Copyright Amendment Bill: deliberations on revised clauses

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Trade, Industry and Competition

22 August 2018
Chairperson: Ms J Fubbs (ANC)
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Meeting Summary

As the Committee had had several meetings to discuss the public submissions and the response from the Department and the Committee, the Chairperson said it was time to consolidate the Committee’s position on the Copyright Amendment Bill. Despite her request for full attendance, there were still Members who were not attending regularly. There were departments that had an interest in the Bill but did not regularly attend. The Committee would approve those clauses of the Copyright Amendment Bill that were largely non-contentious. Contentious issues would be flagged for further discussion.

The revised clauses of the Copyright Amendment Bill were presented by the Parliamentary Legal Advisor, assisted by the DTI technical team, the Companies and Intellectual Property Commission and State Law Advisor. The team was particularly conscious of the need to align the Copyright Amendment Bill with the upcoming Performers’ Protection Bill. The technical team also made use of the revision of clauses to improve alignment of some clauses, and especially definitions, with the principal Act.

A definition for ‘royalty’ was provided in Clause 5 because, surprisingly, royalty was a term in law for only two works, sound recordings and audio visual works. The definition for ‘royalty’ included other ways in which authors earned money for their work, such as profit sharing. The definition referred to ‘profit’, which led to some discussion of the word, and the fact that profit had to be quantifiable. There were also exceptions. The clause was flagged for further discussion.

As a result of public comment, the concept of a ‘cooling off’ period for authors and publishers was struck from the Bill as the disadvantages outweighed the advantages. Clause 5 and subsequent clauses dealt with retrospectivity. The technical team had been unable to solve the practical implementation problems as the team did not have the relevant information or data. If the implementation problem was not solved, the Bill could not comply with the rule of law. There was a suggestion that retrospectivity should be withdrawn from the Bill until the problems could be solved. Although retrospectivity had been added to the Bill by the Committee, ANC Members indicated that the retrospectivity clauses were fundamental to the Bill as the requirement to ensure redress was a constitutional requirement, and also a humane requirement in the light of artists who were dying in poverty. One solution would be to stagger the implementation of the retrospectivity clauses until research had been undertaken, regulations written and there was confidence that the process would be in accordance with the rule of law. Those clauses were flagged for further attention.

The clause on resale royalty right which required sellers to pay a percentage of resale royalties to artists, regardless of who owned the copyright, would only apply to sales subsequent to the implementation of the Bill. The revised clause was accepted.

The words ‘complete, true and correct’ had been added to describe the log sheets in Clause 11 that would provide evidence of ‘needle time’, as per the input from a submission. Submissions had also requested that log sheets be introduced to protect copyright in other fields. The Department of Trade and Industry was unable to comply with those requests until further research had been undertaken.

Section 19B, which dealt with computer programs and had been removed from the Bill, was reinstated in accordance with public comment. A proposal was made to include a clause that made it an offence for an unaccredited body to intentionally portray itself as an accredited collecting society. Members were concerned that intention might be difficult to prove, although it was possible that for an offence to be determined, a court had to find that there was an intention to deceive. The clause was flagged until clarity could be obtained from the Department of Justice and Constitutional Development and legal counsel.

Clause 30 establishing a Tribunal was amended to ensure reinstatement of the Copyright Tribunal but without paragraphs dealing with Chairperson or Deputy Chairperson, as it was not intended as a permanent body. Clause 32 which dealt with appeals was reinstated.

Meeting report

Meeting report

The Chairperson said that the technical team had the previous day recapped the Copyright Amendment Bill processes that the Committee had engaged in. The Chair of the Chairpersons Forum had stated that Committee Chairs could no longer go back over work missed by people who were absent because Parliament had a specifically budgeted the amount of time allocated to deliberations by Committees, but Committees were taking longer and longer to deliberate the matters before them. Everyone was reminded that when legislation was on the table, all Committee Members had to attend that meeting. The only challenge was when all Committees in which a Member sat had legislation on the table. In such a case, one attended the meeting of the Committee with the most urgent legislation. One of the Committee Members had experienced that situation and had complied with the rule.

Mr J Esterhuizen (IFP) agreed that Members had to attend when there was a Bill, but he had been unable to attend the previous day as he had been involved in the deliberations in the House. That morning he had had to arrange special transport to be at the meeting at 8:30, only to find that the morning meeting had been cancelled. He expected the Committee to inform him of any changes in arrangements. He would be asking a question in the House that afternoon and would need to leave.

The Chairperson told the Committee Secretary that he had an obligation to inform all Committee Members of changes in meeting times. She apologised for the lack of communication but noted that Mr Esterhuizen was not the only one who had missed yesterday's meeting.

Copyright Amendment Bill: revised clauses
Dr Evelyn Masotja, DTI DDG: Consumer and Corporate Regulation, explained that the technical task team had met that morning and Adv van der Merwe, Parliamentary Legal Adviser, would present the proposals.

