The Copyright (Amendment) Act 2014: The Good, the Bad and the Ugly

parliament of kenya by diasporadical

This blogger has received official confirmation that the Statute Law (Miscellaneous Amendments) Bill, 2014 passed by the National Assembly on 13/08/2014, was assented to by the President of the Republic on 28/11/2014 thereby bringing the Copyright (Amendment) Act 2014 into force. The Bill has effectively amended four sections of the Copyright Act, namely sections 22, 28, 33 and 46. A copy of the Bill is available here.

The Bill’s Memorandum of Objects and Reasons explains that the Copyright Act has been amended to “empower the competent authority to grant a compulsory licence for the publication or republication or broadcasting of works which are subject to copyright where it considers that the right holder withholds consent unreasonably. It [The Bill] also restricts the imposition of a tariff or levying of royalties unless approved by the Cabinet Secretary.”

It is recalled that four other sections in the Copyright Act were amended in 2012 in the exact same manner. Please see this blogger’s comments on the 2012 amendments here. What follows are this blogger’s thoughts on the 2014 amendments to the Act:

Section 22(5)

This is an amendment by insertion. The new subsection inserted relates to the principle of automatic protection under the Berne Convention for the Protection of Literary and Artistic Works (Paris Text 1971). Article 5(2) of the Berne Convention reads:

“The enjoyment and the exercise of these rights shall not be subject to any formality; such enjoyment and such exercise shall be independent of the existence of protection in the country of origin of the work. Consequently, apart from the provisions of this Convention, the extent of protection, as well as the means of redress afforded to the author to protect his rights, shall be governed exclusively by the laws of the country where protection is claimed.”

This blogger reckons that this amendment is aimed at counteracting the effects of section 36 of the Act which requires authentication of copyright works.

Section 28(5)

The amendment to Section 28(5) states that the blank tape levy shall be collected by KECOBO and then distributed to “the respective copyright collecting society registered under section 46”. This wording is problematic since no CMO has been registered to administer audio blank tape compensation from the private copying of musical works and sound recordings.

Currently section 28(3) as read with section 30(6) of the Act provide that that owner of the sound recording and the owner of a related right in the fixation of a performance shall have the right to receive fair compensation consisting of a royalty levied on audio recording equipment or audio blank tape suitable for record and other media intended for recording, payable at the point of first sale in Kenya by the manufacturer or importer of such equipment or media.

Section 28(4) as read with section 30(7) further provides that the royalty payable under the above subsection (3) shall be agreed between organisations representative of producers of sound recordings, performers, manufacturers and importers of audio recording equipment, audio blank tape and media intended for recording or failing such agreement by the competent authority appointed under section 48.
From the aforegoing, it is clear that the copyright owners of musical works have been systematically side-lined from receiving any compensation from the collection of audio blank tape levies within the Republic of Kenya.

With reference to international best practices, it is clear that Kenya’s current legislative provisions on private copy levying are not only illegal but more importantly unconstitutional. This line of argument has been explored by this blogger here.

Finally, this blogger wonders whether the reference to “the respective copyright collecting society registered under section 46” in the amendment creates an opportunity for establishing a Collective Agency for blank tape levy administration. In other jurisdictions, such Agencies do exist and are made up of all CMOs that represent concerned rights holders.

Section 33A

This is an amendment by insertion. The new section inserted officially introduces compulsory licensing in Kenyan copyright law. However this blogger has argued previously that section 30A in the 2012 Amendments was the Government’s successful move to unofficially introduce a compulsory licensing regime under the guise of the right to equitable remuneration.

Compulsory license is the term generally applied to a statutorily license to do an act covered by an exclusive right, without the prior authority of the right owner. This concept of compulsory licensing in copyright is derived from patent law, where the owner is forced to face the competition in market, similarly in copyright law; the copyright holder is subjected to equitable remuneration. One of the main reasons for introducing non-voluntary licenses is where the users of certain works have access to these works on terms which are known in advance and it is not practicable for them to locate right owners and obtain an individual license from them.

