Shamalla v KECOBO: Balancing the Protection of Intellectual Property and Environmental Rights

This blogger has come across a twitter exchange involving one Jennifer Shamalla and the Kenya Copyright Board (KECOBO). Screen shots of the exchange have been posted below. Shamalla complains that Ozone Lounge and Bar in Valley Arcade within Nairobi plays “incredibly loud music” and that its patrons “engage in obnoxious behavior in total disregard of the environment as they scream and shout along with the music thus keeping the residents of the Valley Arcade area awake”. According to Shamalla, these actions by Ozone and its patrons “are a direct infringement on the constitutional right to a clean and healthy environment as provided for under Article 42 of the Constitution.” Therefore, Shamalla argues that KECOBO is vicariously liable for contravening the residents’ rights to a clean and healthy environment by licensing and supervising collective management organizations (CMOs) who issue licenses to Ozone. As a result, Shamalla has written to KECOBO (in a letter signed and dated August 11, 2014) demanding that KECOBO ensures that the CMOs withdraw any licenses issued to Ozone with immediate effect.

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By bringing this issue to light, this blogpost will comment on Shamalla’s argument and the issues arising from the above matter. This blogpost concludes that while Shamalla’s argument appears to be largely misplaced, the questions surrounding KECOBO’s statutory function to supervise CMOs cannot be ignored and perhaps ought to be addressed conclusively.

Many will not dispute World Health Organisation (WHO) reports and studies which have demonstrated that noise and excessive vibrations are a direct contribution to stress as a cause of sleep disturbance which is a direct contribution to fatigue, noise-induced hearing loss and high blood pressure, among other health effects.

Be it as it may, can KECOBO and/or the CMOs’ be held liable for the actions of Ozone and its patrons?

This blogger submits that Shamalla’s argument is premised on the assumption that by licensing Ozone, CMOs have authorised, sanctioned and/or condoned the alleged violations of environmental rights by Ozone and its patrons. Therefore, KECOBO (as the licensor and supervisor of CMOs) is liable for the violations allegedly caused by the issuance of these licenses by CMOs. This assumption couldn’t be further from the truth. In addition, this blogger opines that if Shamalla’s argument were to be adopted by KECOBO, it would result in the violation of one constitutional right (Article 40 on protection of the right to property) in order to uphold another right (Article 42 on Environment).

The Kenya Copyright Act No. 12 of 2001 establishes KECOBO, whose mandate is the overall administration of copyright and related rights in Kenya. Section 5(b) of the Act provides that KECOBO shall license and supervise the activities of collective management organisations as provided for under Part VI of the Act, which deals with collective administration of copyright. Section 46(1) of the Act makes it mandatory for any person or association of persons seeking to commence or carry on the business of a CMO to obtain a certificate of registration granted under the Act. Section 46(2) provides that the applications for CMO registration must be accompanied with the prescribed fees and that once the application is approved, KECOBO shall declare the applicant as a CMO for all relevant copyright owners or for such classes of relevant copyright owners.

Once KECOBO issues the license to CMOs to operate, KECOBO is required to supervise the activities of CMOs to ensure that the latter comply with the Act. One of the the most controversial activities by CMOs is the collection of royalty payments from members of the public who use copyright works for commercial purposes. A brilliant explanation of licensing by performing rights CMOs can be found in the recent video clip at the beginning of this post from our good friends at the Southern Africa Music Rights Organisation (SAMRO).

In the Kenyan context, the licensing activities of CMOs have been challenged on numerous occasions as infringing on several constitutional rights including equality and freedom from discrimination (Art. 27), human dignity (Art. 28), freedom and security of the person (Art. 29), privacy (Art. 31), among others. However these constitutional challenges relate almost entirely to the manner in which the licensing process is carried out, including collection of license fees. It is important to note that CMOs issue licenses on behalf of various rights holders to users so that they may exploit the exclusive rights provided under section 26(1) and that these licenses are consistent with section 33(1) of the Act. In this connection, the recent case of Nairobi Pacific Hotel Ltd v. Kenya Association of Music Producers & another (see our discussion here) clearly explains that the public performance license issued by MCSK is separate and distinct from the communication to the public license issued jointly by KAMP and PRiSK.

In light of the above, Shamalla’s argument fails to clearly explain how the licensing activities by the CMOs directly infringe the Valley Arcade residents’ rights to a clean and healthy environment. It follows then that the connection between the CMOs’ licenses to Ozone and the alleged noise pollution by Ozone is extremely remote, at best. Remoteness aside, Shamalla’s argument also fails to account for the loss of income in the form of royalties due to rights holders, if the licenses issued to Ozone were to be withdrawn by CMOs. In this regard, it is important to remember that the license fees collected by CMOs from users such as bars and restaurants form the bulk of royalties earned by rights holders. Article 40 protects the CMO members’ right to royalties from use of their work. However, this right is not absolute and can be limited in accordance with Article 24 of the Constitution. Enshrined within Article 40 is a positive obligation on the State (which includes KECOBO) to support, promote and protect the intellectual property rights of the people of Kenya (which includes CMOs and their Kenyan members). Therefore Shamalla’s argument does not demonstrate why the rights under Article 40 must be limited in favour of those under Article 42, if indeed there is a conflict between these two constitutionally-guaranteed rights.

