Copyright Amendment Bill: flagged clauses

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Trade and Industry

07 June 2018
Chairperson: Ms J Fubbs (ANC)
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Meeting Summary

The Committee began with a recap on the clauses in the Copyright Amendment Bill that had been resolved in the previous meeting and those that still required resolution. Clauses had not been resolved either because a legal opinion was required, the Committee had requested further information or examples of international best practice, or because Committee Members could not come to an agreement. Decisions also had to be made as to whether certain issues had to be written into the Bill or whether they were matters for enforcement using existing mechanisms.

The Parliamentary Legal Advisor had made the changes agreed upon at the previous meetings and summarised those that required decisions by the Committee.

Despite the call for contractual freedom, the Department of Trade and Industry (DTI) argued for minimum requirements for a contract because many artists do not understand contracts and giving them minimum requirements would help those artists in drawing up and understanding contracts. It was a developmental approach to prevent artists from signing away their rights. It was agreed that the Minister could increase the royalty rate from time to time.

DTI presented the research on penalties in other countries. DTI was unable to find any penalty for non-compliance because it was considered a civil liability. Infringement was considered both a civil and a criminal liability. Singapore imposed a fine for each copy of a work sold that infringed copyright. The penalty was S$10,000 per infringing copy. Possession or importation of infringing copies for commercial purposes was subject to imprisonment up to five years. The Committee discussed the imposition of a fixed fine or a fine of 10%, preferably a minimum of 10%, of the annual turnover of the company. The Committee was in agreement that, should a person be convicted of either infringement or non-compliance, the person could be liable to imprisonment for a period not exceeding five years or to both a fine and such imprisonment. Extensive debate did not bring about a convergence of views on the fine. The importance of the matter and the need for penalties that would make an impact was highlighted by the National Association of Broadcasters which had a non-payment rate of royalties of 70%.

The exceptions in the ‘fair use’ clause were deliberated and generally agreed upon, with a stumbling block being the clause that indicated that a full work could be copied for educational purposes if the work was not available in the country at a reasonable price in comparison to comparative works. Although the price of such material would be determined by market forces, some Members considered that a subjective measure but, as no alternative was offered, the exception was approved.

The process of identifying orphan works was cumbersome in the Bill but it had been put in abeyance until there was clarity on fair use/fair dealing. A new clause would be drafted on orphan works. The process of getting artists to sign a contract prior to needle time was also seen as far too time-consuming and clumsy, as well as impractical in the broadcasting environment. It was determined that the general agreements for payment would apply to all artists and implementation of the log sheets would suffice to ensure that all, even new, artists were paid the correct royalties.

Should collecting societies be required to meet BBBEE requirements for accreditation? The question was hotly debated but because it could be in conflict with BBBEE legislation, the Committee determined that another way would have to be found to ensure transformation of the collecting societies.

DTI formally, and in writing, would request the Judge President to designate the five retired judges and ten acting judges for a period not exceeding five years to hear and adjudicate copyright disputes as Commissioners of the Copyright Tribunal. DTI would then introduce the legislative changes to expand the current jurisdiction to include the functions of conducting hearings, adjudication of cases and dispute resolution.

It was agreed to include Panorama in the exceptions as that would allow the use of photographs that might have a copyright image in the panoramic view and would therefore be infringing copyright if it were not included in the exceptions. Remix rights were also added to exceptions. Public lending rights would have costs for the state which could have unintended consequences. The public lending rights clause was not recommended for developing countries and a decision was taken not to include those rights in the Bill.

The extension of the copyright term of sound recordings from 50 years to 70 years was not supported. The concept of reciprocity in the payment of royalties internationally was fully supported.

Members decided that copyright on unpublished works had to be treated differently. It related to archived content that had not been published and to which copyright could not apply. The material was, however, a national asset. The Committee did recommend that claiming archived work as one’s own should be seen as fraud and treated accordingly.

Meeting report

The Chairperson welcomed DTI, the Department of Arts and Culture (DAC), the Company and Intellectual Property Commission (CIPC), the State Law Advisor and other visitors.

Revised Matrix presentation
Adv Charmaine van der Merwe, Parliamentary Legal Advisor, indicated where flagged clauses had been resolved on 6 June and what was still outstanding. Thereafter, DTI would deal with the big issues that were still outstanding.

Clause 1: Definitions
The definition of ‘visual artistic work’ had been drafted and a decision had been made that there was no need for a definition of ‘user’.  That meant that there was nothing outstanding in clause 1.

Clause 2 – Scope of copyright protection
Nothing outstanding.

Clause 3 – Copyright in relation to the State
“funded by” had been removed.

A decision was required on whether the clause should apply to only the state and prescribed international organisations. As some local organisations might be foreign-owned, consideration had to be given to whether local organisation should be included.

The concern raised by DAC that works owned by the state would been commercially exploited was a matter for enforcement and DTI felt that there were mechanisms for enforcing it, and that it was not necessary to include this in the Bill.

Clause 4 – Nature of Copyrights in literary or musical works
No amendments required.

Clause 5 – Royalties regarding literary or musical works
The clause dealt with contractual freedom and the Committee had indicated that the clause had to be retrospectively applied. That would have to be advertised.

The question had arisen on whether prescribing minimum content in the contract would impact on contractual freedom. The matrix contained a draft of the broad areas that the contract should cover, and Members needed to determine whether it was sufficiently broad to allow contractual freedom.

Clause 6 – Nature of copyright in artistic works
No amendments required.

Clause 7 – section 7 a: Royalties regarding artistic works
DTI had proposed that the clause be deleted but after consideration it had been agreed to retain the clause. No further amendments. However, the retrospective application would have to be advertised.

Clause 7 – Section 7B
The phrase “citizen of a designated country” had been amended. DTI had to draft the wording for the fixed rate that the Minister would set at the commencement of the Bill. DTI had suggested 5% as a commencement rate.

Clause 7 - Section 7C Proof of Author
The concern that an artist’s work might be adapted/“copied” after rejection, had led to the proposal of a register but that might affect the nature of copyright. It had been decided that a much neater solution would be for the artist to send the script or to email it to him or herself.
 
The references to indigenous cultural expressions and indigenous communities had to be resolved. Those terms were dependent on the Bill being prepared by the Department of Science and Technology which had not yet been passed by Parliament and might not be passed before the Copyright Amendment Bill. DTI had suggested the removal of the words “national trust” and retention of “indigenous community”.  That would be effected in all the relevant clauses.

Clause 7 - Section 7D
No amendments required.

Clause 7 - Section 7E
The issue of the Intellectual Property Laws Amendment Act had been resolved.

Clause 8 – Nature of Copyright in Cinematograph films
No amendments required.

Clause 9 – Section 8A: Royalties regarding audio-visual works
The retrospective application would have to be advertised for comment.

Clause 10 – Section 9: Nature of copyright in sound recordings
No amendments required.

Clause 11 - Section 9A: Royalties regarding sound recordings
There was still a flagged issue in clause 11. The inclusion of the log sheets process in the Bill would have to be advertised. The question was whether log sheets would replace the agreement process or whether it would be in addition to that. A decision needed to be made around that issue.

It had been agreed that a failure to record needle time on the log sheet would be an offence. The actual penalties had to be agreed upon and a decision had to be made as to whether there would be a different penalty for second offenders. DTI had been requested to provide an international comparison of penalties to the Committee. Adv van der Merwe had drafted something for Members to consider: “the maximum fine for a first offence, R 5 000 or 5% of turnover, whichever is the greater. For the second or further offences, a maximum fine of R 10 000 or 10% of turnover, whichever is the greater.”  It was a proposal for the Committee to consider.

The “indigenous community” issue had been resolved.

Clause 12 – Section 11: Nature of copyright in programme – carrying signals
No amendments required.

Clause 13 – Section 12: General exceptions from protection of literary and musical works
No amendments required.

Clause 14 – Section 12A: General exceptions from copyright protection
The clause dealt with the issue of “fair use”.  The Bill was correctly worded, but DTI needed to check the wording to ensure that DTI was satisfied that it was correct.

