Very Awkward Interview on Music Copyright & Piracy on KTN Africa Speaks

 

Along with KECOBO’s bad decision not to attend the interview, this blogger was left with several other questions after watching the above full length video clip.

1. Was there any mention or explanation of KECOBO’s role as regulator of collective management organisations (CMOs)? And how this role could impact both positively and negatively on the music industry?

2. Was there a clear distinction made between:
– the benefits of depositing one’s work at KECOBO for registration?
– the benefits of declaring one’s work at a CMO for purposes of membership (which may entail further entitlements such as royalties, centralised rights clearances and policing of rights)?

3. Was the issue of the internet as a double-edged sword (music distribution vs music piracy) addressed (as brilliantly brought out in the Salif Keita clip)?

4. Was there any mention of the role of KECOBO in fighting piracy through enforcement actions and prosecutions arising from the various offences created under the Copyright Act? And how this role could impact both positively and negatively on the music industry?

5. Is “having one CMO” (whatever that means) the only solution available to the current problem of unlawful competition and unethical practices among the three music CMOs?

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Kenya Copyright Board and Collecting Societies: Myths and Facts

Kenya Copyright Newsletter 8th Edition 2013

The subject of this article is to critically analyse some of the questionable statements made by KECOBO in the latest edition of its newsletter, “Copyright News”. This particular edition is themed: Collective Management Organisations (CMOs). As many may know, there are currently four registered CMOs in Kenya namely (from oldest to youngest): the Music Copyright Society of Kenya (MCSK), the Reproduction Rights Society of Kenya (KOPIKEN), the Kenya Association of Music Producers (KAMP) and the Performers Rights Society of Kenya (PRiSK).

In a previous article here, this blogger commented on KECOBO’s poor performance in licensing and supervision of CMOs. Therefore this recent publication by KECOBO is useful in identifying certain areas of concern in the regulation of CMOs.

Take for instance, the statements on page 4 made by KECOBO’s second-in-command, Mr. Edward Sigei:

In the last few years, there has been some progress and a few of setbacks in this area [regulation of CMOs] as can be seen elsewhere in this publication.

One wonders why no mention is made of KECOBO’s deregistration of MCSK in 2011 and the ensuing court battle spanning over a year. One may also be curious to know why KECOBO fails to address the increasing reports of anti-competitive and/or unethical practices by the three CMOs operating within the music industry namely, KAMP, PRiSK and MCSK. How does KECOBO propose to deal with this emerging issue?

In this regard, this blogger submits that competition between CMOs may provide the solution to increase their productivity and efficiency. The one society per category of works rule entrenched in the Act ought to be amended so as to allow other entrants in the collective management business. This move would ensure that members and users alike benefit more from the collective administration of copyright.

Currently, there is a popular push for further reform in the sector to strengthen the oversight role of the Kenya Copyright Board in the absence of vibrant membership within the CMOs.

The absence of a vibrant membership within CMOs is due to ignorance. CMO members may not be fully aware or fully appreciative of their power as shareholders in the CMO. The creation of this awareness or appreciation among these members ought to be stated openly and clearly as an integral part of KECOBO’s outreach and sentisation agenda in collaboration with the CMOs.

Users generally complain of arbitrary license hikes to already high tariffs and they are subsequently demanding controls. Small kiosks and shops are being threatened thereby.

One of the novel features of the revised 2001 Copyright Act was the Competent Authority whose mandate includes reviewing CMO tariffs. However KECOBO has not pushed hard enough or fast enough for the Government to set up this Competent Authority. This Authority, once fully in place, would act as a Copyright Tribunal to hear and determine cases brought against CMOs by users of copyright works.

Drawing from this campaign to reform the law and recent developments globally, some of the legislative interventions under consideration include:

• Empowering the Kenya Copyright Board to order forensic or other audit on CMOs based on credible information

Who is to bear the costs of KECOBO’s decision to order forensic and other audits of CMOs where these audits are treated separately from the normal audits carried out by CMOs in every financial year? Will the members of the CMO still have a final say in the firm of auditors to be appointed?

• Introduction of the Attorney General’s power to approve and review tariff and to exempt small businesses from time to time.

Why not empower the AG to examine the entire licensing system including terms and conditions of license agreements as well as licensing procedures?

• Empower the Kenya Copyright Board to disband CMO Boards in cases of gross mismanagement and call for fresh elections and/or disqualify outgoing Board members.

