Copyright Amendment Bill: Subcommittee engagement with DTI on flagged clauses

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Trade and Industry

02 May 2018
Chairperson: Ms L Theko (ANC)
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Meeting Summary

The Subcommittee went through the flagged clauses referred to it by the Portfolio Committee:

The Clause 2 concerns were resolved. A Member asked about the academic environment because authors employed by universities had no control over the work they produced and secondly, disabled people are seemingly not catered for. These questions were flagged.

In Clause 3, on copyright conferred on the state when a commissioned work is funded by government. This had been a highly contentious clause. DTI had suggested the removal of the words ‘funded by’; however, Members agreed to remove the clause and retain section 5 of the principal Act.

In Clause 5, there was a concern that the 50/50 split in royalties may be problematic in application; however, the 50/50 does give the author or artist more negotiating power. Members agreed the 50/50 split needs further deliberation and advice from technical experts.

DTI said without the fall-back of the 50/50 split, there was no methodology or mechanism on how the royalties may be distributed in the context of the value chain and it would create problems.

In Clause 5 Members agreed that the word ‘transfer’ should be removed.

In Cause 7, the Bill provides recourse for how an artist could gain from subsequent profits on re-sale of the artist’s work. Some Members suggested that such things should not be tampered with and left to the discretion of contractual freedom. DTI said it is introducing this provision because artists do not get the benefits of the value of their work – with this provision, the Bill is following international trends.

On whether a person should be eligible for the resale of their royalty rights if they are not legal residents in the country, DTI stated that if you are in the country illegally, you need to comply with the minimum requirements of being in the country. A Member said that when speaking about illegal persons, the country needed to comply with international refugee rights. Those people’s rights cannot be cut off. The Committee needs to ensure that the clause is narrow in its scope to avoid excluding just anyone.

The Subcommittee agreed that the transitional provisions are needed.

In Clause 11, the parliamentary law advisor suggested that standard terms and conditions should be inserted, because broadcasters, collecting societies and other users avoided paying royalties by not keeping proper records.

The Subcommittee was encouraged to refresh their memory on the copyright training presentation that they had received in 2017 because copyright law is complex.

Members asked about the two technical experts that were supposed to assist the Committee.

Meeting report

Ms L Theko (ANC), Subcommittee Chairperson, said the Department of Trade and Industry (DTI) needs to convince the Committee why its proposals needed to be accepted and welcomed. The redrafted document was accepted but the Committee needs to work expeditiously due to the upcoming elections which makes Parliament’s time very limited.  

Copyright Amendment Bill: outline of flagged clauses
Adv Van Der Merwe, Parliamentary Legal Advisor, presented the table of flagged clauses the Portfolio Committee had referred to the Subcommittee:

Clause 2 inserting section 2A(1)(b)
In section 2A(1)(b), Members wanted to know why the copyright protection excluded computer programs. She said that it is not that copyright does not exist for computer programs but the clause referred to the interface specifications.

Dr Evelyn Masotja, DTI Deputy Director-General: Consumer and Corporate Regulation, indicated the provision looked at areas in the Bill that will not be catered for in terms of copyright protection. When it came to interface specifications, DTI was saying that it forms part of the technological sphere - these are open and made available for free in the public domain. Thus one cannot claim copyright on them. They are publicly accessible interfaces for technology outside the scope of the provisions of copyright.

Mr G Cachalia (DA) asked for an example and if these specifications were indeed free as well as how that impacted on the creator of that digital interface.

Dr Masotja replied that these interfaces are made freely available to the public; therefore, one cannot claim copyright on them as it is something that the public can make use of.

Ms Meshenderi Padayachy, DTI Deputy Director: Intellectual Property Law and Policy, explained the exclusion saying that copyright is a creative input, the clause modernised that context – an idea cannot be copyright. Creative input on the work was key, a computer program is copyrightable but a specification is more of a ‘how to’ manual on developing or assembling something – it is not a creative effort. A computer program will have its copyright excluding ideas and specification information (manual).

Mr J Esterhuizen (IFP) said that the digital world has changed copyright completely but there are some exceptions, there are still many problems – a few grey areas, hopefully those would be clarified.

Dr Masotja replied that some of the grey areas were already covered in the working document of the Bill based on the public submissions – these will be addressed as the Committee moves through the Bill.

Clause 2 inserting section 4(b)(ii)
Adv Van Der Merwe said the concern raised by Members was copyright protection of speeches made publicly and the available remedial action when a person is misquoted. Members felt that if the Bill did not cover this, the Bill would be going backwards. She indicated that remedial action is available in law depending on which platform the person was misquoted. If the press misquotes, the aggrieved person can lay a complaint with the Press Ombudsman, and if it is a publication, a complaint can be lodged with the publisher.

