Goodwill as Constitutionally Protected Property: High Court Case of Bia Tosha Distributors v Kenya Breweries, EABL, Diageo

warm-beer by gobackpackingdotcom Kenya tusker crate eabl

“I am acutely aware of the far reaching consequences of my conclusive finding that purely constitutional issues and questions have been borne out of a hitherto commercial relationship and hence the court’s jurisdiction rather than agreed mode of dispute resolution. I however do not for a moment view it that the framers of our Constitution intended the rights and obligations defined in our common law, in this regard, the right to freedom of contract, to be the only ones to continue to govern  interpersonal relationships.” – Onguto, J at paragraph 101 of the ruling.

A recent well-reasoned ruling by the High Court in the case of Bia Tosha Distributors Limited v Kenya Breweries Limited & 3 others [2016] eKLR  tackled the complex question of horizontal application of the Constitution to private commercial disputes governed by contracts with private dispute resolution mechanisms. More interestingly, the court had to consider whether the amount of Kshs. 33,930,000/= paid by the Petitioner to acquire a ‘goodwill’ over certain distribution routes or areas of the Respondents’ products can be defined as ‘property’ held by the Petitioner and as such protected under Article 40 of the Constitution.

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How Laughter Works: XYZ Show, Parody and Intellectual Property Rights in Constitutional Kenya

XYZ SHOW BUNI TV

“A society that takes itself too seriously risks bottling up its tensions and treating every example of irreverence as a threat to its existence. Humour is one of the great solvents of democracy. It permits the ambiguities and contradictions of public life to be articulated in non-violent forms. It promotes diversity. It enables a multitude of discontents to be expressed in a myriad of spontaneous ways. It is an elixir of constitutional health.” – Justice Albie Sachs in Laugh It Off Promotions CC vs South African Breweries 2005 (8) BCLR 743 (CC)

A parody, also called burlesque, satire or spoof, in contemporary usage is a work created to mock, comment on, or poke fun at an original work, its subject, author, style, or some other target, by means of humourous, satiric or ironic imitation. Parody, as a method of criticism, has been a very popular means for authors, entertainers and advertisers to communicate a particular message or view to the public.

In recent times, the popularity of parodies has brought this creative form of expression in direct conflict with the owners of the original works protected under intellectual property (IP) law, particularly copyright and trademark.

Read the rest of this article over at the CIPIT Law Blog here.

Interpretation of Intellectual Property Rights in Kenya’s Constitution: Lessons from Supreme Court Advisory Opinion on the One-Third Gender Rule

Supreme Court Fountain Kenya

It is true the constitution will present the courts with inconsistencies, grey areas, contradictions, vagueness, bad grammar and syntax, legal jargon, all hallmarks of a negotiated document that took decades to complete. It reflects contested terrains, vested interested that are sought to be harmonized, and a status quo to be mitigated. These features in our constitution should not surprise anybody, not the bench, or the bar or the academia. What cannot be denied, however, is we have a working formula, approach and guidelines to unravel these problems as we interpret the constitution. We owe that interpretative framework of its interpretation to the Constitution itself. – W. Mutunga, CJ, Supreme Court of Kenya, Advisory Opinion No. 2 of 2012.

On 10th October 2012, the Attorney General sought the Supreme Court’s advisory opinion on one notable issue: Whether Article 81(b) as read with Article 27(4), Article 27(6), Article 27(8), Article 96, Article 97, Article 98, Article 177(1)(b), Article 116, and Article 125 of the Constitution of the Republic of Kenya require progressive realization of the enforcement of the one third gender rule or if it requires the same to be implemented during the general elections scheduled for 4th March 2013.

This month, the Supreme Court delivered its Advisory Opinion on the issue raised above, in which the majority view supported progressive realisation of the gender equity rule and whereas a dissenting view in the minority argued for immediate realisation of the constitutional rule. The four Supreme Court judges in majority namely Justices Tunoi, Ojwang, Wanjala, Ndungu were of the opinion that the gender equity principle in Article 81(b) of the Constitution is a statement of aspiration and would only transform into a specific, enforceable right after it is supported by a concrete normative provision.

