Intellectual Property Laws Amendment Bill: Version IP18 deliberations

Meeting report

Intellectual Property Laws Amendment Bill: Version IP18: deliberations
The Chairperson asked for a brief input from the drafters on the latest working draft of Intellectual Property Laws Amendment Bill labelled IP18.

Adv Charmaine van der Merwe, Parliamentary Legal Advisor, said changes to the amendments were what were agreed upon by the Committee. The definition of 'artistic work' had been amended to include the phrase "traditional works" and the phrase "expressions of folklore" had been deleted to prevent the Bill falling foul of WIPO. The definition of the 'Copyright Act' was included to mean "the Copyright Act, 1978 (Act 98 of 1978)". The drafters also deleted the term "expressions of folklore" in the definition of 'dramatic works' and they included the term "traditional works". The same was done for the definitions of 'literary works', 'musical works' and 'works of joint authorship’. In Clause 8B (Disputes), provision was made for appeal in sub-clause (6). The phrase "or areas" was included in the definition of 'indigenous community' and the word "exist" was substituted with the word "existed". In the definition of 'indigenous cultural expression or knowledge', the drafters inserted the phrase, "expressions of spirituality or religion" and deleted, "rituals in sacred places and places the location of which are not fixed peregrinations". A new sub-clause (5) was inserted in Clause 28B that said a community was supposed to take into account their community protocol if they interacted with anyone else. In Clause 28D(3) the drafters deleted the phrase "if the work is a traditional work and". In Clause 28G(2)(a) they deleted the words "or after". There was a concern that a copyright in a derivative work created two rights hence they inserted a new addition to sub-clause (2)(b) of Clause 28 which would allow an owner to continue to hold a right. The only impact would be the obligation to do the benefit sharing agreement and the royalties. The period in which a person was supposed to approach a community was extended from "six” to "12" months in Clause 28G(3). Wherever the word "royalties" appeared, the drafters added the phrase "and benefits". In Clause 28G(5), the drafters added the phrase "a benefit, or both such royalty and benefit". In Clause 28K(6) the drafters added an appeal clause to the Alternative Dispute Resolution (ADR) process. In Clause 28N on 'compliance with international agreements', they inserted section 37 of the Copyright Act so that sub-clause (1) would read, "The Minister may by notice in the Gazette provide that any provision of this Act specified in the notice shall in the case of any country so specified apply so that...". In addition, sub-clause (4) came from the Copyright Act. The other amendments were mainly repetitions to what she had outlined earlier on. In Clause 43F the drafters made provision that the royalties would start at the commencement of the Bill. Clause 53E(a)(i) was aligned with the current Designs Act.

Discussion
The Chairperson thanked the drafting team for providing the Committee with a clean Bill.

Mr M Oriani-Ambrosini (IFP) commented that term ‘royalty’ defined the type of relationship which created it. The word ‘royalty’ could mean anything hence there was no need to insert the word 'benefit'. In addition on the issue of the legal personality of an indigenous community, he thanked the drafters for accepting a point that he had been raising for a year. However, the issue was addressed with a deeming provision which raised problems. Firstly, they would have to set out the internal rules of such an organisation and how the entity expressed itself and how it operated. There was no law in the world or history which created a legal entity that did not make provision for who spoke on behalf of the legal entity. The way the issue could be fixed was the way the Communal Land Rights Act (CLARA) had done so where the government gave communities a standard constitution which the communities could change. The solution was to transform the protocol into a government document given to a community subject to the community's capacity and power to change it. The second problem was that the indigenous community would no longer give a member of the community a right to exercise on behalf of the legal entity and continue to enjoy the Intellectual Property and Indigenous Knowledge. In order to finesse the Bill out of the constitutional problem of expropriation, the Bill phrased the Clause that the beholder kept the right save for the need of paying royalty and the agreement with the community. Unintended consequences would be created by the Clause. One would draw a conclusion that once a right was used by someone and that someone paid the community, the community could then not licence the same rights to someone else.

The Chairperson said that the issue of royalties had been discussed and the Committee chose to broaden it irrespective of what the legal fraternity had said. The issue of the community protocol had been there for some time. She welcomed the input and thanked Mr Oriani-Ambrosini for availing himself. It was suggested that the drafters delete 's' from the word ‘constitutes’ so that the phrase would read 'aspects which constitute' and not constitutes in the second paragraph on page 4. She added that some of the points that had been dealt with, might have been dealt with in Mr Oriani-Ambrosini’s absence.

Adv van der Merwe said that the points that had been raised by Mr Oriani-Ambrosini were not new. The advice that they were given by Professor Pitika Ntuli and Dr Johanna von Braun was that they were not supposed to prescribe to communities. It would be a decision of the Committee whether or not to follow what CLARA had done, as suggested by Mr Oriani-Ambrosini.

Mr T Harris (DA) said that the DA supported the idea to upgrade the protocol to being a requirement and this would solve a multitude of issues including how to identify the community. If they did not turn the protocol into a requirement, the Committee would leave too many loopholes open.

The Chairperson suggested that the issue be flagged.

Mr Harris said that the definition of 'derivative indigenous work' was supposed to highlight the fact that it was non-original. There was need to insert the term ‘protocol’ in the definition of 'indigenous community'. He was concerned with the issue of living versus extinct and the burden of proof when it came to the definition of 'indigenous community'. The definition of 'indigenous cultural expression or knowledge' was said to be very broad. He suggested that the Committee remove the phrase "or knowledge" from the title. A suggestion was raised that the right in Clause 28B(1) be named something else as opposed to copyright. He was also concerned that Clause 28B(4) was prohibitive and that Clause 28B(4)(c) on the benefit sharing agreement was in contravention of the Berne Convention.

The Chairperson said that the Committee had dealt with the Berne Convention and that they had made a decision. There was need for the Committee to take a decision on the issue of 'indigenous cultural expression or knowledge'. She asked Adv van der Merwe to comment on the issues that had been raised.