Adv van der Merwe referred to the input given by Prof Schonwetter in an email the previous day in which he had said that it was essential to keep the four factors in relation to copyright, as in section 12A (1)(b) but had suggested that, as Singapore had discarded the fifth factor, it need not be considered. However, Andre Myburgh, a member of the technical panel, had informed the advocate that Singapore had conducted a survey on the fifth factor but had not yet made a decision to discard it. The Committee could therefore decide whether they wish to add the fifth factor which was: Could one obtain the work at a reasonable price?

Adv van der Merwe added that the four factors listed in the Bill was not a closed list as it stated: “relevant factors to be taken into account, including”.  The word “including” meant that the possibility of the fifth factor could be considered, even if it was not specifically listed. She reminded the Committee that a decision had been taken not to copy the Singapore legislation exactly but to include in the Bill what would work in the South African context.

Clause14 – Section 12B: Specific exceptions
The issue in the clause was about making personal copies of such a work that one owned, for example, a textbook. Members had pointed out that it was important to be able to make of a book that one was working from. Section 12B(j)(ii) indicated that “a personal copy of the work made by the individual for the individuals personal use and made for ends which are not commercial.”  That subsection captured what the Committee had intended. The proposal was, therefore, to remove section 12B (j) (i) which was an open-ended and contentious sub-section talking about making copies of the individual’s own copy of the work. The removal of that subsection would prevent wholesale copying of a work.

The Chairperson indicated that the Members of the Committee were in agreement with that amendment.

Clause14 - Section 12C
There were no concerns.

Clause14 -Section 12D
The question was about who determined reasonable price. It had been decided that would be a market-related issue.

Clause 19 – Section 19B: General exceptions to computer programmes
The clause dealt with general exceptions to computer programmes. Two proposals had been put to the Committee on Tuesday and DTI had indicated that DTI was in favour of being as open as possible. She had, therefore, included proposals by the University of Cape Town and Anton Mostert of Stellenbosch University in that clause.

The concern that the Chairperson had raised about the Microsoft legal case in the United States had not been resolved yet. DTI was considering the issue and would provide a response on that.

Clause 20 – Section 19C: Libraries
The issue had been the inclusion of galleries in the clause, but it was best international practice to include galleries and the Committee could see no reason for excluding them. The clause therefore remained the same.

Clause 20 – Section 19D: Persons with disabilities exceptions
No amendment was required.

Clause 21 – Section 20: Moral rights
No amendment required.

Clause 22 – Section 21: Ownership of copyright
The issue in that clause was the concern around commissioned work. DAC and DTI had proposed the Canadian model. The Committee had to decide whether a written contract was required. However, that would mean that a verbal contract would be invalid and that might have implications. If the agreement was not valid, then the Canadian model would apply. DTI had to supply the amended wording for that clause.
Adv van der Merwe and DTI would work on it together and present it to the Committee the following week.

Clause 23 – Section 22: Assignment and licences in respect of copyright
The question was about the assignment of copyright and what happened when that copyright reverted to the author after 25 years. DTI did not want the author to be responsible for contracts that he had not signed. There were two ways of dealing with it. Firstly, the rights of the person to whom the copyright had been assigned could be restricted to the 25-year period or, secondly, the author could be obliged to take over any outstanding contracts. That had not been decided but the clause would have to be advertised and possibly the public could provide some direction.
The Committee had agreed that the period would be up to 25 years and not exactly 25 years, no more and no less.

Clause 24 – Section 22A: Orphan works
If the orphan works were linked to ‘fair use’, it would be an exception and that would mean that no royalties would be paid. Therefore, the clause had to stay.  Secondly, the Bill could not limit claims to five years as that would be considered expropriation. The clause had to be advertised.

Clause 25: Chapter 1A Sections 22A – 22F Collecting societies
The clause had been flagged. Members had to consider the point about how long collecting societies would retain royalties and the issue of interest earned on royalties not paid out. The advocate cautioned Members to consider the National Credit Act and the implications for collecting societies if they were earning interest from royalties because interest was closely linked to being a creditor. The Committee could consider other ways of managing that situation. The clause had to be advertised.

Clause 26 - Section 23 infringement
No amendments required.

Clause 27 – Section 27: Penalties and proceedings in respect of dealings which infringe copyright
DTI had given careful consideration to the wording in on technological measures. It was a balancing act, and DTI was satisfied with the balance.

Clause 28 - Section 28 Provision for restricting importation of copies
No amendments required.

Clause 29 – Section 28O, 28P, 28Q, 28R and 28S Technological issues
No amendments were required.

Clause 32 – Sections 29A to 29S: The Tribunal
Sections 29A to 29S all dealt with the Tribunal and the overarching decision was to retain the Copyright Tribunal and to add powers to it. Depending on additions, there might be a need to advertise. It would depend on how much the new clause differed from the principal Act.

Section 29P dealt with Legal Aid assistance. However, the Legal Aid Act excluded work in Tribunals. DTI believed that the issue of indigent artists requiring legal assistance could be handled outside of the Bill. It was possible that in the powers of the Tribunal, that a clause could be included allowing the Tribunal to provide assistance in such cases.

Clause 35 – Section 39B: Unenforceable contractual term
The concern was that artists could not be contracted out of the protection. The clause had, however, allowed for a settlement or a license which also would have contracted them out of the protection. The decision had been to delete the two clauses: 39B (2) (b) and (c).

The wording and other technicalities in the schedules would have to be checked.

Clause 37 - Amendments of Certain Expressions in Act 98 of 1978
No amendments were required but the technical panel needed to check the wording and phrases.

Clause 38 – Transitional provision
The clause would deal with the phrases “indigenous community” and the removal of “National Trust”, etc.

The Chairperson raised the fact that during deliberations, the Committee and others had referred to Mr Myburgh as the technical expert but, in fact, there was a panel of experts. The Committee Secretary had received communication to the effect that other panel members wanted to be consulted. As she understood it, the Committee was only going to approach the technical panel as a team once the draft Bill was complete. However, the Subcommittee, DTI and Adv van der Merwe might have approached specific panel members for assistance when they had needed it. The Committee needed to look at the contact in that manner and not allow some technical experts whose noses might be out of joint to halt the process. The Chairperson indicated that the technical experts, or anyone, were welcome to write in with any contributions they might wish to make while the Committee was deliberating on the Bill.

Adv van der Merwe added that the technical panel was not intended to give policy advice.

Adv van der Merwe informed the Committee that the last few of issues had been added to the matrix. She was raising them to highlight them and draw the Committee’s attention to them.

Panorama’ and ‘incidental use’: At the public hearings, the inclusion of ‘panorama’ and ‘incidental use’ had been requested. Her recollection was that Members had been positive towards the inclusion of those concepts. It was a gap in the legislation and she had prepared a draft for consideration by the Committee.
Levy: The request to consider a levy had been rejected because it would turn the Bill into a Money Bill.
Public lending rights: The question of public lending rights had been raised about books in libraries but that would involve a cost to government. The Committee could include anything in the Bill but if something was added that had not been considered, especially financially, it would delay the Bill. She was simply alerting the Committee to the possible pitfalls in including such a clause. 31 countries had embraced the public lending right.
Re-mix’: The ‘re-mix’ exception had been raised. It was where certain sound recordings were put together. It should be covered under ‘fair use’ but the Committee might wish to include it as an exception.
The term of sound recordings: There had been a request to extend the term of sound recordings to 70 years as, it was said, that would update the term and support the development of industry. It sounded good, but the Committee would have to consider the impact of that amendment.
Data mining and c-text: A new request had been the consideration of adding c- text and data mining as exemption. That had been included in the amendments to the IT section.
Perpetual copyright: The request to remove perpetual copyright would mean that a work surfacing from a long-deceased author would be subject to copyright but, again, the Committee had to consider the implications of including perpetual copyright.
Reciprocity: A new clause would be added on payment of royalties by collecting societies to other countries. A legal opinion was being sought by CIPC on this.

