Collecting Societies Demand Whopping 170 Million Shillings from Leading Broadcasters in Copyright Infringement Suits

KECOBO Renews Registration of KAMP and PRiSK as CMOs. L-R: Justus Ngemu - KAMP Chairman, Clifford Wefwafwa - KAMP GM, Marisella Ouma - KECOBO ED, Angela Ndambuki - PRiSK CEO, Robert Kimanzi - PRiSK Chairman.

KECOBO Renews Registration of KAMP and PRiSK as CMOs. L-R: Justus Ngemu – KAMP Chairman, Clifford Wefwafwa – KAMP GM, Marisella Ouma – KECOBO ED, Angela Ndambuki – PRiSK CEO, Robert Kimanzi – PRiSK Chairman.

This blogger has confirmed a recent media report that the two related rights collecting societies: Kenya Association of Music Producers (KAMP) and Performers’ Rights Society of Kenya (PRiSK) have simultaneously taken five broadcasting organisations to court for infringement of copyright. The five identical suits HCCC No. 322, 323, 324, 325 & 326 of 2015 have been filed in the Commercial Division of the High Court against Royal Media Services (RMS), Nation Media Group (NMG), Standard Group (SG), MediaMax Network (MMN) and national broadcaster, Kenya Broadcasting Corporation (KBC).

PRiSK and KAMP claim that they are mandated to collect license fees on behalf of the performers and producers of sound recordings and duly notified the five broadcasters that it is under an obligation under Sections 27, 30A, 35(1)(a), 25 and 38(2) and 38(7) of the Copyright Act to pay licensing fees in respect of sound recordings and audio-visual works broadcast to the public. In this regard, the collecting societies claim that the broadcasters have all failed and/or neglected to pay the requisite license fees to KAMP and PRiSK from the year 2010 until and up to the year 2014.

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Why Private Copying Law and Practice in Kenya is Unconstitutional

50 bob movies by wamathai dot com

Private copying can be defined as the act of making any copy for non-commercial purposes by a natural person for his/her own use. Kenya’s Copyright Act defines it as the making of a single copy for the personal and private use of the person making the copy. Although the right of reproduction under copyright law is exclusive, Kenya is among many jurisdictions worldwide that limit the application of the reproduction right to activities that can be qualified as private copying, the reasoning being that it is practically impossible to grant permission to large numbers of individuals, or to monitor the use consequently made of it. It follows that private copying is allowed under the condition that a fair compensation is paid to the authors and other rights holders for loss of revenues or harm caused to the rights holder whose work had been copied. Private copying levy (or the audio blank tape levy as it known in Kenya) is currently the only efficient mechanism which allows creators to be compensated for widespread copying of their works for private/domestic use. It therefore follows that the blank tape levy would be applicable to blank CDs, tapes, cassettes, DVDs, VCDs, USB Disks, MiniDiscs, Memory Cards, Mobile Phones among others. It is yet to be operationalised in Kenya despite being provided for under section 28(3),(4),(5) and (6) of the Copyright Act.

In December 2013, this blogger discussed here that one of the proposed amendments to the Statute Law (Miscellaneous Amendments) Bill, 2013 related to the provisions of audio blank tape levying provided under Section 28(5) of the Copyright Act. The effect of this proposed amendment was that the blank tape levy be collected by KECOBO and then distributed to the registered CMO representing the owners of sound recordings, currently known as the Kenya Association of Music Producers (KAMP). However, this blogger argues that this section 28 (in both its current and proposed form) is unconstitutional and ought to be fundamentally amended so as to address the economic rights of all rights holders.

The WIPO International Survey on Private Copying Law and Practice 2012 explains that where private copying remunerations are gathered by collective management organisations (CMOs), these societies are appointed by the government or by rights holders. According to the Survey, these CMOs must be representative of each variety of rights holders namely the authors, performing artists and producers. In some jurisdictions, a distinct CMO exists dealing solely with private copying levy and the board of such a CMO is comprised of the various rights holders’ representatives.

From all the 30 countries selected for the Survey, it is clear that there are two main categories of rights holders who benefit from the royalties collected for private copying: copyright holders and the related rights holders. The copyright holders appear to take the lion’s share of the collections with countries like Switzerland and Canada recording an authors’ share of 58%. All in all, the share for copyright holders appears never to be less than 30%.

Meanwhile, back in Kenya, the related rights CMO representing sound producers (KAMP) has recently published a public notice on it’s official website which reads in part:-

“The Kenya Association of Music Producers and Performers Rights Society of Kenya Stakeholders Meeting on Blank Media Levy concluded by setting an unopposed tariff of 6% of import price at the point of sale on the aforementioned equipment. KAMP and PRISK by virtue of Sections 28 (5) and 30 (8) will commence collections May of 2014.”

According to section 28(4) of the Act, the royalty payable for private copying can only be set in one of two ways: through agreement with stakeholders or by the (non-existent) competent authority. The question which therefore must be asked is which one of the two ways was used and what was the rationale behind the percentage figure of 6% purportedly agreed upon pursuant to the Act.

Assuming that the conditions of section 28(4) of the Act have been met, it would follow that the audio blank tape levy would only be applicable to KAMP and not PRiSK. This is because the section refers only to audio recording equipment and audio blank tape and not video. In addition, according to the WIPO Survey, the only jurisdiction with a tariff of 6% (of the import price) is Lithuania and this tariff covers both copyright and related rights holders, as illustrated in the table above.

