Select Committee on Trade and International Relations
National Council of Provinces
3rd Floor
W/S 3/083
90 Plein Street
Cape Town
8001
Email:
@parlia
Art.4(1)(b)
ment.gov.za
Att: Art.4(1)(b)
22 February 2019
Dear Sir
SUBMISSIONS ON THE CONSTITUTIONALITY OF THE COPYRIGHT
AMENDMENT BILL, 2017
1
On 14 February 2019, the Select Committee on Trade and International
Relations of the National Council of Provinces (“the Council”) published a call
for submissions on the Copyright Amendment Bill, 2017 (“the Bill”). The Bill
seeks to amend the Copyright Act 98 of 1978 (“the Act”).
2
On instruction from Adams & Adams attorneys, we make these submissions
on behalf of the following industry stakeholders:
2.1
Juta and Company (Pty) Ltd;
2.2
Media24 Boeke (Pty) Ltd;
2.3
Music Publishers Association of South Africa (MPA-SA);
2.4
Pearson South Africa (Pty) Ltd;
2.5
Schuter & Shooter (Pty) Ltd;
2
2.6
Sony Music Entertainment Africa (Pty) Ltd;
2.7
Universal Music SA (Pty) Ltd; and
2.8
Warner Music SA (Pty) Ltd
(“the stakeholders”)
3
These submissions are supported by the following South African trade
associations:
3.1
Academic and Non-Fiction Authors’ Association of South Africa
(ANFASA) – a national organization, established in 2004, with
members in all nine provinces, that has approximately 500 members,
including many from the academic and educational sectors.
ANFASA’s objectives include to raise the status of authors in society,
to build a strong organization to support and uplift authors and create
opportunities for them to generate sustainable income; and to
contribute to South African culture, heritage and nation building with a
focus on social and cultural development.
3.2
Animation South Africa (Animation SA / A.S.A) – a non-profit
organization founded in 2006 and mandated by industry to develop,
promote and represent South African animation and visual effects.
A.S.A represents the interests of all who produce content for screens
using digital animation, visual effects and post production software.
This includes television commercials and shows, films, series, games,
3
online content, explainer videos, art, educational material, architectural
walk throughs and 3D printing professionals
3.3
The Independent Black Filmmakers Collective (IBFC) – a growing
collaborative business network of likeminded black independent
filmmakers, content creators; film/tv/commercial directors, producers,
distributors, exhibitors; media and entertainment facilitators and
service entrepreneurs.
3.4
Music Publishers Association of South Africa (MPA-SA) – an
industry association representing music publishers in South Africa that
exists to safeguard and promote the interests of music publishers and
the writers signed to them, to represent these interests to government,
the music industry, the media and to composers and the public.
3.5
Publishers Association of South Africa (PASA) – the largest
publishing industry body in South Africa that represents book and
journal publishers in SA in the field of non-fiction, fiction, education,
academic and trade publishing. Membership comprises the majority
of South African publishing houses, for profit and non-profit, university
presses, small and medium sized companies and multinational
publishing enterprises. For a listing of PASA’s members, please see:
http://publishsa.co.za/members/category?all=all
3.6
Recording Industry of South Africa (RiSA) – The Recording Industry
of South Africa (RiSA) is a trade association that represents the
collective interests of producers of music sound recordings, being
4
independent and major record labels in South Africa. For a listing of
RiSA’s members, please see: http://www.risa.org.za/members
4
In addition to these written submissions, the stakeholders would greatly
appreciate an opportunity for their representatives to make oral submissions
to the Committee, as detailed in the covering letter to these submissions.
5
The stakeholders are concerned that certain aspects of the Bill may be
inconsistent with the Constitution, and subject to challenge if the Bill is enacted
in its current form. The written submissions address these constitutional
issues, which, it is submitted, must be remedied before the Council passes the
Bill.
6
The submissions address the following issues:
6.1
The Bill has been incorrectly tagged as a section 75 bill;
6.2
Sections 6A(7), 7A(7) and 8A(5) constitute retrospective and arbitrary
deprivation of property;
6.3
Sections 6A(7)(b), 7A(7)(b) and 8A(5)(b) impermissibly delegate
legislative authority to the Minister;
6.4
There has been inadequate public consultation on section 12A – the
new fair use exception;
6.5
The new exceptions constitute arbitrary deprivation of property; and
5
6.6
The new exceptions violate the right to freedom of trade, occupation
and profession.
THE BILL HAS BEEN INCORRECTLY TAGGED AS A SECTION 75 BILL
7
The Constitution provides for two different processes to be followed when
enacting ordinary bills. The first procedure is section 75. It applies to bills “
not
affecting the provinces”. The second procedure is section 76. It applies to bills
“
affecting the provinces”.
8
A failure to use the correct procedure is fatal: it means that the resulting Act will
be constitutionally invalid. As the Constitutional Court held in
Tongoane, in
declaring an Act invalid on this basis:
“I consider that enacting legislation that affects the provinces in
accordance with the procedure prescribed in s 76 is a material
part of the law-making process relating to legislation that
substantially affects the provinces. Failure to comply with the
requirements of s 76(3) renders the resulting legislation invalid.”1
9
The present Bill was tagged as a section 75 bill and has thus far been dealt
with according to the processes set out in section 75 of the Constitution.
10 The stakeholders submit that the Bill ought to have been enacted according to
the process in section 76 of the Constitution, instead of section 75.
11 The procedure to be used in enacting a bill depends on the bill’s subject-matter:
1
Tongoane and Others v Minister of Agriculture and Land Affairs and Others 2010 (6) SA 214 (CC)
(“
Tongoane”) at para 109.
6
11.1 Where a Bill deals with the areas of competence falling within
schedules 42 or 53 of the Constitution, it must be dealt with in terms of
section 76 of the Constitution.
11.2 By contrast, where a Bill deals with an area of competence not falling
within either schedule 4 or schedule 5 of the Constitution (that is,
anything not mentioned in either schedule),4 it must be dealt with in
terms of section 75 of the Constitution.
12 In
Tongoane, the Constitutional Court held that the test for determining
whether an ordinary bill should be classified as a section 76 bill is whether the
bill’s provisions “
substantially affect the interests of the provinces”.5 Therefore,
to be classified as a section 76 bill, it is not necessary that the Bill deal solely
with an area listed in schedule 4. It is sufficient if its provisions substantially
affect a matter listed in schedule 4.
