Blind Opposition to Caller Ringtone Deal between Safaricom and Collecting Societies: High Court Case of Irene Mutisya & Anor v. MCSK & Anor

Robert Collymore CEO Safaricom

This blogger has recently come across Nairobi High Court Civil Case No. 262 of 2015 Irene Mutisya & Anor v. Music Copyright Society of Kenya & Anor. In this case Mutisya and another copyright owner Masivo have filed suit against Music Copyright Society of Kenya (MCSK) and mobile network operator Safaricom Limited for copyright infringement. The copyright owners filed an urgent application on 30th July 2015 for a temporary injunction to restrain Safaricom from remitting license fees to MCSK pursuant to a recently concluded license agreement for caller ring-back tones (CRBT) made available through Safaricom’s Skiza platform. The copyright owners also asked the court to restrain both Safaricom and MCSK from implementing the CRBT License Agreement pending the hearing of the application.

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Legality of Equitable Remuneration Challenged: High Court Petition of Xpedia & 4 Ors v. Attorney General & 4 Ors

equitable remuneration

Editor’s Note: On 31st July 2015, the urgent application in this Petition No.317 of 2015 dated 29th July 2015 was heard and certain interim orders were granted. A copy of the orders is available here.

This blogger has confirmed a recent media report that two content service providers and three copyright owners have jointly filed a petition challenging the constitutionality of the right to equitable remuneration under the now infamous section 30A of the Copyright Act. The Petition was filed against the Attorney General, Kenya Copyright Board (KECOBO), Kenya Association of Music Producers (KAMP), Performers Rights Society of Kenya (PRiSK) and Music Copyright Society of Kenya (MCSK).

As stated above, the crux of the Petition filed by Xpedia Management Limited, Liberty Afrika Technologies Limited, Elijah Mira, Francis Jumba and Carolyne Ndiba is that KAMP, PRiSK and MCSK should be stopped by the court from receiving or collecting royalties under section 30A of the Copyright Act in respect of works owned or claimed by the Petitioners.

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Collecting Societies Demand Whopping 170 Million Shillings from Leading Broadcasters in Copyright Infringement Suits

KECOBO Renews Registration of KAMP and PRiSK as CMOs. L-R: Justus Ngemu - KAMP Chairman, Clifford Wefwafwa - KAMP GM, Marisella Ouma - KECOBO ED, Angela Ndambuki - PRiSK CEO, Robert Kimanzi - PRiSK Chairman.

KECOBO Renews Registration of KAMP and PRiSK as CMOs. L-R: Justus Ngemu – KAMP Chairman, Clifford Wefwafwa – KAMP GM, Marisella Ouma – KECOBO ED, Angela Ndambuki – PRiSK CEO, Robert Kimanzi – PRiSK Chairman.

This blogger has confirmed a recent media report that the two related rights collecting societies: Kenya Association of Music Producers (KAMP) and Performers’ Rights Society of Kenya (PRiSK) have simultaneously taken five broadcasting organisations to court for infringement of copyright. The five identical suits HCCC No. 322, 323, 324, 325 & 326 of 2015 have been filed in the Commercial Division of the High Court against Royal Media Services (RMS), Nation Media Group (NMG), Standard Group (SG), MediaMax Network (MMN) and national broadcaster, Kenya Broadcasting Corporation (KBC).

PRiSK and KAMP claim that they are mandated to collect license fees on behalf of the performers and producers of sound recordings and duly notified the five broadcasters that it is under an obligation under Sections 27, 30A, 35(1)(a), 25 and 38(2) and 38(7) of the Copyright Act to pay licensing fees in respect of sound recordings and audio-visual works broadcast to the public. In this regard, the collecting societies claim that the broadcasters have all failed and/or neglected to pay the requisite license fees to KAMP and PRiSK from the year 2010 until and up to the year 2014.

