Editor’s note: This article is a commentary on the LSK CLE on Competition and Consumer Law on Feb 8, 2014 at the Hilton, Nairobi. Audio recordings of the various presentations made during the CLE have been uploaded here.
From an intellectual property (IP) perspective, the enactments of the Competition Act, 2010 and the Consumer Protection Act, 2012 have played a major role in balancing the interests of IP owners and IP users in Kenya. The Competition Act is a broad piece of legislation as it seeks to promote and safeguard competition in the economy whilst protecting consumer rights. The Consumer Protection Act was enacted with a view to consolidate various consumer protection provisions scattered in several pieces of legislation. In this regard, the 2012 Act governs the protection of the consumer and aims to prevent unfair trade practices in consumer transactions.
In this discussion of how IP intersects with consumer protection law and competition law, the point of departure is the Constitution of Kenya, 2010. The rights of the various categories of IP rights holders are guaranteed under Article 11, 40 and 69 of the Constitution, whereas the rights of IP rights licensees as users are guaranteed under Article 46 of the Constitution.
However it is important to note that, under Article 24 of the Constitution, none of these rights enshrined in the Bill of Rights are absolute in nature. This Article provides that a right in the Bill of Rights can be limited by law where that limitation is reasonable and justifiable in an open and democratic society, taking into account certain factors relating to the nature, extent, importance and purpose of the limitation.
In this connection, it is submitted that the Competition and Consumer Protection Acts introduce several limitations to the rights of IP owners, discussed below.
In the Competition Act, restrictive trade practices are defined to include any agreement, decision or concerted practice which amounts to the use of an intellectual property in a manner that goes beyond the limits of legal protection. However the Act provides for the grant of exemption for certain restrictive practices in respect of intellectual property rights. This blogger wonder whether de jure monopolies such as collective management organisations would be required to apply and obtain such exemptions.
In addition, the Act defines the abuse of dominant position to include abuse of an intellectual property right. This latter point is discussed by Guserwa, SC at 4:37 in the audio recording below, labelled: “Competition Law Issues in the Legal Profession”.
With regard to the provisions on extra-territorial operation and mergers in the Act, it is important to note the use of the word “asset” which is defined in section 2 as follows:
” “asset” includes any real or personal property, whether tangible or
intangible, intellectual property, goodwill, chose in action, right, licence, cause
of action or claim and any other asset having a commercial value;”
Another important section of the Act is part VI which deals with consumer welfare. This blogger submits that these consumer welfare provisions may have the effect of limiting some of the rights enjoyed by IP owners. These provisions are further enhanced by the Consumer Protection Act. Therefore it is noteworthy that the provisions in the Competition Act relating to false or misleading representations and unconscionable conduct are covered in the provisions relating to unfair practices under the Consumer Protection Act.
From an IP perspective, the consumer law provisions in these two Acts interact with IP at both international and national levels. At the international level, these consumer law provisions give effect to Kenya’s obligations under the Article 10bis of the Paris Convention. These obligations are reinforced by Article 2 of the TRIPs Agreement. At the national level, these consumer law provisions give effect to three IP legislations, namely the Copyright Act, the Trade Marks Act and the Anti-Counterfeit Act. In this context, this blogger argues that the definition of “supplier” in the Consumer Protection Act is broadly defined such that it includes owners of IP rights. Therefore the obligations and duties imposed on suppliers can therefore be extended to IP owners in their normal course of trade.