeal the decision at the High Court.

The neighboring rights society had proposed a new tariff where larger establishments paid significantly more than smaller ones.

However, the long-running case ended up at the Copyright Tribunal following a government referral, after the British Beer and Pub Association and the British Hospitality Association challenged the new rates from PPL (Phonographic Performance Ltd), which were introduced in 2005.

The Copyright Tribunal has now rejected PPL's rates. The verdict was reached on July 30 but the Copyright Tribunal only published its decision today (Oct. 22). The rates paid to PPL, on behalf of performers and record companies, cover the right to play music on TVs and radios in public in the hospitality sector (pubs, bars, restaurants, cafes, hotels, shops) and offices and factories.

The British Beer and Pub Association (BBPA) and the British Hospitality Association estimates their industry will save £5 million ($8.3 million) a year following their victory, and further claims that £15 million ($24.8 million) to £20 million ($33.1 million) is now owed in refunds. The BBPA and BHA were awarded 50% of their legal costs by the Tribunal.

The proposed PPL rate started at £100 ($165) per annum and then increased according to the size of the premises, up to £500 ($827) per annum above 401 square meters. Sales tax VAT was then added to the bill.

Following the Tribunal verdict, the new rates start at £109.75 ($182) up to 400 square meters, and only increase to £150.91 ($250) up to 550 square meters, with further increments of £13.72 ($23) for every additional 50 square meters above 550 square meters.

"We are extremely disappointed by the decision of the Tribunal which, even by its own admission, is 'ill-equipped' to perform its new investigatory role," said Fran Nevrkla, chairman and CEO of PPL, in a statement.

"The Tribunal has failed to have proper regard for the real value of music to businesses, ignoring PPL's extensive consultation with licensees. On behalf of our 42,000 performer and 5,000 record company members, many of whom themselves are small businesses, we are appealing this decision in the High Court."

He added: "The Tribunal's 'one-size-fits-all' approach, which was proposed by the hospitality industry, is particularly unfair to small pubs and shops that in future would pay exactly the same as much larger businesses. Despite a total absence of opposition to PPL's tariff for factories and offices, the Tribunal has completely overturned that tariff, ignoring the clear views of respondents to PPL's consultations."

In a statement, the BBPA and BHA said that during an Oct. 15 hearing it "pressed strongly for full refunds for all those who have had to pay over the odds since 2005 to play music" and that the Tribunal agreed. However, repayments will be delayed pending an appeal; PPL licensees owed less than £50 ($83) will not be refunded and interest will not be owed on any repayments, the Tribunal decided.

Licensees will be able to claim refunds based on their own calculations of what they are owed, or they will be able to ask PPL to make the calculation for them.

"This is a major victory for the industry - not to mention the fully justified prospect of refunds for overpayments in recent years," said Brigid Simmonds, BBPA chief executive, in a statement. "I'd like to thank everyone right across the hospitality sector who has worked so hard to reverse these indefensible charges. It's been a long struggle, but worth it, given today's total victory. We will be doing everything we can to ensure that any appeal case is heard quickly, so that the matter of repayments can be settled as soon as possible."

Martin Couchman, deputy chief executive, BHA, added: "This successful result shows how much time and effort the industry needs to spend when it fights damaging decisions made by public monopolies. The fact that the Tribunal says we are the clear winners shows how justified we were to fight the case."