13 Schedule 4 lists a number of areas of concurrent national and provincial
legislative competence. The stakeholders that the Bill substantially affects two
matters listed in schedule 4: “
trade” and “
cultural matters”.
2 By way of example, the first four listed are “
Administration of indigenous forests; Agriculture; Airports other
than international and national airports; Animal control and diseases….”
3 By way of example, the first four listed are “
Abattoirs; Ambulance service; Archives other than national
archives; Libraries other than national libraries…”
4 The list of examples is necessarily endless, but obvious examples include foreign affairs, defence and the
justice system.
5
Tongoane at para 72.
7
Trade
14 First, a number of provisions of the Bill undoubtedly have a substantial effect
on trade.
15 The concept of “
trade” has, at its heart, the notion of buying and selling;6 a
commercial transaction where something is exchanged for something else. In
the world of copyright, “
trade” occurs through authorising acts in respect of
works in which copyright exists (i.e. issuing licences) and assigning copyright
in a work to another person, in exchange for consideration.
16 On this understanding, the Bill clearly regulates how copyright may be
“
traded”:
16.1 The new sections 6A, 7A and 8A7 provide for a right to receive royalties
for the author of a literary, musical or visual artistic work, and a
performer of an audio-visual work. This right to receive royalties cannot
be waived, and any assignment or authorisation is subject to it. This
clearly affects how an author is able to deal with his copyright.
16.2 Sections 39(cG) and (cI)8 provide that the Minister may make
regulations prescribing compulsory and standard contractual terms to
be included in agreements to be entered in terms of the Act; and
prescribing royalty rates or tariffs for various forms of use.
6 See
Battiss and another v Elcentre Group Holdings Ltd and Others 1993 (4) SA 69 (W) at 73.
7 Introduced by clauses 5, 7 and 9 of the Bill, respectively.
8 Clause 33 of the Bill.
8
16.3 Section 22(3)9 sets formalities for the assignment and exclusive
licensing of copyright. It also provides that the assignment of copyright
in a literary or musical work shall only be valid for a period of up to 25
years from the date of such assignment.
17 In addition, certain provisions of the Bill have a significant impact for the trade
in art works in particular:
17.1 Sections 7B-F10 provide for resale royalty rights for visual artistic
works. This means that the artist is entitled to be paid a royalty on each
commercial resale of his work. This wil have a substantial impact on
the trade in art works.
17.2 Section 22A11 provides that a licence must be obtained to do an act
subject to copyright in respect of an orphan work. This applies also to
visual artistic works. The effect is that traders in second-hand goods,
in particular art-works, who re-sell visual artistic works where the
copyright owner is not identified or cannot be traced, wil be required
to pay royalties when they re-sell the art work. This too wil have a
substantial impact on the trade in art works.
18 Therefore, the manner in which authors and copyright owners are able to deal
with – or “
trade” in – their copyright is regulated by the Act. The Bill’s provisions
9 Clause 22 of the Bill.
10 Clause 7 of the Bill.
11 Clause 24 of the Bill.
9
therefore have a substantial effect on trade – a matter listed in Schedule 4 of
the Constitution.
Cultural matters
19 Second, the Bill’s provisions also have a substantial effect on cultural matters.
20 In terms of the Bill, indigenous works will become eligible for the payment of
royalties. An ‘
indigenous work’’ is defined as a literary, artistic or musical work
with an indigenous or traditional origin, including indigenous cultural
expressions or knowledge which was created by persons who are or were
members, currently or historically, of an indigenous community and which
literary, artistic or musical work is regarded as part of the heritage of such
indigenous community.12 The Bill provides for the registration of collecting
societies to administer rights on behalf of copyright owners or authors.13
21 The Bill’s authors themselves have recognised that the Bill deals with the
“‘
customs of traditional communities’’,14 and as a result found it necessary to
refer the Bill to the National House of Traditional Leaders15. This referral was
made pursuant to section 18(1) of the Traditional Leadership and Governance
Framework Act 41 of 2003, which provides that “
any parliamentary Bill
pertaining to customary law or customs of traditional communities must, before
12 In terms of section 1 of the Act, after amendment by the Copyright Amendment Act 66 of 1983 (with effect
from a date to be proclaimed).
13 See sections 22B and 22C, clause 25 of the Bill.
14 Explanatory Memorandum to the Bill, para 6.10.
15 Explanatory Memorandum to the Bill, para 6.9. The referral was done on 11 September 2017. See
“Copyright Amendment Bill (B13-2017): Bill History” at https://pmg.org.za/bill/705/.
10
it is passed…be referred by the Secretary to Parliament to the National House
of Traditional Leaders for its comments.”
22 Once it is accepted that the Bill deals with the customs of traditional
communities such that it must be referred to the House of Traditional Leaders,
it must follow that the Bill also affects “
cultural matters” within the meaning of
schedule 4 of the Constitution.
23 Because the provisions of the Bill fall, in substantial measure, within matters
listed in schedule 4, the stakeholders submit that the Bill ought to have been
enacted following the section 76 process. Therefore, if the Bill is ultimately
enacted following the current section 75 process, the resulting Act would be
invalid.
SECTIONS 6A(7), 7A(7) AND 8A(5) CONSTITUTE RETROSPECTIVE AND
ARBITRARY DEPRIVATION OF PROPERTY
24 The new sections 6A, 7A and 8A provide that authors of literary, musical or
visual artistic works have the right to receive a royalty on the exploitation of
that work; and a performer of an audio-visual work has the right to share in
royalties received by the copyright owner. In the case of literary, musical and
visual artistic works, this right endures notwithstanding any assignment of the
copyright in the work or authorisation granted by the author.16 In the case of
audio-visual works, the performer’s share of the royalty is to be determined by
16 Section 6A(2); section 7A(2); section 8A(2)(b).
11
a written agreement, and any assignment of the copyright in that work is
subject to that agreement.17
25 Subsections 6A(7), 7A(7) and 8A(5) give these royalty provisions retrospective
effect:
25.1 Though the right to share in royalties only applies to royalties received
in the future, subsections 6A(7), 7A(7) and 8A(5) provide that the right
to share in royalties applies not only to future assignments, but also
where copyright in the relevant work was assigned before the
commencement date of the Act.
25.2 Therefore, if copyright in a literary work was assigned in 2010, for
instance, its author will, from the commencement date of the
Amendment Act, have a right to share in the royalties received in
respect of that work, notwithstanding the assignment.