British Photographer, Indonesian Macaque, American Website: Copyright Ownership Dispute Over Monkey Selfies

From the above clip of British wildlife photographer David J Slater, it is clear that Slater is strongly considering taking legal action against Wikimedia for copyright infringement in the now infamous “monkey selfie” photographs.

In the clip, Slater explains how the photographs came about by saying:

After a three day exploration of a forest in North Sulawesi, Indonesia, the monkeys followed me around, I followed them around, they got too used to me, eventually they started grooming me, touching me – it was an amazing experience. I still wanted that one shot, that one shot full in the face, just for my self satisfaction and to give it to an agent and therefore I could promote the conservation issue. But it wasnt going to happen not unless they took the photograph themselves. And I did that by setting it up on a tripod with a cable release, walking a few metres away, allow them to come in watch their own reflections, play with the camera, play with the cable release and bingo, they took their own shot.

Wikimedia, the US-based organisation behind Wikipedia, has refused Slater’s repeated requests to remove one of the monkey selfie photographs which is used online without Slater’s permission, claiming that because the monkey pressed the shutter button no one owns the copyright. Wikimedia is reported as saying:

We take these requests very seriously, and we thoroughly researched both sides of the claim (….) When a work’s copyright cannot vest in a human, it falls into the public domain. We believe that to be the case here.

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If Slater decides to take legal action against Wikimedia, he has the option of suing under the copyright laws of the United States, United Kingdom or Indonesia. The central issue for determination would be whether Slater can claim authorship and/or ownership of the monkey selfies? A quick perusal of US Copyright law appears to automatically rule out any copyright claim by a non-human author. According to the rules published by the US Copyright Office:

503.03 Works not capable of supporting a copyright claim.

Claims to copyright in the following works cannot be registered in the Copyright Office:

503.03(a) Works-not originated by a human author.

In order to be entitled to copyright registration, a work must be the product of human authorship. Works produced by mechanical processes or random selection without any contribution by a human author are not registrable.

Under both United Kingdom and Indonesian copyright laws, the definition of an author refers solely to “a person” therefore non-human authorship is not possible. In the Kenyan context, this blogger has discussed the question of non-human copyright authorship here and here.

Nonetheless, as an amateur photographer (see here), this blogger appreciates the enormous amount of time, skill and effort expended by Slater which resulted in the monkey selfie photographs. Therefore, this blogger argues that, by affording some copyright protection to Slater, the courts would be greatly incentivising him and other photographers to carry on the arduous task of photography.

One possible middle-ground solution which ensures that Slater is incentivised for his undeniable role in the monkey selfie photographs is joint authorship. According to the US Copyright Act 17 U.S.C. § 201(a): “Copyright in a work protected under this title vests initially in the author or authors of the work. The authors of a joint work are co[o]wners of copyright in the work.” Further, Section 101 provides that “[a] ‘joint work’ is a work prepared by two or more authors with the intention that their contributions be merged into inseparable or interdependent parts of a unitary whole”.

Therefore, in the present case, the court could find that the monkey selfies were works of joint authorship between the macaque monkey and Slater. This would then allow Slater to exercise economic rights over the works of joint authorship between human and non-human authors.

Gwer v. KEMRI Case: Researchers Awarded 30 Million Shillings for Infringement of Intellectual Property Rights

KEMRI-Wellcome Trust Research Programme KWTRP

In the recent case of Dr. Samson Gwer & 5 others v. Kenya Medical Research Institute (KEMRI) & 2 others Petition No. 21 of 2013, the Industrial Court at Nairobi found that KEMRI-Wellcome Trust Research Programme (KWTRP) had violated the constitutional rights to intellectual property of six Kenyan research doctors and ordered KEMRI to pay each of the doctors a sum of 5 million shillings as compensation. A copy of the court’s judgment is available here.

After an in-depth review of this case from an intellectual property (IP) perspective, this blogger concludes that this case sets an important precedent for the State’s obligations to protect the right to property under Article 40 of the Constitution of Kenya.

The researchers alleged that the respondents “routinely violated the Petitioners’ right under Article 40(1) of the Constitution by taking away the Petitioners’ right to intellectual property resulting in the Respondents, its servants, employees and students taking credit for the work and scientific innovation of the Petitioners by:

(i) (a) disregard syndrome; (b) Mathew Effect (Discovery credit inadvertently reassigned from the original discoverer for a better known researcher)

(ii) disapproval by the Respondent of the Petitioners and other local scientists innovations or work to apply for grants;

(iii) misappropriation of the work of local scientists to benefit expatriate scientists

(iv) frequent unfair administrative action

(v) Inability to veto adverse decisions by the scientific team leader

(vi) redeployment and chastisement through mail from the Director of KEMRI on the account of raising these grievances.

