High Court Judgment on Caller Ringback Tones, Definition of Public Performance and Regulation of Collecting Societies

IMG-20151023-WA0023 edaily dot co dot ke

Previously we reported here that several members of Music Copyright Society of Kenya (MCSK) had filed a case in the Commercial Division of the High Court challenging a license pertaining to the caller ringback tones (CRBT) service known as “Skiza Tunes” owned by mobile network operator, Safaricom issued by the three music collective management organisations (CMOs) including MCSK.

While the outcome of this commercial suit is still pending, we have come across a recently delivered judgment in the case of Petition No. 350 of 2015 David Kasika & 4 Ors v. Music Copyright Society of Kenya in which several MCSK members alleged that the collection of royalties by MCSK under the CRBT license agreement in question violates their constitutional rights, that the making available of works for download on Safaricom’s CRBT service amounts to a private performance as such section 30A of the Copyright Act does not apply and thus the CMOs cannot collect royalties on behalf of its members as required under the section. Finally, the petition invited the court to weigh in on several damning allegations made regarding mismanagement by MCSK in its collection and distribution of members’ royalties.

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High Court Judgment on Constitutionality of Equitable Remuneration Right and Copyright Collective Management

skiza safaricom caller ringback tone service copyright license collective management society

 

Previously we reported here that two content service providers and three individual copyright owners had filed a constitutional petition at the High Court challenging the content of the equitable remuneration right in section 30A of the Copyright Act, the application and implementation of section 30A by the collective management organisations (CMOs) and the manner of licensing and supervision of the CMOs by Kenya Copyright Board (KECOBO).

Recently in the case of Petition No. 317 of 2015 Xpedia Management Limited & 4 Ors v. The Attorney General & 4 Ors Lady Justice Mumbi Ngugi (known to many readers for her landmark decision on anti-counterfeit law and access to medicines here) delivered a judgment at the High Court dismissing claims by content service providers and the copyright owners that the contents and implementation of section 30A are unconstitutional.

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Blind Opposition to Caller Ringtone Deal between Safaricom and Collecting Societies: High Court Case of Irene Mutisya & Anor v. MCSK & Anor

Robert Collymore CEO Safaricom

This blogger has recently come across Nairobi High Court Civil Case No. 262 of 2015 Irene Mutisya & Anor v. Music Copyright Society of Kenya & Anor. In this case Mutisya and another copyright owner Masivo have filed suit against Music Copyright Society of Kenya (MCSK) and mobile network operator Safaricom Limited for copyright infringement. The copyright owners filed an urgent application on 30th July 2015 for a temporary injunction to restrain Safaricom from remitting license fees to MCSK pursuant to a recently concluded license agreement for caller ring-back tones (CRBT) made available through Safaricom’s Skiza platform. The copyright owners also asked the court to restrain both Safaricom and MCSK from implementing the CRBT License Agreement pending the hearing of the application.

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High Court Affirms Role of Collecting Society in Copyright Enforcement: Case of Ruma Lodge v. MCSK

This blogger has recently come across a recent judgment of the High Court in the case of Maurice Owino Onyango v Music Copyright Society of Kenya [2015] eKLR. In this case, Music Copyright Society of Kenya (MCSK), the sole collecting society or collective management organisation (CMO) for authors, composers and publishers of musical works, was the respondent in an appeal in the High Court challenging the decision of the Magistrates’ Court in a case filed against MCSK for malicious prosecution. Majanja J sitting in the High Court found in favour of the CMO and upheld the judgment of the lower court.

A copy of the judgment is available here.

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Copyright Society Successfully Appeals Malicious Prosecution Suit

Music Copyright Society of Kenya MCSK Press Conference

This blogger has recently come across a recent judgment of the High Court in the case of Music Copyright Society Of Kenya v Tom Odhiambo Ogowl [2014] eKLR. In this case, Music Copyright Society Of Kenya (MCSK), the sole collective management organisation for authors, composers and publishers of musical works, lodged an appeal in the High Court challenging the decision of the Magistrates’ Court in a case filed against MCSK for malicious prosecution. Majanja J sitting in the High Court found in favour of the CMO and set aside the judgment of the lower court. A copy of the judgment is available here.