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A Tale of Two Danish Bio-Tech Firms, Protection of Genetic Resources and 2.3 Million Shillings in Royalties for Lake Bogoria Enzyme

Lake Bogoria Bio-Enzyme Royalties Kenya Baringo County 2014

The Baringo County has confirmed recent media reports that residents living around Lake Bogoria in Baringo County have received the sum of KES 2.3 Million in royalties from a Dutch bio-enzyme company. According to Baringo County news, this royalties deal comes after “successful negotiation between the Kenya Wildlife Service (KWS) and Novozyme – a foreign company that took an enzyme drawn from a Bacteria in Lake Bogoria hot springs about 15 years ago”. It is reported that the royalties will be partly used as bursaries for over 200 local students while part of the funds will be deployed to fund other development projects in the area. However, local civil society organisations have reportedly demanded full disclosure of all the money from the royalties deal.

This blogpost uses the recent news from Baringo County to examine the protection of genetic resources in Kenya, taking into account Kenya’s new domestic and international rights and obligations in this area.

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Regulation of Online Video Content, Territoriality and Copyright

Trevor-3

This month South Africa’s top comedian Trevor Noah announced that he will be joining the award-winning late-night satirical news show, “The Daily Show With Jon Stewart” aired on US cable network, Comedy Central (CC). For those who would want to enjoy this Emmy and Peabody Award-winning television show on demand, there is always “Hulu”, a leading online video service. However for those accessing Hulu outside the US, you are likely to receive the following notice: “We’re sorry, currently our video library can only be streamed within the United States. For more information on Hulu’s international availability, click here.”

A similar service to Hulu called Netflix has been the subject of conversation in South Africa in a recent article here by TechCentral South Africa titled: “DStv wont sue Netflix users” then later changed to “DStv to launch Catch Up Plus”. The relevant portion of the article reads: “[DStv Digital Media CEO John] Kotsaftis says it’s not clear if it’s legal or not for South Africans to watch Netflix and similar services. What is clear, he says, is that these companies are breaking the law when they allow access to services to consumers in markets for which they haven’t purchased content distribution rights.” In this regard, many Kenyans may ask: “when you purchase a US virtual private network (VPN) to by-pass Netflix or Hulu region locks to watch shows and movies that are supposed to only be available to Americans, is that copyright infringement?” This blogpost explains why this question must be answered in the affirmative.

Read the rest of this article here.

Lessons from Kenafric on Intellectual Property Rights and Permissions

BEN 10 Cartoon Network CN Poster

The Business Daily recently reported that Time Warner Inc and Kenafric are in talks to settle their copyright and trade mark infringement dispute out of court. It is reported that both parties recently appeared before the soon-to-retire IP-savvy Justice JB Havelock to request more time to conclude settlement discussions.

As we had previously discussed here, Cartoon Network Africa through its parent company, Time Warner had moved to the High Court to stop local confectionery giant Kenafric from using its cartoon “BEN 10” on the wrappers of its bubble gum products. Time Warner argued that the association of the chewing gum with its brands was damaging to the reputation of BEN 10 and goods branded with the label including toys, video games and clothing valued at Sh275 billion therefore Kenafric’s use of the name BEN 10 amounts to trade mark infringement of BEN 10 Trademarks. In addition, the sworn affidavit by Cartoon Network’s Vice President Louise Sams claimed that the unauthorised reproduction or adaptation or publication or broadcast or sale or distribution or possession or importation of the offending chewing gum by Kenafric constituted copyright infringement.

KENAFRIC BEN 10 BUBBLE GUM BRAND

In its defence, Kenafric argued that the Cartoon Network products in question are registered under different classes under the Nice Classification hence Time Warner cannot challenge Kenafric given that the latter deal in different products. Kenafric also argued that the US firm has no local operations that can make consumers links its products with those of Kenafric, which are mostly sold within East Africa. All in all, Kenafric contended that the line of trade of the two companies is distinct and there are no similarities between their goods that can confuse customers.

In the meantime, many intellectual property (IP) commentators agree that Kenafric runs the risk of being dragged to court in similar fashion by the Coca Cola Company for its wrappers which appear to infringe on the “FANTA” and “SPRITE” marks. These infringing get-ups are available below:

KENAFRIC SPRYTE BUBBLE GUM

FANTY MAGIC KENAFRIC

Be it as it may, this blogger argues that Kenafric’s public experience with intellectual property enforcement should serve as a lesson to other commercial entities on how not to use the IP of other entities.

