AMBITIOUZ ENTERTAINMENT VS FIFI COOPER

Artists around the world go through so much struggle to obtain a record deal that when a record deal comes along, they just put pen to paper without proper due diligence. They end up signing their intellectual property away without being aware.

One such artist is Fifi Cooper as we have recently witnessed the interdict that Ambitious entertainment obtained from the Gauteng High Court which basically stripped Fifi Cooper of her songs and the rights associated with them.

This leaves us with questions regarding the terms of the contract/record deal she signed with Ambitious Entertainment.

Most people/artists never realise the legal implications of entering into a recording deal. They presume a record label will gladly pay them an advance of R 1 000 000 at the minimum and not expect to make a return in triplicate of that amount.

In order for the record label to make their money back they look to own exclusive rights to the artists music. We take a look at how this occurs in legal terms. We will look at copyright as it applies in many recording deals particularly in South Africa.

Let’s start by defining what copyright is……. “Copyright is the exclusive right in relation to work embodying intellectual content (i.e. the product of the intellect) to do or to authorize others to do certain acts in relation to that work, which can be exploited for personal gain or profit.”

It’s important that we highlight the gist and purpose of copyright law. It’s sole purpose is to afford a qualified monopoly in the use or exploitation of a work in order, firstly to compensate and reward it’s creator for the effort. Secondly to act as an incentive, because there is no copyright in ideas, only in the expression of ideas.

It’s also important to know what can be protected and what can’t be protected under the Copyright Act. In terms of the Act, the following works are eligible for protection, provided they are original:

• Literary works
• Musical works
• Artistic works
• Cinematograph films
• Sound recordings
• Broadcasts
• Programme-carrying signals
• Published editions
• Computer programs

However before copyright can apply, a subject matter must qualify as a ‘work’. In other words, “the subject matter must have sufficient substance to warrant being the subject of protection under the Act.

The work must not be too commonplace (trite, trivial or does not excite peculiar attention).

Authorship

Once it’s established that it qualifies as a work, it’s important to establish and ascertain who the author of the musical work is. This is usually stipulated in the recording contract entered into by artist & recording label.

In terms of section 1(q) of Act 125 of 1992, musical work is defined as “a work consisting of music, exclusive of any words or action intended to be sung, spoken or performed with the music.”

Depending on the recording contract, the creator(artist) is not always the author as envisaged by the act. The author(s) of a musical work and a literary work obtain copyright in the work.

The controversy starts when the artists are not the authors of their musical works. This is due to the fact that the copyright exists in the “sound recording” of a musicians performance of a song.

The ‘author’ of a sound recording is the person who ‘made arrangements’ for the recording to be made. As much as the Record label is not the one that created the music by virtue of owning a studio and allowing the artist to use their recording facilities for the ‘sound recording’ of the musical work, song, the copyright vests with the Record label because they made the necessary arrangements for the recording.

I’m sure the question you are asking yourselves, is well “if copyright does not vest with the artist who composed, wrote the song? How can the artist acquire such copyright from the author or rather how can the artist ensure that it becomes the author.

I think it is imperative to establish that the artist can have copyright only to the literary works and the performance but the “sound recording” will vest with whoever organised for the sound recording to be done. So the artist will own the rights to the lyrics but not the sound recording.

The Union of South African creative arts was up in arms a few years ago at the fact that literary, musical and artistic works (excluding photographs) are protected for the life of the author and 50 years from the end of the year in which the author died. They argued that this is taking food out of the artist’s mouth especially since most of the times the authorship vests with the record labels. These sentiments were echoed by Fifi Cooper and led to her acrimonious exit from Ambitious Entertainment.

The issue of authorship/ownership of copyright is generally a question of fact……..it vests with the person who is responsible for the creation of the embodiment of the work. Although there is the possibility/option of Co-authorship or joint authorship it is highly unlikely that the Record label would agree to such. We saw that the late Brenda Fassie co-authored her musical material with other individuals. In recent times, we have witnessed that her former manager is refusing to allow the making of a movie that will celebrate her life and citing that he owns the copyright to all her songs therefore, no one can do a movie without obtaining clearance from him to use her music.

