Jubilee Government Scorecard One Year Later: Waiting for Intellectual Property Organisation of Kenya

gado editorial cartoon April 10 2014 daily nation

As many readers may know, the Jubilee government of President Uhuru Kenyatta, his Deputy William Ruto and his Cabinet mark the end of their first year in office this month. To this end, Gado’s comic in today’s Daily Nation newspaper depicts Kenyatta and Ruto being accused of copyright infringement by the immediate former president Kibaki. The message is clear: the Jubilee government is literally singing the same tune as the previous government.

As this blogger has previously noted, Kenyatta has been very supportive of the creative economy and has on several occasions reiterated his administration’s commitment to creating a conducive environment for creators to reap from their intellectual property (IP) assets. However, Kenyatta’s lasting mark on IP in the past year was the decision to reform all state corporations and parastatals in Kenya which has set in motion plans to merge the copyright office, the industrial property office and the anti-counterfeit agency into one national IP office. (See this blogger’s comments on the merger here and here).

According to recent media reports, the heads of the various government parastatals spent the month of March at the Kenya School of Government deliberating and making recommendations to the Jubilee Government on the best ways to merge the various state agencies across the various sectors, including intellectual property administration and enforcement. Unconfirmed whispers received by this blogger indicate that the proposed name for the new IP body is the Intellectual Property Organisation of Kenya (IPOK) which will be composed of three directorates (Copyright and Related Rights, Industrial Property and Anti-Counterfeit). This new body, IPOK, will be run by a Director-General, much like the African Regional Intellectual Property Organisation (ARIPO) or the World Intellectual Property Organisation (WIPO).

Regardless of the new IP body’s format, it is clear that members of the Jubilee Cabinet will play a crucial role to ensure that this body functions smoothly and delivers on the expectations of Kenyans. In particular, the Cabinet Secretaries in charge of Industrialisation, Justice and Culture will play the greatest role to midwife and steer the operationalisation of the proposed IP body. In a recent publication titled “Cabinet Scorecard”, the Star newspaper used the following rating to gauge the performance of the Jubilee Cabinet over the past year:

“A. You are doing an excellent job

B. Good, but room for improvement

C. You are okay

D. Get your act together

E. Resign

F. Please fire him, Mr President”

According to the Star, no member of the Executive obtained an “A” grade with Kenyatta being the highest scorer with a “B” grade. The Cabinet Secretary for Industrialisation, Adan Mohammed was among the lowest scorers with a “D” grade.

The scorecard reads in part:

“A year later, no one can say with certainty whether he [Mohammed] has done anything let alone inspire change. Nothing much has been heard of his ministry and nothing has reverberated on the ground from the golden touch everyone expected from him…It is no surprising therefore that in the ministry’s website, only three events appear in the “news and events” category one year later.”

Many will recall that Mohammed’s docket is the parent ministry for two out of the three IP agencies to be merged, namely the Kenya Industrial Property Institute (KIPI) and the Anti-Counterfeit Agency (ACA). Furthermore, it is widely speculated that the Industrialisation Ministry may be charged with direct oversight and supervision over the new IP body.

As the Jubilee government enters the second year of its administration, this blogger will continue to review the highs and lows of the Executive, including the current national IP offices, in promoting, supporting and protection the IP rights of the Kenyans.

High Court Orders Government to Operationalise Copyright Tribunal in PERAK Case Against KAMP and PRiSK

pub kenya perak

In a judgment delivered recently, the High Court in the case of Republic v Kenya Association of Music Producers (KAMP) & 3 others Ex- Parte Pubs, Entertainment and Restaurants Association of Kenya (PERAK) [2014] eKLR has ordered the State to set up the Competent Authority established under the Copyright Act to hear and determine the dispute between PERAK and the related rights collective management organisations KAMP and PRiSK with respect to the latter’s tariffs for communication to the public.

As many may know, the Pubs, Entertainment and Restaurants Association of Kenya (PERAK) is the largest single entity representing owners and managers of the major restaurants, pubs and entertainment venues in Kenya. PERAK is registered under the Societies Act as a welfare Organization and its main objective is to bring together operators with a view of resolving common problems in the hospitality industry, developing a code of conduct for its members, engage in social responsibility activities and generally to help members comply with various regulations governing the hospitality industry.

The gist of the PERAK’s judicial review action is summarised in the following three orders which were sought from the court, namely:-

“1. That this Honourable Court be pleased to grant an order of prohibition to prohibit the 1st and 2nd Respondents from arbitrarily imposing and collecting high tariffs/license fees and other levies from the Applicant’s members’ business premises using a wrong tariff structure and generally harassing, intimidating and confiscating their business equipment throughout the Republic of Kenya.
2. That this Honourable Court be pleased to grant an order of mandamus compelling and directing the 3rd and 4th Respondents to hear and determine the dispute between the Applicant and the 1st and 2nd Respondents in relation to the high license fees charged and /or tariffs charged/levied using a wrong tariff structure by the 1st and 2nd Respondents.
3. The costs of this Application be provided for.”

In the court’s judgment, PERAK succeeded to prove that it had locus standi to institute proceedings on behalf of its members in addition to order no. 2. However PERAK was unsuccessful on order no. 1. With respect to order no. 3, the court declined to make any order as to costs.

Comment:

This blogger is surprised by PERAK’s poor form in mounting its judicial review suit against KAMP and PRiSK. This was clearly manifest from several unsubstantiated allegations, inaccurate and outrightly false statements of the provisions of the law by PERAK.

