Non-Existent Intellectual Property Financing: Blame it on the Banks or on the Innovators?

Recently, the Business Daily and the Star published articles discussing the boom of mobile apps in Kenya and how young developers are finding it hard to access financing to support their software innovations.

While the Business Daily points an accusing finger at the banks for not appreciating the value of IP, the Star argues that the problem is not the banks but the software developers themselves and their lack of understanding of the basics of running and building a business, including understanding your target market and how to reach it.

Below is an except from the Business Daily article: “Breaking into mobile apps market an uphill task for young developers”:

“Hardly a day passes without a news report that a new mobile application has been developed in Kenya. However, behind this success is the untold story of the challenges that developers face as they seek to break into the market and access funding to develop and market their inventions. Top on the list is lack of support from corporate organisations.
Most of the developers are either college students or fresh graduates and often lack the money to complete their projects. To compound this is the fact that financial institutions don’t offer loans for software enterprises since most banks are yet to appreciate that intellectual property is something they can put money on.”

In a response to this article, the Star published a piece titled: “Why It’s So Hard for Software Developers To Get Loans” which reads in part:

“the [Business Daily] article cites ‘lack of support from corporate organisations’, specifically that banks don’t offer loans for software enterprises because they don’t understand the value of intellectual property. That is not really correct: Banks will not finance straight-from-uni-developer start ups, mostly because banks just don’t finance start ups in any industry, period. They do business with software enterprises, but a straight-from-uni-developer start up – or more specifically, a mobile app – is not an enterprise.”

Both these articles bring out several key problems that IPKenya believes should be underlined:

1. The problem of IP valuation: The assumption here is that banks and other financial institutions would only be willing to loan money to an inventor if the inventor can put a monetary figure to its registrable IP. As we’ve discussed before, Kenya does not have any credible institutions that carry out IP valuations.

2. The lack of marketing and branding: The argument here is that banks and other lending institutions would be more willing to invest in a mobile app that has a brand name backed by creative and agressive marketing strategies. This view of the role of trademarks in Kenyan software development was well articulated in a recent article on the patentability of MPesa by Isaac Rutenberg on the Afro-IP blog.

3. The lack of a business-minded approach to software development: As the Star article above rightly notes, software developers, by and large, lack business know-how and the entrepreneurial skills necessary to develop software and mobile application solutions that respond to the needs of their target market. The examples cited in this article show that software developers failed to carry out any sort of market research, market survey or market sampling. This isn’t just a problem for software developers but indeed creators and innovators in all areas of IP. Indeed, there is a growing need to educate IP owners on basic business skills and practices to enable them to fully commercialise their IP. New business models with respect to various forms of IP have arisen and IP owners must be alive to the practicalities of their consumer markets so as not to be exploited or to make financial losses.

In sum, while it is promising to see young Kenyans leading the way in software development, IPKenya believes that these developers must not neglect the business aspect of innovation and therefore they must work towards building their products, brands and businesses in order to attract real investment and financing.

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Blast from the Past: Nairobi Treaty on the Protection of the Olympic Symbol

The Olympics are finally here!

IPKenya reckons now is as good a time as any to remind everyone that Nairobi once hosted an important international conference on 26 September 1981 which culminated in the adoption of the Nairobi Treaty on the Protection of the Olympic Symbol. The Nairobi Treaty entered into force in September 25, 1982.

A full copy of the Nairobi Treaty text is available here.

As one of the most recognisable logos in the world, all States which are party to the Nairobi Treaty are under the obligation to protect the Olympic symbol against use for commercial purposes without the authorization of the International Olympic Committee. The Olympic symbol consists of five interlaced rings: blue, yellow, black, green and red, arranged in that order from left to right. It consists of the Olympic rings alone, whether delineated in a single color or in different colors.

Any State member of WIPO, United Nations or the International Union (Paris Union) for the Protection of Industrial Property may become party to this Treaty.

The Treaty provides that all State parties must refuse or invalidate the registration as a mark and to prohibit by appropriate measures the use, as a mark or other sign, for commercial purposes, of any sign consisting of or containing the Olympic symbol, as defined in the Charter of the International Olympic Committee, except with the authorization of the International Olympic Committee.

