An interesting battle between pro and anti-copyright industries in the US is being played out in submissions to the US Trade Representative’s Office (USTR) regarding whether South Africa should be stripped of its GSP (Generalized System of Preferences) status. According to USTR, “The GSP program provides for the duty-free importation of designated articles when imported from designated beneficiary developing countries.” GSP status can be challenged by US industries on various grounds. For example, the current GSP review is looking at a number of countries beside South Africa, including Azerbaijan and Uzbekistan for alleging denying worker rights, Ecuador for not acting in good faith in implementing arbitral awards and South Africa (and Indonesia) for allegedly failing to provide adequate and effective protection of intellectual property rights. It is the South African case that is of interest here.
IIPA’s GSP Petition on South Africa: Weaknesses in South Africa’s Copyright Laws
Back in April 2019, a petition was filed by the International Intellectual Property Alliance (IIPA), a Washington-based private sector trade alliance representing the major US intellectual property (IP) industry associations (publishing, film, television, music, videogames), expressing dissatisfaction with South Africa’s IP regime and market access rules for content based products. The IIPA had a number of complaints but it particularly focussed on two draft pieces of legislation then making their way through the South African Parliament and which are now awaiting the signature of President Cyril Ramaphosa. Among the concerns were proposed restrictions on contracting by rights-holders (by limiting certain assignment of rights to 25 years), inadequate penalties for infringement, weak provisions regarding technological protection measures (TPMs) for digital content, as well as market access barriers arising from broadcast quotas, and the application of VAT to online content. But the IIPA’s main complaint was that the draft South African legislation would;
“create an overbroad amalgamation of copyright exceptions that includes a more expansive version of the U.S. “fair use” rubric appended to a proliferation of extremely open-ended new exceptions and limitations to copyright protection (on top of “fair dealing” provisions), resulting in a vast and unclear thicket of exceptions and limitations.” (emphasis added)
The IIPA made it clear that it was opposed to the introduction of US-style fair use in South Africa, citing a number of reasons including;
(a) “South Africa lacks a deep and rich body of case law that, in the United States, helps to mitigate the inherent uncertainty of the scope or applicability of the fair use exception;
(b) the South Africa proposal includes language even broader than the U.S. fair use statute, which further heightens the uncertainty discussed above, and the risk that an unacceptably wide range of uses in South Africa will be considered “fair” and non-infringing;
(c) the proposal retains South Africa’s existing “fair dealing” system, while expanding the impact of fair dealing exceptions by effectively removing the limiting standard of “fair practice.”
(d) the uncertainty that will be caused by the proposed hybrid model is particularly problematic in South Africa because its legal system lacks statutory and punitive damages…”.
These are all valid concerns. I have argued in the past (with respect to the fair use debate in Australia and New Zealand) that because of its long history and decades of jurisprudence dating back to the 1830s (although not formally codified until 1976), the fair use doctrine works reasonably well in the US. However that does not necessarily mean that it would transplant well to UK-style fair dealing jurisdictions without the same long experience and legal history of interpreting the parameters of fair use.
Fair Use vs. Fair Dealing
At this point it is probably worthwhile to summarize quickly the differences between the fair use and fair dealing. In the US context, fair use is an affirmative defence against copyright infringement and is determined by the courts on a case by case basis, judged against several fairness factors (purpose and character of the use, the nature of the work copied, the amount and substantiality of the amount of the work used, and the effect of the use on the value of the original work). It is used in the United States and Israel. Fair use is not defined by law. Some examples are given in US law of areas where the use is likely to be fair (criticism, comment, news reporting, teaching, scholarship, research) but these are illustrative and not exhaustive. In short, it is the courts that decide. This in turn can lead to extensive litigation as to what is and is not fair use, and it is worth noting that different judicial circuits in the US have at times come up with conflicting interpretations.
