Ten Years Later: Dismal Performance Scorecard for Kenya’s Anti-Counterfeit Agency

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In 2008, Anti-Counterfeit Agency (ACA) was birthed as Kenya’s TRIPS-plus experiment to spearhead intellectual property (IP) rights enforcement by coordinating efforts among various state agencies. In our humble opinion, ACA deserves no score higher than 3/10 for its performance in fulfilling its overall statutory mandate in Kenya.

It was envisioned that ACA would be a shining example of an inter-agency approach to IP rights enforcement with private sector coordination. Ten years later, it is safe to say that ACA has failed to live up to its potential. The reason? Two words: Institutional Corruption.

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High Court Declares Appointment of Anti-Counterfeit Agency Inspectors Unconstitutional

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“In my view fresh appointments to the positions of inspectors must be open to the public and such positions must be advertised. It therefore does not matter whether the interested parties were handpicked by the Board or Mr Igathe [Former Chairman of ACA Board of Directors]. The era of handpicking persons and appointing them as public officers was in my view buried with the retired Constitution and has no place in the current constitutional dispensation.” – Odunga J at para. 39.

In a recent judgment in the case of Republic v Anti-Counterfeit Agency Ex parte Moses Maina Maturu [2016] eKLR, the High Court quashed Gazette Notice No. 9451 published on 24th December, 2015 appointing several individuals (enjoined in the suit as interested parties) as inspectors of Anti-Counterfeit Agency (ACA). According to ACA, the present suit was a scheme to paralyze its operations instigated by persons who have been behind several court cases, which ACA has been forced to defend thereby directing its resources away from the fight against counterfeiting.

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High Court Judgment on Constitutionality of Equitable Remuneration Right and Copyright Collective Management

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Previously we reported here that two content service providers and three individual copyright owners had filed a constitutional petition at the High Court challenging the content of the equitable remuneration right in section 30A of the Copyright Act, the application and implementation of section 30A by the collective management organisations (CMOs) and the manner of licensing and supervision of the CMOs by Kenya Copyright Board (KECOBO).

Recently in the case of Petition No. 317 of 2015 Xpedia Management Limited & 4 Ors v. The Attorney General & 4 Ors Lady Justice Mumbi Ngugi (known to many readers for her landmark decision on anti-counterfeit law and access to medicines here) delivered a judgment at the High Court dismissing claims by content service providers and the copyright owners that the contents and implementation of section 30A are unconstitutional.

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Kenyans Pay Three Times More Than South Africans to Use Sound Recordings: Lessons from Appeal Court Judgment in SAMPRA v. Foschini Retail Group & 9 Ors

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Recently, Kenya Copyright Board (KECOBO) published on its website here the proposed 2016 collecting society joint tariffs for musical works, sound recordings and audio-visual works. A copy of these joint tariffs is available here. In order to ensure public participation before the approval of these tariffs, KECOBO will convene an open half-day public forum to be held next week on February 10th 2016 at the Auditorium of NHIF Building starting at 8:30am.

This blogpost will focus on the tariffs for sound recordings since they have recently been the subject of thorough debate and analysis in South Africa’s Supreme Court of Appeal. It is hoped that the South African experience will be useful to Kenyan users in their negotiations with collecting societies on reasonable tariffs to pay for use of copyright works.

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High Court Upholds Freeze of Collecting Society’s Bank Accounts: Ruling in MCSK v Chief Magistrate, Inspector General

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This blogger has recently come across an astute ruling by the High Court in the case of Music Copyright Society of Kenya v Chief Magistrate’s Court & Inspector General of Police [2015] eKLR. Justice L. Kimaru sitting in the High Court was approached by the authors’ collecting society, Music Copyright Society of Kenya (MCSK) to stay orders issued by the Magistrate’s Court freezing all the bank accounts of MCSK following a request by the Serious Crimes Unit under the Directorate of Criminal Investigations (DCI). DCI requested that MCSK’s accounts be frozen as it investigates complaints made by MCSK members in regard to alleged misappropriation and theft of funds at the collecting society.

After carefully evaluating the facts before him, Kimaru J ruled that the investigations were lawful and based on several complaints received by DCI from MCSK members and that the orders to freeze MCSK’s accounts were within the precincts of the law.

