COPYRIGHT AMENDMENT BILL (2015) SUMMARYAFAI Cultural Policy Reading Group (Aug 6th)

Prepared by Gino Engle

History and Structure

The original Copyrights Act 98 (1978) came into effect in 1979, and since then there have been nine Amendment Acts, the last being the Copyright Amendment Act 9 (2002).

Structure of legislation document:• Definitions (Section 1)• Nature of copyright in various works, including royalties

(Sections 6-11)• General exceptions (Sections 12-19)• Ownership and licencing (Section 21-22)• Infringements (Sections 23-28)• Tribunal and procedures (Sections 29-39)• Miscellaneous items (Sections 40-47)

Background Statement

‘The current policy revision is based on the need to bring the copyright legislation in line with the digital era and developments at a multilateral level. The universal purpose of copyright is to reward and incentivise creators of knowledge and art. The purpose of the Bill is to increase access to knowledge, access to education, learning materials for nationals and persons with disabilities. The creative industry particularly musicians, are vulnerable to abuses by users of their Intellectual Property and the Bill seeks to redress this matter. The closing date for comments is 26 August 2015.’

-http://www.thedti.gov.za/

Official MotivationsTo amend the Copyright Act 98 (hereafter CA 98 or principal Act) of 1978, so as:• to amend certain definitions; • to allow for the reproduction of copyright work; • to provide for the protection of copyright in craft work; • to provide for the accreditation and registration of Collecting

Societies*; • to provide for the procedure for settlement of royalties disputes; • to allow fair use of copyright work; • to provide for access to copyright works for a person with disabilities; • to provide for the protection of ownership of orphan works* by the

state; • to provide for the establishment of Intellectual Property Tribunal*; • to provide for the appointment of members of the Intellectual Property

Tribunal;

Official Motivations (continued)• to provide for the powers and functions of the Intellectual Property

Tribunal; • to provide for protection of performers’ moral and economic rights; • to provide for the protection of rights of producers of phonograms; • to provide for prohibited conducts in respect technological

protection measure; • to provide for prohibited conduct in respect of copyright

management information; • to provide for management of digital rights; • to provide for the promotion of broadcasting of local content; • to provide for certain new offences.

Preliminary Definitions• Collecting Societies: ‘Collective Rights Management refers to the

management of copyright on a collective basis. Organisations, usually known as collecting societies, are granted by rightsholders (whether by way of agency mandate or assignment of rights) the right to license the use of copyright-protected works on a collective basis (i.e. the user has access to all the works controlled by the collecting society by virtue of the one licence). The benefit of collective rights management is that it significantly reduces the administrative burden for both rightsholders and users that is associated with direct licensing.’ (www.capasso.co.za/index.php/more-on-collective-rights-management)

• Orphan works: means ‘works in which copyright still subsists but the right holder, both the creator of the work or the successor in title cannot be located;’ (definition in Amendment Bill).

• Intellectual Property Tribunal: New juridical body to substitute the Copyright Tribunal (Amendment details below).

List of Key Amendments

a) Protection over digital content

b) Coverage of ‘artistic works’ and resale royalties

c) Coverage of ‘craft works’

d) Exception of disabled peoples and educational services

e) Exception of ‘fair use’ of copyrighted works - limits

f) Establishment of the Intellectual Property Tribunal

g) Collecting Societies

h) Broadcast – ‘local content’

i) Infringements – with respect to broadcast

j) Orphan Works - ownership

Key Amendmentsa) Protection over digital contentAmendment, throughout the Bill, of public communication of “works” terminology. E.g. Section 9 (CA 98) from:- “(e) communicating the sound recording to the public.” to- “(e) communicating the sound recording to the public[.] of

their works, by wire or wireless means, including the making available to the public of their works in such a way that members of the public may access these works from a place and at a time individually chosen by them.”.

Issue not over what work is protected but who owns the rights to the work.