26 The stakeholders submit that subsections 6A(7), 7A(7) and 8A(5) (“the
retrospective provisions”) are constitutionally invalid.
27 First, the fact that these provisions have retrospective effect raises significant
rule of law concerns.18 Inherent in the rule of law is the principle that law must
be certain, clear and stable, and give those bound by it sufficient warning so
as to enable them to conduct themselves in accordance with it.19 By altering
17 Section 8A(2)(a) and (b).
18 The rule of law is a foundational constitutional principle, protected in section 1(c) of the Constitution.
19
Affordable Medicines Trust v Minister of Health 2006 (3) SA 247 (CC) (“
Affordable Medicines”) at para 108.
12
the legal effects of transactions concluded in the past, the retrospective
provisions violate this principle. The provisions seek to undo the legal effects
of agreements concluded in the past – removing vested rights from parties
who, at the time of contracting, had no way of knowing that their contractual
rights would later be undone. The stakeholders submit that these provisions
are constitutionally invalid on this basis alone.
28 Second, in addition to the rule of law concerns, the stakeholders the provisions
are constitutionally invalid because they constitute an arbitrary deprivation of
property.
29 Section 25(1) of the Constitution provides that “
no one may be deprived of
property except in terms of law of general application, and no law may permit
arbitrary deprivation of property.” In order for there to be an infringement of
section 25(1): (i) the thing in question must be property; (ii) there must be a
deprivation; and (ii ) the deprivation must be arbitrary.20
30 Intellectual property has been recognised by the Constitutional Court as
constitutionally protectable property.21 As an intellectual property right,
copyright will similarly fall within the protection of section 25(1).22
20
South African Diamond Producers Organisation v Minister of Minerals and Energy and Others 2017 (6) SA
331 (CC) (
South African Diamond Producers) at para 34.
21
Laugh It Off Promotions CC v SAB International (Finance) Bv t/a Sabmark International (Freedom Of
Expression Institute as Amicus Curiae) 2006 (1) SA 144 (CC).
22
Moneyweb (Pty) Ltd v Media 24 Ltd and Another 2016 (4) SA 591 (GJ) at para 108.
13
31 “
Deprivation” entails an interference with a property right that is “
substantial”.
This means that the extent of the intrusion must be so extensive as to have a
legally significant impact on the rights of the affected party.23
31.1 The stakeholders submit that the interference with copyright
occasioned by sections 6A(7), 7A(7) and 8A(5) is substantial.
31.2 Whereas, previously, copyright owners had the right to claim all of the
fruits of the exploitation of the relevant work for themselves, these
provisions mean that, going forward, they will be required to share
these amounts with the author or performer. Copyright owners will be
entitled to a lesser share of the fruits of their property than previously.
31.3 The relevant provisions thus undoubtedly involve a deprivation of
property.
32 Further, the deprivation is arbitrary. A deprivation of property is “
arbitrary” as
meant by section 25 when the depriving law does not provide “
sufficient
reason” for the particular deprivation in question or is procedurally unfair.24
33 Sufficient reason is to be established as follows:
“(a) It is to be determined by evaluating the relationship between
means employed, namely the deprivation in question and ends
sought to be achieved, namely the purpose of the law in
question.
(b) A complexity of relationships has to be considered.
23
Jordaan and Others v Tshwane Metropolitan Municipality and Others 2017 (6) SA 287 (CC) at para 59;
South African Diamond Producers at para 48.
24
First National Bank of SA Ltd t/a Wesbank v Commissioner, South African Revenue Service and Another;
First National Bank of SA Ltd t/a Wesbank v Minister of Finance 2002 (4) SA 768 (CC) at para 100.
14
(c) In evaluating the deprivation in question, regard must be had
to the relationship between the purpose for the deprivation and
the person whose property is affected.
(d) In addition, regard must be had to the relationship between the
purpose of the deprivation and the nature of the property as
well as the extent of the deprivation in respect of such property.
(e) Generally speaking, where the property in question is
ownership of land or a corporeal moveable, a more compelling
purpose will have to be established in order for the depriving
law to constitute sufficient reason for the deprivation than in the
case when the property is something different and the property
right something less extensive. This judgment is not concerned
at all with incorporeal property.
(f)
Generally speaking, when the deprivation in question
embraces all the incidents of ownership, the purpose for the
deprivation will have to be more compelling than when the
deprivation embraces only some incidents of ownership and
those incidents only partially.
(g) Depending on such interplay between variable means and
ends, the nature of the property in question and the extent of
its deprivation, there may be circumstances when sufficient
reason is established by, in effect, no more than a mere rational
relationship between means and ends; in others this might only
be established by a proportionality evaluation closer to that
required by s 36(1) of the Constitution.
(h) Whether there is sufficient reason to warrant the deprivation is
a matter to be decided on all the relevant facts of each
particular case, always bearing in mind that the enquiry is
concerned with ‘arbitrary’ in relation to the deprivation of
property under s 25.”
34 The stakeholders submit that the deprivation of property brought about by
sections 6A(7), 7A(7) and 8A(5) is arbitrary, for the following reasons:
34.1 It appears that the aim of these retrospective provisions is to assist
authors who were previously victims of bad deals, and who assigned
their copyright at too low a fee, by giving them a right to royalty
payments going forward.
15
34.2 Even assuming that this purpose is legitimate, the stakeholders submit
that the retrospective provisions cast the net far too wide.
34.3 The provisions permit the deprivation of property regardless of the
terms of the original assignment agreement. In many cases,
performers and authors will have negotiated effectively, and obtained
a fair payment. In these cases, there is no reason to require a perpetual
royalty payment. This simply cannot fulfil the stated legislative purpose.
34.4 The legislative purpose here could be achieved in a much less
restrictive manner. For instance, the legislation could provide for an
investigation to be done, on application by a particular performer or
author who feels himself to have been the victim of an unfair contract,
into the circumstances into which that contract was concluded. The
legislation could then provide for a process to afford remedies to those
who have actually been unfairly treated – as opposed to a blanket,
retrospective provision for royalty payments, regardless of whether a
fair assignment fee was paid.
34.5 In many cases, the current copyright owner, whose property stands to
be deprived by these provisions, is the second or subsequent assignee
of the copyright. He is not the person who concluded the initial
assignment agreement with the author or performer; he simply
acquired it later on, from a prior assignee. Here, it is entirely arbitrary
to deprive such a person of their property. This owner has no link to
the contract feared to have been unreasonable. He has acquired the
16
copyright in good faith; yet stands to lose a substantial portion of it as
a result of the retrospective provisions.