Discussion
The Chairperson noted that three decisions had to be taken, keeping in mind that the Committee would deal with the Tribunal, clause by clause. For easy reference, Adv van der Merwe had provided Members with a single sheet indicating those clauses which had to be advertised. After the Tribunal deliberations, the Committee would have to discuss, together with any issues flagged in the deliberations on the Tribunal, clauses where a decision had to be taken

Mr B Radebe (ANC) suggested that Committee should first deal with decisions to be taken as Adv van der Merwe had refreshed their memories and then they could address the Tribunal.

The Chairperson checked with DTI and found that DTI had, indeed, prepared a presentation that followed the clauses in the Bill, which meant that the Tribunal would not be presented first, but they would get to it during the presentation.

DTI presentation on policy concerns and the Tribunal in the Copyright Amendment Bill
Dr Evelyn Masotja, DTI Deputy Director-General of Consumer and Corporate Regulation, apologised for errors in the presentation because the DTI had worked under extreme pressure the previous night to prepare it. The presentation would take the Committee through some of the clauses it had flagged the previous day, including the Tribunal and the collecting societies.

Clause 5 - inserts Section 6A: Royalties regarding literary or musical works
DTI had considered the issue of contractual freedom versus the minimum requirements for a contract. DTI had debated the issue but felt very strongly that the Bill had to set minimum requirements for a contract because many artists did not understand contracts and giving them minimum requirements would help them in drawing up and understanding contracts. It was a developmental approach to prevent artists from signing away their rights. She recommended that the minimum requirements for a contract remained in that clause.

Section 7B: Royalties regarding Visual Works
On setting the rates for royalties for visual works, DTI proposed the following wording for clause 7B (2) (c) “The Minister may by Notice In the gazette increase the rate prescribed in terms of paragraph (a) from time to time.”

Clause 11 Section 9A
DTI presented the research on penalties in other countries. DTI was unable to find any penalty for non-compliance because it was considered a civil liability. Infringement was considered both a civil and a criminal liability. Singapore imposed a fine for the sale of copies that infringed copyright. The penalty was S$10,000 per infringing copy. Possession or importation of infringing copies for commercial purposes was subject to imprisonment up to five years.

In the United States, a civil copyright infringement was subject to payment of damages not less than $750 and not more than $30 000. The criminal penalty was imprisonment for up to 5 years and $250,000.

DTI proposed an amendment to Section 27 of the principal Act by substituting the following words in subsections (6): “A person convicted of an offence under this section shall be liable to a fine or to imprisonment for a period not exceeding five years or to both a fine and such imprisonment or, if the convicted person is not a natural person, to a fine not exceeding 10% of its annual turnover.”

Mr Radebe commended DTI on good drafting but the clause did not indicate the details of the 10%. SABC, for example, had other radio stations etc. The guys had to get their ducks in a row. Was it 10% of the group or the division? He asked what could be done about constructive bookkeeping that showed a loss instead of a profit.

The Chairperson stated that it had been discussed the previous day. The ANC had said 10% of group turnover and Mr G Cachalia (DA) had suggested 10% of the division. She was looking for a decision.

Mr D Macpherson (DA) enquired whether it meant that a court could decide to impose a 5% fine, should wish to do so.

The Chairperson agreed that that was what the proposed draft clause stated.

Mr Radebe noted that when it came to the law, people had to do things properly. He believed that a minimum of 10% of annual turnover of the group was necessary to ensure that people adhered to the law and ensured that their employees did so as well.

Mr Cachalia thanked DTI for coming back with examples of international best practice. He had said he was prepared to be guided by international best practice and he found that both examples provided for criminal sentences of up to 5 years in prison. If there was to be a percentage, then he would say that it should be in line with international best practice of up to five years. Both examples also set a fixed amount while there was a suggestion on the table for a minimum of 10%. That was not aligned with best practice. The Members had two cogent examples, one of which the Committee was using as a model for “fair use” and the other, the US, which was, in many ways, a leader in that area. He pleaded with the Committee not to reinvent the wheel.

The Chairperson heard that he agreed with ‘up to 5 years’ but had a different point of view on fines.

Mr Macpherson said the fine should not become a burdensome thing for the court. To have to determine what the annual turnover would be was burdensome. The problem of the percentage was burdensome. What was the turn-over of a local radio station? Determining the percentage should not be burdensome to the court.

He raised an issue that he had raised on another Bill. What was more precious, was the licence to operate. Making compliance conditional of the licence was an effective deterrent. For example, an habitual offender could lose his licence to operate for 5 years. He would like the Committee to consider that as an option for enforcing compliance.

The Chairperson thanked Mr Macpherson for raising a stick and carrot approach.

Mr S Mbuyane (ANC) suggested that financial statements would assist in terms of determining turn-over. It would be easy to determine 10% of turn-over. It was not always about best practice. SA had also to find its own ways. He agreed with the five-year imprisonment.

Mr Radebe agreed with the issue of strikes, which was a new element, but the Committee had to look at what it was dealing with. If there was no compulsion, someone would go hungry because royalties would not be paid while the company was getting its three strikes. Even a radio station had annual financial statements. 10% was instantaneous at the time of the misconduct. 10% of turn-over was best.

The Chairperson had heard Adv van der Merwe mention that Section 27(9)(A), dealing with offences and penalties regarding log sheets, referred to a first offence and a second offender. Adv van der Merwe had crafted a draft proposal which seemed to fit between the two positions. Adv van der Merwe had pointed out that section 27(9)(a) referred to a fine or imprisonment, not exceeding three years or both for each offence. If the convicted person was not a natural person R5 000 or 5% of turn-over and (b) in the case of a repeat offence imprisonment and a fine not exceeding R10 000 or both. The current Act had penalties. Taking that into account, the Committee had to take a decision. What was the decision? Was the current arrangement not working or what was the approach?

Mr Cachalia suggested that it was sensible to follow best practice. For cogent reasons the drafters had put in a fixed amount to ensure compliance, which was what everyone in the Committee wanted. However, the Committee did not want unintended consequences. It did not want to be punitive to the degree that it made sure people went out of business. That would harm the very people that the Committee was trying to help. So, the intention was to ensure compliance, not to drive companies out of business because artists would suffer. There had to be a reason why the original Act, as well as legislation in the United States and Singapore, had gone for a fixed amount. The Committee should be sensible and accept that guidance.

The Chairperson stated that she was looking for a constructive approach and convergence to finalise the matter.

Mr Radebe said that there was convergence in a serial offender going to prison for up to five years. Secondly, the issue of a fixed amount had not protected the artists in the past and they were hungry, so the law had to be strengthened. Any investor who wished to go into the industry had to study the laws for their business and understand what it would take to comply. One could do a SWOT analysis. If it was in law, people would know that the artists had been suffering so he wanted the penalty to be severe. The government had to protect people and so he was suggesting a minimum of 10% of annual turnover. The word must go out and the industry must comply. The industry met regularly and after the Bill had been passed, they would decide how to comply. Lots of musicians had been exploited.

The Chairperson suggested that the Committee had to take into account that the clause in the principal Act was passed in 1992. What did R10 000 buy in 1992? What was its buying power in 2018? That was the problem with fixed amounts which had to be taken into account.

Mr Cachalia suggested that the wording could index the fine to inflation.

The Chairperson said that, as an economist, she heard him. The principle problem leading to the difficulty was the amount. But there were two positions. All Members wanted compliance and the prison sentence had been agreed upon. The suspension of a licence was a third point that could be factored in. The question revolved around the 10% and whether it was a minimum, a maximum or exactly 10%.

Mr Kadi Petje, CIPC Senior Manager: Copyright, indicated that infringement was different from non-compliance. Infringement could be making money at the expense of another person. Non-compliance was simply not adhering to administrative requirements. Punitive measures should be directed at infringement.

The Chairperson clarified that the log sheets were about non-compliance, but which suggested someone was not benefitting as the royalties were not being paid, whereas infringement was making money out of someone.

Mr Petje added that the Committee should just note the difference between the two. Infringement was always about making money.