Article 9(2) of the Berne Convention provides the legal basis for compulsory licensing in copyright law. The Article reads:

“It shall be a matter for legislation in the countries of the union to permit the reproduction of such works in special cases, provided that such reproduction does not conflict with the normal exploitation of the work and does not unreasonably prejudice the legitimate interests of the author.”

This provision provides the Convention’s exclusive basis for compulsory licensing and provides for the conditions which should be met before a member country can entirely excuse a use which includes compulsory licensing and not prejudicing the reasonable interests of the author. Therefore this Article provides the so-called three (3) step test for compulsory licensing, namely exceptional circumstances, no conflict with the normal exploitation of the work and no unreasonable prejudice to legitimate interests of the author.

Article 11 bis (2) provides that:-

“It shall be a matter for legislation in the country of the Union to determine the conditions under which the rights mentioned in the preceding paragraph [11 bis (1)] may be exercised but these conditions shall apply only in the countries where they have been prescribed. They shall not in any circumstances be prejudicial to the moral rights of the author, nor to is right to obtain equitable remuneration which in the absence of agreement, shall be fixed by competent authority.”

The amendment to section 33 emphasises the regulatory role of the Competent Authority (aka Copyright Tribunal) in compulsory licensing. This role is common in other common law jurisdictions such as the UK, US, Australia and India.

As this blogger has previously noted here, the reality in Kenya is that the Competent Authority provided under section 48 of the Act remains non-existent over a decade since the establishment of the Kenya Copyright Board (KECOBO). This situation is problematic as there are no mechanisms in place to monitor the practical implementation of the compulsory licences under section 30A and the proposed section 33A.

Section 46A

This is an amendment by insertion. The newly introduced section 46A creates an approval system for all tariffs set by CMOs to license copyright users. This new section prohibits any registered CMOs from imposing or collecting royalty based on tariffs that have not been approved and published in the Government Gazette from time to time by “the Cabinet Secretary in charge of copyright issues”. In addition, the new section empowers “the Cabinet Secretary” to exempt users of copyright works from paying royalties by notice in the Gazette.

A preliminary issue that may require clarification is whether the Attorney General can be deemed to be “the Cabinet Secretary” for purposes of the Act? The Act defines “Minister” as “the Minister for the time being responsible for matters relating to copyright and related rights”. In the previous dispensation, the Attorney General (who was an ex-officio member of the Cabinet) assumed the role as “Minister” since KECOBO was under the Office of the Attorney-General. It is submitted that there is an established practice in Kenya whereby the Attorney General exercised the powers and performed the functions conferred on the “Minister” such as appointment of the Competent Authority and making Regulations for the better carrying out of the provisions of the Act.

However this issue is now settled under the Statute Law (Miscellaneous Amendments) Act, 2014 which has amended the definition of “Minister” under the Interpretation and General Provisions Act (Cap 2 Laws of Kenya) making specific reference to the Attorney General. The relevant portion of the amendment has been reproduced below:

Statute Law Miscelleneous Amendments Act 2014 Kenya

Nevertheless, this blogger maintains that the section 46A amendment may serve to further frustrate the relationship between CMOs and users of copyright. Over the years, this relationship has been severely strained due to the absence of the Competent Authority – a body which is authorised under the Act to deal with all issues relating to the licensing terms and conditions imposed on users by CMOs. The powers given to the Attorney General to approve tariffs and to exempt users from paying royalties may also prove problematic for CMOs.

Regrettably, this blogger notes that KECOBO and the Office of the Attorney General did not formally invite for public comments and/or conduct stakeholder consultations before causing these amendments to the Copyright Act to be passed by the Legislature and the Executive.

In the next blogpost, this blogger will discuss another set of IP law-related amendments with respect to the Kenya Anti-Counterfeit Act as contained in the Statute Law Miscellaneous Amendments Bill, 2014.