An important effect of the Nairobi Treaty is that, if the International Olympic Committee grants authorization for the use of the Olympic symbol in a State party to the Treaty, the National Olympic Committee of that State is entitled to a part in any revenue the International Olympic Committee obtains for granting the said authorizations.

With that said, IPKenya would like wish all the olympians well, particularly those representing Africa’s 53 countries.

Let the Games of the XXX Olympiad begin!

“Sue, Baby, Sue!”: Miguna’s Peeling Back the Mask and the Digital Copyright Infringement Debate

This wouldn’t be the first, second or third time that this blogger has written on the collision between politics and intellectual property. This time, we focus on a controversial new book called “Peeling Back the Mask: A Quest for Justice in Kenya” penned by Mr. Miguna Miguna, a former close aide to Prime Minister Raila Odinga. As many may be aware, on August 4 2011, Miguna was unceremoniously suspended as the PM’s senior Advisor on Coalition, Legal and Constitutional Affairs. Four months later, Miguna was offered reinstatement but categorically turned down the PM’s offer.

A week ago, Miguna Miguna launched “Peeling Back the Mask” which his publishers, Gilgamesh Africa Publishing Ltd. based in London have previewed on their site:

“In his explosive new memoirs, Peeling Back the Mask, Miguna Miguna exposes Mr Odinga’s lacklustre leadership – questioning his progressive credentials and claim that he is an agent of change. The book presents a true insider’s account of the intrigues, discussions and power plays that have occurred in Kenya’s “corridors of power” in recent years. The book depicts a troubled and cowardly leadership undeserving of the praise and attention of recent years. It is a must read for everyone interested in social justice and good governance in Africa.”

In just over since six days since the book’s release, Miguna and his family’s life has been threaten severally, angry protesters in Kisumu County have burnt an effigy of Miguna, the Director of Public Prosecutions has ordered the Commissioner of Police to investigate some of the damaging claims made by Miguna, not to mention the mounting pile of pending libel suits against Miguna by those adversely mentioned in the book.

This blogger has been keenly following this ‘Miguna Storm’ as it moves from criminal law to constitutional law to defamation law to contract law and now it has entered the realm of intellectual property law. Today, local media reports indicate that Miguna intends to sue Nation Media Group for copyright infringement of his book, which leaked online 3 days ago and has been hosted on various sites including blogger Robert Alai’s BidiiAfrika.

The question on everyone’s mind must be: Would a copyright infringement suit against NMG be successful?

In an interview today with local media, Dr. Marisella Ouma, Executive Director of KECOBO, addresses Miguna’s protest over copyright infringement of his book and clears up important aspects of copyright law in Kenya. In the same vein, IPKenya would like to quickly throw in his two cents on this debate.

Why is Miguna suing NMG?

A basic understanding of copyright law tells us that Miguna and Gilgamesh Ltd. are the copyright owners of the book as author and publisher, respectively. Therefore Miguna and Gilgamesh Ltd. can sue any person or entity that does anything which is reserved as part of the exclusive rights of a copyright owner including: “reproduction in any material form of the original work or its translation or adaptation, the distribution to the public of the work by way of sale, rental, lease, hire, loan, importation or similar arrangement, and the communication to the public and the broadcasting of the whole work or a substantial part thereof, either in its original form or in any form recognizably derived from the original” (see section 26 of the Kenya Copyright Act, 2001)

Therefore obtaining a .pdf copy of a book and uploading it online aka ‘leaking it’ would amount to ‘reproduction’ and/or ‘distribution’ as envisaged in the Copyright Act (needless to say, our Act continues to play catch-up with technological developments). Also, this would mean that even IPKenya and others, who received a .pdf copy of this book via email and subsequently forwarded that email to others, could be guilty of copyright infringement. However, law school teaches us that the plaintiff in any case always sues the deepest pockets! So, I guess we’re all safe, except NMG of course. Without doubt, no pockets are deeper than NMG’s and the existence of an underlying agreement between Miguna and NMG makes NMG the most likely culprit of the book’s leak.

How does Miguna go about proving copyright infringement on the part of NMG?

