— Sanya Samtani[1]
In Part I of this blogpost, I briefly set out the procedural history of the copyright reform process that led to the Presidential Referral of the Bill to the Constitutional Court. I also briefly explained the scope of Referral proceedings and the parties involved. In this Part, I discuss the issues raised during the hearing and what to expect going forward.
Issues raised during the hearing
In line with the Court’s past jurisprudence, the proceedings centred around the constitutionality of the two sets of provisions referred by the President on the basis that he referred them – the fair and equitable remuneration provisions and the new exceptions and limitations. I discuss the arguments raised regarding each set in turn. I focus here on the oral submissions – the full written submissions on record are available here.
Fair and equitable remuneration (proposed sections 6A, 7A, 8A)
On the fair and equitable remuneration provisions, the President remained concerned that these provisions apply retrospectively which, in his view, would constitute arbitrary deprivation of property. The President explained that although Parliament deleted the specific subsections that explicitly provided for the retrospective application of the provisions, he believed that the provisions were still applicable retrospectively. Retrospectivity, he argued, would constitute a substantial interference in the copyright owner’s enjoyment of their property (and the profits derived from it) as it would open up the possibility for windfall gains for authors notwithstanding whether their original historical assignment of copyright was unfair. Moreover, the President argued that the indiscriminate application of these provisions to all past and future assignments constituted an arbitrary deprivation of property. To prevent retrospective application, the President argued that it was necessary for the language of the provisions to explicitly state that they would apply prospectively. Underlying this argument, the President confirmed that in his view, copyright constituted a constitutionally protectable set of property interests. When questioned, the President conceded that should these provisions be read exclusively prospectively they would not be unconstitutional.
The President’s initial position was supported by the Freedom Front Plus. It was also supported by the Democratic Alliance who argued that the only reasonable interpretation of these provisions was that they applied retrospectively to past and future profits derived from the exploitation of the work under copyright. On a prospective interpretation, the DA argued, the language that allows the existence of an agreement to the contrary in proposed section 6A(2) would render the provision a nullity. The DA also supported the proposition that these provisions ran the risk of arbitrarily depriving copyright owners of their property on the basis that there was a substantial interference with the right by significantly reducing its value, imposing uncertainty costs upon the entire industry and interfering with the contractual autonomy of the parties. Further, the DA argued that the lack of similar language in sections 7A and 8A was irrational – and although the President adopted this argument in his oral submissions, irrationality was not expressly part of the 2020 or 2024 Referral letter, raising the question whether the Court can consider it. NAB/SANEF/CFE aligned themselves with the arguments made by the President that these provisions had retrospective effect and ran the risk of arbitrarily changing the rights negotiated and acquired by broadcasters in the current regime, asserting that the broadcasting industry may face dire consequences as a result.
Parliament, however, explained in their oral submissions that they had a clear legislative intent to ensure that the impugned provisions had prospective effect. This intent was demonstrated by the deletion of the relevant subsection from all three provisions, as acknowledged by the President, in addressing the reservations set out in his 2020 Referral letter.
Recreate Action aligned with Parliament’s position on the deletion of the explicit retrospectivity provisions, and argued that there is a presumption against retrospectivity in the law. Where a provision can be read prospectively, it must be read in that manner. Recreate Action responded to the DA’s argument that a prospective reading of section 6A renders it a nullity by explaining that the non-obstante clause in that section would ensure its continued application. In any event, Recreate Action argued that even if the impugned provisions applied retrospectively, that did not in and of itself render them unconstitutional. To the extent that they were a deprivation of property, Recreate Action argued that even if copyright was incorporeal constitutional property, it required a lower threshold of justification for such deprivation, and that the deprivation only encompassed a single incident of ownership – the royalty right. Finally, Recreate Action responded to the claim of indiscriminate application as arbitrariness by explaining that the standards of ‘fairness’ and ‘equity’ in the text of these provisions act as levers to calibrate the application of these provisions to address unequal bargaining power and prevent any windfall gains.
In addition to testing these arguments, the Court raised concerns about the specificity of the President’s reservations with regard to these provisions. In particular, the Court was concerned as to whether Parliament had a meaningful opportunity to address the whole of these provisions – in other words, whether the President’s 2020 Referral letter flagged the whole of these provisions as triggering his reservations, or just the relevant subsection that explicitly provided for their retrospective application. If the Court were to find that the whole provisions were not referred to Parliament – to enable Parliament’s consideration of them prior to the Referral to the Court – this may bar the consideration of the merits.