The most significance of this judgment can be found in the last four paragraghs where the court examines whether the government can and should be compelled to give effect to section 48 of the Copyright Act. On numerous occasions (see some examples here, here, here and here) this blogger has emphasised the need for Kenya to immediately operationalise the Competent Authority aka the Copyright Tribunal which is established under the Copyright Act to hear and determine disputes between users and CMOs.

Therefore this blogger is elated that the High Court has seized the opportunity to state clearly that the Government, in particular the Office of the Attorney General and Department of Justice can no longer rely on the same old excuses as reasons for not facilitating the operations of the Competent Authority.

To quote the court:

“The only reason advanced by the Kenya Copyright Board why the Competent Authority cannot fulfil its said statutory duty is that the Competent Authority is yet to be operationalized owing to budgetary and administrative challenges and hence the same is not functional. Article 47(1) of the Constitution provides that every person has the right to administrative action that is expeditious, efficient, lawful, reasonable and procedurally fair. Article 21(1) of the Constitution on the other hand provides that it is a fundamental duty of the State and every State organ to observe, respect, protect, promote and fulfil the rights and fundamental freedoms in the Bill of Rights. It is therefore upon the State to facilitate the Competent Authority so that it can undertake its statutory duties. To fail to do so amounts to abdication of the Constitutional duties imposed upon the State and in applying a provision of the Bill of Rights this Court is enjoined by Article 20(3)(b) of the Constitution to adopt the interpretation that most favours the enforcement of a right or fundamental freedom.
Adopting the said approach, this Court is not satisfied that the reason advanced by the Kenya Copyright Board warrants the state being absolved from the performance of its statutory duties taking into account the fact that the Competent Authority is already in the office.”

The ball is therefore squarely in the government’s court to operationalise the Competent Authority failing with PERAK will be at liberty to return to court for contempt orders against the Kenya Copyright Board.

The Problem with Private Copying Remuneration in Kenya

50 bob movies by wamathai dot com

Private copying can be defined as the act of making any copy for non-commercial purposes by a natural person for his/her own use. Kenya’s Copyright Act defines it as the making of a single copy for the personal and private use of the person making the copy. Although the right of reproduction under copyright law is exclusive, Kenya is among many jurisdictions worldwide that limit the application of the reproduction right to activities that can be qualified as private copying, the reasoning being that it is practically impossible to grant permission to large numbers of individuals, or to monitor the use consequently made of it. It follows that private copying is allowed under the condition that a fair compensation is paid to the authors and other rights holders for loss of revenues or harm caused to the rights holder whose work had been copied. Private copying levy (or the audio blank tape levy as it known in Kenya) is currently the only efficient mechanism which allows creators to be compensated for widespread copying of their works for private/domestic use. It therefore follows that the blank tape levy would be applicable to blank CDs, tapes, cassettes, DVDs, VCDs, USB Disks, MiniDiscs, Memory Cards, Mobile Phones among others. It is yet to be operationalised in Kenya despite being provided for under section 28(3),(4),(5) and (6) of the Copyright Act.

In December 2013, this blogger discussed here that one of the proposed amendments to the Statute Law (Miscellaneous Amendments) Bill, 2013 related to the provisions of audio blank tape levying provided under Section 28(5) of the Copyright Act. The effect of this proposed amendment was that the blank tape levy be collected by KECOBO and then distributed to the registered CMO representing the owners of sound recordings, currently known as the Kenya Association of Music Producers (KAMP). However, this blogger argues that this section 28 (in both its current and proposed form) is unconstitutional and ought to be fundamentally amended so as to address the economic rights of all rights holders.

The WIPO International Survey on Private Copying Law and Practice 2012 explains that where private copying remunerations are gathered by collective management organisations (CMOs), these societies are appointed by the government or by rights holders. According to the Survey, these CMOs must be representative of each variety of rights holders namely the authors, performing artists and producers. In some jurisdictions, a distinct CMO exists dealing solely with private copying levy and the board of such a CMO is comprised of the various rights holders’ representatives.

From all the 30 countries selected for the Survey, it is clear that there are two main categories of rights holders who benefit from the royalties collected for private copying: copyright holders and the related rights holders. The copyright holders appear to take the lion’s share of the collections with countries like Switzerland and Canada recording an authors’ share of 58%. All in all, the share for copyright holders appears never to be less than 30%.

Meanwhile, back in Kenya, the related rights CMO representing sound producers (KAMP) has recently published a public notice on it’s official website which reads in part:-

“The Kenya Association of Music Producers and Performers Rights Society of Kenya Stakeholders Meeting on Blank Media Levy concluded by setting an unopposed tariff of 6% of import price at the point of sale on the aforementioned equipment. KAMP and PRISK by virtue of Sections 28 (5) and 30 (8) will commence collections May of 2014.”

According to section 28(4) of the Act, the royalty payable for private copying can only be set in one of two ways: through agreement with stakeholders or by the (non-existent) competent authority. The question which therefore must be asked is which one of the two ways was used and what was the rationale behind the percentage figure of 6% purportedly agreed upon pursuant to the Act.

Assuming that the conditions of section 28(4) of the Act have been met, it would follow that the audio blank tape levy would only be applicable to KAMP and not PRiSK. This is because the section refers only to audio recording equipment and audio blank tape and not video. In addition, according to the WIPO Survey, the only jurisdiction with a tariff of 6% (of the import price) is Lithuania and this tariff covers both copyright and related rights holders, as illustrated in the table above.

However there is a fundamental question which remains unanswered, namely: is the current private copying levy provision under section 28 constitutional? The blogger argues that the answer must be no. In all the countries studied in the WIPO Survey above, copyright holders were allocated a substantial share of collections from the respective private copying levies. However, the Kenyan Act only refers to owners of sound recording. It is therefore possible to argue that section 28(3),(4),(5) and (6) are unconstitutional for two cardinal reasons, namely the discrimination of rights holders contrary to Article 27 of the Constitution and the deprivation of property contrary to Article 40 of the Constitution.