34.6 Finally, the Bill does not set a time-limit for the operation of these
retrospective provisions. As a result, it appears that even assignments
made decades ago will be subject to the royalty payment requirements.
To reach into the past to this extent, without a clear factual basis for
doing so, is arbitrary.
35 Therefore, the stakeholders submit that sections 6A(7), 7A(7) and 8A(5) permit
arbitrary deprivation of property, would be invalid if enacted and ought to be
deleted from the Bill.
SECTIONS 6A(7)(b), 7A(7)(b) AND 8A(5)(b) IMPERMISSIBLY DELEGATE
LEGISLATIVE POWER TO THE MINISTER
36 Section 6A(7)(b) confers substantial powers on the Minister to determine how
assignments that pre-date the Amendment Act are to be dealt with. It provides:
“(b) The Minister must—
(i)
develop draft regulations setting out the process to give
effect to the application of this section to a work
contemplated in paragraph (a);
(ii)
conduct an impact assessment of the process proposed
in the regulations contemplated in subparagraph (i); and
(iii)
table the draft regulations and impact assessment
contemplated in subparagraphs (i) and (ii) respectively,
in the National Assembly for approval, before the
Minister may make the regulations contemplated in
subparagraph (i) in accordance with the process
envisaged in section 39.” (emphasis added)
17
37 Sections 7A(7)(b) and 8A(5)(b) are largely similar to section 6A(7)(b), and so
they are not repeated here. The submissions that follow apply equally to these
sections.
38 The stakeholders submit that the delegation of power to the Minister contained
in these subsections constitutes an impermissible delegation of legislative
authority.
39 In
Executive Council, Western Cape Legislature,25 the Constitutional Court
held that detailed provisions are often required for the purposes of
implementing laws, and Parliament is permitted to delegate subordinate
regulatory authority to other bodies for this purpose.26 However, the Court held
that there is a difference between delegating authority to make subordinate
legislation within the framework of a statute, and assigning plenary legislative
power to another body.27 The assignment of plenary legislative power to
another body is not permissible.
40 The principles first articulated in
Executive Council have now been applied by
the Constitutional Court in a series of decisions in different contexts.28
41 The key question that emerges from these decisions is that it is necessary to
consider whether section 8D(3) –
25
Executive Council, Western Cape Legislature and Others v President of the Republic of South Africa and
Others 1995 (4) SA 877 (CC) (“
Executive Council, Western Cape Legislature”).
26
Executive Council, Western Cape Legislature at para 51.
27
Executive Council, Western Cape Legislature at para 51.
28 See, for example, most recently:
South African Reserve Bank and Another v Shuttleworth and Another 2015
(5) SA 146 (CC).
18
41.1 delegates authority to the Minister to make regulations “
within the
framework of” the Bill – in which case it is constitutionally permissible;
or
41.2 purports to assign plenary legislative power to the Minister – in which
case it is not.
42 The Bill sets the following framework:
42.1 In terms of section 6A(2), the author of a literary or musical work is
entitled to royalties, notwithstanding assignment or authorisation.
42.2 In terms of section 6A(3), the author’s share of the royalty must be set
out in a written agreement. Any assignment is subject to that
agreement. Where agreement cannot be reached, the Tribunal may be
approached.29
42.3 Section 6A(7)(a) provides simply that the other provisions of section 6A
apply where copyright in the relevant work was assigned before the
commencement date of the Act (subject to certain provisos).
42.4 This is obviously not a straightforward exercise. The other provisions
of 6A, which 6A(7) makes applicable to past assignments, require
agreement to be reached between the parties on the royalties payable,
and that other prescribed matters be dealt with in that agreement. It is
not possible to reach into the past and place similar provisions into
assignment agreements that have already been concluded. Therefore,
29 Section 6A(4).
19
the provisions of section 6A cannot simply be made applicable to past
assignments by a provision saying they are.
43 In recognition of this problem, section 6A(7)(b) provides that the Minister must
“
develop draft regulations setting out the process to give effect to the
application of this section to a work [that was assigned before the Amendment
Act came into effect].”
44 The stakeholders submit that section 6A(7)(b) permits the Minister to make
key decisions regarding the deprivation of property (copyright) from those to
whom it was assigned in the past.
44.1 The Minister is, in essence, empowered to develop rules regarding
how the rights and obligations in section 6A are to apply in respect of
works assigned before the Amendment Act came into force.
44.2 This is not a question of working out the details of how existing
statutory provisions are to be implemented: rather, it purports to permit
the Minister to determine the rights and obligations of persons who
concluded assignment agreements in the past.
44.3 For instance, the Minister may decide that a time-limit should be set,
and only assignments concluded within the last 10 years should fal
under section 6A(7).
45 Indeed, the provision itself seems to recognise that the decision-making
delegated to the Minister falls within the domain of the National Assembly.
20
45.1 It seeks to claw back a role for the National Assembly, providing that
the regulations must be approved by the National Assembly before
they are to take effect.
45.2 But this does not save the provision. The fact remains that the relevant
decisions are taken by the Minister, and simply ratified by the National
Assembly. The extensive participation processes to which legislation
is subjected do not occur; and there is no oversight by the NCOP at
all. In
Executive Council, Western Cape Legislature, for instance, the
impugned provision empowered the President to amend the Act by
proclamation, but required him to act with the approval of the select
committees on constitutional affairs of the National Assembly and the
Senate. The provision was held to confer plenary legislative power on
the President, notwithstanding the involvement of these parliamentary
structures.
46 Therefore, the stakeholders submit that sections 6A(7)(b), 7A(7)(b) and
8A(5)(b) constitute an impermissible delegation of legislative authority on the
Minister and as such would be constitutionally invalid if enacted.
INADEQUATE PUBLIC CONSULTATION ON THE FAIR USE EXCEPTION IN
SECTION 12A
47 In terms of section 59(1) of the Constitution, the National Assembly is obliged
to facilitate public involvement in its legislative and other processes and those
of its committees. The Constitutional Court has held that the obligation to
facilitate public participation is a material part of the law-making process, and
21
the failure to comply with this requirement renders the resulting legislation
invalid.30
48 Following the public hearings in August 2017, substantial amendments were
effected to various sections of the Bill. The relevant provisions, as amended,
were not put out for public comment before the final version of the Bil was
published.
