Kenya: Collective Management Organisations In Danger After Court Questions Their Role

NAIROBI, Kenya — A ruling this month by a Kenyan court that artists, performers and musicians cannot be compelled or forced to join a collective management organisation (CMO) to collect royalties on their behalf could spell doom for CMOs in the country, experts fear.

The ruling questioned the legality of the Kenya Music Copyright Act, which compels artists to join or belong to a CMO in order to receive royalties from various entities, notably entertainment clubs, radio and television stations, as well as mobile phone companies.

“Section 30A of the Copyright Act is unconstitutional as it was enacted without public participation, it also limits artists’ freedom not to be compelled to join an association of any kind as provided under Article 36 of the Kenyan constitution,” ruled the court, sitting at the Kenyan Indian Ocean resort town of Malindi.

The November 8 ruling observed that the Music Copyright Society of Kenya (MCSK), a CMO could not purport to enter a contract with music content users such as mobile phone service providers who download tunes and sell them to subscribers as ringtones for a fee, and then proceed to collect royalties on behalf of artists without their express consent.

The judgement also directed the region’s biggest GSM mobile service operator Safaricom Ltd, a subsidiary of UK’s Vodaphone and one of the biggest content users to pay royalties directly to content service providers, potentially implying that CMOs including MCSK could soon find themselves in trouble.

The company operates a portal called SKIZA tunes, where content service providers (CSMs) upload their music and the source for the GSM operator’s subscribers (of mobile phone service) to upload them to their phones for a daily fee “to entertain their callers.”

Safaricom pays an average of US$6 million per year, with artists pocketing 15 percent and the rest split between the company and the government as taxes and duties.

“The ruling calls for rethink in the way CMOs engage content owners and also in terms of the way in which the law on music copyright is framed,” Nairobi human rights lawyer Suyainka Lempaa told Intellectual Property Watch.

“The Kenya constitution is clear that people are free to join associations they may wish to. It also very categorical that no one can be compelled to join an association against their will,” the lawyer said.

As the parties involved ponder the consequences of the ruling, another group of artists and musicians have obtained a 7-day court injunction stopping CMOs from receiving payments on their behalf until a legal framework on compensation is agreed upon.

The injunction issued by a Nairobi court stopped the Kenya Copyright Board (KECOBO) from handling any royalties on behalf of content owners until KECOBO and the Office of the Attorney General comes up with a copyright management framework, “through which music artists in Kenya can be compensated effectively and transparently for the use of their music.”

The matter was filed by a group calling itself Intellectual Property Owners Association of Kenya (IPOAKE), a trade association for owners of patents, trademarks, copyrights and trade secrets.

According to lawyer Lempaa, the filing of the disputes in court more than anything else points to a rising awareness of IP issues in Africa, a subject previously little known on the continent, and for which few people cared in the past.

“This is at best an indication that IP awareness is growing all around and people are becoming more aware of their rights, and are willing to put their foot down to claim what they feel is rightfully theirs,” he added.

Some observers attribute the numerous suits over royalty payments to the realisation that there is money to be made from IP rights, which has lately led to proliferation of numerous CSPs as well as CMOs.

Arts and Culture Principal Secretary Joe Okudo was recently quoted in the Kenyan media blaming the confusion in the sector on the proliferation of the associations, some of whose mandates and contracts with performers are not clearly defined.

“It is time we put a stop to the confusion in the music industry which has seen unnecessary duplication of roles by various agents and allowed room for masqueraders,” he was recently quoted saying by the local daily, the Star.

The government is working on a bill that will supposedly end confusion in the sector and which he says will end the muddle and duplication of roles by empowering a single agency to collect payments. But this too could be subjected to a legal challenge if it was deemed oppressive by an increasingly assertive performance community.

The confusion looks like it could be far from ending with some artists last month proposing that the government national revenue collection agency, Kenya Revenue Authority (KRA), be appointed as collecting agencies for their monies.

The suggestion has received backing from some government officials and could mean real trouble for CMOs, considering the capacity of the government agency.

Currently, there are a number of CMOs representing artists in Kenya, including MCSK, the Kenya Association of Music Producers (KAMP) and the Performers Rights Organisation of Kenya (PRISK), all whom have been battling to collect payments for the sector.

Besides GSM companies, public services vehicles (PSVs) commonly known as matatus, hotels and restaurants, and commercial buildings owners pay loyalties for music they play to clients including in lifts.

Kenyan CMOs including KECOBO have so far remained mum on the developments, preferring instead to watch the events from a distance before making their stand known.

Newly elected chairman of the MCSK, Albert Gacheru, told Intellectual Property Watch that they are keenly watching the events, emphasising that whatever the outcome the body’s priority is to see musicians get the compensation due to them.

“We are watching the events as they unfold, I cannot say much for now since I’m still new in office but our priority as always is to ensure that artists get the compensation that is due to them for their work,” Gacheru said.