Vindicating Your Intellectual Property Rights: Penny Galore Ltd. v. Amani Women’s Group

grey kura necklace by goop dot com

Earlier this week, Amani Women’s Group posted a blog article here after receiving a Cease and Desist Demand Notice from Penny Galore Ltd. In the explicit Demand Notice, Amani is accused of infringing Penny Galore’s rights under both copyright and the law of passing-off with respect to the latter’s handmade necklace branded and marketed widely as the Kura Necklace. According to Penny Galore’s counsel, Coulson Harney, the necklace is “made up of bone quills that are creatively decorated around a ring necklace which is joined by a hook and comes in various colours such as grey, cream and black”.

Penny Galore alleges that Amani has substantially copied and/or reproduced the Kura Necklace Grey and that Amani are selling this infringing work at its shops to individuals and/or independent traders. Therefore Penny demands that Amani immediately stops all dealings with its alleged infringing necklace and that all pieces of the disputed Amani neckace must be destroyed. In addition, the Demand Notice requires that Amani provides a written promise not to infringe on Penny Galore’s rights in the Kura Necklace. Of course, Penny Galore’s counsel has threatened to sue Amani if the latter does not comply with the Demand Notice.

Comment:

This blogger submits that this is an important lesson on protection of one’s intellectual property rights. From the little information that is publicly available, there is no doubt that Penny Galore has and continues to invest heavily in commercialising its products and its brand, both of which are protected under the intellectual property (IP) system. The sole fact that Penny Galore has engaged the services of (high-end) IP counsel in this matter demonstrates that it is willing to invest in protecting the IP rights subsisting its various products that have been made available to the public.

On the other hand, it is clear that Amani enjoys equal IP protection as Penny Galore with respect to its unique creations. Therefore, Amani can and should rely on the IP system to defend any unfounded claims made against its products by anyone, including Penny Galore.

Based on Penny Galore’s demand notice and Amani’s website alone, it is impossible for any third party, including this blogger, to ascertain what the alleged infringing necklace looks like and whether there is an objective similarity between the above necklace and the Kura Necklace. However, most IP commentators would agree that necklaces, in their material form, are the subject of copyright protection as artistic works defined in section 2(1) of the Copyright Act.

A good illustration of the required standard of proof for copyright infringement in an artistic work may be found in the case of Macmillan Kenya Publishers v Mount Kenya Sundries Ltd Civil Suit No. 2503 of 1995. In this case, Macmillan Kenya Publishers claimed its rights under copyright has been infringed with respect to its maps “Kenya Tourists Map”. Macmillan argued that the “Kenya Travellers’ Map” by Mount Kenya Sundries Limited was similar to the Macmillan’s maps save for some changes made in certain aspects of the maps’ details.

The court ruled in favour of Macmillan and stated as follows:-

As was pointed out in Alternative Media Ltd vs Safaricom Ltd (2005) 2 KLR 253, infringement of copyright arises not because the Defendant’s work resembles the Plaintiff’s, but because the Defendant had copied all or a substantial part of the Plaintiff’s work. In the case before me, the Plaintiff has submitted evidence which I find to be both sufficient and credible, that its maps (PEx 6 and PEx 7), were copied by the Defendant in the production of the Defendant’s map (PEx 8), and I find the Defendant fully liable for the infringement of the Plaintiff’s copyright.

The above-cited Alternative Media case is the leading case in relation to copyright infringement of artistic works. In that case, the court found that Safaricom had infringed Alternative Media’s rights under copyright with respect to artistic works created by the latter. These works of art were used by Safaricom on it’s 250 Shillings Scratch Cards without Alternative Media’s authority.

Regarding the law of passing-off, the central enquiry is whether the public is likely to be confused into believing that Amani’s necklaces are, or are connected with, those of Penny Galore. The underlying rationale behind passing off is to ensure that competitors within the same market do not engage in any acts aimed at interfering with the goodwill between each business and its customers.

Therefore although Penny Galore appears not to have registered its necklaces, the provisions of section 5 of the Trade Marks Act are clear that:-

“No person shall be entitled to institute any proceeding to prevent, or to recover damages for, the infringement of an unregistered trade mark, but nothing in this act shall be deemed to affect rights of action against any person for passing off goods.”

In the case of Githunguri Dairy Farmers Cooperative Society Limited v. Uplands Diaries Limited 2009 eKLR, the court found that the features and design of Uplands’ milk packaging were strikingly similar to Githunguri’s Fresha Milk packaging and that the latter’s market survey confirmed that there is confusion in the market.

In arriving at this ruling, the court stated as follows with respect to passing-off:-

The principles to bear in mind when considering a claim under the tort of passing off, is the plaintiff must prove reputation of good will connected with the goods which are known by the buyers by distinctive get up or feature. Secondly, the plaintiff must prove the defendant either intentionally or not, misrepresented to the public leading them to believe that the defendant’s goods are the plaintiffs. The plaintiff has also to prove that they have suffered damages because of the erroneous believe caused by the defendants’ misrepresentation.

The above principles may be useful to Amani as they craft a response to Penny Galore’s Demand Notice.

In light of the above, this blogger looks forward to seeing Amani’s comprehensive evidence showing that the Kura Necklace falls part of the traditional cultural expressions of African and Kenyan communities, as Amani appears to have suggested in its blog article. In the meantime, this blogger is not convinced by Amani’s attempts to portray its dispute with Penny Galore as “bullying” or a case of David versus Goliath.

