Deciphering AI Ownership in South Africa: A Closer Look

Introduction: 

In today's world, artificial intelligence (AI) is everywhere, even in your smartphone's recognition features. AI's capabilities extend to creating art, music, and written content. These generative AI services raise a pressing question: who owns what the AI produces? Is it the one who instructs the AI, or the original creator of the AI? 

Background: 

Various AI companies differ in their stance on ownership. Some, like Midjourney, claim ownership of user-generated content, though subscribers may gain ownership. Others, like ChatGPT, lean toward users owning the AI's outputs. Stable Diffusion grants users a license for the AI model but doesn't claim rights over the generated content. Amidst this uncertainty, users must delve into terms and conditions for clarity.  

International law trends vary, often revolving around US copyright laws. An infamous US case, the "monkey selfie" case, suggests non-human authorship might not be copyrightable in the US. However, other countries adopt nuanced views. In South Africa, the Copyright Amendment Act 125 of 1992 is significant. It defines authorship for computer-generated works, stating the person responsible for arranging the work's creation process is considered the author. 

South African courts have further elucidated this concept. They distinguish between "computer-assisted" and "computer-generated" works, where the former involves human-aided creation, and the latter is largely autonomous. Recent cases underscore minimal human involvement in "computer-generated" works. 

See Payen components SA Ltd v Bovic Gaskets CC, and Haupt v Brewers Marketing Intelligence (Pty) Ltd 

Conclusion: 

For South African users of generative AI, the more detailed their input, the likelier they are to be deemed the authors of resulting copyrightable work. Techniques like prompt engineering can aid this. Understanding the legal context empowers creators to navigate AI ownership intricacies.

Inherent Requirement of the Job - Unfair Discrimination

  

Introduction:

The case of Damons v City of Cape Town revolves around the contentious issue of unfair discrimination in the workplace, focusing on the concept of inherent requirements of the job as a defence, and the extent of reasonable accommodation for employees unable to meet these requirements. The central question posed was whether the employer had unfairly discriminated against the employee based on disability and whether the principle of reasonable accommodation should apply in such cases.

Facts:

The respondent municipality's Fire and Rescue Service employed the plaintiff as a firefighter. However, an accident during training rendered the plaintiff permanently unfit for regular firefighting duties. Despite his limitations, he was transferred to an administrative role while retaining the firefighter designation and associated remuneration. The municipality had a promotion policy dictating that individuals seeking advancement to the position of senior firefighter needed to meet specific physical fitness criteria. Despite failing to meet these requirements, the plaintiff applied for the senior firefighter position, which was subsequently denied on the grounds of his inadequate physical fitness.

Court Findings:

The case navigated the intricacies of the Employment Equity Amendment Act (EEA), which prohibits unfair discrimination based on arbitrary factors and outlines the defence that discrimination is not unfair if tied to an inherent job requirement. The plaintiff argued that he had suffered unfair discrimination due to his disability, contending that the municipality should have accommodated him by waiving the physical fitness criterion.

The initial Labor Court ruled in favour of the plaintiff, but on appeal, the Labour Appeal Court (LAC) held that physical fitness was an inherent requirement as defined in the EEA. The LAC's decision was then challenged in the Constitutional Court.

The Constitutional Court emphasized that the inherent requirement defence provided by Section 6(2)(b) of the EEA was a 'complete defence.' However, it delved into whether an obligation existed for the employer to reasonably accommodate the employee. The Court clarified that reasonable accommodation aimed to level the playing field between disabled and non-disabled employees regarding job performance. This obligation only applied if such accommodation would enable the employee to fulfil the inherent job requirements. Beyond this, accommodation ceased to be reasonable, as it would necessitate employing someone unable to meet the essential job criteria.

Conclusion:

The Constitutional Court determined that the municipality had not unfairly discriminated against the plaintiff. While the EEA's inherent requirement defence shielded the employer, the Court underlined that reasonable accommodation should only extend to what enables an employee to meet the essential job requirements. In cases where accommodating a disabled employee goes beyond this scope, it is deemed unreasonable. This decision has significant implications for understanding the intersection of inherent job requirements, reasonable accommodation, and unfair discrimination in the workplace.

New Rules for Trustees: Reporting Who Benefits from Trusts

 Introduction:

Effective from 1 April 2023, trustees must establish, record, and maintain an up-to-date record of information relating to the beneficial ownership of trusts.

This relates to amendments to the Trust Property Control Act, 1988 (Act No. 58 of 1988) ("the TPCA") that requires trustees of mortis causa (created by wills) or inter vivos (while someone is alive) trusts to document and maintain, in a register to be submitted to the Master of the High Court, the particulars of each beneficial owner. Trustees must submit the record electronically through a platform provided by the Master of the High Court.

Section 1 of the TPCA defines "beneficial ownership" to mean:

• a natural person "…who directly or indirectly ultimately owns the relevant trust property"; or
• a natural person who exercises effective control of the administration of the trust arrangements; or
• each founder of the trust; or
• each trustee of the trust; or
• each beneficiary referred to by name in the trust instrument or other founding instrument in terms of which the trust is created;
• if a beneficiary is a legal person, partnership or trust, the natural person controlling that entity.

