Page 18 – CIP – The Anton Mostert Chair of Intellectual Property

So, the Department of Trade and Industry (“DTI”) has finally gone ahead and done it. It has caused the Government to pass the Intellectual Property Laws Amendment Bill (the so-called “Traditional Knowledge Bill”) despite vociferous objections from all quarters. It has rushed headlong into terrain where no angel would venture through acute trepidation. It has entered Wonderland and assumed the role of the Mad Hatter.

”rushed headlong into terrain where no angel would venture through acute trepidation”

The Vine Oracle (that is to be found in the vineyards of the Winelands) is of the view that the traditional knowledge law will simply be unworkable and is destined to be a dead letter. By seeking to protect traditional knowledge as species of copyright, designs, etc and to attempt to apply the existing laws in these areas to it, it has purported to create rights which are simply incapable of being enforced. The Vine Oracle predicts that no successful claim based on a traditional knowledge right will ever succeed in the South African court. An enormous edifice of bureaucracy, councils, funds, trusts, databases and registration systems is to be created at inordinate expense and all to no avail since the system is not capable of being operated. What an exercise in futility and a waste of innumerable hours on the part of stakeholders, Government Departments and the Parliamentary process!

”no successful claim based on a traditional knowledge right will ever succeed”

The Vine Oracle is not alone in holding this view. The DTI and the Government have been told time and again by an army of commentators that it is going down the wrong track which will lead to a cul-de-sac. The IP profession, academics, the judiciary, the Intellectual Property industries, the World Intellectual Property Organisation (WIPO) are but a few of those that have tried to show the DTI the folly of its ways. Even a Regulatory Impact Assessment commissioned in 2009 by the State President opined that the legislation was ill advised and that, apart from any other considerations, the cost of implementing it would outweigh any possible benefits that might flow from it.

“it takes a special form of mindless arrogance to shrug off such a body of informed opinion”

Alas, the DTI has been undaunted and unwavering in its purpose. It takes a special form of mindless arrogance to shrug off, nay be totally impervious to, such a strong body of informed opinion. Such obduracy is difficult to fathom and it has been suggested that the Department, or individuals within it, have a double agenda. Perhaps the motivation and process regarding the drafting of the legislations should be investigated by the Public Protector!

It is true that a small minority of the IP profession has given succour to the DTI in its endeavours and it has gratefully favoured and made mileage out of this. This collection of praise singers has, however, been categorised by Nose Week as persons seeking to ingratiate themselves with the Department. Actually the descriptive term used by Nose Week is somewhat less flattering and alludes to movement around the human posterior. This group, who are outside the mainstream of informed IP opinion, can be discounted and it is true to say that the Traditional Knowledge Bill has been roundly condemned by anyone who has any savvy of IP law.

”seeking to achieve the impossible”

The Parliamentary Trade and Industry Portfolio Committee have been complicit in this debacle. To its credit, the Committee recognised that the offering produced by the DTI could not pass muster and it tried manfully to improve the Bill. It succeeded to a degree. However, it was seeking to achieve the impossible (given the misguided nature of the raw material that it had to work with) and moreover, while it was at least willing to listen to informed opinion (in contrast to the DTI), it failed to give due weight to that opinion and in the main chose to perpetuate the folly of the DTI. In effect, it changed an outright slap-stick farce into a mere comedy (of errors). It must, nevertheless, also be held accountable for the disaster that has been visited upon South African IP law.

Due credit must, however, be given to those members of the Portfolio Committee who represent opposition parties as they saw the light and recognised the Bill for what it is, namely an abomination, and did their level best to cause sanity to prevail, alas in vain. Be that as it may, the Bill has now had its second reading in the House of Assembly and been passed by courtesy of the majority commanded by the ruling party. Die Burger described the vote as being close, which, given the size of the majority held by the ruling party in Parliament, suggests that the Bill did not enjoy wholehearted support even within the ranks of the ruling party.

”proceed to build castles”

The nett result is that the Mad Hatter is now in a Wonderland of its own making and it will now presumably attempt to give effect to its new creation. It will doubtless proceed to build castles comprising the Bill’s structures, registers, army of new employees to implement the system, etc., in short the full catastrophe. If, as predicted, none of this works or has any practical effect, the main losers will be the taxpayer and disillusioned traditionalists who have been lead to believe that a pot of gold awaits at the end of the traditional rainbow.

But, what about poor IP law? Ay, there’s the rub. The damage that this new wondrous creation grafted on to IP statutes does to established principles of IP law cannot simply be shrugged off. When the edifice in Wonderland has come tumbling down, or is left derelict and fades into oblivion, the damage to IP law caused by the undermining of its basic principles is likely to remain and we, the country’s reputation (it has been made to look ridiculous in the international IP community) and its ability to encourage innovation and business activity will suffer the negative consequences.

”the country’s reputation will suffer the consequences”

How is the use of material having a traditional flavour likely to be influenced in the future? The Vine Oracle predicts that there will in practice be very little change. It predicts that most informed IP lawyers will advise their clients to simply ignore the provisions of the TK law and to carry on as before in the belief that in practical terms the purported rights in traditional knowledge which have been created will simply not be capable of being enforced and will amount to naught. The likely approach to the demands of purported traditional knowledge rights holders for payment of royalties will be “go ahead and sue us if you will!”. Rights which only exist in Wonderland will have little or no effect in the real world.

Then there is of course the prospect of a constitutional challenge to the legislation. There are several good grounds for such a challenge. These include that the Bill is procedurally flawed in that it should have been referred to the House of Traditional Leaders, but was not (what do traditional leaders know about traditional knowledge and why should they have anything to say about it?); after been radically altered by the Portfolio Committee, which introduced new principles into it, it was not again made available for proper public consultation; it conflicts with the property clause of the Bill of Rights; and so forth. Possibly the only factor which will save it from a constitutional challenge is that it will be a proverbial white elephant so why go to the trouble and expense of mounting a challenge? Rather allow it to wither away of its own accord and die a natural death. To quote Shakespeare, its death, through whatever cause, would be a “consummation devoutly to be wished.”