It is indeed disappointing for Amani to resort to comments such as:

“Kenya is 50 years old and its seems we are still under control of people wanting to make money on the backs of poor wananchi, its not fair … Or may it is just if you have money and success, you think you are entitled to step on whoever you please while you try to make yourself richer”

All businesses, large and small alike, must be alive to possible IP issues in their operations and develop effective IP strategies. Perhaps this is an important lesson not just for Amani but other businesses in the creative and innovation sectors.

Anti-Homosexuality Law and Intellectual Property Collide: Denver David Robinson vs. Red Pepper Uganda

Uganda gay pride. Photo by David Robinson © 2012

In a recent article in the New York Times here, it is alleged that Ugandan tabloid newspaper Red Pepper infringed the copyright of Denver David Robinson, the photographer behind the photographic project titled: “We Are Here: LGBTI in Uganda” which was published by The Advocate, an American L.G.B.T. magazine here.

From an intellectual property (IP) perspective, this blogger aims to discuss Robinson’s claim against Red Pepper and the extent to which the provisions of fair use under Ugandan copyright law would be applicable. In addition, this blogger will also consider the moral rights issues that may arise in this case.

Robinson, a gay man, explains that his photo essay of the LGBTI community in Uganda was a result of his stay in the East African country in 2012. His work featured the photographs of a dozen members of the community who told their stories. Although The Advocate has taken down Robinson’s work from its site, some of Robinson’s photographs can be viewed on the GLAAD site here.

On February 24, 2014, Ugandan President Yoweri Museveni signed Uganda’s Anti-Homosexuality Bill into law. This Bill was first introduced in 2009 by David Bahati, a Member of Parliament, with the intention of criminalising same-sex relations whereby a person considered as homosexual would receive the death penalty, or life imprisonment.

Robinson alleges that following this presidential assent, Red Pepper ran a series of stories aimed at “outing” LGBTI persons in Uganda and that these stories all used his photographs from The Advocate publication. He explains it thus:

The Red Pepper, published an article titled “Homosexuality Could Cause Mental Illness — Medics.” One of the photographs accompanying the article was one — also published by The Advocate — that I had taken at Uganda’s very first pride parade in 2012, showing two Ugandans with broad smiles. The Red Pepper had not contacted me or sought my permission.

On many days since, similar stories and photographs have been published. The worst for me and my activist friends came on Feb. 28, when the Red Pepper reprinted — again, without permission — a version of my photo essay for The Advocate. The feature was retitled “Top Ugandan Gays Speak Out: How We Became Homos.”

With regard to the copyrightability of Robinson’s photo essay, Uganda’s Copyright and Neighbouring Rights Act, 2006 is identical to Kenya Copyright Act, 2001. Both Acts provide that Robinson’s work is eligible for copyright as both an artistic and a literary work.

The next step for Robinson is to establish that there is an objective similarity between his original work and the work published by Red Pepper. In this regard, Robinson says:
“Although the Ugandan participants and I knew that the photos and stories might someday be used against us, we never thought the entire project would be stolen wholesale.”
This wholesale theft alleged by Robinson would sufficiently be proved by a side-by-side comparison between the photographs published by tabloid and those taken by Robinson for publication in The Advocate.

The final leg in Robinson’s copyright infringement suit will be to show that there is a causal connection between his original work and Red Pepper’s infringing copy. This causal connection would be established by showing that his work was accessed from The Advocate, a publication made available online since February 2013.

In reply to Robinson’s claim, Red Pepper may decide to challenge the photographer’s locus standi (legal standing) to bring this copyright suit. This is because the original work copied was by The Advocate, which is a separate entity from Robinson. In this connection, it is clear that the infringement is confined to the economic rights contained in sections 9(a) and (f). Therefore it would be important to interrogate the nature of the relationship between Robinson and The Advocate to determine who has the locus standi to bring a suit for copyright infringement of the economic rights. However, it is clear that Robinson would have locus standi to bring a copyright infringement suit with respect to his moral rights to claim authorship of the work and object to any distortion, mutilation, alteration or modification of the work as provided under sections 10(1)(a) and (c) of the Ugandan Act.

However, Red Pepper may be able to counter Robinson’s copyright infringement claim by relying on the defence of “fair use” as provided under section 15 of the Ugandan Copyright Act. This defence appears to be an option for Red Pepper due to the following remarks made by Robinson:

I had been given a byline as if I were one of the newspaper’s reporters. Some words were changed, and the photographs were cropped to cut out my copyright watermark. The Advocate was neither contacted nor credited.

Like Kenya’s Act, Uganda’s Act contains several general exceptions and limitations to the exclusive rights granted to copyright owners. It follows that whatever falls within the exceptions and limitations constitutes lawful conduct and therefore liability for infringement would be excluded. With specific reference to the present case, section 15(1)(e) states as follows:

The fair use of a protected work in its original language or in a translation shall not be an infringement of the right of the author and shall not require the consent of the owner of the copyright where the work is reproduced, broadcast or communicated to the public with acknowledgement of the work, in any article printed in a news paper, periodical or work broadcast on current economic, social, political or religious topic unless the article or work expressly prohibits its reproduction, broadcast or communication to the public;

In this regard, it is not disputed that Red Pepper used the photographs in the reporting of current events however the question for the court to determine is whether the author of the work was acknowledged as such. It is clear that this determination will entail a discussion of what would objectively amount to acknowledgement under the Ugandan Copyright Act.

This blogger will be keenly following the developments in this case as it proceeds to court.