Adv van der Merwe said that there was a concern about traditional or indigenous knowledge not fitting into the conventional IP system because it was not original or novel. They did not want to deal with cross pollination hence they had to demarcate that whatever was in the Bill did not affect the conventional IP. She said that Ms Shabangu was of the opinion that the word copyright had an entrenched meaning and if it was applied to traditional knowledge, a contradiction was created. In her opinion there were two sides to the issue. They were creating law and there was need to put in new concepts and the term copyright needed to expand a little bit. There was need to realise that they wanted to bring the issue within the ambits of the IP system. At the same time if they steered away and agreed that copyright had an acknowledged meaning then the Committee would cause confusion. The drafters did not want to use the term copyright when they referred to indigenous knowledge but it was possible that they could substitute the word copyright with indigenous knowledge right. She said that the DTI was very concerned about the change.

Mr A Alberts (FF+) said that the question related to a broader question which related to protecting and promoting indigenous knowledge as a whole. He said that there were other ways of dealing with the issue. From a legal point of view the rights that had been created came from the existing IP Bill. He said that even if they called the rights different names, the effect would be the same in application. He added that in future an overarching clause was supposed to be drafted that could take out the uniqueness of indigenous knowledge and create a separate set of rules in the Bill existing alongside the IP Bill. It was suggested that that a phrase be added in the preamble that pointed out that it was one ways of promoting and protecting indigenous knowledge and that there were other ways of doing so.
The Chairperson welcomed the addition.

Ms S van der Merwe (ANC) said that in relation to the community protocol, the Committee did not want communities to be forced into a structure. She said that forcing communities into structures was contrary to the spirit of the copyright environment. In addition it was in contravention to all the issues that they had raised such as making the right a traditional right in the same way that other people had rights. In relation to the derivative indigenous work she said that she was not clear how the Committee could insert non-original. On the definition of indigenous community she said that the Committee had flogged the question of living vs. extinct to death. In her opinion there was need for the definition to allow for extinct communities. In relation to the definition of 'indigenous cultural expression or knowledge', she said that the issue came directly from a WIPO example and Dr von Braun had introduced it. She said that the definition would put the Bill in line with what was happening in the world. She said that there was a necessity to change things when it came to the issue of traditional works being eligible for copyright. Indigenous work was said to be original and there was no reason for it not to be protected by IP as a copyright. The Committee was supposed to stick with their original assumption that they were extending copyright rights to traditional works. Lastly she said that Clause 28B(4)(c) that related to the benefit sharing agreement was supposed to be read in the full context of the Bill and that the Clause did not oppose the Berne Convention.

The Chairperson said that the experts had not opposed the Berne convention.

Mr MacDonald Netshitenzhe, Chief Director: Policy and Legislation, read a paragraph from a WIPO publication. He submitted that people got confused if a person working on something in the public domain or on someone’s IP and that person designed something new it was derivative hence there was need for it to be protected. He stressed that the Committee was not supposed to tamper with the issue that the Committee was not supposed to talk about copyrights in the Bill. He submitted that the DTI concurred with Ms S van der Merwe.

Mr G Radebe (ANC) agreed with Ms S van der Merwe and Mr Netshitenzhe. He said that indigenous knowledge was unique and the knowledge was equal to any other knowledge in the world. If the Committee was to protect it they were supposed to use the traditional forms of protection one of which was the copyright. An example of the current South African national anthem was given. The anthem was said was to be a mixture of the pre-1994 ANC national anthem and the national anthem under former President P W Botha.

Adv van der Merwe said that it was supposed to be made clear that an author would continue to have the right to sell books and make copies. It was only when the Committee limited this right that they would have contravened the Berne Convention. Anyone who created a story had copyrights but they were supposed to enter into a benefit sharing agreement. The indigenous work was supposed to be acknowledged.

Mr Netshitenzhe addressed the issue of things being reduced into writing by saying that the Berne Convention did not necessarily require that issues be reduced to writing. This was the same with the WIPO UNESCO model.

Mr X Mabasa (ANC) supported what Mr Netshitenzhe had said.

Mr C Kotsi (COPE) reminded the Committee of the reasons why the Act had to be amended. She said that the reason why they had to amend the Act was to protect the sliming tea called Hoodia and the community from which it came from.

Mr Harris said that the point that had been made by Ms Kotsi was not relevant because the issue had been resolved. The reason of requiring a protocol was that the fix in the deeming provision was not going to work because it did not answer questions on who was going to speak on behalf of the community. The Committee could not build a structure and avoid supporting that structure content. To address the issue a community protocol was supposed to be a requirement. On the definition of 'indigenous communities' he was unconvinced on the living and extinct and the historical record. The argument that had been raised by Mr Netshitenzhe was said to have no bearing on the question that he had raised. In addition allowing works from extinct communities to be protected would remove the issue out of the public domain. It was asked whether there was a similar position in any other law elsewhere and if so then he would reconsider his argument. On the issue of the historical record he said that the Committee had not spent enough time to consider nefarious uses of the legislation for people to get benefits that were not legitimate. The need for some burden of proof was stressed. If the Committee did not address the issue of the historical record then they would make it too easy for fraudsters to steal traditional knowledge. He said that copyrights had fundamental aspects such as originality and the limited term of use. To name the rights rights of remuneration and moral rights an indigenous knowledge right did not do any injustice but it simply prevented any confusion around the term copyright. He urged the Committee to get rid of their hang-ups.

Mr Radebe referred to the presentation that had been done by Prof Ntuli on the onerous expectations that could be placed on a community. For each and every community to exist it was supposed to have a protocol. On the issue of the nationalization of knowledge in the public domain he gave an example of how France and Italy used the WTO to remove grappa from the public domain. With regards to the issue of Hoodia he said that it was correct because for them to get the rights the people had to go to court hence there was need to make it easier for the South African communities.

Mr Smalle asked with regards to Clause 28B whether the commercial benefit would be spread out into the community or whether it would go to the national fiscus.

Ms Zodwa Ntuli, Deputy Director-General: Consumer and Corporate Regulation, Department of Trade and Industry, responded that there was a specific provision that indicated how the benefits or proceeds would be used but the provision did not specify within which community the money was supposed to be used in.

Adv van der Merwe responded that the Clause that dealt with the issue was Clause 28I(4), (5).The drafters were not specifically stating which community was supposed to receive the money. The issues of administration, training, and the manner in which the payments would be made to the communities would be catered for in regulations.

Adv van der Merwe noted that the DTI was supposed to have provided for additional guidelines in Clause 39A.
Ms Ntuli responded that the provision was supposed to remain as it was. The issue that they raised was whether the provision was supposed to be applied consistently to other areas of IP.

