Author’s Rights - Celebration or Electric Shock
7/02/2012
In the recent case between Rafael Vergara Hermosilla and The Cola-Cola Company, The Coca-Cola Company was accused of infringing copyright in a translation of a song used in promotions for the 2010 FIFA WORLD CUP. The United States Court of Appeals for the Eleventh Circuit held that it had a perfect defence because the copyright had been assigned to it as the result of an ordinary exchange of e-mails. Will the position be the same in South Africa?
The background is presented in different and, at times, seemingly inconsistent,ways in the successive judgements but the basic facts appear to be those set out below.
In 2009, Coca-Cola commissioned the performer K'naan to adapt his song "Wavin' Flag" to create the Celebration Mix song as part of Coca-Cola's advertising campaign for the 2010 FIFA WORLD CUP. Coca-Cola needed a Spanish language version of the lyrics and asked Jose Puig (“Puig”) of Universal Music Latin America to attend to it. Puig appointed Vergara to adapt the Celebration Mix into Spanish and he delivered the final product to Universal Music in December 2009. Vergara also produced the recording of the Spanish Celebration Mix. He was paid for his production work.
In February 2010, the Spanish Celebration Mix was sold through iTunes without credit being given to Vergara for the Spanish adaptation. The owners of the musical composition refused to give an “adapter’s share” to Vergara and he threatened legal proceedings based on his copyright interest in the adaptation.
Vergara's dealings were primarily with Puig, the Vice-President of Marketing at Universal Music.
On 4 March 2010, Universal Music assigned the copyright in the adaptation to Coca-Cola, claiming that it had acquired the copyright from Vergara. The issue in dispute was whether or not Universal Music had actually acquired the copyright from Vergara.
Vergara and Puig had been involved in e-mail correspondence throughout March 2010 regarding royalties and ownership. Vergara had stated in an e-mail to Puig that his only demand was that his name as adapter was listed every time the name of any composer of the Spanish Celebration Mix was shown, along with production credits. He then went on to tell Puig to consider the adaptation to have been a work for hire “with no economic compensation other than one dollar”.
Although Puig sent a contract to Vergara for signature, it did not include provisions complying with Vergara’s requirements for credit for his work. However, Puig advised Vergara that he would have credits on the track and he sent the contract again. Vergara refused to sign. He claimed that his requirements were clear and he revoked his proposal for a settlement. Shortly after that the first lawsuit was brought.
In June 2010, the District Court temporarily restrained Coca-Cola from advertising, selling, distributing or disseminating the Spanish Celebration Mix unless it attributed credit to Vergara as the adapter of the song. However, in February 2011, the District Court issued a summary judgement in favour of Coca-Cola, setting aside the restraining order and ruling that Vergara had assigned his rights to the lyrics for a dollar, as he had received a payment and had received credit for his contribution.
According to Section 204(a) of the United States Copyright Act of 1976, the transfer of the ownership of copyright, other than by operation of law, is not valid unless an instrument effecting the transfer is in writing and signed by either the owner of the rights that are assigned or the owner’s duly authorized agent. The parties' intent, as evidenced by the “signed writing”, must demonstrate a transfer of the copyright. The court confirmed earlier judgements holding that e-mails constitute “signed writings” and that e-mail correspondence could therefore give rise to an effective assignment.
The District Court held that an offer was made by Vergara in the e-mail to Puig, in which he stated that he agreed to sell his rights to the lyrics for a dollar as long as he received credit for his contribution. It also held that the proposal was unequivocally accepted by Puig when he wrote to Vergara saying that Vergara could count on the credits being on the track. This was an acceptance of Vergara's essential terms. At that moment, the deal was made and was irrevocable. Therefore, Vergara had entered into a contract to assign his copyright in his adaption to Universal Music through the e-mail correspondence with Puig.
The Appeal Court, although stating that the initial restraint had been properly granted on the evidence available to the Court at the time of the first judgement, confirmed the second judgement to the effect that Vergara had assigned his copyright to Universal Music. The Appeal Court held that the two relevant e-mails were connected with each other in such a way that they were fairly said to constitute a complete contract. The e-mails did not contain any language from which conflicting legal inferences could be drawn regarding the offer by Vergara and acceptance by Universal Music. Thus, Vergara had assigned his copyright to Universal Music which, in turn, assigned it to Coca-Cola. Since Coca-Cola could not be sued based on copyright that it owned, the Appeal Court confirmed the summary judgment.
Would the same result be reached in a South African Court of Law?
According to section 22(3) of the South African Copyright Act of 1978, no assignment of copyright shall have effect unless it is in writing signed by or on behalf of the assignor.
Section 12 of Electronic Communications and Transactions Act, 2002, usually called the ECT Act, states that a requirement in law that a document must be in writing is met if the document or information is in the form of a data message and accessible in a manner usable for subsequent reference. Section 13 of the ECT Act, stipulates that, where the signature of a person is required by law and that law does not specify the type of signature, that requirement in relation to a data message is met only if an advanced electronic signature is used. Section 13(4) states that, where an advanced electronic signature has been used, the signature is regarded as being a valid electronic signature and to have been applied properly, unless the contrary is proved.
The ECT Act defines an “advanced electronic signature” as “an electronic signature which results from a process which has been accredited by the Accreditation Authority as provided for in section 37”. The “Authority” in this case is the Director-General of the Department of Communications, although he may also appoint other employees of the Department as Deputy Accreditation Authorities. The goal of these accreditation processes is an authentication product or service authenticating electronic signatures. The core function of an advanced electronic signature is to ensure that the identity of the signatory can be determined. At face value, an electronic signature may be treated as a normal signature if these requirements are met.
Therefore, since the Copyright Act of 1978 requires that assignment of copyright should be effected in writing and signed by or on behalf of the assignor, a data message will probably be regarded as a valid instrument for the purpose of assigning copyright if an advanced electronic signature is used.
Applying South African law to the Vergara case, it seems likely that the e-mail communications between Vergara and Puig, although meeting the requirement that an assignment document should be in writing, would not have been sufficient to assign the copyright in the work to Universal Music. Any “signature” that was used was not authenticated and the requirement for the assignment to be “signed” would not have been fulfilled.
To our knowledge, this situation has not been tested in our Courts and it will be interesting to see whether or not our Courts, in due course, regard e-mail correspondence between individuals as being sufficient to assign copyright.
Bouwer is an associate, Trade Mark Prosecution with Adams & Adams. The article was verified by Alan Smith, Partner, Trade Mark Litigation
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The firm practises directly in several Southern African countries and through long-established associates in others.
