“A girl has no name”: Does the decision in MCSN v COSON and 2 Others have any impact on copyright collective administration in Nigeria?

Names...

Last month, the Nigerian Federal High Court delivered its judgment in the case of Musical Copyright Society of Nigeria Ltd/Gte (MCSN) v Copyright Society of Nigeria Ltd/Gte (COSON) and 2 Others (FHC/L/CS/274/2010), directing the Corporate Affairs Commission (CAC) and the Attorney-General of the Federation (AG) to take necessary steps to cancel/rescind the change of name of the 1st Defendant, COSON. The court also granted an injunction, restraining COSON from continuing to use its name, COSON. The crux of the case was that the Plaintiff, MCSN had applied to CAC to reserve the name, “Copyright Society of Nigeria” for incorporation and the CAC reserved the name solely for MCSN for 60 days. While the reservation was still valid, CAC approved an application from Performing and Mechanical Rights Society Ltd/Gte (PMRS) to change its name from PMRS to COSON, a name similar to the reserved “Copyright Society of Nigeria”.

The Court took the view that by approving PMRS’s change of name to COSON while MCSN’s reservation was still valid, the 2nd and 3rd Defendants (i.e. CAC and AG) acted illegally and improperly. The reasoning of the court was that given the provisions of section 32 of the Companies and Allied Matters Act 2004 (CAMA) and the petition written by MCSN to the 2nd and 3rd Defendants challenging PMRS’s impending change of name, the CAC ought not to have approved PMRS’s change of name to COSON. Section 32 of CAMA provides that once a name is reserved, the CAC shall not permit the registration of any copy under the reserved name or a name, which in the opinion of the CAC bears too close a resemblance to the reserved name.

Both MCSN and COSON are companies registered as Collective Management Organisations (CMOs) with the object of negotiating and granting licence to copyright users on behalf of copyright owners and collecting and distributing royalties to copyright owners. While MCSN currently has the licence of the Nigerian Copyright Commission (NCC) to operate as a CMO, COSON’s licence was suspended in 2018 and the licence subsequently expired in 2019 with no application for renewal made. See previous related posts here, here and here.

What is the impact of this decision of the Federal High Court on copyright collective management in Nigeria? Not much, in this Kat’s opinion. Why?

Not much impact?
First, a duly registered company does not cease to exist merely because its name ought not to have been its name. The Companies and Allied Matters Act stipulates different procedures for various kinds of applications by prospective and existing companies. PMRS was duly registered by the CAC as a company limited by guarantee and therefore has all the rights and obligations of a legal person. If it is found that its application for change of name ought not to have been granted, it will merely revert to its previous name: PMRS. This brings me to my second point.

If COSON had a licence to operate as a CMO, it should will not lose its licence to operate merely because it has reverted to its previous name: PMRS. Section 39(2) of the Nigerian Copyright Act stipulates the requirements an entity must comply with in order to be granted a licence to operate as a CMO. These include the requirement that the entity be a company limited by guarantee, have as its objects the business of negotiating and granting copyright licenses and collecting royalties on behalf of copyright owners and distributing same to them; and complies with the terms and conditions prescribed by regulations made by the NCC. So long as PMRS meet those requirements, it is submitted its licence to operate even though issued in the name of COSON remains valid. Section 31(6) of CAMA provides that a change of name will not affect the rights or obligations of a company or render defective any legal proceedings by or against such company. This brings me to my third and concluding point.

In May 2018, the NCC suspended COSON’s licence to operate as a CMO citing as its reason COSON’s refusal to comply with directives issued by the NCC. Subsequently, COSON’s licence to operate lapsed after the statutory 2-year period stipulated as the length of a CMO operating licence. COSON is yet to apply for renewal of the expired licence and therefore lacks the requisite approval to operate as CMO. Ironically, COSON has relied on two decisions of the Supreme Court in favour of MCSN in MCSN v Compact Disc and Adeokin v MCSN to argue that it can continue to operate as a CMO in so far as it is an owner, assignee and exclusive licensee of rights validly given to it by copyright owners.

However, one can confidently say that as far as Section 39(2) of the Copyright Act is concerned, COSON (or PMRS, if it reverts to its previous name) cannot operate as a CMO without the licence and approval of the NCC and COSON does not have the requisite licence and approval. This remains the position.