Controversial 2018 Proposed Amendments to The Anti-Counterfeit Act

2018 Amendments to Anti-Counterfeit Act Kenya ACA Bill

The Statute Law (Miscellaneous Amendments) Bill, 2018 seeks to make various, wide-ranging amendments to existing intellectual property (IP) law-related statutes. The Bill contains proposed amendments to the following pieces of legislation: The Industrial Property Act, 2001 (No. 3 of 2001), The Copyright Act, 2001 (No. 12 of 2001), The Anti-Counterfeit Act, 2008 (No. 13 of 2008) and The Protection of Traditional Knowledge and Cultural Expressions Act, 2016 (No. 33 of 2016). The Memorandum of Objects and Reasons for the Bill is signed by Hon. Aden Duale, Leader of Majority in the National Assembly and it is dated 29 March 2018. This blogpost will focus on the proposed changes to The Anti-Counterfeit Act.

Generally, the proposed amendments reveal that Anti-Counterfeit Agency (ACA) is making a power play to upgrade its status from an “Agency” to an “Authority”. Other Service and Regulatory State Corporations with the “Authority” status include Kenya Revenue Authority (tax administration), Capital Markets Authority (financial sector services) and Communications Authority of Kenya (telecommunications and broadcasting), among others. Curiously, the Bill proposes to establish an “Authority” but in the proposed amendments to sections 16, 23, 34 and 35 discussed below, ACA is referred to as the “Agency”. More fundamentally, this power move by ACA brings to mind the recommendation by the Task Force on Parastatal Sector Reforms to merge all intellectual property (IP) administration and enforcement organs, including ACA, into one entity. It was expected that ACA’s parent ministry which also oversees Kenya Industrial Property Institute (KIPI) would take the lead in pushing for this merger of IP agencies.

In section 16, the Bill proposes that no claim under the Act shall be brought against ACA for any alleged damage to or loss of any goods after the expiry of a period of twelve months from the date of the seizure, removal or detention of the goods, as the case may be. This proposal appears to be an unjustifiable reduction of statutory time periods to bring certain actions guaranteed in the Limitation of Actions Act.

There is a curious proposed amendment to section 23 of the Act which states that: ‘An inspector shall have the power to investigate any offence related or connected to counterfeiting notwithstanding that such an offence is not expressed as such under the provisions of this Act.’  It is not clear why ACA inspectors would need such broad investigation powers especially since such a blanket provision may be readily open to abuse.  Similarly, it is proposed that any magistrate may issue a warrant valid for an entire month authorising an ACA inspector to use force to enter any premises.

In section 32, the Bill proposes the introduction of seven (7) new offences. Therefore, if enacted, it will be an offence for any person to:

(i) have in his possession or control in the course of trade any labels, patches, stickers, wrappers, badges, emblems, medallions, charms, boxes, containers, cans, cases, handtags, documentations, or packaging of any type or nature, with a counterfeit mark applied thereto, the use of which is likely to cause confusion, to cause mistake, or to deceive;

(ii) aid or abet or conspire in the commission of any offence under the Act;

(iii) import into Kenya, any goods or items bearing a trade mark, trade name or copyright that has not been recorded with ACA;

(iv) import into Kenya, in the course of trade, any goods or items except raw materials that is unbranded;

(v) fail to declare the quantity or the intellectual property right subsisting in any goods being imported into the Kenya;

(vi) falsely declare the quantity or the intellectual property rights subsisting in any goods being imported into Kenya; or

(vii) import into or transit through Kenya any labels, patches, stickers, wrappers, badges, emblems, medallions, charms, boxes, containers, cans, cases, handtags, documentations, or packaging of any type or nature, with a counterfeit mark applied thereto, the use of which is likely to cause confusion, to cause mistake, or to deceive.

The proposed new definition of ‘counterfeit mark’ read with the offences (i) and (vii) above is problematic for at least two reasons. Firstly, such marks may created and used for the purpose of satire, parody, criticism or other related purpose. Secondly, ACA ought to be required to prove that such application was made knowingly in the course of trade.

The proposed offence (iii) alludes to the introduction of a new statutory requirement that all persons importing goods into Kenya bearing a trade mark, trade name or copyright must have such IP recorded with ACA. The requirement for recordation of copyright is wholly inconsistent with domestic and international copyright law and demonstrates a fundamental misunderstanding of the basic principles of IP. This new requirement of trade mark and copyright recordation is dealt with in the context of the proposed section 34B below. At this juncture, it must be noted that these proposed amendments to sections 32 and 34 were termed as a ‘recipe for chaos’ by former KIPI Managing Director, Dr. Henry Mutai while current Kenya Copyright Board (KECOBO) Executive Director, Mr. Edward Sigei states here that the copyright administrator was ‘not consulted’, that the proposals are ‘against international practice’ and that the proposals would ‘be challenged’.

