[6] The evidence establishes that copyright proprietors in the film industry have, for the purpose of controlling the
distribution of their films territorially, divided the world market into six "zones" of which zone 1 comprises the
USA and Canada, zone 2 comprises Japan, Europe, South Africa, the Middle East and Greenland and the
remaining four zones are situated in other territories in the world and need not be further defined for present
purposes. The DVD recordings of films in each zone are electronically encoded. The playback equipment
marketed in each zone is also encoded so as to preclude it from playing DVDs which are not encoded for that
particular zone. Thus a DVD player sold in South Africa will have a code that enables it to play only DVDs
encoded for zone 2. DVD recordings sold or hired out for home viewing in each zone have explicit warnings
and reservations of rights on their packaging, advising the user of the copyright limitations to the proposed
use and the penalties that may result from misuse.
[7] According to Fox, Disney and Warner, the DVD recordings of the films produced for sale in the USA are all sold
and supplied with these "copyright warnings", inter alia, drawing users' attention to the fact that the DVDs are
sold for home viewing in the zone 1 territories only. It is common cause, however, that the Video Group,
having purchased the American products, offered them for hire from the various outlets operated by the
franchisees in the Video Group, and also supplied their customers with a pamphlet describing how local DVD
players can be "decoded" to enable them to play zone 1 films.
[8] The provisions of section 24(1) are quoted earlier in this judgment. The section gives the court a discretion to
order that the infringer should deliver up all "infringing copies". An "infringing copy" in relation to a
cinematograph film is defined in section 1 of the Act as:
". . . a copy of the film or a still photograph made therefrom; . . . being in any such case an article the making of
which constituted an infringement of the copyright in the . . . cinematograph film . . . or, in the case of an imported
article, would have constituted an infringement of that copyright if the article had been made in the Republic."
Page 38 of [2010] 2 All SA 34 (SCA)
The Video Group contend that Fourie J erred in ordering The Video Group to deliver up the zone 1 DVDs in
their possession or under their control. The argument is that the zone 1 encoded DVDs were acquired lawfully
from the USA and that they are, accordingly, not "infringing copies" as defined. The submission is that, to
establish that the zone 1 DVDs are infringing copies, "it would have been necessary for [Nu Metro and the
owners] to allege and prove that the making of the article in South Africa by the person who as a fact made
the article in the USA would have constituted an infringement of the copyright in South Africa". The Video
Group contend that no allegation to that effect has been made in the papers. It is difficult to understand this
contention. The very basis upon which the application is brought by the proprietors of the copyright in the
films is that zone 1 DVDs are not available for lawful distribution in South Africa. There is no evidence to show
that the person who manufactured the zone 1 DVDs in the USA had the right to do so in South Africa. In fact
the probabilities are overwhelmingly against such a suggestion. Accordingly, if the DVDs had been made
locally by that person, the inference must be that the making would have constituted an infringement. The
attitude adopted by the owners in these proceedings is fully in keeping with that inference. There is,
accordingly, no substance in this contention.
[9] The further submission concerning the order for delivery up is that the court should have had regard to the
fact that the zone 1 DVDs were the property of the Video Group and the court should have been reluctant to
deprive them of their property rights. Fourie J rejected this submission. He held that the order was necessary
in the circumstances to enable Nu Metro and the owners to monitor and enforce the interdicts. He pointed out
that at least 22 respondents were involved and he surmised that the very opposition to the order for delivery
indicated a probable intention to deal in the zone 1 DVDs. There is a further consideration which warrants an
order under section 24(1) in this case. It is that the infringing DVDs were acquired for an unlawful purpose
and there is no lawful use to which they could be put in this country: at any rate, no such use could be
suggested by counsel for the Video Group. The history of the Video Group's conduct with regard to its use of
the zone 1 DVDs also militates against any suggestion that Nu Metro and the owners would be properly
protected if an order for delivery up was not made. As indicated, this was a matter involving the exercise of a
discretion by the lower court. I consider that the learned Judge correctly exercised his discretion in favour of
the grant of the order for delivery.
Costs
[10] The three orders as to costs made in the court below and challenged on appeal are the following:
(a)
the order that the costs of the application should include the costs of various affidavits aimed at
establishing infringing conduct on the part of a number of the Video Group in their respective franchise
businesses;
(b)
the order that the Video Group pay Nu Metro's costs in the application;
(c)
the order that the costs of the owners be taxed and paid on the attorney and client scale.
Page 39 of [2010] 2 All SA 34 (SCA)
[11] The Video Group's submission in relation to the costs of the affidavits is that they (the Video Group) had made
no secret of the fact that the franchisees were dealing in zone 1 encoded DVDs which they had imported from
the USA. Accordingly, so the submission runs, it was unnecessary for Nu Metro and the owners to produce
evidence of individual acts of infringement by individual franchisees. The short answer to this submission is
that, until the answering affidavit was delivered, Nu Metro and the owners had no way of knowing what the
Video Group would put in issue. It is significant that the Video Group challenged Nu Metro and the owners'