Key Amendmentsb) Section 7; ‘artistic works’Section 7 of the principal Act concerns ‘artistic works’ which is defined in Section 1 as:

‘“artistic work” means, irrespective of the artistic quality thereof—

(a) paintings, sculptures, drawings, engravings and photographs;

(b) works of architecture, being either buildings or models of buildings; or

(c) works of craftmanship not falling within either paragraph (a) or (b)’

Which is distinct from copyright in ‘broadcast’ (Section 10), ‘cinematographic film’ (Section 8), and ‘sound recordings’ (Section 9).

Key Amendmentsb) Section 7; ‘artistic works’The Amendment Bill proposes to introduce ‘Resale royalty rights’, which would cover secondary markets (e.g. auction houses). Key amendments include the insertion of sections 7A-D, e.g.:• “7A Resale royalty right

(1) A creator of artistic work shall, with respect to original works of art enjoy the inalienable resale royalty right on the commercial resale of his or her created work of art subsequent to the first transfer by the author or creator of such work of art.

(2) Resale royalty shall be payable at the rate of 5% of the commercial resale price or as prescribed by the Minister.”

The conditions under which resale royalties might be ‘prescribed by the Minister’ are unstipulated.

Key Amendmentsc) Copyright in craft workInsertion of specific subsection for craft work, as follows:

“11C Nature of copyright in craft work (1) Copyright in craft work vests the exclusive right to do or to authorize the doing of any of the following acts in relation to the whole craft work or a substantial part thereof:

(a) create the original craft work automatically protected by copyright from the time they are created, as –

(i) work of the person who created the craft; or

(ii) work assigned to the creator by the manufacturer, publisher or employer, which copyright work is owned by the creator and the persons who assigned the work, respectively.

(b) design or draw a pattern for a craft item including, templates, drawings of shapes, diagrams, paintings and sculptures for crafts work;

(c) reproduce the work; or

(d) make arrangement or other transformation of the work.”.

Where ‘craft work’ means works of pottery, glasswork, sewing, knitting, crochet, jewellery, tapestry, woodwork, lace work, embroidery, paper tolling, folk art and hand-made toys.

Key Amendmentsd) Disabled persons and education services

19D General exceptions regarding protection of copyright work for a person with disability

(1) It shall be permitted without the authorisation of the author or other owner of copyright to make an accessible format of a work for the benefit of a person with a disability, to supply that accessible format or copies of that accessible format to persons with a disability by any means including, by non-commercial lending or by electronic communication by wire or wireless means and undertake any intermediate steps to achieve these objectives, provided that the following conditions are met:

(a) the person or organisation wishing to undertake any activity under this provision has lawful access to that work or a copy of that work;

(b) the work is converted to an accessible format which may include, any means needed to navigate information in the accessible format, but does not introduce changes other than those needed to make the work accessible to a person with a disability; and

(c) the activity is undertaken on a non-profit basis.

Allows for the reproduction of a work for personal use by disabled persons and protects organisations that offer services for disabled persons.

Similar amendments over educational and inter-libraries reproductions, which may require further specification (i.e. private and/or public providers, at what level, in what capacity) (see Section 12.15 and 13).

e) ‘Fair use’ exception of copyright works

“12A General exceptions from protection of copyright for fair use:

(2) Notwithstanding any provision of this Act, fair use of work for purposes such as criticism, comment, news reporting, judicial proceedings, professional advice, teaching which may include, making multiple copies for classroom use, scholarship or research is not an infringement of copyright.

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(4) Fair use of copyright work shall allow for some limited and reasonable use of copyrighted work for purposes of cartoon, parody or pastiche work in songs, films, photographs, video clips, literature, electronic research reports or visual art for non-commercial use, without having to request a permission specified in the Schedule hereto. The use includes -

(a) quoting the works of the copyright owner in a manner that is reasonable and fair;

(b) making copies of eBooks or compact discs purchased by the user; or

(c) transferring of purchased compact discs onto the user’s MP3 format player.”

Issues around ambiguity of “limited and reasonable use” (NB: offensive artistic depictions of Zuma).

f) Intellectual Property TribunalEstablishment of an independent juristic body to replace the Copyright Tribunal (Section 29) and to act as the key national “regulatory and enforcement agency” under the Constitution and the law. Details include the appointment procedures of the Ministerial Committee (29B-F).