Prof OH Dean

1 November 2011

The Vine Oracle recently chatted to a professional photographer and had occasion to reflect on the treatment meted out to this group by our Copyright law. Apparently freelance photography in South Africa is not the lucrative business it appears to be– quite the contrary.

Copyright is supposed to allow creators of original works to make money by commercialising their works. Copyright is failing freelance photographers on this count. Why you ask?

Remember that copyright comes into being automatically (provided of course the other requirements for subsistence of copyright are present) – registration is not necessary for copyright to exist.

In terms of the South African Copyright Act, 1978 the initial copyright owner is generally the author – who, in the case of a photograph, is the person responsible for the composition(the artistic input) of the photograph. However, there is a critical exception to this:commissioned photographs – the client who commissions and agrees to pay for the taking of a photograph, is the owner of the copyright in that photograph. The freelance photographer has no rights to his work. In this respect the law discriminates against photographers because peer groups like artists, composers and writers do not suffer the same fate. Wherein lies the distinction? Of course, if (and it is a big ‘IF’) the photographer can get the client to agree, they can exclude the operation of the exception so that the photographer owns the copyright in the commissioned photograph.

The problem is not only that the vast majority of professional photographers don’t know what their rights are and therefore don’t protect themselves, but also they simply don’t have the clout to enforce their rights on the publishing and advertising houses and risk not getting any work from them. The law needs to change so that photographers are protected from the outset (which is the case in foreign jurisdictions) and they can have level playing fields with their fellow creative types.

“the law needs to change so that photographers are protected from the outset”

This is yet another example of what the Vine Oracle (among others) has been saying so often over the past few months – South African intellectual property laws need urgent amendment. During the fifteen or so years since the Copyright Act was last meaningfully amended the commercial and technical landscape has changed tremendously and the law is now badly out of kilter with reality. Whatever the position might have been in the past, there is now no justification for commercial photographers to remain downtrodden. A photographer’s work is created in his/her own image and the individual should have dominion over it.

“the law is now badly out of kilter with reality”

The Association of Professional Photographers (Africa) runs an information forum for all the budding and seasoned photographers out there – visit http://www.appa.org.za.

Surreptitious negotiations, covert drafts, leaked documents and swift announcements at the eleventh-hour – such is the stranger-than-fiction story of the ‘Piracy Treaty’ signed by several world powers in the past week.

Amid controversy about the autocratic role of the USA in the drafting process, and the not-so-voluntary gist of the treaty, most of the Allied Powers have signed the treaty, including Australia, New Zealand and Canada. The other signatories are Japan, South Korea, Morocco and Singapore, while the EU, Mexico and Switzerland have indicated their willingness to accede to the treaty before May 2013.

Shrouded by great secrecy, spurred by in camera negotiations, the multi-lateral Anti-Counterfeiting Trade Agreement (ACTA), or ‘Piracy Treaty’, is now public knowledge and open for (inevitable) debate.

“combat the proliferation of counterfeit and pirated goods”

While the final version of ACTA is significantly less potent than the original leaked version (dating from late 2009), it still bears a marked resemblance to the DMCA. Once in force, ACTA will operate to effectively expand upon the enforcement of IP rights in all member states while ensuring that such “measures and procedures […] do not themselves become barriers to legitimate trade”.

According to its preamble, the treaty aims to combat the “proliferation of counterfeit and pirated goods, as well as of services that distribute infringing material, undermines legitimate trade and sustainable development of the world economy, causes significant financial losses for right holders and for legitimate businesses, and […] provides a source of revenue for organized crime”.

Apart from deserving praise for leading the charge, ACTA should be welcomed for taking the fight to the enemy. Drafted in a very clear, transparent and often direct manner, ACTA contains several provisions for the speedy, procedure-free enforcement of IP rights.

Importation

These include the right to seize and detain, without justification, any shipment of goods (of commercial or domestic nature) under the suspicion that it may contain infringing goods in the widest sense. Similar “border measures” apply to the personal luggage of individuals, which may only be exempt from search and seizure at the discretion of the customs authority (s14 & 16).

As most torrent supporters will soon realise, ACTA will allow customs officials to examinethe content of personal computers under the suspicion that it may contain counterfeit or pirated goods or any mechanism designed for or capable of being used to circumvent IP rights protection mechanisms or create infringing copies.

“provision to search the contents of personal computers at border control”

After a reasonable period (s19) to establish whether such goods infringe IP rights, the competent national authority (customs) are vested with the discretion to destroy any infringing goods or dispose of it “outside the channels of commerce” (s20(1)). In the case of trademark infringement, removal of the mark is considered insufficient to qualify the goods for release.

Finally any determination of infringement may be followed by the imposition of “administrative penalties”, which is not defined.

Criminal Provisions

ACTA obliges every signatory to establish “criminal procedures and penalties to be applied at least in cases of willful trademark counterfeiting or copyright or related rights piracy on a commercial scale” (s23(1)).

Once again the ambit of the treaty extends beyond the limits of current law by referring to piracy on a commercial scale as acts carried out for direct or indirect economic or commercial advantage, punishable by a fine or imprisonment of a scale “sufficiently high to provide a deterrent to future acts of infringement, consistently with the level of penalties applied for crimes of a corresponding gravity”.

Enforcement in the Digital Environment

By far the most extensive provisions of ACTA are dedicated to curbing IP rights infringement through electronic means (s27 et seq) (specifically Internet-assisted infringement).

Among others, these (arguably draconian provisions) allow for the interception of communications under the suspicion of infringement to the extent that such action is required in a civil or criminal suit for the purpose of identifying the infringing party.

In addition, the treaty requires every signatory to implement sufficient technological measures to prevent the unauthorised disclosure or dissemination of protected work by means of a digital network, provided that such measure will not interfere with legitimate activity. Clearly the treaty envisions the highest level of control over peer-to-peer file sharing services and cloud storage.

Of course the nature of such measure are not dictated by the treaty, and it is difficult to imagine a national monitoring system that may give effect to ACTA without unduly infringing the individual’s rights to privacy, freedom of expression and due process.