Mr Harris pointed out that he was convinced by the argument that had been raised by Mr Oriani-Ambrosini that the term royalties was an established legal term that was very broad hence there was no need to include the word benefit.

The Chairperson said that the Committee was of the opinion that the word benefit was more accessible.

Adv van der Merwe said that the drafters could not find a specific definition of royalty the included non-monetary payments and this was where uncertainty was created. She added that any articles and case law that they found on royalties referred to monetary payments.

Ms van der Merwe said that the DTI had been asked to apply their minds on whether designs could be registered both as aesthetic and functional in Clause 53B.

Adv Johann Strydom, Legal Advisor, Department of Trade and Industry, responded that there were about three designs were namely the existing designs and the new ones designs namely the indigenous design or derivative indigenous designs. The Bill clearly provided for the designs to be either aesthetic or functional designs. The DTI had discussed the issue amongst themselves and they had a telephonic interview with an official in Pretoria in order to deal with the practicalities of the matter. The question was responded to by an example of a tea spoon. He said that a tea spoon was functional on the basis that it was used to take sugar and put the sugar in a cup of tea. The tea spoon might have a golden insert at the end of the handle which would give an aesthetic quality to the object in respect of the very same spoon. Hence there were two characteristics one which was purely functional and the other one purely aesthetic. The proprietor of the tea spoon could register the aesthetic part in the aesthetic register and he could register the functional part ion the functional register because the requirements were different. In addition he said that the two registers were supposed to be different because the requirements were different.

The Chairperson said that the logic behind it was very clear.

Mr Harris stressed that the DA was of the view that the single biggest threat to the Bill was in the final Clause of the memorandum because the Bill was supposed to go to the National House of Traditional Leaders in terms of the Traditional Leadership and Governance Framework Act. In light of this he said that there was a possibility that the Bill could be challenged on very strong grounds.

Afternoon session
In the afternoon session, the Chairperson firstly asked that the Department of Trade and Industry (dti) should address the Committee on two issues: the first relating to the sustainability of a trust, and the second the answer to how many patents were registered relating to indigenous stock.

Numbers of patents registered
Mr MacDonald Netshitenzhe, Chief Director, Department of Trade and Industry, noted that at present, three patents had been registered in South Africa that had a genetic source component. However, he indicated that many more could still be in the pipeline, A National Phase PCT application was territorial in nature, so patents had to be registered country by country, according to each country’s rules. Although from a procedural point of view there were attempts to harmonise the administration process, there were still substantive differences in the law. A person wanting to register a patent internationally would firstly need to approach the World Intellectual Property Organisation (WIPO), who would do a preliminary search and indicate in what countries there might be similar patents, or where products might be registered that had effectively cornered the market already that might make the new product not viable. A time period of 36 months was allowed for the decision whether to register, before that application was then forwarded to the next country on the list. For that reason it was not possible to say with any certainty how many other applications might still be received. The Registrar had referred the three applicants whose applications were received to date, and who were using genetic resources, to the Department of Environmental Affairs, for the necessary permits, and for benefit sharing agreements to be drawn.

He added that genetic resources of South Africa were being used by Nestle, but this was not revealed in South Africa, but through the international process. Its patent could still be coming to South Africa. The Makaza community could still conclude a benefit sharing agreement with Nestle, although it would not be based on the registered patent as yet.

Ms Zodwa Ntuli, Deputy Director General, Department of Trade and Industry, added that dti did not believe that the current requirements imposed an unnecessary burden. This was not indicated by the statistics, and the decline was in line with declines in other areas. Dti felt strongly that the permission to use genetic resources must be sought.

National Trust issue
Mr Netshitenzhe said that the National Trust that would be the custodian of the indigenous work of no-longer existing communities was well described in the Bill. The dti had been asked for comment whether it would be sustainable, once it was in operation. The National Economic Development and Labour Council (Nedlac) report noted that this Trust would effectively function like a collecting society, and would be self-sustainable. Worldwide practice showed that collecting societies were able to retain about 20% of what they collected to fund their operations. However, it was suggested that it would be preferable to follow the model of similar bodies in South Africa, until there was a review of collecting legislation.

At the moment there were three collecting societies for administration of “needle time royalties”. One related to recording companies, and one to artists and musicians, and the third had been liquidated, not because it was insolvent but due to mismanagement. The National Lotteries Act also established the National Lotteries Board (NLB) which was a manager or trustee of the National Lotteries Distribution Trust Fund. The Board retained 34% for distribution to needy areas, and 5% was permitted for “miscellaneous use”.

Mr Netshitenzhe noted that Parliament could be asked for an appropriation for start up costs, similar to the Companies and Intellectual Property Commission (CIPC). There would be no conflict of interest and no further liability to the State.

Discussion
Mr J Smalle (DA) questioned the cap of 20% on the collecting societies, and questioned also why the NLB had a discretion and a different cap. He would not agree with any suggestion that the Trust should have discretion to withhold funds for distribution as the Trust saw fit.

Mr Smalle was also concerned that this Trust would have to come on board within a twelve-month period. He asked if the start-up capital would be calculated on a sliding scale, spread over a number of years, and asked how it could be ensured that there was no shortfall.

Ms Ntuli explained that in the case of the NLB, the 34% withheld was not used by the Board itself; it was instead deducted directly from ticket sales, and about 2% of that amount was paid to the Board for its administration fees, while the rest was distributed directly to the needy. There were specific provisions and requirements set out in the National Lotteries legislation to cover this. In fact, the National Trust envisaged under this Bill would act in a similar way to collecting societies, and this model was already used and covered by legislation. However, some start-up funds might be needed. The request would be made after doing a projection for three years, and if it was found that in year 2 or 3, the funds were not needed, then they would not be requested.

Drafters’ input on issues flagged
Adv Johan Strydom, Legal Advisor, dti, said that he would give input on the issues flagged, following the order of questions raised on the previous day.

Clause 57F: Infringement exceptions, royalties and benefits
Adv Strydom noted that when the Bill came into force, the Designs Act would henceforth apply to registered designs already registered in terms of the Designs Act, indigenous designs in respect of which indigenous communities were the authors, and then a new category of derivative indigenous designs, which were those derived from indigenous designs. An indigenous community would seek registration of its indigenous design (which was defined in the Bill). When it came to the registration, it might be discovered that a substantial portion of that indigenous design related to an existing registered design, which was already vested in another person (the proprietor). This would then raise the issue of the relationship between indigenous community and proprietor. The Bill provided that if there was a 70% relationship between the two designs, then the indigenous community could ask the proprietor to enter into a benefit sharing agreement and pay the necessary royalties.