As a result the Petitioners submitted that the cumulative effect was to forever stifle the progress by Kenyan researchers and to impede their autonomy and dream of Kenyanising scientific innovations.

Therefore the petitioners sought the following reliefs, inter alia, a declaration that the Respondent’s conduct, acts and/or omissions are unlawful, illegal and/or unfair and the same violates Article 40 of the Constitution as well as an order that the Petitioners are entitled to compensation for the above alleged violation of the Constitution.

With regard to allegation (i) on the ‘disregard syndrome’, the petitioners submitted that the most rampant scientific misconduct by the Respondents against the Petitioners was plagiarism, a behaviour the latter termed as ‘citation amnesia’, ‘disregard syndrome’ and ‘bibliographic negligence’ on the part of the Respondents.

In this connection, the Petitioners alleged that the Respondents “arm-twisted the Petitioners to give up their intellectual property rights and cede their passwords to research and innovation” and that “the contracts of employment do not entitle KEMRI to the intellectual property of the Petitioners and the appropriation outlined is unlawful.”

The Respondents flatly denied these allegations arguing that there was not an iota of evidence before the court to substantiate the petitioners’ claims.

In its determination, the learned court noted that whereas KEMRI as an employer is a public institution, the funding under the KEMRI Wellcome Trust Research Programme emaned from external donors. These external donors attached specific terms and conditions to the grant and administration of the Wellcome Trust Research Programme which terms and conditions became subject of grievances by the Petitioners. However the Court found in favour of the Petitioners and stated thus at paragraph 82:

“The 1st Respondent as a state employer is bound by the Constitution to protect the right of the Petitioner and not allow a policy that appropriates their intellectual property as has been ably demonstrated by the Petitioners herein contrary to Article 40(1) of the Constitution.”

Therefore the court ordered that each of the Petitioners is entitled to compensation for the said constitutional violation in the sum of KES 5 Million within thirty days of the judgment date, including interest at Court rates from the judgment date to payment in full. Further the court ordered that the Petitioners are entitled to access all the outcomes of their scientific research and to the credit and benefit attached to the outcomes under Articles 35 and 40 of the Constitution. KEMRI was also ordered to pay the costs of the Petition.

Comments:

From the above, it is submitted that the petitioner’s case for scientific misconduct and denial of intellectual property (IP) rights by KEMRI raises a number of important issues. Furthermore, the learned court’s determination that the petitioner had ably made a case for infringement of the constitutional right to property under Article 40 is quite significant as it reinforces a dangerous precedent set by the Court of Appeal on constitutional enforcement of IP rights.

To begin, the petitioners’ case is problematic as it does not disclose which specific intellectual property rights have been infringed by KEMRI. This case is further complicated by the petitioners’ conflation of plagiarism and alleged IP infringement. As previously discussed by this blogger here and here, copyright infringement may also amount to plagiarism but plagiarism can never amount to copyright infringement. However the petitioners appear to have successfully misled the court to make a finding that KEMRI’s scientific misconduct of plagiarism amounts to infringement of the petitioners’ intellectual property rights as enshrined in the Bill of Rights.

This leads us to consider the impact of the court’s IP-related findings in this case. The present judgment in the Gwer v KEMRI case appears to be in line with the recent Court of Appeal decision in the digital migration case where the majority of the appellate judges found that the alleged infringement of intellectual property rights could be the subject of a constitutional Petition. However as this blogger has argued here, the reasoning by the Court of Appeal on IP (and seemingly adopted in the Gwer case) was flawed.

Therefore on this issue of constitutional enforcement of IP rights, this blogger respectfully submits that the earlier decisions by the learned Majanja J. in the High Court cases of Sanitam Services (EA) Ltd v Tamia Ltd Petition No. 305 of 2012 and Royal Media Services Ltd & 2 others v Attorney General & 8 others [2013] appear to be more cogent and correct in law compared with the findings in the present judgment and that of Court of Appeal in the digital migration case.

As a parting shot, this blogger notes that one unintended consequence of this emerging jurisprudence of constitutional enforcement of IP rights particularly in the employment context is that ex-employees such as Samson Ngengi (See our analysis of Ngengi v. KRA here) have an added avenue to obtain damages and compensation from public sector ex-employers in IP-related disputes. This blogger is informed that arbitration proceedings in the Ngengi’s case are still on-going.

IP Kenya Named in Managing IP Top 50 Most Influential People in Intellectual Property 2014

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“This is the 12th year we have compiled a list of the 50 most influential people in IP worldwide. Over that time, ideas about influence have changed. It’s no longer the case that IP law and policy is determined by self-important officials sitting in the centres of power, and academics preaching to small audiences. Today, everyone from business leaders to consumers has views on IP use and limits; many people make those views heard loudly; and some of them lead to actual change in laws and commercial strategies.” – Managing Intellectual Property (MIP), July 21st 2014.