The functions of this Tribunal are (29A):

(1) The Tribunal must carry out the functions and exercise the powers and functions assigned to it in terms this Act or any legislation.

(2) The Tribunal may – • (a) adjudicate any application or referral made to it in terms of this Act, Companies

Act, 2008 (Act 71 of 2008) or any legislation and make any appropriate order in respect applications or referrals;

• (b) hear appeals or review any decision of the Commission or any accredited dispute resolution institution;

• (c) adjudicate any application or referral made to it by any person, institution or regulatory authority where the dispute which is the subject of the application or referral relates to intellectual property rights;

• (d) settle disputes relating to payment of royalties or terms of agreements entered into as required by this Act or agreement entered into to regulate a relationship or matter in relation to intellectual property rights”.

Key Amendmentsg) Collecting SocietiesBackground: The original Copyright Act 98 (CA 98) (1978) omits legalities surrounding the registration and administration of Collecting Societies.

Case study which highlights the practice of Collecting Societies

“Copyright Tribunal Rules On Sound Recording Royalties” (http://www.mondaq.com; R. Sikwane, 6 Dec 2013):

This case, which was referred to the Copyright Tribunal, regarded a royalty dispute between the rightsholders of sounds recordings and retailers who play those recordings in public.

This case pitted major retailers (incl. Foschini, Mr Price, Pick ‘n Pay, etc.) against a Collection Society known as the South African Music Performance Rights Association (SAMPRA), the representative and collector of royalties for ‘almost the entire recording industry’ (incl. Sony, EMI, Universal and Gallo). SAMPRA had ‘unilaterally set a tariff... basically [adopting] a take-it-or-leave-it approach when demanding payment’. Both sides were unable to reach an agreement through negotiations, hence the referral.

Upon evidence from expert witnesses (incl. copyright lawyers, economists, and music therapists), Judge Phatudi suggested that the Tribunal find a tariff that ‘optimises public welfare’, in the end ruling that SAMPRA had been wrong to unilaterally impose a tariff. The judge’s referral to ‘licencing schemes’ (Chapter 3, Copyright Act 98) upheld the imposition of a new tariff by the Copyright Tribunal, against the wishes of economist Prof Don Ross (UCT) whose evidence favoured free-market principles to determine the level of tariff.

Key Amendmentsg) Collecting Societies

Registration of Collecting Societies: (Sections 9B, 9C, 9D, 9E, and 9F), including:

• ‘9B. Registration: (1) There shall be one Collecting Society per copyright and per set of rights with regard to all music rights such as performance, needletime and mechanical, to be registered and regulated by the Commission.

• 9C. Administration of rights by Collecting Society: (1) Subject to such terms and conditions as may be prescribed - (a) a Collecting Society may accept from an owner of rights exclusive authorisation to administer any right in any work by issue of licences or collection of licence fees or both; and (b) an owner of rights shall have the right to withdraw such authorisation without prejudice to the rights of the Collecting Society concerned.’

Key Amendmentsg) Collecting SocietiesAmendment regarding Collecting Societies in relation to royalty disputes (9A):

“The Tribunal must adjudicate such matter as soon as reasonably practicable and where possible, before the performance which is the subject of such application, make any order it deems fit including, but not limited to an order that -

(a) a provisional payment of royalty is made into a trust account of an attorney nominated by the copyright owner or Collecting Society pending the finalization of the terms and royalty payable: Provided that such amount shall be paid over to the copyright owner or Collecting society as it represents the difference, if any, between the amount determined as the appropriate royalty and the amount already paid and any balance, if any, must be repaid.”.

“(b) The amount of any royalty contemplated in paragraph (a) shall be determined by an agreement between the user of the sound recording, the performer and the owner of the copyright, or between their representative Collecting Societies: Provided that in the absence of such agreement, the amount of royalty shall be determined by the Tribunal;”.

