In a Judgement delivered by the High Court sitting in Malindi on 3rd November 2016 in the case of Mercy Munee Kingoo & Lydia Nyiva Kingai v Safaricom Limited & Attorney General [2016] eKLR, the court pronounced itself on the constitutionality of section 30A of the Copyright Act, 2001 (the Act).
The facts of the case are that the petitioners had contracted Premium Rate Service Providers to digitize their musical works and download in the Skiza tunes portal owned by Safaricom Limited (the Company). The portal allows telephone end users to select and download ring back tones. The Company was thus remitting royalties through the Premium Rate Service Providers contracted by the petitioners. However, the Statute Law (Miscellaneous Amendments) Act of 2012 introduced section 30A to the Act providing for the equitable right to remuneration for use of sound recordings and audio-visual works for producers and performers through their respective Collective Management Organizations (CMOs).
The petitioners’ case was that the payment of royalties through CMOs infringed on their intellectual property rights since they have already engaged other Premium Rate Service Providers and agreed on how their royalties would be paid. They argued that the Company’s decision to enter into contracts with CMOs pursuant to section 30A of the Act was ill motivated and intended to cause a breach of contract between the petitioners and their contracted service providers, particularly so since they were not members of any CMO. The petitioners also claimed that there was no public participation in the enactment of that section. It is on this basis that the petitioners called, among others, for a declaration that Statute Law (Miscellaneous Amendments) Act of 2012 introducing section 30A to the Act was unconstitutional.
On the other hand, the respondents’ case was that the matter was res judicata having been determined in Nairobi Petition No. 317 of 2015 (the Nairobi Petition) where the judge found that section 30A was constitutional. The Company also argued that it was enjoined by section 30A to only pay royalties to the producers and performers through their respective CMOs and that to that end the company was acting in compliance with the law.
In determining the matter, the Court held that the same was not res judicata stating that similar cases challenging the constitutionality of a statutory provision may be brought to court based on a different cause of action. The case introduced an aspect of public participation that was not raised in the Nairobi Petition. This, coupled with the fact that the petitioners were not party to the Nairobi Petition, led the judge to conclude that the matter was not res judicata.
On the question of constitutionality of section 30A of the Act, the learned judge affirmed the finding in the Nairobi Petition that it is not mandatory for artists and producers to be members of CMOs in order to receive royalties from users. The court found that CMOs should only receive and pay royalties to its members and bemoaned the act of CMOs receiving royalties on behalf of artists who were not registered with them. The court thus held that this manner of implementation of section 30A was unconstitutional.
Consequently, the learned judge held that section 30A of the Act was unconstitutional (i) to the extent that it limits the rights of artists to choose how their royalties are to be paid since it limits the petitioners’ freedom of association and (ii) the section was enacted without public participation.
The High Court decision (available here) signaled a resounding victory for artists by affirming their right to decide how they will receive royalties from users, be it through CMOs or their appointed service providers.
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