This blogger is pleased to learn that the international magazine, Managing Intellectual Property has listed the IP Kenya blog, authored by yours truly, among the Top 50 Most Influential People in Intellectual Property Worldwide. This blogger is extremely proud and honoured to be recognised for his contribution to the ever-changing IP landscape in Kenya and throughout Africa. As the only African in this year’s #MIP50 list, the IP Kenya blog is delighted to be identified among some of the giants on the IP social media scene such as: @patentlyo, @jamie_love, @copyrightgirl, @Ipkat, @ipwatchdog, @DrRimmer and @FOSSpatents.

Here is what MIP had to say about the IP Kenya blog in 2014 Top 50 list:-

“It often seems hard to find out what’s going on in IP in Africa. Thank heavens, then, for IP Kenya (coordinated by Victor Nzomo). Despite a dearth of case and deal information, the twitter account brings interesting updates on a daily basis, with blog posts every few days, covering topics as diverse as copyright policy, traditional knowledge and famous trade marks as well as linking to articles on interesting disputes. As IP becomes more visible throughout the continent, sites such as this will become more important.”

This fantastic endorsement by MIP is yet another reason for this blogger to keep blogging, sharing and interacting virtually on IP related matters for years to come!

Thank you to IP Kenya readers, commenters, subscribers, followers and supporters.

A Case for the Inclusion of the Artist’s Resale Right in Kenyan Law

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“Artists do not live on thin air. And because they enrich the world with their art, they should be protected. So it is fair that those who trade in their works pay them a share of what they earn. That is the purpose of the resale right: to share all forms of enrichment.” – Ousmane Sow, Senegal.

Artisans and visual artists of Kenya, unite! With the anticipated amendments to the Kenya Copyright Act in line with the forthcoming establishment of the Intellectual Property Office of Kenya, this is the opportune time for owners and authors of artistic works to actively lobby the Government of Kenya for the inclusion of the artist’s resale right (often referred to by its French name, “droit de suite”) in the Act. In at least 70 countries around the world, artist resale rights legislation exists which enable artists to receive a small percentage (usually between 0,25 and 5%) of the value of sales of their work in the secondary market (i.e. sales that occur after the first sale of the work in the primary market through, for example, a gallery). In Africa, the artist’s resale right exists only in two countries namely Burkina Faso and Senegal.

The artist’s resale right can either be integrated into existing legislation (as is the case with most EU countries) or functions as standalone or sui generis legislation (eg. the UK and Australia). The resale royalty addresses the relative disadvantage that visual artists have (by comparison to other art forms) on account of the ‘once-off’ or singular nature of visual artworks, and the limited ability of visual artists to benefit from the subsequent success of their work in the marketplace after the first sale has taken place. The first resale right law was enacted in France in 1920. The need for the right became clear when a collector made a significant amount of money from the sale of Jean-François Millet’s painting “The Angelus,” (pictured above) while the artist’s family was living in extreme poverty.

From a Kenyan perspective, it is important to note that the resale right is provided for under Article 14 of the Berne Convention. This Article creates a Droit de Suite right for artists and writers of original art and manuscripts subject to existence of the provision in national legislation and country of claim (reciprocity). Since Kenya has signed and ratified the Berne Convention, the Berne Convention now forms part of the laws of Kenya pursuant to Article 2(6) of the Constitution. In this regard, KECOBO, in the recent issue no. 12 of its Newsletter stated as follows:

At the moment there is no provision for resale right in the Kenyan law. However the inclusion of resale right in Kenya is part of the amendments deemed necessary by KECOBO as part of the reforms and updates of the Copyright Act, 2001. Initially, the management of the resale right shall be by individual artist though ultimately the Board envisions the creation of a collecting society in this area along the lines of the UK.

In the case of copyright in music, literature and other art forms, royalties are accrued to artists by virtue of the volume of sales of multiple copies of that work (in the form of books, CDs, monetised downloads, etc). In the case of the visual arts, value is generated through single, high-value sales, and potentially through a small number of high-value resales. The resale royalty enables artist to receive a moderated economic benefit from the latter. As with copyright royalties, resale royalties are in all instances collected by rights management organisations in the countries in which this right exists. Unlike several existing proposals discussed here, a crafts and visual arts collecting society would definitely be a welcomed addition to the copyright collective management ecosystem in Kenya. This collecting society would be able to administer the resale right as well as license for various forms of reproductions, distributions, renting or lending, communications to the public and making available to the public of artistic works.

In light of the above, it would be worthwhile to investigate the size, strength and nature of Kenya’s secondary art market so as to arrive at an appropriate tariff for the artist’s resale right.

Update on Kenya’s Draft National Music Policy

Kenya at 50

Recently, it was reported that the Cabinet Secretary in the Ministry of Sports, Culture and the Arts, Dr. Hassan Wario has appointed a 10-person committee to finalise work on Kenya’s National Music Policy. This Music Policy Committee will be chaired by the Director of Administration at the Ministry, Mr Wenslas Ong’ayo and comprises two representatives from the related rights collective management organisations (CMOs) namely Suzanne Gachukia (KAMP Board Member) and Angela Ndambuki (PRiSK CEO). Interestingly, there are no representatives from the Music Copyright Society of Kenya (MCSK) not to mention the apparent lack of broad-based stakeholder representation in the committee’s membership. In addition the appointments appear to contravene the two-thirds gender principle in the Constitution.