However, this then gave rise to the question whether the indigenous community would be obliged to seek registration in order to get that protection. As the Bill was currently drafted, the community would need to do so, because no protection would vest without registration.

Adv Strydom noted that the Committee needed to consider whether this wording was a correct reflection of the policy considerations underlying the Bill. There were some questions raised as to why an indigenous community should be obliged to register a design, and why automatic protection should not apply on the basis of the registered proprietor’s right.

The Chairperson said that Adv Strydom had raised an important principle.

Mr Z Mabasa (ANC) said that the community that had a right to a design or a manufactured good should automatically be given first preference, and it should be assumed that the design belonged to that community. He did not think that an indigenous community should be obliged to go through the registration process. He pointed out that if the Committee itself was struggling to get to grips with some of the concepts in the Bill, then communities would have even more difficulty, and it was unlikely that many of them would have ready access to legal assistance.

Ms S van der Merwe (ANC) asked if this was only related to the Designs Act. She noted that if the community had to register then it would have to have a Community Protocol or juristic person in place.

Adv Strydom noted that clause 53F(1) clearly suggested that registration was a prerequisite for enjoying rights. Similar terminology was used in relation to trademark protection. In relation to copyright, registration was not a prerequisite, but people could register, usually to make it easier for them to prove their rights.

Ms S Kotsi (COPE) asked why this differential treatment was included, and whether it was not open to challenge.

Adv Strydom said that the dti did not see why an indigenous design should not be protected, irrespective of whether it had or had not been registered. Mr Netshitenzhe would elaborate later on another possibility, which was recordal but not registration of a right. He reiterated that this was a policy issue.

Mr Smalle believed that an indigenous community who wished to benefit commercially from an existing trademark or design should have to register its claim. It would be different if the community did not wish to derive any financial benefit, but if it did, then it must comply with the requirements for registration.

Mr Smalle also questioned the requirement for establishing a 70% relationship and asked if some kind of “point system” would be set out in the regulations. If no criteria were set somewhere, he was worried that this might create a loophole for people to argue that in fact only 68% similarities existed, for instance.

Mr Netshitenzhe noted that there was sufficient jurisprudence as to what would constitute a “substantial part” of a design and he did not think this would be a problem.

The Chairperson asked what might happen in a situation where, for three years after the Bill had come into effect, an indigenous community might not have been aware of the exploitation of its design, and only became aware of this when seeking to register. She questioned if the compensation would be able to be backdated over that three year period during which there had been no registration.

Ms van der Merwe said that there had always been a requirement to register a design or trademark, but copyright did not have to be registered.

Mr Netshitenzhe said that some hereditary matters, in a “raw” form, might not meet the standards for registration as a design or trademark. He noted that recordal, rather than registration, could be used simply to enter the proof of ownership into a database, for ease of reference, so that claims could be more easily identified and assessed. A community could still raise objections during a registration process.

Adv Strydom referred to page 92 of the Bill, which related to traditional designs eligible for registration. An indigenous community may apply, but registration was stated as discretionary, not compulsory. However, page 97 of the Bill, in clause 53F, stated that registration was a requirement, and referred to the “registered proprietor” of a design, stating also that a commercial benefit would be paid by the proprietor of the existing design to the “proprietor” of the traditional design. As a matter of principle, the Committee would need to decide whether it wanted a community to be obliged to seek registration.

Adv Mongameli Kweta, State Law Advisor, Office of the Chief State Law Advisor, said that clause 53(2) stated that any person who had acquired rights must approach the indigenous community and obtain consent to continue to use the rights, and enter into a benefit sharing agreements. The indigenous community would not be required, in terms of this clause, to be “a registered proprietor”. He wondered if the solution might not be to remove the reference to the requirement for registration from clause 53(1), and rely on clause (2) to enforce benefit sharing.

Mr T Harris (DA) expressed his surprise at the discussions. He noted that both designs and trademarks were required to be registered before they would be protected. If the principle was to be extended also to traditional designs and trademarks, then surely they too would require to be registered. He proposed that traditional and conventional designs should enjoy the same protection and therefore should also be subject to the same requirements.

The Chairperson said that there was a difference between registration and recordal. The dti had pointed out that registration was compulsory under clause 53F(1), but not under other clauses.

Ms van der Merwe asked why the Committee had jumped to this aspect now. She thought that it would have made more sense for the Committee to settle other question around expropriation of rights before attempting to move on to this issue.

The Chairperson agreed that perhaps it might be useful to refer back to earlier clauses, which might then lead on to clause 53.

Clause 28G
Adv Charmaine van der Merwe, Parliamentary Legal Advisor and member of the drafting team, noted that a person could holding a current right (in the case of clause 28G, this would be a copyright) in an artistic work in one of two ways. A person publishing a storybook about a person lost on a mountain would be writing a simple artistic work. However, if the person published a storybook based on the old traditional community fable of Jackal and Lion, then not only would storybook writer hold a copyright, the indigenous community who had passed the fable down over hundreds of years would also be able to claim copyright. The storybook would now be known as a derivative indigenous work. The storybook writer of the person lost on the mountain would not have any change to his/her exclusive copyright.

When both the storybook writer and the indigenous community held rights in the fable, the question was how these rights would interact. In practice, the storybook writer of the Jackal and Lion story would hold only one right that he or she could sell to another, and could not attempt to sell the same book to Exclusive Books as both a normal and a derivative work. However, it was necessary to consider how the rights between writer and indigenous community must be handled. Clause 28G essentially said that the storybook writer would have certain obligations to notify the Commission that his story did contain aspects of the traditional fable, to contact the indigenous community for permission to continue publishing and to make arrangements to pay a portion of royalties or benefits to the indigenous community. If those three obligations were fulfilled, then the storybook writer owning copyright in his or her book may continue to hold that copyright and the protection that he or she had before.