Clause 1 - Definitions
The first proposal for an amendment was in Clause 1 in the definition of visual artistic works, which had been advertised. The intent was to make it clear that it referred to visual artistic works as opposed to industrial design, etc. Spoor & Fisher (intellectual property law firm) suggested that the definition of artistic work in the Act was clear. Adv van der Merwe proposed that that definition be accepted:
‘Visual artistic work means an artistic work as contemplated in paragraph (a) of the definition of artistic work.’

The Committee accepted the amendment.

Clause 5: Section 6A(1) – Royalties regarding literary or musical works
The clause had a contentious part so Adv van der Merwe would deal with the non-contentious issue. She noted that the same wording was repeated in Clauses 6 and 7. The intention was to insert Section 6A into the Act. The issue was that an author might have passed copyright over to someone else who had then made a lot of money, and there should be a sharing of those profits. Subsection 1 provided a definition for royalty. However, legally there were only two works, sound recordings and audio visual works, for which royalties were paid. In addition, not all authors sold the copyright as some came to other arrangements with the publishing house. Subsection 1, therefore, included a definition of royalty:
6A(1) The profit made on the exploitation of a literary work or musical work by the author or a person who has been licensed to do any of the acts contemplated in section 6 (..) shall, for purposes of this section be deemed to be a royalty.”

The Committee accepted the amendment

Mr Mahlobo asked that the legal team indicate to what extent each proposal met the concerns of the submissions.

Adv van der Merwe added that there were so many methods of payment because the term ‘royalty’ was not contained in the Act. The definition included the word ‘profit’ as it referred to the income after expenses.

The Chairperson confirmed that, in the principal Act, ‘royalty’ did not cover all art forms on what their income was known as, and that was what the clause was trying to achieve.

Mr Mahlobo appreciated that the definition and the use of the word ‘profit’ came close to explaining what was meant. However, would it be a problem to include the word ‘benefit’ as sometimes the benefits were not quantifiable. He did not know if he was clouding the issue from a marketing point of view.
Mr A Alberts (FF+) was not sure about the use of ‘profit’ in the definition. There was lot of litigation about
profit in the United States. Many artists saw their profit disappear when one talked about net profit which was after expenses and could amount to nothing. Gross profit was different. One needed to be careful when talking about profit.

Mr A Williams (ANC) agreed with the Member who had suggested expanding the definition to include benefits because it could happen that a company might not make a profit, but had used a person’s original music to promote something and had gained a benefit from using that person’s music.

The Chairperson asked whether Members were talking about a legal issue, or was it a policy decision. She wanted to know the Department’s position on that point because it was very relevant.

Mr B Radebe (ANC) understood what Members were saying but asked how one was going to quantify benefit. For example, Operation Hunger had no profit. The benefit of Operation Hunger was exposure, but the question remained as to how one measured that.

The Chairperson suggested that the Committee was talking about something that was quantifiable in rands and cents.

Mr Williams raised the point that radio advertisement jingles were not quantified but the artists got paid royalties. The Committee had to work out how to make things quantifiable or it would mean that, if the matter was not easily quantifiable, the artist would not get paid.

Mr G Cachalia (DA) added that not everything was quantifiable. Some things were impossible to quantify. For example, if the ‘Free Mandela’ concert had resulted in Nelson Mandela being released, how would one quantify that? It was impossible.

The Chairperson noted that there were exceptions to be dealt with later in the section, so that definition would be flagged until the end of the section.

Clause 5: Section 6A(1)- flagged

Clause 5: Section 6A(2)

The clause was as it had been originally in the Bill and all that she had done was to break up authorisation because a number of people had raised the concern that the work was not always exploited simply by assigning the copyright. For example, one could simply use the services of a publisher. Section 6(2)(b) had been broken up to include a paragraph ensuring that the author was still entitled to a share of royalties even when only a part of the work had been used.

The Committee supported the extension of Section 6A(2).

Mr Cachalia had a problem with the word ‘any’ in ‘any royalty’ as it was far too broad and created a right in the future which talked to intention.

Mr Alberts noted that sometimes an author sold a book for a large sum of money because he was not sure that his book would sell, and he did not want to bank on royalties. The clause did not create space for such arrangements. There had to be a provision for those cases.

Mr Mahlobo said that Section 6A(2)(ii) was broad but could not be read in isolation of (i) and (iii), or 6A(1). Further, 6A(3) was about implementation and allowed for a contract to be created. He asked whether the context did not create a kind of certainty. There was a definition, so one did not want to restrict the possibilities.

Mr Radebe confirmed that Mr Mahlobo was correct because the definition had identified royalty. What if a person had taken out the money and something bad happened in the future and then he had no money? What about his heirs? The work might make a lot of money. One could not tell the future.

