Footing the bill Quarter 3 2021

By OWEN DEAN, Published in Intellectual Property

The Copyright Amendment Bill (CAB) was passed by Parliament, despite widespread criticism and condemnation by informed commentators. The CAB was rejected by President Ramaphosa and referred back to Parliament with the direction that it be reviewed and amended where necessary. His objections mainly centred on the issue that it contained provisions that are in conflict with the South African Constitution and, more particularly, the Bill of Rights contained in Chapter 2, sections 7 – 39.

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'Footing the bill'

The term or expression 'footing the bill' can have several meanings or connotations when used in relation to the CAB. Depending on the context, the term 'Bill' can mean the CAB or the Bill of Rights.

'Footing the Bill' conveys the following:

First, it can mean being landed with, or having to pay, the cost of something.

Second, it suggests putting the boot into the Bill in the sense of criticising it or damaging it.

Third, it can mean giving the Bill the boot, i.e. kicking it away or doing away with it.

All these meanings of the term come into play in this discourse.

Nature of copyright

Copyright is a system which enables 'authors' (the term used in copyright to denote the creators of original works, whether they be writers, artists, composers and so forth) to control the commercial exploitation of their works and thereby to derive remuneration from their use. The French term for copyright is droite d'auteur, literally 'right of the author'. The term, 'author's rights' is indeed a synonym for 'copyright'. The author is the cornerstone of copyright and all rights conferred by it stem from, and generally vest initially in, the author.

In a seminal copyright judgment ( Video Parktown North (Pty) Ltd v Paramount Pictures Corporation 1986 (2) SA 623 (T)), Goldstone J described copyright as being a 'bundle of rights'. This is an apt description. Each of the categories of copyright works, e.g. literary works, artistic works, musical works, are awarded a collection of exclusive rights for the benefit of the author; for instance, the right to reproduce the work, the right to publish it, the right to perform it in public, and the right to adapt it.

The individual rights within the bundle can be exploited separately and individually. 'Copyright' and 'author's rights' are thus collective terms, describing a composite item. They denote a form of property, i.e. intellectual property, which is immaterial or intangible. As such, they fall within the scope and ambit of the controversial s25 of the Bill of Rights, the so-called 'property clause'. Copyright is considered to be a class of property protected by the property clause.

The property clause

In terms of s25(1), no law may permit arbitrary deprivation of property. The thrust of the section is to protect existing property rights or interests (including copyright) against certain forms of interference. According to the authorities, deprivation, as contemplated, entails any interference with the use, enjoyment or exploitation of property. Further, where property has various components, protection applies to even individual components, and not only to the whole. Thus, depriving a copyright owner of a component right of copyright – for instance, the right to control the whole, or a part of the whole right of reproduction of a work – amounts to a deprivation of property for purposes of the section. Such a deprivation diminishes the bundle of rights which make up copyright.

The authorities say that a deprivation of property is arbitrary when brought about by a law in circumstances where there is not sufficient reason or justification for it. The circumstances to be taken into account must necessarily include whether the law in question, or a relevant provision of it, offends against South Africa's obligations under an international treaty. There can be no 'sufficient reason' to act in contravention of an international obligation in a country governed by the rule of law, as South Africa is.

Treaty obligations

South Africa's international obligations in respect of copyright are imposed by the Berne Convention and the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS). These treaties require copyright protection to be granted to original works in a specified manner. The Copyright Act is in compliance with these obligations. The treaties allow exceptions, catering for the public interest, to be made to the scope of protection conferred by copyright, only in clearly circumscribed circumstances, namely when the so-called 'three step test' can be satisfied. The three-step test requires that:

(1) the exceptions may only be granted in certain special cases.

(2) an exception must not conflict with the normal exploitation of the work.

(3) an exception must not unreasonably prejudice the legitimate interests of the rightsholder.

These tests must be applied consecutively, in the specified order. In other words, if the first test is not met, that is the end of the matter, and so forth.

Three-step test and arbitrary deprivation

The upshot of the aforegoing is that an exception to the copyright in a work that does not pass the three-step test will amount to an arbitrary deprivation in respect of that item of property, as provided for in s25 of the Constitution. In terms of the section, no law may breach this.

The equation is straight forward: an exception that does not comply with the three-step test is unconstitutional.

Exceptions to copyright

The Copyright Act currently provides for various exceptions to copyright in sections 12 to 19B. For the major part, these exceptions are taken straight out of the Berne Convention, and they meet the three-step test.

The principle applied by the Act is known internationally as 'fair dealing' with a work. Each exception is detailed in the legislation and there is a so-called numerus clausus, or closed list, of such exceptions. The list is now outdated and must be extended or amplified by further clearly defined exceptions that meet the three-step test, in order to meet contemporary reasonable requirements.