What Kenya is Missing: South African Copyright Tribunal Sets Aside License Tariff for Use of Sound Recordings

PicknPay

It is recommended that a tariff to be set by the tribunal should neither be too high nor too low, but a tariff which the owners of the royalty will realise profits on the one hand and the consumers will purchase voluntarily. It is hard, in my view, to satisfy the preferences of either party. It has already been indicated that I am not tasked to judge as to which case is superior in law but to set a tariff that may be said to be reasonable. – Foschini Retail Group (Pty) (Ltd) and 9 (Nine) Others v South African Music Performance Rights Association (0003/2009) [2013] ZAGPPHC 304 at Paragraph 76.

Recently this blogger reported a major victory for Kenya’s related rights collective management organisations (CMOs) when the court upheld their statutory mandate to license for the communication to the public right (See here). It is clear that the majority of these disputes between the related rights CMOs and users arise because the latter contest the license fees charged by these CMOs. The genesis of this contestation stems from the users’ perceived “double taxation” of paying both a copyright CMO on the one hand and the related rights CMOs on the other hand.

In this regard, this blogger has argued on several occasions (see here, here and here) that the Competent Authority must be immediately operationalised to deal with the rising cases of CMO-user disputes. Meanwhile, in South Africa, the Copyright Tribunal (equivalent to the Competent Authority under the Kenya Copyright Act) has recently issued a landmark judgment in which it set aside the license tariff for retailers as fixed by the South African Music Performance Rights Association (SAMPRA) holding that the tariff was not reasonable and proceeded to set a tariff to be applied by SAMPRA. In addition, the Copyright Tribunal ordered SAMPRA to pay the the retailers’ costs of referring the matter to the Tribunal.

For Kenya, this judgment is of great importance as the tariff determined by the Copyright Tribunal in South Africa is significant lower than that of the concerned related right CMO in Kenya. Therefore this blogger submits that there is a need for a review of all tariffs set by related rights CMOs using the methodology of the South African Copyright Tribunal.

In the present case, the retailers, namely Foschini Retail Group (Pty) (Ltd), Pepkor Retail Limited Stores, Just Kor Fashion Group (Pty) (Ltd), Mr Price Group Limited, Pick ‘n Pay Retailers (Pty) (Ltd), Truworths Limited, New Clicks SA (Pty) (Ltd), Dunns Stores, Metrotoy (Pty) (Ltd) and Young Designers Emporium (Pty) (Ltd) contended that SAMPRA had unilaterally set a tariff, and that it basically adopted a take-it-or-leave-it approach, when demanding payment. The retailers claimed that the tariff was inflated and without economic justification. They said that they had tried to negotiate with SAMPRA, but that the parties had been unable to reach agreement, hence they referred the matter to the Copyright Tribunal for determination.

As many know, the South African Music Performance Rights Association (SAMPRA) is a national, non-governmental, organization that licenses to third parties specific copyrights that vest in record companies that are members of the Recording Industry of South Africa (RiSA). It is therefore clear that SAMPRA’s equivalent in Kenya is the Kenya Association of Music Producers (KAMP).

In response to the retailers’ contentions, SAMPRA claimed that its tariff was reasonable. It stated that its tariff was bench-marked with international best practice, with reference to the UK, Australia and Canada being mentioned. SAMPRA’s tariff was based on the square meterage of the ‘audible area’, in other words those parts of the store where the music can be heard even if they are inaccessible to customers. Therefore according to SAMPRA’s tariff, the annual fee for a store of 51 to 100 square metres was ZAR 1000.00, whereas the annual fee for a store of 201- 300 square metres was ZAR 2000.00.

The Tribunal agreed with the retailers that the SAMPRA’s tariff was too high, even compared with lower tariffs in developing countries such as Australia. The Tribunal also agreed with the retailers that SAMPRA’s take-it-or-leave-it approach in setting its tariff was wrong both under the Copyright Act and the Collecting Society Regulations. In this connection, the Tribunal found that it would not be in the interest of justice to “cut and paste” the international practice without engaging the market forces prevailing in South Africa.

Therefore the Tribunal was of the view that tariff to be set must be a tariff that “optimizes public welfare”, in other words “a tariff that is neither too high nor too low, by which the service providers would realize profits, whereas the consumers would purchase voluntarily”. The Tribunal therefore set a tariff which, for example, saw the annual cost for shops of 50 to 100 square metres drop down to ZAR 389.00, whereas the annual fee for shops of 200- 300 square metres was set at ZAR 620.00.

As alluded to above, the tariff set by the Tribunal does not compare favourably with KAMP’s tariff here in Kenya. According to KAMP’s recent tariffs available here, the annual cost for shops of 50 to 100 square metres is currently set at KES 6500.00 which is approximately ZAR 650.00. In other words, a Kenyan shop half the size of a South African shop pays twice as more in license fees per year.

In light of the above, this blogger submits that there is a pressing need for the relevant government agencies to intervene and regulate the license tariffs, terms and conditions imposed by CMOs in Kenya to protect the public interest.

Defence of Anterior Use of Imported Brands Under Trade Mark Law

INFINITY TM TYRES

Under both the Kenyan and South African Trademark Acts, there are several provisions which limit the right to the use of a trade mark granted by registration. For purposes of this blogpost, let us consider the provision of section 10 of the Kenya Trade Mark Act and its equivalent section 36 in South Africa’s Trade Marks Act. This provision, referred to in Kenya’s Act as the Saving for vested rights, creates a defence against trade mark infringement claim by a trade mark owner.

In a recent South African case of Etraction (Pty) Ltd v Tyrecor (Pty) Ltd (16926/11,16926A/11) [2014] ZAWCHC, a dispute arose over the trade mark INFINITY registered by Etraction in Class 12 in respect of “vehicle components and accessories; tyres, wheels, rims”. Etraction was therefore seeking an interdict to restrain Tyrecor from infringing its trade mark.