The Chairperson agreed with the distinction but reminded Mr Petje that, in the case at hand, one could get benefit e.g. more sales or more advertising if one were complying and so it was still depriving someone of money. However, she suggested that the DTI legal drafter should perhaps give input.

Ms Pregoria Mabaso-Muvhango, DTI Director: Legislative Drafting, explained that non-compliance was not doing something, like keeping a log sheets, but section 27 stipulated offences, including infringements. Non-compliance was not playing by the rules.

The Chairperson commented that the explanation aroused more concerns.

Mr Radebe did not understand the difference. Infringement was like stealing. Non-compliance was also stealing because non-compliance meant that the artists were being deprived of their income. That was stealing from them. The bottom line was that both were stealing. Non-compliance was stealing from the artist who was not getting the money. If a log sheet was not kept, it was stealing.

The Chairperson stated that it reminded her of the need for companies to keep records of payment. In this case it was a record of payments that had to be made. Non-compliance could be serious, e.g. non-compliance with tax had very serious implications. One was hit with a sledgehammer. In some cases, non-compliance could lead to the depravation of someone’s income. That was the point that she was making. As Mr Radebe had said, it amounted to stealing. She wished to persuade Mr Cachalia. The prison sentence was out of the way as there was consensus. The issue now centred around the fine and what that would be. She would hear Mr Cachalia and then DTI, and then the Committee would take a decision.

Mr Cachalia thanked CIPC and DTI for the intervention. The difference between compliance and infringement was crucial. Tax collectors made a difference between evasion and avoidance. The point was that non-compliance could be remedied. The person could be made to pay the money back. Sending people to jail for something like that would not remedy the situation, would not get the money back and was a bit crazy in his view. The punitive measures were excessive.

The Chairperson wanted to stay within the confines of cogent argument.

Dr Masotja noted that the log sheet brought up the issue of penalties. In the copyright industry, there was a massive amount of money to be made and R5 000 was insignificant. Stealing a song could make someone millions and that was not balanced out by a R5 000 fine. The industry needed to take copyright and payment of royalties seriously. Benchmarks showed that imprisonment was allowed. Maybe three years would be sufficient, but a serious penalty would prevent a loss of copyright infringement

Adv van der Merwe said if there was a concern about infringement, it should be noted that all offences were currently about infringement. The Bill could have a subsection for infringement and another subsection for non-compliance. The Act provided for first offender and repeat offenders. Even if the clauses were split, the current penalties were inadequate. The DTI recommendation was for infringement, which was a specific amount per article. For infringement, the fine would be an amount per article. She recommended splitting the penalties because non-compliance would not be per act of non-compliance. Although it might be a good remedy if the set amount had to be paid for each time a recording was not written up in the log sheet, that was not realistic. Infringement could be also be x %. It must be noted that her recommendation had not given how turn-over was to be established but one could copy from the National Credit Act. She noted that The Department of Justice and Constitutional Development did not put an exact fine in legislation but there was an Adjustment of Fines Act which would interpret what x period in prison would be in monetary terms.

The Chairperson stated that she would prefer a percentage as it would overcome the volatility that one had with money. The prison sentence was agreed to. What was the recommended percentage? In the draft, it stated ‘not exceeding” while there was a view that it should state, ‘a minimum of’. What if one just said 10%? The Chairperson asked the legal advisors if the Bill could stipulate 10% with no minimum or maximum. What were the legal implications, if one just stated an exact amount.?

Adv van der Merwe stated that she had checked the latest constitutional decision. In a recent constitutional case, the fine for drugs had been R10 000 exactly per event. So, could be just 10%. The National Credit Act had added an amount because the fine was a percentage of the turn-over or a fine of R10 000, whatever was the maximum.

The Chairperson did not believe that the issue would be resolved in the meeting. Both positions were set so she would like to put aside until after lunch.

Members disagreed with the Chairperson’s proposal as they wanted to deal with it immediately.

The Chairperson acceded to the request but wanted substantive points only and on the fine only.

Mr Radebe stated that a minimum of 10% was still valid because they were dealing with it as a deterrent. Even non-compliance was serious because it deprived artists of food. The issue of best international best practice was useful, but one had to look at the running economies, and one of the running economies was China. So how did the Chinese deal with the issue? And going to Arabia, one could ask how those countries dealt with the issue. Members needed that comparison against countries that were really running well economically.

The Chairperson agreed with Mr Cachalia’s view that the Committee had to be measured and serious.

Mr Cachalia confirmed that the Members had to be measured. He cautioned against emotion. How much money someone made as a result of an agreement with one, was not the issue. Companies had to be forced to comply. But to conflate that with how much money someone made was a different issue. It was a faulty conflation. He said that the Bill should make them comply but make them comply in the manner contracted. If they infringed, there were penalties. The Committee should not be driven by emotions about how much money companies were making from someone.

The Chairperson noted that it was not an entirely fallacious argument. Many large companies could budget for infringements. If there were two companies and the huge company was earning x and the backyard radio station was earning y, the same fine would not deter large corporations. The Committee had to look at a fine that would be an encouragement towards compliance. Looking at the current situation, one saw that SABC had just started paying out royalties because it had realised that it had better pay out or it would have huge fines. It was not just private companies that had to watch the bottom line. Originators had to benefit. Many passed away before getting their royalties. She requested the DA position.

Mr Cachalia agreed that it needed to force people to comply with the mechanism for recording the use of originators’ work. The penalty for log sheet non-compliance and further penalties should be in line with what the Committee wanted to do. He had asked DTI to come up with the comparison because the Bill was modelled on the Singapore model, which was the hybrid position of ANC. The Committee needed to fix on how to get them to pay. He suggested the Singaporean example of a fixed amount, although he understood that Singapore did not have an inflation problem that negated the value of the amount for the fine. Fortunately, Singapore had a well-managed economy.

The Chairperson asked for the ANC position.

Mr Radebe stated that the Singapore model would not work because Singapore was a city state in which most people were wealthy and there were high standards of living. There was no poverty and the numbers were small. SA was very different. Artists could not even afford legal aid. They had to be protected by the state. There was a clear distinction between the two countries. The African continent had been exploited for many years. He did not want separation of compliance of log sheets and infringement because one could not break the law a little bit and a lot. The minimum penalty was valid. The ANC could not meet agreement with DA because the ANC represented the poor and vulnerable.

The Chairperson asked if he wanted a minimum or a maximum of 10%.

Adv van der Merwe said that she had checked, and the Bill could state the fine was a maximum, a minimum or exactly the selected percentage.

Mr Radebe stated that the ANC position was a minimum of 10%.

The Chairperson thanked him and stated that the Committee would have to come back to the issue.

Mr Zwelakhe Mbiba, DAC Acting Deputy Director-General, stated that he had heard the arguments. His point of view was that non-compliance was a serious matter. The National Association of broadcasters had been playing games. There was a non-payment rate for needle time of 80% for all broadcasts and 70% by the National Association of Broadcasters, so there was a need to consider powerful legislation. The National Association of Broadcasters (NAB) had looked at paying needle time as instructed in the Supreme Court of Appeal (SCA) judgement. NAB owed needle time since 2006 but wanted to pay from 2014 because that was the date of the SCA judgement. How were they going to get other broadcasters to pay? The SABC was paying out royalties because DAC had asked them to set a precedent. Only government could protect the artists.

The Chairperson noted that culture was also an emotional issue in the country, it was not just land that was an emotional issue.

Mr Cachalia appreciated the input and agreed that 70% was a worrying figure. He wanted to caution Members. Singapore had been oppressed. They were rich today because they had instituted legislation and systems that had allowed their economy to grow. That was why he wanted to emulate Singapore. Singapore had grown rich using the tactics of laws and mechanisms to support growth of the economy. That was what South Africa had to emulate, and not always hobble the economy.

Mr Radebe said that the ANC would never support the Singapore example as they were rich, it was a small city state and it had never been divided into different tribal groups. So, the level of colonialisation had not been the same and the ANC would not accept that it was the same.

The Chairperson declared that there had been enough discussion on colonialism as she did not want to join the colonisation argument. She thanked DTI for the work done. There was no convergence and the matter would go forward for the moment. Was there no need for an advertisement?

