Endless wrangles in Kenya’s collective management system have made us all experts in copyright law. The thorny question of how and to what extent key players in the collective administration of copyright and related rights must comply with the Constitution remains a hotly debated topic. This brings us to a recent judgment by the High Court in the case of Laban Toto Juma & 4 Others v. Kenya Copyright Board & 2 Others Consolidated Kakamega Petition No. 3B of 2017 delivered on 13 July 2018. A copy of this High Court judgment is available here. Not surprisingly, both sides in this see-saw legal battle are claiming victory following the court’s final verdict. So, this blogpost will attempt to examine the key issues tackled by the court in its judgment as well as some of the questions that have been left unanswered.
The three-judge bench that delivered the above judgment was constituted following the consolidation of three separate constitutional Petitions filed in the High Court at Kakamega and Kisumu. First, Kakamega Petition No. 3B of 2017 was lodged by two veteran musicians and members of the embattled Music Copyright Society of Kenya (MCSK) who challenged the constitutionality of the decision taken by Kenya Copyright Board (KECOBO) not to register MCSK as a collective management organisation (CMO) and instead approve the application for registration of Music Publishers Association of Kenya (MPAKE) as the new CMO to replace MCSK. The petitioners claimed that this decision by KECOBO violated their rights under Articles 36 (freedom of association), 40 (property) and 47 (fair administrative action) of the Constitution.
Second, Kisumu Petition No. 11 of 2017 was filed by an association of bar owners and one restaurant against MCSK. The petitioners argued that MCSK had no legal right to collect public performance license fees from users of copyright in musical works since the body was no longer registered as a CMO by KECOBO. Similarly in the third case, Kisumu Petition No. 15 of 2017 was a suit challenging the legality of MCSK’s collection and distribution of royalties following the expiry of its CMO registration status on 31 December 2016. It is worth noting that this last petition was filed by a member of MCSK, a fact which is not surprising considering that MPAKE itself was formed by ex-MCSK members who were unhappy with the status quo.
In its defence, KECOBO claimed that its decision not to renew MCSK’s registration for the year 2017 was because the CMO had failed to comply with the conditions of its 2016 registration license. On expiry of MCSK’s registration, KECOBO invited applications for a new CMO to replace MCSK. KECOBO explained that MCSK had submitted a fresh application but failed to attach its audited accounts for the year ended 30 June 2016 as required by law as well as a statement of royalty collections and distributions made during that period. This lack of audited accounts is apparently one of the reasons why KECOBO declined to renew MCSK’s 2016 registration as a CMO in 2017. In court, MCSK admitted its failure to submit audited accounts on time but claimed that it wrote to KECOBO giving reasons for the failure. MCSK claims it finally submitted its audited accounts on 13 March 2017 and that it was invited for a meeting by KECOBO on 15 March 2017 where the CMO presented its application.
On 27 March 2017, MCSK claimed that it received a letter from KECOBO notifying it of the Board’s decision not to register it as a CMO. According to MCSK, the letter raised several issues with regard to its application namely ‘the fact that MCSK’s Board expenses went beyond the cap of Kshs 8 million set by KECOBO, that its financial report was not a true reflection of the state of affairs of accounts and that the sum of the royalties and beneficiaries reflected as from revenues from the previous financial years.’ It was MCSK’s contention that KECOBO failed to give the CMO an opportunity to be heard on the issues raised in the letter of 27 March 2017. As such, MCSK claimed that it was condemned unheard by KECOBO which acted as judge, jury and executioner in its own cause. Furthermore, MCSK argued that KECOBO’s action effectively compelled the CMO’s members to join MPAKE in order to receive their royalties thus violating its members’ right to freedom of association as well as depriving them of their right to property. Naturally, MPAKE disagreed with MCSK and urged the court to find that its registration as a CMO was lawful and procedurally fair. Similarly, the copyright users in their respective petition challenged MCSK’s legitimacy as a CMO, thus bolstering the case by MPAKE and KECOBO.
According to the court, there were two central issues for determination, namely: (1) whether section 46 of the Copyright Act violates the fundamental rights and freedoms in the Bill of Rights and as such is unconstitutional and; (2) whether the decision by KECOBO to register MPAKE as a CMO violated Article 47 (1) of the Constitution on fair administrative action.
With regard to the first issue, readers may know that section 46 of the Act outlines the scope of KECOBO’s power to approve applications for registration of collecting societies as well as the duration of registration certificates for CMOs once issued by KECOBO. In particular, this section contains the so-called ‘one society per right’ rule under section 46(5) which states that: ‘The Board shall not approve another collecting society in respect of the same class of rights and category of works if there exists another collecting society that has been licensed and functions to the satisfaction of its members.’
The court found that ‘the Act does not restrict the rights of any copyright holders from engaging with a CMO of their choice or compel them to join an organisation against their choice or participate in the activities of the organisation.’ In arriving at this finding, the court distinguished the provisions of section 46 from those of the former section 30A of the Act on the right to a single equitable remuneration, the latter which had been held to a violation of the right to freedom of association by the same court in Mercy Munee Kingoo & Anor v. Safaricom Limited & Anor Malindi Petition No. 5 of 2016, discussed on this blog here. Interestingly, the court in the present case held that ‘even assuming section 46 of the Act violates the freedom of association, the violation is justified under Article 24(1) of the Constitution.’ Article 24 of the Constitution lays down a test for the limitation of rights and fundamental freedoms. Having made this finding and holding, the court disappoints supremely by not applying the Article 24 test to the present case.