49 One such provision was the new section 12A(1)(a). The stakeholders submit
that, because there was a material change to the wording of section 12A(1)(a),
further consultation was necessary, and failure to consult on the wording
change renders the provision constitutionally invalid.
50 The version of section 12A(1)(a) put out for public comment read as follows:
“In addition to uses specifically authorised, fair use in respect of a
work or the performance of that work, for the following purposes,
does not infringe copyright in that work…”
51 The final version of section 12A(1)(a), reads as follows:
“In addition to uses specifically authorized, fair use in respect of a
work, for purposes such as the following, does not infringe copyright
in that work:…”
52 The effect of this amendment is that, whilst the original text provided for a
closed list of purposes for which a work could be used and be considered “
fair
use”, the final version provides for an open list. The purposes enumerated in
30
Doctors for Life International v Speaker of the National Assembly and Others 2006 (6) SA 416 (CC)
at para 209;
South African Veterinary Association v Speaker of the National Assembly and Others
[2018] ZACC 49 at para 23.
22
section 12A(a)(i)-(vii) are no longer the only purposes for which a work may
be used under the provision – they are now only illustrative of the sorts of
purposes that may be taken to constitute “
fair use”.
53 This is a material change:
53.1 The change in wording in section 12A(1)(a) in effect shifts the nature
of the exception from being one more akin to the existing “
fair dealing”
exception in section 12 of the Act, to one that is closer to the type of
“
fair use” exception used in US law.
53.2 The Explanatory Memorandum to the Bil , both as introduced in May
2017 and after its revision by the National Assembly, states:
“Scope is left for the reproduction of copyright material for limited
uses or purposes without obtaining permission and without paying
a fee or a royalty. Furthermore, this provision stipulates the factors
that need to be considered in determining whether the copyright
work is used fairly.”
(Our emphasis.)
53.3 Under the Act’s existing “
fair dealing” exception in section 12, the test
whether use infringes copyright is whether the use is for a specific
exempted purpose, and if so, whether the use is fair.31 Fair dealing is
permissible only in respect of specific purposes; other types of dealing
are not permitted no matter how “
fair” they might be.32
53.4 The key difference between this and a “
fair use” provision (such as that
in US copyright law) is that a “
fair use” exception provides only
31 Dean
Handbook of South African Copyright Law 2015 (Juta & Company: Cape Town) at 1-95 para 9.2.2.
32 Davies et al (eds)
Copinger and Skone James on Copyright 17ed 2016 (Sweet & Maxwell: London) vol 1
(“
Copinger”) at p716; para 9.28 (referring to a similar fair dealing provision in UK law).
23
guidelines as to what amounts to “
fair use”:33 the purpose of the use is
not a separate qualifying enquiry, but rather forms part of the
assessment of whether the use is fair.
53.5 The wording on which comment was sought was in the nature of a “
fair
dealing” provision, in that the test on that wording would have been
whether the use is for a specific, listed purpose, and if so, whether the
use is fair. By contrast, the new wording, post public participation, is
clearly in the nature of a “
fair use” provision, as the new wording only
provides an illustrative list, by way of guidance as to what sorts of
purposes a work may be used for. These are therefore no longer the
“
limited uses or purposes” contemplated by the Explanatory
Memorandum.
54 The stakeholders therefore submit that the public did not have sufficient
warning that a change of this nature was being contemplated, in order to
comment properly in favour of, or against it. As a result, there was inadequate
consultation on this issue, and section 12A(1)(a) would be constitutionally
invalid if enacted.
THE NEW EXCEPTIONS CONSTITUTE ARBITRARY DEPRIVATION OF
PROPERTY
55 Copyright exceptions provide a defence to a claim of infringement. If an
exception applies, then a person may perform what would otherwise be a
33
Copinger at p716; para 9.28.
24
restricted act in respect of a work, without obtaining permission from, or paying
remuneration to, the copyright owner.
56 Currently, the Act provides for work-specific exceptions based on “
fair
dealing”.34
57 The Bill proposes the introduction of new exceptions that are general in nature,
rather than work-specific. The new section 12A introduces an exception based
on “
fair use”, and section 12B sets out specific exceptions that wil apply to all
works. Section 12C allows temporary reproduction and adaptation; while
section 12D allows reproduction for educational and academic activities.
Additional new exceptions are introduced by the new sections 19B,35 19C36
and 19D.37
58 The stakeholders submit that various of these new exceptions constitute an
arbitrary deprivation of property within the meaning of section 25(1) of the
Constitution.
Law on arbitrary deprivation
59 As explained above in relation to sections 6A(7), 7A(7) and 8A(5), in order for
there to be an infringement of section 25(1) of the Constitution: (i) the thing in
34 Sections 12 to 19B of the Act.
35 General exceptions regarding protection of computer programs; clause 19 of the Bill.
36 General exceptions regarding protection of copyright work for libraries, archives, museums and galleries;
clause 20 of the Bill.
37 General exceptions regarding protection of copyright work for persons with disability; clause 20 of the Bill.
25
question must be property; (i ) there must be a deprivation; and (iii) the
deprivation must be arbitrary.38
59.1 Intellectual property has been recognised by the Constitutional Court
as constitutionally protectable property.39 As an intellectual property
right, copyright wil similarly fall within the protection of section 25(1).40
59.2 “
Deprivation” entails an interference with a property right that is
“
substantial”. This means that the extent of the intrusion must be so
extensive as to have a legally significant impact on the rights of the
affected party.41
59.3 A deprivation of property is “
arbitrary” as meant by section 25 when the
depriving law does not provide “
sufficient reason” for the particular
deprivation in question or is procedurally unfair.42
Section 12A: the fair use exception
60 The new section 12A43 introduces a general “
fair use” exception. It provides:
“(a) In addition to uses specifically authorized, fair use in respect of
a work or the performance of that work, for purposes such as
the following, does not infringe copyright in that work:
38
South African Diamond Producers Organisation v Minister of Minerals and Energy and Others 2017 (6) SA
331 (CC) (
South African Diamond Producers) at para 34.
39
Laugh It Off Promotions CC v SAB International (Finance) Bv t/a Sabmark International (Freedom Of
Expression Institute as Amicus Curiae) 2006 (1) SA 144 (CC).
