Legality of Equitable Remuneration Challenged: High Court Petition of Xpedia & 4 Ors v. Attorney General & 4 Ors

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Editor’s Note: On 31st July 2015, the urgent application in this Petition No.317 of 2015 dated 29th July 2015 was heard and certain interim orders were granted. A copy of the orders is available here.

This blogger has confirmed a recent media report that two content service providers and three copyright owners have jointly filed a petition challenging the constitutionality of the right to equitable remuneration under the now infamous section 30A of the Copyright Act. The Petition was filed against the Attorney General, Kenya Copyright Board (KECOBO), Kenya Association of Music Producers (KAMP), Performers Rights Society of Kenya (PRiSK) and Music Copyright Society of Kenya (MCSK).

As stated above, the crux of the Petition filed by Xpedia Management Limited, Liberty Afrika Technologies Limited, Elijah Mira, Francis Jumba and Carolyne Ndiba is that KAMP, PRiSK and MCSK should be stopped by the court from receiving or collecting royalties under section 30A of the Copyright Act in respect of works owned or claimed by the Petitioners.

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High Court Orders Government to Facilitate Copyright Tribunal in PERAK Case against KAMP and PRiSK

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In a judgment delivered recently, the High Court in the case of Republic v Kenya Association of Music Producers (KAMP) & 3 others Ex- Parte Pubs, Entertainment and Restaurants Association of Kenya (PERAK) [2014] eKLR has ordered the State to set up the Competent Authority established under the Copyright Act to hear and determine the dispute between PERAK and the related rights collective management organisations KAMP and PRiSK with respect to the latter’s tariffs for communication to the public.

As many may know, the Pubs, Entertainment and Restaurants Association of Kenya (PERAK) is the largest single entity representing owners and managers of the major restaurants, pubs and entertainment venues in Kenya. PERAK is registered under the Societies Act as a welfare Organization and its main objective is to bring together operators with a view of resolving common problems in the hospitality industry, developing a code of conduct for its members, engage in social responsibility activities and generally to help members comply with various regulations governing the hospitality industry.

The gist of the PERAK’s judicial review action is summarised in the following three orders which were sought from the court, namely:-

“1. That this Honourable Court be pleased to grant an order of prohibition to prohibit the 1st and 2nd Respondents from arbitrarily imposing and collecting high tariffs/license fees and other levies from the Applicant’s members’ business premises using a wrong tariff structure and generally harassing, intimidating and confiscating their business equipment throughout the Republic of Kenya.
2. That this Honourable Court be pleased to grant an order of mandamus compelling and directing the 3rd and 4th Respondents to hear and determine the dispute between the Applicant and the 1st and 2nd Respondents in relation to the high license fees charged and /or tariffs charged/levied using a wrong tariff structure by the 1st and 2nd Respondents.
3. The costs of this Application be provided for.”

In the court’s judgment, PERAK succeeded to prove that it had locus standi to institute proceedings on behalf of its members in addition to order no. 2. However PERAK was unsuccessful on order no. 1. With respect to order no. 3, the court declined to make any order as to costs.

Comment:

This blogger is surprised by PERAK’s poor form in mounting its judicial review suit against KAMP and PRiSK. This was clearly manifest from several unsubstantiated allegations, inaccurate and outrightly false statements of the provisions of the law by PERAK.

The most significance of this judgment can be found in the last four paragraghs where the court examines whether the government can and should be compelled to give effect to section 48 of the Copyright Act. On numerous occasions (see some examples here, here, here and here) this blogger has emphasised the need for Kenya to immediately operationalise the Competent Authority aka the Copyright Tribunal which is established under the Copyright Act to hear and determine disputes between users and CMOs.

Therefore this blogger is elated that the High Court has seized the opportunity to state clearly that the Government, in particular the Office of the Attorney General and Department of Justice can no longer rely on the same old excuses as reasons for not facilitating the operations of the Competent Authority.