The Chairperson spoke about an artist who donated royalties to a charity. Royalty had been defined but the implementation was an issue. A definition is fine but, challenges lay in the implementation. She believed that the proviso was reasonably defined as it had to be determined by a written agreement. She asked the Committee to move with caution because many things had been changed in a written contract over the years such as selling a piece of land for one cent. The agreement was not determined by the price per se, but by the words in the contract. The Chairperson had seen many things changed in a written contract, so it was not automatically a safeguard for authors and others. The Chairperson suggested that the presenter complete the section before a decision was made.

Ms P Mantashe (ANC) agreed with the Chairperson. She cautioned that people could be persuaded to give away their rights by signing a contract. The Committee should look at protecting those people.

Mr Esterhuizen noted that it was covered under Clause 11.

The Chairperson added that the Performers’ Protection Bill was coming up which would give performers more protection. She asked Adv van der Merwe to continue until the end of Section 6A(3)(b).

Adv van der Merwe said that the word ‘any’ could be removed, but it was limited by the definition of royalty. One could say ‘any royalty received’, or even ‘any royalties received’.

Section 6A(3) dealt with how one got to the sharing agreement. When the Bill had been introduced, it had been a 50:50 split of royalties. There had been a lot of concern about interfering with the agreements of a contract, so the Bill had been opened up and in 3(a) and (b) and in subsection 5, the minimum content of an agreement was indicated. The agreement could say that the author had been paid upfront and would receive 0% share of the royalties. The terms of the contract were to be decided by those signing the agreement, not by the Bill. The Bill only provided guidance so that an author knew what had to be considered in a contract. A template would be created by the Department between author and copyright holder or by representatives of the collecting societies.

It was important to note, if it were decided that there would only be one collecting society per right, the agreement would have to changed, because it would not make sense with the parties negotiating with themselves. 6A(3)(b) said that one could sell the copyright on, but all copyright owners had to agree with the original contract. That did not prevent the copyright holder from offering a better deal.

Section 6A(4) came into operation where the parties could not agree. Either of the parties could approach the Tribunal. The Tribunal was an adjudicating body and only in cases where both parties were interested in entering into an agreement, would they go to the Tribunal.

Section 6A(5) The agreement had to include a number of minimum terms as indicated. One of the terms had been the requirement for a ‘cooling off’ period so that the author could reflect on the deal and whether it was the best possible deal. However, authors could not have a cooling off period and not publishers. However that raised the question of confidentiality. The author was also left out on a limb while awaiting confirmation of a contract. The disadvantages far outweighed any advantages and the ‘cooling off’ period had been removed from Section 6A(5). The regulations could refer to ‘cooling off’ in a softer way.

Section 6A(6) dealt with retrospectivity. Many submissions had suggested that the clause did not fit. The clause had to say what it did not apply to. The technical team had been unable to solve the practical implementation problems as the team did not have relevant information or data. If the implementation problem was not solved, the Bill would not comply with the rule of law. A suggestion was to take retrospectivity out of the Bill and to find data so that a determination could be made about what works were still available, what was creating a profit, and whether the people who should be earning a royalty could be found. That assessment would take more than seven months and so the proposal was for retrospectivity to be taken out of the Bill. DTI could look at this and make recommendations based on an impact assessment.

Dr Evelyn Masotja agreed that the DTI was not able to provide any data to cast light on the situation. The Department did not have any information to inform the Bill. As the Department would be starting an impact study from scratch and would have to determine what information was needed and where to find the information, as there were no systems in place, it could take even longer than seven months. However, the DTI agreed with Adv van der Merwe that it would be better to process the Bill without retrospectivity and to make legislation on that later.

Ms Mantashe said that she was speaking without having consulted her party study group, but she had to say that it was a death to her to lose that. She wanted to give DTI time to find the information, but if that was the case, it would have to go to the Sixth Parliament. She had wanted thorough research and an investigation, but she did not know if she could wait for it.

Mr Mahlobo said that they could look at the other clauses and flag retrospectivity. The clause enforced contract law or Roman Dutch law. There was a small possibility of exploitation but there was a fundamental issue – the piece of legislation sought to protect the most vulnerable from the more powerful, wealthy, and capacitated. Without retrospectivity, it would mean that future generations of these artists still would not receive any benefit. The Committee had to find a way to protect the artists and their talents.

Retrospectivity had been discussed and agreed upon in an earlier meeting but then the question of practicality of implementation had arisen. Members would not accept the exclusion of retrospectivity from the Bill. The very reason that the Bill had been drafted was because so many artists had died in poverty. As the Bill was being delayed in Parliament, so the artists continued to perish. Their legacy continued but their families were living in poverty. What was the South African position? South Africa was a land of dispossession. People who had come to the country had not brought land. They had conquered and taken the land and had created a system that said that one had to have proof that one owned land. If one did not have proof, someone else could attest to it. A document was not needed. One could not put all the details in the Act, but the regulations could deal with implementation. One had to remember what that piece of legislation meant to the people who had not benefitted from their work. The Committee should not box itself in but should rather detail how it had to work.