On January 17, 2011, MCSK moved to the Ogwol’s premises at Sofia Estate, Homabay Town and impounded his electronic equipment on the ground that he was operating a business without a public performance licence issued by MCSK. On the next day, Ogwol was arraigned and charged at the Homabay Senior Residents Magistrates Court with the infringement of copyrighted musical works contrary to section 38(2) as read with section 38(7) and 38(8) of the Copyright Act, Act No. 12 of 2001. According to MCSK, its officers visited Ogwol’s premises and found that he was operating a hall where local and international videos were being shown and played to the paying public. MCSK alleged that Ogwol did not display or produce a Public Performance Licence issued by MCSK permitting him to relay copyrighted works in his premises. When confronted by MCSK officers accompanied by the Police, Ogwol is said to have “vanished from the premises” whereupon his electronic gadgets were impounded and subsequently this caused him to be charged. After the hearing of the prosecution case, the presiding magistrate found that the prosecution had not established a prima facie case and that Ogwol had no case to answer consequently he was acquitted under section 210 of the Criminal Procedure Code (Chapter 75 of the Laws of Kenya).

Following his acquittal, Ogwol instituted civil proceedings against MCSK for malicious prosecution. According to Ogwol, his arrest and arraignment in court at the hands of MCSK was actuated by malice and that as a result of the trial, he incurred expenses. In making its judgment in favour of Ogwol, the court found that: “[the] defendant [MCSK] and the agents [of] the 2nd defendant [Attorney General] by insisting to charge the accused yet no artistic author was identified fell short of the statutory obligation. By doing this they had no probable and reasonable cause for arresting and charging the accused. I further find that malice was proved.”. The Magistrate awarded Ogwol the sum Kshs. 200,000.00 as general damages against MCSK.

Aggrieved by this judgment in the Magistrates’ Court, MCSK filed the present appeal in the High Court. MCSK’s main contention was that the learned magistrate erred in law and in fact by making a finding on liability for malicious prosecution when none was proved. In particular, MCSK’s contention was that Ogwol had failed to prove that there was no reasonable and probable cause in instituting the criminal proceedings therefore judgment ought to have been entered against him in the lower court. In this connection, counsel for MCSK submitted that the reason for Ogwol’s arrest and charge was that he did not have or display a valid public performance licence from MCSK, a fact which Ogwol did not dispute. As a duly registered CMO under section 46 of the Copyright Act, it was submitted that MCSK went to Ogwol’s premises in order to enforce compliance with the Copyright Act, particularly the provisions of section 35 that all public performances of music required a licence which licence Ogwol did not have. Therefore MCSK contended that there was no proof of malice and that mere acquittal of the respondent was insufficient to prove malice.

JUSTICE DAVID MAJANJA

In a concise well reasoned judgment, High Court Justice Majanja finds favour with MCSK’s arguments and dismisses the judgments of both magistrates in the criminal and civil suits. Here are some of the poignant findings made by the learned judge on appeal:

“…Whether there was reasonable and probable cause is to be determined from the nature of the charge preferred by the police. The respondent [Ogwol] was charged with the infringement of copyrighted musical works contrary to section 38(2) of the Copyright Act (….)

In essence, the provision makes it an offence to cause the performance of a literary, musical or audio visual work protected by copyright in public where such a performance constitutes an infringement. While displaying a licence is one way of showing that owner of the premises has permission to cause the copyrighted work to be performed publicly, it is by no means necessary as the accused is entitled to show he acted in good faith and had no reasonable ground for supposing that copyright would or might be infringed.

