Sean Flynn is the Associate Director of the Program on Information Justice and Intellectual Property, American University Washington College of Law, and a former clerk to Chief Justice Arthur Chaskalson. He has been working on intellectual property and development projects in South Africa for over 20 years and lived in South Africa from 1999-2001.

The National Council of Provinces is set to vote on the Copyright Amendment Bill [B13-2017] on March 20.

What are your thoughts about the copyright amendment bill?

The Bill is exceptional in including what will be the world’s most well considered and detailed fair use right.

The fair use and education rights are eminently reasonable for a country founded on the principle that all laws must promote the Bill of Rights, including rights to freedom of speech, to receive information, and to education.

It borrows from US law an open public interest fairness test that is applicable to all uses of copyright works. It borrows also from the US law the centrality of the concepts of transformative use and a market test for whether a use substitutes for the use of an original. These provisions in US law are widely recognized among scholars to be the most freedom of expression and innovation protecting rules the world over.

Knowing the definition of a fair use is key to understanding fallacy of all the arguments against it. A fair use cannot substitute for the original work in the market and therefore cannot devastate markets for copyrighted works. What it can do is allow new means of expression and technology.  

2. A study  commissioned by the industry showed that it could have a devastating impact such as a possible 33% decrease in sales, equivalent to R2.1-billion on baseline sales and an associated reduction in VAT and corporate tax; a decrease in the relative share of exports of local titles; an increase in the share of imports of foreign titles; and a weighted decline in employment of 30%, or the equivalent of 1 250 jobs.

Can you comment on this and some of the impacts of it?

The PwC report erroneously assumes that the bill will eliminate all licensing of works.

The fair use clause prohibits uses that substitute for the original work in the market. And the education right applies only to uses of excerpts. While the bill may reduce budgets spent on licensing mere extracts for educational use, it does not provide the means for wholescale displacement of licensing or of spending on educational materials.

The Report’s analysis show that some reduction in educational spending is sorely needed. The report shows:

  • the education and academic sector make up over 80% of publishing revenues in South Africa in recent years, compared to under 50% in countries like the UK and US;
  • The spending is mostly on imported texts, with publishing imports exceeding exports by about R1bn. P. 23
  • Authors report very little income (under 2% ort total income) from licensing of secondary uses of their work of the kind most affected by the bill.

The report concludes without showing its methodology that there would be a R2.1bn reduction in educational spending on publishing. But the whole market in South Africa is just over R5bn.

The Bill specifically provides that coursepacks or other forms of copying may not “incorporate the whole or substantially the whole of a book or journal issue, or a recording of a work” under normal circumstances. (12D(2)).

It authorizes copying of full works only if “a licence to do so is not available from the copyright owner . . .  on reasonable terms and conditions”; “where the textbook is out of print”; or “where the owner of the right cannot be found”. (Copyright Amendment Bill Section 12D(3)-(4). In each case, copying is not permitted for commercial gain, (12D(5)), and the copying must be restricted to the “extent justified by the purpose.”  

Our research based on a study of wealthy and middle income countries concluded that adopting fair use rights led to increases in technology investment and in the production of scholarship with no decrease in income from publishing.

Our recent report concludes:

“Our empirical tests find positive relationships between more open user rights and innovative activities in information and communication technology industries, returns to firms in these industries, and the production of scholarly publications. We do not find evidence that opening user rights causes harm to revenue of copyright intensive industries like publishing and entertainment.”