To quote the court:

“The only reason advanced by the Kenya Copyright Board why the Competent Authority cannot fulfil its said statutory duty is that the Competent Authority is yet to be operationalized owing to budgetary and administrative challenges and hence the same is not functional. Article 47(1) of the Constitution provides that every person has the right to administrative action that is expeditious, efficient, lawful, reasonable and procedurally fair. Article 21(1) of the Constitution on the other hand provides that it is a fundamental duty of the State and every State organ to observe, respect, protect, promote and fulfil the rights and fundamental freedoms in the Bill of Rights. It is therefore upon the State to facilitate the Competent Authority so that it can undertake its statutory duties. To fail to do so amounts to abdication of the Constitutional duties imposed upon the State and in applying a provision of the Bill of Rights this Court is enjoined by Article 20(3)(b) of the Constitution to adopt the interpretation that most favours the enforcement of a right or fundamental freedom.
Adopting the said approach, this Court is not satisfied that the reason advanced by the Kenya Copyright Board warrants the state being absolved from the performance of its statutory duties taking into account the fact that the Competent Authority is already in the office.”

The ball is therefore squarely in the government’s court to operationalise the Competent Authority failing with PERAK will be at liberty to return to court for contempt orders against the Kenya Copyright Board.

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.

CIPIT Proposes Kenya Association of Intellectual Property Professionals (KAIPP)

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The Strathmore Law School Centre for Intellectual Property and Information Technology Law a.k.a CIPIT has just announced that there will be a stakeholders’ meeting to discuss and agree on the proposed creation of an Intellectual Property (IP) association for Practitioners in Kenya, tentatively christened it the Kenya Association of Intellectual Property Practitioners or KAIPP.

This meeting will take place during the next IPCheckin Meet-up scheduled for 8th June, 2013 at Strathmore Law School from 11:00am.

In preparation for this meeting, CIPIT has prepared a draft constitution for KAIPP available here.

This on-going push for a fully fledged IP association in Kenya comes in the wake of encouraging news from Nigeria. Afro-IP reports that the Intellectual Property Lawyers Association of Nigeria (IPLAN) has gone to court to challenge a move by the Nigerian Registry of Trademarks, Patents and Designs to only accept electronic applications for registration of trade marks, patents and designs filed by accredited agents. IPLAN contends that this move unlawfully creates compulsory accreditation system for law firms, stakeholders and potential registrants as well as illegally purports to increase or prescribe additional fees. We will be keenly following this case as it develops.

Meanwhile, back home, this blogger is fully in support of an IP Association in Kenya and for Kenyans.

Looking forward to seeing you at on the 8th of June 2013 at 11:00am. Bring a friend or three.

In Support of An Intellectual Property Association of Kenya

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It was in response to Isaac’s post on Afro-IP that this blogger put forth the idea of setting up a bona fide association for intellectual property practitioners and professionals in Kenya. Many of us may have pondered upon this very topic in the past but to-date nothing seems to have materialised.

In the past weeks, there is renewed buzz around establishing such an IP Association, tentatively christened as Kenya Association of Intellectual Property Practitioners (KAIPP).

Within Africa, the only other national IP Association is in South Africa. Established in 1952, the South African Institute of Intellectual Property Law (SAIIPL) is an association representing “some 164 patent attorneys, patent agents and trade mark practitioners in South Africa who specialise in the field of Intellectual Property Law”. According to its official site, SAIIPL states that:-

“It [SAIIPL] is widely regarded as the custodian of South Africa’s intellectual property rights, and comprises practicing attorneys, academics, practitioners in businesses and in general, people interested in the protection and enforcement of intellectual property rights. The members of the SAIIPL represent the majority of national and international businesses who have built their businesses on brands, innovation and technology, and who protect their interests through our country’s intellectual property laws.”

SAIIPL has four types of memberships: Fellow, Associate, Student and Ordinary. It is important to note that unlike Kenya, South Africa has an institutionalised system of IP qualifications. The first is the Patent Attorneys qualification which is a statutory qualification under control of the Patent Examination Board. There is also the Trade Mark Practitioners qualification is offered by SAIIPL to provide proficiency in trade marks and related fields. An Attorney with this qualification is entitled to Fellowship of SAIIPL. A quick browse through SAIIPL’s membership list reveals that the whos-who of South African trademark and patent lawyers are on the list including Prof. Owen Dean (@ipchair), Darren Olivier (@afroIP) as well as this blogger’s former classmate, Jeremy Speres (@jeremysperes), among many others.