Adv van der Merwe also said that this principle extended to trademarks, under clause 43F(2)(b), which was worded virtually the same as clause 28G. A person who was currently the holder of a trademark, whether that trademark was registered, or was merely regarded as “well-known”, would be protected. She pointed out that this would apply to a normal mark, a mark on a car, or something like a rock-painting. When this Bill came into operation, a “derivative mark” would be defined as a mark that had as a component something that was indigenous, such as a depiction of rock art, or a geographical location. There was not likely to be a conflict, because the current rights holder would have to inform the Commission of the indigenous component, enter into an agreement with the community, and pay royalties. The trade mark would continue to be held by the current registered owner.

The same principle would also apply to designs, under clause 53F(2)(b), as outlined by Adv Strydom. The distinction between functional and aesthetic was not important for these purposes, as the provisions would apply to all categories. An example might be an architect designing a building, for the purposes of climate control, therefore a functional design, in the shape of a round hut. This would become a derivative design once the Bill was in operation. The rights holder would again notify the Commission, enter into an agreement with the community, and pay royalties.

Ms S van der Merwe noted that this had explained the position clearly. This had also explained that people would not hold parallel rights and rights would not be expropriated. However, there was still the question of how the community or rights holder would know of another person’s claim to that mark. Using the example of the round building, she noted that unless the indigenous community whose design this was came forward, the architect would not know that his right was derivative. She felt that either a Community Protocol, or some system of recordal, was needed to allow communities to claim their birthright. The community would also need to know how it could claim those rights.

Mr G Selau (ANC) said that the general feeling seemed to be that an indigenous community should not have to go through a registration process, but the knowledge should be protected. The discussions were based on the premise that registration was likely to be difficult and arduous, despite the fact that the principles of registering a business were well applied. The fact that the registered rights holder would have to fulfil the requirements of notification to the Commission, engagement with the community and payment of royalties would give an indication to indigenous communities that they had rights.

Mr Smalle noted that information about anything registered at CIPC could be easily extracted, but also made the point that some businesses had not registered, although they did use designs or trademarks. The question was how they would be linked in. That must be seen as work in progress, and would not be an easy task. He noted that although mention had been made of a 70% connection between registered and indigenous designs, this was not in the Bill, and must be dealt with in the regulations. He took the example of the architect further, asking whether, in the situation where an architect drew a design and a company derived commercial value by renting that building out, the company would need to enter into an agreement with the indigenous community.

Adv Strydom said the clause headed “Application to traditional designs”, clause 53A, was to be incorporated into the existing principle Designs Act. As the Bill was currently worded, the architect could carry on and do as he pleased as long as the design for the hut was not registered. However, he was not sure whether this was really in line with what the Committee wanted.

The Chairperson agreed that the Committee was trying to protect indigenous knowledge.

Ms S van der Merwe then noted that the Designs Act contained two definitions – one for “proprietor” and one for “registered proprietor”. The second could perhaps be removed to address the concerns around registration. She agreed that acknowledged or well-known trade marks were recognised. She also noted concerns that indigenous communities, who lacked access to computers or lodgment processes, would find it very difficult to register, but the policy clearly required that their rights should be upheld. She suggested that perhaps the dti had some responsibilities in regard to how this could be done. She suggested that perhaps teams of unemployed graduates might need to go around the country and identify the indigenous knowledge in the community that should be incorporated into the process. Ndebele designs had been used ubiquitously in the past by others, for profit, and the question was how communities could claim those designs as their own. She believed that government bore the onus to ensure protection of indigenous rights and knowledge, and the principle policy position should be upheld that a right would belong to a community, irrespective of a need to register.

The Chairperson noted that Department of Science and Technology (DST) was busy piloting such a project of field workers.

Mr Harris said that the DA fully supported the principle of giving protection. However, he had serious concerns that to allow this protection without fulfilling the existing statutory requirements, as set out in both the Designs Act and Trademarks Act, in relation to registration (as well as daily use, in the case of trademarks). That was a fundamental requirement for these two forms of intellectual property (IP) and he believed that if the IP principles were to be extended also to traditional knowledge, then the requirements must similarly be extended.

Mr B Radebe (ANC) noted that the First National Bank Stadium was based on a design of a calabash, but the Sotho communities probably neither knew that the design should be registered, or even that a register existed. He agreed that government must take the onus of ensuring that a database was compiled. It was probably already possible for the dti to track whose designs were being used, so that profit sharing arrangements could be put in place. He suggested that this aspect must be covered when the costing of the Act was debated.

Adv A Alberts (FF+) said that his first instinct was that it may not make sense to insist upon registration in terms of the Trademarks Act, There might be a simpler way to overcome this. The Trademarks Act already applied the principle of the “well-known trademarks rule”, where trademarks such as Coca-Cola or McDonalds were so well known that they would not have to be registered in that country for protection to apply. It might be possible to extend this to the local context, although he was not sure exactly what the case law on this stated. If something was not registered, then there would be practical difficulties – for instance, a person wanting to operate an African-theme restaurant may unintentionally fall foul of the law. He agreed that government should have an obligation to inform people of their rights. However, he noted that the Designs Act already required registration in order to have the design protected, and he thought that there would have to be a very good reason cited to justify a departure from this legislation.

Mr Netshitenzhe agreed that not all hereditary intellectual property should have to be registered but also noted that the dti should not force communities to reveal their trade secrets or knowledge, as they may know very well how best to protect themselves already.

Adv van der Merwe thought that Members seemed to agree on the principles in relation to trademarks, and said that it would be possible to effect amendments quite simply, by removing the reference to “registered owners” and leaving only that in relation to “owners”. It was also possible to retain the possibility of registration. In clause 43A the principle of “well-known marks” was already incorporated by implication.

Adv van der Merwe thought that the question of designs needed to be tested. The Designs Act provided for a “proprietor”, being the person from whom the design emanated. She agreed with Mr Smalle that a number of designs were not registered. Dti should perhaps try to ensure that communities would register, because it would otherwise be very difficult for them to prove ownership. If the term “registered proprietor” was removed, then this would imply that the indigenous community creating the design would have certain rights, and another person wanting to use that design would have to approach the community for permission, so that there would be protection. Some designs might be brought forward for registration that were already so well known that they would not in fact be capable of registration under the existing legislation.

Adv van der Merwe said that this might be creating new law in relation to copyright, but it had already been indicated that the law of copyright may need to be expanded to cater for the new recognition of traditional rights. She did not believe that there was anything so contradictory as to fall foul of the existing law, although she accepted that others may hold a contrary view. Not every single issue could be addressed by the Bill, and the practicalities would fall to the dti to arrange.

