The President of South Africa recently exercised his power to return the long considered Copyright Amendment Bill back to Parliament because of reservations about its constitutionality.[1] Specifically, the South African President declared unconstitutional the provisions in the bill that would require contracts with creators to include royalty payments, the reversion of ownership rights back to creators, and the introduction into South Africa of a fair use right and other common exceptions to copyright. The move was immediately heralded by representatives of collecting management organizations, multinational publishers and music labels as a win for creators. In fact, the provisions declared unconstitutional by the President serve the interests of individual creators vis a vis these well-heeled intermediaries who lobbied extensively against the bill. This note analyzes the specific constitutional reservations given by the President for his referral and concludes that all of them are acutely unsupported.

        I.            The President’s Reservations

The President’s letter concludes with three express constitutional reservations about the bill. He states:

I am of the view that the Bills have been incorrectly tagged and that they ought to have been classified and passed as section 76 Bills. This is primarily because their provisions have an impact on “Trade” and “Cultural matters” as contemplated in Schedule 4 of the Constitution.

The retrospective application of the proposed new sections 6A, 7A and 8A of the Copyright Bill to copyright assigned before the new sections come into operation may indeed be unconstitutional on the ground that it constitutes an arbitrary deprivation of property under section 25 of the Constitution.

The new exceptions introduced by sections 12A, 12B, 12C, 12D and 19B and 19C of the Copyright Bill are also likely to be declared unconstitutional on the basis that they are in breach of section 25(1) of the Constitution and the Three-Step test binding South Africa under international law.

 I explain each of these reservations in turn.

A.     Incorrect tagging

Under the South African Constitution, a bill being considered by Parliament must be “tagged” as a general purpose bill (Section 75) or as a bill implicating the concurrent regulatory authority of both the national government and the Provinces (Section 76). Section 76 bills must be passed through a process that involves substantially more provincial consideration.

Copyright is regulated only by the national government, and therefore the Bill was tagged as a general purpose bill under Section 75. The President declares in his letter that the Bill was wrongly tagged because “trade” and “culture,” which are “affected” by copyright law, are areas of concurrent national and provincial jurisdiction. He specifically criticizes the following sections as affecting “trade”:

  • require the payment of royalties in assignment contracts. 6A, 7A, 8A.
  • give the Minister authority to prescribe “compulsory and standard contractual terms to be included in agreements to be entered in terms of this Act.” 39(cG).
  • give the minister authority to prescribe “royalty rates or tariffs for various forms of use.” 39(cI)
  • provide that an “assignment of copyright in a literary or musical work shall only be valid for a period of up to 25 years from the date of such assignment.” 22(3)
  • provide for a resale royalty right for artistic works. 7B-F
  • establish a system for the licensing of orphan works. 22A

The President’s objections appear unfounded. Section 76 of the Constitution requires heightened provincial participation in the passing of any Bill implicating the functional areas of concurrent provincial and national legislative competence described in Schedule 4 of the Constitution. Although these areas include “trade” and “culture,” they do not include copyright or intellectual property. Copyright is not among “the explicit list of legislative matters” listed in Section 76(3)(a) – (f); nor does copyright “in substantial measure fall within a concurrent provincial legislative competence” — the “two ways” the South African Constitutional Court has indicated that a section 76 Bill is determined.[2] The most recent amendment to the Copyright Act, — by Act 9 of 2002 — was enacted as a Section 75 Bill.[3]

B.      Royalty rights as arbitrary deprivations of property

The sections that the President complains of as “retrospective” and “arbitrary” deprivations of property provide for a process in which the Minister must make regulations requiring the payment of “fair” royalties for currently existing contracts assigning away copyright.[4] The Bill makes clear the royalties required to be paid in respect of past contracts are prospective only – i.e. they can only require payment for activity after the enactment of the Act.[5] These provisions were included in the bill in response to the 2011 Copyright Review Commission report concluding that many black creators – especially musicians – were exploited by major publishers into assigning their copyrights for paltry fees and with no right to ongoing royalty payments.[6]

A similar history of exploitation of black creators has been well documented in the U.S, and has led to calls for publishers to implement fair royalty systems like those required by the South African bill.[7]   

It is, of course, well within government powers of every country to ensure that workers are fairly compensated. The application of minimum wage and other regulations of remuneration to existing contracts has been considered a valid exercise of government authority in the U.S. since the overturning of Lochner.[8] Adjusting copyright protections is one mechanism that countries use to promote fair payment of creators.[9] The South African Constitution is expressly dedicated to enabling the government to regulate property and contracts to overcome the vestiges of Apartheid. It is unfathomable that the Constitutional Court would hold that government could not regulate existing unfair contracts with creators as an incident of this power.