Stealing a march

ACTA is certainly not a preemptive strike, and the time for reconnoiter is long gone. The only defense to IP infringement is a sound offence, and acceding to this treaty should be the primary objective for every nation.

“our shores are a hotbed of infringement”

Unfortunately, while peer nations are engaged on the front line addressing piracy and counterfeiting, in South Africa all is calm. This, despite the fact that our shores are a hotbed of infringement and the primary conduit for pirated goods on the African continent, is hardly surprising.

“South Africa is likely to ignore the existence of ACTA”

It is trite that piracy threatens the very viability of IP, yet our Government is still pursuing its facile preoccupation with traditional knowledge – to the exclusion of everything else. Again, this comes as no surprise – South Africa is likely to ignore (if it ever recognises) the existence of ACTA in precisely the same manner it has shunned the WIPO copyright treaties.

And so it is inevitable that when the dust settles, the only loser in this battle will be our IP laws, and those who seek its protection.

A bite worse than its bark?

ACTA has sounded the horn in a battle of the current century, and it is clearly set to tackle the problems of today head-on. There is little doubt that it will meet with resistance from many nations, and even more so from the citizens of current signatories.

The Vine Oracle notes with interest the early commentary by supporters of the anti-IP movement, all of which is laced with no small measure of despair and trepidation – for good reason!

However, despite the possible opposition to ACTA (of which there is definitely some) the possible support for ACTA (of which there should be many) is undeniable.

For too long those in the know have lived in despair for the lack of effective protection mechanisms. ACTA has drawn a line in the sand, and it is time to pick a side. Let IPStell be the first to join the battle in support of ACTA…

Amidst the vineyards in Stellenbosch there is an oracle. This oracle, the Vine Oracle, holds forth on matters pertaining to intellectual property (IP). As may be expected, the Oracle communicates with those wishing to consult its wisdom through the grapevine.

The rustling of the vine leaves in the summer breezes and the birds and the bees going about their business fill the vineyards with music. Music evokes love, passion, reverie, thoughts and creativity. The Vine Oracle is inspired by music. Songs flow when desired from a Nickelodeon holding a vast and varied repertoire.

On this occasion the song selected by the Vine Oracle is “Come on Baby Light my Fire” (performed by Jim Morrison and the Doors in the late 1960’s). The Oracle has chosen this song to inspire this particular commentary on IP. What, you might well ask, has this song got to do with IP? The answer is: very little, if anything at all. But, read on, all will be revealed.

CONFERENCE ON ACCELERATING IP AND INNOVATION IN SOUTH AFRICA

On 19 and 20 September the Department of Science and Technology, acting in concert with the National Intellectual Property Management Office (NIPMO), held a conference in Cape Town with the theme “Accelerating IP and Innovation in South Africa”. The conference featured an imposing range of speakers, including a bevy of American judges and experts from abroad, as well as several local experts. One of the distinguished local speakers was Judge Louis Harms, the Deputy President of the Supreme Court of Appeal, who is of course an internationally recognised expert on IP law. The conference attendees, numbering around 200, included the incumbent of this Chair, the Dean of IP. Details of the conference can be obtained at http://www.acceleratingipsouthafrica.com/.

Judge Harms and colleagues from the American bench were the panelists in a session having the subject “The Role of the Judiciary and the Court System in Shaping IP Policy”.By and large the view expressed by the panelists was that it was the role of the government and the legislature to shape and develop policy, not that of the court. Judges must interpret the law and attempt to give effect to policies embodied therein, as perceived by them.

“it is the role of the government and the legislature to shape and develop policy, not that of the court”

An American expert, and indeed one of the hosts of the conference, one Sherry Knowles, was the moderator of the panel. In introducing the subject and the speakers, Sherry extolled the virtues of South African inventiveness and reeled off the longest list that she could find of significant South African inventions, including the Kreepy Krauly and “dolosse”, and then referred to the greatest South African invention of all – indeed one of the greatest and most significant inventions of all time. FIRE!

She said that fire was discovered many millennia ago just a few miles from present day Johannesburg by our forbears and that all mankind was greatly indebted to them. She facetiously expressed regret and disappointment that fire and its uses could not be the subject of any monopoly in this day and age. Noble sentiments expressed by a foreign visitor! Just imagine what wealth could be generated by charging a royalty every time a fire is lit. All those cigarettes, braais, braziers, hearths for warming the home, to mention but a few royalty opportunities! If it could be applied worldwide South Africa would be the wealthiest country in the world and its government would at last appreciate IP and give it its rightful priority!

“just imagine what wealth could be generated by charging a royalty every time a fire is lit”

At question time the Dean of IP ignited a lively conflagration of discussion by opining that the esteemed foreign well-wisher, in expressing regret for the lack of opportunity to monopolise fire, had obviously not read the new South African legislation dealing with IP protection for traditional knowledge – if she had done so, she might not have been so quick to write off IP protection for fire and its uses. Reference to the wide definitions of “traditional knowledge” and “indigenous community” in the Intellectual Property Laws Amendment Bill (the Bill), taken together with the fact that in certain instances protection under the Bill will be in perpetuity, may well lead her to the conclusion that her previously expressed view was unduly pessimistic and negative. Of course it was difficult to articulate this observation with the tongue firmly compressed between the molars.

With this introduction the Dean of IP went on to ask the panel how a court would interpret a provision in a statute which attempts to give expression to a policy when the well established principles, and indeed the language, of the statute made it impossible to give that provision a meaning compatible with the policy. Calling on his vast experience as a jurist and a seasoned judge, and relying on his in depth knowledge and expertise as an IP authority, Judge Harms replied that he simply did not know. There was no reason to believe that he was being anything less than completely frank and honest. A lively discussion of the wonders of attempting to protect traditional knowledge through performing a graft operation on hapless IP statutes then followed. Judge Harms repeated his oft expressed (and studiously ignored in official circles) view that the Bill was fundamentally flawed, could not work in practice, and should be scrapped. This is a view with which the Vine Oracle heartily agrees.