The Chairperson summed up Mr Mahlobo’s input stating that he stood firm on retrospectivity in the Bill but had suggested using the regulations to deal with practicalities.

Mr Radebe stated that the fundamental law of the country was the Constitution and the Preamble stated that “We, the people of South Africa recognise the injustices of our past’. There were injustices which had to be rectified. There were socio-economic injustices that had to be addressed. The Bill had to do justice to the people who had been trampled. It was not that people did not have records. People had proof of the things that had been done. The Bill had to include retrospectivity, even if the details had to be included in the regulations. The regulations could allow artists to come forward with whatever proof they could find. The people who had called for the Bill had called for it for that specific provision and there was no point to the Bill if there was no retrospectivity. Those people were suffering, and they would be very angry if the Bill did not do what they had asked for. In the 1980s there were contracts. Although they were very skewed, people had taken the contracts because they had needed the money.

Mr Cachalia noted that the Bill defined royalty, quite successfully, and went on to say what the author’s share should be. However, in between that, the Bill says “any" which opened it up again and it should be taken out. The Bill then clarified minimum requirements, which would be detailed further down the line. In subsection (4) ‘where the author and copyright owner…’ did that refer to subsequent sales? If that was so, it was fine. However, he raised a question about how much power was being given to the Tribunal. One had to be careful about how much power was given to the Tribunal.

As far as retrospectivity was concerned, as raised by Mr Mahlobo, there was a duty to pass responsible legislation which meant that the legislation had to give due regard to intent and fairness. He approved of the idea to remove retrospectivity at that stage and to consider the idea of an impact assessment, but he believed that it should also be an assessment in terms of practicability and law, including vested transactions, vested rights, etc. The Committee would be remiss if it did not look into those things.

Ms Theko addressed retrospectivity. The advocate had suggested that it could be removed, and the Bill would be quicker to process. DTI said that there should be an assessment and time was a factor for the assessment. retrospectivity had been in the Bill since she had been in the Committee. It should be flagged. Parties should go to caucuses to deal with it so that when the Members came back to debate, they could ask the DTI, if it needed time, what had the DTI been doing up to that point.

In the Sub-Committee, Members had discussed the collecting societies and it was coming back in another shape as if no decision had been taken. She asked if they were going to take decisions and come back and take more decisions. A word was changed here and there in the Bill. There was always a change. The Committee kept taking different resolutions and she needed clarity. Could the Adv remind the Committee of decisions already taken in the Committee and Subcommittee? What was the legal opinion on the collecting societies? She recalled that the Subcommittee had asked for a legal opinion on that.

The Chairperson reminded Ms Theko that more information had come in about collecting societies from CIPC and it would be involved in the accreditation, etc., which was why she had asked CIPC to make a presentation. She agreed that the Committee was back and forth over decisions and, although the additional information had caused the Committee to re-consider collecting societies, the Committee had to stick with decisions taken if there was no valid reason for wanting a change. She reminded the Members that it was the Committee that had added retrospectivity, which they had every right to do, but it had not been in the original Bill submitted by DTI.

She noted that there were three positions in relation to the question of retrospectivity. One strong voice was saying that retrospectivity simply could not be removed from the Bill; one less strong voice was saying that it should be unpacked, assessed and there should be a look at the legal point of view and the contract issues. The third position acknowledged that it would not be done overnight. The urgency of the Copyright Bill was to stop the haemorrhaging of the artists, etc. It was urgent. It had to be dealt with. Members did not want to postpone it until the sixth Parliament. Members had also suggested leaving it in and unpacking it in Regulations.

The Chairperson stated that there was something she wanted to ask of the legal counsel and the State Law Advisor. She recalled a case where something had been put in a Bill but implementation of that section of the Bill had been subject to a study being done. Was it possible to section off and delay the retrospectivity issue and make it for implementation on a date when the x or y had been done? Was it possible to delay certain clauses?

Adv Strydom, Legal Advisor at DTI, said there was indeed a possibility of building into the long title a commencement clause which would build in a staggered implementation of the various sections of the Bill, which would enable the President to implement certain sections, or all sections of the Bill, except for a specific section.

Mr Mahlobo thanked the Chairperson for getting guidance, as Members had come from diverse backgrounds and experiences, but he knew that it could happen. It had happened before that clauses were staggered for implementation. The Committee had already agreed on the clause. No one should get the impression that different parties had different views on retrospectivity. They had all agreed to it. The problem had been implementation. But if the Bill could set up a staggered clause, the Committee could set up two precursors to the implementation of the Bill. The first was the question of the socio-economic impact assessment (SEIA). Normally the Executive would have had the capacity to do such an assessment. But if they looked at the legal and technical aspects of the Bill, Members should never forget that it was about redressing the injustices of the past. Redress was a constitutional matter. That was how it had to be couched. The technical team knew what the Committee wanted and how it could be done. They should make it happen.