C.      Copyright exceptions as takings

The Presidents letter concludes that the following exceptions to copyright (aka “user rights”) violate the constitutional right to protection of property:

  • fair use general exception. 12A.
  • quotation. 12B (1)(a)(i).[10]
  • reproductions needed to facilitate broadcasts. 12B (1)(c).[11]
  • news of the day. 12B(1)(e)(i).[12]
  • non-commercial translations. 12B (1) (f).[13]
  • educational use. 12D. 
  • inter-library lending. 19C(3).[14]
  • library making available of works “on its premises, in an institutional classroom or lecture theatre, or … by means of a secure computer network.” 19C(4).[15]
  • library preservation of websites. 19C(5)(b).[16]
  • library copies of orphan works. 19 (9).[17]

The letter does not contain any analysis of why these common exceptions are unconstitutional. An extensive opinion on the Bill by South African Senior Counsel Susannah Cowen with Jonathan Burger and M. Nxumalo provides an expansive analysis on why the Bill would be unconstitutional without the exceptions given South Africa’s expansive rights to freedom of expression, education and access to information.[18] Section 36 of the Constitution permits a limitation of rights, such as the right to property, which is “reasonable and justifiable in an open and democratic society based on human dignity, equality and freedom, taking into account all relevant factors.”[19] Thus, even assuming that copyright exceptions limit constitutionally protected property, any court would examine the reasonableness of the exceptions in part by reference to other laws. There one would find that all of the exceptions in the Bill are similar to those that exist in many other countries around the world.[20]

The main criticism of the proposed fair use right is that it added the words “such as” to a list of permitted purposes, making the previous “fair dealing” right potentially open to a “fair” utilization for any purpose. South Africa would not be the only country to adopt such an open general exception. There is extensive academic commentary that open general exceptions — as long as constrained by a fairness test that protects the legitimate rights of the author — are fully in line with the international 3-step test.[21]

Conclusion

At bottom, the President’s letter appears to fail to raise any constitutional issue that warrants sending the bill back to Parliament. Recent document releases from the US and EU show that the South African President was being heavily lobbied by multinational film, music and publishing industries, bolstered by EU and US trade pressure. [22] These industries oppose the globalization of fair use and copyright protections for creators that would come at their expense. The South African President’s letter declaring fair use and creator protections unconstitutional is an incredible political victory for these interests. But it is not one supported by law.

[1] Referral of President Cyril Matamela Ramaphosa of the Copyright Amendment Bill (CAB) [B13B – 2017] and the Performers’ Protection Amendment Bill [B24 – 2016] to the National Assembly (16 June 2020) http://infojustice.org/wp-content/uploads/2020/06/ramaphosa06162020.pdf. Under the South African Constitution, the President lacks a general policy veto and can only send a bill back to Parliament for reservations about its constitutionality.

[2] Tongoane and Others v National Minister for Agriculture and Land Affairs and Others (CCT100/09) [2010] ZACC 10; 2010 (6) SA 214 (CC) ; 2010 (8) BCLR 741 (CC) (11 May 2010).

[3] See Copyright Amendment Bill 73, GG 22249 (24 Apr. 2001).

[4] Each provision (extending the same rule to different works) requires that the Minister:

(i) develop draft regulations setting out the process to give effect to the application of this section to a work contemplated in paragraph (a);

(ii) conduct an impact assessment of the process proposed in the regulations contemplated in subparagraph (i); and

(iii) table the draft regulations and impact assessment contemplated in subparagraphs (i) and (ii) respectively, in the National Assembly for approval, before the Minister may make the regulations contemplated in subparagraph (i) in accordance with the process envisaged in section 39.

[5] See (c) (“The share in the royalty only applies to royalties received, in respect of a work contemplated in paragraph (a), after the commencement date contemplated in section 38(2) of the Copyright Amendment Act, 2017.”).

[6] https://www.gov.za/documents/copyright-review-commission-report-2011

[7] See K. J. Greene, Stealing the Blues: Does Intellectual Property Appropriation Belong in the Debate Over African-American Reparations? TJSL Public Law Research Paper No. 05-03; Tim Ingham, Could Music Companies Help Black Artists By Adjusting Old Record Deals?, Rolling Stone (June 8, 2020); Richard Harrington, MCA TO PAY ROYALTIES TO RB GREATS, Washington Post (December 7, 1989).