I.e. in the case of Retailers vs. SAMPRA, Tribunal determines tariff. Issue that there are no stipulations over how the Tribunal is to determine the royalty.

Key Amendmentsh) BroadcastKey insertion in the beginning of Section 10 (‘broadcast’), where ‘broadcast’ is defined as:

‘“broadcast”, when used as a noun, means a telecommunication service of transmissions consisting of sounds, images, signs or signals which—

(a) takes place by means of electromagnetic waves of frequencies of lower than 3 000 GHz transmitted in space without an artificial conductor; and

(b) is intended for reception by the public or sections of the public, and includes the emitting of programme-carrying signals to satellite, and, when used as a verb, shall be construed accordingly’

Key Amendmentsh) Broadcast

Insertion amendment in full:

“10A(1) The broadcasting industry is under obligation to develop the culture and support the growth of local content in specified areas for the Republic, by amongst others -

(a) guiding the broadcast to develop and protect the national identity, culture, character and strengthen the social and economic fabric of the country;

(b) promoting local broadcasting, local programming and production of local television content, as defined in the Independent Broadcasting Authority Act, 1995 (Act 36 of 1995), as amended, by

(i) broadcasting 80% of local television content in public channels, consistently with applicable local content quotas as may be developed by the broadcasting industry and relevant laws; and

(ii) broadcasting 60% of local television content in private channels, consistently with applicable local content quotas as may be developed by the broadcasting industry and relevant laws;

(c) promoting local broadcasting, local programming and production in radio and ensure that maxim allowance of time is given for broadcasting of recorded music (needle time) of local content, consistently with local content quotas as may be developed by the broadcasting industry to increase the play of such music as follows:

(i) 80% of play of local music in public and community radio stations; and

(ii) 60% of play of local music in private radio stations;

(d) promoting compliance with subsections (1)(a), (b) and (c) above by –

(i) obliging the institution regulating the broadcasting industry to use measures to ensure compliance with the obligation to promote local programming; and

(ii) monitor developments of copyright law and its implications in the broadcasting industry.

(2) Section 10A shall have a retrospective operation, as the date of publication and adoption of quotas for programming of local content as may be developed for the broadcasting industry.”.

Key Amendmentsh) Broadcast

Issues around ‘local content’: definitional

Independent Broadcasting Authority Act (1995) defines ‘local television content’ as “a television programme (excluding broadcasts of sports events and compilations of them, advertisements, teletext and continuity announcements) that is produced by a South African broadcaster, or by South African people”.

The definition of South African music meets two of the following criteria:• The lyrics are written by a South African citizen • The music is composed by a South African citizen • The music and/or lyrics are performed principally by musicians who are

South African citizens • The musical work is a live performance recorded wholly in South Africa,

or performed wholly in South Africa, and broadcast live in South Africa.

Key Amendmentsh) Broadcast

Issues around ‘local content’: quotas

Setting of quota-level (according to three tiers of broadcasting; public, community, and commercial); transparency; representation; and enforceability:

“Due to a number of factors, including the absence of an effective monitoring system, ICASA (Independent Communications Authority of South Africa) has failed to monitor the SABC’s adherence to its license conditions and to its local content regulations (quotas). This has led to a situation where the SABC has been allowed to air endless repeats and too great a proportion of international programming.” – Right2Know, 2011

“Calculating local content is a complex job, and there are concerns that it is not being done correctly. All minutes of shows aired for the first time count towards the quota, but a first rerun counts just 50% of time, while subsequent flightings cannot be counted”– Marc Schwinges (of SA Screen Federation), themediaonline.co.za, 2011

Key Amendmentsh) BroadcastIssues around ‘local content’: current (Jul-Aug 2015) consultations with broadcasters (SABC, M-net, Vodacom, etc.) and interested parties on local content regulations.

In collecting submissions, ICASA (2015) state:

“The Authority acknowledges that there is no universal definition of social and cultural objectives such as cultural diversity, national identity. However local content programmes should recognize and reflect the diversity of all social and cultural backgrounds in South African society.”