The Chairperson agreed that there was a constitutional injunction to redress the past. It was how it was done that was causing the difficulties.

Mr Cachalia told the Chairperson that the Member was incorrect and there had been no agreement by the Committee on the clause. It was a thorny issue that had to be thrashed out. He was not saying that to be malicious but because it was not just an issue of mechanics and practicalities. In law there was an assumption of introspection, although he knew that intent trumped that. He welcomed the socio-economic assessment and also asked that there be a legal assessment. He agreed that that the Bill should get out sooner rather than later.

The Chairperson agreed that the Committee had not agreed to retrospectivity in the Bill.

Mr Radebe agreed that Members had put retrospectivity into the Bill. They had put it in the Bill because it was required by the Constitution of the country, the same Constitution had not been able to help those artists who had died in poverty. He agreed with the impact study and hoped that the Department would come back with a way of making it happen. The people were there. They were not far away. He agreed that it should stay in the Bill and that it should be a case of staggered implementation.

Mr Alberts said that it was a difficult issue. The objective was morally correct. The question that Mr Cachalia had made had important points, but he acknowledged the need for the retrospectivity. The question was whether the Bill was the right instrument. Another legal consideration was that existing contracts were in place and he did not know if the advocate had indicated whether it was allowable to intervene in existing contractual relationships. He understood that the intention was to create a fair playing field. His second question related to the exceptions. If one was going to re-negotiate, was that only for royalties going forward and not for claiming royalties going back? He needed clarity.

Ms Mantashe stated that, because the country had experienced colonialisation of a special type in that the people colonized and the colonizers had lived in the same country, there would be no way that Members of the Committee would agree. What Adv Strydom had said had put the ANC in a comfort zone but if anything less what he had said was proposed, the ANC would disagree.

Mr Cachalia asked Adv Strydom to explain exactly what he had suggested because he thought that there was some disjuncture between what had been said and what was understood. His understanding was that the clauses on retrospectivity would not apply before the situation was resolved. Had he understood Adv Strydom correctly?

The Chairperson asked Adv van der Merwe to lead the responses but asked other members of the technical team to assist her.

Adv van der Merwe noted that Mr Cachalia had been concerned about the word ‘any’. As she had said, the word could be removed. There was a question about whether Section 6A3(b) dealt with a subsequent sale. She agreed that it did. The words ‘subsequent assignment’ had been removed as it did not seem necessary to spell it out, but it did deal with subsequent sales only.

In response to Ms Theko’s question on the collecting societies, she requested that she and CIPC came back on that the following week with a full presentation on collecting societies, including submissions made, observations by CIPC and other additional information. Regarding retrospectivity, she would like to return the following week with a cleaner and leaner clause that might satisfy Members.

Mr Alberts had asked if the Bill was dealing with existing contracts. She agreed that it was and for that reason, she had acknowledged that the Bill was dealing with deprivation of property and was being careful in drafting the clause. However, constitutionality, she believed that it was a law of general application, and not an arbitrary process. There was no problem with the intention of the Bill. Her only concern was regarding the practical implementation process and impact of that process on the rule of law. She was confident that the clause was constitutional. It was the implementation problem that had to be addressed.

Section 6A(d)(iii) did not to go back in time for profits as that would be problematic and the Committee had accepted that. The intention was to ensure that the Amendment Act going forward did not exclude assignment of copyright as had happened in the past. If that was not clearly stated in the Bill, it meant that those assignments would have been excluded.

Adv Strydom responded about a staggered commencement. He referred to the Companies Act as an example and read the short title and commencement clause which stated that Section 11 would be implemented three years after the implementation of the Companies Act. He added that, in that particular case, the commencement clause had indicated precisely when it would be implemented, but it was not necessary to give a specific date.

Mr Cachalia asked what would govern the proclamation by the President in such an eventuality.

Adv van der Merwe would come back to the Committee with suggested wording but it would be something about the process prescribed for the Minister for regulations. The commencement of the clause would be subject to the regulations being gazetted.

Clause 7: Section 7A – Royalties regarding artistic works
Adv van der Merwe explained that Clause 7 was the same as Clause 5 in every respect, except that it referred to the nature of copyright in artistic works. Every subsection was a repeat of Section 6A. However, instead of the broad artistic work that was referred to in the Bill, it had been suggested that The clause be applicable to ‘visual artistic works’. The question was how that royalty would differ from the resale royalty. One of the concerns raised by the public was whether that clause was applicable to designs, such as jewellery designs. It was, in fact, limited to visual artistic works which meant that it would only apply to paintings, statues and so on and would only apply when those works were adapted. It would exclude the resale royalty right (7B). She sought direction as to whether she needed to go through The clause in detail with the Committee.

The Chairperson stepped outside for a moment.

The Acting Chairperson noted that the Committee was pressed for time and asked if the advocate address the Committee on collecting societies.

Adv van der Merwe explained that a presentation would be made the following week when there would be more time and she could make a detailed presentation.