Fair dealing is a specified exception to copyright infringement established by statute. The list of exceptions varies by country although most have a number of exceptions in common such as criticism, research, private study, review or news reporting and sometimes, in addition, parody, satire and education. Provisions are normally made for technical issues such as format-shifting, data mining etc., through periodic updates. Even if a dealing (unlicensed use) falls within the listed exceptions, it must still be fair according to a number of factors, such as the amount and nature of the use, the alternatives to the dealing and the effect of the dealing on the original work. In other words, you can’t copy willy-nilly just because your use falls within the fair dealing exceptions. But while the courts can add interpretation, they don’t determine the definition of a fair dealing. That is the responsibility of elected legislators.
South Africa Under Pressure
It seems that South Africa is considering a mish-mash of the two systems. Where did this idea come from? It seems apparent that there has been a campaign in South Africa by some US companies and associations, (i.e. those generally associated with the promotion of weaker copyright), to push fair use on South Africans. In its response to the USTR GSP hearing, the South African Government provided a submission that Google provided to the South African Parliament during the development of the legislation. Google commended the government for “its thoughtful outline of a fair use doctrine” and went on to say that “There is no doubt that a fair use regime will promote socially beneficial, pro-competitive and innovative uses”. According to Google, fair use would cure just about all ills, bringing benefit to industry, higher education, research, innovation and culture.
Why Introducing Fair Use in South Africa is the Wrong Remedy
The issue has been extensively debated in South Africa, is controversial, and is not yet law. If there is debate in South Africa over whether to adopt fair use, the same is equally true in the US where the wisdom of South Africa adopting fair use is being played out in submissions to USTR. Lining up with IIPA are organizations such as the Center for Promotion and Protection of Intellectual Property. Submitting on behalf of a number of IP scholars, the Center writes;
“South Africa is currently considering major amendments to its copyright law that, if enacted, would further weaken the protection and enforcement of copyrighted works in sub-Saharan Africa’s most vibrant creative market. Of chief concern is the implementation of the U.S. fair use doctrine on top of new and existing fair dealing exceptions that fall short of adequate and effective copyright protection. If the provisions become law, the result would be an impractical mashup of fair use and fair dealing standards that would deter foreign investment and ultimately harm local creators and creative industries.”
Another industry alliance that includes a range of US content industries states that South Africa proposes;
“…to introduce a new and unclear copyright exception to the exclusive rights that would create a conglomeration of aspects of fair use and fair dealing as well as other exceptions. This approach to copyright exceptions is untested. It would create a first-of-its-kind exception of unequalled breadth and uncertainty, and would be the source of copious and expensive lawsuits in South Africa for creative industries. The nature and parameters of copyright protection for creators would be in constant question and shrouded in ambiguity.”
Fair Use: Why Push It?
On the other hand, the Internet Association (IA), the self-styled “voice of the internet economy” writes that, “Fair use enables digital trade by providing the legal framework that allows nearly all internet services to function effectively.” (Is one therefore to suppose that internet services don’t work in fair dealing jurisdictions?). Apparently without fair use in other countries US exports are disadvantaged, according to the IA, which even gets in a dig at European regulations;
“In countries that lack fair use measures that are equivalent to the U.S. legal framework, U.S. innovators are at a significant risk of loss of market access. For example, other governments such as France are increasingly misusing copyright law to limit market entry and to discriminate against U.S. providers…As a result it is critical for the US to support the adoption of fair use in other countries.”
The Computer and Communications Industry Association (CCIA) in Washington chimes in with “It is both appropriate and in the economic interest of the United States for other countries to adopt a fair use exception modelled on the provisions…of the US Copyright Act”.
South Africa is Still Undecided
I could go on citing other examples for and against fair use. Creative Future’s submission is against its introduction in South Africa; Wikimedia Foundation takes the opposite stance. The Songwriter’s Guild and IFPI (International Federation of the Phonogram Industry-a major music industry association) are against expanding exceptions and the introduction of fair use, while the Library Copyright Association supports it, and so on. As for the South Africans, most of their submissions make the point that there is no provision in US law to deny GSP treatment on the basis of a proposed law, noting that President Ramaphosa has yet to sign the Bill and even if he does, there are still constitutional challenges that must be exhausted. He may have reservations and send it back to Parliament for revision and if Parliament does not accept the revisions, they could be referred to the Constitutional Court. In other words, the legislation is far from a done deal.
