Proposed 2015 Intellectual Property Law Amendments: Kenya Copyright Act

nhif

Recently, the Statute Law (Miscellaneous Amendments) (No. 2) Bill, 2015 was published in Kenya Gazette Supplement No. 165 (Bills No. 58). The Bill seeks to one section of the Copyright Act, namely section 30(8). A copy of this Bill is available here (See pages 3229-3230). This proposed amendment inserts the following words at the end of the section: “and the compensation shall be collected by the Board and distributed to the respective copyright collecting society registered under section 46.”
According to the Memorandum of Objects and Reasons in the Bill, the proposed amendment to section 30(8) is intended to provide for structured compensation of performers and producers of sound recordings for private copying of works in line with international norms and practices.

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

pub kenya perak

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.

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.