The Nature of Copyright
Copyright refers to the ownership rights that an author has in the work they have created. It automatically protects the expression of such creative or original works as music, computer programs or codes, photographs, drawings, etc. in a fixed medium.
Apart from fixation in a definite medium of expression, it is also important that—for musical, literary, and artistic work—sufficient effort has been expended in giving the work its original character.
The copyright system is designed to reward those who have devoted their time and resources into producing original contents—it seeks to balance the individual and communal interests by granting an individual copyright owner proprietary right and by protecting their work from unlicensed exploitation or use for a particular period of time after which the proprietary right expires and the work becomes available in the public domain for public use.
Copyright grants authors two types of rights: economic and moral rights. Basically, the economic right encompasses an author’s exclusive ability to exploit their creation and reap financial benefits. In this wise, authors have the right to distribute their works to the public, display, show, or perform their works, and receive some compensation commensurate with the value of their copyrights where their works are sold or licensed out to another person or entity.
As the court puts it in Mazer v Stein, “Sacrificial days devoted to creative activities deserve rewards commensurate with the services rendered”. Economic rights are transferable.
On the other hand, an author’s moral right is the right to be identified as the creator of their work (also known as the right of attribution) and the right not to have their work subjected to derogatory treatment which is prejudicial to their honour or reputation (also known as the right of integrity of authorship).
Unlike economic rights, moral rights cannot be transferred to someone else, because they are personal to the creator, but it may be waived by express agreement.
The Scope of Copyright Protection
According to the Nigerian Copyright Act (the “NCA”), works eligible for copyright are: (a) literary works, (b) musical works, (c) artistic works, (d) cinematograph works, (e) sound recording, and (f) broadcasts.
For copyright to be conferred on any of these works, the author must be a qualified person, i.e., an individual who is a citizen of, or is domiciled in Nigeria; or a body corporate incorporated by or under the laws of Nigeria. Viewed from this perspective, it becomes immediately obvious that not all expressions can be protected by copyright.
Although not expressly stated in the Act, the following works are generally also not eligible for protection: official government works (legislations and official documents), ideas, names, slogan, or short phrases, and facts.
Duration of Copyright
As obtainable in most countries, the NCA stipulates the duration within which copyright in works subsists before the work goes into the public domain, at which point it may be exploited by anyone without consequences. What this means is, unlike such other intellectual property rights as a trademark—which when maintained can last indefinitely—copyright is not a perpetual right.
According to Paragraph 1 of the NCA’s First Schedule, copyright in literary, musical, or artistic works other than photograph remains in force for 70 years after the year of the author’s death. (If the copyright is owned by an organization or a corporate entity, it lasts 70 years after the end of the year the work was first published.)
Copyright in cinematograph films and photographs lasts for 50 years after the end of the year in which the work was first published; copyright in sound recordings lasts 50 years after the end of the year in which the recording was first made, and copyright in broadcasts lasts 50 years after the end of the year in which the broadcasting first took place. For anonymous literary, artistic or musical works, copyright subsists for 70 years after the end of the year the work was first published.
An Overview of the Nigerian Music Industry
Globally, the entertainment and media market was worth 1.72 trillion U.S. dollars in 2015 and is set to rise to 2.14 trillion by 2020. The Nigerian entertainment industry is currently estimated at $4 billion and is now reputed to be the second-highest employer of labour. According to Pricewaterhouse Coopers LLP (PwC), Entertainment and Media Outlook: 2017-2021, Nigeria is expected to have the fastest-growing Entertainment and Media (E & M) industry in the world between 2017 and 2021.
“Based on her musical and cultural output, Nigeria has once been described as ‘the musical heartbeat of Africa’”, and with a population of over 180 million, the country offers a market large enough to sustain and ensure the commercial success of most artistic endeavours.
Thus, despite the challenges that face the entertainment industry as a whole—such as piracy, unreliable content distribution platforms, increasingly volatile state of the economy, and foreign exchange instability—the Nigerian music industry is witnessing a healthy ascent. “Total music revenue in Nigeria rose 9.0% in 2016 to reach US$39 million, and is set to rise at a 13.4% [compound annual growth rate] to US$73 million in 2021.”