Conclusion:

Trustees must record details about people who benefit from trusts. These details include full names, birthdates, nationalities, official IDs, home addresses, contact information, how they benefit, and when their benefits start and end. Trustees must also keep copies of their IDs or passports. The regulations also say that trustees must record information about any organizations or people they hire to help with trust matters. These could be lawyers or financial experts. The trustee has to update this information regularly to make sure it is correct.

The changes introduce penalties for trustees who do not follow these rules. If trustees do not report the right information or keep it up to date, they could be criminally charged. This could mean a substantial fine, up to R10 Million, or even up to 5 years in prison. It is not clear yet how strictly these new rules will be enforced. But one thing is clear: Being a trustee now comes with more responsibilities than before.

 

Navigating Estate Challenges: Widow's Resistance to Property Sale

 Introduction

An executor had to sell a home to settle estate debts, but the widow refused to consent to the sale. An examination of Bester NO v Master of the High Court [2023] ZAWCHC 208.

Background 

To finalise the estate, the executor (the applicant) needed to have sufficient funds to pay creditors, the administration costs of the estate, the advertising, the Master’s fees, and the executor’s fees. To raise such funds, he had no option but to sell the estate’s Hout Bay property. However, the surviving spouse and sole heir did not want the property to be sold, for several reasons, the main one being that she would then have nowhere to stay.

Under section 47 of the Administration of Estates Act (the Act), such a sale requires the heir’s consent to the manner and conditions of the sale and, if such consent is not given, then the property is to be sold in a manner and on conditions approved by the Master. 

The reason for this is that the Master plays an oversight role in relation to the manner and conditions of sale of an estate’s assets. In situations like this one, where there was a sole heir who did not consent, the Master’s approval was required. 

The executor wrote the Master who was grossly dilatory in failing to respond to the applicant’s request for approval. 

Legal Proceedings

As the Master failed to respond to the applicant’s request for approval under section 47 of the Act, the executor approached the court for an order authorising him to sell the house on specified terms and conditions, so that sufficient funds were realised to finalise the estate. The widow opposed the application.

The Court's Ruling

The Master’s failure to respond to the applicant’s request for approval under section 47 of the Act was reviewed and set aside. The decision was remitted to the Master who was directed to decide on the manner and conditions of the sale of the immovable property within two months of the date of service of the order.

 

 

An Amendment to Section 7(3)(a) of the Divorce Act for Spouses Married Out of Community of Property

A look at Greyling v Minister of Home Affairs

Background

Before 1984 there were only two matrimonial property regimes, a marriage in community of property and one out of community of property (excluding community of property, community of profit and loss and accrual sharing in any form).  The Matrimonial Property Act, 1984 (“MPA”) introduced the concept of accrual sharing.

Section 7(3)(a) of the Divorce Act, 70 of 1979 (“Divorce Act”) states that a court granting a decree of divorce in respect of a marriage out of community of property –

(a) entered into before the commencement of the Matrimonial Property Act, 1984, in terms of an antenuptial contract by which community of property, community of profit and loss and accrual sharing in any form are excluded may… on application by one of the parties to that marriage, in the absence of any agreement between them regarding the division of their assets, order that such assets, or such part of the assets, or of the other party as the court may deem just be transferred to the first-mentioned party.”

Mrs Greyling, an estranged wife, married her wealthy farmer husband in March 1988, out of community of property, excluding the accrual system. She contended that it was unconstitutional that couples married out of community of property, excluding the accrual system, and after the commencement of the MPA, were precluded from petitioning the court to exercise its discretion in granting an order for redistribution of assets.

The Gauteng High Court in Pretoria was not called upon to decide whether Mrs Greyling was entitled to a redistribution order but rather to determine whether section 7(3)(a) of the Divorce Act (which deprived her from such relief) was constitutional.

Judgment

Mrs Greyling argued that section 7(3)(a) of the Divorce Act was unconstitutional in that it infringed section 9(1) of the Constitution for arbitrarily and irrationally differentiating between people married before and after 1 November 1984 when the MPA commenced, and violation of section 9(3) of the Constitution in that the cut-off date has disproportionate consequences for women.  

The Court declared section 7(3)(a) of the Divorce Act, 70 of 1979 (“Divorce Act”) unconstitutional. The order was referred to the Constitutional Court for confirmation in terms of section 172(2)(a) of the Constitution, 1996. The Concourt has not yet heard the matter.

Conclusion

The finding that section 7(3)(a) was declared constitutionally invalid, to the extent that its operation is restricted to marriages out of community of property entered into before the commencement of the MPA, does not grant an automatic entitlement to a redistribution order. Instead, a court will need to assess the evidence presented concerning the direct or indirect contributions made by each spouse towards the estate during their marriage. Subsequently, the court will make an order that is both fair and equitable.