The fair dealing principle in respect of exceptions to copyright is applied in the vast majority of countries in the world. The copyright law of the USA, on the other hand, applies a different principle to exceptions, known as 'fair use'. This principle is only applied in a handful of countries which are disposed to follow the American lead. 'Fair use' entails the empowerment of the court hearing a copyright infringement matter to decide whether, on the facts of the particular case, it is fair to condone the defendant's infringing conduct. Certain criteria that the judge must consider are specified, but in the final analysis, the judge is given a wide, almost unfettered, discretion to excuse just about any conduct in respect of a work from being copyright infringement on the basis that it is 'fair use' of the work. The uncertainty brought about by this system is manifest. The parties to a dispute, and the public at large, will only know the answer to this question in each specific case once the case has been taken through to its final conclusion and all appeals have been exhausted, a process that could take several years from the commencement of the dispute.

It is widely accepted that the 'fair use' doctrine does not meet the three-step test. This seems self-evident, since it defies logic that a judge's general power to make an ad hoc discretionary ruling on the particular facts of a case can qualify as a "certain special case" for purposes of copyright legislation, and as required by the treaties.

It must be pointed out that every exception made to copyright comes at the expense of the author or copyright owner of the work. His/her right to derive remuneration in respect to the particular right in the bundle is extinguished or diminished. This deprivation should not be granted lightly, nor should its ambit be wider than is necessary in the circumstances. The deprivation should only be imposed where it is clearly in the public interest. Before granting an exception, the legislature must weigh up the rights of the author/copyright owner against the public interest. This entails applying particularly tests 2 and 3 of the three-step test. If too liberal an approach is adopted towards the granting of exceptions, the incentive provided to authors to produce original works is taken away and the public interest suffers in the long run due to a decline in the production of works, which impacts on the development of the arts and sciences.

In the CAB, the legislature seeks to bestow generous bounty on the public at the expense of the author, and in apparent disregard of his/her treaty-guaranteed rights. The result is that the balance between authors' rights and the public, who become free riders, is thrown drastically out of kilter. In the process, the legislature is riding roughshod over the threestep test and breaching our country's international obligations.

Novel exceptions

Section 13 of the CAB deals with the question of exceptions. It introduces various new sections containing novel exceptions.

The proposed new s12A causes the undisguised invasion of the alien American fair use doctrine into our law. It allows judge-made fair use measures to become law and, as stated above, it offends against the Berne Convention and TRIPS. It thus furthers arbitrary deprivation of property and is contrary to s25 of the Constitution. It should be deleted in its entirety.

To the extent that s12A's subject matter is not covered by the proposed new sections 12B to 12D (there is presently a measure of duplication of s12A in them), these sections should be amended to incorporate some of the examples contained in s12A. This situation highlights the fact that sections 12B to 12D, which are essentially in the nature of 'fair dealing' sections, are overlaid by the 'fair use' provisions of s12A. Virtually every country in the world opts for one or the other of these systems. The CAB employs both, which is anomalous and excessive.

The new sections 12B and 12D introduce new 'fair dealing' type exceptions and vary some of the existing exceptions. Each of these exceptions must be tested against the three-step test and where they do not satisfy that test, they must be removed or varied. By way of example, s12(1)(i) allows the making of a personal copy by an individual of entire works for non-commercial use without any qualification that the activity must be fair. Allowing unauthorised copying to this extent would destroy the market for most books. The exception does not meet tests 2 and 3 of the three-step test and the provision is unconstitutional.

Similarly, s12D(1) permits a person to make multiple copies of works for educational and academic purposes, provided the copying does not exceed the extent justified by the purposes. This could allow a lecturer to make copies of all the salient parts of a textbook for each member of his class of one hundred students, thus making it unnecessary for them to each purchase the textbook. This could be justified on the basis that each student requires a copy of such material in order to follow the course. The sales of textbooks could virtually dry up in these circumstances, and the businesses of academic publishers and the livelihood of academic writers would be mortally affected by such activities.

Conscientious application of the three-step test to these new exceptions will result in a large number of them not passing muster. The legislature appears to have given scant attention to the three-step test, assuming that it is aware of its existence and applicability.

Conclusion

The CAB is a poor piece of draft legislation. It is infested with anomalies, inconsistencies, and incorrect or imprecise terminology and concepts.

Above all, it is unconstitutional in many respects, as highlighted above. It must be reviewed in its entirety and redrafted by a committee of true copyright experts.

'Footing the Bill' as prefaced above comes to the fore in the following respects:

(a) The CAB is detrimental and impoverishing to authors and copyright owners, and comes at a severe cost to them, which they are expected to pay.

(b) The CAB does damage to constitutional property rights and puts the boot into the Bill of Rights.

(c) Informed commentators are amply justified in severely criticising the CAB and putting the boot into it.

(d) The CAB and the drafters warrant being "given the boot" and replaced. We are entitled to expect and to receive delivery of a firstclass Bill and should not have to accept the defective Bill which the legislature appears to find sufficient.

(e) Bearing the cost of the constitutional litigation, for both the state (the tax payer) and private parties, which will surely follow in the event that the Bill, in substantially its present form and state, becomes law.

Professor Dean is Emeritus Professor of the University of Stellenbosch and a practising Attorney of the High Court of South Africa.