FIRE POWER

The Vine Oracle will now proceed to examine the Bill in order to ascertain whether Sherry indeed erred in thinking that it is not possible to protect fire and its uses under South African IP law.

Sherry clearly had the Cradle of Humankind, near Johannesburg, in mind as the location where she said that fire was discovered. The inhabitants of the Cradle (the “babes” of Morrison’s song) were, so the scientists tell us, the forebears of the entire human species, and thus of the current inhabitants of South Africa. Their habitat is part of present day South Africa and knowledge of fire and its uses has, commencing with them, been handed down from generation to generation. The crucial questions are whether fire can constitute traditional knowledge and the “babes” who were nurtured in the Cradle could at the time have constituted the forebears of a current community for purposes of the Bill. In essence if these two hurdles can be crossed then the current descendants of the “babes” living in South Africa will in principle own fire as a form of traditional knowledge in perpetuity.

In terms of section 2 of the Bill, “traditional work” means an “indigenous work”. This latter term means, inter alia, “indigenous cultural expressions or knowledge which was created by persons who are or were members, currently or historically, of an indigenous community”. “Indigenous cultural expressions or knowledge” is in turn defined to mean “any form, tangible or intangible, or a combination thereof, in which traditional culture and knowledge are embodied, passed on between generations”. One of the examples of the aforegoing given in the definition is “expressions of sacred places”.

The Vine Oracle inclines to the view that fire as discovered by the babes in the Cradle is indeed a form of indigenous knowledge covered by this verbiage. The verbiage is certainly vague and indefinite enough to cover just about anything capable of being classified as knowledge (or knowhow) passed down from generation to generation, which fire certainly is.

Next, the definition of “indigenous community” must be examined. This term is defined in the Bill to cover “any recognisable community of people originated in or historically settled in a geographic area or areas, located within the borders of the Republic” who constitute, and are recognised as, a distinct collective. Many, if not all, of us descendants of the babes of the Cradle, fit into this category. If the scientists are to be believed, we all originated from the Cradle which is located squarely within the borders of South Africa. We can thus be eternally grateful to the babes who lit those fires for the first time and passed this knowledge down to us from generation to generation over the eons of time.

The beauty of the Bill is that, provided the aforegoing conditions are met, it does not matter how long ago the traditional knowledge originated. There is no cut-off date going back in time. Moreover, traditional knowledge of this nature is protected in perpetuity, i.e. for forever and a day.

So, we the South African based descendants of the babes of the Cradle, living in our community (which one is that?) are, in terms of the Bill, the proud owners of fire as an item of traditional knowledge. It is our IP. We are thus empowered to charge everyone, including ourselves, a royalty each time a fire is lit. What a bonanza! How lucky we are that our forefathers were so inventive and bequeathed this valuable item of property to us. Happily, the babes of the Cradle all those years ago went ahead and lit our fire. Armed with this valuable asset there is no need for us ever to invent anything again in the future. Our livelihood is secure till the end of time. From the cradle to the grave.

A DOSE OF REALITY

Of course, the above is absurd. Fear not, fire is free for use by all, in the true tradition of IP. However, what this shows is that ill-conceived, fundamentally flawed and badly drafted legislation can lead to absurd results. The Bill has no place on our statute book, particularly in a field like IP which is international in character and is exposed to scrutiny throughout the world. If we want to look ridiculous, let it not occur on the world stage where we dearly want to shine.

It is time to move on from “Come on baby light my fire” to another song which will hopefully give greater satisfaction.

Remember, you heard it on the grapevine.

Lucasfilm Limited v Ainsworth [2011] UKSC 39.

The facts: Andrew Ainsworth was a prop-designer engaged to produce the iconic Imperial Stormtrooper costumes for the first Star Wars movie in 1977. More recently in 2004, Mr Ainsworth (domiciled in the UK) started making replicas of the Stormtrooper helmet (using his original tools) which he proceeded to sell worldwide over the internet.

To cut a long story short – Lucasfilm sued Ainsworth and the battle ultimately ended up before the English Supreme Court.

It was accepted that Ainsworth had violated Lucasfilm’s US copyright by selling the helmets there.

The question: can an English court entertain and enforce a claim for infringement of an American copyright?

The answer: Yes. Relying on the rule in British South Africa Co v Companhia de Moçambique [1893] AC 602 (namely, that English courts have no jurisdiction to entertain actions for damages for infringement of property rights in foreign land), the Court of Appeal below had come to the conclusion that claims for infringement of foreign copyright were not justiciable in England.

The Supreme Court however adopted the view that much of the underpinning of theMoçambique rule (and the decision in Potter v Broken Hill Pty Co Ltd [1905] VLR 612, (1906) 3 CLR 479 which had extended the rule to patents) had been eroded and held that all that remained of the Moçambique rule (except to the extent modified by the Brussels I Regulation) is that there is no jurisdiction in proceedings for infringement of rights in foreign land where the proceedings are ‘principally concerned with a question of the title, or the right to possession, of that property. The Supreme Court came to the “firm conclusion that, in the case of a claim for infringement of copyright of the present kind, the claim is one over which the English court has jurisdiction, provided that there is a basis for in personam jurisdiction over the defendant.”

The bottom line: provided that the defendant is domiciled in the UK, a rights owner can sue in the UK for infringement of copyright (and potentially other unregistered intellectual property rights) which occurred in foreign countries. May the ‘force’ be with all UK-domiciled defendants!

On the plus side, it makes it easier to sue where you have infringements in multiple jurisdictions. The down side – ‘forum-shopping’ becomes a temptation.

This case highlights the potential for conflict of intellectual property policies of different countries.

A short time ago in a jurisdiction not so far away….

Last year the South African Supreme Court of Appeal (SCA) confirmed the territoriality of jurisdiction in Gallo Africa Ltd v Sting Music (Pty) Ltd 2010 (6) SA 329 (SCA).

The facts: Gallo sued Sting for copyright infringement in respect of a musical known as ‘Umoja’, which Sting allegedly performed, made recordings and cinematograph films of, and broadcasted, in South Africa and nineteen other countries.