Mr Mahlobo stated that there was no need for her to go through each clause, if they were the same. As far as collecting societies were concerned, he wanted to repeat that there had to be the right to associate. Why did CIPC not engage with the collecting society? Why did CIPC not call IMPRA and SAMPRA and try to resolve their differences? It was necessary for CIPC to start to engage. The presentation by CIPC the following week should differentiate between dispute and governance issues and legislative issues.

The Chairperson reminded CIPC that the Committee had requested a copy of the SABC court case.

Adv Rory Voller, CIPC Commissioner, informed the Chairperson that CIPC had provided a copy of the court case relating to the collecting society and SABC. It had been handed to the Content Advisor.

Clause 7: Section 7B – Resale Royalty Right
There were not a lot of amendments, but Adv van der Merwe had tried to accommodate all comments received.

Section 7B(1) included the ‘heir’ because the heir automatically became the copyright owner, but ‘heir’ had to be added for the resale royalty right or the heirs would not be included because it was a new concept in law. The term ‘art market” had been included to limit resale royalties to the ‘art market’ and to make it clear that the intended market did not include personal sales.

Section 7B(2)(c ) ‘increase’ had been replaced by ‘amend’. The proposal was that the Minister could ‘amend’ the prescribed rate, meaning that it could be increased or decreased.

Section 7B(3) was a new paragraph: ‘The royalties contemplated in subsection (i) are payable by every seller; Provided the duty to pay the royalty to the author or his or her heirs as may be applicable, shall rest on the art market professional concerned.’
The royalty would be payable by the seller of every artistic work sold but it was not the seller who performed the function of paying the royalty to the artist; that was the function of the art market professional.

Section 7B(4) included a reference to the heirs of the artist as per 7b(1).

Section 7B(4)(a)(i) dealt with artists who were alive and 7B(4)(b) dealt with artists who were dead. The two paragraphs were aligned and the words ‘designated country’ were replaced with ‘country specified by the Minister in accordance with Section 37’. It was a neater way of indicating the country and had been suggested by public comment.

Section 7B(4)(c) – reference to the Berne Convention removed and replaced with the words ‘specified by the Minister in accordance with Section 37’.

Section 7B(5) – correction of numbering

Section 7B(5)(a), (b) - deleted as the paragraphs no longer apply. A definition of an art market professional was included.

Section 7B(6) – The proposal was that The clause be deleted and set in a separate section for retrospectivity of commercial sales. It would become new Section 7F(1) ‘Sections 7B, 7C, 7D and 7E apply to a visual artistic work that was made before the commencement date of the Copyright Amendment Act, 2019, if that visual artistic work falls within the application of this Act.’ The paragraph ensured that previously created works were not excluded.

(New)Section 7F(2) ‘The resale royalty right only applies to a commercial resale made after the commencement date of the Copyright Amendment Act, 2019.’ The paragraph stated that payments would only become due from the implementation of the Act forwards and not for sales prior to the implementation of the Act.

There would be consequential amendments relating to the inclusion of ‘heirs’.

The Chairperson recognised the presence of DTI Director General, Mr Lionel October.

Mr Mahlobo felt that issues had been clarified and the differentiation was more definite. In principle, the ANC agreed, but the implementation was still to be considered.

Mr Williams asked whether the clause covered prints of art works.

The Chairperson referred to the definition of an art professional. She referred to (e) a person otherwise involved in the business of dealing in artworks.’ Earlier the advocate had said that it did not apply to one’s personal gallery at home, but if one had money and was buying works for one’s gallery, that person could be said to be dealing in artworks. The definition would have to be refined.

Mr Cachalia suggested that the definition of the art market professional could include the words ‘as defined by the South African Revenue Service (SARS). SARS did not tax people on personal sales but if one was in the business of dealing in paintings, SARS would be taxing those sales and purchases.

The Chairperson asked what the situation would be for a stateless person who was a dealer in artworks.

Adv van der Merwe stated that prints had been part of a major discussion. Section 7(A) covered prints as it related to any adaptation of an artistic work. The proposal to look at the definition in the Income Tax Act about dealing was a good suggestion that would be followed up. Concerning stateless persons, the Bill talked about a person domiciled in South Africa and she would assume that a stateless person would have a residence permit or refugee status.

Mr Williams stated that he had discovered in the Portfolio Committee that Labour Laws applied even to people working illegally in South Africa, and not just citizens. Did that position not apply in the Copyright Bill?

Dr Masotja explained that the DTI had used the international definitions and would not differentiate in terms of a person’s legality or otherwise, but in terms of the work. She also explained that the Bill was talking about the market and commercial dealing. An individual would not be engaged in the practice of dealing in artworks.

Mr Cachalia did not understand last comment. He understood that individuals were exempted, unless deemed to be acting as a dealer.

DDG indicated that that was the correct interpretation.