In its defence, Tyrecor argued that its predecessor in title had commenced using the trade mark prior to Etraction applying for registration of INFINITY in its own name. In this regard, the court accepted that the aim of the statutory defence relied upon by by Tyrecor was to “preserve common law rights that are antecedent to the rights of the registered proprietor”.

After reviewing the submissions of the parties, the court found that Tyrecor could not be restrained from using INFINITY since it had made continuous use of INFINITY since July 2006 and before the Etraction’s application for registration was accepted on 15th April 2008.

Comment:

In order to discharge the onus of proving an earlier right under Section 10 of the Kenya Trade Marks Act, it must be demonstrated that the use of a trade mark would amount to passing off or infringement of another earlier right. This reasoning has been cited with approval in the case between Trans-National Bank Limited vs Equity Bank Limited where Trans-National opposed Equity’s application for registration of “fanikisha” before former Registrar of Trade Marks, Prof. Odek. A copy of the Registrar’s decision is available here.

In the “fanikisha” case, the Registrar interprets Section 10 of the Act to the effect that an anterior mark is:

(i) an earlier mark having an earlier application date taking any priority into account or
(ii) an earlier registered mark or
(iii) if unregistered, an earlier mark that exists by virtue of continous use under Section 5 of the Act or
(iv) is an earlier well known trademark.

In the case of where the anterior mark is unregistered, the Etraction case is significant as it demonstrates that the availability (or lack thereof) of an action for passing-off is an important determinant of whether reliance can be placed on the defence. In the present case, Tyrecor successfully argued that Etraction’s abandonment of the possibility of a passing-off action strongly indicated that Etraction recognised that it had no exclusive right to INFINITY prior to its application for registration.

Another important finding from the Etraction v. Tyrecor case is in relation to the “predecessor in title” option in the defence. In the present case, Tyrecor claimed that it was the successor of an entity known as Falck Trading (Pty) Limited, a company which it took over in 2009. However, Tyrecor did not adduce any formal documents or agreements before the court relating to the take-over of the business. Nonetheless, Tyrecor claimed that the take-over was done verbally due to the common shareholders and directors of both the predecessor and successor.

Despite the absence of documentation relating to the transfer of business from Falck to Tyrecor, the court held that Tyrecor is still entitled to the defence of anterior use. The court stated, as follows:

I am persuaded that there was a transfer or an assignment of rights and obligations between the predecessor and successor in relation to the import and sale in INFINITY branded tyres. That [Tyrecor] appears not to have a written contract in its possession or that relevant provisions of the Companies Act have not been complied with, does not vitiate such a transfer of rights and the [Tyrecor] faces sanctions embodied in the Companies Act. However, it does not in my view affect the [Tyrecor]’s defence available in terms of Sections 36 of the Act.

World Intellectual Property Day 2014 Theme Revealed: “Movies – a Global Passion”

world ip day 2014 movies a global passion

The theme selected by the World Intellectual Property Organisation (WIPO) for this year’s World Intellectual Property (WIP) Day celebrations could not be a better fit for Kenya. From an intellectual property (IP) perspective, there appears to be a renewed focus on the audio-visual industry (television and film) in Kenya, culminating in the introduction of section 30A which introduced the right to equitable remuneration for use of audio-visual works (see my comments on section 30A here, here, here and here). More recently, Kenya successfully negotiated and signed the WIPO Beijing Treaty on Audiovisual Performances (See my comments on Kenya and the Beijing Treaty here).

In 2007, a study by the Kenya Copyright Board (KECOBO) and the World Intellectual Property Organisation (WIPO) showed that the audio-visual industry (production, distribution and projection) contributed a total of KES 566 Million to Kenya’s Gross Domestic Product.

According to the Kenya Film Commission (KFC), the film industry employed 4,103 people on permanent basis in 2009, which increased by 25% from 2005. The total wage earnings in the industry also increased from 2,098.4 million in 2005 to 2,955.6 million in 2009/2010 – an increase of 40.8%. The total number of establishments in the industry also increased by 85% from 222 in 2005 to 411 in 2009. The international impact of the industry in Western countries, assessed by the issuance of special permits for film and documentary producers, rose from 2350 in 2010 to 3180 in 2011.

To the extent that the Kenyan films are cultural works, the Kenya Constitution promulgated in 2010 recognises culture as the foundation of the nation and as the cumulative civilization of the Kenyan people and nation. Article 11 of the Constitution states that the State shall promote all forms of national and cultural expression through literature, the arts, traditional celebrations, science, communication, information, mass media, publications, libraries and other cultural heritage. In addition, Articles 11 and 40 of the Constitution mandate the State to support, promote and protect the intellectual property rights of the Kenyan rights holders in the film industry.

As far the Kenya’s political leadership is concerned, President Uhuru Kenyatta has been a keen supporter of the Arts (see the Uhuru-Otonglo story on YouTube here) and his government has consistently pledged to nurture, grow and promote the creative arts in Kenya. In this regard, many will recall President Kenyatta’s message to the Cannes Film Festival (available on YouTube here) and his remarks at Kenya’s Groove Awards Ceremony (available on YouTube here).

At the county level, Machakos County Government launched the Machakos Entertainment Centre for Film, Media, Music and the Arts aimed at creating “Machawood” akin to “Hollywood” in the United States, “Nollywood” in Nigeria and “Bollywood” in India (Machawood press statements are available on YouTube here and here)

lupita by thewiredotcom

Enter: Kenyan Actress Lupita Nyong’o. Earlier this week, Kenya joined the rest of the world in celebrating Lupita’s Oscar win for Best Actress in a Supporting Role. Lupita’s sterling performance as an abused servant in the movie “12 Years A Slave” undoubtedly put Kenya on the global stage and the 31 year old actress becomes the first Kenyan to win an Academy Award.