In relation to the alleged infringement in the other jurisdictions, Gallo did not rely on our Copyright Act but on the respective copyright laws for each of those jurisdictions.

Sting filed an exception to the summons stating that proceedings for copyright infringement instituted in a South African court may only be founded on the provisions of the South African Copyright Act.

The question: can a South African court entertain and enforce a claim for infringement of a foreign copyright?

The answer: No.

The SCA confirmed that registered IP rights (such as patents and trade marks) and unregistered rights (such as copyright) are territorial in nature.

The Court looked at the general principles relating to jurisdiction in respect of movable and immovable incorporeals and concluded that:

(1) IP rights, including copyright, are immovable incorporeals; and

(2) in terms of the principle accepted in Eilon v Eilon 1965 (1) SA 703 (A) (namely that South African courts do not have jurisdiction to decide claims in respect of property located outside of South Africa), local courts do not have jurisdiction in respect of foreign copyright issues.

The SCA referred to the judgment of the Court of Appeal in Lucasfilm and noted with approval that the Court of Appeal also took into account practical considerations as to why a local court should not exercise jurisdiction over foreign copyright, which considerations include the fact that (1) enforcement may result in a clash of IP policies of different countries; (2) extraterritorial jurisdiction involves a restraint on actions in another country, which interference a foreign judge should avoid; (3) it will create too much room for forum-shopping; and (4) international agreements on copyright had refrained from creating a regime for the international litigation of copyright by a national court, a system which could have been created if so desired, but was not.

The bottom line: South African courts do not have jurisdiction in respect of foreign copyright issues (even if the defendant is domiciled in South Africa).

The SCA judgment in Gallo preceded the decision of the UK Supreme Court in Lucasfilm. Does it matter? Was our SCA wrong in saying that South African courts can hand down judgments only on local infringements? We think the SCA was and still is correct. Gallo should pursue its claims in the foreign jurisdictions where the infringements took place. Has the English court gone on a R 2 Detour?

“Ex Africa semper aliquid novi”, which can be freely translated from Latin to mean “there is always something new coming out of Africa”, said Pliny, the ancient Roman writer and scholar. Presumably then, as is the case now, the concept of “new” included an expression of sarcasm and deprecation as in “absurd, nonsensical and ridiculous”. Well, Pliny has been proved right once again.

The Government is on the threshold of passing legislation to grant protection of, and the facility to derive revenue from the use of, so-called “traditional knowledge” (TK) – i.e. folklore, tribal art and music and the like, or so it thinks. The Trade and Industry Portfolio Committee of Parliament has finalised the Intellectual Property Laws Amendment Bill (available here) and it is well on its way towards becoming law. It is indeed a “new” piece of legislation coming out of Africa.

THE DRAFTING PROCESS

The Bill has been at least four years in the making. A first draft prepared by the Department of Trade and Industry (DTI) first saw the light of day in 2007. After three years of introspective effort on the part of the DTI, the Bill came before the Portfolio Committee. To its credit the Committee soon recognised that it was rubbish and that it could not advance in the state in which it had been received. The Committee wisely realised that there was little prospect of the DTI coming up with anything better and decided that it would, itself, redraft the Bill. It probably did not, and still does not, realise the enormity and complexity of the task. To its credit, the Portfolio Committee has greatly improved the Bill and has altered it radically. Its version has not been made available to the public for scrutiny and comment. It contains a number of new provisions and principles and has (thankfully) radically changed the original version. This raises the question of whether the revised Bill should have been re-published for public comment and whether, in the absence of its re-publication, there has been adequate consultation on it as required by the Constitution.

The approach adopted by the DTI, and regrettably perpetuated by the Portfolio Committee, was to take four of the existing Intellectual Property (IP) statutes, namely the Copyright, Designs, Performers Protection, and Trade Marks Acts, and to write into them provisions aimed at granting protection to traditional works akin to the subject matters of the individual statutes. Unfortunately, this approach overlooks a fundamental and very basic principle of each of these acts, namely that they are based on the philosophy that new creative works can be protected for the benefit of their individual originators for a strictly limited period of time subject to the condition that, upon the expiry of the term of protection, they are surrendered to the public at large and become free for use by all. In other words they fall into the public domain. Traditional works, on the other hand, are already in the public domain and are now to be plucked from it and become the private property of traditional communities who will be entitled to remuneration for their use forever hereafter.

“akin to driving a square peg into a round hole”

It is not difficult to realise that a set of rules designed for one situation is not going to be easily applicable to the antithesis of that situation. And so it has proved to be. Attempting to protect traditional knowledge (TK) in the existing IP statutes has been akin to driving a square peg into a round hole. There has been no shortage of eminent and knowledgeable people pointing out the error of their ways and drawing attention to the fundamental and numerous flaws and errors in the draft Bill. These have included the specialist IP profession, academics, the judiciary, the compilers of the Regulatory Impact Assessment commissioned by the President and the World Intellectual Property Organisation (WIPO), the agency of the United Nations that administers IP throughout the world as well as the international treaties that regulate it. There has been a constant refrain if you want to protect TK – it was to be done in a sui generis, or customised piece of legislation designed to take account of the unique and special nature of TK.

WIPO itself has been grappling with the problem of protecting TK for several years and has been devoting its specialist expertise towards achieving a workable outcome. It is on the verge of a breakthrough and it is anticipated that next year a model sui generis law and an international treaty providing for it will be presented to the international community. The sensible approach would be to await this development and then to pass domestic legislation in tune with the model law and treaty, thus enabling South Africa to be in step with the international movement. One would expect our Government to want our TK to be protected internationally, like our IP generally, but we have rather chosen to buck the international trend and to be the only one in the army not marching in step. This will result in our not being eligible to join the treaty when it comes along, thereby passing up the opportunity of meaningful international protection being available for our TK.

