Friday, 22 July 2011

Collecting royalties in Nigeria: a confused situation?

The following note was written by IP lawyer and business consultant Ayo Solarin, whose weblog IP Matters and Business Solutions is well worth a look.
"Nigerian Music Copyright Administration in Legal Chaos 
The decision of the Court of Appeal in Musical Copyright Society Nigeria [MCSN] v Cowpact Disc Technologies & others [CA/L/787/2008] delivered on 17 March 2010 has blown wide open the question of who has the legitimate right to collect music royalties on behalf of composers, authors, songwriters and music publishers, both international and indigenous, whose rights are recognised by the Copyright Act. The Court of Appeal in MCSN v Nigeria Hotels [1992], MCSN v Adeokin Records [2004] and the Federal High Court in MCSN v Vee Networks Ltd [2009] held that MCSN is the owner, assignee and exclusive licensee of the largest repertoire of musical works within Nigeria based on an international reciprocal representation agreement with the Performing Rights Society of England [PRS] which grant MCSN exclusive ownership of musical works belonging to over ten million composers and songwriters worldwide, including renowned Nigerian composers, songwriters and authors who have assigned their musical copyrights directly to either PRS or any of the 225 authors’ societies in 118 countries whose repertoires are exclusively controlled in Nigeria by MCSN. The court decisions were reached in favour of MCSN on the ground that it has the locus standi to institute legal actions against infringers under section 15 of the Copyright Act 1988 being the owner, assignee and Exclusive licensee of the musical works in question. 
A new provision, now section 17 of the Copyright Act 2004, was introduced which in effect restricted MCSN, or any other substantial owner of copyright works, from suing infringers under the old section 15, now section 16 of the Copyright Act 2004, unless registered as a collecting society or given a certificate of exemption by the Nigeria Copyright Commission [NCC]. The decision of the Court of Appeal in MCSN v Cowpact Disc Technologies [2010] is that in spite the gamut of evidence before the court that MCSN is the owner, assignee and exclusive licensee of the largest repertoire of musical works in Nigeria, a fact that was not in dispute, the court had no choice but to rule MCSN lacked locus standi to bring the action against infringers of numerous musical works belonging to its repertoire since it isn’t a registered collecting society in accordance with section 17 of the Copyright Act. MCSN has a history, dating back to 1993, of application to the Nigeria Copyright Commission for registration as a collecting society but always denied, except in 2005 when NCC issued MCSN with a license which was withdrawn within three months, without explanation. NCC approved Performing Mechanical Rights Society [PMRS] to operate as a collecting society in respect of musical works in 1995, and with the demise of PMRS, Copyright Society of Nigeria [COSON] was licensed to collect royalties for musical works. The fundamental question is what qualifies COSON to be registered as a collecting society in respect of musical works and what disqualifies MCSN in respect of same? 
The provision of section 39(2)(c) of the Copyright Act 2004 is vital in the registration process of any collecting society since there is a mandatory pre-registration conditionality that the applicant must “ represents a substantial number of owners of copyright in any category of works protected by this Act”. 
The impression given by NCC is that COSON met the pre-registration requirement of section 39(2)(c) and NCC is satisfied under section 39(3) that the approved COSON adequately protects the interest of substantial numbers of musical copyright owners in Nigeria. However, the reality of the contractual arrangements before the law courts is that MCSN is in fact the largest owner of musical works representing substantial owners in that category numbering over ten million composers, authors, songwriters and music publishers across the world whose works are controlled through assignments and exclusive license arrangements entered into with MCSN. The presumption of the court decisions is that MCSN is the owner, assignee and exclusive license of these musical works, since there is no evidence to the contrary before the courts, in accordance with section 43 of the Copyright Act. If the presumption of the Nigerian courts is that MCSN is the substantial owner of musical copyright within Nigeria then the assumption of NCC in support of COSON’s registration remain unsubstantiated unless COSON can present the assignments and exclusive licenses that make it the “substantial owner of musical copyrights” in compliance with section 39(2)(c). Since PMRS or COSON is yet to establish its rights in court as owners, assignee and exclusive licensee of musical works under section 16 it is difficult to determine the extent of the society’s repertoire, that is, if any. 
Did COSON meet the requirement of section 39(2) (c) of the Copyright Act 2004? The evidence of Chief Tony Okoroji, then PMRS and present COSON chairman, on behalf of the defendant infringer in MCSN v Vee Networks Limited [page 18 & 19] is that PMRS has no legal nexus whatsoever to the author/owner of the musical work in question which it licensed for use to the defendant company, “PMRS is in the habit of collecting royalties of those who are not assignees of the society”, “PMRS protect artists without any agreements which “is the tradition all over the world” and “PMRS does these activities because it has the approval of NCC to do so”. The summation of the judge on the evidence given by Chief Tony Okoroji is that “He did not give any useful evidence that relates to infringement of the copyright of the plaintiff by the defendant...in fact this witness did not give any substantial evidence to show that they have a right to the musical work or to use it or that it was obtained from a legal source”. It is clear that the activities of PMRS, as described in evidence by Chief Okoroji, is tantamount to illegality and touting the license issued to the society by NCC which is contrary to the intention of the Copyright Act. 
Where does this leave music copyright administration in Nigeria? MCSN the legal owner, assignee and exclusive licensee of musical works under section 16 is debarred by virtue of section 17 from protecting and enforcing tens of millions of musical works belonging to it unless it is approved as a collecting society. COSON, on the other hand, is registered as a collecting society and though it may claim to have locus standi by virtue of section 17 but obviously it doesn’t have the locus standi to prosecute infringement actions in respect of the substantial numbers of musical works belonging to MCSN under section 16. COSON may have a government license but clearly not the contractual consent of the majority of musical copyright owners. 
In practicality both MCSN and COSON are rendered incapable of licensing or enforcing the copyrights of millions of composers, authors, songwriters and music publishers worldwide who continue to suffer piracy of their musical works on Nigerian radio, television and cable stations. What can be done to resolve the dilemma? NCC has clearly goofed in law thereby creating the chaotic situation. It has no choice but to revisit the provisions of sections 39(2) (c) and 39(3) of the Copyright Act through which the locus standi requirement in sections 16 and 17 derive its source of authority. The alternative is for NCC to grant MCSN a certificate of exemption under section 17 permitting it to enforce its legitimate rights under section 16 of the Copyright Act or even create a level playing field by approving both societies to compete in a free market".
Thanks so much, Ayo!

1 comment:

Aurelia J. Schultz said...

Ayo, great post; curious to hear your opinion. With the political history of the NCC-PMRS-MCSN battles, how likely do you think it is that the NCC will either adjust the Copyright Act again or will grant MCSN collecting society status? Do you think the fairly recent (last few years) change of DG at the NCC will factor in at all?