Publishers’ association of south africa
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| The Negotiation of Collective Licensing in South Africa – A History
The negotiation of the blanket licences through the higher education system was a stormy process. While PASA readily accepted the blanket licence developed by DALRO, the prospect of having to pay considerable amounts of money to publishers to photocopy material previously photocopied gratis was not warmly welcomed by the universities and technikons in general. Eventually, the institutions had to choose between compliance and the possibility of prosecution, and the blanket licence was the only vehicle for compliance in institutions without the infrastructure to license transactionally. Eight institutions, four universities and four technikons, acceded to the blanket license in 1999. One of the eight took the opt-out clause in the licence at the beginning of 2002, but a further two universities and two technikons signed during 2001 and 2002.93 In 2002, there were nine HE institutions holding blanket licences. DALRO’s blanket licence distribution for 2002 took place in May 2003, and the South African academic publishers between them received over R1 million, which sum represents approximately 50% of the total sum available for disbursement. In 2002, there were 15 universities not holding blanket licences. Of these, two were properly compliant. Four licensed transactionally from a satisfactory to very satisfactory extent, four licensed transactionally to some reasonable extent, and only five licensed little or nothing at all.94 Government Plans for Supervising Collecting Societies In May 2001, the Office of the Registrar for Patents, Trade Marks and Copyright convened a workshop to discuss the regulation of collecting societies in South Africa. The DTI was worried about the practices of collecting societies. The cause of this anxiety was public perception (boosted by inflammatory articles in the press about the deaths, in poverty, of people’s musicians) that performing artists and composers of music were being cheated out of their rightful earnings. It is quite likely that DACST, under pressure from the artistic community, had requested the DTI to address the need for a regulatory framework for collecting societies to ensure that performing artists get their fair share of needle time royalties, instead of their falling in their entirety to the recording industry. Whether or not the real source of the problem was the unfavourable contracts many had concluded with recording companies, signing away their economic and even moral rights, the spotlight nonetheless fell on the collective management of performing, recording and broadcasting rights (the so-called ‘neighbouring rights’). Collecting societies for copyright found themselves in its glare as well. The rationale for this workshop on collecting societies was evident from the invitation: The Department of Trade and Industry has placed before Cabinet the amendments to [the Copyright Act].95 The purpose of the amendments was to effect changes to the collective management of copyright and neighbouring rights ... Cabinet has approved the amendments with a rider i.e. the exercising of these copyrights ... should be preferably by statutory collecting societies which should account, on distribution of royalties and participatory democracy by members of a particular collecting society, to a competent authority (an arm of the South African Government). In discussion at the workshop and in the working groups which met at the end of the workshop session to discuss conclusions, it was agreed – and endorsed by the Registrar’s office – that the ideal situation would be for there to be one collecting society for each rights owners’ grouping; that ownership of collecting societies should be in the hands of rights owners in order to ensure transparency and legitimacy; and that the government should not own or control collecting societies, but play a regulatory role, to ensure transparency and prevent abuses. Workshop participants pointed out that there was the potential for a conflict of interest if the government tried to regulate tariffs, given that the government is in fact a major rights purchaser.96 Workshop participants received an introductory document containing the following statements: Intellectual property protection, which provides an adequate balance between the interests of rights owners and the public in general, has proven to be highly beneficial for investment, growth, job creation, cultural diversity, creativity and the entire economy ... this statement presupposes that:
The document’s starting point was that the collective management of copyright and neighbouring rights97 was necessary because individuals in general do not have the capacity to monitor all the users, to bargain with users and to collect a fair and equitable remuneration. In respect of reprographic reproduction rights, the document made it clear that ‘special public considerations’ govern the use of these rights, which provide a basis for certain ‘restrictions’ on the author’s exclusive right in accordance with Article 9(2) of the Berne Convention. Prejudice to the legitimate interests of the author must be ‘mitigated by equitable remuneration’. To explain what was meant by ‘prejudice mitigated by equitable remuneration’, the document approvingly provided examples from the Federal Republic of Germany, the Netherlands, Norway and the United Kingdom.98 These examples are salutory: