Publishers’ association of south africa

THE NATURE OF INTELLECTUAL PROPERTY RIGHTS

INTELLECTUAL PROPERTY RIGHTS (IPRS) are the rights granted by statute law to the originators of what might be referred to as ‘the products of the mind’, and which give the author, or creator, a qualified monopoly over the ways in which the created work might be used or exploited.
Intellectual property is divided into four branches: patents, trademarks, designs (so-called ‘industrial property’) and copyright. There are a number of fundamental principles common to all the intellectual property rights, but this Report, emanating as it does from the print industries, is concerned only with copyright as this is the branch of intellectual property which shapes the environment of those industries.

General Principles

Although copyright legislation differs from country to country – sometimes fundamentally, sometimes merely in the detail – there are certain central principles which are universally agreed and enshrined in international treaties and national legislations:

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  Remunerating creators: the fundamental principle of copyright is to provide an incentive to produce more creative works by providing creators with a fair return for their labours. Copyright is the indispensable remuneration for the creators’ work, allowing them rightfully to enjoy the fruits of the labour that created the work.
  

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  Encouraging creation: copyright in theory allows the production of intellectual works of added intellectual value to be furthered by giving creators the assurance that the goods they create are protected, thus ensuring that they get a just reward for their work and providing a stimulus for creative investment. In this way, the supply of intellectual products and their appropriate distribution is enhanced.
  

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  Spreading ideas: copyright is an instrument of cultural policy that is also designed to support the spread and movement of ideas and of culture. So considered, authors’ rights and the limitations on these rights are the two levers of this policy.⁸ And so, at the same time as copyright confers rights upon authors, it places limitations on those rights in the interests of due access to information and knowledge. Copyright is not designed to prevent the dissemination of creative works and knowledge products; on the contrary, it is copyright legislation that ensures that these works are available, but in a way that protects the rights of their creators.
  

Lying behind copyright law is the recognition of the intrinsic difference between intellectual products and other products. The report by the UK Commission on Intellectual Property Rights sums up that difference as follows:

A characteristic of knowledge is that one person’s use does not diminish another’s (for example, reading this report). Moreover, the extra cost of extending use to another person is often very low or nil (for example, lending a book or copying an electronic file). From the point of view of society, the more people who use knowledge, the better because each user gains something from it at low or no cost, and society is in some sense better off. Economists therefore say that knowledge has the character of a non-rival public good.
The other aspect of knowledge, or products embodying knowledge, is the difficulty – often intrinsic – of preventing others from using or copying it. Many products incorporating new knowledge can be easily copied. Probably most products, with sufficient effort, can be copied at a fraction (albeit not necessarily small) of the cost it took to invent and market them. Economists refer to this characteristic as contributing to market failure. If a product takes a considerable effort, ingenuity and research, but can be copied easily, there is unlikely to be sufficient financial incentive from society’s point of view to devote resources to invention.⁹

Copyright as a Human Right

The creator’s monopoly is based on a compromise between creators’ interests and the interests of society at large, which demands the open movement of ideas, information and commercial exchange.¹⁰ That compromise is a delicate balance, and one which will be kept in mind throughout this Report. If copyright can be viewed principally as a set of economic and commercial rights, it is also important to recognise that it also has political and social implications, for according to the United Nations, it is a fundamental human right. In 1948 the General Assembly of the United Nations passed the Universal Declaration of Human Rights. According to Article 27(2), ‘Everyone has a right to the protection of the moral and material interest resulting from any scientific, literary or artistic production of which he is the author’, balanced by the right of the community ‘to share in scientific advancement and its benefits’. ¹¹

This balance, between the author’s moral and economic interests and the requirements of society, provides an ongoing tension, which lies at the heart of nearly all the controversies regarding copyright. The role of the legislator is to fine-tune opposing – and often conflicting – positions, always maintaining the balance.
It is worth noting that, although South Africa has one of the most advanced and enlightened constitutions in the world, intellectual property rights are not recognised in the constitution as a fundamental right. The Constitutional Court has ruled that intellectual property rights are subsumed in the general property provisions of the Constitution. This is problematic, according to leading copyright lawyer, Owen Dean, given the essential differences between intellectual property rights and other property rights.¹² It is arguable that a real commitment to the importance of intellectual property rights to South Africa’s development should be reflected in the Constitution.

Moral Rights

Moral rights are different from the economic rights that ensure the copyright owners’ right to control the exploitation of the work.