In arriving at this majority view, the following statement was made:

“The word “shall” in our perception, will translate to immediate command only where the task in question is a cut-and-dried one, executed as it is without further moulding or preparation, and where the subject is inherently disposable by action emanating from a single agency.”

Read the rest of this article on the CIPIT Law Blog here.

Tobacco Plain Packaging Law: Intellectual Property Rights versus Human Rights in Kenya

Australia’s Parliament is without doubt one of the most proactive legislatures in the world. In a few short years, it has made history as the first country to legislate on carbon taxes and now it is taking on the multi-billion dollar worldwide tobacco industry. In the above clip, circa 10:53, Richard di Natale, Senator from Victoria had this to say on the need to legislate further against ‘Big Tobacco’:

“The one frontier that has remained open to tobacco companies is on the packets themselves. They are little billboards of nastiness advertising their wares to passers-by from pockets, from kitchen tables, on dashboards of cars, all around the country. And smokers do see the branding on these packets potentially dozens of times a day. And this Bill will remove that opportunity. An opportunity for tobacco companies to compete on grounds of brand awareness and image.

The Tobacco Plain Packaging Act 2011, when it does come into law, will remove the ability of tobacco manufacturers to display logos, images and promotional text on their packs and will replace it all with a plain brown packet. Current health warnings will be enlarged and accentuated… Under the Act it will be an offence to sell a non compliant product with potential penalties in excess of one million dollars for a wilful breach of the act by a body corporate. Under the Act, the packet will be tightly controlled: they have to be made of cardboard, packs have to be rectangular, contain no embossing, the colour needs to be a drab dark brown and no trademarks will be allowed. The location and orientation of the branding variant name are strictly prescribed and the graphic warning will be enlarged to 70% of the front of the packet.

In short, this bill aims to ensure that the packet of cigarettes is as ugly as the product itself.” (Emphasis added)

Australia has now enacted this Bill into law.

Meanwhile here in Kenya, the Tobacco Control Act 2007 remains in force and section 21 of this Act contains the following provisions with regard to packaging of tobacco products:

“21 (2) Every package containing a tobacco product shall –

(a) have at least two warning labels of the same health messages, in both English and Kiswahili, comprising of not less than 30% of the total surface area of the front panel and 50% of the total surface area of the rear panel, and both located on the lower portion of the package directly underneath the cellophane or other clear wrapping;
(b) bear the word “WARNING” appearing in capital letters and all text shall be in conspicuous and legible 17-point type, unless the text of the label statement would occupy more than seventy percent of such area, in which case the text may be of a smaller but conspicuous type size, provided that at least sixty percent of such area is occupied by the required text; and
(c) bear text that is black on a white background or white on black background in a manner that contrasts by typography, layout or colour with all other printed material on the package.

(3) All the warning labels specified in the Schedule shall be randomly displayed in each twelve-month period on a rotational basis and in as equal a number of times as is possible, on every successive fifty packages of each brand of the product and shall be randomly distributed in all areas within the Republic of Kenya in which the product is marketed.
(4) The Minister may, by notice in the Gazette, prescribe that the warning, required under this section, be in the form of pictures or pictograms; (..)”

Returning back to Australia, in the recent case of JT International SA and BAT Australasia Limited v Commonwealth of Australia [2012] HCA 30, Big Tobacco went to court challenging the constitutionality of the Plain Packaging Act. The High Court of Australia earlier issued orders ruling that “at least a majority of the judges” are of the view the plain packaging regime is valid under the Australian Constitution. The High Court rejected the arguments of Big Tobacco that there was an acquisition of property on less than just terms. See case citation here.