40
Moneyweb (Pty) Ltd v Media 24 Ltd and Another 2016 (4) SA 591 (GJ) at para 108.
41
Jordaan and Others v Tshwane Metropolitan Municipality and Others 2017 (6) SA 287 (CC) at para 59;
South African Diamond Producers at para 48.
42
First National Bank of SA Ltd t/a Wesbank v Commissioner, South African Revenue Service and Another;
First National Bank of SA Ltd t/a Wesbank v Minister of Finance 2002 (4) SA 768 (CC) at para 100.
43 Clause 13 of the Bill.
26
(i)
Research, private study or personal use, including the
use of a lawful copy of the work at a different time or with
a different device;
(ii)
criticism or review of that work or of another work;
(iii)
reporting current events;
(iv)
scholarship, teaching and education;
(v)
comment, illustration, parody, satire, caricature,
cartoon, tribute, homage or pastiche;
(vi)
preservation of and access to the collections of libraries,
archives and museums; and
(vii) ensuring proper performance of public administration.
(b) In determining whether an act done in relation to a work
constitutes fair use, all relevant factors shall be taken into
account, including but not limited to—
(i)
the nature of the work in question;
(ii)
the amount and substantiality of the part of the work
affected by the act in relation to the whole of the work;
(iii) the purpose and character of the use, including
whether—
(aa)
such use serves a purpose different from that of
the work affected; and
(bb)
it is of a commercial nature or for non-profit
research, library or educational purposes; and
(iv) the substitution effect of the act upon the potential market
for the work in question.
(c) For the purposes of paragraphs (a) and (b) the source and the
name of the author shall be mentioned.”
(emphasis added)
61 The effect of section 12A is to substantial y reduce the degree of protection a
copyright owner has over his property (copyright) and the degree to which the
owner is able to benefit from the fruits of that property. It does this in two key
respects.
61.1 First, it introduces four new purposes for which works may be used
without constituting infringement: those listed at section 12A(a)(iv) to
(vii). Previously, copyright owners were entitled to remuneration if their
27
works were used for education or governmental purposes: now, they
are not.
61.2 Second, it changes the list of purposes for which work may legitimately
be used from a closed one (as is the case in section 12 of the current
Act) to an open, illustrative one. Previously, a work could only be used,
without permission, for a closed list of purposes. Now, copyright
owners will not be entitled to remuneration whenever their work is used
for a purpose similar to those actually listed in section 12A(a).
62 The effect of section 12A is that copyright owners are afforded less protection
for their works than they previously had. This, in turn, means that their rights
to benefit from those works is limited. This substantially limits the owner’s
entitlement to exploit that work and constitutes a deprivation of property.
63 Furthermore, the deprivation of property occasioned by section 12A is
arbitrary.
63.1 It appears that the purpose of expanding the exceptions is to promote
access to copyright material. 44 However, the extent of the deprivation
caused by section 12A casts the net far too wide, and is entirely
disproportionate to the end sought to be achieved.
63.2 The extent of the deprivation caused by section 12A is considerable.
Because section 12A provides for an open list, the circumstances in
44 Para 2.3 of the Memorandum on the Objects of the Copyright Amendment Bill (“the Explanatory
Memorandum”).
28
which a work may now be used, without the requirement to obtain the
copyright owner’s permission, or to pay remuneration, are both
unknown and unknowable. It will require a lengthy period of
incremental judicial interpretation before it is possible to predict, with
any certainty, the purposes for which a work may be used under the
exception.
63.3 The extent of this deprivation is not justified by the purpose of
enhancing access to copyright material. For one thing, this purpose
could be achieved by far less restrictive means. For another,
Parliament has conducted absolutely no assessment as to the
economic effects of increasing the scope of copyright exceptions so
drastically. Nor has any assessment been conducted to determine
whether this step – which dramatically weakens copyright in South
Africa – is actually necessary to achieve the desired increase in
access.
63.4 In the absence of compelling economic research – let alone any
research at all – as to the economic impact of section 12A, the
deprivation of property it gives rise to is entirely arbitrary.
64 Therefore, the stakeholders submit that section 12A constitutes an arbitrary
deprivation of property, and would be constitutionally invalid if enacted.
29
Section 12D: the educational and academic activities exception
65 As explained above, copyright owners were, under the existing Act, entitled to
remuneration whenever their works were used for educational and academic
activities.
66 The new section 12D45 changes this position. It provides:
(1) Subject to subsection (3), a person may make copies of works
or recordings of works, including broadcasts, for the purposes
of educational and academic activities: Provided that the
copying does not exceed the extent justified by the purpose.
(2) Educational institutions may incorporate the copies made
under subsection (1) in printed and electronic course packs,
study packs, resource lists and in any other material to be used
in a course of instruction or in virtual learning environments,
managed learning environments, virtual research
environments or library environments hosted on a secure
network and accessible only by the persons giving and
receiving instruction at or from the educational establishment
making such copies.
(3) Educational institutions shall not incorporate the whole or
substantially the whole of a book or journal issue, or a recording
of a work, unless a licence to do so is not available from the
copyright owner, collecting society or an indigenous community
on reasonable terms and conditions.
(4) The right to make copies contemplated in subsection (1)
extends to the reproduction of a whole textbook—
(a)
where the textbook is out of print;
(b)
where the owner of the right cannot be found; or
(c)
where authorized copies of the same edition of the
textbook are not for sale in the Republic or cannot be
obtained at a price reasonably related to that normally
charged in the Republic for comparable works.
(5) The right to make copies shall not extend to reproductions for
commercial purposes.
(6) Any person receiving instruction may incorporate portions of
works in printed or electronic form in an assignment, portfolio,
thesis or a dissertation for submission, personal use, library
deposit or posting on an institutional repository.
45 Clause 13 of the Bill.
30
(7)
(a)
The author of a scientific or other contribution, which is
the result of a research activity that received at least 50
per cent of its funding from the state and which has
appeared in a collection, has the right, despite granting
the publisher or editor an exclusive right of use, to make
the final manuscript version available to the public under
an open licence or by means of an open access
institutional repository.
(b)
In the case of a contribution published in a collection that
is issued periodically at least annually, an agreement
may provide for a delay in the exercise of the author’s
right referred to in paragraph (a) for up to 12 months
from the date of the first publication in that periodical.
(c)
When the contribution is made available to the public as
contemplated in paragraph (a), the place of the first
publication must be properly acknowledged.