There are two types of copyright infringement: primary or direct infringement and secondary or indirect infringement. Primary or direct infringement is where the infringer commits any of the acts specifically designated in section 26 of the Act as acts, the doing of which, or the authorisation of which, in relation to the particular work is the sole prerogative of the copyright owner.
An infringement of copyright is indirect or secondary where the infringer, although not actually committing any of the acts designated in section 26, still knowingly does something to further the commission of any of these acts.

Therefore to commit direct/primary infringement, the infringer does not need to know that he/she/it is infringing copyright. Thus, knowledge or ‘mens rea’ (‘guilty mind’) is not a requirement for primary/direct infringement but it is however a requirement for secondary/indirect infringement.

A three-pronged methodology helps in proving infringement: a) Similarity, b) Causal connection between original work and infringing copy; c) Copyrightability of infringed work:

a) Similarity between original work and infringing copy: the question to be asked here is whether there’s objective similarity between the electronic copy of the book given to NMG by Miguna strictly for serialisation purposes and the .pdf copy that is doing the rounds on the internet?

b) Causal connection between original work and infringing copy: the first question to be asked here is whether Miguna can prove that NMG had access to his book? The answer is clearly, yes. NMG and Miguna entered into a serialisation agreement whereby NMG received a copy of the book from Miguna for purposes of publishing a series of articles on the book prior to its launch. the second question is whether Miguna can prove that NMG either directly or indirectly are the source of the book leaking on the internet?

c) Copyrightability of the original work: the question to be asked here is whether Miguna’s work is itself copyrightable? Again the answer is clearly, yes. Under copyright law, the book is considered as literary work (irrespective of its quality) and is protected as such.

What is Miguna’s likelihood of success in a copyright infringement suit against NMG?

As explained above, the onus of proof is squarely on Miguna to show that NMG were responsible for the book finding its way online without the publisher’s or his permission. An onerous burden indeed!
If Miguna is successful in his copyright infringement suit, he may be handsomely rewarded in terms of damages. Earlier, Robert Alai tweeted that over 42,000 copies of Miguna’s book have been illegally downloaded from his site alone resulting in over 138.6 million shillings in losses from book sales (the book is retailing at about 3,300 shillings in bookshops).
Presently, this number of downloads must be well over 100,000.

This blogger is not sure whether to believe that Miguna is on holiday (as he claims) or he’s gone into exile (as is widely believed) but the book is clearly staying put and will be the subject of copyright for as long as his enemies or natural causes allow (plus fifty years, of course).

A Challenge for Law Schools in Kenya to Take IP Seriously

IPKenya would like to begin by echoing Article 40 (6) of the Constitution of Kenya which states:

“The State shall support, promote and protect of the intellectual property rights of the people of Kenya”

This post is a call for a different interpretation of this article that puts us, intellectual property scholars and students, at the heart of it’s implementation.

It’s no secret that “the State” (in this case, our IP offices and other government agencies that deal in IP-related areas) is over-stretched, under-funded and ill-equipped as it takes on the daunting task of addressing all the issues faced in the changing world of Intellectual Property and relate these to the needs of society, IP holders and consumers.

Attend any forum, workshop or meeting in Kenya where IP is discussed and you will notice how every participant is quick to blame the IP Offices for piracy and counterfeiting due to what they term as “poor” policing and enforcement of IP rights within the country. While this may be true in principle, we conveniently choose to ignore the reality facing these IP Offices. The public servants working in the IP offices are never more than 100 in number and yet they are expected to serve a country of close to 50 million inhabitants. These public servants are required to attend to the day-to-day administration of the secretariat; receive complaints; carry out investigations; conduct raids; make arrests; prosecute cases in court; conduct awareness campaigns, training workshops, forums and seminars; liaise with government stakeholders and private entities, examine/verify applications for IP registration or filing; give IP advice to members of the public; assist members of the public in preparing certain applications for IP registration/filing; periodically review existing IP laws to ensure they are in up to date and relevant to changing times; register/file IP applications; deal with IP-related correspondences from members of the public; attend all local, regional and international conferences on IP; represent Kenya in high-level negotiations and formulation of IP instruments and policies, among many more.