This committee is mandated with streamlining the entire music industry, reviewing the legal and institutional framework and also recommending implementation plans through the formulation of a robust National Music Policy. We have previously discussed an earlier draft of the policy here. This draft has since been revised and an updated version of the draft policy is available here. This blogpost offers some thoughts on the draft policy for the consideration of the newly appointed Committee.

A general observation that cuts across the entire draft policy is the issue of distribution of functions between the National Government and the County Governments as set out in the Fourth Schedule of the Constitution. In this connection, the policy at numerous sections does not appear to distinguish between the functions of these two levels of Government vis-à-vis the music industry in Kenya.

The Policy Statements on page 6 impose an obligation on the government to promote all forms of cultural expressions. However no reference is made to Article 11 of the Constitution which deals with Culture. The draft policy fails to address the critical issues related to the implementation of Article 11 by all arms of government, in particular the Legislature. According to the Fifth Schedule of the Constitution, the Legislature has until August 2015 to enact legislation in respect of culture. This legislation will have a considerable impact on the music industry therefore this matter ought to be included in the draft policy including appropriate mechanisms for review and consultations with regard to the legislation once enacted.

The Policy Statements on page 11 call for the government to create an enabling environment for the music industry to thrive through the enforcement of the Copyright Act. However it may also crucial for the policy to enumerate some of the key areas of interest for the music industry within the Copyright Act and how these areas can be positively reviewed and strengthened. The same policy statement refers to the introduction of a banderole, which already exists in Kenya and is administered by the Kenya Copyright Board (KECOBO).

The Policy Statements on page 18 refer to the infamous quota of “60% of Kenyan music content” to be enforced against all media owners, however a central definitional issue has not been addressed by the draft policy, namely “what is Kenyan content?” The same policy statement also imposes an obligation on the government to reinforce existing laws and regulations in regard to payment of royalties by the broadcasting houses. This statement would require some elaboration since the Copyright Act and Kenya Information and Communications Act already contain adequate provisions to regulate broadcasting content matters.

The rights of music consumers appear to have been largely ignored by the draft music policy despite the recognition of these rights under Article 46 of the Constitution and the Kenya Consumer Protection Act of 2012. In addition, consumers of music have expressed numerous concerns about the multiplicity of licenses provided under the existing legal framework for collective management of copyright and related rights in Kenya.

Finally Chapter Five of the draft policy proposes the enactment of a piece of legislation on the music industry in Kenya and the establishment of a statutory body known as National Music Board.

On the Proposed Intellectual Property Office of Kenya

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Recently, the Standard newspaper published a piece titled: “Truth behind delay in parastatal reforms, months after President Uhuru Kenyatta’s directive”, in which it explained that the reason for the delay in the setting up of the proposed Intellectual Property Office of Kenya (IPOK) among other newly merged parastatals was that the Government Owned Entities (GoE) Bill 2014 is yet to be passed by Parliament. The draft GOE Bill 2014 is available online here. The media report also speculates that the slow pace in implementation of the parastatal reforms could be a sign that there is strong resistance from powerful parastatal chiefs opposed to the mergers.

In the most recent issue no 12 of the Kenya Copyright Board (KECOBO) newsletter, there is an article on the proposed merger of KECOBO, KIPI and ACA, which we have previously discussed here, here and here. Although KECOBO’s article discussed the human resource management aspects of the proposed merger, it provides us with a suitable entry point to discuss this planned centralization of intellectual property (IP) administration and enforcement in Kenya.

As previously discussed, it was the presidential taskforce on parastatal reforms which proposed that the three IP parastatals: Anti-Counterfeit Agency (ACA), Kenya Industrial Property (KIPI) and KECOBO be merged to form a single state agency tentatively christened IPOK. According to the GoE Bill 2014, a state agency means any entity formed by the government to undertake a specific government objective in delivering public service.

The idea behind IPOK was borrowed from several jurisdictions with a similar centralised system of IP administration such as; The Intellectual Property Office in United Kingdom, The Intellectual Property Office of New Zealand among other countries. Therefore the taskforce argued that international best practice shows that the functions undertaken by the three existing IP bodies complement each other and are domiciled in as one institution in many countries.

The nature and powers of IPOK will be drawn from the Copyright Act, Anti-Counterfeit Act and the Industrial Property Act and Trade Marks Act which will all be amended and incorporated in the Act creating IPOK. Presumably these amendments to existing IP legislation and the IPOK Act will be done after the GoE Bill has been passed by Parliament. More fundamentally, IPOK will spearhead the Executive branch’s implementation of Articles 11, 40 and 69 of the Constitution, which all impose an obligation on the government to promote, protect and support the IP rights of all Kenyans.