Adv van der Merwe stated that the offence and the log book would have to be advertised.

The Chairperson noted that the issue would be opened up for public comment, which would be helpful. She suggested that the Committee returned to the DTI presentation.

Dr Masotja checked that everyone had a copy of draft 2 of the Bill. She wanted to show the Committee the list of exceptions and what would or would not be included in the Bill. In order not to waste paper, she would refer directly to the Bill.

Ms L Theko (ANC) reminded the Chairperson that she had asked for a separate copy of the list of exceptions before the meeting. She could not accept the proposal from DTI to just look at the Bill. What if it had changed in some way?

The Chairperson explained that in Parliament, when it came to legislation, there was no such thing as excessive expenditure or excessive use of paper. The Chairperson requested Ms Masotja to email the list to Members.

Clause 14 – Section 12A, 12B, 12C, 12D
Dr Masotja referred the Committee to page 16 of draft 2 of the Bill. Section 12A remained exactly as in the Bill. Section 12B on page 17 remained.

Mr Radebe noted that Adv van der Merwe had suggested the removal of 2B(1)(j)(ii). The Committee had agreed with the advocate.

The Chairperson reminded the DDG that Adv van der Merwe worked for Parliament and not DTI, so her recommendations had to be taken into account.

Dr Masotja agreed that 2B(1)(j)(ii) would be removed. Section 12C would be retained as it was. Section 12D was retained.

Mr Macpherson stated that it was very difficult to work in that manner. The Committee could not just have a verbal discussion as it was impossible to recall that verbal discussion later. He asked that the Committee move onto something else until Members had it in writing and they could see how it fitted into the Bill and the rationale behind it.

The Chairperson differed from him although she was aware that he was supporting Ms Theko, but she had asked Members to make notes on draft 1 of the Bill. She had made notes and knew exactly who had said what in relation to each clause. She asked him where his notes were. She noted that an agreement had been reached on clause 12D(4)(c).

Mr Macpherson stated that there had not been agreement on that point.

Mr Radebe stated that there had been a discussion on how one would determine a ‘reasonably priced’ work and the recommendation had been that the market forces would determine the price. DTI, in its report back that morning, had agreed that market forces would be the relevant factor.

Mr Macpherson argued that just because Mr Radebe had made some notes and believed there was an agreement did not mean to say that there had been an agreement. He was the whip of the ANC and not of the DA. He had very specifically stated that there was no understanding of what could be considered reasonable and, just because a work was not in the country, did not mean it was not available for sale in the country. He had disagreed that the market could determine what was reasonable because it was open to abuse. It was a purely subjective point and a purely subjective decision was open to interpretation and therefore he did not think that, by any means, the point had been agreed to.

The Chairperson considered that, being human, she might have made an error, but she had a note that said, ‘After long deliberation, agreed to’.  If the DA was saying that she had captured it incorrectly, she would accept that because she did not go forward on a Bill when there was a dispute. She wanted to point out that, unfortunately, many of the members had to pop in and out for different reasons as she herself had done on more than one occasion, but then Members missed the finalisation of a discussion.

Dr Masotja said that market forces would determine reasonable prices. She did not know how else to respond to it.

The Chairperson noted that in the current dispute around land, there was an alternative to market related prices, but she was not going to get into that. She requested Mr Macpherson to put his point.

Mr Macpherson stated that where the clause said that authorised copies were not available for sale in the Republic, it did not mean that there were not for sale or available at all. It meant that they were obtainable, but they just were not in the country at that particular point. The clause continued that the book had to be available at a reasonable price for such a work. The point was that a hard copy or an original or some other expensive version might be available. Someone could interpret it to mean that that was not what one would normally pay for a similar work in South Africa. It was entirely subjective. One was looking at both whether the work was comparable and whether the price was reasonable. It was way too open-ended and needed to be tightened up.

The Chairperson suggested that they should look at the purpose for which it was intended. The heading was ‘Reproduction for educational purposes.’  The section stated that the extent of the copying should not exceed the purpose. The clause explored what copying could take place but indicated that the whole work could not be copied and then gave exceptions for when a complete work could be copied, and that was when it was out of prints, when the author or originator could not be found, and when there was not a copy available in the country at a reasonable price. That subsection had to be read in context of the entire section. She understood that as he had expressed his position, he had diverged from the ANC position. She stated that Mr Macpherson had to put the final position of the DA on the table, and she asked Mr Radebe to put the final clarification of the ANC position on the table.

Mr Radebe agreed with Mr Macpherson that he was not the whip of the DA. However, what was very important to him was that the ANC policy positions were articulated without fear or favour and that was the bottom line. He recalled that in discussing collecting societies, it had been decided that market forces would determine who lived and who died. The same principle applied in that section. DTI was correct in that the market forces would determine the price.

The Chairperson suggested that the issue was around copy when one obtained a copy from Amazon, it was a purchase. However, the Bill was talking about a copy. The Chairperson determined that that issue would be flagged and that the Committee would move on.

Mr Macpherson stated, with respect, that Mr Radebe had not addressed the issue. He had not justified the position. To allow market forces to determine whether a work could be copied or not was not a cogent answer to the issues that he had put on the table.

The Chairperson informed Mr Macpherson that the Chair was elected by the Committee and not deployed by the ANC or even the DA, the EFF, etc. She was the chairperson and while she remained the chairperson, she would determine who would be allowed to speak. She had not recognised Mr Macpherson to speak and she wanted to make that clear. And if anyone wanted to run to the Speaker in writing, he or she could do so. While she was chair, she requested that she be allowed to chair.

The Chairperson indicated that section 12B had not been finalised.

Clause 20 – Section 19C: Libraries
Dr Masotja noted that 19C was complete.

The Chairperson noted that she had a query next 19C (6). The Chairperson had noted that some users of libraries, including university libraries, were very abusive with books and sometimes the library was left with only the hardcover of the book. She assumed that the words “missing parts” could mean even the entire work within the covers and thought that it should be made clear. It was a query, not a disagreement. However, it seemed that the legal people agreed that it meant that, so they could leave the clause as it stood.

Clause 20 – Section 19D: Persons with disabilities exceptions
Dr Masotja said that DTI proposed to retain section 19 D which dealt with general exceptions regarding the protection of copyright work for persons with disability. She stated that she had completed the list of the exceptions that DTI had wanted to bring to the attention of the Committee.

The Chairperson called for Mr Macpherson’s attention. There was some disruption as he and the Chairperson disagreed as to whether he was paying attention. Mr Radebe raised an objection. Ms Theko asked Mr Macpherson to respect the Chairperson and not to engage in a dialogue.

Dr Masotja noted that Mr Macpherson had requested details of the works that were affected by the proposals and she indicated that DTI would provide a list of those works at the next meeting.

The Chairperson requested the DDG to email the information on Tuesday of the following week so that Members could prepare for the next meeting.

Dr Masotja reported on the Microsoft case as requested by the Chairperson. In the Microsoft versus Moonbox 2017 case, Microsoft was awarded $1 million for copyright infringements by online software seller, Moonbox Software. Moonbox Software sold more than 3 600 pirated product keys relating to 17 different Microsoft software products over the period of a year. As part of its ruling, the federal court restrained Moonbox and its directors from infringing copyright of Microsoft software products in the future. It was found that Moonbox Software had sold the unlawful product keys on its website. The ruling followed other infringement cases in which Microsoft had been awarded damages by the court.

Clause 22 – Section 21: Ownership of copyright
The Chairperson appreciated that information. She noted that in clause 22 section 21 (1) (c) which dealt with work done on contract and what would happen in the case where there was not a valid contract.

Dr Masotja indicated that there had been a discussion on the clause that currently provided that if there were not a contract governing the relationship, the person who had commissioned the work was the copyright owner and the author had a licence to do anything with the work that the copyright owner might do. There was no final decision on the matter and DTI was proposing that the Canadian model be supported, as per the DAC proposal, where the author owned the work. Dutch Copyright law also followed the Canadian model. That route had been opposed by big companies, including broadcasters, during the public hearings. However, the Committee had also raised a number of issues and DTI was concerned that there might be implications that had not yet been identified and that would take some time to research. Therefore, DTI was proposing that the clause remained as it existed in the principal Act at that time. The issue could be considered for the future.

