Judgment
NAVSA JA:
[1] Except for a period between 1916 and 1965, there was no legislative machinery compelling commercial and
public radio stations to pay copyright royalties to the recording industry and performers for the use of sound
recordings in their broadcasts.1 This changed with legislative amendments to the Copyright Act 98 of 1978
(the "Act") during 2002. The applicable provisions will be dealt with in due course. The present appeal and the
related crossappeal, with the leave of this Court, concerns the correctness of a determination by the
Copyright Tribunal (Sapire AJ), established by section 29 of the Act,2 about the rate of royalties broadcasters
are required to pay and it requires a consideration of the extent of the Tribunal's jurisdiction. This is the first
case of its kind.
[2] The appellant is the National Association of Broadcasters ("NAB"), a nonprofit organisation funded entirely by
its members, more than 80 in number, who are all active participants in the South African Broadcasting
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Industry (the "SABI"). These members include all television broadcasters, most commercial and public radio
stations, community radio stations and signal distributors. The present dispute only concerns 31 commercial
and public radio stations.
[3] The first respondent, the South African Music Performance Rights Association ("SAMPRA"), in terms of the Act
and the regulations promulgated thereunder, is an accredited 3 collecting society of royalties for sound
recordings on behalf of its only member, the Recording Industry of South Africa ("RISA"), an industry body
representing members of the recording industry.
[4] The second respondent, the Southern African Music Rights Organisation ("SAMRO"), which represents the
interests of composers, played the part of observers during proceedings before the Tribunal. Similarly, before
us, they chose not to participate but to observe.
[5] A sound recording (embodied in a record, CD, tape, digital or other device) is usually the product of many
talents, namely, the musical work of the composer, the literary work of the poet or lyricist, the performance of
the artist, and the arrangements made for its making by its producer. A sound recording need not contain
music, alternatively it need not contain words.4
[6] In appreciation of these talents the Act and the amendments thereto, read with the provisions of the
Performers' Protection Act 11 of 1967 (the "PPA"), recognises three kinds of copyrights involved in the
broadcast of a given piece of music. First, section 6(d) of the Act protects the rights of the composer5 i n
relation to the broadcasting of his or her work. Second, section 5(1)(a) of the PPA, which deals with the rights
of performers, states:
"(1)
Subject to the provisions of this Act, no person shall
(a)
without the consent of the performer
(i)
broadcast or communicate to the public an unfixed performance of such performer, unless the
performance used in the broadcast or the public communication is itself already a broadcast
performance; . . . ."
Third, section 9A(1)(a) and section 9A(2)(a) and (b) of the Act dealing with the position of the owners of
copyright in sound recordings, provide as follows:
"(1)
(a)
In the absence of an agreement to the contrary, no person may broadcast, cause the transmission of or
play a sound recording as contemplated in section 9(c), (d) or (e) without payment of a royalty to the
owner of the relevant copyright.
. . .
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(2)
(a)
The owner of the copyright who receives payment of a royalty in terms of this section shall share such
royalty with any performer whose performance is featured on the sound recording in question and who
would have been entitled to receive a royalty in that regard as contemplated in section 5 o f t h e
Performers' Protection Act, 1967 (Act No 11 of 1967).
(b)
The performer's share of the royalty shall be determined by an agreement between the performer and
the owner of copyright, or between their representative collecting societies."
[7] There is no statutorily prescribed rate of royalties to be paid by radio stations to record companies. The
Legislature chose to leave it to agreement between radio stations and owners of copyright in sound
recordings, failing which, arbitration or, as in the present case, where the parties failed to agree on either a
rate or referral to arbitration, determination by the Copyright Tribunal.6
[8] This case does not involve the rights of composers. Essentially, it is a dispute between NAB and SAMPRA,
concerning the reasonableness of the rate of royalties the former should be paying the latter. It is accepted
by NAB that royalties should be paid to SAMPRA for the broadcast by radio stations of sound recordings. NAB
and SAMPRA differ on the formula to be used in determining what is due. It is common cause that the royalties
to be collected are to be shared between the recording studios and performers. During the hearing of the
present appeal we were informed that recently, following negotiations between their respective
representatives, an equal split had been agreed.