Such a statutory power to disband CMO Boards by KECOBO ought to be carefully worded and exercised sparingly. For instance, in section 76 of Uganda’s Copyright Act, the Registrar of Copyright is empowered to order the cancellation of registration of a CMO after the findings of ad-hoc committee of inquiry or inspection or an application made by two-thirds of the members of a CMO.

(…)
• Reconsider utility of Section 38(2) of the Copyright Act in view of the rising cases (sic) alleged harassment arising out of its enforcement.

This section deals with the restricted act of public performance in copyright and related right in a musical work and sound recording, respectively. This section creates the offence of wilfully causing a public performance without the authorisation of the rights holders in the works. It is this blogger’s opinion that rights holders or their respective CMOs have the right to enforce this provision and pursue criminal action against all infringers under this section. Such infringers include all commercial premises, public service and commercial vehicles, telecomunications companies, broadcasters, content service providers and premium rate service providers, operating countrywide.

However CMOs lack trained prosecutors to deal with copyright infringement cases brought forward by CMOs as complainants. In 2012, the Director of Public Prosecutions appointed five (5) individuals employed at KECOBO to serve as public prosecutors for the purposes of cases arising under the Copyright Act. These prosecutors are required to handle all copyright infringement cases countrywide, including infringement cases brought by CMOs. To date, KECOBO has not provided any guidance or assistance to CMOs in prosecuting cases arising out of section 38(2) of the Act.

Let’s now consider some of the statements made by the KECOBO Chief Executive, Dr. Marisella Ouma on the subject of CMOs in Kenya.

On page 5 of the Newsletter, she states:

Their [CMOs’] licences are renewable annually subject to each CMO fulfilling their obligations under the Copyright Act, Companies Act as well as the implementing regulations.

From a practical point of view, the duration of the CMO license ought to be reviewed. One calendar year is too short a period to adequately assess the performance of a CMO. This reality is compounded by the statutory requirement to submit annual reports and audited accounts. How does KECOBO evaluate the performance of a CMO throughout an entire year on the basis of one single report submitted at the end of the licensing period?

A cursory look at the license conditions in other African countries is also instructive. In South Africa, a CMO license is granted for 5 years, whereas in Nigeria, the CMO license runs for 3 years and in Uganda, license duration is perpetual.

However, if KECOBO is adamant on retaining the one year license duration, the Act ought to be amended to require at the very least semi-annual if not quarterly reports from the CMOs.

The legality of KECOBO’s CMO Guidelines and Licensing Agreement for CMOs is worth mentioning. These two documents developed by KECOBO have no basis in the Copyright Act and yet they continue to be enforced against CMOs. Both CMOs and other key stakeholders ought to have a say on how KECOBO exercises its public powers in licensing and supervision of CMOs.

The collection of royalties has to be done within the provisions of the laws of Kenya. Thus the Collective Management Organisations have no right to confiscate any property such as radios, TVs and other equipment from users unless they have followed the due process for instance obtained a warrant or a court order to detain the property.

This blogger respectfully disagrees with this position. Section 39(2) states clearly that in addition to the copyright inspectors appointed under the Act, any police officer may perform the functions of an inspector under the Act. Section 41 vests powers of seizure on inspectors and section 42 deals with the powers of arrest. For the offence relating to public performance under section 38(2) of the Act, the prosecution must produce in court the device used to cause the public performance.

Looking generally at the Newsletter’s content, it may be of interest to note that the interviews with the CMO leaders do not disclose certain key information that would be of great use to the public. Apart from MCSK, none of the other CMO interviews deal with the issue of royalty distribution. The facts and figures on distributions vis-a-vis expenditures is an important area of collective management that ought to have been addressed across all CMOs interviewed.

Still on the question of partial interviewing, the responses by the star interviewee, Mr. John Katana are also questionnable. Firstly, this interview totally fails to address the responsibility of CMO members to hold their CMO accountable and the powers of members to take charge and make decisions on the governance and operation structures of their respective CMOs.
Secondly, the interview blatantly suggests that there is a standard worldwide cost-royalty ratio of 30:70 whereby 70% is paid to musicians and 30% is used for administrative costs. This blogger would be interested to know the source of this assertion.
Finally, the interview conveniently fails to disclose that the interviewee is a Board Director at KECOBO. Therefore any reasonable reader of the newsletter would read in between the lines of this interview and see clear statements made by KECOBO to advance its own agenda on regulation of CMOs.