Isn’t it high time we took some of this load of our IP Offices’ shoulders? Isn’t it time we stepped up and joined in since we all share the same desire for a balanced development of intellectual property law and policy in Kenya? Instead of always whining that the IP Offices are not doing enough to reduce piracy and fight counterfeiting, why not be part of the solution for a change?

The challenge before us is to find ways of supporting, promoting and protecting IP in Kenya. IPKenya believes that our law schools are a good place to start.

SUPPORT OF IP: Primarily through sustained scholarship, research, teaching and training in all areas of IP.

PROMOTION OF IP: Creating IP awareness and furthering the application and development of IP law in a wide variety of fields including business, science, engineering, commerce, law, banking, entrepreneurship and the arts.

PROTECTION OF IP: Ensuring that the development of IP laws and policy both domestically, regionally and internationally are in Kenya’s best interests.

In an ideal situation, IPKenya argues that IP Offices’ responsibilities should primarily be administration and enforcement of the various IP laws and policies in Kenya. However, IP Offices currently find themselves taking on more and more roles and are too thinly spread in as far as addressing their key statutory mandates. Hence the need for our law schools to rise to the occasion and assist IP Offices and the government as a whole so as to play a more meaningful role in the support, promotion and protection of the IP of the people of Kenya.

In this regard, IPKenya urges Kenyan law schools to borrow a leaf from our neighbours in South Africa:

University of Cape Town (UCT), Faculty of Law, Intellectual Property Law and Policy Research Unit:

 

Stellenbosch University (SU), Faculty of Law, Anton Mostert Chair of Intellectual Property:

 

Dear readers, what are your thoughts on this?

 

Finding a Balance in Software Copyright Litigation: Microsoft Cases in Nigeria and Kenya

 

Recently, IPKenya came across the Nigerian Court of Appeal’s decision in the case of Microsoft Corporation v. Franike Associates Ltd. Excerpts from this case are available here.

The Court of Appeal in this case was asked to overturn a Federal High Court decision which dismissed Microsoft’s copyright infringement claim on the following basis:

“the application of the said foreign copyright in Nigeria is subject to a reciprocal extension of protection in accordance with section 33 of the Copyright Act. And in the absence of which this court will not in my view exercise the requisite jurisdiction over the matter. This is premised on the fact that the exclusive jurisdiction of this court pursuant to section 251(1) (f) of the 1999 Constitution is only limited to the listed Federal Enactments and does not extend beyond copyright etc. other than those listed therein. In the instant case, the copyright sought to be protected was established pursuant to a law other than the Federal Enactments listed in Section 251(1) (f) of the 1999 Constitution. There is also nothing before the court to show that there is any reciprocal extension of protection of the copyright in question…”

The Court of Appeal actually upheld this ruling of the High Court; a ruling which clearly flies in the face of well-established international copyright principles, most notably the principle of national treatment.

Under this principle, foreign works are to be granted the same protection as local works by extension of the provisions of the Copyright Act. However in most Anglophone African countries this extension of protection is restricted to copyright protected works from countries that are party to international conventions to which the country in question is a party.

Fortunately, the Nigerian Copyright Commission has recently published a public notice where it rejects this decision of the Court of Appeal and properly states the true position of Nigerian copyright laws vis-a-vis US works:

“For the avoidance of doubt, the Commission hereby reaffirms that in addition to works authored by Nigerians and first published in Nigeria, section 5 of the Copyright Act (Cap. C28, Laws of the Federation of Nigeria, 2004) extends the provisions of the Nigerian Copyright Act to works from over 165 countries (the USA inclusive) that are members of the Berne Convention or other treaties or international agreements to which Nigeria is party.”

With the law firmly on its side, Microsoft will certainly seek to appeal this ruling. IPKenya however feels that the Court would do well to go beyond the present software copyright dispute and address the glowing elephant in the room: piracy. Software piracy on the African continent persists largely because consumers generally feel that genuine software prices are too high and thus prohibitive for most consumers. Software giants like Microsoft Corporation are often accused of not setting prices that reflect the purchasing power and average incomes of their clients in Africa but rather exploit their monopoly position to engage in price discrimination. In this regard, the IP system could be perceived as a tool of oppression that Microsoft and others use to get colossal sums in damages from courts.