New exceptions including education and library exceptions (proposed sections 12A-D, 19B, C)
I now turn to the second set of provisions that the President was concerned about – the new exceptions and limitations. The President argued that the exceptions and limitations sought to be introduced go too far and would conflict with the normal exploitation of the work and cause unreasonable prejudice to the rights holder. The President was also concerned that the fair use provision suffered from vagueness and introduced a level of uncertainty that could only be resolved by courts, raising rule of law concerns. In the 2024 Referral letter, the President highlights that these provisions are contrary to international law and that without the evidence that international law requires these exceptions may constitute an arbitrary deprivation of property. During the hearing, the President asserted that the three-step test in the Berne Convention would be violated by these exceptions. The President also asserted that the constitutional property clause was engaged for the same reasons advanced with regard to the first set of reservations. In oral argument, the President conceded that both sets of obligations – international human rights and copyright obligations – were relevant to the determination of the concern.
The FF+ aligned themselves with the arguments made by the President and asserted that these exceptions – the fair use provision in particular – would lead to uncontrolled and unreasonable access to works under copyright to the detriment of the rights holder and that it would serve the interests of content aggregators and big corporations. They also argued that the fair use provision was contrary to the three-step test. RISA aligned themselves with these arguments concerning fair use, but limited their submissions to highlighting that the shift in the approach from the current copyright legislation where sound recordings are not covered by the personal use exception, to the Bill’s application of the personal use exception to all works including sound recordings, may potentially deprive the recording industry of profits. The CAPA amici aligned themselves with the FF+’s contention that the exceptions sought to be introduced were overbroad and vague. In addition, the CAPA amici asserted that these exceptions would affect publishers’ market share, particularly in the education sector. They also aligned themselves with the President’s contention that these exceptions would put South Africa at odds with its international obligations, and further argued that these exceptions would unjustifiably limit the constitutional rights of creators under the property clause interpreted in alignment with creators rights under the Universal Declaration of Human Rights. Further, the CAPA amici argued that the purposes permitted by the Berne Convention under the educational exceptions provision are narrower than those provided for in the Bill, and that the three-step test has blanket application across all exceptions, relying on an opinion by a former WIPO Assistant Director General.
However, Blind SA argued that in asserting that these provisions were contrary to international law, the President exclusively – and incorrectly – focused on international copyright law, which does not generally require that exceptions be enacted. Had the President considered all of South Africa’s interlocking international obligations including international human rights obligations, Blind SA argued that he would have noted that these exceptions may be required to give effect to constitutional and human rights obligations and fulfil a constitutional purpose. In fact, without these exceptions, Blind SA argued, copyright legislation may unjustifiably limit rights in the Bill of Rights. In any event, Blind SA argued that copyright was not a form of constitutionally protected property under the property clause – that it was a creature of statute, distinct from trademarks and an instance of state largesse – and that the mechanism of exceptions and limitations have historically been an integral part of the copyright system. As such, should the Court find that copyright is property, these exceptions would not constitute deprivations as they do not extend beyond the normal limitations to the right.
Blind SA responded to the President’s interpretation of the three-step test explaining that for specific exceptions including educational exceptions the appropriate standards are in Arts 10 and 10bis in the Berne Convention that are present in the Bill, rather than a blanket application of the three-step test in Art 9(2) of the Berne Convention and Art 13 of the TRIPS Agreement. Ultimately, Blind SA argued that even if and to the extent that the three-step test is applicable, it must be interpreted in light of the objects and purposes of the TRIPS Agreement and South Africa’s international human rights obligations, mediated through the Constitution, which is likely to demonstrate compatibility of the Bill’s proposed exceptions with the test.
CCL/UNESCO aligned themselves with Blind SA’s arguments that copyright was not constitutionally protected property and that there was no arbitrary deprivation even if it was considered to be such. Further, they argued that in South Africa, a country with deep and enduring inequalities, educational and library exceptions are not only permissible under international law, they are constitutionally required to discharge South Africa’s international human rights obligations. States are permitted by international law to implement their obligations domestically in a context-sensitive manner. In particular, CCL/UNESCO highlighted that the exceptions give effect to the constitutional rights to equality and non-discrimination, education and the best interests of the child – something that the President did not consider due to his selective legal paradigm in his 2024 Referral letter. CCL/UNESCO explained that the educational exceptions strike the right balance as they are all related to core aspects of education, are limited to non-commercial purposes, and include suitable qualifiers and limitations to ensure that copyright holders rights are protected. Further, in response to questions, CCL/UNESCO explained that the unenumerated purposes in the fair use provision would be qualified by the existing purposes using a canon of statutory interpretation, ejusdem generis.
