Some Comments on the Draft Copyright (Collective Management) Regulations – 6th February 2017
This blogger’s attention has been drawn to a set of draft copyright regulations on collective management published online here which appears to have been prepared by two consultants: Nicolas Jondet and Smita Kheria listed as such here. A link to this website and the draft regulations therein appears on the official website of Kenya Copyright Board (KECOBO) here.
Under section 49 of the Copyright Act, the Attorney General (AG) has the powers to make regulations for the better carrying out of the provisions of the Act. In exercise of these powers, the AG made the Copyright Regulations 2004. Sections 15, 16, 17 and 18 of these Regulations contain several provisions relating to collective administration of copyright. In this regard, the draft regulations propose a new standalone framework for “collective management”. This blogger has perused the draft and sections requiring comment have been addressed seriatim below.
The term “Collective Management” is used in the title of the proposed draft regulations whereas the Act refers to “Collective Administration”.
The proposed definition of “Collective Society” does not appear to be necessary since it is already contained in section 48(4) of the Copyright Act. Further, such a definition ought to be narrow in scope referring only to organisations that are registered as collecting societies pursuant to the Act.
The proposed new definition of “User” does not appear to be necessary since it is unlikely to give rise to any issues of interpretation. Nonetheless, such a definition ought not to exclude a person who is not acting in the capacity of consumer. Such exclusion may have the effect of negating the collecting societies’ obligations to users under the Consumer Protection Act, or any other relevant laws of Kenya. Finally, such a definition ought to be construed broadly as referring to any member of the public.
Registration of Collecting Societies
Registration is an integral part of KECOBO’s supervisory and licensing mandate. The proposed regulations ought to address the distinct possibility under section 46(4) that KECOBO may opt to approve an application for registration as a collecting society subject to any modifications, conditions or limitations as may be appropriate to satisfy KECOBO as to any matter required of the applicant under these Regulations or the Act or any other written law of Kenya. In this connection, an applicant whose application has been refused or accepted subject to modifications, conditions or limitation, and on payment of the prescribed fee, should be entitled to request and be furnished with written reasons stating the grounds for KECOBO’s decision.
The proposed draft regulations do not contain any provisions on this area of law. Whereas section 46(9) of the Act lists four conditions for deregistration namely: a) the collecting society is not functioning adequately as a collecting society; b) the collecting society is not acting in accordance with its Memorandum and Articles of Association or in the best interests of its members; c) the collecting society has altered its rules so that it no longer complies with subsection 4 of section 46 and; d) the collecting society has refused or failed to comply with any of the provisions of the Act. The proposed regulations ought to give illustrative examples for each of these conditions to aid in interpretation and application of the Act.
In the past, the proper interpretation of this section has been problematic. For instance, it has been argued that this section provides a collecting society may only be deregistered where KECOBO is satisfied that that all four conditions are present.
More importantly, the Act and Regulations do not set out what rules and procedures apply in deregistration of a collecting society under section 46(9) of the Act. For instance, what is the role of KECOBO Senior Management, KECOBO Board Committees and KECOBO Board of Directors in the deregistration process? To what extent should the deregistration process be compliant with rules of natural justice and fair administrative justice and constitutional principles? Can any interested party apply to KECOBO for deregistration of a collecting society?
Furthermore, the Act and Regulations do not contain any transitional provisions to protect the rights of collecting society members and the interests of users once a collecting society is deregistered by KECOBO. This creates a state of limbo which is not in the best interests of copyright owners and users.
General meeting of collecting societies
The proposed regulations ought to compel each registered collecting society to prepare a report containing the minutes and decisions taken at every general meeting to be entered in a special register kept for that purpose and a certified copy of such register be submitted to KECOBO where KECOBO so requires.
KECOBO ought to be notified of any general meeting well in advance and be allowed to attend such general meetings as an observer.
During the registration of a collecting society, the proposed regulations ought to impose certain positive obligations on a collecting society to furnish certain information both to KECOBO as well as the general public. In this regard, KECOBO ought to be immediately notified by the collecting society on the following issues: 1) any alterations to its Memorandum or Articles of Association or any internal rules; 2) any adoption of Tariffs and alteration thereof; 3) any Reciprocal Representation Agreements entered into with foreign collecting societies; 4) any alteration to the standard membership agreement; and 5) any decisions in judicial or official proceedings to which the collecting society is a party, where KECOBO so requires.
Filing of Annual Reports and Audited Accounts by Collecting Societies
The proposed draft regulations ought to oblige collecting societies to submit quarterly performance reports to KECOBO in addition to the statutory Annual Reports.
More importantly, these regulations ought to grant KECOBO discretion to audit, investigate or inspect the accounts, records, operations, practices and systems of a collecting society at any time during the registration period. This includes the power to summon any officer of a collecting society to appear before KECOBO in connection with any such audit, inspection or investigation. Any reasonable costs directly associated with such audit, inspection or investigation may be borne by the collecting society as directed by KECOBO.
These proposed draft regulations provide an opportunity to set the requisite standards to ensure proper functioning of the collective management system. Therefore these regulations ought to clearly articulate the nature and scope of KECOBO’s statutory powers to license and supervise collecting societies. Similarly, these regulations ought to ensure that collecting societies are induced to behave in a manner that optimizes social welfare through an elaborate framework of rights and obligations vis-à-vis their relations with rights holders and the general public.