In the final analysis, the total value addition of copyright-based industries to Kenya’s Gross Domestic Product (GDP) is estimated to be over Kshs. 85.21 Billion. It is submitted that this fact underscores the important role played by KECOBO as the state agency responsible for the administration of copyright and related rights in Kenya. Part of this weighty mandate is the licensing and supervision of Collective Management Organisations (CMOs) who represent the bulk of Kenya’s creators and copyright owners.

Comparing Apples and Oranges: Faulu Kenya on Shaky Ground in Intellectual Property Suit Against Safaricom

safaricom_hq3

It was naive of the Plaintiff [Faulu Kenya] to suggest that it was the only entity to recognise the potential of the mobile phone platform to reach potential customers with banking products. – Faulu Kenya Deposit Taking Micro-Finance Limited vs Safaricom Limited HCCC No. 756 of 2012 at page 13.

This blogger has come across a recent High Court ruling in the Faulu Kenya vs Safaricom case. Faulu Kenya made an application for temporary injunctions to restrain the Safaricom from offering to its subscribers and the public generally, the cash saving and advance product called M-Shwari howsoever both during the pendency of its application and the entire suit. To recap briefly, the M-Shwari row arose late last year when Faulu Kenya claimed it was the first entity to come up with the idea of a mobile money service that allows users to save, borrow loans and earn interest using their mobile phones. As a result, Faulu Kenya moved to court to claiming that Safaricom had infringed former’s copyright rights in a concept paper containing the idea.

The Honourable Judge Havelock, in the present ruling, dismissed Faulu Kenya’s application with costs awarded to Safaricom. From an intellectual property perspective, Faulu Kenya appears to have exposed serious flaws in its copyright claim, including its understanding of rights under copyright and the offence of infringement. Therefore this blogger concurs with the ruling of the learned judge.

Comments:

A good starting point would be to examine each of Faulu Kenya’s submissions in this matter as summarised on page 11 of the ruling:

i. To the extent that the respondent has and offered to the market the offensive product, it infringes on the applicant’s [Faulu Kenya’s] copyright to the work.

The subject matter of Faulu Kenya’s rights under copyright is its concept paper which relates to the idea of a mobile money service that allows users to save, borrow loans and earn interest using their mobile phones. Therefore the question, one must ask is whether Safaricom have carried out any restricted act relating to the literary work claimed by Faulu Kenya?

In the opinion of this blogger, the fact that Safaricom has offered a product or service similar to the concept described by Faulu Kenya does not fall within the definition of infringement contained in section 35 of the Copyright Act.

ii. To the extent that the respondent has not evidenced having had the concept in the offensive product in the manner proposed by the applicant, prior to receiving the applicant’s proposal and concept on 25th February 2011, then it is more likely than not that the offensive product is a reproduction in a material form of the applicant’s concept and therefore an act of infringement of the copyright therein.

Faulu Kenya appears to be cleverly shifting the onus of proof from itself to Safaricom. However this blogger submits that the onus solely rests on Faulu Kenya using the popular three-pronged test for proving infringement, namely: (a) Similarity, (b) Causal connection between original work and infringing copy; (c) Copyrightability of the original work. Faulu Kenya ably deals with requirement (c) at pages 8 and 9 however as we have seen above, requirement (a) is absent since there are two separate copyrightable subject matter both relating to the same idea. The same reasoning could be extended to requirement (b). This requirement relates to the question of access, which presupposes that the original work and the infringing copy fall under the same category of work as defined in the Act.

All in all, this blogger submits that it is both factually and legally impossible for Faulu Kenya to claim that the Safaricom M-Shwari service is an infringing copy of its concept paper therefore this defeats any claim by Faulu Kenya on the grounds of intellectual property infringement.

Intellectual Property and Employment: Did Vodacom South Africa “Steal” Please Call Me From Ex-Employee?

Vodacom Tower, Johannesburg RSA - by finepixtrix

Many years ago, this blogger landed in South Africa as a wide-eyed 20-something law student. With a meager budget to survive on, many of my classmates and South African friends may have forgiven me for making abundant use of PCM. PCM is short for “Please Call Me”, a revolutionary service whereby Vodacom allowed its subscribers to send FREE messages to anyone on all South African networks, asking them to call you. PCM was a great way of getting in touch when you didn’t have any airtime to make calls or send SMSs. It suffices to say that this nifty PCM function really came in handy in cases of emergencies.