Read the rest of this article on the CIPIT Law Blog here.

To Photocopy or Not to Photocopy: The Role of the Reproduction Rights Society in Kenya

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One of the local newspapers recently published an article titled: “Can’t someone stop this photocopying madness?”, which raises the alarm over high levels of illegal photocopying especially in tertiary institutions of learning, namely our universities. The writer explains:

We were taught in classes that photocopying a book without the requisite permission of the copyright holder would be against the law, except for the very strict exemptions made on the copyright page of the book. Yet at student centres and other photocopying areas in institutions of higher learning, the exact opposite of this lesson goes on in the open.
Students photocopy entire books. Some shop owners photocopy books in advance and store them for sale. With such scenarios, what does the student learn? That the lessons on copyright law are a mere hot air?

Recently, a news feature was published by Al Jazeera titled: “Photocopying courts India campus controversy” which was premised on the on-going Indian High Court case of Oxford University Press and Others vs Rameshwari Photocopy Services and Delhi University. In this case, Cambridge University Press (CUP), Oxford University Press (OUP) and Taylor & Francis, the three of the world’s largest publishers have filed a case in court seeking to stop the reproductions of their work into study packs and course packs for students.

Authors and publishers all over the world contend that they fully support free access to information. But they have come to realise that their contended principle of free flow of information must not be confused with the idea of the flow of free information. After all, books, journals, newspapers etc. cost money to produce and the same must apply to the right to reproduce them, particularly through photocopying. The only way authors and publishers have been able to deal with this situation has been through collective administration of rights. It is widely agreed that no single author or publisher can effectively police the use or abuse of its bundle of rights throughout a whole national territory let alone the world at large. Thus, collective administration is a solution devised to overcome the many difficulties which individuals authors and other rights holders face in the enforcement of their rights separately by themselves in the face of fast-growing technologies of the modern world.

In the case of reproduction rights, one of the practical, instrumental and utlity organs in the process of this collective administration is the reprographic rights organisation (RRO). Simply put, the RRO aims to deal with both unauthorised reproduction of copyright works for internal use as well as for the market place. This reproduction is dealt with through licensing. The RRO is therefore an intermediary organisation. It brings the rights holders in contact with the users. It facilitates understanding between the owners and users of copyright rights. Most importantly, it negotiates with, and grants licenses to the users to use the works of authors on the one hand; and on the other, it ensures that authors and publishers are justly remunerated for their works and investments.

This blogger believes that in both the Indian and Kenya scenarios highlighted in the media reports above, the RRO is clearly missing from the picture yet the latter plays an important role in striking the right balance between the rights of the copyright holders on the one hand, and the interests of the users on the other hand. This blogger is indeed surprised that the reprographic society in India (IRRO) has not sought to be enjoined in the Delhi University court case yet it is an interested party given the issues for determination by the judges in that case.

KOPIKEN Launch Collective Management Reproduction Rights Society of Kenya

Meanwhile, here in Kenya, we have the Reproduction Rights Society of Kenya (KOPIKEN) which is fully functional but seems not to have attained the critical mass in terms of licensees for reproduction of printed works yet all indications are that the photocopying business is booming in most urban centres countrywide. Regarding the universities in Kenya, this blogger would be correct in stating that over 95% of them are not licensed by KOPIKEN yet these institutions are actively engaged in photocopying both for internal use and also as indirect commercial activity.

Therefore, the time has come for KOPIKEN to assert itself on behalf of all the local and foreign authors, publishers and other rightsholders in the print medium whom they duly represent. Borrowing from the situation in India, this bloggers contends that time has come for KOPIKEN to consider litigation as a means of ensuring compliance with the copyright law, deterring infringers and creating jurisprudence in this silent area of the law. In respect to the last point of jurisprudence, litigation by KOPIKEN against one of the local universities would also allow the courts to revisit the questions surrounding the exceptions and limitations (fair dealing) provisions contained in section 28 of the Copyright Act, particularly as they relate to educational institutions, libraries and archives.