The Copyright Amendment Bill and claims for compensation in criminal cases

The Copyright Amendment Bill (“the CAB / the Bill”) has caused much debate and controversy in the protection of Intellectual Property rights in South Africa. One of the main points of contention is the fair use policies the CAB seeks to implement, which are similar to the fair use policies incorporated in United States (“US”) Law. Opposition to this Bill has pointed out that the CAB does not make provision for the adequate protection of copyright owners in South Africa by implementing the same checks and balances provided for in US Law. In this regard, the absence of the right of a claimant to claim punitive damages under South African law and/or the CAB has been raised as an important concern and objection to the implementation of the Bill.

Interestingly, one argument raised in support of the Bill is that Section 300 of the Criminal Procedure Act No. 51 of 1977 (“the CPA”) provides copyright owners in South Africa with adequate protection and a right to claim compensation for damages suffered as a result of criminal activity involving copyright infringement.

Section 300 of the CPA is a civil remedy which provides for and authorises the criminal court, on application, to make provision for compensation orders to be imposed where an accused person has been convicted and his offence(s) caused the complainant to suffer damages or loss of property. However, a closer reading and study of the principles of Section 300 and the relevant case law indicates that criminal courts take a narrow interpretation of the concepts of damages or loss of property[1] when considering whether to grant an order under this Section.

There are various practical challenges and aspects when considering whether Section 300 will assist in providing additional protection to a copyright holder, other than that which already exists during the normal course of civil litigation.

Firstly, an application in terms of Section 300 of the CPA may only be made subsequent to the accused person being found guilty of the criminal offence[2]. Therefore, the State first needs to prove its case beyond a reasonable doubt, followed by the conviction of the accused, before the application for compensation under Section 300 of the CPA can be made. The burden of proof required for a conviction in a criminal case is higher than the balance of probabilities threshold required to be successful in a civil case.

Furthermore, evidence needs to be placed before the criminal court proving and quantifying damages or loss of property. In this regard, the court may consider the evidence presented during the criminal matter and further evidence may be furnished by the applicant to the presiding officer.

Therefore, the issues relating to the quantifying of damages to or loss of property, which is well-known to be difficult to prove during a normal civil trial relating to copyright infringement, also applies under the proceedings in terms of Section 300 of the CPA. In fact, in a criminal case where the accused is alleged to have, inter alia, contravened the provisions of the Copyright Act, it is highly unlikely that evidence will be adduced that may assist in quantifying damages in respect of copyright infringement (i.e. sales records), as the accused is not obliged to discover any documents in criminal proceedings.

A copyright holder proceeding under Section 300 of the CPA will, therefore, have a difficult task in quantifying damages to or loss of property without the benefit of discovery, as implemented during the normal course of civil action proceedings.

Furthermore, Section 300 of the CPA places an additional enquiry to consider whether the compensation order is possible of being executed[1]. Hence, copyright owners are faced with an additional hurdle by the courts also considering whether the infringer is capable of making payment of the compensation order for damages to or loss of property, whereas this is not the case with normal civil action proceedings for damages.

Therefore, although a copyright owner remains free to discuss this option with a prosecutor when a criminal case is pursued, it may very well create more challenges than solutions.

[1] S v Liberty Shipping and Forwarding (Pty) Ltd and others

[2] S v tlame

[1] S v Bepela

Cheslin Petersen
Associate | Attorney