Copyright cowboys under fire

SMALL traders in South Africa are up in arms against a Johannesburg-based organisation that claims it enforces copyright piracy laws for major international corporations such as Sony, Warner Brothers, Paramount Pictures, Universal Pictures and others.

The South African Federation against Copyright Theft (Safact) has for three years been seizing CD-ROMs, DVDs, Playstations and other computer game devices belonging mainly to small retailers.

Safact managing director Fred Potgieter says the company has been retained by seven major movie studios in the United States, and local film distributing companies such as Nu Metro and Ster Kinekor to fight piracy in Southern Africa.

Since the organisation was formed in 1999, Safact has seized merchandise from airports, shops, flea markets and warehouses.

But inquiries by the Mail & Guardian into Safact’s activities reveal that the company’s conduct may not only be unlawful, as many traders allege, but that some acts by Safact officials were probably fraudulent.

One example of such apparently fraudulent activity are permits (copies of which this newspaper has) allowing Potgieter and two other employees of his company to enter customs, and other restricted areas at Johannesburg International Airport.

They use these permits under false pretences because Potgieter’s indicates he is an official of the South African Revenue Services - which he admits he has never been - and the two other permits indicate that Safact operatives Cornelius Potter and PJ Allers are policemen. But Potter, according to his boss, has never been a policeman. Allers was once a policeman but left the force (a former colleague says he was dismissed from the South African Police Service for tampering with evidence).

When the M&G faxed Potgieter copies of the permits for comment, he vehemently proclaimed his, and Safact’s, innocence, saying Safact had never done anything improper or unlawful.

“Yes we applied for permits at Johannesburg International,” Potgieter said in a telephone interview. “But there must be a serious error and the person to ask is Helena [Tripmaker, a customs official at the airport]. Various attempts by the M&G to contact Tripmaker have been unsuccessful.

Potgieter also confirmed that he had never been appointed as an inspector, under the Counterfeit Goods Act, by the Department of Trade and Industry.

The M&G also has in its possession a sworn statement to the police by former Safact agent Hendrik Willem Jonker stating that while he was a Safact enforcer he was misled by Potgieter into believing that when he conducted raids on traders, the company had power of attorney to do so.

Jonker said in the statement: “My job description involved the investigation of illegal or counterfeit products that were on sale to the public by various retailers.

“I was informed by Potgieter that the right for Safact and its employees to act was by virtue of a power of attorney from Sony Playstation, as well as a power of attorney from the major film studios of the Motion Pictures Association that Safact represents.”

Jonker said he found out that in fact Safact had not acted legally when early last year Potgieter received a phone call from a lawyer who wanted to inspect their power of attorney from Sony Playstation.

“Fred informed me that we didn’t have one, and that he had stalled the attorney to give him ample time to request one from Sony Computer Entertainment, Japan, urgently.

In response to related inquiries, Potgieter faxed the M&G copies of the powers of attorney Safact uses in its operations.

But nowhere on these documents is it indicated that any company ever conferred powers of attorney to Safact to act on its behalf.

Rather, one of the documents, signed by Ken Katuragi, President of Sony Computer Entertainment Inc, was to Sony Computer Entertainment of Europe, and cannot be lawfully used in South Africa. Another was from Vicki R Solmon, assistant secretary of Columbia Pictures conferring his company’s power of attorney to Potgieter in his personal capacity. Lawyers say this too is a document that cannot be used by Safact in its raids.

Safact, which has to seek the assistance of the SAPS, the Department of Trade and Industry, the Border Police and other branches of the SAPS to conduct raids, has on a number of occasions been taken to court by traders who accuse it of breaking the law when it seizes their goods.

Last year in July - the Pretoria High Court heard - two policemen from Mondeor police station, accompanied by two Safact enforcers, Potter and Jonker (before he left the organisation), entered the business premises of Kai Hei Wong, a trader at the Panorama Flea Market of Kliprivier in Johannesburg, without showing a search warrant and confiscated his entire stock of 507 discs.

Kai Hei filed an application to the court to obtain an order for the return of his goods.

The court issued a ruling in Kai Hei’s favour on March 8 this year, and ordered the Ministry of Safety and Security to return his goods and pay the costs of the application.

The court also issued judgement in the case of Ahsam Hafeez, whose CD-ROMs had been seized by Safact.

Police had obtained a search warrant before moving on to Hafeez’s premises with Jonker after the latter served a “Film and Publications Notification” on a Safact letterhead stating all interactive games must be certified and classified.

But, said Judge Gerrit L Grobler in a finding: “If it is indeed a requirement that applications for classifications of all such CDs have to be made before they can be legally distributed, the whole CD-ROM and CD industry would grind to a halt.”

The judge based his argument on the fact that many thousands of applications for classification and exemptions to the Films and Publications Board were pending, and that the board did not have the manpower and time to handle these applications.

“Indeed, the industry largely ignores these requirements,” said Grobler, who said that Safact acted with intent to ruin small traders. The court pointed out that major distributors like CNA, Pick ‘n Pay, Incredible Connection, Game and others were not the subject of Safact’s attention. But, technically, big stores too should be subject to at least some of Safact’s seizures because, since the inception in 1999 of the Film and Publications Regulation - the relevant law on the sale and distribution of CD-ROMs and CDs in South Africa - only about 31 computer games out of many thousands on the market had been classified.

Asked about the seeming selectivity in Safact’s operations, Corne Guldenpfennig of Spoor & Fisher, the company’s attorneys in Pretoria, said: “Unfortunately, I don’t keep detailed statistics of all raids conducted by Safact.

“However, as advised, inspections are continuously carried out on all traders in films and Playstation games, and any found to be dealing in illegitimate products will have action taken against them, irrespective of their social status.

“Experience should have taught you by now what the standard profile of a criminal is.”

A surprising number of these “criminals”, though, have, like Hafez and Kai Hei, won favourable court rulings on applications to have their seized or confiscated goods returned.

The M&G has in its possession transcripts of court rulings in favour of small traders in at least 12 cases.

One trader, Marcus Mocke, told the M&G that he won the right to have some of his seized DVDs returned when a Roodeport court ordered Safact to hand them back. The court found that Safact had seized the merchandise without a power of attorney.

Another, Zaere Saley, a trader at Booysens, said that some policemen who did not have a search warrant entered his premises and seized his entire stock of more than 5 000 CDs.

Invariably, according to lawyers who have been involved in litigation against Safact, it is the SAPS, the Department of Trade and Industry and any other government agencies that assist Safact in seizures or confiscations of purportedly counterfeit merchandise, that end up having to pay the traders’ legal costs. Safact has no financial responsibility.

Gauteng police spokesperson, Superintendent Lungelo Dlamini, said the Commercial Crimes Unit had heard several complaints about Safact activities and that investi-gations into cases and the ways in which they seized goods had been centralised.

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