Meanwhile back to Kenya, BAT East and Central Africa Area Director Gary Fagan is reported as being “extremely disappointed” by the court] decision on the Australian Act which he termed as a “bad piece of law”. He adds that:

“”We fully support any form of evidence-based regulation but there is no proof to suggest plain packaging of tobacco products will be effective in discouraging youth initiation or encouraging cessation by existing smokers (…) In fact, plain packaging would only exacerbate an already significant illicit tobacco trafficking problem, and would have other significant adverse unintended consequences including driving down prices which would lead to increased smoking while reducing government tax revenue(…)”

As a matter of fact, earlier this year, IPKenya recalls government authorities raising the alarm over increased sale of counterfeit and smuggled cigarettes in Kenya. Kenya Anti-Counterfeit Agency (ACA) reported that cigarettes are rapidly becoming the most illegally traded product in the region, while health experts warned a health crisis could be looming. Local cigarette makers BAT-Kenya and Mastermind Kenya Ltd estimated that counterfeiters pocket upwards of US$1.05 billion (Sh100 billion) every year from sales across East Africa.

Comment:

In deciding whether Kenya should or shouldn’t follow Australia’s bold legislative approach, IPKenya asks: Is destroying trade marks or brands of Kenyan cigarette companies in order to discourage the use of tobacco products reasonable and justifiable under the limitation clause in Article 24 of the Constitution?

Unlike in Australia, Kenya’s Constitution has over 3 specific provisions on intellectual property rights including the broad provision on the protection of right to property enshrined in Article 40. In this regard, the stand-out constitutional provision which would need some legislative and judicial interpretation is Article 40(5) which states: “The State shall support, promote and protect the intellectual property rights of the people of Kenya”. This provision alone could form the basis of a constitutional challenge by Kenyan tobacco companies if the government decided to propose a law similar to the Australia’s Tobacco Plain Packaging Act 2011. In addition, Big Tobacco in Kenya may chose to rely on other persuasive arguments mentioned above such as the potential increase of smuggled and/or counterfeit tobacco products and its effect on illegal and organised crime in the country.

If our government was desirous to push for such legislation, it would argue that intellectual property rights must be balanced with other fundamental rights and freedoms also enshrined in the Constitution. In a recent High Court case discussed by IPKenya here, the court considered the intellectual property rights of pharmaceutical manufacturers protected in the Anti-Counterfeit Act but held that the provisions of this Act denied Kenyans access to essential HIV medicines therefore it violates the right to life of Kenyans as protected by Article 26 (1), the right to human dignity guaranteed under Article 28 and the right to the highest attainable standard of health guaranteed under Article 43 (1). The rights under Articles 26(1), 28 and 43(1) of the Constitution in addition to Article 42 on the right to a clean and healthy environment can be relied upon by the State in support of a plain packaging law.

Within Africa, it is reported that South Africa’s government has already expressed its intention to follow Australia’s controversial new tobacco law.

The Rise of Constitutional Intellectual Property in Kenya

In a recent judgment in the case of Patricia Asero Ochieng, Maurine Atieno and Joseph Munyi vs Republic H.C.C.C. Petition No. 409 of 2009 handed down by Lady Justice Mumbi Ngugi (also known as “Kenyan Jurist” in blogging circles), the Constitutional Division of the High Court held that one of Kenya’s intellectual property laws namely the Anti Counterfeit Act was unconstitutional.

The full text of the judgment is available here.

At paragraph 87 of the judgment, the court’s ruling on the unconstitutionality of this IP act reads as follows:

Sections 2, 32 and 34 of the Anti Counterfeit Act threaten to violate the right to life of the petitioners as protected by Article 26 (1), the right to human dignity guaranteed under Article 28 and the right to the highest attainable standard of health guaranteed under Article 43 (1) and the court hereby grants the declarations sought by as follows:

(a) The fundamental right to life, human dignity and health as protected and envisaged by Articles 26(1), 28 and 43(1) of the Constitution encompasses access to affordable and essential drugs and medicines including generic drugs and medicines.

(b) In so far as the Anti Counterfeit Act, 2008 severely limits or threatens to limit access to affordable and essential drugs and medicines including generic medicines for HIV and AIDS, it infringes on the petitioners’ right to life, human dignity and health guaranteed under Articles 26(1), 28 and 43(1) of the Constitution.

(c) Enforcement of the Anti Counterfeit Act, 2008 in so far as it affects access to affordable and essential drugs and medication particularly generic drugs is a breach of the petitioners’ right to life, human dignity and health guaranteed under the Constitution.

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