the thinking behind citing them is that the bargain to be struck between rights owners and users is that exceptions should be granted only in return for payment. It was abundantly clear from the tenor of the meeting that Government was determined to impose some form of control over collecting societies. From the perspectives of the authors and publishers, and also from the perspective of the RRO, a regulatory mechanism stopping short of outright control would be a welcome development, so long as regulation is accompanied by the required enabling legal environment. DALRO, for instance, strongly supports limited regulation along the lines of the Canadian model in which collecting societies must be registered and tariffs must be filed annually at the Copyright Board; users can object to the tariff and if they do, the tariff is contested and the Board intervenes. An arrangement such as this would give the RRO the legitimacy it needs in order to promote and protect the best interests of its mandating rights owners. However, closing remarks by the DTI official at the abovementioned workshop contained the following of general relevance to the collective management of rights:
Concerning reprographic reproduction rights, it was said by the DTI official that although there are special public considerations such as the right to an education, users must not say they do not want to pay. They must pay, he said – but the cost is up for negotiation. So far, the DTI has made no move to legislate a regulatory mechanism for the RRO although efforts are in progress to draft legislation for the regulation of collecting societies for ‘needle time’ (as the Copyright Act has since been amended to re-introduce this neighbouring right, and regulations to amplify its operation are urgently required). A highly informative analysis by Professor Daniel Gervais of collective administration in Canada, contemplating the introduction of the extended collective licence (characteristic of the Nordic countries) could be instructive in South Africa where a number of scenarios are being contemplated.99 The publishing industry supports the proposals of the DTI for ownership and regulation of collecting societies. DALRO, for historical reasons, is owned and subsidised by SAMRO, the composers’ and lyricists’ collecting society, but the ideal situation would be ownership collectively by all classes of rights owners in literary, dramatic and artistic works. This would necessitate the organisation of these groups into associations capable of managing the complex process of disbursing royalties collected by DALRO to their respective memberships and of setting up means of also using those royalties for developmental purposes. This is a long-term view but, with the successful collective management systems of countries such as Norway, Canada and Australia in sight, South Africa should be taking the first steps towards it. Those steps could include government support of the academic and non-fiction authors’ association, and collaboration with the DTI in putting in place the enabling legal framework for the collective administration of rights. At other points in this Report we make reference to the heated debate occasioned by recent attempts to amend the Copyright Act and regulations, with the academic sector opposing efforts to accord stronger protection to creator communities on the grounds that educational needs override all other considerations. This debate has been both debilitating and inconclusive, leaving legislative reform stalled. One of the primary objectives of this report is to seek ways to end it and to get legislative reform back on track. The South African print industries, along with Government, therefore broadly supports the Canadian model of collecting society, which has government regulation to ensure transparency and fair pricing, but that still allows for voluntary participation, albeit with regulatory incentives to encourage maximum participation.100 International examples such as Canada and Australia demonstrate the value of a collecting society in helping to create a balance between the interests of rights owners and the needs of users. Moreover, in a context in which there is a high level of demand for customised content and for the ability to provide multiple copies for library and classroom use, a collecting society provides an effective way of achieving this without eroding the rights of authors and while still providing an affordable route for the user. Collecting societies can play a vital role in providing ease of access to information while ensuring fair rewards for authors and publishers. The degree to which a country enforces statutory licensing depends upon national policy approaches, negotiated between government, rights holders and rights users, particularly educational institutions. The ownership of collecting societies is an important adjunct to their policy role: in general, collecting societies are owned by rights owners, an important factor in their credibility in the eyes of rights users. Authors and other content creators are important stakeholders involved in collecting societies and their ownership. Money collected through collecting societies can make an important contribution to the advancement of copyright awareness, through publications and awareness programmes. Collecting societies such as Kopinor contribute to cultural development through projects funded from rights income. RECOMMENDATIONS
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