Will the goal of updating the law for the Internet Age sacrifice creative industry instead?
In December it will be 20 years since South Africa signed international copyright treaties to bring its copyright laws into the digital age. South Africa has still not ratified these treaties and the Copyright Act has not been amended to apply to the Internet environment, resulting in uncertainty for creative industry and consumers alike.
The Copyright Amendment Bill, introduced in May 2017, has the object of addressing this deficiency, but is so poorly drafted and introduces so many other egregious provisions, that it has led to more questions than answers, as well as vociferous debate.
The Bill was preceded by the findings of the Copyright Review Commission which mainly dealt with the application of copyright in the music industry. However, the Government did not carry out any serious study to support many provisions of the Bill, especially new exceptions to copyright that it proposes to introduce, and an independent impact study promised by Government in 2015 never materialised.
In Parliamentary hearings in August this year, the Publishers Association of South Africa (PASA) presented an economic impact assessment by PricewaterhouseCoopers (PwC) that they had commissioned, showing the detrimental impact that the proposed “fair use” exception and very broad exceptions for education would have on the publishing industry.
The impact assessment found that the proposed amendments would result in declining revenue from sales of educational publications, a sharp reduction in licensing income via collective management organisations and an erosion of the incentive for the creation of educational works, specifically:
• Weighted average decline in sales of 33% – implies a decrease in sales revenue of approx. R2.1 billion on the baseline, concomitant reductions in GDP, and VAT and corporate tax revenue collections.
• Decline in revenue.
• Reduction in licensing income via collective management.
• Imports to increase as a proportion of sales in the domestic market.
• Exports to decrease as a proportion of total sales.
• Weighted decline in employment of 30%, associated reductions in personal tax collections, equating to around 1 250 full-time equivalent jobs.
PASA pointed out that these findings are largely consistent with a review of available literature on the impact of copyright reforms in Canada and the potential impact of similar reforms once contemplated in the UK.
The 2012 Copyright Modernization Act in Canada has negatively impacted Canadian educational publishers in particular. “The royalties that have traditionally come from our Canadian sister organizations have fallen like a stone since the 2012 Copyright Modernization Act,” said Copyright Clearance Center’s Michael Healy, speaking on a panel at the Frankfurt Book Fair in October. But “what has become the norm in Canada,” Healy added, has for some reason become “an exemplar” for other governments around the world. The takeaway seems to be that when it comes to educational use “copy as much as you like, and to hell with the creator.”
Of importance to the South African case is the comment that the addition of “education” as a purpose for fair dealing in the Canadian legislation has meant that both the school and higher education sectors in Canada now claim – for free – the same copies for which they had previously paid license fees.
PASA’s submission to Parliament highlighted specific issues with the Bill:
Fair use: Introduction of ‘fair use’ defence to copyright infringement, which is based on a statutory defence to copyright infringement under the laws in the United States, but admitting more permitted use cases than in the United States (including “education”, “underserved populations”, “public administration”).
User rights – A new right by a “user, performer, owner, producer or author” to claim a royalty for the “use” of the copyright work, which not only runs contrary to the objects of copyright, but does not exist anywhere else in the world.
Parallel importation: Reversal of recognised rules relating to parallel importation, that will undermine the local publishing industry.
Moral rights: Provisions that are held out to be improvements to authors’ moral rights, instead take rights away from authors, specifically in the application of exceptions to copyright.
Limitation on assignments: A limitation on all transfers of copyright to a period of 25 years.
Contract override: A blanket override of all contractual terms by the provisions of the Act, interfering with the freedom to contract and creating uncertainty in every agreement involving copyright works.
PASA’s submission also highlights the changed focus of the Bill from the original directive, which was to benefit the position of authors and performers, to a more “users’ rights” agenda and State control over copyright works.
Following the public hearings in August, Parliament came to the conclusion that the Bill had so many shortcomings, it decided not to return the Bill to Government, but to rewrite it itself. A task team has been established with a directive to have an alternative Bill ready to present to the General Assembly in early 2018, subject to a fresh round of public hearings.
Professional Editors Network (PEN) South Africa is convinced that many of the changes envisioned by the Bill will have a direct and detrimental impact on its members, and indeed all South African authors.