From a copyright perspective, literary and artistic works that make up a trader’s brand image cannot usually be used without that owner’s permission. Of course, the copyright owner may refuse to give permission for use of their work. In the case of Kenafric’s operations, it is clear that its uses would not fall within the scope of the fair dealing provisions and would not be subject to compulsory licensing through the Competent Authority. Therefore Kenafric would have to seek and obtain permission in writing to use, reproduce or adapt any trader’s copyright works.

Therefore, Kenafric would have to negotiate a licence to cover the use it intends to make of the work. This licence is essentially a contract between Kenafric and the copyright owner including the terms and conditions of use and payment or royalty for the use. The Copyright Act distinguishes between exclusive and non-exclusive licenses however the license must be in writing.

From a trade marks perspective, if Kenafric wants to use other people’s trade marks, it must obtain permission. Trademarks may be registered or unregistered. The registration of a mark gives the proprietor of that mark the exclusive right to the use of the trademark upon or in relation to the goods in respect of which it is registered, or in relation to services for the purpose of indicating that a particular person is connected, in the course of business, with the provision of those services. It follows that the proprietor of the mark may sue for infringement where there has been an unauthorised use of the registered mark. In addition, the registered owner of a trademark also retains the right to protect any reputation acquired through use by means of a passing-off action.

Therefore if Kenafric wants to use a trade mark, it must approach the owner and enter into a licence agreement with them. As one of the largest confectionary companies in the East African region, this blogger is of the view that Kenafric has sufficient bargaining power to negotiate favourable licensing terms and conditions with respect to both trade mark and copyright uses. As witnessed previously in the Mandela Foundation case against Zuji Travel Agency, globalization has made it easy for IP owners to detect IP infringement all over the globe, therefore the onus is on IP users to take all reasonable precautions to ensure that they obtain the necessary permissions and licenses from the IP owners.

In the case of most commercial entities such as Kenafric, formalized licensing arrangements provide a desirable win-win outcome for all parties involved as opposed to costly and lengthy court cases. What remains to be seen is whether Kenafric and other local companies will learn from the Ben 10 case.

Intellectual Property and Tax Law: Bata Shoe Company Kenya v. Kenya Revenue Authority

Picture1 Bata Kenya Blog

Recently, the High Court delivered an interesting judgment regarding the chargeability of intellectual property (IP) royalties and license fees for purposes of customs duty valuation. In the case of Republic v Kenya Revenue Authority Exparte Bata Shoe Company (Kenya) Limited [2014] eKLR the Kenya Revenue Authority (KRA) issued a partial demand notice to Bata Kenya requiring the latter to make a total payment of KES 90,489,947.00 to The Commissioner of Customs Services within 30 (thirty) days from November 24, 2010. Despite several exchanges, KRA and Bata Kenya were unable to agree on the total amount of taxes owed by the latter. Bata Kenya then moved to court under judicial review proceedings seeking for KRA’s notice to be quashed on the grounds that distribution royalties are not subject to customs duty as they are not royalties related to the goods being valued that the buyer must pay, either directly or indirectly, as a condition of the sale of the goods being valued within the meaning of Rule 9(i)(c) of the Fourth Schedule to the East African Community Customs Management Act, 2004 (EACCMA).

Bata Kenya owes its entire existence to two separate agreements namely, a Trade Mark License Agreement (TLA) with Bata Brands and an Agreement on commission/service charge with China Footwear Services Limited (CFS) and Bata Shoe (Singapore) Pte Ltd (BSS). An overview of the TLA entered on 1st January, 2006 between Bata Brands (as the licensor) and Bata Kenya (as the licensee) states that the latter is allowed to use the ‘BATA’ trademark for all its business activities in Kenya (known as the Territory). In return, Bata Kenya is required to pay 2% of the total annual sales “after all withholding and other taxes, levies or dues of all kinds imposed by any authority in the Territory”.
In clause 10 of the agreement, one of the conditions for early termination of the TLA is non-payment of the royalty. As per clause 11 the effect of termination would mean that Bata Kenya would cease trading in products with the trademark ‘BATA’.

Read the full article here.