With regard to the proposed offence (iv), it is not entirely clear what the importation of ‘unbranded’ goods and items means and why this should be prohibited by IP law. Mr. David Njuguna, Manager, Patents at KIPI notes that this proposal would have an adverse effect on ‘plain packaging.’ Finally, with regard to the proposed offences (v) and (vi), it is not clear why IP law should require the declaration of the quantity being imported into Kenya. The proposed new definition of ‘consumer’ read with proposed amendment to section 33 suggest that ACA seeks to donate unto itself a consumer protection mandate that is already provided for to other state entities under the Consumer Protection Act, the Competition Act and other laws.

Undoubtedly the most controversial proposed amendment to the Act is section 34B which introduces a framework for mandatory ‘recordation’ of trade marks and copyright with ACA. According to experts, the effect of this section would be to introduce ‘parallel registration of trade marks and copyright’ contrary to both domestic and international IP law principles. As such, it is viewed that this proposal has serious implications on the statutory mandates of KIPI and KECOBO as well as Kenya Plant Health Inspectorate Service (KEPHIS). It is not clear why ACA would want to brazenly grab the mandates of the copyright, trade mark and plant breeders rights offices, especially since it does not have any expertise or resources to carry out those administrative IP functions. For instance, in the context of trademarks and plant breeders rights, it is noted that KIPI and KEPHIS have employed and trained dozens of examiners as well as other personnel who serve as assistants to the respective Registrars. In addition, it is apparent that the effect of the proposed system of parallel IP registration of trade marks, copyright and plant breeders rights will significantly increase the cost of doing business in Kenya.

 

 

Advertisements

One thought on “Controversial 2018 Proposed Amendments to The Anti-Counterfeit Act

  1. ANTI-COUNTERFEIT AGENCY RESPONSE

    (a) The proposed amendments do not have any negative impact on the mandates of KIPI and KeCoBo. On the contrary, they will enhance their respective mandates.

    The principal mandate of KIPI is to, inter alia, register intellectual property rights like trademarks. The proposed amendments will compel IPR owners to comply with the statutes administered by KIPI by not only making fresh registrations but making timely renewals of e.g. trademarks in active use.

    On KeCoBo, the proposed amendments will, in our view, enhance their ease of enforcing copyrights and related rights by ensuring ready availability of information on IPRs imported into the country across the land borders. ACA and KeCoBo actively collaborate in the enforcement of IP especially copyrights.

    (b) The proposed amendments are meant to enhance ease of doing business.

    “Ease of doing business” has various components and one of them is conducive environment necessary to ensure fair competition and trade practices. Counterfeiting leads to unfair competition in the market place and generally drives away legitimate businesses since it’s an integral aspect of illicit trade.

    The other component of “ease of doing business” is investment climate. Investors will not come to a market where counterfeiting is rife. The proposed amendments aim to keep away counterfeit goods from our borders with the aim that investors will set up in Kenya. You will recall that some investors have closed shop citing, inter alia, rampant counterfeiting that makes their sales figures unsustainable.

    The biggest source of counterfeit goods, from empirical data, is imports. To ensure fair trade and competition among others, the import of counterfeit goods must be actively curtailed. The proposed amendments aim to achieve that.

    (c) On international best practice, we have borrowed from other jurisdictions especially the United States of America which has a robust recordation system administered by their Immigration & Customs Enforcement (ICE).

    Enforcement of intellectual property rights is hinged principally on being in possession of information of the active rights in use, their owners and the cooperation of those owners. The proposed amendments will ensure that the Agency and other Government agencies in general with mandate on matters counterfeiting will be in possession of information on actual goods being imported into the country and other details like registration status of trademarks.

    This available information will be a powerful tool in ensuring enhanced effectiveness and efficiency of all inspectors and law enforcement agencies in enforcing measures to combat counterfeiting in the country especially imports.

    I trust that this answers your queries and that you will partner with us to support the proposed amendments with the result that the fight against counterfeiting will be enhanced and taken a notch higher.

    J.O. Adera
    Deputy Director Enforcement & Legal Services
    Anti – Counterfeit Agency

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s