At the end of the day, there is no question that there are weaknesses in South Africa’s copyright regime that need to be addressed and that the 1978 apartheid-era Act needs to be updated. A number of the objections of IIPA and the copyright industry associations target various weaknesses in the proposed laws in addition to the proposal to introduce fair use stacked on top of wider fair dealing exceptions. Notably, the tech industry submissions do not address any of the other points raised by the IIPA and others, but simply focus on touting the benefits of exporting fair use globally. The real question for South Africans is whether it is really in their interest to be one of the first countries outside the US to climb onto this bandwagon.
Fair Use–Not a Silver Bullet
Given the arguments of the US tech community that fair use is more flexible, promotes innovation and investment and should be exported, other jurisdictions, notably the UK and Australia, have extensively studied the question of whether to adopt it and have decided that there are more downsides than upsides. As Professor Ian Hargreaves, author of the leading UK report on IP issues that (among other issues) examined the issue of potentially introducing fair use in Britain concluded, simply adopting fair use would not turn East London into Silicon Valley, no matter how much fair use is promoted as the secret sauce leading to innovation and economic benefit.
Caught in the Middle of the US Debate
What is somewhat disconcerting for other countries (especially developing countries dependent on GSP benefits for broader access to the US market) is to be caught in the meat-grinder of the internal debate in the US over whether or not to export US legal models, especially fair use, as part of US trade policy. Respect for international copyright standards is one thing; forcing other countries to willy-nilly adopt US models through trade agreements or trade policy leverage like GSP tariff privileges is another. (The insertion of language into the new NAFTA (USMCA) that is based on the internet platform liability immunity provisions of Section 230 of the Communications Decency Act is another example of a measure being advanced as an official US negotiating position even though that measure is very controversial and enjoys no consensus within the US. Fortunately the final version of the USMCA language on this is sufficiently vague so that there is no commitment by the US to never alter Section 230 and no commitment on the part of Canada to implement Section 230-like measures, as I outlined in a recent blog).
Pushing Adoption of Fair Use in Trade Agreements: Not a Good Idea
Back in 2015 at the time of the negotiation of the Trans-Pacific Partnership (which the US signed but then withdrew from), the International Center for Law and Economics, based in Portland, OR, produced a paper titled “Dangerous Exception: The Detrimental Effects of Including “Fair Use” Copyright Exceptions in Trade Agreements”. It concluded that Congressional mandating that fair use be a negotiating objective in future trade agreements would not be in the interests of the United States because of the potential disruption that this would introduce into well-established copyright systems around the world that had already worked out an appropriate balance of use and exceptions. Among the disruptive factors would be extensive litigation to establish the national parameters of fair use. To quote from this paper;
“…the wholesale importation of “fair use” into other jurisdictions without appropriate restraints may not result in a simple extension of the restrained and clearly elaborated fair use principles that exist in the U.S., but, rather, something completely different, possibly even a system untethered from economics and established legal precedents.”
Where Will it all Lead?
At this point it is difficult to know where USTR will come down on the question of maintaining or removing GSP preferences for South Africa. The internal battle lines have been clearly drawn on fair use in the position papers submitted by both pro and anti-copyright elements in the US. (Other complaints such as the proposed restrictions on contracting by rights-holders and restrictions affecting the music industry seem relatively uncontroversial from a US perspective.) The South Africans, with their unwise proposal to import a US-style fair use system and to combine it with a wide loosening of existing fair dealing exceptions, have landed themselves smack in the middle of an ongoing US debate. This could affect more than just US stakeholders as the decision taken by USTR could influence the US position in future trade negotiations or tariff reviews. Meanwhile the internal debate within South Africa will also continue and at the end of the day, President Ramaphosa might not sign the legislation in its current form, and it will go back to the drawing board. That might be the best of all outcomes.
© Hugh Stephens 2020. All Rights Reserved.