The Chairperson asked for the response of Members to that proposal, seeing that they had had such an extensive engagement on the matter the previous day.

Mr Radebe reminded the Chairperson that he had requested that legal opinion be sought in terms of that clause and he again requested that legal opinion be sought and that the Committee addressed the issue in the light of whatever the opinion might be at the next meeting, before agreeing to revert to the original Act.

Mr Mbiba requested that when the Committee looked at that clause that it look at resale rights of artistic works because they were not transferable and that had not been addressed in the section on commissioning of work. The resale rights remain with the author and that was not the case regarding commissioned works in the current Act.

The Chairperson noted that clause 22 section 21 was flagged for a legal opinion.

Clause 23 – Section 22: Assignment and licences in respect of copyright
Dr Masotja addressed clause 23 section 22. It was about composers and publishers recovering economic benefits from the assigned copyright works. She requested Ms Mabaso-Muvhango to present the DTI position.

Ms Mabaso-Muvhango noted that she would give the proposal to the advocate to check. The proposed clause for the reversion of right for composers and publishers read as follows:
22(b)“(3) No assignment of copyright in literary or musical work and no exclusive licence to do an act which is subject to copyright in such work shall have effect unless it is in writing and signed by or on behalf of the assignor, the licensor or, in the case of an exclusive sub-licence the exclusive  sub-licensor, as stipulated in Schedule 2; Provided that assignment of copyright in literary or musical work shall only be valid for a period of up to 25 years from the date of such assignment.
The proposed clause was limited to composers and publishers.

The Chairperson requested the views of the Committee.

Mr Radebe requested that the advocate take a look at the proposal and provide comment on it at the next meeting.

The Chairperson agreed and flagged the clause.

Clause 24 – Section 22A: Orphan works
Dr Masotja stated that the process of identifying orphan works in the Bill was cumbersome and DTI had awaited clarity on fair use/fair dealing. The DTI was aware that it had to draft a new clause on orphan works but requested time until the next meeting to draft that clause in consultation with Adv van der Merwe.
Clause 25: Chapter 1A Sections 22A – 22F: Collecting societies
Dr Masotja stated that that was the clause with which members had engaged extensively the previous day. One of the issues that she had been requested to look into was the BBBEE requirements and transformation. She had discussed the issue with CIPC at length. She understood that BBBEE was about transformation in ownership and management. She reminded the Committee that there were talking about non-profit organisations where the members were mostly from the historically disadvantaged background.

DTI and CIPC were of the view that due to the nature of Collecting Societies which are membership-based and non-profit making, the BBBEE requirement would create a burden for the members and most of the members of Collecting Societies were historically disadvantaged individuals. They were not a normal form of for-profit companies and collecting societies might be deterred by BBBEE requirements for NPOs. She was, therefore, flagging the issue for the Committee to advise on.

The Chairperson said that as she understood it, it was law and unless one was exempted, it would apply. As she understood it, everyone had to comply unless one was exempted. She therefore assumed it would be an overarching requirement in any event.

Mr Macpherson required clarity on the reason that BBBEE had been raised. He could not support it if it was being proposed as a specific requirement for accreditation. He stated that companies required BBBEE in order to be accredited based on the turnover requirements and it would not be lawful to enforce that requirement on a company that was exempted by virtue of its turnover, unless it chose to comply. He did not believe it would be lawful to require adherence to BBBEE for accreditation.

The Chairperson agreed that he might have a point.

Mr Radebe made an example of an NPO earning billions of Rand but agreed with Mr Macpherson that if a company was not compelled by virtue of its turnover to adhere to BBBEE requirements, one could not make that a condition of accreditation.

The Chairperson noted that the point about the turnover threshold was pertinent. She did not know what the threshold was. The DDG should look it up but she did not want to impede emerging societies by including it in the accreditation.

Mr Petje reminded Members that the model of a collecting society was to collect, pay royalties and keep administration fees. It should have a zero balance in its bank account. That was the ideal. He did not believe BBBEE was necessary.

Mr Radebe asked what happened if a collecting society retained monies and made a profit.

Mr Petje replied that, in that case, the system would not be working properly and there should be another mechanism to correct that.

Mr Radebe pointed out that one had to look at the practical situation and not just the theoretical or ideal situation. He agreed that BBBEE should not be a requirement for accreditation.

Mr Cachalia noted that NPO’s and BBBEE were governed by law and there was no point in trying to invent a law.

The Chairperson agreed that it was governed by law and the Committee did not want to impede accreditation and so BBBEE could not be a requirement for accreditation.

Mr Mbuyane asked about transformation and what the Committee would do about. He noted that SAMPRA had been in the business since 1963 and he did not think that the industry should be governed by 1963 laws. So, what was the Committee saying about transformation? Transformation and localisation were key.

The Chairperson stated that the Committee needed to specify the accreditation requirements. She requested DTI, CIPC and the advocate to make some recommendations on the criteria.

The DDG said that the criteria were already in the CIPC regulations but there was in need to find a way to transform the collecting societies. The BBBEE would not work in that situation.

The Chairperson stated that she needed a position from Members.

Mr Radebe agreed that the Committee should see what DTI came up with.

Mr Macpherson stated that the Bill could not ask someone to adhere to a law that was not applicable to them. The accreditation should not be a barrier.

Mr Radebe commented that ignoring BBBEE was fine but non-payment of royalties by SAMPRA was not right. It could not stop paying royalties because of an external problem. He asked what had happened in the AGM. He proposed that the report on the Bill should indicate that the Minister had to pass regulations stating that artists had to be paid regularly and timeously. The financial statement had to be read at the AGM and the statement should show a zero balance. The Minister should also regulate that, at the AGM, the financial statements presented would have to indicate when royalty payments had been made and what royalty payments had not been made.

The Chairperson said that it would be included in the criteria for accreditation. Criteria to be included would include financial statements, tax certificates and also a record of when royalty payments were made. Accreditation needed to address timeframes for paying royalties. That was not a barrier to entry.

The DDG suggested that collecting societies had to be accredited within 18 months, if they were not already accredited. That would give them a transitional period to adjust to the legislative framework.

The Chairperson agreed that it was necessary to give them some space in order for them to be able to comply.

The DDG had noted a question as to whether artists other than musicians were catered for in collecting societies. There were other collecting societies such as DALRO which was for composers, but it was under SAMRO. She did not know if it was necessary to widen the scope and to make allowance for artistic works.

Mr Petje stated that the CIPC only regulated needle time. That meant that DALRO was not subject to CIPC regulations. However, DTI had indicated that it would like to ensure that all collecting societies, for all forms of original work, would be subject to CIPC regulations under the Act.

Mr Radebe agreed that there had to be regulations and that all collecting societies had to be regulated, which meant that they had to be registered and accredited. There had to be no stand-alone societies.
The Chairperson noted that that affirmed the decision taken the previous day and that it had to be reflected in the Bill.

DDG asked about other sectors. Should DTI create collecting societies for them? DTI also suggested the retention of royalties for three years instead of five years. However, the question of interest needed to be addressed and DTI would get back to the Committee on that one

Mr Petje suggested asking the collecting societies themselves to advise. It was not for him to sit there and decide what the collecting societies should do.

The DG stated that the area that needed to be in addressed included clarity and the response would be presented on Thursday.

The Chairperson reminded DTIs and the Commission that the Bill was closing off on the following Thursday. Thereafter, the Committee would be advertising those clauses that it had to advertise. Anything to be presented on Thursday had to be sent electronically on the Tuesday so that Members could be prepared for Thursday. Thereafter there could be no additional inputs, so they needed to get their acts together.

The DDG assured the Chairperson that DTI was mindful of the time pressures. She would bring more clarity after lunch.