Moral rights and rights of paternity are infringed if the author is not identified as the creator, and they are also infringed by someone distorting, materially altering or mutilating the work to the extent that the author’s reputation is tarnished. In practical terms, a publisher needs to protect the integrity of the work in the publication process and not allow it to be changed in such a way as to harm the author’s integrity or reputation.
Duration of Copyright
The author’s monopoly over the exploitation of the work is of limited duration. In the United States, the recent extension of the duration of copyright from 50 to 70 years after the author has died, generated controversy. Rights owners – more particularly the large corporations owning the lucrative rights in Walt Disney creations such as Mickey Mouse – were in favour of the extension. Members of the public, seeking for themselves the rights to such economic exploitation, were against it. The duration of copyright, however, is not an issue considered in detail in this Report. We raise it merely to demonstrate the delicacy of the balance which always has to be maintained taking into account the legitimate demands of the various sectors of society. ¹³ In South Africa the term of copyright is 50 years from the death of the author.
THE STATE OF COPYRIGHT IN SOUTH AFRICA –

A BACKGROUND

WHILE IT IS GENERALLY RECOGNISED nationally and internationally that South Africa’s copyright legislation is reasonably sound, there are nevertheless issues that cause concern. There is consensus in government and among rights owners and some rights users that the position in South Africa is not satisfactory.¹⁴

The South African Copyright Regime

Copyright in South Africa is governed by the Copyright Act No. 98 of 1978, and the regulations promulgated in terms of Section 13 of the Act. Legislation follows broadly the United Kingdom and Commonwealth copyright traditions.

Copyright Infringement

South Africa is perceived by local and international rights holders as a country with high levels of copyright infringement, particularly regarding photocopying in schools, colleges, technikons and universities. The levels of copying are perceived to be high enough to threaten the viability of local industries and contribute to unnecessarily high prices for books, as a result of a considerable erosion of the economies of scale.¹⁵

As it emerges from copying practices encountered by industry members and international observers, it would seem that intellectual property is not highly valued by many South Africans and illegal copying is not always seen as reprehensible (see the discussion of copyright observance and infringement in Chapter 2).
Improvements are therefore not only a matter of legislation and enforcement (see Chapter 4), but of the creation of a national culture that recognises the value of the creative industries, in this case particularly the book industries, and the vital role of creators in national growth and development.
While justifications for photocopying are often based on the perception that book prices are too high, copying books instead of buying them is probably the single greatest factor in generating higher prices for locally published products, as economies of scale mean that higher print runs can create a dramatic reduction in price.
Enforcement
Aggravating this state of affairs are legislative shortcomings that have been identified by local and international industry associations as inhibiting the effective prosecution of offenders, coupled with a lack of capacity in the criminal justice system for prosecution and enforcement.
A number of problems in South African copyright legislation have been raised in recent years by such bodies as the International Intellectual Property Association (IIPA) and local and international trade associations. These will be discussed in further detail below (see Chapter 5). The problems most commonly identified, and articulated in the 2003 IIPA report, are:

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  The damages that can be awarded in criminal cases of infringement are insufficient to act as a deterrent to future infringement. Local and international industry participants have been arguing for some time for the introduction of statutory damages in criminal proceedings as a deterrent and as recompense for authors and publishers who suffer copyright violations.
  

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  The requirements for providing evidence to prove ownership and the existence of copyright are onerous. This subjects copyright owners to overly costly and burdensome procedural hurdles, placing obstacles in the way of civil and criminal prosecution of piracy.
  

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  A set of regulations providing concessions for libraries and educational institutions, which are ambiguous, contradictory and virtually unworkable in practice, further undermines the effectiveness of the law.
  

As far as copyright legislation is concerned, the questions to be asked are:

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  In what ways do the present legal and judicial systems inhibit the growth of South African writing and of the publishing industries?
  

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  And what impact does this have on the ability of the print industries to deliver the country’s need for affordable and relevant information and knowledge products and achieve the related targets for educational and cultural development?
  

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  How can the identified failings be rectified and a more favourable environment be created and nurtured?
  

These are the fundamental questions the Report will seek to answer.
However, the state of copyright in South Africa is not only a matter of legislation and effective enforcement. This Report argues that the social, economic and cultural milieu in which the copyright industries operate is of vital importance. The existence of an effective copyright environment, leading to healthy growth in the cultural industries is reliant upon a context in which intellectual and creative products are valued.
It needs to be understood, however, that the legislative context is only one facet of the intellectual property regime in the country and this report will need to cast its net wider, to look at the cultural, social and developmental context in which IPRs operate in the country. Stakeholders in the print industry sector in South Africa feel that there is an urgent need for education and awareness campaigns on copyright in South Africa.