According to the merger team’s report, IPOK’s management shall be led by a Director General who will provide overall direction and support to the four directors on the day to day running of IPOK.
These four (4) Directors are: Industrial Property; Copyright; Enforcement; and Corporate Services. With the full establishment, IPOK will require 236 members of staff against the current 184 staff members in the three IP institutions. The current personnel emolument for the combined institutions is Kshs 396,375,000 whereas for the proposed merged institution will be Kshs 512,547,360. This means that IPOK will cost the Kenyan tax payer an extra cost of Kshs 116,172,360 on personnel costs alone.

With regard to office space, the merger team report proposes that IPOK’s headquarters be at NHIF Building (the same building currently occupied by KECOBO). In addition, it is proposed that IPOK has five (5) regional offices in Mombasa, Kisumu, Eldoret, Nakuru and Namanga. Currently, the IP bodies have a regional office in Mombasa and a go down at Kiang’ombe, Mombasa Road. The current rent for the combined three (3) IP offices in Nairobi, one regional office and one (1) go-down is Kshs 60,000,000 whereas for the rent for proposed merged institution will be Kshs 128,684,000. This leads to an increased rental cost of Kshs 68,684,000 to be borne by the Kenyan tax payer.

However the Kenyan tax payer will be pleased to learn that there will be an estimated saving of Kshs 18,500,000 in board related expenses with the establishment of IPOK. Presently, the Board of Directors of the three IP bodies consume a total of Kshs 28,500,000 which is expected to drop to Kshs 10,000,000 with the proposed merger since the three institutions will have one single board of no more than 11 members.

Finally, the merger team report states that the implementation of the merger will take approximately one year from July 2014 through to July 2015. The timeframe provided is as follows:

July 2014: Enactment of enabling legislation

September 2014: Constitution of the IPOK Board of Directors

October – November 2014: Recruitment of IPOK Director General

December 2014: Formulation of IPOK Budget for the financial year 2015-2016.

December 2014 – May 2015: Staff Placement

June – July 2015: IPOK sets up new office locations and begins work!

This blogger will be closely monitoring the progress and developments in the implementation of this proposed merger and the establishment of IPOk.

Can Employees Make Money from Ideas Given to Employers: High Court Decision in Makate v. Vodacom South Africa

Vodacom Tower, Johannesburg RSA - by finepixtrix

Recently, the much-awaited judgment in the case of Makate v Vodacom (Pty) Limited [2014] ZAGPJHC was delivered by the South African High Court in Johannesburg. The case revolves around the “Please Call Me” (PCM) service whereby Vodacom allowed its subscribers to send FREE messages to anyone on all South African networks, asking them to call you. The idea behind this nifty service come from a former Vodacom trainee accountant Nkosana Makate who went to court seeking compensation from the telecommunications giant for the idea. In November 2000, the ex-employee had reduced his idea into writing i.e. a memorandum which he presented to his immediate superior, Lazarus Muchenje, for advice on how to go about selling the idea to Vodacom. At the time he thought his idea would have have immediate tangible benefit for Vodacom subscribers but it would also have a massive benefit for Vodacom. Muchenje referred Makate to the then head of product development at Vodacom, Philip Geissler. Thus the thrust of Makate’s case was to enforce against Vodacom an oral agreement in terms of which the Vodacom (which was ostensibly represented by Geissler, as Makate claims) would take and test the idea and if it was successful, pay Makate an amount to be negotiated between by both parties, but which represented a share of the revenue generated by the product that was to be developed based on the idea.

The court, in its judgment, was prepared to accept an agreement with Geissler on the terms alleged by Makate had been concluded. However, the court ultimately held that Vodacom was not bound by the agreement entered into by Geissler since Makate had not shown that Vodacom made any representations as to Geissler’s authority to represent Vodacom in conclude the agreement or, even if it had, that the representations were such that Makate should reasonably have acted upon them. The court also found that Makate’s claim was time barred i.e. the debt claimed by Makate had prescribed in terms of the South African Prescription Act.

This blogpost considers several intellectual property (IP) issues related to this case and possible lessons for Kenyans who come up with creative and innovative ideas within the course of employment.

In the course of the Makate case, the court accepted expert witness testimony stating that Makate’s PCM “idea (and more particularly the business part) was novel and patentable”. Like Kenya’s patent law, the South African Patent Act 57 of 1978 states that only inventions can be patented. The meaning of invention in section 25(1) of the South African Act expressly excludes discoveries and presentations of information. With regard to novelty, both the South African and Kenyan patent law embrace the notion of absolute novelty therefore PCM (assuming it fell within the definition of an invention) would deemed to be new if it did not form part of the state of art immediately before November 2001 anywhere in the world. It is important to note that in addition to the novelty requirement, the requirements of inventive step and utility must be met for an invention to be patentable. However Vodacom does not appear to have contested the testimony of Makate’s expert witness that the PCM idea was “novel and patentable”.

