#ipkenya Monthly Review (July 2014)

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This past month, we discussed several interesting developments and aspects of intellectual property (IP) in Kenya including: the Industrial Court decision in Gwer & 5 Others v. Kenya Medical Research Institute (KEMRI) & 2 others; the timeframe for the establishment of the Intellectual Property Office of Kenya, the revised Draft National Music Policy and the newly appointed Music Policy Committee and the inclusion of the artist’s resale right in Kenya. Outside Kenya, we discussed the Aereo and Vodacom Please Call Me decisions by the US Supreme Court and South African High Court respectively.

As always, your comments and views on these blogposts are more than welcome. This month was particularly memorable for this blogger, who was recognised among the Top 50 Most Influential People in IP worldwide!

In addition, this blogger was fortunate to travel to the Maasai Mara last week. Below are some of the photos from this memorable trip:

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KEMRI Ordered to Pay Researchers 30 Million Shillings for Constitutional Infringement of Intellectual Property Rights

KEMRI-Wellcome Trust Research Programme KWTRP

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

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

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

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

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

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

(iv) frequent unfair administrative action

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

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

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

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

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

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

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

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

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

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

Comments:

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

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

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

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

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

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

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

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

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

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

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

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

Artist’s Resale Right: How Kenya Can Make History in Africa

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

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

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

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

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

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

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

Comments on the Revised Draft National Music Policy

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

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

Read the full article here.

Insights on the Proposed Intellectual Property Office of Kenya

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

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

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

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

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

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

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

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

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

July 2014: Enactment of enabling legislation

September 2014: Constitution of the IPOK Board of Directors

October – November 2014: Recruitment of IPOK Director General

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

December 2014 – May 2015: Staff Placement

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

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

Intellectual Property in the Employment Context: South African High Court Dismisses “Please Call Me” Case Against Vodacom

Vodacom Tower, Johannesburg RSA - by finepixtrix

Recently, the much-awaited judgment in the case of Makate v Vodacom (Pty) Limited [2014] ZAGPJHC was delivered by the South African High Court in Johannesburg. The case revolves around the “Please Call Me” (PCM) service whereby Vodacom allowed its subscribers to send FREE messages to anyone on all South African networks, asking them to call you. The idea behind this nifty service come from a former Vodacom trainee accountant Nkosana Makate who went to court seeking compensation from the telecommunications giant for the idea.

The thrust of Makate’s case was to enforce against Vodacom an oral agreement in terms of which the Vodacom (which was ostensibly represented by Geissler, as Makate claims) would take and test the idea and if it was successful, pay Makate an amount to be negotiated between by both parties, but which represented a share of the revenue generated by the product that was to be developed based on the idea.
The court, in its judgment, was prepared to accept an agreement with Geissler on the terms alleged by Makate had been concluded. However, the court ultimately held that Vodacom was not bound by the agreement entered into by Geissler since Makate had not shown that Vodacom made any representations as to Geissler’s authority to represent Vodacom in conclude the agreement or, even if it had, that the representations were such that Makate should reasonably have acted upon them. The court also found that Makate’s claim was time barred i.e. the debt claimed by Makate had prescribed in terms of the South African Prescription Act. This blogpost considers several intellectual property (IP) issues related to this case and possible lessons for Kenyans who come up with creative and innovative ideas within the course of employment.

Read the full article here.