“the only one in the army not marching in step”

The simple fact of the matter is that IP is a super-specialised branch of the law and is dealt with in practice by people who have particular expertise. It is a complex and esoteric subject and not easily understood by people who have not acquired specialist skills, hence the creation of this Chair. With the best will in the world, knowledge of IP is in short supply in the DTI and is virtually non-existent in the Portfolio Committee. In redrafting the original Bill, the Portfolio Committee has utilised the services of Parliamentary draftspersons. With the greatest respect, to expect such persons to take on the task of taking a fundamentally misconceived draft Bill and convert it into a highly specialised piece of legislation dealing with subject matter that IP specialists around the world have struggled to come to terms with, is asking the impossible, and the results show. The Bill in its final form is half-baked, riddled with anomalies and practically unworkable. It is submitted that it is destined to become a dead letter and to produce no good results.

“knowledge of IP is in short supply in the DTI and is virtually non-existent in the Portfolio Committee”

It is trusted that, by disclosing the inner workings of the drafting process of the Bill, we have not revealed secret state information as contemplated in the notorious so-called “Secrecy Bill” and have thus become “whistle blowers” who have transgressed and would be liable to prosecution. But then the Secrecy Bill has not yet passed into law so our right of freedom of expression remains untrammelled for the present. Something that the present Bill has in common with the Secrecy Bill is that the Government has also shown a determination to forge ahead with it come what may, riding roughshod over all opposition. And, despite concerted protest, at this stage in the proceedings it has shown indecent haste to complete the legislative process. Perhaps this is the new tradition in passing legislation!

WHO NEEDS ASSISTANCE?

Numerous IP experts, including the President of the South African Institute of Intellectual Property Law (the professional body that represents the specialist IP attorneys), on behalf of its members, and this Chair, have offered their expertise and assistance, free of charge, to the Government to assist with the drafting of a suitable workable Bill. Unfortunately these offers have been spurned, either by not taking them up or, where an audience has been granted, by ignoring any advice given.

It is true that the DTI and the Portfolio Committee have sought counsel from certain individual purported experts but, judging by the results, either the views of these individuals have also been ignored or misunderstood or bad advice, out of the mainstream, has been given.

“disregard of all advice from experts”

The DTI and the Portfolio Committee have by and large shrugged off all critical comment directed at the Bill. Anyone criticising it has been labelled as someone who is against protecting TK and is thus bordering on being unpatriotic. The DTI and the Portfolio Committee have been unable or unwilling to distinguish between opposition to the principle of protecting TK (of which there has been virtually none) and opposition to the present Bill as an appropriate vehicle to provide such protection (in respect of which there has been a clamour from all sides). This has probably been a factor in the disregard of all advice from experts.

THE OUTCOME

So, we now face a Bill that is a blot on the statute book. It is not only unworkable and will not provide any meaningful protection to TK (which is likely to lead to considerable unfulfilled expectations) but it also undermines and does injury to well established and clear principles of IP law, which will lead to confusion and uncertainty of interpretation in the future, where there has been clarity in the past. Moreover, by not providing automatic protection to works of foreign origin in the case of certain of the manifestations of TK (more especially literary, musical and artistic works that have a traditional character and are to be protected as such), the Bill is in breach of our international treaty obligations through not providing so–called “National Treatment”. This will bring us into conflict with the World Trade Organisation. It is debatable that the Bill is, on this score and on other counts, unconstitutional and it is likely that a constitutional challenge to it awaits.

“the Bill is in breach of our international treaty obligations”

In broad terms the Bill purports to create monopolies in the use of traditional works, which by and large in each instance (with certain exceptions) become the property of an “indigenous community”. This term is defined to mean any recognisable community of people that originated, or historically settled, in a geographic area or areas located within South Africa, which group is characterised by social, cultural and economic conditions distinguishing it from other sections of the national community, and which identifies itself, and is recognised by other groups, as a distinct collective. This definition has been paraphrased to make it more intelligible. It is a very broad definition and probably includes the major black tribes (but what about clans within the tribes?), the Indian and Coloured communities, Jews and Afrikaners. These communities’ ownership of their traditional knowledge entitles them to demand royalties for the use of their TK. They can also exercise these rights over the use of works derived from, or containing significant elements of, their TK. The TK over which they have rights of ownership includes works, whether in a tangible or intangible form, in which TK or culture is embodied, passed on from generation to generation. The term of protection for certain of these works is in perpetuity.

Whereas licences for the use of conventional IP works can be obtained informally, licences in respect of TK are subject to stringent conditions and formalities and certain agreements pertaining to such licences are required to be scrutinised and approved by state entities. These conditions and formalities are such that in the modern business world they are likely to stifle or frustrate the economic use of TK.

“likely to stifle or frustrate the economic use of TK”

A database for the recordal of TK, a Trust Fund for the collection and distribution of royalty revenue, and a Council for giving advice regarding TK are provided for. If nothing else, the Bill should satisfy the Governments objective of creating employment. In this regard it might be mentioned that the Regulatory Impact Assessment on the Bill concluded that the whole purport of the Bill is not economically viable and that the costs of operating the system would probably exceed the revenue generated by it. It found that any benefits from the system were outweighed by the substantial costs and other attendant disadvantages attaching to it. As mentioned, this assessment has been disregarded.

“the whole purport of the Bill is not economically viable”

The fundamental purpose of IP legislation is to foster and promote creativity and innovation in the form of the making of future works for the ultimate benefit of all. The Bill is not aimed at this objective. Its goal is to look backwards and not forwards and to turn what already exists, and has perhaps existed for past centuries, into moneymaking tools. It does nothing “to promote the progress of science and useful arts” as is required of IP legislation by the American Constitution and is a common-sense principle which should guide our legislature.

It is beyond the scope of this report to go into any detail regarding the nature of the protection purported to be granted to TK, and more importantly, the practical difficulties that will be encountered in attempting to interpret the legislation and to enforce the protection. This presents sufficient subject matter for an entire textbook. It suffices to say that there are going to be monumental problems in establishing the subsistence and ownership of the property and in bringing successful claims before the court enforcing the rights and payment of the envisaged royalties. It is apparent that no one involved in the drafting process of the Bill has ever conducted IP litigation.

“there are going to be monumental problems”

Be it as it may, the current situation could lead to substantial employment opportunities and the generation of wealth in the legal profession. However, the crucial question is: where is the money going to come from?

