2018 Proposed Amendments to The Industrial Property Act

2018 Amendments to Industrial Property Act Kenya KIPI

The Statute Law (Miscellaneous Amendments) Bill, 2018 seeks to make various, wide-ranging amendments to the 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 Industrial Property Act (IPA).

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Proposed Amendments to Intellectual Property Laws in Kenya

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On 11th November, 2016, pursuant to Special Issue of Kenya Gazette Supplement No.185 (National Assembly Bills No. 45) the Attorney General published the Statute Law (Miscellaneous Amendments) (No. 2) Bill 2016. It is recalled that this Bill is intended to “make minor amendments which do not merit the publication of separate Bills and consolidating them into one Bill”. The Bill proposes to amend several intellectual property (IP) laws including Industrial Property Act, 2001 (No. 3 of 2001), Copyright Act, 2001 (No. 12 of 2001) and Anti-Counterfeit Act, 2008 (No. 13 of 2008).

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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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The Litter/Sanitary Bin Patent Monopoly Continues: Court of Appeal in Hygiene Bins v. Sanitam Services

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Readers of this blog are familiar with Sanitam Services (EA) Limited, the holder of ARIPO Patent No. AP 773 entitled “Foot Operated Sanitary/Litter Bin”. Over the years, Sanitam has been involved in numerous suits pertaining this patent as previously discussed here. This blogger has recently come across a judgment in the case of Hygiene Bins Limited v Sanitam Services (E.A) Ltd [2015] eKLR.

In this case, Hygiene Bins was in the Court of Appeal seeking to overturn the ruling of the High Court allowing Sanitam’s application for an injunction restraining Hygiene Bins from selling, providing services, using its foot operated sanitary bin, offering for sale, selling, passing off the same as theirs, trading in Kenya howsoever and in any manner likely to cause Sanitam’s business to be confused with that of Hygiene Bins and/or from trading in any manner as to infringe Sanitam’s granted patent pending the hearing and determination of the suit.

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Preliminary Objections in Copyright and Industrial Property Cases: High Court Ruling in Vermont Flowers EPZ v. Waridi Creations

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Recently the High Court made a ruling in the case of Vermont Flowers (EPZ) Limited v Waridi Creations Limited HCC 524 of 2014, a patent and copyright infringement suit filed by the Belgian-owned Vermont Flowers against Waridi Creations, a company formed by Vermont’s former Kenyan employees. A copy of the ruling is available here.

Vermont Flowers made an application for an injunction and Anton Piller orders on the basis that it is the registered owner of various copyrighted and patented manufacturing processes and designs and that Waridi Creations had infringed those copyrights and patents. However Waridi Creations, through the very able representation of Senior Counsel, successfully used the preliminary objections of jurisdiction and locus standi (standing) to have Vermont’s application dismissed.

According to media reports, Vermont Flowers claims that its former employees Godino Mwasaru, Nelson Oware and Jennifer Mumo formed Waridi Creations. Vermont Flowers further claimed that the ex-employees were on the verge of exporting a large consignment of flowers vases that have been branded with Vermont’s logo and were likely to destroy evidence of the copyright infringement. An interesting fact is the reported criminal suit instituted by Vermont Flowers against the ex-employees who are now Waridi’s Directors. In this criminal suit, it is reported that Vermont Chairman testified under oath that “Vermont had no registered invention or patent in Kenya and that the floral vases are not copyright protected in any country in the world”.

In the ruling, the court makes several important points on the jurisdiction objection in patent suits and the locus standi objection in copyright suits.

In addressing the jurisdiction of the Industrial Property Tribunal, the judge states as follows:

“The Industrial Property Tribunal under section 106 has been conferred with jurisdiction by statute to grant relief of; 1) injunction to restrain infringement of patent or registered utility or industrial design; 2) damages or 3) any other relief provided in law in respect of infringement of patent or registered utility or industrial design (…) my considered view is that such applicant [for grant of patent] like the Applicant here [Vermont Flowers], has protection in law and may apply for injunction to stop infringement or claim compensation for infringement of the invention under published application for grant of patent, as if a patent had been granted for that invention, as long as he can show that the person, without his authorization, performed any of the inventions, claimed in the published application, and that the said person, at the time of the performance of the act, had; a) actual knowledge that the invention that he was using was the subject matter of a published application; or 2) received written notice that the invention that he was using was the subject matter of a published application, such application being identified in the said notice by its serial number. The Applicant made an application for grant of patent through application No KE/P/2012001715, paid the relevant fee and notification of filing date of the application was given by the Managing Director of the Kenya Industrial Property Institute to be 3/2/2012. The Applicant, therefore, is covered by the jurisdiction of the Tribunal in the Industrial Act and they should refer the claims which form part of the application for grant of patent to the Tribunal. The Application before me in so far as it relates to the grant of patent under Industrial Property Act should be and is hereby referred to the Industrial Property Tribunal for relief.

I wish to reinforce my decision above through the following rendition. See and consider section 55 of the Industrial Property Act. (….) Note that section 55 refers to acts of infringement under section 54 as some of the acts of infringement which can be restrained by an injunction. Therefore, an injunction to restrain infringement of patent or utility model or industrial design is issued at first instance by the tribunal under section 106 of the Act. And therefore, as the Applicant is also the applicant for grant of patent under the Act, I am persuaded and I have so held that the Tribunal has statutory jurisdiction over the claims which have been presented before this court. The claims herein fall within section 55(c) of the Industrial [Property] Act.”

The learned judge also hints at possible areas for legislative action to aid proper interpretation of the law:

” I do not think section 55(c) intended the relief thereto to be canvassed or sought only after registration of the patent or certificate of utility model or industrial design. I think, the law wanted to provide for remedy and protection to an invention of an applicant whose application has been published. The said section is a basis for an injunction to restrain a person who without authorization, performed any of the inventions, claimed in the published application as if a patent had been granted for that invention. I wish, however, to see legislative intervention towards clarifying the section by providing some measure of protection to utility or design for which registration has been filed and accepted by the MD of the Institute. Section 19 of the Companies Act will provide some lead here; on written application being received, the name is reserved for sixty days pending registration of the company. However, such reservation should be subject to prior users of the invention or contemporaneous inventions.”

The learned judge makes an identical finding in a recent ruling in the case of Naili East Africa Limited v Samuel Kariuki & another HCC 295 of 2014 where the plaintiff sought injunctive relief to restrain the Defendants from infringing the rights under the Industrial Property Act in an invention described as “The aquatic plant removal apparatus which includes a heavy duty marine net preferably made of carbon fiber. To the net are attached to a winch, the winch being mechanically driven by deriving its rotary power from a tractor, a lorry or electric motor”. A copy of the ruling is available here.

In addressing the issue of standing to institute a copyright infringement suit, the judge states as follows:

“As long as the Applicant [Vermont Flowers] is claiming exclusive licensee of copyright which is not domestic registered copyright, the assignment must be accompanied by a letter of verification from the Board. None has been provided. That requirement is critical and its importance is well understood when one considers two things; 1) the international obligations of the nation to provide for adequate and effective protection of rights of copyright owners; and 2) the provision of section 33(2) on assignments and testamentary disposition of copyright (….) The nature of intellectual property and the strict requirements of the law make it absolutely necessary that the licensee should plead his status that he is an exclusive licensee; give all particulars of the licence as well as the copyright for which he has been granted exclusive licence by the owner. (….) It is readily discernible from the plaint and the application without probing for any evidence, that; there is not specific pleading in the plaint on exclusive licensee and the specific copyrights on which the licence is granted; yet the application and the affidavits filed thereto introduces exclusive licensee or assignment. As long as that situation has not been clarified by amendment of the plaint, the application for injunction lacks a foot on which to stand.”

This fatal error by Vermont Flowers compounded with the apparent poor drafting of its pleadings are not punished with a dismissal of the entire suit and in this regard the learned judge states that: “I hereby uphold the preliminary objections but in respect of the application only. (….) I will not extend these finding to the plaint as the plaintiff [Vermont Flowers] can always amend the plaint to measure up to the legal thresholds in such cases. That course will also give the plaintiff an opportunity to have its day in court.”

This blogger will continue to follow the developments in this case.

Intersections between Intellectual Property, Consumer Protection and Competition Law in Kenya

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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.