It should be noted that the popular and ordinary meaning of ‘author’ as the maker or creator of a work applies only to literary, musical or artistic works. The authors of all other works are defined with reference to persons who are not authors in the ordinary sense of the word but who have a financial interest in the end result.  This means that more often than not someone other than the person involved in actually making or creating the work may qualify as its author.

We may not know or be in a position to explain why artists find themselves having concluded deals which don’t allow them to own their music. One thing we have seen is the devastating effects of those recording deals on the artist’s careers.

Some questions asked is whether a juristic person can be an author? Well the general position is that the author of a work under section 3(1)(b) can be a juristic person. So yes, a record label such as Ambitiouz Entertainment can be an author.

Other pertinent issues is whether work produced under a ‘contract of work’ not ‘of service’ can be authored by anyone besides the person who creates it. At common law there is a distinction between a contract of service (location conduction operarum) and a contract of work (location conduction operis): This distinction is according to Smit v Workmen’s Compensation Commissioner 1979 (1) SA 51 (A).

Essentially the contracts concluded are contracts of work and not of service in most instances.In the case of Nel v Ladismith Co-Operative Wine Makers and Distillers Ltd (2000) 3 All SA 367 (C) it was held that a court will primarily be influenced by the actual contract before it rather than by what the parties try to call it.

As mentioned above that these contracts of work concluded, and in most instances  are employment contracts. Let’s take a look at this contract known as the employer/ employee contract.

For this contract, a work is made in the course of the author’s employment by another person under a contract of service or apprenticeship, that other person (the employer) is the owner of any copyright subsisting in the work by virtue of sections 3 or 4.

This exception extends beyond literary or artistic works intended for publication and in effect applies a blanket exception to all works in which copyright can subsist when an employer employee relationship is involved.

A distinction must be drawn between the employer-employee relationship (to which this exception applies) and the independent contractor situation (which falls beyond the scope of this exception).

For exception to apply, contract of service or apprenticeship must be established. Then we need to consider whether the work was in fact created outside the course and/or scope of employment, the exception does not apply.

In King v South African Weather Service, the court had occasion to consider the meaning of the phrase “in the course of employment”. It was held to be a standard concept in employment law (formerly known as the law of master and servant). A practical and common-sense approach directed at the facts of the matter must be adopted in interpreting the term and applying it. Whether or not a work is created in the course of the employee’s employment is largely a factual issue that depends not only on the terms of the employment contract, but also on the particular circumstances in which the work was created.

The issue as to whether an employee created the work at home or after office hours is only one factor to be taken into account in answering the question whether the work was made in the course of his/her employment. Indeed, a work may be created in terms of a formal contract of service. The scope of an employee’s employment may be determined. It may change explicitly or by implication from time to time.

Let’s have a look at the nature of copyright in sound recordings

Section 9 of the Copyright Act regulates the nature of copyright in a sound recording. It gives copyright in a sound recording the exclusive right to do or authorise any of the following acts in South Africa:

• “Making, directly or indirectly, a record embodying the sound recording;
• Letting, or offering or exposing for hire by way of trade, directly or indirectly, a reproduction of the sound recording;
• Broadcasting the sound recording;
• Causing the sound recording to be transmitted in a diffusion service, unless that service transmits a lawful broadcast, including the sound recording, and is operated by the original broadcaster;
• Communicating the sound recording to the public.”

Since copyright grants the author protection, one way of not infringing this the copyright is if the author exercises their rental rights they have. Rental rights is when the copyright owner has the exclusive right to let or offer or expose for hire by way of trade, directly or indirectly, a reproduction of the sound recording.