The Makate case also illustrates the limits of copyright protection, in that it protects form and not function. Although it was not in dispute that Makate had expressed his idea in written form i.e. the memorandum, the protection of Makate’s idea only extends to its expression as a literary work. Be it as it may, Vodacom publicly acknowledged Makate as the orginator of the idea expressed in the latter’s literary work in a staff email set in February 2001 and later in Vodacom’s internal newsletter published in March 2001. These public attributions ostensibly addresses any moral rights issues under copyright law that would have been raised by Makate.

Finally, an important issue that cuts across both intellectual property and employment laws relates to the expression “in the course of employment”. In the case before us, Makate was a trainee accountant at Vodacom who develops a business idea in a technical field which falls well outside the scope of his employment. The question arises: if Makate had managed to develop PCM as a product and tested it with Vodacom’s main rival, MTN, could Vodacom claim ownership of the PCM product since it was made in the course of Makate’s employment at Vodacom?

Lessons for Kenya from US Supreme Court Decision in American Broadcasting Cos. v. Aereo, Inc.

Aereo-Logo

In the recent case of American Broadcasting Cos. v. Aereo, Inc., the Supreme Court of the United States (SCOTUS) held, by majority (6 to 3), that the Aereo streaming service is a “public performance” within the meaning of US Copyright law and therefore amounts to an infringement of copyright in the underlying content. The case concerns Aereo, a US company which retransmits TV programs to its subscribers via the internet without the permission of the owners of copyright in the broadcasts or their underlying content.

Aereo CEO termed the SCOTUS decision as a “massive setback to consumers” arguing that its streaming service was the culmination of a journey to improve the consumer television experience, using technology to create a smart, cloud-based television antenna that consumers could use to access live over-the-air broadcast television. Following the SCOTUS decision, Aereo published a letter to its customers, which reads in part:

“The spectrum that the broadcasters use to transmit over the air programming belongs to the American public and we believe you should have a right to access that live programming whether your antenna sits on the roof of your home, on top of your television or in the cloud.”

A simple illustration of how the Aereo service works is available below:

how aereo works

The petitioners, who were television producers, marketers, distributors, and broadcasters that own the copyrights in many of the programs streamed by Aereo, sued the latter for copyright infringement. They argued that Aereo was infringing their right to “perform” their copyrighted works “publicly.” The majority opinion of SCOTUS held in favour of the petitioners that Aereo performs the petitioners’ copyright works within the meaning of the Transmit Clause within the US Copyright Act of 1976.

This blogger believes that the Aereo decision is instructive for Kenya for many reasons including the following.

The two issues dealt with by the majority judges were whether Aereo’s service amounted to a “performance” within the meaning of the Copyright Act and secondly, whether it was “public”.

The exclusive rights of the copyright owner under US Copyright law includes “the right to perform the copyrighted work publicly”. This includes the right to “transmit or otherwise communicate a performance . . . of the [copyrighted] work . . . to the public, by means of any device or process, whether the members of the public capable of receiving the performance . . . receive it in the same place or in separate places and at the same time or at different times.” Interestingly, under Kenyan Copyright law, the right to perform in public and to communicate to the public are two parts of the “communication to the public” right.

It had been argued that Aereo did not perform e.g., did not communicate, the sounds and images that viewers watched and listened to when they used the Aereo service. The claim was that Aereo merely provided the equipment that was used by subscribers to watch TV. This “volitional defense” argument, which the three dissenting Justices were prepared to adopt, was rejected by the majority of the Court. The majority held that by operating its service, Aereo was not merely supplying equipment, as it contended, but was “performing” within the meaning of the Copyright Act. In this regard, the majority held that:

“When an Aereo subscriber selects a program to watch, Aereo streams the program over the Internet to that subscriber. Aereo thereby “communicate[s]” to the subscriber, by means of a“ device or process,” the work’s images and sounds. §101. And those images and sounds are contemporaneously visible and audible on the subscriber’s computer (or other Internet-connected device). So under our assumed definition, Aereo transmits a performance whenever its subscribers watch a program.”

This is an important point for content owners since users of copyright works in Kenya tend to employ business models that are “designed solely to avoid the reach of the Copyright Act and to take advantage of perceived loopholes in the law”.

In order to answer the question whether Aereo’s service amounted to a public performance, the majority first had to identify the relevant performance. For example, was it the underlying broadcast being retransmitted by Aereo or did the transmission of the television programs by Aereo amount to performance in itself? The majority proceeded on the basis that “to transmit a performance of (at least) an audiovisual work means to communicate contemporaneously visible images and contemporaneously audible sounds of the work.” It therefore held that Aereo transmits a performance whenever its subscribers watch a program.

The majority then turned to consider whether the fact that each transmission was to a single Aereo subscriber preceded it from being “public”.

“As we have said, an Aereo subscriber receives broadcast television signals with an antenna dedicated to him alone. Aereo’s system makes from those signals a personal copy of the selected program. It streams the content of the copy to the same subscriber and to no one else. One and only one subscriber has the ability to see and hear each Aereo transmission.”

Having considered the facts, the majority stated:

“Viewed in terms of Congress’ regulatory objectives, why should any of these technological differences matter? They concern the behind-the-scenes way in which Aereo delivers television programming to its viewers’ screens.”

