Copyright Review Commission Report - ICT Law and Regulation ...

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NORMOSPsPOSAPPLPPL (India)ProLitterisPRSPwCRBTRiSARROSABCSAMPRASAMROSANTACOSARRALSACEMSACVENSCPPSOCANSPPFSPEDIDAMSPRESSASUISASUISSIMAGEthe dtiTONOTPMsTRIPSWASPAWCTWHOWIPOWPPTWTONational Organisation for Reproduction Rights in Music in Southern AfricaOnline Service ProvidersPerformers Organisation of South AfricaPhonographic Performance LtdPhonographic Performance LimitedGesellschaft fur die collective Verwertung der Rechte an Literatur, Fotografie und bildenderKunstPerforming Rights Society LtdPriceWaterhouseCoopersRingBackToneRecord Industry of South AfricaReprographic Reproduction OrganisationSouth African Broadcasting CorporationSouth African Music Performing Rights AssociationSouthern African Music Rights Organisation LimitedThe South African Taxi CouncilSouth African Recording Rights Association LimitedSociety of Authors Composers and Publishers of MusicSociedad de Autores y Compositores de VenzuelaSociete civile des Producteurs de PhonographiquesThe Society of Composers, Authors and Music Publishers of CanadaSociete civile des Producteurs de Phonogrammes en FranceSociete de perception et de distribution des droits des artistes interpretes de la musiqueSociété de Perception de la Rémunération EquitableSociété Suisse des AuteursCooperative Society of Music Authors and Publishers in SwitzerlandSwiss Authors' Rights Cooperative for Audiovisual WorksDepartment of Trade and IndustryThe Collecting Society For Composers And Lyricists In Musical Works In NorwayTechnical Protection MeasuresAgreement on Trade-Related Aspects of Intellectual Property RightsWireless Application Service Providers AssociationWIPO Copyright TreatyWorld Health OrganisationWorld Intellectual Property OrganisationWIPO Performances and Phonograms TreatyWorld Trade Organisation- 2 -
EXECUTIVE SUMMARYi. The Copyright Review Commission (CRC) conducted a detailed examination of the workings of collectingsocieties that were established in South Africa to license musical and literary works, sound recordings andpublished editions to prospective users, and to collect on behalf of the rights owners the royalties payable by theusers. It analysed their functioning and the degree to which they complied with the accepted principles ofcorporate governance. Societies set up to collect royalties payable for the broadcasting, transmission in adiffusion service or communication to the public of sound recordings (so-called 'needletime' royalties) areregulated by statute and the Commission considered the extent to which they complied with the regulationspromulgated under the Copyright Act, 1978.ii.A major focus of the CRC's work was to ascertain how it came about that, nine years after the enactment ofneedletime legislation in 2002, not a cent had been paid in royalties to musicians and record companies. Itconcluded that the legislation, which provided for a statutory licence in respect of needletime, did not adequatelyprotect the rights owners, whose rights were made subject to the licence. This made possible the delay ofpayment and led to the current situation where two cases before the Copyright Tribunal and another in the NorthGauteng High Court have to be decided before the musicians and record companies involved are able toreceive the money owing to them. The royalties in these cases amount to millions of rand. The CRC says itappears that those entitled to these royalties have not received payment because of what looks like a prolongedfilibuster designed to postpone the day when broadcasters will have to pay needletime. If that is the case, then itis unfortunate that the main beneficiary of this alleged filibuster is the national broadcaster. The CRC makesdetailed recommendations as to how the defects in the law that made this situation possible could be rectified. Italso recommends that the Copyright Tribunal be drastically recast to enable it to function expeditiously andefficiently. See Chapter 3, paragraphs 3.3.11 to 3.3.13.iii.Based on international trends and the problems experienced as a result of multiple collecting societies operatingwithin the same set of rights (e.g. the National Organisation for Reproduction Rights in Music (NORM) versusthe Southern African Music Rights Organisation (SAMRO) with regard to mechanical rights) the CRCrecommends that the legislation be amended to allow for only one collecting society per set of rights with regardto all music rights governed by the Copyright Act of 1978 (i.e. performance, needletime and mechanical rights).See Chapter 6, paragraph 6.3.4.iv.Currently, only needletime collecting societies are supervised by the Registrar. Considering the recent collapseof the South African Recording Rights Association Ltd (SARRAL) and the inadequate protection of its members,the CRC believes it appropriate to regulate all relevant music rights collecting societies (SAMRO and NORM).See Chapter 7, paragraph 7.4.2.1.v. The CRC believes that the provisions in the Collecting Society Regulations for payment into an ‘escrow’ accountare unsatisfactory because: The money that users agree that they are liable to pay and subsequently deposit into such accounts,cannot be distributed until the dispute over the appropriate tariff is resolved; and If users have to pay the money demanded before being permitted to broadcast or otherwise communicatethe recordings to the public (an issue which is sub-judice), they may be obliged to pay unreasonably largesums of money into the account.- 3 -
Page 2 and 3: TABLE OF CONTENTSLIST OF ABBREVIATI
Page 4 and 5: 11.8 RECOMMENDATIONS ..............
