Tax Law and Intellectual Property: “Shell” Trade Mark Licensee Vivo Energy v. Kenya Revenue Authority

vivo energy shell licensee africa - Copy

 

The High Court recently delivered its judgment in the case of Vivo Energy Kenya Limited v Kenya Revenue Authority [2016] eKLR holding that the Commissioner of Domestic Taxes erred for concluding that a non-exclusive and non-transmissible license to use “Shell” trade marks was a sale of a property giving rise to royalty within the meaning of Section 2 of the Income Tax Act and hence chargeable to tax.

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Intellectual Property Rights Protection and Brasil 2014 World Cup Fever in Kenya

FIFA WORLD CUP BRASIL 2014

In fourteen days time, the Brazil 2014™ FIFA World Cup™ (WC) kicks off in the South American nation of Brazil! As many readers may know, the WC is a Fédération Internationale de Football Association (FIFA) event embodied in the FIFA Statutes. As one of the largest single sports events and most-watched competitions on earth, the WC enjoys phenomenal interest from sports fans and the business world alike. From an intellectual property (IP) perspective, FIFA has developed and protected an assortment of logos, words, titles, symbols and other trade marks to be used in relation to the 2014 FIFA World Cup™ (the Official Marks). In order to attract funding to stage such a large event, FIFA offers its partners, sponsors and supporters the exclusive rights to use of the Official Marks for promotional and advertising purposes. The full picture of WC partners, sponsors and national supporters is available below:

FIFA WORLD CUP BRASIL 2014 PARTNERS SPONSORS SUPPORTERS

Therefore, according to FIFA, the protection of the exclusive rights is crucial for the funding for the 2014 FIFA World Cup Brazil™ and therefore non-affiliated entities are asked to respect FIFA’s intellectual property (IP) and conduct their activities without commercially associating with the 2014 FIFA World Cup™

Read the full article here.

High Court Orders Government to Facilitate Copyright Tribunal in PERAK Case against KAMP and PRiSK

pub kenya perak

In a judgment delivered recently, the High Court in the case of Republic v Kenya Association of Music Producers (KAMP) & 3 others Ex- Parte Pubs, Entertainment and Restaurants Association of Kenya (PERAK) [2014] eKLR has ordered the State to set up the Competent Authority established under the Copyright Act to hear and determine the dispute between PERAK and the related rights collective management organisations KAMP and PRiSK with respect to the latter’s tariffs for communication to the public.

As many may know, the Pubs, Entertainment and Restaurants Association of Kenya (PERAK) is the largest single entity representing owners and managers of the major restaurants, pubs and entertainment venues in Kenya. PERAK is registered under the Societies Act as a welfare Organization and its main objective is to bring together operators with a view of resolving common problems in the hospitality industry, developing a code of conduct for its members, engage in social responsibility activities and generally to help members comply with various regulations governing the hospitality industry.

The gist of the PERAK’s judicial review action is summarised in the following three orders which were sought from the court, namely:-

“1. That this Honourable Court be pleased to grant an order of prohibition to prohibit the 1st and 2nd Respondents from arbitrarily imposing and collecting high tariffs/license fees and other levies from the Applicant’s members’ business premises using a wrong tariff structure and generally harassing, intimidating and confiscating their business equipment throughout the Republic of Kenya.
2. That this Honourable Court be pleased to grant an order of mandamus compelling and directing the 3rd and 4th Respondents to hear and determine the dispute between the Applicant and the 1st and 2nd Respondents in relation to the high license fees charged and /or tariffs charged/levied using a wrong tariff structure by the 1st and 2nd Respondents.
3. The costs of this Application be provided for.”

In the court’s judgment, PERAK succeeded to prove that it had locus standi to institute proceedings on behalf of its members in addition to order no. 2. However PERAK was unsuccessful on order no. 1. With respect to order no. 3, the court declined to make any order as to costs.

Comment:

This blogger is surprised by PERAK’s poor form in mounting its judicial review suit against KAMP and PRiSK. This was clearly manifest from several unsubstantiated allegations, inaccurate and outrightly false statements of the provisions of the law by PERAK.

The most significance of this judgment can be found in the last four paragraghs where the court examines whether the government can and should be compelled to give effect to section 48 of the Copyright Act. On numerous occasions (see some examples here, here, here and here) this blogger has emphasised the need for Kenya to immediately operationalise the Competent Authority aka the Copyright Tribunal which is established under the Copyright Act to hear and determine disputes between users and CMOs.