Then we have what we call needle-time rights which are found in section 9A of the Copyright Act. In terms of this section, needle-time rights were introduced to make provision for sound recordings to enjoy some so-called ‘needle-time’ or ‘pay for play’. It also provides for the payment of a royalty to the owner of the copyright in a sound recording when a person (the user of the work) broadcasts or causes the transmission of or communicates the sound recording to the public. The copyright owner must share the royalty with any performer whose performance is featured on the sound recording and who would be entitled to receive a royalty in terms of section 5 of the Performers Protection Act of 1967.

Infringement of Copyright (Direct or Indirect)

Copyright infringement may be direct or indirect. It is a direct infringement to perform the work in public without the consent of the copyright owner, but an act of indirect infringement to permit a place of public entertainment to be used for the performance of the work in public, knowing to lack the consent of the copyright owner.

Direct copyright infringement, then, takes place when a person without the licence of the copyright owner does or causes someone else to do any of the acts that the owner has the exclusive right to do or to authorise. The exclusive rights of copyright owners are contained in sections 6 to 11B.

Fifi cooper in this instance was committing direct infringement while the individuals who kept booking her were arguably committing indirect infringement.

Although we may not know the details concerning the contract that existed between Ambitiouz Ent and Fifi Cooper, we cannot ignore the interdict the record label obtained against her.

It is clearly evident that she infringed the copyright which in this case vests with the record label.

In order for us to understand what this means, we need to famliarize ourselves with the philosophy of copyright protection which by the way is one of the reasons everyone wants to be independent nowadays.

Philosophy of Copyright Protection

There are four arguments which have been advanced to justify copyright protection:

• the natural-justice argument
• the economic argument
• the cultural argument
• the social argument

According to the principles of natural law authors, like any worker, are entitled to the fruits of their labour. They are the creators of their work and

their personality is expressed in the work.  They therefore have a right to control the exploitation or modification of their own works.

The principle of a just return on labour supports the economic argument. According to this argument it is just that authors be remunerated for the exploitation of their works. You see, this argument is based on the economic aspect however does not remedy the injustice that is done when the parties to a recording contract are entering into an agreement.

Copyright works produced by authors contribute to culture. The cultural argument supports the view that rewarding creativity is in the best interest of the public and leads to an enhanced national culture. No investments will be made in the creation of new works unless there is a reasonable expectation of a return on investment. It is argued that if authors earn profits from their works they will continue to generate creative and original works because the return on investment provides a stimulus for creativity.

Lastly, society is advanced by the widest possible dissemination of copyright works to the public. The wide dissemination of works leads to social cohesion and is ultimately viewed as a social service.

Countries with a common-law tradition give the economic and social arguments more weight.

In Biotech Laboratories v Beecham Group, the court noted that South African Copyright Act is based on the Anglo-American copyright model in which commercial rights tend to reign supreme. The court noted that the definition of ‘author’ in section 1 also covers a large number of persons who are not authors in the ordinary sense of the word but persons with financial interests in the end result.

The court concluded that one need not be cynic to be sceptical about the philosophical premise on which South African copyright protection is based.

Although we may believe that there is clearly injustices that occur in our music industry with regards to contracts which favour the record label more than the artists. We should not forget that we need to balance the freedom to contract to other policy considerations which weigh against the upholding of the contract.

At the end of the day the record label is conducting business and the artist is hoping to be star and make a living as well. Its important that we respect such contracts and the people who have signed this agreements be held accountable to the agreement.

Conclusion

It is quite evident from the above and taking the statement from Ambitiouz Entertainment into account that there is unequal bargaining powers in our music industry.

The lack of legal advice is prevalent in how things unfolded in this scenario. You can sense that Fifi Cooper had no idea what she was getting herself into when signing that contract.

My advice to individuals who are planning on signing recording contracts or even contracts in general, read through the terms and make sure you understand them. Have a legal representative look at the contract and explain everything to you in simple terms. This also applies to using other people’s studios for free.

This was just another case of unequal bargaining powers between an individual who had no idea what she was getiing herself into. She just wanted to make a better life for herself and her family meanwhile the record label with resources was focused on business profitability.

Brian Komane LLB (WITS) is a candidate attorney at Sefalafala Attorneys Inc in Hyde Park, Johannesburg.