SOUTH AFRICA’S COPYRIGHT LAW IS ON A KNIFE-EDGE

The August 2017 Parliamentary hearings on the Copyright Amendment Bill involved more than 70 submissions (written and oral), leading the Portfolio Committee for Trade & Industry to conclude that the Bill requires a lot more work. The Committee decided to take over the drafting of the Bill from the Department of Trade and Industry (the dti) and to prepare a so-called B-Bill.

Whilst it is undisputed that SA’s copyright legislation needs to be updated to address the new ways in which copyright-protected works are dealt with and also to improve accessibility to copyright protected materials for people with disabilities and to strengthen the position of artists, composers, authors and performers following the recommendations of the 2011 report of Copyright Review Commission chaired by Judge Ian Farlam, the expectation was not for our Copyright Act to, in effect, be ‘turned on its head.’  However, many of the proposed provisions in the Amendment Bill may achieve just that, the cause being a new and unmandated focus on so called “users’ rights”.

Our creative industries, whether in the publishing, entertainment, film, music, arts, technology, broadcasting, education and software development sectors, all rely on copyright in some way or another in order to facilitate dealings in their works, whether by their audiences, their customers or even other creative industries.  Any amendment to our Copyright Act should therefore only be considered on the basis of policies backed by evidence and with the interests of all parties in the ecosystem, creative industry stakeholders and consumers alike.

A perceived lack of proper and meaningful stakeholder engagement

One of the key issues raised by multiple industry stakeholders in their submissions to Parliament, is the perception that the dti did not engage with all stakeholders concerned in a meaningful and constructive manner or on an equal footing during the drafting phase.

One of the most powerful presentations delivered during the hearings was undoubtedly that of a composers’ delegation led by music producer Gabi le Roux, and supported by several high profile performing artists, including Vicky Sampson, Kwesta, Ernestine Dean, Locnville and Zolani Mahola.  They informed Parliament that, while dti appears to have engaged more closely with the technology sector, that includes the largest commercial users of copyright protected materials (Google / YouTube, in particular), there was unfortunately no meaningful engagement with artists, authors, composers. This, despite the 2011 Copyright Review Commission report which clearly recommended that our copyright legislation should be amended to ensure that our artists, authors, composers and performers are afforded increased legal protection against the unauthorized use and access to their copyright protected works and that royalty collection and distribution streams be managed more effectively.  Instead, provisions in the Bill are more harmful to those in our creative industries who are already vulnerable, than those in the current Act.

Concerning proposals for ‘users’ rights’

The Bill’s introduction of an inalienable royalty right in favour of “users” has raised many eyebrows. Many observers first thought that the entitlement of “users” to royalties of copyright works that they “used” was the result of a ‘global cut & paste’ error in the drafting, but were shocked to find that this was actually what was intended by the drafters of the Bill.

In what appears to be an attempt to include a ‘user’ of copyright protected works (in particular literary, musical, and artistic works, cinematograph films, sound recordings and audiovisual fixations) into the value chain of parties who would be entitled to receive royalty payments for the use of those protected works, the Bill expressly provides that a ‘user’ shall have the right to claim an equal portion of the royalty payable for use of the relevant copyright protected works.  Further, the ‘user’ shall also have the right to transfer copyright in a literary or musical work.  The ‘user’ is even entitled to give consent to remove or modify the copyright management information of a work which is subject to a technological protection measure.

Insofar as ‘user access’ to copyright protected materials is concerned, the Bill proposes to make allowance for the copying or reproduction of copyright protected works for the ‘purposes of educational and academic activities if the copying does not exceed the extent justified by the purpose’.  Further, the Bill seeks to introduce a legal defence of fair use (see more on this below) insofar as the reproduction and use of copyright protected materials for the purposes of ‘scholarship, teaching and education’ and for ‘expanding access to underserved populations’ are concerned.

The introduction of “users’ rights” begs the question:  Who is the “user”?  With one notable exception, the terms “use” and “user” do not appear in the Act.  Copyright only concerns itself with specific acts in relation to copyright works that amount to their commercial exploitation, notable being reproduction and public performance, which are exclusive rights reserved to the copyright owner.  The exception is Section 9A, introduced in an amendment in 2002, which itself has had a tortuous route to proper interpretation, which was only resolved more than ten years after the section came into effect – to the detriment of composers and performers.

The ‘fair use’ debate

No doubt, the most significant proposed amendment for turning our copyright system into a ‘user access oriented system’ is the proposed replacement of our fair dealing provisions with an open-ended and general defence against copyright infringement in the form of the fair use doctrine, which has its origin in the United States.