Dr Masotja agreed that, in terms of the legislation, the copyright will not cater for this area.

Ms Pregoria Mabaso-Muvhango, DTI Director: Legislative Drafting, added that a book had copyright protection, but if there was something in the book that infringed the law, there were existing relevant pieces of legislation to address the infringement.

Mr Cachalia said what would happen if he compiled all of his speeches and put them in the book, but people circumvent the copyright protection, how would that be dealt with?

Dr Masotja replied that would be a publication; thus, it would be subject to the copyright protection and this legislation was applicable to deal with the any infringement. If an extract were taken from that book, it must be properly referenced and, if not, the author could lay a complaint.

Mr B Radebe (ANC) referred to university lecturers who do extensive amounts of research and publications – which section of the Bill will protect that work?

Ms Padayachy replied that work done in the context of employment by the university is owned by the university; thus, it will be subject to copyright protection.

Mr Esterhuizen said that in most cases it is extremely difficult for people to lay complaints. University lecturers, especially those who write textbooks, have no control over how the content may be reproduced. This needed to be considered in the Bill.

Ms Mabaso-Muvhango said she agreed that it was difficult to lay a complaint, hence the Bill suggested a Tribunal to make the process easier for people to lodge complaints that could be dealt with expeditiously. Some of the complaints are received through the Companies Intellectual Property Commission (CIPC) which is within the DTI. CIPC then channels those complaints to the relevant institutions.

Mr Esterhuizen said his concerns stem from the academic environment because authors employed by universities had no control over the work they produced. Secondly, disabled people are also seemingly not catered for.

Dr Masotja stated that it was important to ensure that the legislation was strengthened and empowered and there was a need to look for more ways to ensure that the infringements were mitigated and guarantee that their work would be protected.

Ms Padayachy clarified that “author” is a broad term in terms of copyright; it could be anyone that created any work who is eligible or qualifies for copyright. Writing textbooks may not necessarily be within the scope. If a lecturer writes a textbook and publishes it, the publisher would then own the copyright of that book because the original author would have entered into a contract to transfer their copyright to the publisher.

Ms Mabaso-Muvhango explained that when writing is owned by an academic institution, those are rights that writer or author has to adhere to when they are under the employment of or study at an institution for a specified period of time. It is only after that period of time has passed that the writer or author will be in a position to regain those rights.

Mr Esterhuizen said that he was not convinced. It appeared that the user and the author share the same rights, because the author’s copyright was forfeited to the academic institution.

Adv A Alberts (FF+) suggested the Committee go back to the copyright works, as they are very broad – clarity needed to be provided on what works fall under the copyright. He mentioned mechanical right [the royalties that is earned when music is reproduced by a device or machine]. The Department needs to provide an overview of the copyright of different works.

The Subcommittee Chairperson suggested that Mr Esterhuizen’s questions be flagged for further deliberations.

Mr S Mbuyane (ANC) asked for more clarity on how an idea can be protected under copyright.

Ms Padayachy said that an idea is not protected because it is not reduced to material form, it must be turned into a concept document, only then it would be eligible to copyright. However, if you wrote that idea into material form under the employment of an institution then the copyright will fall under that institution. People can insert the copyright © icon into a piece of work and it will be automatically protected. However, this needed more public education and awareness to teach people on how they can protect their works through copyright.

Adv Van Der Merwe stated that at the outset of the Bill in 2017 the Committee had copyright training. She suggested that perhaps that training session presentation should be circulated to Members to refresh their memory because this is a complex legal framework.

Clause 3 (section 5)
Adv Van Der Merwe said there was a lot of contention on this clause. It deals with where copyright is conferred on a work that is funded by government but the copyright was not enjoyed by the State. A lot of concerns were raised on this; even the DTI raised some concerns. The DTI suggested the removal of the words ‘funded by’; however, Members agreed to remove the clause and retain section 5 of the principal Act.

Clause 5 (Section 6A)
Mr Cachalia asked for clarity on what 50% was based on as proposed by DTI and how it would be quantified if the 50% consist of a suite of things. He asked DTI to comment on the proposal for a contract template.

Adv Van Der Merwe said the idea of a contract template made sense. The Committee did not need to spend time on it because DTI would design it. Practically, if parties cannot agree on the terms and conditions, they cannot be forced to agree on the 50/50 or “half” – this may be problematic in application. However, the 50/50 does give the author or artist more negotiating power. And because an artist may be aware that in disagreeing with the terms of the contract, he/she will be entitled to 50%, no contract may ever be concluded.

Members agreed to refer the matter to technical experts.

Mr Cachalia said that he was in favour of contractual freedom. Contract legislation is fully effective – there may be unintended consequences if it is tampered with.