Shambles on Social Media: Balancing the Protection of Intellectual Property and Environmental Rights

This blogger has come across a twitter exchange involving one Jennifer Shamalla and the Kenya Copyright Board (KECOBO). Screen shots of the exchange have been posted below. Shamalla complains that Ozone Lounge and Bar plays “incredibly loud music” and that its patrons “engage in obnoxious behavior in total disregard of the environment as they scream and shout along with the music thus keeping the residents of the Valley Arcade area awake”. According to Shamalla, these actions by Ozone and its patrons “are a direct infringement on the constitutional right to a clean and healthy environment as provided for under Article 42 of the Constitution.” Therefore, Shamalla argues that KECOBO is vicariously liable for contravening the residents’ rights to a clean and healthy environment by licensing and supervising collective management organizations (CMOs) who issue licenses to Ozone. As a result, Shamalla has written to KECOBO (in a letter signed and dated August 11, 2014) demanding that the CMOs withdraw any licenses issued to Ozone with immediate effect.

jenifershamalla twitter 1

jenifershamalla twitter 2

jenifershamalla twitter 3

jenifershamalla twitter 4
By bringing this issue to light, this blogpost will comment on Shamalla’s argument and the issues arising from the above matter. This blogpost concludes that while Shamalla’s argument appears to be largely misplaced, the questions surrounding KECOBO’s statutory function to supervise CMOs cannot be ignored and perhaps ought to be addressed conclusively.

 

Read the full article here.

Lessons for Kenya: South African Copyright Tribunal Sets Aside License Tariff for Use of Sound Recordings

PicknPay

It is recommended that a tariff to be set by the tribunal should neither be too high nor too low, but a tariff which the owners of the royalty will realise profits on the one hand and the consumers will purchase voluntarily. It is hard, in my view, to satisfy the preferences of either party. It has already been indicated that I am not tasked to judge as to which case is superior in law but to set a tariff that may be said to be reasonable. – Foschini Retail Group (Pty) (Ltd) and 9 (Nine) Others v South African Music Performance Rights Association (0003/2009) [2013] ZAGPPHC 304 at Paragraph 76.

Recently this blogger reported a major victory for Kenya’s related rights collective management organisations (CMOs) when the court upheld their statutory mandate to license for the communication to the public right (See here). It is clear that the majority of these disputes between the related rights CMOs and users arise because the latter contest the license fees charged by these CMOs. The genesis of this contestation stems from the users’ perceived “double taxation” of paying both a copyright CMO on the one hand and the related rights CMOs on the other hand.

In this regard, this blogger has argued on several occasions (see here, here and here) that the Competent Authority must be immediately operationalised to deal with the rising cases of CMO-user disputes. Meanwhile, in South Africa, the Copyright Tribunal (equivalent to the Competent Authority under the Kenya Copyright Act) has recently issued a landmark judgment in which it set aside the license tariff for retailers as fixed by the South African Music Performance Rights Association (SAMPRA) holding that the tariff was not reasonable and proceeded to set a tariff to be applied by SAMPRA. In addition, the Copyright Tribunal ordered SAMPRA to pay the the retailers’ costs of referring the matter to the Tribunal.

For Kenya, this judgment is of great importance as the tariff determined by the Copyright Tribunal in South Africa is significant lower than that of the concerned related right CMO in Kenya. Therefore this blogger submits that there is a need for a review of all tariffs set by related rights CMOs using the methodology of the South African Copyright Tribunal.

In the present case, the retailers, namely Foschini Retail Group (Pty) (Ltd), Pepkor Retail Limited Stores, Just Kor Fashion Group (Pty) (Ltd), Mr Price Group Limited, Pick ‘n Pay Retailers (Pty) (Ltd), Truworths Limited, New Clicks SA (Pty) (Ltd), Dunns Stores, Metrotoy (Pty) (Ltd) and Young Designers Emporium (Pty) (Ltd) contended that SAMPRA had unilaterally set a tariff, and that it basically adopted a take-it-or-leave-it approach, when demanding payment. The retailers claimed that the tariff was inflated and without economic justification. They said that they had tried to negotiate with SAMPRA, but that the parties had been unable to reach agreement, hence they referred the matter to the Copyright Tribunal for determination.