“By granting a set of exclusive rights, copyright incentivises authors and the larger creative industries to expend their skills, talent and labour in the creation of works for the ultimate benefit of all. Copyright enables authors to earn income from their creative work. The introduction of wide-ranging exceptions and limitations would discourage authors from writing books and publishers from taking the financial risk to publish those books, as it would create a climate within which freely copying copyright works for a wide range of purposes is permitted. Other points of objection are the proposed weakening of moral rights protection and the appropriation of state-funded copyright works by the state.”
Lazarus Serobe, who represents the rights of writers and publishers at DALRO, also suggests that the Copyright Amendment Bill places too much emphasis on giving free access to creative works, and not enough on the benefit to creators of those works.
However, there are some copyright scholars who disagree. The Daily Maverick quoted Dr Tobias Schonwetter, from the University of Cape Town, as saying that “fair use” has flexibility on its side and is in line with international best practice.
The Daily Maverick also quoted US copyright academic Professor Sean Flynn at the public hearings in August, who argued that the notion of “fair use” in the Bill should be extended even further in order to cover the digital realm.
Flynn pointed out that it is only because of the US’s accommodating copyright legislation that companies like Google have been able to thrive. Google’s search function and language applications both use copies of copyrighted work. The Google Books function takes it even further, with Google having digitised the books of university libraries in order to make them available for research purposes. This does not substitute for purchasing the book on the market, Flynn argued, because only portions of the books are made available.
“When you introduce fair use you will be giving a green light for innovators,” Flynn told the committee.
PASA Copyright Legal Counsel, André Myburgh, strongly disagrees with this sentiment in a piece written for the Business Day after the hearings.
“We hear about internet search engines and other technological applications, all of which use machines to “read” millions of works with the purpose, it is said, “to expand our knowledge and improve our lives”. This description does not cover the Google Books Project, which started with Google making digitised reproductions of entire book collections of participating libraries and keeping a copy for purposes held by the US courts to constitute “fair use”, namely the making available on the internet of bibliographical data and so-called “snippets”.
“The concern publishers have with this result, which was raised by the Publishers Association of SA at the hearings, was that this case and others are causing US “fair use” law to become — in the words of Jon Baumgarten, former general counsel of the US Copyright Office — “a legal regime that permits regular, concerted, systematic, commercially purposed, 100% complete and uncompensated copying without permission, day in day out, of millions of copyrighted books”.
“The digitisation exercises must have left Google with the world’s biggest library, without having bought a single book.”
Mpuka Radinku, PASA executive director and Copyright Alliance member, told Fin 24 that the association welcomes one of the main goals of the Bill, namely to bring the Copyright Act of 1978 up to date with the Internet age.
“PASA supports the principles of access to copyright works if permission is obtained where required by international treaties and practice,” said Radinku.
“PASA, nevertheless, suggests that many of the provisions in the Bill will need to be re-evaluated, reconceptualised and rewritten. We strongly feel that new rules allowing the state to assume ownership of copyright works made with state funding and the across-the-board overriding of contractual terms should be rejected.”
In PASA’s view, the Bill must do more to improve the protection of authors and publishers in the internet age.
“Whereas publishers recognise that exceptions to copyright are part of the copyright landscape, we contend that, as the PwC report shows, overly broad exceptions are to the prejudice of authors and publishers and interfere with their legitimate expectations to earn from their work,” said Radinku.
Thanks to Andre Myburgh for his expert and editorial input.
http://www.wipo.int/treaties/en/ShowResults.jsp?lang=en&treaty_id=16
http://www.publishsa.co.za/file/1501662149slp-pwcreportonthecopyrightbill2017.pdf
https://www.dailymaverick.co.za/article/2017-08-02-copyright-amendment-bill-in-parliament-whose-right-is-it-anyway/#.Wfrj7YZx1E4
https://www.fin24.com/Economy/new-copyright-bill-may-negatively-impact-publishers-pasa-20170802-2
https://www.businesslive.co.za/bd/opinion/2017-08-24-reassurances-about-fair-use-benefits-ring-hollow-to-publishers/
https://www.businesslive.co.za/bd/opinion/2017-08-24-reassurances-about-fair-use-benefits-ring-hollow-to-publishers/