It is rather peculiar that the dti were inspired by the United States for guidance for the development of our law.  The doctrine of ‘fair use’ has developed completely independently from copyright legislation in the rest of the world for more than 200 years, and importing this legal doctrine without also importing the legal mechanisms that support the operation of that doctrine would be extremely risky.

The ‘fair use’ doctrine represents an open-ended defence to copyright infringement exemption provision which has general application in that it can apply to any purpose derived from a non-exhaustive list of ‘public good’ purposes.  Application of the defence is determined by a Court after the event by reference to four factors, to determine whether the unauthorized use or reproduction of a copyright protected work may, in certain circumstances, be allowed.

One of the mechanisms which supports the functioning of the ‘fair use’ legal defence in the United States, is the fact that punitive damages may be, and are regularly, awarded.  Plaintiffs in copyright infringement cases may be able to obtain top class legal representation if the attorneys are of the view that they may be successful in landing a huge monetary award. This results in a cautious approach in relying on ‘fair use’.

In South Africa, our Courts rarely award punitive damages for copyright infringement.  In the absence of balancing factors ad qualifications, ‘fair use’ will result in the very opposite of the recommendations of the Copyright Review Commission report being achieved, since composers and performers will not be in any position to protect their rights if they anticipate that a ‘fair use’ defence will be raised, whether in substance or simply as a matter of tactics on the part of the defendant. Consider a large multi-national organization backed by financial and legal resources raising a ‘fair use’ defence for mass unauthorised reproductions of copyright works – such a case would run in the Courts for years, if the rightsholders were able to take on such a case in the first place.

Interestingly enough, in countries with which we do share common law legal heritage, such as the UK, EU, Australia and Canada the importation of a ‘fair use’ system akin to that of the USA, was rejected.  In the UK, government commissioned an independent investigation to determine whether the current copyright (and other IP) legislation was in any way prohibiting or restraining technological or other advances.  Professor Ian Hargreaves and his team of professionals conducted this investigation over the course of many months and eventually concluded (in the so-called Hargreaves report) that that the benefits of the US fair use system are largely overstated; that it could introduce vagueness into law and that the same results could be achieved by taking up copyright exceptions into their already existing fair dealing provisions (which are similar to SA copyright law as it stands) that would accommodate future technological change where it does not threaten copyright owners.

In South Africa, we need to find a solution that works within our existing legal framework and that establishes an appropriate balance between rights holders in our vulnerable creative sectors (our authors, composers, artists and performers which the 2011 CRC Report recommended should receive increased legal protections and should benefit from more effective royalty collection and distribution systems), on the one hand, and those businesses that make commercial use of their copyright protected materials on the other.

The recommendation would be for Parliament’s drafting team to work on keeping our very clear copyright infringement provisions (our so-called fair dealing provisions) intact and to introduce additional exceptions where there is a clear need to do so.

Economic impact

One of the many criticisms of the process leading up to the introduction of the Bill was that the dti had not carried out any meaningful impact assessment, with the report under the Government’s Socio-Economic Impact Assessment System (SEIAS) not indicating any independent research – or any research at all – on the impact of the Bill, especially its proposed exceptions and the ‘fair use’ clause.  The SEIAS report and an earlier regulatory impact assessment referred to in the Bill’s Explanatory Memorandum were not even released by the State in the consultation process.

The publishing sector is understandably very concerned with these proposed amendments to our Act, since the education sector has always been considered as a legitimate market for the publishing industry, just as the education sector is a legitimate market for any form of commerce.  The Publishers Association of South Africa, PASA, had an economic impact assessment of the exceptions for education and the ‘fair use’ provisions carried out by consulting firm PwC, which warned of “severe negative consequences” for the publishing industry if these provisions were to pass into law.  PASA presented PwC’s report to Parliament at the hearings.

Conclusion

The integrity of SA’s copyright law is on a knife-edge. The Bill has become the battleground between those who rely on copyright to freely benefit from original creative works and those who advocate that copyright “locks up” copyright works and makes them inaccessible whilst paying lip service to rights of creators.  When considering the clear and express recommendations made by Judge Farlam and the Copyright Review Commission that SA’s copyright system should protect the vulnerable members of our creative industries, our authors, composers, artists and performers, to enable them to benefit from the works they created and performed, one wonders why the dti unilaterally shifted the policy objective to promote “users’ rights” instead.

STEPHEN HOLLIS

Partner
Trade Mark Attorney

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