As many know, the South African Music Performance Rights Association (SAMPRA) is a national, non-governmental, organization that licenses to third parties specific copyrights that vest in record companies that are members of the Recording Industry of South Africa (RiSA). It is therefore clear that SAMPRA’s equivalent in Kenya is the Kenya Association of Music Producers (KAMP).

In response to the retailers’ contentions, SAMPRA claimed that its tariff was reasonable. It stated that its tariff was bench-marked with international best practice, with reference to the UK, Australia and Canada being mentioned. SAMPRA’s tariff was based on the square meterage of the ‘audible area’, in other words those parts of the store where the music can be heard even if they are inaccessible to customers. Therefore according to SAMPRA’s tariff, the annual fee for a store of 51 to 100 square metres was ZAR 1000.00, whereas the annual fee for a store of 201- 300 square metres was ZAR 2000.00.

The Tribunal agreed with the retailers that the SAMPRA’s tariff was too high, even compared with lower tariffs in developing countries such as Australia. The Tribunal also agreed with the retailers that SAMPRA’s take-it-or-leave-it approach in setting its tariff was wrong both under the Copyright Act and the Collecting Society Regulations. In this connection, the Tribunal found that it would not be in the interest of justice to “cut and paste” the international practice without engaging the market forces prevailing in South Africa.

Therefore the Tribunal was of the view that tariff to be set must be a tariff that “optimizes public welfare”, in other words “a tariff that is neither too high nor too low, by which the service providers would realize profits, whereas the consumers would purchase voluntarily”. The Tribunal therefore set a tariff which, for example, saw the annual cost for shops of 50 to 100 square metres drop down to ZAR 389.00, whereas the annual fee for shops of 200- 300 square metres was set at ZAR 620.00.

As alluded to above, the tariff set by the Tribunal does not compare favourably with KAMP’s tariff here in Kenya. According to KAMP’s recent tariffs available here, the annual cost for shops of 50 to 100 square metres is currently set at KES 6500.00 which is approximately ZAR 650.00. In other words, a Kenyan shop half the size of a South African shop pays twice as more in license fees per year.

In light of the above, this blogger submits that there is a pressing need for the relevant government agencies to intervene and regulate the license tariffs, terms and conditions imposed by CMOs in Kenya to protect the public interest.

Proposed Intellectual Property Law Amendments: Kenya Copyright Act

Parliament of Kenya

Recently, the Statute Law (Miscellaneous Amendments) Bill, 2013 was published in Kenya Gazette Supplement No. 146 (Bills No. 32). The Bill seeks to amend four sections of the Copyright Act, namely sections 22, 28, 33 and 46. A copy of this Bill is available here (See pages 933-936).

It is recalled that four other sections in the Copyright Act were amended in 2012
in the exact same manner. Please see this blogger’s comments on the 2012 amendments here. What follows are this blogger’s thoughts on the proposed 2013 amendments to the Act

Read the rest of this article here.

The Competent Authority: Behold! Kenya’s New Copyright Tribunal

During the Second Reading of the Copyright Bill on November 20, 2001, the following statement was made by the Deputy House Speaker recorded in the Hansard at page 3186:

“the competent authority will act as an arbiter between the Board and the members.”

Section 48 (1) of Kenya’s Copyright Act provides for the appointment of a “competent authority” which is really a Tribunal appointed by the Minister in charge of the Kenya Copyright Board who happens to be the Attorney General (AG).

In Gazette notice no. 4339 dated 2nd April 2012, the AG has now appointed the following 5 individuals to form the Competent Authority:

Prof. Ben Sihanya – appointed as Chairman of the Competent Authority

Sihanya is currently Associate Professor of Law at the University of Nairobi School of Law. He has researched, published and spoken widely on Intellectual Property, Constitutionalism, Education Law and ICT Law in Kenya.

Sihanya is known for his innovative approach to the law and other inter-disciplinary areas of legal research and practice. He has conducted training, publishing, consulting and mentoring in Intellectual Property and Innovation, Education, Training, Research and Mentoring (ETRM) Law, Constitutionalism and Governance, Communications Law as well as Trade and Corporate Governance Law in Kenya specifically and Africa generally.