Clause 32 – Sections 29A to 29S: The Copyright Tribunal
The scope of the tribunal was not wide enough. The current constraints on the effectiveness and efficiency of the Copyright tribunal revolved around the availability of the judges from the bench to hear and adjudicate on Copyright licence schemes. The judges, sitting as commissioners, were designated by the Judge President of the Transvaal from time to time to hear and adjudicate on matters of licence schemes.

In order to respond and address those two challenges, DTI proposed the following model: The Department of Trade and Industry formally, and in writing, would request the Judge President to designate five retired judges and ten acting judges for a period not exceeding five years to hear and adjudicate copyright disputes as Commissioners of the Copyright Tribunal. DTI would then introduce the legislative changes in the Copyright Act to expand the current jurisdiction to include various functions of conducting hearings, adjudication of cases and dispute resolution.

The Committee resumed after lunch but as some of the Members were busy, a number of ANC Members of Parliament attended the meeting for 15 minutes to form a quorum. The Chairperson thanked the ANC Members who were attending until the Members returned from their other business. She noted that Ms Theko had a personal matter to attend to and Mr Macpherson had apologised that morning, saying that he had an appointment at lunch time, but he should be returning shortly. She asked the DDG of DTI to continue with her presentation.

Clause 25: Chapter 1A Sections 22A – 22F: Collecting societies
Dr Masotja reported back on the issue of royalties and how long collecting societies could retain royalties. She pointed out that the situation was similar to orphan works where royalties had to be held for authors who could not be located. The society was required to retain the royalties. There had to be a process for searching for the person and a particular fund for keeping the royalties. When an artist identified him or herself, he or she was entitled to the royalties. DTI was looking at a five-year period because it was time-consuming finding a person, but there had been a proposal of three years.

Mr Radebe stated that it was a rational approach but, if the money was in the fund, what happened to the interest?

The Chairperson was concerned about financial issue. The matter of interest would be flagged. DTI would have to come back with a recommendation regarding the interest.

DTI required clarity from the Committee on the matter of one collecting society per sector.

Mr Radebe stated that the principle was to open up the space and to let people run with it if they were competent.

The Chairperson had a similar view, so that was the view of the Committee.

Clause 32 – Sections 29A to 29S: The Copyright Tribunal
Coming back to the Tribunal, Dr Masotja stated that DDG needed to add the relevant clauses relating to issues such as the appointment of judges, qualification required, procedures etc. DTI would beef up the clause and align it to governance structures in the Bill.

Thereafter there were technical issues to be dealt with. Legal aid had been dealt with. DTI would meet with Adv van der Merwe and give written responses on those issues that had been flagged for DTI to finalise.
A list of clauses that had to be advertised had been presented to the Chairperson.

Ms Padayachy, Deputy Director: Intellectual Property and Policy, DTI, indicated that she would address a number of minor issues:
Panorama – would allow the use of photographs that might have a copyright image in the panoramic view and would therefore be infringing copyright if it were not included in the exceptions, so DTI did not oppose making panorama an exception.
Public lending rights –related to the payment of a fee for every book borrowed from a public library. It would have costs for the state and therefore could have unintended consequence. The public lending rights clause was not recommended for developing countries.
Remix rights – DTI was proposing that it be added to exceptions.
Term of sound recordings – Mr Petje stated that 70 years was not supported. Society should be able to access work after the expiration of the 50-year period. The Copyright Act covered many areas of work that were protected for 50 years and there was no reason for treating sound recordings differently.
Copyright on unpublished works – had to be treated differently. It related to archived content such as the Rivonia trial but was not like a book that had been published and gone through the channels, so copyright could not apply in that case.
Reciprocity –was fully supported by DTI.

Mr Mbiba stated copyright also affected communities whose archived unpublished work was at risk. One wanted to allow public to access the material, but some companies exploited archived materials for commercial and the Committee needed to look into how to protect that material. It could be information obtained from communities that Deputy Director: Intellectual Property and Policy Deputy Director: Intellectual Property and Policy had been archived as cultural heritage. Researchers could exploit those materials for commercial benefit. The works were a national asset.

The Chairperson noted that DAC was requesting some form of protection for unpublished archived work.

Dr Masotja agreed with that consideration could be given to the protection of those works but it needed further analysis and might be addressed in implementation. She asked to park that issue because the nature of the issue needed to be explored.

The Chairperson asked if copyright only extended to published work. Did copyright not extend to photographs and writings in archives? Who had placed the works there? How was it different from orphan material where the originator could not be found? Or was the fact that the material had not been published the issue?

Mr Mbuyane wanted to add cyber-work copyright. How was cyber-work going to be protected?

The Chairperson stated that opened up a huge new area. Mr Mbiba wanted to protect archived work. It needed to be archived for South Africans and could not be destroyed. The question was how to open material for public use but ensure that it was not used for commercial use. What was the concern about commercial use?

Mr Mbiba clarified his concerns. A researcher would get into the archives and claim copyright to material because no one else had claimed copyright.

Mr Radebe agreed that there needed to be protection to ensure that community work was not exploited by researchers.

Mr Macpherson stated that the example cited by Mr Mbiba had really confused him. The copyright of work in the archives would depend who had put it there. It could have been put in the archive by the Commissioner which would mean that it was owned by the state or the copyright would have been owned by the author of that time, but the example suggested fraud. Someone could not take work from the archives and claim it as his own because that was simply fraud. It was not a copyright issue at all. The larger point was that the Committee should never restrict access or be seen to be restricting access to archives for credible research. Every dissertation that he had ever come across cited where the work had come from. He was not too sure about the relevance of the point to the copyright discussion.

The Chairperson stated that the clue was that it was a national asset. If one did not know the author, it was almost getting into the area of orphan work. If it was in that area of not knowing who had produced the material, and the state owned the orphan work, surely the state owned archived work. It required a database of everything in the national archives, which she was sure had been done, so even if it had not been published, someone could not publish it and claim it to be theirs. That was simply fraud. There was no question about that. Surely, there would be a penalty?

Dr Masotja agreed that taking material unlawful was fraud but that there was a need for protection of archived work, but she did not think that it had a place in the Bill. It was an orphan work, and there was a database of the work, so it could be identified but there were other legal mechanisms to deal with it. It was about enforcement and not a copyright issue.

The Chairperson suggested that archived work was a national asset. The Committee did seem to be coming forward with a suggestion for protecting the archived material. It had to be protected and she was wondering whether it was not the equivalent of library material. It was just much older material lying somewhere. It was a storeroom of a library. Would it not fall into the libraries category?

Dr Masotja explained that the difference was the unpublished nature of the work. It was unrecognised work which was not what one found in a library or the archives of a library.

The Chairperson accepted the explanation. She told Mr Mbiba that he had heard DTI, and that the protection of that material belonged somewhere else in some other legislation. It was fraud. She regretted that he was not getting the response that he wanted but that was the position.

Mr Radebe stated that the Committee could not be held up for that. DTI needed to do research on the matter.

The Chairperson noted that Mr Mbuyane was concerned about cybersecurity. She asked whether DTI had addressed the issue of the private copy levy.

Dr Masotja explained that it had been dealt with. To charge a levy in the Bill, would make it a Money Bill, an issue which the Committee wished to avoid and therefore it had been left out. As far as cybersecurity was concerned, there were technological protection measures in the Bill to cover cybersecurity. She noted that DTI had covered everything that it had been asked to address.

The Chairperson reminded the Committee that there were three flagged issues arising from the morning session. One was the log sheet penalties. What would the penalty be? She asked Mr Macpherson to share the DA position. She was looking for convergence. The Committee had agreed on a prison sentence. The issue of contention whether it should it be a fixed amount, or based on turnover and, if so, how was turnover to be determined, and, thirdly, was it a minimum, maximum or the exact amount of 10%.

Mr Macpherson stated that his colleague had expressed the position for the DA. He believed that fixed amounts were best and could obviously be a bigger amount. But the percentage was problematic in turns of determining turnover.

The Chairperson noted that Mr Cachalia had also said that a percentage would be a measured approach. Businesses should not be collapsed.