(d)
Third parties, such as librarians, may carry out activities
contemplated in paragraphs (a) to (c) on behalf of the
author.
(e)
Any agreement that denies the author any of the rights
contemplated in this subsection shall be unenforceable.
(8) The source of the work reproduced and the name of the author
shall be indicated as far as is practicable on all copies
contemplated in subsections (1) to (6).”
(emphasis added)
67 As with the fair use exception contained in section 12A, the effect of the
educational use exception in section 12D is that copyright owners are afforded
far less protection for their works than they previously had. This, in turn, means
that their rights to benefit from those works is limited. This substantially limits
the owner’s entitlement to exploit that work and constitutes a deprivation of
property.
68 Again, this deprivation is arbitrary:
68.1 It appears that the purpose of section 12D is to promote access to
copyright material for educational purposes. However, the extent of the
31
deprivation caused by section 12D casts the net far too wide, and is
entirely disproportionate to the end sought to be achieved.
68.2 The extent of the deprivation caused by section 12D is extreme. Not
only does it provide for extracts of copyright works to be reproduced
verbatim in course materials, but it also permits the wholesale copying
of an entire textbook, in a wide variety of circumstances – including
that the user considers the copyright owner’s licence terms to be
“
unreasonable”. What constitutes an “
unreasonable” licence term,
justifying what would otherwise be serious infringement of copyright, is
not specified in section 12D – opening the door for unscrupulous users
to ignore copyright entirely.
68.3 The extent of this deprivation is not justified by the purpose of
enhancing access to copyright material. This purpose could be
achieved by far less restrictive means. In addition, Parliament has
conducted absolutely no assessment as to the economic effects of, in
effect, removing copyright in academic works entirely. In the absence
such research, the deprivation of property section 12D gives rise to is
arbitrary.
68.4 In addition, section 12D fails entirely to recognise that education is, in
many instances, a commercial enterprise. South Africa has a large
number of private educational institutions, which exist to make a profit.
Section 12D effectively permits these institutions to reduce their
business costs, by removing the obligation to pay licence fees, and
32
thereby enhance their profits at the expense of copyright owners. This
does nothing to further the purpose of enhancing access to education.
69 Therefore, the stakeholders submit that section 12D constitutes an arbitrary
deprivation of property, and would be constitutionally invalid if enacted.
Other exceptions that constitute arbitrary deprivation of property
70 As explained above, the Bill introduces a number of new exceptions, that
reduce the degree of protection copyright owners have in respect of their
copyright, and the extent to which they are able to benefit from their copyright.
71 We have dealt with two key exceptions above: sections 12A and 12D. Both of
these provisions constitute an arbitrary deprivation of property of copyright
owners. However, they are not the only new exceptions that do so.
72 Below, we list other exceptions that similarly, the stakeholders submit,
constitute arbitrary deprivation of property, for reasons substantially similar to
those set out above in relation to sections 12A and 12D: they interfere
substantially with copyright owners’ legal rights in respect of their property,
and are arbitrary in that they do so without sufficient reason. We reiterate that
Parliament has conducted absolutely no assessment as to the economic
effects of these new exceptions. In the absence of such research, the
deprivation of property these exceptions give rise to can only be arbitrary.
73 In addition to sections 12A and 12D, the stakeholders submit that the following
exceptions also deprive copyright owners of their copyright arbitrarily:
33
73.1 Section 19C: the library, archive, museum or gallery exception. In
particular:
73.1.1 Section 19C(3), which provides for a library, archive, museum
or gallery to provide “
temporary access” to a copyright work to
a user in another library. This is complicated by the fact that the
meaning of “
access” is not clear.
73.1.2 Section 19C(4), which provides that a library, archive, museum
or gallery may permit a user to view or listen to a whole work,
for educational purposes, on its premises, in a classroom or
over a computer network.
73.1.3 Section19C(5)(b), which permits a library, archive, museum or
gallery to place works reproduced for preservation on publicly
accessible websites.
73.1.4 Section 19C(9), which permits a library, archive, museum or
gallery to make a copy of a work for its own collection.
73.2 Section 12B(1)(a)(i), which provides that copyright shall not be
infringed by any quotation. The problem in this provision lies in the fact
that it is not work-specific: the quotation exception that currently exists
in section 12(3) of the Act applies only to literary or musical works.
Section 12B(1)(a) applies also to visual artistic works, which cannot,
by their very nature, be “
quoted” without reproducing them in their
entirety.
34
73.3 Section 12B(1)(c), which permits reproduction by broadcasters. The
problem in this provision lies in the fact that it is not work-specific: the
broadcasting exception that currently exists in section 12(5) of the Act
applies only to literary or musical works. Section 12B(1)(c) now
extends the application of this exception to cinematographic films,
thereby depriving the authors of those films of property.
73.4 Section 12B(1)(e)(i), which permits any reproduction in the press, or in
a broadcast or other communication to the public of an article in the
press, whenever the reproduction, broadcasting or communication has
not been expressly reserved.
73.5 Section 12B(1)(f), which permits any translation of a work.
74 The stakeholders submit that al of the provisions listed above permit arbitrary
deprivation of property, and would therefore be constitutionally invalid if
enacted.
THE NEW EXCEPTIONS VIOLATE THE RIGHT TO FREEDOM OF TRADE,
OCCUPATION OR PROFESSION
75 The stakeholders submit that certain of the new exceptions, in addition to
arbitrarily depriving copyright owners of property, also unjustifiably limit the
rights of copyright owners to freedom of trade, occupation or profession.46
46 Section 22 of the Constitution.
35
The law on freedom of trade, occupation or profession
76 Section 22 of the Constitution provides that “
[e]very citizen has the right to
choose their trade, occupation or profession freely. The practice of a trade,
occupation or profession may be regulated by law.” Section 22 comprises two
elements –
76.1 the right to choose a trade, occupation or profession freely, and
76.2
the proviso that the practice of a trade, occupation or profession may
be regulated by law.47
77 Different levels of scrutiny attach to each of these two elements:48
77.1 If a legislative provision has a negative impact on choice of trade,
occupation or profession, it must be tested in terms of the criterion of
reasonableness in the limitations clause – section 36(1) of the
Constitution.
77.2 If the provision only regulates the practice of that trade and does
not affect negatively the choice of trade, occupation or profession, the
provision will pass constitutional muster so long as it passes the
rationality test and does not violate any other rights in the Bill of Rights.