Adv Alberts said that the point of view of a person wanting to start a business, for instance building a theme park using themes from indigenous communities, must also be considered. A businessman would want to be able to conduct due diligence studies, which would include investigations into trademarks and IP, including a search of the applicable register. It would be problematic if this register was not comprehensive, and a business would be unwilling to invest if there was uncertainty around the processes. He thought that although a community should not be forced to register, it probably should be required to do so if it wished to stake a claim, both in order to enforce the rights and to make itself known, with the exception that secret indigenous knowledge could be protected. It might be a solution to require registration in order to enforce.

Mr Selau said that the Committee must recognise that it was changing history, and could not simply adopt provisions, as they were, from other legislation. This was a very sensitive issue, and the Members had a duty to affirm the rights of those whom they represented. Whilst he would not like the ANC necessarily to speak out against registration, he was mindful that the sector of society to whom this Bill applied would have difficulty with a registration process. There was still a long way to go to change mindsets. Although he had heard the possibility of entering information on a database, he would be worried to provide alternatives. He believed that it would be in the interests of the dti to build up a database, and it would be preferable to stress the incentives, to persuade people to register. As the Bill was currently worded, those holding the rights had no benefits to gain from registering with the Commission, paying the communities and entering into agreements with them. In future, he agreed that a database would be needed.

Ms van der Merwe emphasised that if another person developed a derivative of a traditional design, without knowing of the original rights holder, and without paying too much attention to finding this out, then indigenous communities could have substantial difficulties in accruing any benefits, if they did not register.

Mr Harris said that the incentive for registration would be to obtain the benefits. Section 2 of the Designs Act noted that this Act applied “in respect of all registered designs”. He pointed out that a database would effectively be a sub-register. He reiterated that the Committee should not run the risks of loosening the requirements in that Act around registration. In practice, registration would be necessary in order to get protection. All the clauses in this Bill were written around the premise that designs must be registered. He cautioned that the Committee should not attempt to change a word here or a phrase there, and that if the Committee was determined that registration should not be a requirement, then all the provisions in relation to designs, at least, would have to be completely re-written.

The Chairperson said that Members did not seem to have any problem with the question of registration to confer ownership, but did have some doubts about registration for purposes of deriving a benefit.

Mr Mabasa added to the points raised by Mr Selau, who had suggested that it should be the task of government to accumulate databases over the country to pursue these principles. He believed that a lengthy and vehement drive must be undertaken to persuade people to submit their details, as many communities would be new to the principle of registration.

Ms Ntuli reminded Members that when this proposal was submitted, the identification of owners was discussed extensively. A distinction was drawn between the registration process and the recordal process; the latter was intended to make it easier for communities to be recognised. For practical purposes, this would mean that when a Registrar received a request for registration he or she would immediately see, from the database, that the interests of an indigenous community were noted. The application to register would then be approved only if the rights holder fulfilled the three requirements of notification to the Commission, agreement with the community and agreement around royalties. She stressed that ownership would not diminish in respect of hereditary work. She noted that problems around identification of the owner were not exclusive to indigenous knowledge; for instance, no database existed in respect of literature, only film. She cautioned that the registration process should not be seen as the only way for an indigenous community to get benefits.

Ms Ntuli further noted that part of the problem in South Africa was that when attempts were made to incorporate customary law, it was often “forced” into a situation that was a strange hybrid. For example, the Customary Marriages Act did not in fact confer automatic recognition of marriages, as it was generally understood to do. People would enter into customary unions, believing that these conferred a particular legal status, but were unaware that they still had to follow other processes, such as having that union formally registered at an office in an urban area. Sometimes this type of legislation in fact conferred no real protection upon the very communities that it purported to assist.

Ms Ntuli suggested that once this process was complete, the dti should perhaps return to the Committee with a proper plan for rollout to communities. She added that dti was already in the process of concluding a Memorandum of Understanding with Contralesa, to use its traditional base to educate communities.

The Chairperson said that these discussions had been useful. She agreed that indigenous law was very complex because attempts were made to “fit” the law into a Western concept.

Mr Radebe also agreed and thought that any conflicts would need to be resolved.

Mr N Gcwabaza (ANC) suggested that the dti and drafters should together try to create something that would in fact benefit the traditional communities.

Mr Harris wanted to disabuse the Committee of the notion that there was any difference between registration and recordal. In this Bill, “recordal” seemed to be used as a synonym for “register”, and the question was simply whether a person’s name was on the database, no matter how it got there.

Adv van der Merwe explained that at one stage the working drafts of this Bill had contained reference to both a database and a register. The question was then raised whether this did not amount to duplication. Dti conceded that the database could be a sub-register. The Copyright Act provided for “a database” on which something could be recorded. The Designs Act and Trademarks Act provided for a “register” on which names would be “registered” and a “database” on which there would be “recordal”. She was not sure whether, in practice, there would be a difference.

Adv Strydom wanted to place on record that the process had started. The drafters would not make registration an absolute requirement before indigenous communities would enjoy protection. He noted that clause 53F(2) should not be looked at in isolation. The existing Designs Act stated that “the provisions of this Act shall apply in respect of all registered designs” so it was necessary then also to amend that Act.

Mr Harris thought that this was the wrong approach. He did not feel that this kind of change should be introduced so late in the process. These amendments were effectively attempting to provide a different type of protection to traditional designs than applied to existing designs. He requested that his objection to this be noted.

Adv Alberts agreed that his party would also see this as problematic, and echoed concerns that the point was being raised so late in the process. More time was needed to consider the practical and legal implications of this change. His party would support the amendments as they were worded at the moment, subject to further investigation into the problems, but would not be in favour of effecting the amendments to the Designs Act.

After a short caucus to discuss the issue further, Adv Strydom reported back that the drafters were not suggesting that the word “registered” should be removed, as it related to existing designs, from section 2 of the Designs Act. However, in view of the Committee’s policy stance, it was suggesting that, in relation to indigenous designs, registration should not be a prerequisite before those designs could enjoy protection. The drafters were not necessarily suggesting that the Committee should amend section 2 of the Designs Act, as this might be beyond the scope and ambit of this Bill. Instead, however, they would recommend that, rather than amending section 2(2) of the Designs Act, a new subclause 53A(2) should be inserted, stating “the provisions of clause 53A(1) shall not apply in respect of traditional designs”.