Presently, media reports indicate that Vodacom is embroiled in a David-vs-Goliath law suit with a former employee who claims that he came up with the idea of PCM and is now seeking compensation from the telecommunications giant. The ex-employee’s name is Nkosana Makate and from various media reports, this is what we know so far.

Read the rest of this article here.

Protection of “BASMATI” in Kenya as Trade mark or Geographical Indication?

Daawat-basmati-rice

In a recent ruling by the Registrar of Trademarks, it was found that the word BASMATI does not enjoy prima facie recognition as a geographical indication (GI) in Kenya therefore its registration is permissible as a trade mark. A full copy of this ruling available here.

In this matter, Krish Commodities Limited (the applicant) had applied to KIPI for registration of six marks all bearing the word BASMATI. The Agricultural and Processed Food Products Export Development Authority (APEDA), a statutory body under the Indian Ministry of Commerce which is primarily in charge of export and development of agricultural and processed food products, including BASMATI rice filed a notice of opposition. APEDA argued that BASMATI was a GI that specifically denoted “a special and unique aromatic long grain rice grown and produced in a specific region of the Indian sub-continent, at the foothills of the Himalayas and falling in India and Pakistan.”

Through its local counsel, APEDA argued that the applicant sought to benefit from the substantial reputation and goodwill built up in connection with the name BASMATI. In this connection, it was alleged that the proposed registration was meant to deceive the public into believing that the applicant had proprietary rights over the word and name BASMATI or to cause confusion in the minds of the public as to the origin of the goods, and that the application was likely to impair, interfere with or take unfair advantage of the distinctive nature of the GI BASMATI.

In response, the applicant claimed that APEDA lacked locus standi to institute opposition proceedings as it was not the owner of the mark as desired to be registered. Furthermore, the applicant contended that it was not claiming any exclusivity to the word BASMATI and had agreed to disclaim the use of the word BASMATI. In this connection, the applicant contended that the application was not to register the mark BASMATI on its own but for the registration of different marks consisting of a combination of words. It was further claimed by the applicant that the word BASMATI was a common everyday word in the food and rice trade.

In making his ruling, the Registrar identified several key issues for determination including: the locus standi of the opponent; the legal position regarding ownership of the mark BASMATI in Kenya and the status of the word BASMATI under Kenyan law. In the first instance, the Registrar found that APEDA as the opponent had the locus standi to bring the oppositions. However the Registrar found that APEDA had failed to establish any proprietary rights to the word BASMATI such as would enable it to prevent its registration as a mark by any other party. The Registrar also found that APEDA had not established that under Kenyan law the word BASMATI is a mark whose registration is prohibited by reason of its being a geographical indication.

Comments:

This blogger was particularly delighted by the Registrar’s fancy footwork in steering clear of the rice wars between India and Pakistan over the registration of BASMATI as a Trade mark or a Geographical Indication.

At the international level, it has been argued that not much has changed since the TRIPS Agreement and therefore GI owners like APEDA continue to struggle to protect names like BASMATI in a world with no uniform mechanism for protection of GIs.

At the national level, it clear that there has been increased awareness and protection of GIs, In the present case, the Registrar is fully cognisant of the government’s obligations under TRIPS but finds that APEDA failed to take necessary steps to secure its IP rights in the word BASMATI within Kenya. In particular, it is important to note the enactment of section 40A of the Kenya Trademarks Act which was made in conformity with TRIPS, specifically to cater for GIs. This provision provides that geographical names or other indications of geographical origin may be registered as collective trade marks or service marks.

The Rise in Intellectual Property Disputes in Kenya: Some Thoughts

copyright litigation cyanide and happiness

Recently, this blogger weighed in on the topic of the rise in intellectual property (IP) disputes in Kenya. This theme was also picked up by the Business Daily in their regular column here. For IP enthusiasts, these are exciting times in Kenya as new IP disputes are constantly reported. Here are some of this blogger’s thoughts on the subject in no particular order.

1. Public Awareness/Ignorance

Presently information can be disseminated faster, cheaper and more widely than ever before. From an IP perspective, this situation has resulted in an encouraging increase in public awareness about IP rights. The public is keen to fully understand the nature and scope of IP rights so as to effectively take steps to cash in on their creations, innovations and inventions. Public institutions, civil society organisations supported by main-stream media, private entities and individuals are all actively engaged in sharing as much information as possible on IP rights.

Read the rest of this article here