NAB/SANEF/CFE aligned themselves with the President on the applicability of the constitutional property clause to copyright. However, NAB/SANEF/CFE argued in defence of the exceptions concerning broadcasters including the ephemeral exception, and the exceptions concerning news reporting, on the basis that they were well-recognised in international law and struck the right balance between copyright owners on the one hand and broadcasters and the press on the other. There was thus sufficient reason for them and these exceptions were not at risk of arbitrarily depriving copyright owners of their property.
Zapiro argued in defence of the exceptions concerning parody and satire explaining that the right balance has been struck as for the exceptions to be applicable at all, the proposed statutory scheme requires the relevant purpose/ground to be identified and the enumerated tests for fairness be met from an operational perspective. These exceptions are not at odds with international law – Zapiro argued that, for instance, the US fair use exception in all its years of existence has not been found to be contrary to the three-step test, even though the World Trade Organisation had an opportunity to consider a different exception in its only Panel Report concerning the three-step test (United States – Section 110(5) of the US Copyright Act, WT/DS160/R (15 June 2000).
The Court tested these arguments by asking questions regarding whether the appropriate balance was struck working through particular provisions as examples – for instance, in its discussion of proposed section 12D(4) with Blind SA, CCL/UNESCO, and the CAPA amici among others. The Court was particularly interested in the evidentiary basis for the claims made by the parties and the amici before it concerning the future operation of the impugned provisions. Since the Referral proceedings are a form of abstract review – without the actual evidence before it that an ordinary constitutional challenge would include – questions were raised as to the extent to which the Court can and should decide questions of impact and the extent to which they may leave these questions open for future determination in adversarial proceedings. The President, interested parties and amici all agreed that Referral proceedings were not meant to act as a ‘mini-certification’ process that immunises the Bill as a whole from future constitutional challenge.
What happens next
The Court will have to first make a determination as to whether the President’s referral is validly before them. It will consider challenges to the validity of both sets of reservations. It will also consider Blind SA’s overarching argument concerning the President’s delay in performing his constitutional obligations as affecting the lawfulness of the referral, and the President’s reply explaining the timeline and context in which he made his decision to refer the Bill. In doing so, the Court will then define the relevant issues before it and determine whether the issues brought up by the amici and interested parties outside of those identified by the President are validly before them such as issues concerning Parliament’s rationality regarding the consideration of a particular legal expert report over other legal expert reports when determining the alignment of the exceptions with the three-step test as raised by the CAPA amici, and those concerning the socio-economic impact assessment study (SEIAS), whether it was materially linked to the issues raised in the referral, and its validity as raised by the CAPA amici and FF+, among others.
Subsequently, if it finds that the reservations were validly referred to it, the Court will have to consider the merits of each reservation in turn. The Court is faced with an objective constitutionality inquiry – it must determine whether the provisions are unconstitutional for the reasons that the President adduces and on the basis of the provision of the Constitution engaged by the President: the constitutional property clause. To do so, the Court may also decide the question of whether copyright is constitutional property – though equally, it may assume without deciding for the purposes of conducting an arbitrary deprivation analysis. In conducting this analysis, due to the President’s reasons for his second set of reservations, the Court may also consider South Africa’s relationship with international law.
The Constitution is silent on what happens should the Court decide that the President’s reservations have merit. In prior referral cases (the singular presidential referral and two referrals made by provincial counterparts), the Court has declared the relevant provisions are unconstitutional, or that the Bill is unconstitutional as a whole with its reasons providing information about the specific aspects that are unconstitutional. However, nothing precludes the Court from determining its own processes, should it wish to make a more specific order about the fate of the rest of the Bill, though the Court cannot sever the unconstitutional provisions from the others – its severance powers are limited to laws already in force. Should the Court decide that the President’s reservations are without merit, the Constitution requires that the Court direct the President to assent to and sign the Bill. Whatever the outcome, this marks a crucial turning point for the way forward for South Africa’s copyright reform saga – and sets a precedent for how other pre-constitutional legislation seeking to transform social and economic relations in South Africa may be considered in the future.
[1] Sanya Samtani BA LLB (Hons), BCL (Oxon.) DPhil (Oxon.) is a Senior Researcher at the Mandela Institute at the University of the Witwatersrand, Johannesburg. The author has acted as an academic advisor to Blind SA in this case and previous copyright litigation. ORCiD: https://orcid.org/0000-0003-0448-8798