Mr Radebe said that the template must be prioritised. On the 50/50 proposal – it may be problematic. As for the ‘how’ of the template, this should be referred to the experts and the bottom line is that the state must protect the artist.

The Chairperson stated that Members agreed to the template but the 50/50 split needs further deliberation and advice from technical experts.

Mr Mbuyane agreed saying the value chain of the final product needs to be considered when discerning the split.

Ms Mabaso-Muvhango replied about the 50/50 split, saying if this were left hanging with no methodology or mechanism outlined in the Bill on how it may be distributed in the context of the value chain, it would create problems. Thus, outlining the background or mechanism in the Bill on how it can be determined would make the process much easier for implementation.

When the word ‘transfer’ was used, it was for a lack of a better word. DTI was envisaging a holding right that gives another person a period of time or tenure over holding the right. This will ensure that the owner does not relinquish their rights on the royalty.

Mr Cachalia stated that could be incorporated in the contract as an optional provision; therefore, the template should be as detailed as possible. Doing it outside the contract makes it mandatory rather than optional – and if it is made mandatory, it would be problematic.

Mr Radebe agreed that the template needed to be as comprehensive as possible.

Members agreed that the word ‘transfer’ should be removed.

Adv Van Der Merwe added that the word ‘transfer’ could only be kept if a definition was made for it.

Clause 7 (section 7B)
Adv van der Merwe said the clause was applicable only to artistic works. The concern was about interference in the freedom to contract. A lot of issues were raised in the public comments on how to deal with commissioned work. There was also a concern about commissioned photographs that were used multiple times where the photographer did not receive proceeds or benefits from the multiple use of the work.

A person that has created an artistic work and the work gets sold. The question was what if the painting (for an example) now hangs in a museum and the museum sells it to an auction house. If the museum sells that work for a lot more than the artist sold it, the Committee needs to figure out a recourse for how the artist could gain from the excess. This could be prescribed (or determined) by the Minister of Arts and Culture. The way the clause is written is not retrospective; currently it will only apply from the date the Bill is in operation. If the provision is made prospective, there will not be any constitutional issues.

Mr Cachalia said that a contract is made at a point in time and an incremental price becomes evident, but if the work declines in value, does that mean the originator will have to account for the loss as well? He suggested that these things should be left at the discretion of contractual freedom.

Mr Estherhiuzen agreed with Adv Van Der Merwe’s suggestion.

Adv Alberts agreed with Mr Cachalia’s point. He asked how this would be policed to ensure that the artist gets the money.

Dr Masotja said it was a rare scenario to find that the artistic work depreciates.

Ms Padayachy said this issue with contracts is happening all over the world, DTI is introducing this provision because artists do not get the benefits of the value of their work – with this provision DTI is following international trends.

Clause 7 inserting section 7B(3)(a)(i)
Adv van der Merwe said a question was raised if a person should be eligible for the resale of their royalty rights if they are not legal residents in the country.

Dr Masotja stated that if you are in the country illegally, you need to comply with the minimum requirements of being in the country before consideration of other legislative frameworks.

Adv Alberts said when speaking about illegal persons, the country needed to comply with international trends such as refugee rights. Those people’s rights cannot be cut off. The Committee needs to ensure that the clause is narrow in its scope to avoid excluding just anyone.

Clause 7 inserting section 7C2)(b)
Adv van der Merwe said the transitional provisions are needed, but a question was raised whether it should be incorporated in the Act or not. The best solution is to bring in transitional provisions subject to the commencement of the Bill.

Mr Radebe said that the explanation was clear.

Adv Alberts asked about the status of the Intellectual Property Laws and Amendment Act – it is been parked for quite a while now. Is there a chance that the Bill will see the light of day?

Adv Van Der Merwe said that it is an Act but it is not yet operational.

Clause 11 (section 9A(10)(aA)(i)
Adv van der Merwe proposed that standard terms and conditions should be inserted, because broadcasters, collecting societies and other users avoided paying royalties by not keeping proper records.

Adv Albert asked about the purpose of the technical panel of two copyright experts. He believed that it would very helpful if they would come in at this point to assist the Committee to better process the Bill.

Dr Masotja said that on the reporting and non-payment of royalties, there should be a specific clause that speaks to a log sheet and how the information is transferred to the collecting societies to ensure that the payment of royalties is not affected.

Ms Theko said that Members should now agree on the clauses that have been discussed, and she appealed to both the Members and DTI to agree on the process moving forward. It was important the Subcommittee was in consensus because a report must be tabled to the Portfolio Committee on all the flagged clauses.

For the next meeting, she requested that DTI present the Farlam Report recommendations as well as the specific policy questions for the flagged clauses.

The meeting was adjourned.



 

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