However there is a fundamental question which remains unanswered, namely: is the current private copying levy provision under section 28 constitutional? The blogger argues that the answer must be no. In all the countries studied in the WIPO Survey above, copyright holders were allocated a substantial share of collections from the respective private copying levies. However, the Kenyan Act only refers to owners of sound recording. It is therefore possible to argue that section 28(3),(4),(5) and (6) are unconstitutional for two cardinal reasons, namely the discrimination of rights holders contrary to Article 27 of the Constitution and the deprivation of property contrary to Article 40 of the Constitution.

Revisiting Section 30A of the Copyright Act: Right to Equitable Remuneration for Performers and Producers

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“For many years Kenyan composers and authors have received royalties from the broadcast or public performance of their songs. These royalties are collected by the Music Copyright Society of Kenya (MCSK).
The Copyright Act has since been amended to acknowledge the essential contribution of performers and producers of sound recordings in the creation of recorded music and works by including a right to equitable remuneration for both the performers and producers, which is in line with international best practices. The rights to equitable remuneration are the rights of performers and producers to be paid fairly for the broadcast and communication to the public of their works.” – Performers Rights Society of Kenya (PRiSK)

In 2012, the Copyright Act was amended with the insertion of a new provision, section 30A which introduced the right to equitable remuneration for use of sound recordings and audio-visual works. This blogger has discussed this section in several blogposts available here, here and here.

In a recent article, intellectual property (IP) lawyer Judy Chebet argues here that section 30A is unconstitutional as it obliges performers and music producers to cede some of their rights to collective management organisations (CMOs). While this blogger fundamentally disagrees with Chebet, it is argued that her views raise serious concerns that must be addressed by the Kenya Copyright Board (KECOBO) and the related rights CMOs both of whom play an important role in explaining to the Kenyan public (in a fair amount of detail) exactly “what section 30A is all about”.

Copyright and related rights are bundles of different rights which can be exercised individually or, where for practical purposes it is very difficult to enter into individual arrangements, can be managed by collective management organisations (CMOs). Because of the uses to which sound recordings and fixations of performances are traditionally put, collective management has become an indispensible method by which performers and producers can be remunerated for the uses of their performances or recordings.

Both Article 12 of the Rome Convention and Article 15 of the WIPO Performances and Phonograms Treaty (WPPT) give performers and producers of sound recordings a right to a single equitable remuneration for broadcasting and communication to the public. In most CMOs this will be the great bulk of the collectable remuneration.

The WPPT goes on to provide that the contracting parties may establish in their national legislation that the single equitable remuneration shall be claimed from the user by the performer or by the producer or by both. The single equitable remuneration may be shared by agreement or domestic legislation may provide how the remuneration must be shared.

Given this modern environment it has started to make more sense for the activities of performers’ and producers’ CMOs to be merged into one organisation; the users are the same and the remuneration has to be shared so that it can be more efficient for one organisation to collect and to manage the distribution of the remuneration to the different parties. The efficiencies also benefit the user who only has one organisation to pay. Even in cases where there are two separate CMOs, they can collect jointly but distribute separately. This is the case for instance in Kenya with Kenya Association of Music Producers (KAMP) or even the case of Sweden with SAMI and the Swedish Group of IFPI. In the Kenyan context this blogger has previously discussed the amalgamation of KAMP and PRiSK here.

Therefore, to the extent that Chebet argues section 30A creates a conflict with the WPPT in that the latter does not allow compulsory licensing, this blogger concurs fully with Chebet. However, the point of departure with Chebet’s views is that this form of mandatory collective management through compulsory licensing amounts to a limitation of Article 40 of the Constitution (Protection to right to property) that is not in accordance with Article 24 (Limitation of rights and fundamental freedoms).

Compulsory licensing is the term generally applied to a statutory 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.

According to copyright scholars, legislative arrangements for equitable remuneration occupy a position on the continuum of copyright and author’s right somewhere between exclusive rights and absolute exemptions. In strictly economic terms, these arrangements reflect the legislator’s judgment that to extend an exclusive right would hamper socially important uses, typically because of the high transaction cost of negotiating a license, but that to make the use entirely free would seriously impair needed rewards for the author. Compulsory licenses trade the bargaining power conferred by the prospect of injunctive or other coercive relief for a monetary award aimed at approximating the sum a reasonable licensee would in good faith offer and a reasonable copyright owner would in good faith accept.

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 equitable remuneration and provides for the conditions which should be met before a member country can entirely excuse a use which includes the equitable remuneration 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.”

Therefore in order for Chebet’s unconstitutionality argument to succeed, this blogger submits that the enactment of section 30A must be proved to be a violation of the Berne 3-step test in a manner that unreasonably and unjustifiably limits the rights enshrined under Article 40 as set out in Article 24.

Meanwhile, this blogger reiterates that the real elephant in the room is the government’s regulatory role vis-a-vis equitable remuneration.

In the UK, the Copyright Tribunal established under the Copyright, Patents and Designs Act, 1988 is empowered to determine the amount of equitable remuneration payable to performers where commercially published sound recordings of their works are performed or communicated to the public. In Australia, the Copyright Tribunal, established under the Copyright Act 1968, is similar in the scope of its jurisdiction to the 1988 UK Tribunal, including determination of remuneration to be paid in respect of certain uses which are subject to compulsory licenses.

In the US, the US Copyright Act 1976 created a Copyright Royalty Tribunal comprising five government-appointed Commissioners with a Chairman appointed annually. The Tribunal’s jurisdiction includes determining royalty rates payable under certain compulsory licenses, and the distribution of royalty fees deposited with the Register of Copyrights in respect to those compulsory licenses.

Meanwhile here in Kenya, the Competent Authority established 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.