As one of the foremost authorities on copyright law in Kenya, IPKenya believes that Sihanya’s appointment as Chairman is well deserved. His wealth of skills, knowledge and experience in intellectual property is unmatched.

The following 4 individuals have been appointed as Members of the Competent Authority:

Continue reading

Music Copyright Society of Kenya MCSK Boss Finally Speaks Out

Over the past year, IPKenya has written several blogposts on the Music Copyright Society of Kenya (MCSK), based primarily on credible information from the national Copyright Office (KECOBO), media reports as well as information from online sources.

IPKenya has always endeavoured to be balanced and fair in its appraisal of the fall-out between KECOBO and MCSK as well as the latter’s own tarnished public image.

Finally, the General Manager of MCSK, Mr. Maurice Okoth has decided to respond to IPKenya and present his side of the story.

Here are his comments:

“Following your post and comments. Bit of misunderstanding and thought perhaps to clear the air.

Firstly, yes court order allowed us to continue collecting license fees and distribute royalties.

Secondly, regulations and conditions for operation of Collective Management Organizations (CMO’s ) vividly set out in the Copyright Act. Also regulation on renewals of certificate of registration etc ..the JR filed basically was addressing these issues as it was our view that KECOBO did not adhere to the law while purportedly deregistering MCSK.

Thirdly, please refer to the law and if you do find provision requiring CMO’s to operate at 30 % admin expenses, please cite this provision of law (local or international laws). This is a creation of KECOBO and cannot thus be used as a legal argument.

Finally, how is it that MCSK is setting a bad precedent in Kenya ..?

Currently, I am in Sweden in part to share the experience and developments at MCSK.
We are one of the only countries that is effective with general rights licensing , also known as performances in public places. In this category of licensing, collections from public service vehicles forms a large part of the collection and again this is a unique scenario in the world and I, on behalf of MCSK, have been invited to several countries to especially share in how we are able to achieve this.

We are unique in another way: unlike most other CMOs, a larger percentage of our collections is from performances in public places (general rights), whereas most CMO’s collect a larger percentage from broadcasting, telecommunications etc ..where collection expenses are quite minimal. The deductions from each class of collections thus varies and as such for collections from broadcasters where minimal costs incurred, you would not need to deduct much admin costs etc ..but in the area of general rights, where the situation in Kenya demands that we have to actually go out to the field in a daily basis to collect the license fees..I would actually like to hear of an alternative way of collecting ..(and you can also refer to how kamp , prsk and even kopiken are collecting where they have also adopted our style..) ..
So I’m not sure what IPKenya means that MCSK is setting a bad example for the other CMOs in Kenya.

I have much more to share ..for example the KECOBO principle of 70-30 and what actually entails admin expenditure ..for example, when we invest in assets for the Society that will in future save on costs i.e. capital expenditure (capex), where then do you classify this ..what about depreciation on assets ..bank charges which rise as you pay more members through the bank …all admin expenditure right, IPKenya ..? What about when you hold seminars for members ..annual general meeting and you pay out fare to members ..? Admin expenditure right ..? What about when members pass on and we make contribution to the funeral etc… What about when members fall sick and we provide funds for medical treatment ..perhaps you should consult with KECOBO and see how they want us to treat these expenditures…and see the rationale for 70-30.

I am also part of an African Committee comprised of Collecting Societies (CMOs) within Africa and part of the International Confederation of Societies for Authors and Composers (CISAC) that has been appointed to look into the budgets for CMO’s and the preferred ratio for operating (rather the permissible expenditure) ..we should be presenting our paper at the next African committee meeting and I think this will now be the guiding principle in future…for now IPKenya, show me where KECOBO ascertained that we should operate at 70-30.”

IPKenya has already contacted Mr. Okoth to schedule a one-on-one interview to discuss the salient issues raised in his comments above.

In the meantime, the floor is yours. Kindly let me know via the comments box if you have any questions or issues you would want me to raise with the MCSK GM.