Jurisdiction is Everything: Time to Merge Tribunals for Copyright, Industrial Property, Seed and Plant Varieties

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As readers may know, a government taskforce had earlier recommended the merger of the three intellectual property (IP) offices dealing with copyright, industrial property and anti-counterfeit matters. The implementation of these recommendations appears to have stalled with no progress made to-date. In addition to the IP offices, there is also the matter of the various IP dispute resolution bodies created under the various IP laws: the Industrial  Property  Act establishes the Industrial  Property  Tribunal, the Copyright Act establishes the Competent Authority (akin to a Copyright Tribunal), the Anti-Counterfeit Act  establishes the Anti-Counterfeit Agency and the Seeds and Plant Varieties Act establishes the Seeds and Plant Tribunal.

Recently, the Judiciary Working Committee on Transition and Restructuring of Tribunals developed a Draft Tribunal Bill 2015 to help domicile all tribunals under the Judiciary. This is an important step that could benefit IP owners and users in the quick and expert settlement of various IP-related disputes.

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

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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.

JB Maina, M-Shwari Updates: Safaricom’s Copyright Battles Continue

Safaricom House

As many may already know, Safaricom, the largest mobile telecommunications company in Kenya is currently embroiled in a handful of intellectual property (read: copyright) law suits, with creators and innovators alike. See full list here. Recently, there have been some new developments in two of these cases, namely the M-Shwari and JB Maina cases.

To recap briefly, the M-shawri row arose late last year when Faulu Kenya claimed that it had pitched to Safaricom the idea of a mobile money service that allows users to save, borrow loans and earn interest using their mobile phones. On the other hand, the JB Maina case has been in court since 2010 when Safaricom was accused of copyright infringement in respect of musical works of JB Maina alleged to have been uploaded on Safaricom’s portals.

The Daily Nation now reports that the Court has declined to grant Faulu Kenya’s application for an interim injunction pending determination of its suit for breach of copyright and violation of trade secret. While this blogger is inclined to agree with this preliminary ruling by Justice Havelock, several concerns the learned judge’s reasoning on this case were raised.

Turning to the JB Maina case, a recent court ruling reported in full here has awarded limited Anton Piller orders to the plaintiff, JB Maina against Safaricom. The effect of these orders is that it allows JB Maina in the company of a copyright inspector to enter Safaricom’s premises, inspect its machines, take records, make copies of records for purposes of gathering and preserving evidence necessary to prove his claim. The court has also granted JB Maina a temporary injunction restraining Safaricom from dealing in JB Maina’s works, in addition to awarding JB Maina the costs of the motion to be paid by Safaricom.

This blogger will revisit this return of Anton Piller orders in Kenya’s IP litigation landscape in a subsequent post. However for the purposes of the JB Maina case, there are a couple of interesting questions that this blogger believes must be at the back of Safaricom’s mind. The first question is whether there is need to have such a complex web of relationships between the right holders (copyright owners); the music collecting societies (the copyright assignees); the content service providers and/or premium rate service providers (the middle men); and itself as a major user of copyright works. This first question requires Safaricom to think hard about eliminating the middle men altogether so as to deal directly either with the music collecting societies or the copyright owners themselves on an exclusive basis. The second question which flows from the first is whether the acts currently performed by Safaricom in respect to musical works and sound recordings ought to be licensed in the first place. This second question arises based on the various unlicensed rights currently being exploited by Safaricom, namely reproduction, communication to the public in addition to the performing right in the musical download.

At the very least, it is hoped that the final conclusion of both these Safaricom copyright suits may provide useful IP jurisprudence that will help settle some of the unanswered questions in Kenya.

The Ghost of M-Pesa: Faulu Kenya Cries Intellectual Property Theft over Safaricom’s M-Shwari

In a recent news article titled “Safaricom loses first round of M-Shwari row with Faulu”, it is reported that Mr Justice Jonathan Havelock, sitting in the High Court, made the following two determinations in respect to Faulu Kenya’s suit against Safaricom’s M-Shwari:

1. The court denied Faulu Kenya’s request that Safaricom be barred from any dealings in the M-Shwari service until the former’s case is heard and determined.
2. The court rejected Safaricom’s bid to have Faulu Kenya’s bid moved to the Industrial Property Tribunal and stated that it had jurisdiction to hear and determine the case.

To recap, Faulu Kenya filed a lawsuit last week in the Kenyan High Court seeking to halt Safaricom from operating M-shwari, arguing that it is similar to its Kopa Chapaa service, which has been in operation since last year in partnership with Indian mobile operator Airtel Kenya. Faulu Kenya claimed that it had pitched to Safaricom the idea of a mobile money service that allows users to save, borrow loans and earn interest using their mobile phones.

During this pitch, Faulu Kenya alleges that it presented to Safaricom a prepared concept paper detailing how the platform was going to operate. Faulu Kenya also claims that it entered into a non-disclosure agreement with Safaricom, which it claims that Safaricom disregarded when it developed and launched the M-Shwari product. However Safaricom now claims that it had knowledge of a similar product to Faulu Kenya’s, having signed a pact with Commercial Bank of Africa (CBA) eight days before the Faulu agreement.

Safaricom has made a lengthy statement on this matter via their official site, which reads in part:

“While this matter is already in court and is therefore subject to sub judice rules, Safaricom Ltd seeks to clarify that M-Shwari is a proprietary product of Safaricom Limited which is the successful result of a 2-year product development process.

As you are aware, Safaricom Ltd has had a strong focus on Financial Inclusivity since 2007, when it launched M-Pesa. The commitment has been sustained through relevant enhancements informed by proactive research into user habits, dynamic customer needs and emerging trends, relating to the use of M-Pesa and other mobile finance solutions.

In developing M-Shwari, Safaricom Ltd and the Commercial Bank of Africa followed the due legal process as required by the Laws of Kenya.

As Kenya’s leading integrated communications company, Safaricom has consistently worked hard to conceptually develop innovative solutions for all Kenyans. As a result Safaricom has built an enviable intellectual property portfolio.

While the allegations are lamentable and unfortunate, Safaricom will seek to have the matter resolved through the right legal processes. We believe that this law suit is tainted with malice because it is founded on untrue allegations(…)”

Comment:

Certainly, this latest row between Faulu Kenya and Safaricom is reminiscent of previous intellectual property (IP) disputes surrounding Safaricom’s flagship M-Pesa product. As one commentator rightly notes, everytime Safaricom launches a new M-product, an “intellectual property” lawsuit is not too far behind therefore such suits are “all part of the cycle of an m-product”.

Fortunately, the learned judge, Mr. Jonathan Havelock did not fall into the trap of his learned sister Lady Justice Joyce Khaminwa, who was persuaded by Safaricom to make a ruling in the M-Pesa litigation that the High Court had no jurisdiction to handle the matter directing that the litigant Mr Christopher Ondieki ought to file his suit at the Industrial Property Tribunal.

This blogger submits that if this litigation proceeds to its full conclusion, Hon. Justice Mr. Jonathan Havelock will have the rare opportunity to, once and for all, provide Kenya with useful jurisprudence on the nature and scope of intellectual property protection, with a clear emphasis on the copyrightability of mobile-based ICT innovations, the oft-misunderstood idea/expression dichotomy and perhaps the patentability of M-products generally.

This may also be a worthwhile opportunity for the learned judge to examine both M-Shwari and Kopa Chapaa and determine whether both products can co-exist in the market bearing in mind Kenya’s new laws on competition and the alleged existence of a non-disclosure agreement signed by both Safaricom and Faulu Kenya.

All in all, this is a case that we will all be following keenly as it now proceeds to the hearing stage.