Download the Intellectual Property Laws Amendment Bill [B8-2010] here.

Authors and authors’ groups from Australia, Canada, Britain and the US have filed a copyright infringement suit against the HathiTrust (a consortium of universities) and five US universities – the Universities of Michigan, California and Wisconsin, Cornell University and Indiana University.

According to one of the plaintiffs – The Authors Guild – the universities obtained unauthorized scans of an estimated 7 million copyright-protected books (the rights to which are held by authors in dozens of countries) from internet giant Google. The universities have pooled the unauthorized files in a repository called HathiTrust, organized by the University of Michigan.

”unauthorised scans of an estimated 7 million copyright-protected books”

The plaintiffs allege that the universities were planning to allow unlimited downloads by students and faculty members of works it deems “orphans” (copyright-protected works whose authors cannot be found) according to rules the school has established.

“planning to allow unlimited downloads by students”

The Australian Society of Authors (also a plaintiff) says HathiTrust’s actions are “an upsetting and outrageous attempt to dismiss authors’ rights. Maybe it doesn’t seem like it to some, but writing books is an author’s real-life work and livelihood. This group of American universities has no authority to decide whether, when or how authors forfeit their copyright protection. These aren’t orphaned books, they’re abducted books.”

The complaint also questions the security of the 7 million unauthorized digital files. The Authors Guild feels that because of the universities’ and Google’s unlawful actions, the books are now at “needless, intolerable digital risk”.

What is the moral of the story? Get copyright owners’ permission to digitize their books.

The US fiasco is a persuasive reminder for all South African universities and other learning institutes to safeguard themselves against copyright infringement claims by obtaining the necessary consents.

Stellenbosch University can rest easy – it has secured appropriate blanket licenses with the relevant licensing agencies. Another instance of Stellenbosch University showing the way with intellectual property.

This week the EU extended copyright protection for performers and record producers from 50 to 70 years.

The EU Council’s justification for the extension – performers often start their careers young, and the current 50-year term means that many are not protected for their entire lifetimes and may be cut off from sources of income at the stage they need it the most.

Not everybody is jumping for joy. Intellectual Property Watch reports that eight EU member states (notably Belgium, Czech Republic, Luxembourg, Netherlands, Romania, Slovakia, Slovenia and Sweden) voted against the extension. The Open Rights Group (ORG) do not mince words and label the extension “a cultural disaster”. They state that research showed that around 90% of the cash windfall from copyright levies will fall into the hands of record labels. “Despite the rhetoric, small artists will gain very little from this, while our cultural heritage takes a massive blow by denying us full access to these recordings for another generation”.

“a cultural disaster”

A significant number of responses generated by the copyright extension appear to view it as bad for innovation and as simply adding wealth to the coffers of the big record labels.

Interestingly, Ars Technica mentions that the European Commission at the outset (some years ago) said that no external expertise on the proposed extension was required. (incidentally, a prominent European academic who concluded that the copyright extension was a bad idea for society as a whole, was furious that his work—which the European Commission requested and paid for—was totally ignored).

“no external expertise on the proposed extension was required”

It appears that the EU has something in common with the South African government – a resistance to intellectual property expertise.

The 27 EU member states have two years to incorporate the new provisions into their national laws.

South Africa

Should South Africa follow suit? We think not – the extended term grants excessive protection. The current rule of thumb for the term of copyright protection is fifty years. The Berne Convention, the international treaty governing international copyright, sets fifty years as the bench mark for the term of protection.

Business interests in the USA have managed to persuade the American Government to extend this period to seventy years and many countries around the world have followed this example. Now the EU are following suit for records. A groundswell has been created. However, we, in South Africa, are under no obligation to increase the period of protection, but should we buck the trend?

We will probably come under pressure from the business moguls and the developed countries to do so, but should we succumb? At a time when the very principle and existence of copyright is being questioned, particularly in developing countries, it seems to be unduly provocative and inopportune to consider lengthening the term of protection. In this instance it is felt that we should be conservative. This issue should be left well alone.

“unduly provocative and inopportune to consider lengthening the term of protection”

Fifty years remains a long period, particularly in the electronic age when things become obsolete in a short period of time. Consider the economic life of the average computer program. Is a monopoly of fifty years not sufficient? In most modern environments fifty years is considered to be an epoch. Let it be.

Neither the rain nor cold could dampen the spirit at the International Intellectual Property Law Conference recently hosted by Stellenbosch University (SU) to inaugurate the Anton Mostert Chair of Intellectual Property established at SU under the patronage of Dr Johann Rupert.

The Conference was addressed by an impressive panel of local and international intellectual property (IP) experts on interesting topics ranging from Confucius philosophy to the protection of handbags, but the message was loud and clear – IP faces many challenges and the time for change is now

South African IP Challenges

Professor Owen Dean, the first incumbent of the Chair, is an outspoken proponent of the view held by many experts, that South African IP law has not kept pace with modern developments and essential amendments are urgently needed. Professor Dean’s vision for the Chair is to become a custodian of IP law and to actively assist in restoring IP law to its former glory.

“South African IP Law has not kept pace with modern developments”

An equally candid Judge Louis Harms said “I do not wish to suggest that IP law is dead – only that it is not adapting at a rate appropriate for sustainable economic growth”. He elaborated by saying that the inertia in the development of IP law in SA manifested itself in many forms, which included the lack of legislative initiative, limited academic and judicial activism and the failure of practitioners to create new arguable challenges.

Judge Harms expressed his views on the “IP-isation” of indigenous traditional knowledge (TK) and to the delight of the attendees, went so far as to say that the attempt to protect TK through IP would “kill IP law as we know it”.

Professor Dean agreed that TK constitutes a new species of IP and custom-made legislation should be drafted to protect it. If the Intellectual Property Laws Amendment Bill which government is attempting to push through parliament is passed, the fundamental principles of IP will be undermined.