With profound respect to the learned magistrates who dealt with the criminal and civil case, the offence had nothing to do with membership of a copyright society. The offence was prosecuted by the police and it applies in respect of all and any works where copyright subsists. A Collection Society, such as MCSK, is charged with collection of royalties on behalf of its members and safeguarding its members’ interests by ensuring that persons who play music publicly are duly licenced and if they are not, they are prosecuted and that is why lays a complaint with the police. It is entitled to lodge complaints with the police where reasonable grounds exist.

On the issue whether there was reasonable ground for belief that the respondent had violated section 38(2) of the Copyright Act, the respondent admitted that he was operating a business showing football matches to the public. He admitted that he was aware that he had to have a licence and to display it. The showing of football matches to the public is an “audio visual work” under the provisions of section 38(2) of the Act. A perusal of the proceedings in the criminal case show that the respondents shop was showing movies and playing music in the background. In view of the clear admissions by the respondent and the evidence, I find that there was reasonable and probable cause that that an offence had been committed under section 38(2) of the Act and the MCSK officers were entitled to lay a complaint against the respondent.”

Finally, the learned judge finds that the mere fact that a person has been acquitted of the criminal charge does not necessarily connote malice on the part of the prosecutor. Therefore Ogwol had no basis in law to claim that MCSK acted with malice by causing his arrest and arraignment in court.

This blogger is happy that MCSK elected to thoroughly litigate this matter and obtain a judicial pronouncement which ought to guide future cases in this area of copyright law.

Editor’s Note: At the time of this publication, this blogger served as MCSK General Counsel. All views expressed herein are his own and not those of MCSK

Court Rules Public Performance and Communication to the Public Licenses Are Distinct Under Copyright

nairobi-pacific-hotels

On February 14, 2014 in the case of Nairobi Pacific Hotel vs KAMP & PRISK CMCC 7240 of 2013, the court dismissed an application filed by Nairobi Pacific Hotel seeking a grant of temporary injunction to restrain the Kenya Association of Music Producers (KAMP) and the Performers Rights Society of Kenya (PRiSK) from collecting fees with respect to their jointly-issued Communication to the Public license. A copy of the ruling is available here.

This court ruling creates an important precedent that a Public Performance License from the Music Copyright Society of Kenya (MCSK) is not sufficient for the protection of the rights of performers and producers represented by PRiSK and KAMP, respectively. In making its ruling, the court noted that KAMP and PRiSK are collective management organisations (CMOs) duly licensed by the Kenya Copyright Board (KECOBO) to collect license fees from the users who broadcast or communicate sound recordings and audiovisual works to the public.

The court further finds that the clean hands doctrine applies since the user in question, Nairobi Pacific Hotel, had been implored upon to obtain a Communication to the Public License but neglected and/or refused to do so solely on the basis that the latter had already obtained a Public Performance License from MCSK.

Comment:

This blogger supports the court’s ruling in this matter and applauds the related rights CMOs for successfully using litigation as a tool to enforce and protect the rights of their respective members.

The existence of the MCSK license and KAMP-PRiSK for public performance is premised on the definition of the “communication to the public” in the Copyright Act. This definition reads:

“communication to the public” means
(a) a live performance; or
(b) a transmission to the public, other than a broadcast, of the images or sounds or both, of a work, performance or sound recording;”

However the Copyright Regulations of 2004 provide the clearest definition of what amounts to “Public Performance” as it is licensed by MCSK for the rights under copyright and KAMP-PRiSK for the related rights.

Section 2 reads as follows:

“public performance” means –
(a) in the case of a work other than an audio-visual work, the recitation, playing, dancing, acting or otherwise performing the work, either directly or by means of any device or process;

(b) in the case of an audio-visual work, the showing of images in sequence and the making of accompanying sounds audible; and

(c) in the case of a sound recording, making the recorded sounds audible at a place or at places where persons outside the normal circle of the family and its closest acquaintances are or can be present, irrespective of whether they are or can be present at the same place and time, or at different places or times, and where the performance can be perceived without the need for communication to the public.