In her acceptance speech, Lupita proves that she truly is a wonderful inspiration, role model and pioneer for all Kenyan actors and actresses. She stated in part:

“When I look down at this golden statue, may it remind me and every little child that no matter where you’re from your dreams are valid.”

All in all, the emergence of a market-driven film industry presents unique opportunities for socio-cultural transformation in Kenya and Africa as whole. It is one of the most creative assets of the knowledge economy and a critical sector for economic growth and development.

This blogger looks forward to Kenya’s celebrations of this year’s WIP Day!

Section 30A of the Copyright Act: Right to Equitable Remuneration for Performers and Producers

studio value music

“For many years Kenyan composers and authors have received royalties from the broadcast or public performance of their songs. These royalties are collected by the Music Copyright Society of Kenya (MCSK).
The Copyright Act has since been amended to acknowledge the essential contribution of performers and producers of sound recordings in the creation of recorded music and works by including a right to equitable remuneration for both the performers and producers, which is in line with international best practices. The rights to equitable remuneration are the rights of performers and producers to be paid fairly for the broadcast and communication to the public of their works.” – Performers Rights Society of Kenya (PRiSK)

In 2012, the Copyright Act was amended with the insertion of a new provision, section 30A which introduced the right to equitable remuneration for use of sound recordings and audio-visual works. This blogger has discussed this section in several blogposts available here, here and here.

In a recent article, intellectual property (IP) lawyer Judy Chebet argues here that section 30A is unconstitutional as it obliges performers and music producers to cede some of their rights to collective management organisations (CMOs). While this blogger fundamentally disagrees with Chebet, it is argued that her views raise serious concerns that must be addressed by the Kenya Copyright Board (KECOBO) and the related rights CMOs both of whom play an important role in explaining to the Kenyan public (in a fair amount of detail) exactly “what section 30A is all about”.

Copyright and related rights are bundles of different rights which can be exercised individually or, where for practical purposes it is very difficult to enter into individual arrangements, can be managed by collective management organisations (CMOs). Because of the uses to which sound recordings and fixations of performances are traditionally put, collective management has become an indispensible method by which performers and producers can be remunerated for the uses of their performances or recordings.

Both Article 12 of the Rome Convention and Article 15 of the WIPO Performances and Phonograms Treaty (WPPT) give performers and producers of sound recordings a right to a single equitable remuneration for broadcasting and communication to the public. In most CMOs this will be the great bulk of the collectable remuneration.

The WPPT goes on to provide that the contracting parties may establish in their national legislation that the single equitable remuneration shall be claimed from the user by the performer or by the producer or by both. The single equitable remuneration may be shared by agreement or domestic legislation may provide how the remuneration must be shared.

Given this modern environment it has started to make more sense for the activities of performers’ and producers’ CMOs to be merged into one organisation; the users are the same and the remuneration has to be shared so that it can be more efficient for one organisation to collect and to manage the distribution of the remuneration to the different parties. The efficiencies also benefit the user who only has one organisation to pay. Even in cases where there are two separate CMOs, they can collect jointly but distribute separately. This is the case for instance in Kenya with Kenya Association of Music Producers (KAMP) or even the case of Sweden with SAMI and the Swedish Group of IFPI. In the Kenyan context this blogger has previously discussed the amalgamation of KAMP and PRiSK here.

Therefore, to the extent that Chebet argues section 30A creates a conflict with the WPPT in that the latter does not allow compulsory licensing, this blogger concurs fully with Chebet. However, the point of departure with Chebet’s views is that this form of mandatory collective management through compulsory licensing amounts to a limitation of Article 40 of the Constitution (Protection to right to property) that is not in accordance with Article 24 (Limitation of rights and fundamental freedoms).

Compulsory licensing is the term generally applied to a statutory license to do an act covered by an exclusive right, without the prior authority of the right owner. This concept of compulsory licensing in copyright is derived from patent law, where the owner is forced to face the competition in market, similarly in copyright law; the copyright holder is subjected to equitable remuneration. One of the main reasons for introducing non-voluntary licenses is where the users of certain works have access to these works on terms which are known in advance and it is not practicable for them to locate right owners and obtain an individual license from them.

According to copyright scholars, legislative arrangements for equitable remuneration occupy a position on the continuum of copyright and author’s right somewhere between exclusive rights and absolute exemptions. In strictly economic terms, these arrangements reflect the legislator’s judgment that to extend an exclusive right would hamper socially important uses, typically because of the high transaction cost of negotiating a license, but that to make the use entirely free would seriously impair needed rewards for the author. Compulsory licenses trade the bargaining power conferred by the prospect of injunctive or other coercive relief for a monetary award aimed at approximating the sum a reasonable licensee would in good faith offer and a reasonable copyright owner would in good faith accept.

Article 9(2) of the Berne Convention provides the legal basis for compulsory licensing in copyright law. The Article reads:

“It shall be a matter for legislation in the countries of the union to permit the reproduction of such works in special cases, provided that such reproduction does not conflict with the normal exploitation of the work and does not unreasonably prejudice the legitimate interests of the author.”
This provision provides the Convention’s exclusive basis for equitable remuneration and provides for the conditions which should be met before a member country can entirely excuse a use which includes the equitable remuneration and not prejudicing the reasonable interests of the author. Therefore this Article provides the so-called three (3) step test for compulsory licensing, namely exceptional circumstances, no conflict with the normal exploitation of the work and no unreasonable prejudice to legitimate interests of the author.