Ms Pregoria Mabaso-Muvhango, DTI Director: Legislative Drafting: Consumer and Corporate Regulation, alerted the meeting to clause 3 where the Bill specified an individual as a ‘person who is a South African citizen or is domiciled or resident in the Republic’.

The Chairperson believed that one would be due something whether the person was legally in the country or not.

Mr Mahlobo asked if there was someone in attendance from the Department of Arts and Culture (DAC).

The Chairperson asked the Secretary if he had got in touch with Arts and Culture. The Secretary said that he had called the Secretary for the Portfolio Committee on Arts and Culture.

The Chairperson indicated that she had wanted officials from the Department of Arts and Culture to attend the meeting, and not the Portfolio Committee.

The DTI DDG stated that she always sent the programme, presentations and all other information to DAC.

The Chairperson agreed to write to the DAC Director-General.

Mr Mahlobo said it was necessary to raise a concern. He did not want a department to say but that it was the lead department and put a spanner in the wheel at the end of the process. The Committee did not want to go back and forth . He asked the DG to raise the matter with his colleague and to explain that the lack of DAC was hampering the work of the Committee.

Clause 9: Section 8A
Section 8A was same as Section 6A and Section 7A. The Performance Royalties Act and the Performers’ Protection Bill did provide for royalties and for equitable remuneration and sharing. Adv van der Merwe suggested that the clause 9 should be subject to the Performers’ Protection Bill. That would ensure that there was not a repeat of royalties, and if the Performers’ Protection Bill was delayed or not passed, performers would be covered in the Bill. In other sections, the Bill referred to the author and here the word ‘performer’ was used because the ‘performer’ was the one who had drawn the short straw. There were no exceptions so that the SABC was not excluded. Again, retrospectivity would be addressed the following week.

Mr Williams asked if the author was protected elsewhere.

The Chairperson assured him that authors had been dealt with elsewhere.

Ms Mesendri Padayachy, Deputy Director for Intellectual Property Law and Policy at DTI, informed Mr Williams that Section 6 would cover authors of audio-visual works.

Mr Alberts pointed out that not everyone shared in the royalties. For example, the other people involved in a feature film did not share in the royalties. What about incidental background actors – the extras?

Ms Padayachy stated that only the main performer shared in the royalties. Extras were not always professional actors and could even be a cameraman filling in. DTI had followed international best practice.

Clause 11: Section 9A Royalties regarding Sound Recording
9(f) dealt with copyright of sound recordings but had been inadvertently omitted. It had been included.

Section 9A(1)(aA) The definition of a performer was revised from ‘a person who performs an act’ to ‘a person who executes an act’ to avoid confusion.

Section 9A(1)(aA)(ii) referred to log sheets. The Bill made it clear that if an individual was performing an act at a party or other personal event, that was not covered by the Bill and log sheets were not required. The Bill referred to keeping record of commercial performances. The words ‘complete, true and correct’ had been added to describe the log sheets, as per the input from a submission.

Section 9A(4)(c) The amendment dealt with the annual turnover and the year for which the turn-over was calculated in the event of an offence. It had to the financial year in which the offence was committed, or if that was not complete, the year prior to that year.

A number of submissions recommended the expansion of log sheets to all works. However, DTI needed to undertake research before log sheets could be expanded. It was possible that log sheets could be added for audio-visual works in the Performers’ Protection Bill. It was about the payment of royalties and so work still had to be done on that aspect.

The Chairperson assumed that the Bill would not be held up while DTI was undertaking the proposed research.

Mr Mbuyane asked for a definition of a performer.

Adv van der Merwe responded that a performer was defined in the Performers’ Protection Act. It was an extensive definition. It related to professionals and would not include an extra.

Mr Alberts asked about a sound recording that was married to a visual work. The soundtrack could be a separate soundtrack but when played as part of an audio-visual work, it was considered a single work, despite having two aspects, sound and visual. The Copyright Act said that they were one property. What was the situation in the Bill?

Mr Kadi Petje, Senior Manager: Copyright, CIPC, said there would be two copyrights, even though the work had been compressed into one. The owner would then register the audio-visual work.

Mr Alberts explained that he merely wanted to ensure that there was no duplication.

Clause 12: Section 11
Adv van der Merwe proposed that the clause be removed as the work communicated through a signal did not form part of the signal. Submissions had suggested that the Bill should revert to the definition in the Act.

Mr Mahlobo agreed. It was a technical issue.

Clause 20: Section 19B
Adv van der Merwe proposed putting the same clause back because they had to ensure that computer programs were covered. It had initially been in the Bill, but the Committee had taken it out. Submissions had requested that it be re-instated.

The Committee approved.

Clause 22 Section 21
The clause talked about ownership and the process of commissioning the work. There were no changes.
Section 21 allowed for a ‘limited ownership’ and there was concern about opening the clause up to litigation. However, Section 22 already referred to limiting the assignment of copyright.