The Chairperson noted that the Rules of Parliament would in fact have allowed the Committee to effect a consequential amendment to the Designs Act, but that alternative now proposed meant that the Committee did not need to adopt that approach.

Clause 43D(5): Trademarks
Adv van der Merwe then noted that because there was protection afforded to well-known trademarks, even some unregistered trademarks enjoyed protection. She noted that the drafters now proposed that the words “applicant and proprietor” should be included in 43D(5)(a), instead of “registered proprietor”.

Mr Harris said that a suggestion had been made to deal with this under the principle of “well-known marks”, referred to in section 35 of the Trademarks Act. However, he thought that might apply only to automatic protection of international marks. He asked if the courts would interpret this provision as applying equally to domestic well-known marks.

Adv van der Merwe said that the Paris Convention had brought the question of well-known marks to the fore. Clause 35(1)(a) did not indicate whether this principle would only apply to an internationally-used trademark, and it also did not say whether the mark had to apply to a person carrying on business in the Republic. Also, portions of this Bill would be applicable to traditional designs “with amendments”. She also added that the principle of well-known marks had existed already in the law of every country, even prior to the Paris Convention, so it was also part of South Africa’s common law.

Clause 43F
Adv van der Merwe said that she would use amendments to clause 43F as an example of similar amendments that would be effected in several other places in the Bill.

The proposed amendments were to substitute the phrase “the proprietor” (of a trade mark) for the phrase “the registered proprietor”, wherever this appeared. References to “registration” would also be deleted, although anything referring to the Register would remain in place, as would references to being able to register a trademark.

In relation to the Designs Act references, she noted that the reference to “registered” designs had been removed. She also drew Members’ attention to the reference to “collecting society”.

Adv van der Merwe pointed out the addition of a new subclause 53A(2) had been added in, on page 90, as outlined by Mr Strydom, which indicated that the provisions of the Designs Act would not be applicable, in this Bill, in relation to traditional designs.

Mr Harris indicated that he was not happy with these proposals. He thought that it was unnecessary to remove the references to “registered” throughout the Bill. If a trademark was already well known, it would be protected by the well-known principle, and so it would be unnecessary to remove the reference to “registered” because that would not in any event confer any grounds for protection. He reiterated again that the principal Design Act and Trademarks Act required registration, as a pre-condition to claim for damages for infringement. He cautioned that if the Committee were to make these amendments, then it might find itself also having to exclude other sections, and he thought that the dilution of the registration clauses was causing conflicts.

Mr Harris reiterated that there was no reason in principle why the same principle – namely that registration was necessary – was not being applied to traditional designs as was applied to hereditary designs. There was uncertainty as to whether these proposed amendments would work. He thought that the only proper way to ensure protection was to require that something be entered on the database. The route that the Committee now seemed to be adopting would have been better served by the Committee deciding to take a sui generis approach.

Mr Mabasa said that the problem with the database and register was that many traditional communities would still not record matters in writing, and many had not changed dramatically over several decades.

Adv Alberts agreed with this, but pointed out that the Committee was grappling with the problem of how something would be proven in Court. In terms of the Trademarks Act, a well-known trademark would be protected irrespective of whether it had been registered, and irrespective of its origin. However, it was also possible that trademarks would be protected under the common law. He did not think it would be necessary to remove the references to “registration” in relation to trademarks, but did point out that if a community wanted to enforce its rights under the Trademarks Act, then registration would be a prerequisite. Those trademarks that needed to be kept secret would be dealt with in a different way. He reiterated that most foreign investors, before investing, would want to be assured that there was certainty not only in the rules, but certainty of information on a database.

Adv Alberts noted that the Designs Act was more problematic. The essence of this Act was that it had universal application, and that if a design was registered, no-one else would be permitted to have something similar or exactly the same as that design. Under the Copyright Act, it was possible for two people to have rights in two things that were very similar. He noted problems with cyber-squatting, where people would seek to register domain names before the true owners, then seek to sell those names back to the owners. The Copyright Act could be used to protect some designs in artistic works, and would provide some effective remedies. He urged that the Designs Act should not be changed, and there should be an onus to register in order to claim rights against the rest of the world.

Mr Gcwabaza cautioned that this Committee should not write legislation that would effectively punish indigenous communities who might not have the benefit of being “lettered” but rather continued to use traditional methods of recording ownership. For instance, in traditional communities, no register of cattle was ever kept, and he suggested that a community’s vouching for ownership should be accepted, without the need to record this on a formal register. If there was a strict requirement that indigenous communities must register, then it might, in practice, amount to postponing the benefits that they could enjoy, until they were lettered. Mr Gcwabaza noted that this Bill was an attempt to fuse conventional IP with indigenous knowledge, and a one-sided approach could not be taken.

Ms Kotsi understood Mr Harris’ point. He had also made the point that the requirement of registration was intended to avoid unscrupulous people from attempting to benefit. She agreed that many indigenous people would have no understanding of how to go about registering. Many of those who were eligible to claim had no doubt missed out on the opportunity to do so, both in relation to the Land Restitution Act and Special Pensions Act, despite attempts to reach the communities. The Committee must realise that matters should be done in a certain way if everyone were to benefit. She wondered if recordal could not be used more proactively, and noted that applications should also be verified.

Ms Ntuli answered that the whole intention behind this Bill was to minimise the process for proving ownership by indigenous communities. They could record their rights, if they preferred, on a database, and this would be a defensive way for them to protect their knowledge. She reiterated that when another person made application to register a similar design, the Registrar would be able to check the database, identify the communities’ ownership and then require the person seeking registration to approach the named communities. There would be different levels of confidentiality in that database. She noted that proof of legality was not a problem unique to indigenous law, and pointed out that a person could sue on the basis of an oral agreement, if he had sufficient proof or could produce witnesses to verify his claims.

Adv Alberts agreed that Mr Gcwabaza’s concerns were valid, but pointed out that his own concerns went not so much to the practicalities, but the legalities. A very short time had been allowed to deal with these rather dramatic changes, and he was worried that the uniqueness of the situation could lead to some unintended consequences.