Article 11 bis (2) provides that:-

“It shall be a matter for legislation in the country of the Union to determine the conditions under which the rights mentioned in the preceding paragraph [11 bis (1)] may be exercised but these conditions shall apply only in the countries where they have been prescribed. They shall not in any circumstances be prejudicial to the moral rights of the author, nor to is right to obtain equitable remuneration which in the absence of agreement, shall be fixed by competent authority.”

Therefore in order for Chebet’s unconstitutionality argument to succeed, this blogger submits that the enactment of section 30A must be proved to be a violation of the Berne 3-step test in a manner that unreasonably and unjustifiably limits the rights enshrined under Article 40 as set out in Article 24.

Meanwhile, this blogger reiterates that the real elephant in the room is the government’s regulatory role vis-a-vis equitable remuneration.

In the UK, the Copyright Tribunal established under the Copyright, Patents and Designs Act, 1988 is empowered to determine the amount of equitable remuneration payable to performers where commercially published sound recordings of their works are performed or communicated to the public. In Australia, the Copyright Tribunal, established under the Copyright Act 1968, is similar in the scope of its jurisdiction to the 1988 UK Tribunal, including determination of remuneration to be paid in respect of certain uses which are subject to compulsory licenses.

In the US, the US Copyright Act 1976 created a Copyright Royalty Tribunal comprising five government-appointed Commissioners with a Chairman appointed annually. The Tribunal’s jurisdiction includes determining royalty rates payable under certain compulsory licenses, and the distribution of royalty fees deposited with the Register of Copyrights in respect to those compulsory licenses.

Meanwhile here in Kenya, the Competent Authority established under section 48 of the Act remains non-existent over a decade since the establishment of the Kenya Copyright Board (KECOBO). This situation is problematic as there are no mechanisms in place to monitor the practical implementation of the compulsory licences under section 30A.

Court Rules Public Performance and Communication to the Public Licenses Are Distinct Under Copyright

nairobi pacific hotels

On February 14, 2014 in the case of Nairobi Pacific Hotel vs KAMP & PRISK CMCC 7240 of 2013, the court dismissed an application filed by Nairobi Pacific Hotel seeking a grant of temporary injunction to restrain the Kenya Association of Music Producers (KAMP) and the Performers Rights Society of Kenya (PRiSK) from collecting fees with respect to their jointly-issued Communication to the Public license. A copy of the ruling is available here.

This court ruling creates an important precedent that a Public Performance License from the Music Copyright Society of Kenya (MCSK) is not sufficient for the protection of the rights of performers and producers represented by PRiSK and KAMP, respectively. In making its ruling, the court noted that KAMP and PRiSK are collective management organisations (CMOs) duly licensed by the Kenya Copyright Board (KECOBO) to collect license fees from the users who broadcast or communicate sound recordings and audiovisual works to the public.

The court further finds that the clean hands doctrine applies since the user in question, Nairobi Pacific Hotel, had been implored upon to obtain a Communication to the Public License but neglected and/or refused to do so solely on the basis that the latter had already obtained a Public Performance License from MCSK.

Comment:

This blogger supports the court’s ruling in this matter and applauds the related rights CMOs for successfully using litigation as a tool to enforce and protect the rights of their respective members.

The existence of the MCSK license and KAMP-PRiSK for public performance is premised on the definition of the “communication to the public” in the Copyright Act. This definition reads:

“communication to the public” means
(a) a live performance; or
(b) a transmission to the public, other than a broadcast, of the images or sounds or both, of a work, performance or sound recording;”

However the Copyright Regulations of 2004 provide the clearest definition of what amounts to “Public Performance” as it is licensed by MCSK for the rights under copyright and KAMP-PRiSK for the related rights.

Section 2 reads as follows:

“public performance” means –
(a) in the case of a work other than an audio-visual work, the recitation, playing, dancing, acting or otherwise performing the work, either directly or by means of any device or process;

(b) in the case of an audio-visual work, the showing of images in sequence and the making of accompanying sounds audible; and

(c) in the case of a sound recording, making the recorded sounds audible at a place or at places where persons outside the normal circle of the family and its closest acquaintances are or can be present, irrespective of whether they are or can be present at the same place and time, or at different places or times, and where the performance can be perceived without the need for communication to the public.

From the users’ perspective, they argue that public performance licensing by KAMP – PRiSK and MCSK “feels like double taxation since one is paying 3 different bodies licence fees for the same thing”. Herein lies the biggest challenge for CMOs: to successfully convince users that “music”, as they know it, is simultaneously categorised as three different subject matter under copyright law, namely “sound recordings”, “musical works” and “audio-visual works”. In this regard, this blogger has previously argued here that it requires a great deal of skill and salesmanship for licensing officers from the CMOs to convince users to take out their respective licenses.

In the present case of the KAMP-PRiSK license, the tariffs are based on the area in square feet of the business premises wwhere the sound recordings and audio-visual works are used. The tariff structure is available below:

PRiSK KAMP Communication to the Public CTP license tariffs

In disputes between CMOs and users, the elephant in the room always seems to be the question of CMO regulation, in particular the reasonableness of the license terms and conditions imposed by CMOs on users. As previously discussed here and here, this blogger has noted that there is an increase in complaints by users against CMOs relating to license fees, in addition to the manner in which license fees are collected from users.

In the case of KAMP and PRiSK, CMO-user relations appear to have been complicated further with the enactment of section 30A in the 2012 Amendments to the Copyright Act. It would seem that Section 30A has introduced a system of compulsory licensing with the introduction of the right to equitable remuneration for use of sound recordings and audio- visual works. However, the term “equitable remuneration” remains undefined and where users of sound recordings and audio- visual works may have complaints against KAMP and PRiSK, the Competent Authority is not yet in operation to give directions on these matters.

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