From the users’ perspective, they argue that public performance licensing by KAMP – PRiSK and MCSK “feels like double taxation since one is paying 3 different bodies licence fees for the same thing”. Herein lies the biggest challenge for CMOs: to successfully convince users that “music”, as they know it, is simultaneously categorised as three different subject matter under copyright law, namely “sound recordings”, “musical works” and “audio-visual works”. In this regard, this blogger has previously argued here that it requires a great deal of skill and salesmanship for licensing officers from the CMOs to convince users to take out their respective licenses.

In the present case of the KAMP-PRiSK license, the tariffs are based on the area in square feet of the business premises wwhere the sound recordings and audio-visual works are used. The tariff structure is available below:

PRiSK KAMP Communication to the Public CTP license tariffs

In disputes between CMOs and users, the elephant in the room always seems to be the question of CMO regulation, in particular the reasonableness of the license terms and conditions imposed by CMOs on users. As previously discussed here and here, this blogger has noted that there is an increase in complaints by users against CMOs relating to license fees, in addition to the manner in which license fees are collected from users.

In the case of KAMP and PRiSK, CMO-user relations appear to have been complicated further with the enactment of section 30A in the 2012 Amendments to the Copyright Act. It would seem that Section 30A has introduced a system of compulsory licensing with the introduction of the right to equitable remuneration for use of sound recordings and audio- visual works. However, the term “equitable remuneration” remains undefined and where users of sound recordings and audio- visual works may have complaints against KAMP and PRiSK, the Competent Authority is not yet in operation to give directions on these matters.

Music Copyright Society Set to Make Millions with Licensees for Performances in Public Places

MCSK MUSIC COPYRIGHT SOCIETY OF KENYA

Recently, the Standard Newspaper in an article titled: “Banking on airwaves” reported that MCSK had entered into a commercial partnership with several well-established entertainment companies aimed at boosting the society’s revenues in license collection.

This so-called “alternative licensing regime” will see the provision of ready-packaged, advert-laden music content to particular establishments and other public places. The revenues generated from the ads in the audio/audio-visual content will then shared between MCSK, the radio and television frequency holder, the content/music provision management and the establishment and/or public service vehicle (through its umbrella body eg. Sacco, Union). The musical content to be used will vary from different music genre mixes, comedy, news highlights, short form documentaries, short films, entertainment news and sports highlights. MCSK notes that Kenyans spend up to 3 hours per day in transit therefore ‘transit advertising’ offers unique opportunities to brands as the audience’s attention is focused on the content in the vehicle, there is over 60% retention and limited distraction unlike in a home/office environment.

According to MCSK, each public service vehicle (PSV) ferries a conservative number of 100 people per day multiplied by the over 70,000 PSVs, MCSK claims it will have an advertising reach of over 7 Million people daily, not including fixed venues (restaurants, pubs, banks, supermarkets etc.)

MCSK contends that its research indicates that point of sale communication contributes to 37% of new purchases. Therefore, MCSK argues that this regime will be able to offer unprecedented exposure and out of home reach for brands. The product will be designed to ensure it’s entertaining, highly engaging and a natural fit to Kenyan lifestyles.

With the advent of this new licensing regime MCSK aims to reduce the operational and logistics costs of collecting these revenues, generate alternate revenue and if optimal capacity from advertiser revenues, then it may not even require to charge the standing fees from partner stakeholders.
This licensing regime will apply to places that rely on broadcast music. (Radio and television stations License is for broadcast into a domestic environment only and not public places and or public environment).

MCSK contends that this new licensing regime will reduce the operational costs with regard to Performance in Public Places (PPP) that usually eats upto 50% of the revenue total revenue collected per annum. Beside sthis, due to the sheer size of the operation and amount of resources required, MCSK claims that the current model of public performance fees collection comes with several inefficiencies like loss of revenue from evasion, corruption and operational gaps.

IPKenya’s comments will be reserved until MCSK officially launches this concept. However at this early stage, it is encouraging to see collecting societies in Kenya being innovative and business-minded in ensuring that the rights holders see greater benefits for their creative work.