[8] Lochner v. New York (1905) (holding that a maximum hours restriction on employment contracts violated the due process clause and its freed om of contract); West Coast Hotel Co. v. Parrish (1937) (overturning Lochner).

[9] German copyright law, for example, contains duties to provide fair remuneration to creators and empowers government to revise contractual terms where necessary to achieve this purpose.  See § 32 of the Copyright Act of Sept. 9, 1965 (Federal Law Gazette I, p. 1273), as last amended by Article 1 of the Act of 1 September 2017 (Federal Law Gazette I p. 3346) (“If the agreed remuneration is not equitable, the author may require the other party to consent to a modification of the agreement so that the author is granted equitable remuneration”).

[10](a) Any quotation: Provided that—

(i) the extent thereof shall not exceed the extent reasonably justified by the purpose;

[11] (c) the reproduction of such work by a broadcaster by means of its own facilities where such reproduction or any copy of the reproduction is intended exclusively for lawful broadcasts of the broadcaster and is destroyed before the expiration of a period of six months immediately following the date of the making of the reproduction, or such longer period as may be agreed to by the owner of the relevant part of the copyright in the work: Provided that any such reproduction of a work may, if it is of an exceptional documentary nature, be preserved in the archives of the broadcaster, but shall, subject to the provisions of this Act, not be used for broadcasting or for any other purpose without the consent of the owner of the relevant part of the copyright in the work;

[12]  (i) the reproduction by the press, or in a broadcast, transmission or other communication to the public of an article published in a newspaper or periodical on current economic, political or religious topics, and of broadcast works of the same character in cases in which the reproduction, broadcasting or such communication thereof is not expressly reserved;

[13] the translation of such work by a person giving or receiving instruction: Provided that—

(i) such translation is not done for commercial purposes;

(ii) such translation is used for personal, educational, teaching, judicial proceedings, research and professional advice purposes only: Provided that such use shall not exceed the extent justified by the purpose; or

(iii) such work is translated and communicated to the public for non-commercial purposes.

[14] A library, archive, museum or gallery may provide temporary access to a copyright work in digital or other intangible media, to which it has lawful access, to a user or to another library, archive, museum or gallery.

[15] A library, archive, museum or gallery may, for educational or research purposes, permit a user to view a whole audiovisual work, listen to a full digital video disc, compact disc or other sound recording or musical work on its premises, in an institutional classroom or lecture theatre, or view such work or listen to such digital video disc, compact disc or other sound recording or musical work by means of a secure computer network, without permission from copyright owners, but may not permit a user to make a copy or recording of the work for commercial purposes.

[16] (5) A library, archive, museum or gallery may make a copy of … a publicly accessible website for the purposes of preservation.

[17] (9) A library, archive, museum or gallery may make a copy of a copyright work for its own collection when the permission of the owner of copyright, collecting society or the indigenous community concerned cannot, after reasonable endeavour, be obtained or where the work is not available by general trade or from the publisher.

[18] Opinion on CAB and the Constitution 13.10.2016 (S. Cowen SC, J. Berger & M. Nxumalo) https://libguides.wits.ac.za/Copyright_and_Related_Issues/Opinion

[19] SA Constitution, Sec .36(1).

[20] See e.g. Kenneth Crews, Study on Copyright Limitations and Exceptions for Libraries and Archives: Updated and Revised (2017 Edition), SCCR/35/6; Daniel Seng, Updated Study And Additional Analysis Of Study On Copyright Limitations And Exceptions For Educational Activities SCCR/35/5 REV. (2017).

[21] See Pamela Samuelson, Unbundling Fair Uses, 77 FORDHAM L. REV. 2537 (2009); Christophe Geiger, Daniel Gervais, & Martin Sentfleben, The Three Step Test Revisited: How to Use the Test’s Flexibility in National Copyright Law, PIJIP Research Paper No. 2013-4 (2013), available at http://digitalcommons.wcl.american.edu/cgi/viewcontent.cgi?article=1041&context=research.   

[22] See FOIA: Film industry lobbies South Africa’s Parliament to suspend Copyright Amendment Bill, https://www.keionline.org/33212 (May 26, 2020); Laura Kayali, How the US and EU pressured South Africa to delay copyright reform, Politico (June 24, 2020).