47
South African Diamond Producers at para 65.
48
South African Diamond Producers at para 65.
36
Section 12A: the fair use exception
78 The stakeholders submit that section 12A of the Bill has a negative impact on
choice of trade, occupation or profession. It makes occupations that rely for
their profitability on the exploitation of copyright works (such as writing books
or music or producing sound recordings or films) so uncertain, and potentially
so unprofitable, that it effectively limits the choice to enter into these
occupations at all.
79 In
South African Diamond Producers, the Constitutional Court recognised that
it is not only laws that regulate entry into a particular trade, occupation or
profession that limit the “
choice” element of section 22. Laws may equally limit
choice if they have the effect of making a trade so unprofitable that the “
choice”
to enter that profession is rendered illusory. The Court held:
“Clearly, then, a law prohibiting certain persons from entering into
a specific trade, or providing that certain persons may no longer
continue to practise that trade, would limit the choice element of s
22; in these cases there is a legal barrier to choice. This would be
the case where, for instance, a licence is necessary to conduct a
particular trade, and that licence is withdrawn. However, one may
also conceive of legislative provisions that, while not explicitly ruling
out a group of persons from choosing a particular trade, does so in
effect, by making the practice of that trade or profession so
undesirable, difficult or unprofitable that the choice to enter into it is
in fact limited.”49 (emphasis added)
80 Section 12A is one such provision: through it does not prohibit persons from
becoming authors, composers, or producers, it does so in effect, by making
these occupations so undesirable, difficult or unprofitable that the choice to
enter into them is in fact limited. The way in which section 12A does this is to
49
South African Diamond Producers at para 68.
37
significantly reduce the protection copyright owners have in respect of their
works – thus significant reducing the copyright owner’s ability to make a living
from exploiting those works.
81 Section 12A does not simply regulate the manner in which copyright owners
may pursue their occupations – instead, it renders the trade or occupation of
becoming a person who deals in copyright (an author, a composer, a producer)
so economically uncertain, that it in effect renders the element of choice
illusory.
82 Section 12A therefore limits the rights protected by section 22 of the
Constitution. In the stakeholders’ submission, it does so without adequate
justification, as required under section 36 of the Constitution.
83 In any event, even if section 12A is considered not to limit choice, but simply
to regulate the practice of copyright owners’ occupations, it nevertheless
violates section 22, because it has no rational basis.50 No research
whatsoever has been conducted to determine the economic impact of section
12A. In these circumstances, there can be no suggestion that section 12A is
rationally connected to a legitimate government purpose.
84 Therefore, the stakeholders submit that section 12A violates the right to
freedom of trade, occupation and profession, would be constitutionally invalid
if enacted, and ought to be deleted from the Bill.
50
South African Diamond Producers at para 65.
38
Section 12D: the educational and academic activities exception
85 Similarly, section 12D also violates copyright owners’ section 22 rights.
86 Here, the limitation is particularly severe for authors of academic texts, or texts
routinely used for academic purposes.
87 As with section 12A, section 12D of the Bill has a negative impact on choice
of trade, occupation or profession. It makes occupations that rely for their
profitability on the exploitation of copyright works in an academic context (such
as authors of academic texts) so unprofitable, that it effectively limits the
choice to enter into these occupations at all. The only avenue an author of
academic works has to monetise his copyright is through licensing the use of
his works, for academic use. Section 12D significantly curtails the extent to
which such an occupation will be profitable, going forward.
88 Section 12D therefore limits the rights protected by section 22 of the
Constitution. In the stakeholders’ submission, it does so without adequate
justification, as required under section 36 of the Constitution.
89 In any event, even if section 12D is considered not to limit choice, but simply
to regulate the practice of copyright owners’ occupations, it nevertheless
violates section 22, because it has no rational basis.51 No research
whatsoever has been conducted to determine the economic impact of section
51
South African Diamond Producers at para 65.
39
12D. In these circumstances, there can be no suggestion that section 12D is
rationally connected to a legitimate government purpose.
90 Indeed, section 12D runs contrary to the purpose of enhancing access to
educational texts, because it disincentivises authors from writing them, and
publishers from publishing them. It is, as a result, entirely irrational.
91 Therefore, the stakeholders submit that section 12D violates the right to
freedom of trade, occupation and profession, would be constitutionally invalid
if enacted, and ought to be deleted from the Bill.
CONCLUSION
92 The stakeholders’ key submissions are as follows:
92.1 The Bill has been incorrectly tagged as a section 75 bill. In fact, its
provisions substantially affect two areas listed in Schedule 4 to the
Constitution: cultural matters, and trade. As a result, the process in
section 76 of the Constitution ought to have been followed. If the Bill is
ultimately enacted following the section 75 process, it is liable to be set
aside as constitutionally invalid on this basis alone.
92.2 Sections 6A(7), 7A(7) and 8A(5) constitute retrospective and arbitrary
deprivation of property. These provisions mean that, going forward,
copyright owners wil be entitled to a lesser share of the fruits of their
property than previously. The retrospective provisions deprive
copyright owners of property without sufficient reason, and therefore
40
permit arbitrary deprivation of copyright. Sections 6A(7), 7A(7) and
8A(5), if enacted, would be constitutionally invalid.
92.3 Sections 6A(7)(b), 7A(7)(b) and 8A(5)(b) impermissibly delegate
legislative authority to the Minister. If enacted, they would be
constitutionally invalid.
92.4 There has been inadequate public consultation on section 12A – the
new fair use exception. Public participation is a prerequisite for
legislation to be constitutionally valid. Section 12A therefore stands to
be set aside on this basis, if enacted.
92.5 A number of the new exceptions constitute arbitrary deprivation of
property. These are, in particular:
92.5.1 Section 12A.
92.5.2 Section 12D.
92.5.3 Section 19C. In particular, sections 19C(3), 19C(4), 19C(5)(b)
and 19C(9).
92.5.4 Section 12B(1)(a)(i).
92.5.5 Section 12B(1)(c).
92.5.6 Section 12B(1)(e)(i).
92.5.7 Section 12B(1)(f).
92.6 Sections 12A and 12F violate the right to freedom of trade, occupation
and profession. Not only do the limit copyright owners’ choice of
41
occupation without justification, but they also constitute irrational
regulation of copyright owners’ occupations.
Art.4(1)(b)
Art.4(1)(b)
Chambers, Sandton
22 February 2019