Therefore, while the courts have an obligation to uphold the law and recognise the intellectual property rights of multinationals like Microsoft, there is a need to protect software infringers from being unnecessarily punished with hefty fines in the name of damages. In Kenya, the courts have taken it upon themselves on several occasions to step in and prevent Microsoft from using the court process to seek orders that may not be reasonable and/or fair to the opposing parties. (See: Microsoft Corp v. Microskills HCCC 833 of 1999 and Microsoft Corp v. Technoskills HCCC 323 of 1999). The rationale for this need for balance is enunciated in the case of Microsoft Corp. v. Mitsumi Computer Garage & Mitsuminet (Kenya) Ltd where Justice Ringera (as he was) stated:

“In the armoury of the law, there are many veritable weapons to fight injustice. One of the weapons at the court’s disposal is its inherent power to prevent abuse of its process.”

Poetic Justice: Dealing with Copyright Infringement, Plagiarism in Kenya

 

Last week IPKenya reported a recent High Court ruling in the case of Njeri Wangari & Another v. Oxford University Press (E.A) Ltd. [2012] eKLR and expressed consternation at the judge’s decision to dismiss the claims of copyright infringement. Although the court acknowledged that Njeri Wangari (KenyanPoet) was the copyright owner of the poem, it failed to award her any compensation for copyright infringement on the basis of a technicality.

In the aftermath of this ruling, it is now emerging that Oxford University Press East Africa’s illegal and corrupt practices not only include copyright theft but extend to large-scale fraud. BBC reports that Oxford University Press East Africa Ltd. (OUPEA) made improper payments to government officials for two contracts to supply text books in relation to two World Bank-financed projects. As a result, the World Bank has announced that OUPEA’s parent company, OUP has admitted misconduct on the part of its wholly-owned subsidiary and has agreed to make a payment of US$500,000 to the World Bank as part of a Negotiated Resolution. In addition, OUPEA will be banned from doing business with the World Bank for a period of three years.

Meanwhile back home, IPKenya believes that creative writers can learn from the experience of KenyanPoet and spread the word on the need to be proactive and vigilant in protecting and enforcing your intellectual property rights particularly copyright.

First and foremost, it is important to distinguish between plagiarism and copyright infringement.
The key distinguishing factor is the use intended. A copyright infringer copy-pastes, performs, broadcasts, reproduces, translates your work in order to derive some commercial benefit. On the other hand, a plagiarizer copy-pastes, performs,  broadcasts, reproduces, translates your work in order to assume your identity as the author for purposes of recognition and attribution. Therefore every case of copyright infringement can also be plagiarism but not all cases of plagiarism amount to copyright infringement. So the law rightly recognizes copyright infringement as a criminal offence but not plagiarism.

Plagiarism is however widely considered as unethical and is a serious offence in all institutions of learning as well as within most professions. Therefore the onus is on the copyright owner to show that the case of plagiarism complained of also amounts to copyright infringement by showing that the work is being used for commercial gain without the copyright owner’s consent.

The internet has become a double-edged sword for creators because uploading your work online increases your visibility but also puts you at risk of plagiarism and copyright infringement. As far as protection goes, creators of online digital works are encouraged to add a generic tag of “(c) (author’s name) + (year of publication) + All Rights Reserved” at the end of every work you upload online. Your contact details should also be easily accessible both on each individual work and on your site/blog in case attempts are made by a third party to contact you regarding consent to use your copyright work.

In the age of the internet, surveillance and monitoring of your copyright work has been made somewhat easier. For instance, using search engines to search for your name and/or the name of your work(s) allows you to track where and how your work has been cited, mentioned or even copied by others. In addition, most private users of digital copyright works could also serve as your eyes and ears and help you as the copyright owner spot unauthorised uses of your work(s) on the internet. It is important to remember that there are several types of uses of copyright work that are allowed under the ‘fair dealing’ provisions of our Copyright Act eg. criticism, review, scientific research, educational uses, private use and reporting of current events for as long as you as the author are acknowledged as such.