Similarly, the court had to consider whether section 46 violates the petitioners’ right to property under Article 40 of the Constitution. The MCSK petitioners argued that the effect of non-registration of MCSK as a CMO was that they were being deprived of income as holders of intellectual property rights since MCSK was prevented by law from collecting license fees and distributing royalties. In dismissing this argument by MCSK, the court stated, in part, as follows: ‘we find nothing in the Act that limits the ability of MCSK to collect royalties on behalf of the petitioners and as KECOBO has pointed out, the licensed CMO [MPAKE] is required to collect royalties on behalf of non-members and it is up to MCSK to decide how it wants to collect royalties on behalf of its members.’
Overall, in determining this first issue, the court appears to have largely deferred to KECOBO and not really exercised its own power to interpret and evaluate KECOBO’s interpretation and application of the Copyright Act vis-a-vis the Constitution with regard to regulation of CMOs. This may well be a possible ground of appeal for MCSK and its members. In this regard, MCSK would do well to consider emerging case law and precedents from several jurisdictions that seem to question the raison-d’etre/legality and/or constitutionality of the ‘one society per right’ rule in collective management of copyright. By not interrogating the MCSK petitioners’ plausible claims of human rights violations through enforcement of section 46 of the Act, the court appears to have abdicated its judicial law-making powers to suggest possible reforms or direct the Executive to consider provisions for enactment to end the perennial feuding between the regulator and the regulated.
With regard to the second issue, the court appears to demonstrate some of the judicial independence missing from its determination of the first issue. The question before the learned bench was whether the process of awarding the license to operate as a collecting society to MPAKE on 27 March 2017 was consistent with Article 47(1) of the Constitution on fair administrative action as well as the provisions of the Fair Administrative Action Act No. 4 of 2015 (FAA Act). In particular, section 5(1) of the FAA Act provides as follows:
‘5. (1) In any case where any proposed administrative action is likely to materially and adversely affect the legal rights or interests of a group of persons or the general public, an administrator shall-
(a) issue a public notice of the proposed administrative action inviting public views in that regard;
(b) consider all views submitted in relation to the matter before taking the administrative action;
(c) consider all relevant and materials facts; and
(d) where the administrator proceeds to take the administrative action proposed in the notice-
(i) give reasons for the decision of administrative action as taken;
(ii) issue a public notice specifying the internal mechanism available to the persons directly or indirectly affected by his or her action to appeal; and
(iii) specify the manner and period within which such appeal shall be lodged.’
Not surprisingly MPAKE sought to convince the court that the public notice requirements itemised in the above section of the FAA Act are not applicable to KECOBO’s actions in relation to registration of collecting societies under the Copyright Act. However the court disagreed and found that actions taken by KECOBO under section 46 of the Copyright Act must comply with the above section of the FAA Act. In arriving at its conclusion, the court stated as follows:
‘Although MPAKE raised an attractive argument in regard to the capacity of the 1st and 2nd petitioners as shareholders of MCSK to participate in the proceedings in their own right, we hold that the right of public participation is wider than the right of the petitioners as shareholders of MCSK. It is a right of the public to participate in the decision-making process that affects them. (…) In the context of the Act, the provisions of section 5(1) of the FAA assume greater significance due to the fact that only one CMO is licensed to represent a particular class of right holders and category of works. Those right holders include non-members of CMOs who must be able to ventilate their views and have an interest in whichever CMO is selected to act in their behalf.’
In this regard, the court goes further to note that the Act and Regulations do not contain sufficiently clear timelines and steps for application and registration as a collecting society. Therefore the court proposed that such regulations and rules be put in place so as ‘to avoid allegations of unfairness’. Shameless plug alert: readers of this blog recall that this issue featured prominently in the Master of Laws thesis by yours truly available online here and subsequently in a peer-reviewed article in African Journal of Intellectual Property available here.
Finally, the court ordered MCSK to account to KECOBO for all the license fees collected and royalties distributed since 1 January 2017 no later than thirty days from the date of the judgment. This is an important relief that protects both MCSK members and non-members whose works may have accrued royalties that were collected by MCSK during the 2017-2018 period. These royalties may not have necessarily been the subject of KECOBO scrutiny since MCSK was unregistered and thus not under the former’s supervisory purview. More importantly, the court is demonstrating deference to KECOBO as the copyright administrator.
Immediately following the judgment, MCSK published the above public notice in one of the national newspapers stating that ‘only MCSK is legally issuing copyright licenses’ as the exclusive assignee and licensee of ‘over 100 Million copyrighted musical works together with details of over 10 Million audiovisual productions from over 14,000 Kenyan Copyright Owners and over 120 Affiliate (Associate) Societies from across the world.’ Unfortunately, this latest public notice by MCSK is no different from its earlier public notices last year save for a legitimate basis to discredit KECOBO and MPAKE over the latter’s registration as a CMO. A few days later, KECOBO responded to MCSK’s public notice by issuing a public notice of its own published online on 17 July 2018. A copy of this KECOBO public notice is pictured below.
The confrontational nature of both sets of public notices by MCSK and KECOBO is a clear sign of turf wars to come. There are two points that immediately come to mind: first, the role of section 46(1) and second, the current status of MPAKE. On the first point, section 46(1) remains unenforced by KECOBO and unchallenged by MCSK despite its primacy in the framework for regulation of copyright collective management. On the second point, KECOBO claims that ‘the court declared the process of issuing a license to MPAKE on 27th March 2017 as not having complied with section 5 of the FAA Act. However, the parties and the court did not raise any issue with the process of issuing a license for the year 2018.’ Some may disagree with this interpretation of the judgment, particularly since it is presumed that MPAKE’s application for the year 2018 would have been an application for renewal of registration under section 15(3) of the Copyright Regulations as opposed to an application for registration under section 15(1) and (2) of the Regulations. More fundamentally, it may be plausibly argued that the spirit of the judgment was that KECOBO would conduct a fresh process with public participation thus restoring all parties to the position they would have been in around February 2017 when KECOBO first invited applications.