Section 21(c)(3)(c) dealt with an agreement that determined ownership. If there was no agreement, limited ownership of the work lay with the commissioner of the work to use it for the purpose for which it had been commissioned. If the owner did not use the work or used it for another purpose, the matter went to the Tribunal. There had been proposals about a set number of years, but the matter would be settled by the Tribunal which was obliged to take into account the reason and the period of time. The term ‘copyright owner’ was replaced by ‘the person who commissioned the work’ because some people would be part-owners of copyright.

Section 21(c)(3)(c) ‘fee’ replaced the word ‘tariff’ as per the public submissions.

Mr Mahlobo agreed with the changes in Clause 22.

Clause 22: Section 22D
The proposal was to include Section 22D(4) which dealt with any collecting society that intentionally presented itself as a collecting society but was not accredited as one. If the false portrayal was intentional that person was liable to a prison sentence of five years. Adv van der Merwe indicated that the clause would have to be advertised for public comment.

Mr Radebe was concerned because it would be really difficult to prove that an unaccredited body had intentionally portrayed itself as an accredited collecting society. That had to be looked at.

Mr Williams agreed with removing ‘intentional’ but was also concerned about other grammar.

Adv van der Merwe thought that advertising for public comment would take two weeks and could happen while the Bill was being quality assured. She cautioned the Committee about removing ‘intentional’ as the Department of Justice had advised that a court would want to know that it was intentional.

The Chairperson suggested that Adv van der Merwe check the need to include ‘intentional’.

Mr Mahlobo asked why the clause had to go for public comment. The Committee did not want opinions on an offence and the penalties. There was common law, so the lawyers could determine how long the prison term should be, or it could be left to the Tribunal. The Bill was overdue. It was difficult to prove ‘intent’ and such cases were normally proven on probability. He suggested that the technical team should look at it and reword the clause as the Committee had no intention of advertising where it was not necessary.

Mr Williams asked why ‘intentional’ was put in.

The Chairperson asked if it was essential to determine consequences for the offence. It might be covered under case law.

Adv van der Merwe was asked to clarify. The decision to advertise for public comment was not the Chairperson’s decision. She would prefer that the Committee erred on the side of caution.

Ms Mantashe was not happy to exclude the penalty and suggested that it be left it as it was.

The Chairperson suggested that ‘intentional’ be removed unless, on legal advice, the word was determined necessary.

Clause 25: Section 22D(3)
The amendment was to extend the period for distribution of royalties from three years to five years.

Clause 25: Section 22F
The amendment was to ensure that the Compliance Notice referred to the Companies Act but in accordance with the Bill.

Clause 27
The clause dealt with penalties and ensured that turnover would relate to the financial year in which an offence had taken place, or should the year be incomplete, the year immediately preceding that year.

Clause 30 Establishment of a Tribunal
The clause was simply to ensure the legal establishment of a Tribunal. The changes had deleted references to Chairperson and Deputy Chairperson as the Tribunal was not a permanent body.

Clause 31 Qualifications for appointment
Public comment had requested that a judge on the Tribunal should not have a criminal record. That had been inserted.

The Chairperson noted that she was still awaiting a response from Chief Justice Mogoeng Mogoeng giving permission for the changes to the Tribunal.

Clause 32 Repeal of Sections
Sections 36 was no longer being repealed because it dealt with appeals.

Clause 37 – Transitional arrangements
The transitional arrangement would only become effective when the IP Act was promulgated.
A definition of ‘commission’ had been included.

Committee Programme
The Chairperson noted that there was a meeting for both the briefing and a copyright discussion on the following Thursday 30 August 2018. She hoped to finish that meeting by 18:00. The National Credit Amendment Bill deliberations would be held all day on 28 August 2018. The formal consideration of the Credit Amendment Bill should take place on Tuesday 4 September 2018 followed by a closed meeting with ITAC which had been moved to this date as the 28 August was full. If approval was given, the public hearings on the Performers’ Protection Bill would be held on 4 and 5 September 2018 with the DTI responses on 6 September 2018. The applications for the study tour would be finalised as previously indicated.

The Chairperson asked Adv van der Merwe to let her have those sections of the Bill that were ready by the end of the week and the rest on the 27 August.

The Chairperson commented that the SA Sugar Association interim arrangements would come to an end on 30 September 2018 unless the Department could gazette regulations.

Mr Lionel October, DTI DG, thanked the Committee for putting pressure on the sugar associations which had met. He had met with the mediator, Charles Nupen, two days previously in an effort to get both federations to agree to a permanent agreement. Mr Nupen and he had agreed to extend the period to give the federations time to reach a permanent settlement.

The Chairperson had told the sugar associations that the Committee would push for tariffs, which had happened, and she did not want the transformational agreement to fall apart. SASA had to strive for a positive agreement and to be truly transformational.

The minutes of 15 August 2018 were approved. The Chairperson asked that Members check the minutes to see which resolutions had been taken. The meeting was adjourned.

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