Mr Radebe agreed with Mr Macpherson that the issues had been thrashed out in the morning. Non-compliance and infringement could not be separated because non-compliance infringed on the rights of the originators.

The Chairperson stated that the principal Act had two different positions. She understood that infringement and non-compliance could be handled separately. She asked Adv van der Merwe to clarify.

Adv van der Merwe said that the Act only provided for penalties for infringement of copyright. The log sheet would be a non-compliance issue. Non-compliance would be a new offence. So, one could insert a new section for non-compliance. She asked if the Committee wanted to draft different penalties for first and repeat offenders. If the Committee added a non-compliance subclause, then the infringement subclause should updated. And did the Committee want to follow the example from Singapore and USA which was a penalty per article on infringement.

The Chairperson recalled that Mr Macpherson had also raised the possibility of the loss of a licence.

Mr Macpherson said he had used the same concept that he had raised on the Liquor Amendment Bill. In that case, the proposal was that habitual offences led to loss of licence. He would like DDG to look at something such as, three infringements in a calendar year, would lead to a loss of one’s licence. DTI, together with The Department of Communications, would need to look at a change to the Broadcasting Act? But that could be a longer-term engagement. Fines were absorbed by the business and the real clout was in taking away their ability to exist.

Dr Masotja’s mandate where they hand out licences for manufacturing of alcohol. It was a very good suggestion, but the broadcasting licence was under different legislation and managed by a different department, so she was worried about the difficulties of getting another department to implement that licence sanction liquor. The DDG did not have control over the licence, so it might make that part of this legislation was unimplementable. The suggestion was very good, but she was worried about the practicality of implementation.

The Chairperson reminded DTI that there were a couple of things that DTI had to keep in mind for further consideration and exploration. The archives had to be kept in mind. The Committee had to deliberate on the use of fines. The flat rate might be very challenging to a smaller business but irrelevant to a larger business. The intention was to ensure that both the small business and the big business to comply. She believed that it would be fairer to have a percentage. She wanted to persuade Mr Macpherson on the issue of compliance and agreed with him that the Committee had to tackle the issue where it matters. Very often it meant hitting people in the pocket. She would look at it a last time before she had to determine that the Committee could not agree.

Mr Mbuyane agreed with Mr Radebe that a minimum of 10% was best.

Mr Macpherson stated that he had nothing to add.

Mr Radebe said that he had thrashed it out and agreed with Mr Mbuyane.

The Chairperson said that there was no convergence, and unless one of the other Members who was not present, Adv Alberts, Mr Esterhuizen or Ms Ntlangwini, could come with a different idea, she would simply have to take a decision.

The DDG offered to look at the penalty and the efficacy in other legislation.

The Chairperson agreed that it would help, especially with efficacy, even if did not resolve the question, it would enable the Committee to take a fresh look. She remarked that the Competition Commission had been very effective with their 10% administrative fine. Other flags. The issue of 25 years and 50 years were agreed upon.

The DDG stated the commissioned work was another one that had to be flagged. She reminded the Chairperson that DTI was to seek a legal opinion on the issue.

The Chairperson added that the third issue was in relation to the log sheets and whether provision should be made for new artists to sign a contract first. She asked Adv van der Merwe to explain how it worked.

Adv van der Merwe explained that the concern was that the Bill provided for a mechanism for a person who wanted to play a song publicly: the person had to contact the artist, discuss conditions, come to an agreement, play the recording and then pay the money. If there was no agreement, it had to go to the Tribunal. It did not work in real time. If someone phoned into the radio station and wanted to hear a song, one could one put the process in place in time for the listener to hear the song. CIPC had said that there was an agreement beforehand so one could play the song immediately. The trouble was that no one kept log sheets about how much should be paid. If there were log sheets, did one need the process? Record keeping on the log sheets had been made enforceable by making it an offence.

Mr Radebe added that the issue of the log sheets was precisely that: to avoid the process of contacting the musicians. That was why it was so important to create an effective penalty to ensure that log sheets were kept. The log sheet process had to be tightened.

Mr Macpherson said the process would be impossible if one had to contact each and every artist and sign a contract with each artist.

Mr Petje agreed that the process was practically impossible, hence needle time gave the artist or collecting society the right to claim royalties when consumed. Currently, there was no problem in that area.

Adv Matseembi added that the right of needle time was created in section 9A (1) in the principal Act. That provision created a compulsory payment of needle time and signing individual contracts would be in conflict with that section.

The Chairperson summarised. The process of notification would not be followed. The matters for advertisement for call for public comment had been listed. She had a question for DTI and the advocate. The Committee was working on the Copyright Bill which was the platform for many other Bills.

Closing remarks
The Chairperson reminded Members that already there was a Bill in the wings. The Performers' Protection  Amendment Bill had come to the Committee first, but the Members had agreed that the Copyright Bill should be dealt with first. The Committee was reminded that everything necessary for the Performers' Protection  Amendment Bill would be in the Copyright Amendment Bill. So, the Chairperson’s idea was that the Committee would not pass the Copyright Bill but would put it aside while waiting for the legal opinion, the advertisement and responses and the Committee would work on the Protection of Performers Bill, which was 18 pages in length. When the Performers' Protection  Amendment Bill reached the same stage that the Committee was at with the Copyright Amendment Bill, she would ask Mr Radebe to get both Bills ATC’d together so that the Committee could try to present the two Bills to the House on the same day.
 
Ms van der Merwe said that the Performers' Protection  Amendment Bill needed a lot of work as it had arrived in a similar state to the original Copyright Amendment Bill. Did the Committee want to withhold Copyright Amendment Bill as there were a number of amendments to the Performers' Protection  Amendment Bill? Written submissions had been received but the public hearing still had to be held. There was a lot of work to be done on it. It would be good for the Copyright Amendment Bill to go to the NCOP as soon as it was ready because by the time that the Performers' Protection  Amendment Bill got to the NCOP, the Copyright Amendment would be an Act and there would not be the problem of basing a Bill on another Bill. She was not sure that NCOP would pass the Performers' Protection  Amendment Bill if it was based on a Bill, and not an Act.

The Chairperson asked if all Members were in agreement with that process. She thought that it made sense. If all went well, it could be in the National Assembly by September.

Mr Macpherson said if she was asking the Committee if it was in agreement with process going forward, the Committee was not quorate and so it could not be approved.

The Chairperson understood that and would put it up for formal consideration the following week. She had raised the issue because she had a request that those who had been in the study group go on a study visit to Singapore or Malaysia. The United States had also been suggested but that was too far and too expensive for the Committee. If that remained the position of the Committee, she was happy to drive the process through Manco, the management committee.

Mr Radebe agreed with the Chairperson.

The Chairperson informed Members that they would receive an updated Committee programme. Space had to be added. The Bill on Space would not be entertained this year as it was coming too late, but the Committee had to put positions forward in that area, including that they would participate in an international visit to Germany to the European Space Centre.

Mr Macpherson added that the NRCS had not been providing quarterly reports as requested. There had been no report in the last Quarter. Secondly, there was the localisation inquiry. He asked that that be brought back onto the table because the locomotives contract had spiralled out of control. Transnet had to be brought back to explain the contract because localisation had been at the very heart of the contract.

The Chairperson agreed. It was in the programme. The meeting on 12 June would address the steel and sugar tariffs, on 13 June the Committee would address SABS, NRCS and the Tripartite agreement and the Committee would get back to the Copyright Bill on 14 June for a full day of deliberations plus some Committee business.

Mr Radebe said the question about sugar should be asked of SARS. SARS should explain why the bucket was leaking.

The Chairperson had heard that it been some computer glitch. SARS had to be present at the meeting.

Mr Macpherson indicated that he wanted to withdraw his comments made earlier in the day, and wanted to apologise to the Chairperson, Members and everyone in attendance. The comments were unparliamentary.

The Chairperson really appreciated the apology as it took a big person to apologise. She noted that she and Mr Macpherson had an excellent working relationship.

The Chairperson thanked DTI and Adv van der Merwe for their contribution to the Bill.

The meeting was adjourned.

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