Licencing Regime under the Nigerian Copyright Act
When songwriters compose lyrics or performers (artists) perform music, their ‘works’ are automatically protected. Like every other property, the copyright they have in such works may then be licensed or even sold out or assigned. Assignment and sale of copyright are a bit straightforward: therefore, the focus of this article is on copyright licencing.
As mentioned above, copyright confers an exclusive right on the copyright owner and excludes any other person from using or exploiting the protected work without the authorisation of the copyright owner.
A licence is an instrument by which a copyright owner grants some or all of his right in a work to someone else. Licencing is usually preferable to outright sale or assignment because it gives the copyright owner a greater control over the work.
Specifically, a music copyright licence is the legal permission to utilize music in instances where such utilization would otherwise result in infringement. Where a music licence is granted, ownership rights remain vested in the artist (licensor), while the other party (licensee) now has the legal authority to exercise some or all of the artist’s rights to such extent as is allowed in the licence agreement between the parties.
A licence may be exclusive or non-exclusive: The NCA defines an exclusive licence as a licence “signed by or on behalf of a copyright owner, authorising the licensee to the exclusion of all other persons (including the person granting the licence), to exercise any right which would otherwise be exercisable exclusively by the copyright owner”. A non-exclusive license usually entails an arrangement that allows the grant of licence to more than one licensee—over the same work—consecutively or simultaneously.
Where a licencing arrangement exists, the licensee has the duty to provide commercial or financial consideration. This may be in the form of royalties or lump sum payments. A lump sum payment is usually made once a license is granted. It reflects the value of the right being purchased.
Where the licensor and licensee agree, a lump sum payment may be spread across the board, such that it is paid in instalments. Usually, licensors prefer to collect royalties—an upfront fee as well as an ongoing payment based on sales, which is calculated using such metrics as the bargaining strength of the parties, the profit potential, and the period within which the licence is to remain valid.
There are different types of music royalties: Mechanical royalties are generated from the digital and physical reproduction and distribution of copyrighted works; synchronization royalties are revenue generated from the pairing of copyrighted music with visual media; and public performance royalties are revenue generated from copyrighted works performed, recorded or played in public.
Typically, a music license contains such clauses as No Joint Venture (which states that while a licensing arrangement exists between the licensor and licensee, the licence is not to be construed as a partnership or any other special form of business relationship); a Force Majeure provision (which basically relieves the parties from liabilities where unforeseen circumstances, such as an act of God, makes it impossible for any of the parties to perform their contractual obligations under the licensing arrangement); and Warranties and Representation (which, among other things, serves to assure the licensee that the licensor is the rightful owner of the right being licensed and that he is in a position to license same).
Considering the practicality of artists negotiating licenses with all interested licensees, artists join Collective Management Organizations that grant licences on behalf of these artists and collect royalties. For example, in Nigeria, there is the Nigerian Copyright Society of Nigeria (“COSON”).
COSON is a Collective Management Organization approved by the NCC to act on behalf of authors, composers, performers, publishers of musical works, and owners of sound recording in Nigeria. (For accuracy sake, it should be noted that the NCC recently ‘suspended’ COSON’s licence and COSON kicked back by slamming the NCC with a N10 billion suit. At the time of writing this, the matter is still in court.)
COSON administers performing and mechanical rights on behalf of its members. It monitors the use of works and collects licence fees on behalf of its members. In 2014 alone, COSON collected and distributed to its registered artists, royalties totalling a staggering sum of $490,000.
Artists are entitled to some form of compensation every time their musical work or sound recording is exploited in a public and/or commercial setting by such entities as hotels, clubs, TV stations, etc. Unfortunately, there seems to be a general lack of awareness among artists as to how their copyright can be effectively exploited in order to generate a sustained stream of revenue.
Although there is an optimistic expectation that the Nigerian music industry will continue to grow, artists must also give some attention to the legal and economic aspect of their business. For artists, it is not enough to be simply talented; it is also crucial to have some legal and commercial awareness.