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Room for Judicial Review in Collective Administration of Copyright: High Court Judgment in Nakuru Pub Owners v. KAMP & PRISK

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The High Court of Kenya sitting at Nakuru has recently handed down an interesting judgment in the case of Republic v Kenya Association of Music Producers (KAMP) & another Ex-Parte Nakuru Municipality Pubs, Bars, Restaurants and Hotel Owners Association (Suing Through Their Trustees) [2015] eKLR. A copy of the judgment is available here. In this case, Nakuru Municipality Pubs, Bars, Restaurants and Hotel Owners Association sought judicial review orders of prohibition to restrain two collective management organisations (CMOs) from collecting licence fees and or levies from the membership of the Association. The CMOs in question: Kenya Association of Music Producers (KAMP) and Performers Rights Society of Kenya (PRiSK), two related rights CMOs representing owners of sound recordings and performers respectively.

The crux of the Association’s case against the CMOs is as follows:

“It is argued that the proposed levies and licences were never communicated to their association or any of the members, and that as they were not notified, or invited to participate in their formulation and approval nor gazetted/published, the Respondents [CMOs] failed in their duty to communicate the passage and approval of the levies to them, they are in breach of rules of natural justice by withholding information that would affect them economically and financially and a breach of their constitutional rights as enshrined in Article 43 of the Constitution. (…)”

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The Copyright (Amendment) Act 2014: The Good, the Bad and the Ugly

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This blogger has received official confirmation that the Statute Law (Miscellaneous Amendments) Bill, 2014 passed by the National Assembly on 13/08/2014, was assented to by the President of the Republic on 28/11/2014 thereby bringing the Copyright (Amendment) Act 2014 into force. The Bill has effectively amended four sections of the Copyright Act, namely sections 22, 28, 33 and 46. A copy of the Bill is available here.

The Bill’s Memorandum of Objects and Reasons explains that the Copyright Act has been amended to “empower the competent authority to grant a compulsory licence for the publication or republication or broadcasting of works which are subject to copyright where it considers that the right holder withholds consent unreasonably. It [The Bill] also restricts the imposition of a tariff or levying of royalties unless approved by the Cabinet Secretary.”

It is recalled that four other sections in the Copyright Act were amended in 2012 in the exact same manner. Please see this blogger’s comments on the 2012 amendments here. What follows are this blogger’s thoughts on the 2014 amendments to the Act:

Section 22(5)

This is an amendment by insertion. The new subsection inserted relates to the principle of automatic protection under the Berne Convention for the Protection of Literary and Artistic Works (Paris Text 1971). Article 5(2) of the Berne Convention reads:

“The enjoyment and the exercise of these rights shall not be subject to any formality; such enjoyment and such exercise shall be independent of the existence of protection in the country of origin of the work. Consequently, apart from the provisions of this Convention, the extent of protection, as well as the means of redress afforded to the author to protect his rights, shall be governed exclusively by the laws of the country where protection is claimed.”

This blogger reckons that this amendment is aimed at counteracting the effects of section 36 of the Act which requires authentication of copyright works.

Section 28(5)

The amendment to Section 28(5) states that the blank tape levy shall be collected by KECOBO and then distributed to “the respective copyright collecting society registered under section 46”. This wording is problematic since no CMO has been registered to administer audio blank tape compensation from the private copying of musical works and sound recordings.

Currently section 28(3) as read with section 30(6) of the Act provide that that owner of the sound recording and the owner of a related right in the fixation of a performance shall have the right to receive fair compensation consisting of a royalty levied on audio recording equipment or audio blank tape suitable for record and other media intended for recording, payable at the point of first sale in Kenya by the manufacturer or importer of such equipment or media.

Section 28(4) as read with section 30(7) further provides that the royalty payable under the above subsection (3) shall be agreed between organisations representative of producers of sound recordings, performers, manufacturers and importers of audio recording equipment, audio blank tape and media intended for recording or failing such agreement by the competent authority appointed under section 48.
From the aforegoing, it is clear that the copyright owners of musical works have been systematically side-lined from receiving any compensation from the collection of audio blank tape levies within the Republic of Kenya.

With reference to international best practices, it is clear that Kenya’s current legislative provisions on private copy levying are not only illegal but more importantly unconstitutional. This line of argument has been explored by this blogger here.

Finally, this blogger wonders whether the reference to “the respective copyright collecting society registered under section 46” in the amendment creates an opportunity for establishing a Collective Agency for blank tape levy administration. In other jurisdictions, such Agencies do exist and are made up of all CMOs that represent concerned rights holders.