Copyright in the Social Context

The development of local writing and knowledge production in a society depends to a large extent on a cultural and educational context that includes literacy levels, reading development and the value placed by society on intellectual products and intellectual property. South Africa’s apartheid history has served to retard both literacy and appreciation of the value of reading, for the apartheid education system placed the emphasis on the acquisition of paper qualifications at the expense of learning. Moreover, books and reading became damagingly associated with the Bantu Education textbooks supplied to schools, often the only books to which many children ever had access.

It is commonly understood that only 5% of South Africa’s population buys books with any regularity. The situation is aggravated by serious problems in the provision of library services, which should provide access to reading materials for poorer readers and should be a core contributor to the growth of a reading culture.
The low levels of reading also mean, of course, that there is considerable growth potential for print products in the South African market. The central problem identified by the PICC is that print products are not reaching the majority of the population, and the core strategic goal of the industry cluster is to expand access to and use of print products in South Africa to a much wider sector of the population.¹⁶

Information and Education

It is apparent from the numerous queries that regularly reach the authors of this report that authors and many publishers (particularly new publishers) have little understanding of copyright, how it works, its value and importance.

Perhaps it would not be going too far to comment that, generally, South African publishers’ knowledge of rights issues is in need of improvement, and that publishers themselves recognise this to be so. This does not only affect the legal and professional relationship between publishers and authors, but also that between publishers and publishers. It all boils down to a failure in many cases to prioritise the management of intellectual property as one of the cornerstones of the publishing business.
A vital part of the print industry sector’s strategy for a healthy copyright environment is therefore the encouragement of information and education campaigns, as well as training initiatives within the industry sector, to create a higher profile for copyright issues and a greater understanding of the value of copyright.

COPYRIGHT AWARENESS AND EDUCATION CAMPAIGNS We are indebted, for the basis of the following notes and suggestions for such campaigns, to the paper ‘Report on Copyright Awareness to the Copyright Committee on Copyright Awareness and Education’, prepared by Amanda Kornfeld for the International Publishers’ association in July 2002. The first steps in copyright awareness campaigns are to identify the message to be communicated and the target audience. A simple working definition of copyright awareness might be: existence, importance and consequences. Existence: many people are completely unaware of the concept of copyright. Importance: acknowledgement of the existence of copyright is worthless if people do not appreciate its value. Consequences: the audience must be made to understand both the deleterious effect of infringement on creativity, and the punitive consequences to themselves. The target audience: Local industry players – if the IP industries do not fight for their intellectual property rights because they lack understanding of how copyright can help them, there is no lobby interest to support copyright development. Education in copyright issues for industry participants is therefore an essential component of a strong copyright regime. The general public can be categorised according to whether they are engaged in work which can easily lead to infringement, or work involving intellectual property. The priority group includes policy-makers, the judiciary, the police, and the education sector. WIPO has suggested that a solid public awareness campaign requires private sector investment as well as private sector-government consultations and partnerships. The mass media can play a useful role, as it has broad outreach to society at all levels but, again, needs to be educated in order to do so. Finally, social and cultural obstacles need to be examined with sensitivity, and taken into account when planning a campaign.

There is a need for heightened copyright awareness and educational programmes throughout the industry and for strong rights owner organisations to drive them. It goes without saying that the general public is even more poorly informed. The thrust of legislation and its enforcement depend ultimately on acceptance by the public, and thus broad-based awareness programmes supported by the industry sector and Government are not only necessary, but also long overdue.

The Moral Basis of Respect for Copyright
It is important to recognise that legislation alone will not further the economic development of the creative industries and counter copyright infringement unless the consumer has the will to cooperate – the history of the software industry more than adequately demonstrates this. It is a trite point that unless public opinion is behind the law, enforcement is problematic.
What needs to happen in South Africa is that the value of the products of the mind to the country becomes widely recognised and copyright infringement becomes regarded as unacceptable and morally reprehensible – something that harms authors and impedes cultural and educational progress.
Discussions of copyright issues need to be related to the broader developmental issues that are at the heart of this Report. Writers need to be in the front line of awareness campaigns if the moral basis of respect for copyright is really to be understood by government and the community. Promotion of the value of the industry is needed if government and the community are to take the industry seriously and respond to its IP protection needs.
Copyright Awareness
It is striking that in the print industries sector in South Africa, there is very little information available on copyright in South Africa and low levels of copyright awareness. In comparison, Australia has extensive copyright resources in print and on the Internet and these documents reflect a very high level of discussion and participation in copyright issues and campaigns in the publishing sector. ¹⁷
Industry/Government Interaction on Copyright Issues
A review of the recent legislative history of copyright issues in Australia demonstrates very active interaction between government and the copyright industries, with extensive stakeholder input into proposed legislative reforms, and government responses to these industry position papers.¹⁸

