A South African judgment dealing with joint ownership of copyright in databases has recently come to light. The judgment was handed down almost a year ago, but it seems to have slipped under the radar. This judgment will, however, be of interest to those involved in IP.
The case is The Philanthropic Collection (Pty) Ltd v Girls & Boys South Africa. The applicant (the "organiser") in this case organises a charitable event that takes the form of a sleep-out – business leaders are asked for donations and they're requested to sleep outdoors on a winter's evening in order to get a better understanding of the plight of the homeless. The first sleep-out happened in 2015 and the proceeds went to the respondent (the "charity").
In the process of organising the first sleep-out, the organiser established an electronic database, which came about because every donor had to register on the organiser's website using an online form. Donors were also able to pay through the website with a credit card. One thing that the organiser seemingly hadn't foreseen was that certain companies would want to pay by electronic funds transfer ("EFT"). To accommodate these companies, a form was created and loaded onto the website. This form would be downloaded, completed and returned together with proof of the EFT payment. The information provided by these donors would then be added to the electronic database. This form was, in fact, created by an employee of the charity, and this employee was also responsible for inputting the donors' information into the electronic database.
Another issue that came up with the first event in 2015 was that the organiser didn't yet have the tax-exempt status of a public benefit organisation. Aware that people are more likely to be charitable when tax breaks are involved, the organiser and the charity agreed that all donations would be paid directly into the bank account of the charity, which had the necessary tax-exempt status and was able to issue tax-exemption certificates. In order to do this, the charity made use of the electronic database, as well as the information that its employee was adding manually.
In 2016 and 2017, the organiser arranged further sleep-outs, but on these occasions, the charity was not a beneficiary. In 2017, the charity started phoning people who had donated money in 2015 and asked them for donations. This upset the organiser, who sued the charity for infringing its copyright in the database. The charity defended the court application, arguing that it was a joint owner of the copyright.
Judge Modiba kicked off by making the point that a database is protected under South African copyright law as a "literary work". This somewhat misleading term is defined to include "tables and compilations of data stored or embodied in a computer".
The judge went on to say that in order to enjoy copyright protection, a literary work must be "original". There have been a number of South African decisions on originality. In Klep Valves (Pty) Ltd v Saunders Valve Company Ltd, the court said that for the purposes of copyright, "all that is required is that the work should emanate from the author himself and not be copied." In Haupt t/a Softcopy v Brewers Marketing Intelligence (Pty) Ltd and Others, the court held that a work is original if it has not been copied from an existing source, and if its production required a substantial degree of skill, judgement or labour.
The judge said that in terms of the Copyright Act, 1978, the author of the literary work is the owner of the copyright unless the copyright has been assigned and, if generated by a computer, the author is the person who undertook the arrangements necessary for the creation of the work. In this case, the organiser was the author of the database. It had conceived the idea of a sleep-out and this had led directly to the creation of the database. It had also made all the arrangements for the creation of the website.
On the other hand, the contribution of the charity's employee did not meet the originality test, as the form that its employee had created for EFT payers was substantially the same as the online form created by the organiser for credit card users. The creation of this additional form involved "no substantial degree of skill, judgement or labour". The judge went on to make a number of further points:
- the form for EFT payments was "ancillary" to the database: "but for its incorporation on the website the respondent would not have had the means to collect the data it claims to have collected in the manner it collected it ... for that reason it would be absurd to separate the manual form from the website."
- even if the employee had innovated the idea of EFT payments, this did not elevate the charity "to the status of a person who made arrangements necessary for the creation of the website". The charity needed "the concurrence of the applicant", and without this it "would not have been able to collect the data it claims to own".
- the purpose of the EFT innovation was simply to make it possible for donors to pay by EFT and get tax exemption certificates, it was not to create a database.
- the charity was a beneficiary of the 2015 event and not a partner of the organiser. The charity only stood to benefit, so its claim to being a partner was "absurd".
The judge concluded that giving the charity the status of an author of the database on the basis of data manually added to the database that is automatically generated from the website would be an "overbroad interpretation". The organiser was the sole owner of the copyright and the charity had infringed this copyright. The judge therefore granted an interdict (injunction).
If there's a lesson to be learned from this case, it's this: copyright issues need to be considered and clarified right from the start.
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