Page 6 and 7: LIST OF TABLESTable 1: Cases of Non
Page 10 and 11: These problems are addressed in the
Page 12 and 13: xxi.The report considers developmen
Page 14 and 15: 1.3.8. Determine whether all money
Page 16 and 17: 1.4.9. The CRC derived considerable
Page 18 and 19: 2.3 SUBMISSION BY THE DEPARTMENT OF
Page 20 and 21: Aspects of Intellectual Property Ri
Page 22 and 23: (1) Subject to the provisions of th
Page 24 and 25: Copyright Tribunal or an arbitrator
Page 26 and 27: society, the South African Recordin
Page 28 and 29: 3.2.14. With the liquidation of SAR
Page 30 and 31: the final rate or rates to be appli
Page 32 and 33: (a)that payment is to be made to th
Page 34 and 35: information as to their use to enab
Page 36 and 37: The WCT and WPPT oblige members to
Page 38 and 39: Once the handset technology changed
Page 40 and 41: 4.3.16. In 2009, in what was coined
Page 42 and 43: 4.4.6. In exchange for the above li
Page 44 and 45: operators are licensed by NORM to p
Page 46 and 47: 5.2 FUNCTIONING OF COLLECTING SOCIE
Page 48 and 49: the grant of licences. Article 17 o
Page 50 and 51: 6.1.3. The CRC’s assessment of th
Page 52 and 53: 6.3.3. SAMPRA should be given one y
Page 54 and 55: Corporate Governance GapsKing II Re
Page 56 and 57: King IIIPrincipleKing IIIRequiremen
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King IIIPrincipleKing IIIRequiremen
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8 COLLECTION OF MUSIC ROYALTIES8.1
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8.1.4.2. Needletime royalties are n
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8.1.7.4. For the past five years, V
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PRS (UK)SPRE (FRANCE)SUISA(SWITZERL
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DetailsPerformance RightsSound Reco
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8.2.7 Comparative Study Performed b
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y a collecting society. A rights ho
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agency, its rights being derived fr
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Mr Robinson said DALRO assumed the
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10.1.6. The distribution to publish
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10.4.4. Most of the other collectin
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10.6.3.4. South African English-lis
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10.10 CONTRACTUAL RELATIONSHIPS BET
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10.12.2. The Regulations should rec
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licence that the licensee comply wi
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11.4.6. The details of ICASA’s ta
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RecommendationsTimelines for Recomm
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enterprises. There was a suggestion
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Copyright as it relates to copyrigh
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13.4 DEPARTMENT OF ARTS AND CULTURE
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Table 28: Comparative Study’s Key
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KEY ITEMS BRAZIL FRANCE INDIA NORWA
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KEY ITEMS BRAZIL FRANCE INDIA NORWA
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about 30%, which is the highest amo
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15.1.3. The Copyright Tribunal’s
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15.1.20. Local music content requir
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for the selected artists. The outco
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King III Report by Institute of Dir
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Paranagua Pedro, “Strategies to I
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Copyright Amendment Act of 1984Copy
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APPENDIX 1(B): SUMMARY OF ORAL REPR
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Due to the fact that the existing c
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Mr BrottelProtection of copyright m
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1.1.3. LIST OF ENTITIES VISITED AND
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In the 2009 Annual Report of ABRAMU
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The implementation of this law led
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ecordings. In respect of audio-visu
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In 1995, ECAD distributed 72% of it
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niches in the market to ensure fair
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Proprietary rights allow authors to
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International royalty distribution
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3.2. Relevant LegislationsThe prese
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IPRS uses the standard tariffs in r
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Ad-hoc workshops on copyright are c
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meaningful living out of their crea
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4.1.3. LICENSING AND LEGAL REGIMESI
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Ballet teachers; Teachers in the fi
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It was founded in 1928 by the Norwe
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6.2. STRUCTURE OF COLLECTING SOCIET
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6.5. COLLECTION OF MUSIC ROYALTIEST
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1957, when the Managing Director of
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16.4.14 SWISSPERFORM: CHF4 millionI
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Cross-border licensing of digital r
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algorithm could be used to determin
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Collecting societies in the UK all
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APPENDIX 3: RECOMMENDATIONS BY MITT
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1.PREAMBLEThe Music Industry Task T
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The environment in which the music
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3.1.3 IMPLEMENTATION AND ACCESSION
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In this regard, the Minister should
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3.5.6 OMBUDSMANThe music industry s
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RECOMMENDATION 23:The MITT recommen
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The MITT further recommends that DA
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APPENDIX 4A: EXTRACTS FROM COPYRIGH
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(f)(g)doing, in relation to an adap
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(i)requiring notice of any intended
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(b)any organization claiming to be
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PERFORMERS’ PROTECTION ACTNO. 11
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the parties may agree to refer the
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ANNEXURE 5: COPY OF SARRAL’S CONT
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ANNEXURE 6: SARRAL’S AUDIT REPORT
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TERMS OF REFERENCESNO’SREQUIREMEN
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