The majority did note that a difference between the Aereo business model and traditional cable companies. That is, rather than transmit programs constantly, the Aereo system is activated by a subscriber. However the Court ruled that the public performance right applies even if the content is streamed to individual users at different times and to different places. The right is broad enough to cover a myriad of on demand services now being provided over the Internet.

An important talking point around the Aereo case concerns what implications, if any; the SCOTUS decision could have for the development of cloud computing technologies. The majority addressed this concern:

“We agree that Congress, while intending the Transmit Clause to apply broadly to cable companies and their equivalents, did not intend to discourage or to control the emergence or use of different kinds of technologies. But we do not believe that our limited holding today will have that effect.”

From a content perspective, it is important to distinguish between the Dropbox-like services from the Aereo-like services. Dropbox-like cloud computing services are used to access content the users already have a legitimate possessory interest in, such as content legally acquired from iTunes. Aereo-like services, on the contrary, provide that content to users in the first instance. The difference between storing legitimately-obtained content in the cloud for later retrieval and obtaining that content for the first time is clear: when content is obtained via cable, satellite, or antenna, those services must have licenses to either publicly distribute, publicly display, or publicly perform the content.

New Cases for Copyright Collective Management in Kenya: Software and Some Rights Reserved

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The collective management of copyright within Africa has emerged as one of the most viable means of bridging the gap between copyright owners and users of copyright works. According to the African Regional Committee of the International Confederation of Societies of Authors and Composers (CISAC), the royalty collections by African collective management organizations (CMOs) totaled over 55 Million Euros, a 25% increase from the year 2012-2013. However the bulk of these royalties relate to the music-related and audio-visual sectors.

In the recent past, there have been suggestions that Kenya should consider encouraging and/or allowing the formation of a CMO that will administer rights on behalf of owners of software and a CMO that will administer the rights of owners whose works are licensed under a “some rights reserved” framework.

This blogpost looks at the current framework for licensing of CMOs in Kenya and the likelihood of registration of these two proposed CMOs. Section 3 of the Copyright Act establishes the Kenya Copyright Board (KECOBO), a state corporation whose mandate is the overall administration and enforcement of copyright and related rights in Kenya. KECOBO is specifically mandated under Section 5(b) of the Act to license and supervise the activities of CMOs as provided for under the Act. Part V of the Act specifically addresses collective administration of copyright. For a body to be licensed as a CMO by KECOBO it must meet all the requirements set out in the Act.

Presently, KECOBO has registered and licensed four CMOs with respect to the administration of rights in musical works, literary works, audio-visual works and sound recordings.

With respect to the proposed CMOs, an important question to be asked is whether the class of rights and category of work in question is already administered through an existing CMO. If so, then KECOBO will not approve another CMO unless it is established that the existing licensed CMO is not functioning “to the satisfaction of its members”.

It is important to note that KECOBO enjoys a discretionary power to “assist in establishing a CMO for any class of copyright owners where it finds it expedient”. This power could be exercised in favour of any proposed CMO.

1. Proposed ‘Society for Giving’ CMO

Alex Gakuru, Creative Commons Regional Coordinator for Africa, makes the proposal for “the formation of Society for Giving CMO to advance the rights and interests of authors and creators whom license their work for sharing. As a mitigation to all other local CMOs that promote private IP interests.”

Society for Giving CMO

The challenge for this proposed CMO is that there already exists CMOs that represent authors and creators of musical and literary works, namely MCSK and KOPIKEN respectively. However there are no CMOs administering rights in audio-visual and artistic works.

2. Software CMO:

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Isaac Rutenberg, CIPIT Director, in a blogpost titled “Why aren’t there CMOs for software?”, makes a compelling case for the collective management of software. According to Rutenberg:

“Computer source code is subject to copyright, so programmers constitute a class of “copyright owners (… )Some software developer companies (particularly those making mobile phone apps) have literally hundreds of independent pieces of software on offer, much like some musicians have vast repertoires of music. Furthermore, cloud computing is already changing the standard model of software distribution, by allowing users to access programs and data stored on remote servers (rather than being stored locally) (….) Perhaps a pizza or chicken restaurant would benefit from having access to thousands of video games sourced from hundreds of developers, all of which is licensed for a set fee from a CMO. Or perhaps individuals could buy a license from a CMO to gain access to thousands of apps for their mobile phone. Or perhaps businesses could buy a license from a CMO and gain access to hundreds of types of business software from different providers.”

While it is conceded that collectivism, generally speaking, may be beneficial to software owners, the collective management system does not seem to be particularly attractive among the industry players. An important prerequisite for the establishment of CMOs in any industry is a concerted push from the copyright owners themselves. The absence of this push from the rights holders is perhaps a clear indication that software owners have no intention or desire to assign their rights to a CMO.

Be it as it may, would it be possible to have two CMOs dealing with literary works namely KOPIKEN for works in the printed form and another CMO for works in the digital form?

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