Therefore this blogger is elated that the High Court has seized the opportunity to state clearly that the Government, in particular the Office of the Attorney General and Department of Justice can no longer rely on the same old excuses as reasons for not facilitating the operations of the Competent Authority.

To quote the court:

“The only reason advanced by the Kenya Copyright Board why the Competent Authority cannot fulfil its said statutory duty is that the Competent Authority is yet to be operationalized owing to budgetary and administrative challenges and hence the same is not functional. Article 47(1) of the Constitution provides that every person has the right to administrative action that is expeditious, efficient, lawful, reasonable and procedurally fair. Article 21(1) of the Constitution on the other hand provides that it is a fundamental duty of the State and every State organ to observe, respect, protect, promote and fulfil the rights and fundamental freedoms in the Bill of Rights. It is therefore upon the State to facilitate the Competent Authority so that it can undertake its statutory duties. To fail to do so amounts to abdication of the Constitutional duties imposed upon the State and in applying a provision of the Bill of Rights this Court is enjoined by Article 20(3)(b) of the Constitution to adopt the interpretation that most favours the enforcement of a right or fundamental freedom.
Adopting the said approach, this Court is not satisfied that the reason advanced by the Kenya Copyright Board warrants the state being absolved from the performance of its statutory duties taking into account the fact that the Competent Authority is already in the office.”

The ball is therefore squarely in the government’s court to operationalise the Competent Authority failing with PERAK will be at liberty to return to court for contempt orders against the Kenya Copyright Board.

QOTD: Do You Own the Rights to Artistic Works Purchased at the Maasai Market?

 

maasai-market-by-bulinya

The “Maasai market” (not represented here) is an open-air market where shoppers can find curios, paintings, drawings, clothes and fabrics with Kenyan prints, jewellery and wood-carvings, hand-made by local artisans. The venue for the Maasai Market rotates between different shopping centres and other locations within Nairobi. For tourists and locals alike, the prices at Maasai Market are very negotiable subject to one’s bargaining prowess and ability to haggle down to the last cent. No receipts are issued for purchases made at the Maasai Market nor should a purchaser expect any warranties or guarantees on items sold at the Maasai Market.

This leads us to our question of the day (QOTD) which is:

If someone buys a painting from an art gallery the Maasai market, do they simultaneously buy the copyright and all rights under that copyright? Can the artist subsequently make copies or postcards of the painting that he/she sold? Can the buyer make postcards of the painting and sell them?

From the explanations above, it is clear that all works sold at Maasai market are subject to copyright protection mainly under the category of artistic works. Further, it must be assumed that these artistic works are sold either by the authors themselves, authorised agents or representatives of the authors.

One possible answer to the QOTD would be in the affirmative on condition that the purchaser waits fifty years after the end of the year in which the author of the artistic work dies. In the event that the identity of the author is unknown (which may be the case with Maasai market works), the purchaser would have to wait 50 years from the end of the year in which the artistic work was first created/published.

However, this blogger submits that there is a better answer to the QOTD. In the context of a Maasai market purchase, it appears that that there is no clear assignment of copyright and exclusive license to carry out any of acts controlled by copyright, including reproduction, adaptation and making of derivative works i.e. post cards. This is because section 33(3) of the Copyright Act provides that such assignment of copyright and exclusive license must be in writing signed by or on behalf of the assignor or licensor of the Maasai market work, as the case may be.

Nonetheless, this blogger argues that the purchaser of a Maasai market work enjoys a non-exclusive license to do any act the doing of which is controlled by copyright. According to section 33(4) of the Act, this non-exclusive license need not be in writing and may be oral or inferred from conduct. The Act however provides that such non-exclusive license may be revocable at any time unless granted by contract.

Therefore, for any IP lawyer, the solution to the uncertainty in ownership of rights to Maasai market works may be resolved by simply having something in writing along the lines of:

“I,……the Author hereby irrevocably assigns, conveys and otherwise transfers to…… the Assignee, and its respective successors, licensees, and assigns, worldwide, all right, title and interest in and to the works, and all proprietary rights therein, including, without limitation, all copyrights, trademarks, patents, design rights, trade secret rights, economic rights, and all contract and licensing rights, and all claims and causes of action with respect to any of the foregoing, whether now known, or hereafter to become known.”

This may be food for thought next time you’re strolling past the Maasai market and something catches your eye.