Questions to consider: what it means for obligations on ‘local content’ to appear under the Copyrights Act?; meaning and enforceability of ‘cultural objectives’?

Key Amendmentsi) InfringementsThe Amendment Bill inserts a list of potential offences (Section 23), including:

“(4) Any person who –

(a) tampers with information managing copyright, as contemplated in subsection 20A(16) of the Act, shall be guilty of an offence;

(b) omits to pay the author or creator of the copyright work a royalty fee as and when the copyright work is used as contemplated in subsection 9(4) of the Act, is guilty of an offence;

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(j) contravenes the provisions relating to the royalty rights of the creator in the case of resale of copyrighted work shall be guilty of an offence.

(5) A broadcasting institution that contravenes the principles of this Act, for failure to promote local broadcasting and local programming in television and radio, shall be guilty of offence.”

The penalties of which is stated as:

“(6) Any person who is found guilty as contemplated in section 23(4) above, shall be liable on conviction to imprisonment for a period not exceeding ten (10) years or to a fine not exceeding fifty thousand (R50 000) or to both imprisonment and a fine. Deregistration of institutions found guilty as contemplated in the provisions of this Act, shall be a measure of last resort.”.

Centres around implementation: suggests that legislation surrounding ‘local content’ is not liable to offence, i.e. it is not ‘unlawful’ to miss quotas and therefore the legislation is not binding, which is problematic.

Key Amendmentsj) Orphan worksOrphan works refer to ‘works in which copyright still subsists but the right holder, both the creator of the work or the successor in title cannot be located’.

Applies to two amendments in the Bill (Sections 21 and 22). A key amendment is proposed in Section 21 by the addition ofthe following subsection to the already contentious clause that entitles copyright ownership of works to “periodicals” (e.g. newspaper proprietors) and commissioners, i.e. employers:

“(3) Ownership of any copyright whose owner cannot be located, is unknown, or is deceased shall vest in the state: Provided that if the owner of such copyright is located at anytime, ownership of such copyright shall be conferred back to such owner.”

NB: no specific mention of ‘orphan works’ perhaps due to ‘deceased’ category, and the nature of this section which only affects digitally reproducible works (e.g. not paintings or craft works).

Key Amendmentsj) Orphan worksThen the Bill stipulates the procedure for using the orphaned work as follows:

“22A Assignment and licences in respect of orphan works

(1) A person who wishes to obtain a licence to do an act which is subject to copyright in respect of orphan works, must make an application to the Commission.

(2) Before making an application in the prescribed manner, the applicant shall publish his or her intention to make such application in the national gazette and two (2) daily newspapers having national circulation within the Republic, in English and any other official language.

(3) Every such application shall be made in such form as may be prescribed and shall be accompanied by copies of the published advertisement issued in terms of subsection (2) and such fee as may be prescribed.

(4) Where an application is made to the Commission in terms of this section, the Commission may, after holding any inquiry as may be prescribed, grant to the applicant a licence to do such act which is subject to copyright, subject to the payment of a royalty and subject to such other terms and conditions as the Commission may determine.

(5) The Commission, upon receipt of such application and having been satisfied that the applicant has undertaken reasonable steps prescribed in this section may, issue a licence subject to terms and conditions it may deem appropriate.

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(13) Any person who can adduce evidence that he or she is the owner of orphan works, he or she may have the copyrighted work returned to him or her with a claim in law to recover any fees that accrued to the copyright work.”

Questions around de facto government ownership and implications (powers to “deem appropriate conditions”, potential alternatives, incentive-structures to pursue potentially orphaned works, and relation to education/inter-library exemptions (Section 19).

General thoughts for discussion• The relevance of the Department of Trade and Industry

(DTI) administering this cultural policy – how much input from creatives and the Department of Arts and Culture (DAC)?

• ‘Fair use’ – limits of parody, cartoon, pastiche clauses, even for non-commercial uses?

• ‘Local content’ – how valuable is this policy and what does it mean in terms of intellectual property?

• Orphan works – how protective is the de facto ownership of orphan works by the government, and why the neglect of open source databases solutions?