“Traditional knowledge constitutes a new species of IP and custom-made legislation should be drafted to protect it”

Tshepo Shabangu, partner in Spoor & Fisher and President of the South African Institute of Intellectual Property Law (SAIIPL), focussed on three challenges facing SAIIPL, namely (1) insufficient judges with IP expertise in the judiciary; (2) the need to transfer IP skills to others; and (3) impact or influence on the making of legislation.

On the topic of IP legislation Ms Shabangu commented that “there is a feeling that our laws have fallen behind, and there is no doubt in my mind that our members will champion the updating of these laws as in the past”.

Hope remains that these voices will not be silenced, that they will continue to make critical comment and that the regrettably reluctant powers-that-be will accept the assistance of the experts so that South African IP law can again become state of the art legislation.

International Challenges

Louise van Greunen, director of WIPO’s Building Respect for IP Division, cited their aim to promote technological innovation and the transfer of technology, to the mutual benefit of producers and users of technological knowledge – not only the rich.

“mutual benefit of producers and users of technological knowledge”

She highlighted that counterfeiting affects developed and developing countries and we must create an environment that promotes respect for IP. For further information on WIPO’s activities, visit http://www.wipo.int.

London based IP practitioner Helen Newman’s discussion of the protection of “iconic” designs and the difficulties of registering shapes such as handbags, where shape is key, was fascinating (yes, even for the guys)
President of OHIM, António Campinos identified the future challenges facing IP in the EU as (1) multiple institutions (including 24 national offices, fragmented in terms of tools and law); (2) attacks on IP rights by pirates; and (3) lack of accurate information.
Xuemin Chen of China explained that the Chinese mindset of “I am free to copy everything” was a direct consequence of the Confucius philosophy of “shared knowledge”. His prudent advice – in China, “register IP as soon and as widely as possible” – otherwise the copycat culture will cause you problems.

Video

The opening session of the Conference can be viewed here.

Innovation, creativity, novelty, ingenuity – the foundations of Intellectual Property (IP) Law is, simply put, the protection of the inventive spark as expressed by its maker. This sweat-of-the-brow approach to IP law is often cited as the rationale for the continued expansion of traditional IP protection measures to new forms of expression. In addition, the increasing human experience and its potential contribution to the knowledge economy is without doubt the strongest motivators for the renewal of IP law.

By default, IP law regulates an assortment of personal effects that are incorporeal, immaterial or intangible. By classifying these intellectual goods as property, IP law provides for the legal subsistence of ethereal commodities and provides the mechanism for its protection and exploitation.

As a result, IP law has allowed man to benefit from the expression of his individuality by dictating the rules of engagement for a game where it is impossible to lay hands on the object.

Not only did IP law bring the expression of intellectual endeavour within the scope of traditional property law, it went beyond the confines of private law to provide a bespoke framework for this type of property.

Over centuries the body of IP law statutes was developed to address the unique nature of every kind of creativity, innovation or material expression of ideas. These statutes now allow the creator, maker, author or owner of the rights to apply his own skill, judgment and labours for financial profit or personal gain. Consequently, IP law has created the means by which an artist (in the widest sense) may be rewarded for his efforts.

While the profit motive for IP law applies the force of the law to enrich the creator, it also limits the extent to which financial gain may be derived from a vested monopoly over the work. Therefore, IP law provides that in many cases the author’s exclusive control over a specific innovation will cease at a predetermined point while the work survives.

Consequently, IP law performs a dual function: the legal status it affords to intellectual property allows for its commercial application while the limited duration of IP rights stimulate further innovation in pursuit of a similar or greater reward.

By protecting the effort invested in creating new work, IP law prevents the unauthorised appropriation or gain from another’s industry. In addition, by offering protection IP law encourages new creators to produce more work of an increasingly higher quality that would attract bigger remuneration. By limiting the duration of protection, demanding the publication of the work and expecting the illustration of innovative ideas IP law allows others to build upon the revolutionary work of their peers. As a result, it is the single largest contributor to the creative commons and the founder of public knowledge.

In this way IP law facilitates the expansion of the knowledge economy, enriches our cultural environment, promotes all forms intellectual science, provides self-employment, maintains the foundation for economic growth, encourages pioneering work and continues to serve the public interest.

Read more:

Copyright

Modern copyright law has become a complex, dynamic, liberal and indispensible mechanism for the protection and commercial exploitation of all types of personal expression. Despite the name, copyright law is not limited to the right of copying work. It may be described as a bundle of rights that (1) define the author’s monopoly over work that embodies his intellectual efforts and (2) determine the manner in which such a work may be used by the author or others.

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Trade Marks

A word, device, symbol or sign that is distinctive, descriptive and/or recognisable by the consumer as an indication of the product’s origin. For this reason, Trade Mark Law is concerned with establishing the most fair, effective, transparent and obvious system for the marketing of goods or services when conducted with the aid of the manufacturer’s insignia (or other recognisable identifying element).

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Patents & Designs

The practice of granting a monopoly over the production and distribution of an invention, or its fundamental idea, is the exclusive field of the law of patents. It was conceived specifically to protect the intellectual activity and aims to stimulate revolutionary technology. Across the scope of intellectual property law, patent protection is the only form that approaches the protection of pure ideas or concepts while other forms of IP law protect the expression of ideas in various forms.

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Digital Intellectual Property

Exclusivity is the calling card of intellectual property law and the primary driver for the continued expansion of IP protection to new types of work, modern technologies and revolutionary expressions of human intellectual activity. On the other hand, Internet-based technology is driven by the central concepts of free access, peer exchange and rapid reproduction.

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CIP – The Anton Mostert Chair of Intellectual Property

Importation

Criminal Provisions

Enforcement in the Digital Environment

Stealing a march

A bite worse than its bark?

CONFERENCE ON ACCELERATING IP AND INNOVATION IN SOUTH AFRICA

FIRE POWER

A DOSE OF REALITY

Lucasfilm Limited v Ainsworth [2011] UKSC 39.

THE DRAFTING PROCESS

WHO NEEDS ASSISTANCE?

THE OUTCOME

South Africa

South African IP Challenges

International Challenges

Video

Copyright

Trade Marks

Patents & Designs

Digital Intellectual Property

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