Mr Harris said that it did not make sense simply to “delink” section 2(2) of the Copyright Act from this Bill. He questioned if it was correct in principle to say that benefits and royalties set out in clause 53F would accrue even if no registration process was followed. The whole point of protection was to confer a benefit.

Mr Gcwabaza said that what conventional intellectual property laws had “legalised”, in the Western sense, was not something that traditional communities followed. This Committee should be attempting to produce a Bill that did not marginalise people by hiding behind legal technicalities.

Adv Kweta said that if this Bill came into operation and an indigenous community did not register, it could still benefit. This was because the person wanting to use that indigenous knowledge would, in future, need to approach the Commission, obtain consent from the community, and enter into a benefit arrangement.

Adv Kweta confirmed that section 33 of the Trademarks Act did, as currently worded, require that a right be registered before the holder of that right could institute an action for infringement. However, clause 43A on page 64 of the Bill said that “subject to the provisions of 12A, the provisions of this Act…. shall apply to traditional terms and expressions and geographic locations”. That meant that all the provisions of the Trademarks Act would apply to traditional matters, except if the provisions in that principal Act were not consistent with the Bill, in which case the Bill would prevail. This was inserted specifically as a safeguard to cater for any possible conflict.

Mr Harris did not understand which clause was the “said section” that suspended section 33 of the principal Act.

Adv Kweta said that no particular clause was suspending section 33. The provisions of this Bill would prevail in the case of any conflict.

Adv van der Merwe noted that clause 43A said “unless as otherwise provided”. Clause 43D would be reworded to note that registration was a possibility. Then clause 43F dealt with infringement. She agreed that if there was any conflict between the Bill and section 33 of the principal Act, then this Bill would prevail.

Mr Harris still thought that if clause 43D was amended to say that registration was not required, then the Bill would also need to state that no registration was required in order to institute proceedings under section 33. He noted the comments on the Bill taking precedence in the case of conflict, but did not agree on this principle.

The Chairperson noted that the original Bill had contained requirements for registration and drawing of databases.

Mr Netshitenzhe said that this was correct, but submissions were made on the burden that would be placed on communities if they had to register performances and similar matters. The dti had then revised its viewpoint, and noted that these matters would not have to be registered. Dti then moved to the idea of recordal, but, after further discussion, decided that recordal should be optional, not compulsory, for ease both of proving ownership, and to make matters simpler for communities. Therefore, the idea of registration was no longer required.

Adv Strydom noted that Adv Kweta and Adv van der Merwe had set out the principles. In relation to the concerns of Mr Harris, he noted that the requirement in the Designs Act was that, in order to be protected, those designs had to be registered. However, the Bill now stated that in respect of traditional designs, this would not be required. Subclause (1) said that if there was any inconsistency, the Bill would prevail.

Reference to “copyright” or “ indigenous knowledge”
Adv van der Merwe referred to a point raised by Ms Tshepo Shabangu, one of the Team of Experts, and said that no final decision had been taken on whether the term “copyright” should be used in respect of indigenous knowledge, or whether another term must be found.

Mr Harris gave his view that the type of protection conferred on indigenous works was equivalent to – but not quite the same as – the protection conferred on hereditary works. This was because although moral and remunerative rights were built in, the indigenous works would not pass the technical legal test to be called “copyright”. He thought that this should be re-branded.

The Chairperson noted that some possibilities proposed were “indigenous knowledge right” and “indigenous copyright”.

Mr Radebe said that “indigenous copyright” would have to be defined, and he suggested that perhaps “indigenous knowledge copyright” could be used, which might emphasise the principle that indigenous knowledge was to be brought within existing intellectual property law.

Mr Netshitenzhe noted that he and Adv van der Merwe agreed that derivative copyright was unlikely to arise in respect of conventional copyright matters. He was not sure why the Committee seemed so cautious to tamper with the principal Acts, given that it was essentially making radical changes to the principles behind the existing intellectual property systems. For this reason, he thought that there was no problem in retaining the term “copyright” and accepting – perhaps even stating this in the Memorandum on the Objects – that this Bill was in fact developing the law of copyright.

The Chairperson asked that the Committee should not go down that road.

Adv van der Merwe said that she would see no problem with retaining the current term, but would personally tend to prefer “indigenous knowledge copyright”.

Mr Radebe, on reconsideration, thought that the reference to “copyright” could stand on its own. WIPO acknowledged that there were already derivatives from this.

Mr Harris reiterated that “copyright”, as generally understood, included compliance with a set of criteria, but indigenous knowledge systems could not meet these criteria. He did not object to conferring protection, but thought that it was inaccurate to call this protection “copyright”, as defined in the Copyright Act. He would have no objection to using either of the two alternative terms proposed.

The Chairperson commented that derivative works may qualify for copyright protection if sufficiently original. Borrowing from and inspiration were permitted, but adaptation and copying were not. She asked the drafters if the Bill would fail a legal technical test if the word “copyright” was retained.

Adv van der Merwe said that copyright was, globally, generally understood to include concepts of originality and other matters. However, she conceded that this Bill was attempting to create new law, and so perhaps it should be accepted that the term “copyright” may need to grow to incorporate other considerations. However, she would not think it incorrect to use “indigenous knowledge copyright”.

Adv Alberts suggested that attention be paid again to the nature of the unique rights created. It would make sense to use “indigenous knowledge right” because that would be what was created in future, when a neater piece of legislation applied to these rights. This Bill did adapt the rights set out in the Copyright Act in a different way. He thought that “indigenous knowledge right” was probably a more accurate description.

Mr Gcwabaza said that if indigenous knowledge was protected under copyright, then he saw no reason to rename it. The danger of using another term was that this might imply that traditional knowledge was being removed from the ambit of copyright.

Mr Harris said that clause 28B(2) of the Bill and section 2(2) of the Copyright Act were quite different.

The Chairperson noted that Clause 28B was headed “Traditional works eligible for copyright”. She emphasised the word “eligible”. The Team of Experts had raised no objection to this. She ruled that this matter would be put to the vote at the appropriate time.

Memorandum on the Objectives of the Act: Paragraph 5
Mr Netshitenzhe referred to the financial implications, reminding the Committee of his earlier remarks on the sustainability of the Trust. However, the finer implications had not been discussed, particularly in relation to the appropriation.

The Chairperson noted this point.
 
The Chairperson noted that the input now needed to be included in a new clean document, to be presented on the following day.

The meeting was adjourned.