Section 33A

This is an amendment by insertion. The new section inserted officially introduces compulsory licensing in Kenyan copyright law. However this blogger has argued previously that section 30A in the 2012 Amendments was the Government’s successful move to unofficially introduce a compulsory licensing regime under the guise of the right to equitable remuneration.

Compulsory license is the term generally applied to a statutorily license to do an act covered by an exclusive right, without the prior authority of the right owner. This concept of compulsory licensing in copyright is derived from patent law, where the owner is forced to face the competition in market, similarly in copyright law; the copyright holder is subjected to equitable remuneration. One of the main reasons for introducing non-voluntary licenses is where the users of certain works have access to these works on terms which are known in advance and it is not practicable for them to locate right owners and obtain an individual license from them.

Article 9(2) of the Berne Convention provides the legal basis for compulsory licensing in copyright law. The Article reads:

“It shall be a matter for legislation in the countries of the union to permit the reproduction of such works in special cases, provided that such reproduction does not conflict with the normal exploitation of the work and does not unreasonably prejudice the legitimate interests of the author.”

This provision provides the Convention’s exclusive basis for compulsory licensing and provides for the conditions which should be met before a member country can entirely excuse a use which includes compulsory licensing and not prejudicing the reasonable interests of the author. Therefore this Article provides the so-called three (3) step test for compulsory licensing, namely exceptional circumstances, no conflict with the normal exploitation of the work and no unreasonable prejudice to legitimate interests of the author.

Article 11 bis (2) provides that:-

“It shall be a matter for legislation in the country of the Union to determine the conditions under which the rights mentioned in the preceding paragraph [11 bis (1)] may be exercised but these conditions shall apply only in the countries where they have been prescribed. They shall not in any circumstances be prejudicial to the moral rights of the author, nor to is right to obtain equitable remuneration which in the absence of agreement, shall be fixed by competent authority.”

The amendment to section 33 emphasises the regulatory role of the Competent Authority (aka Copyright Tribunal) in compulsory licensing. This role is common in other common law jurisdictions such as the UK, US, Australia and India.

As this blogger has previously noted here, the reality in Kenya is that the Competent Authority provided under section 48 of the Act remains non-existent over a decade since the establishment of the Kenya Copyright Board (KECOBO). This situation is problematic as there are no mechanisms in place to monitor the practical implementation of the compulsory licences under section 30A and the proposed section 33A.

Section 46A

This is an amendment by insertion. The newly introduced section 46A creates an approval system for all tariffs set by CMOs to license copyright users. This new section prohibits any registered CMOs from imposing or collecting royalty based on tariffs that have not been approved and published in the Government Gazette from time to time by “the Cabinet Secretary in charge of copyright issues”. In addition, the new section empowers “the Cabinet Secretary” to exempt users of copyright works from paying royalties by notice in the Gazette.

A preliminary issue that may require clarification is whether the Attorney General can be deemed to be “the Cabinet Secretary” for purposes of the Act? The Act defines “Minister” as “the Minister for the time being responsible for matters relating to copyright and related rights”. In the previous dispensation, the Attorney General (who was an ex-officio member of the Cabinet) assumed the role as “Minister” since KECOBO was under the Office of the Attorney-General. It is submitted that there is an established practice in Kenya whereby the Attorney General exercised the powers and performed the functions conferred on the “Minister” such as appointment of the Competent Authority and making Regulations for the better carrying out of the provisions of the Act.

However this issue is now settled under the Statute Law (Miscellaneous Amendments) Act, 2014 which has amended the definition of “Minister” under the Interpretation and General Provisions Act (Cap 2 Laws of Kenya) making specific reference to the Attorney General. The relevant portion of the amendment has been reproduced below:

Statute Law Miscelleneous Amendments Act 2014 Kenya

Nevertheless, this blogger maintains that the section 46A amendment may serve to further frustrate the relationship between CMOs and users of copyright. Over the years, this relationship has been severely strained due to the absence of the Competent Authority – a body which is authorised under the Act to deal with all issues relating to the licensing terms and conditions imposed on users by CMOs. The powers given to the Attorney General to approve tariffs and to exempt users from paying royalties may also prove problematic for CMOs.

Regrettably, this blogger notes that KECOBO and the Office of the Attorney General did not formally invite for public comments and/or conduct stakeholder consultations before causing these amendments to the Copyright Act to be passed by the Legislature and the Executive.

In the next blogpost, this blogger will discuss another set of IP law-related amendments with respect to the Kenya Anti-Counterfeit Act as contained in the Statute Law Miscellaneous Amendments Bill, 2014.