In contrast, communication between South African industries in the print sector and the Department of Trade and Industry, which is responsible for IP issues, has in recent years been poor (see Chapter 4). Copyright expert Owen Dean claims that copyright legislation in South Africa is in a state of paralysis and that urgent action is needed by industry organisations and alliances to get a momentum going.¹⁹ There has been a lack of dialogue around copyright issues, with sporadic interventions by the DTI followed by periods of inaction and lack of communication. At the same time, the industry sector itself has failed to put pressure on government, partly because of a lack of organisation on the part of rights owners.

The imperative for providing a protective legal environment for creative endeavour of course extends beyond the cultural and creative industries, and is of vital importance for national economic development in the context of the global knowledge economy. While this is acknowledged, to an extent, by the Department of Trade and Industry, in its creation of a Cultural Industries directorate, there appears to be little acknowledgement by the DTI of the urgent need to develop copyright legislation to support economic growth and global positioning.²⁰
The print industries sector believes that if there is to be genuine growth and development for authors and publishers, the creation of a culture of respect for creative and intellectual products will need to be accompanied by an effective legislative environment in which creative effort can be rewarded, copyright violations can be curtailed and piracy brought under control.
RECOMMENDATIONS

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   The print industry sector needs to become more active in forging alliances both within the industry sector and with other copyright industries to promote copyright issues and to lobby for national policy initiatives and legislative reform.
   

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   However, the industry sector cannot achieve this alone. Active government engagement is needed, in a transparent and consultative process, to ensure the creation of an effective copyright regime that will
   

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  Foster the growth of the copyright industries;
  

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  Provide an effective framework for information and knowledge dissemination to meet national needs;
  

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  Provide an enabling context for South Africa’s international trade negotiations.
  

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   If the print industries are to make their maximum contribution to the country and its cultural and economic growth, attempts to improve the copyright framework in South Africa will need to be linked to:
   

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  Active programmes for the growth of a reading culture;
  

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  Support for and promotion of the rights of authors;
  

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  Educational programmes on the value of copyright;
  

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  The expansion of library services.
  

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   From the perspective of industry strategy, this could include:
   

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  Initiatives to produce information and raise the profile of copyright issues;
  

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  The promotion of training in copyright for publishers and rights owners;
  

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  Active interaction with readers and consumers to promote the value of copyright and copyright compliance.
  

COPYRIGHT AND ELECTRONIC MEDIA

THE ADVENT AND RAPID SPREAD OF DIGITAL MEDIA in the last decades have posed a number of challenges in the copyright arena. The speed and ease with which digital media can transmit information across the globe undoubtedly offer opportunities for the lower-cost and widespread dissemination of information (at least where hardware availability and connectivity allow), but it also poses threats to rights owners because of the potential for creating limitless, untraceable copies at low cost. Digital content can also be altered very easily, posing threats to the moral rights of authors as well as making it difficult to track infringements.
On the other hand, rights users fear the erosion of fair dealing rights, given the potential to block access to free information with a pay-per-use supply model. Technology offers not only the potential for freer dissemination of content, but also for greater control of that content, leading many users to fear a loss of the rights that they have in relation to print products.
Across the world, different countries have grappled with the question of legislating for this new environment, debating the issue of necessary legislative change to deal with digital media and the challenges posed. Given the rate of growth of the digital knowledge economy worldwide, this is a matter of vital national importance for any country that wants to have its own voice in a rapidly expanding global information market.
South Africa has fallen badly behind in addressing the questions of digital copyright law. While the print industry sector believes that attention to the state of copyright law for the print media should be the primary concern in South Africa at the moment, it nevertheless urges stakeholders in the print industry value chain and Government to begin the process of creating policy for electronic copyright in South Africa.
The growth of digital media poses urgent policy concerns for countries wishing to develop their knowledge and technological industries. The Digital Divide can only widen in the absence, in a developing country, of a coherent intellectual property policy, linked to national initiatives for technological growth.