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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Quick Thoughts on “Zindua Cafe”: Safaricom’s New Idea Submission Portal

zindua cafe safaricom homepage

This week, Safaricom launched “Zindua Cafe”, an idea submission web portal which allows registered users to submit ideas, applications or prototypes to Safaricom Limited, Kenya’s leading mobile network operator. Once these submissions are made to Safaricom, the telecommunication giant will review them internally and send either a ‘interested’ or a ‘regret’ response to the user. If Safaricom is ‘interested’ in any submission, the user will be offered a non-disclosure agreement and commmercial contract governing Safaricom’s intended implementation of the submission.

Having taken Zindua Cafe for a test-run, this blogger has a few thoughts on Safaricom’s new innovation portal:-

1. Intellectual property (IP) advice: Zindua Cafe is an excellent source for unsolicited legal advice on IP rights protection. The portal reads in part: “We strongly recommend that you patent your idea or get your IP in place”. The portal then explains the distinction between WIPO, KIPI and KECOBO and provides links to their respective websites. In the case of IP- protected submissions, the terms of use on the portal clearly state that users “irrevocably grant Safaricom the unrestricted right or license to use any idea or material [submitted] for the purpose of improving it, assessing its viability and determining its progression to the next stage within the Innovation Cycle”. In this regard, users of the portal agree that such use by Safaricom under the above license “shall not be deemed a violation of the user’s rights or the rights of any third party or give rise to any claim based on such alleged violation.”

2. Proof of IP protection: Zindua Cafe requires users to disclose whether submissions are protected as patents, trade marks or copyright in addition to providing the registration numbers of any certificates received from WIPO, KIPI and KECOBO. Copies of these certificates must also be submitted by users. This is a really smart way for Safaricom to establish the extent of IP protection involved in all submissions made on the portal. More importantly, Safaricom is in a better position to determine what steps would be necessary to exploit and/or acquire any intellectual property rights in the submissions.

zindua cafe safaricom brewing ideas

3. What’s the big idea?: As part of the submission process, Zindua Cafe requires users to provide a name for the idea/product/service/solution and select the applicable industry from a list including Agriculture, Education, Energy, Entertainment, Financial Services, Health, ICT, Manufacturing, Retail, Transport, among others. This section also requires the users to describe the idea/product/service/solution in 200 characters as well as explaining the need/problem that will be solved by the idea. Finally, users are required to itemise any similar or competing ideas/products/services/solutions already in the market and explain why their submissions are better! This is a really smart way for Safaricom to reduce on the amount of time spent in meetings with people pitching their ideas.

So, what do the users get in return after going through this rigourous 3-step submission process? Nothing. The terms and conditions of use on the portal ensure that Safaricom is fully protected from any claims arising from users and third parties while imposing several obligations on users including indemnity to Safaricom, assurance to Safaricom of IP ownership, among others.

Following the Vodacom “Please Call Me” case in South Africa and the numerous IP infringement cases involving Safaricom here in Kenya, this blogger applauds the move to introduce Zindua Cafe particularly because of the emphasis the portal places on protection of IP by its users prior to submitting their creative and innovative ideas to Safaricom.

What remains to be seen is whether this new portal for brewing ideas will deter future innovators and creators from bringing IP-related suits against Safaricom.

Med Dispenser Loses First Round Against Health Presence: Copyright Ruling in Dedan Maina Warui & another v. Safaricom case

“It could be said that Copyright seeks to protect the author’s actual expression and not the ideas, and it does not therefore forbid independent creation. As such, the claim that the two parties in this suit had an idea on tele-healthcare, but which they expressed differently is not untenable in law.” – Gikonyo J. at page 7.

In a recent ruling by the High Court in the case of Dedan Maina Warui & another v Safaricom Limited [2014] eKLR, a medical doctor was denied a temporary injunction and an order of delivery up with respect to a health-related product launched by Safaricom. A copy of the ruling is available here.

Dr. Dedan Maina Warui claims that Safaricom infringed its copyright in a concept styled under the name “Med Dispenser” which the doctor pitched to the leading mobile network operator’s Enterprise Business Unit on or about March 2011. To prove ownership of the copyright in the concept, the doctor presented a certificate of registration No. CR 000712 dated 8th March, 2011 whereby the Med Dispenser was registered as a Literary Work number KCB 0712 by the Kenya Copyright Board. The literary work in question is a concept paper containing the work flow, methodology or the process in which the med dispenser innovation would work once deduced into a software program.

AAR Safaricom Health Presence October 2012

Safaricom admitted that it did give some initial consideration to the Warui’s proposal, but however made a decision to proceed with a separate proposal which involved a partnership with AAR and Cisco Systems Inc. (Cisco’s system is featured in video featured above) to launch the Tele-health product which was developed without any reference to the Warui’s innovation or ideas. Safaricom claims that the electronic medical prescription concept upon which it’s “Health Presence” product is built, has been in use in other jurisdiction, namely India, since May 2010 and was therefore not an original idea of Warui as claimed.

The learned Gikonyo J. appears to have rendered a fair ruling in this case avoiding the error made by his brother Havelock J. in the case of Faulu Kenya Deposit Taking Microfinance Limited v Safaricom Limited [2012]eKLR where the latter stated that a concept paper does not fall within any of the existing categories of copyright works (See our analysis of Havelock and his ruling here).

In October 2011, a media report published here by our good friends over at CIO East Africa announces that Cisco, Deaf Aid and Safaricom formally piloted the first Cisco HealthPresence clinic in Kenya. The article reads in part:

“This first implementation of Cisco’s HealthPresence solution in Kenya demonstrated how technology can transform the delivery of healthcare to underserved, remote, and rural areas. Bandwidth connectivity was provided by Safaricom, the leading provider of converged communication solutions in Kenya.”

Tele-medicine The Standard October 23 2012

In the same month, Warui claims he saw the above article titled: “Tele-medicine: Treating patients from a distance” published by the Standard newspaper on October 23, 2012. The article reads in part:

“Safaricom Health Presence is a product that will use tele-presence to deliver health services to patients, with the doctor giving instructions to the patients or nurse, on what to do, and what medicine to prescribe. (…) Speaking at the launch of the product, Safaricom CEO, Bob Collymore noted that the adoption of tele-medicine would help address the gnawing question of the skewed doctor to patient ratio. He [Collymore] noted: ‘With this technology, all a doctor needs is a computer or a tablet to treat a patient. The product aims at widening reach of quality healthcare in the country’.”

Warui further claims that Safaricom made a business presentation in January 2013 on its “Health Presence Solution” to the Pharmaceutical Society of Kenya. In light of these two claims, Warui alleges that these products by Safaricom were based on his work which formed the core of his proposal registered as a literary work with KECOBO.

While the court rightly agrees with Warui that his concept paper was copyrightable, the ruling is cautious to note that from the evidence adduced by Warui, it is not clear which exclusive rights in the Concept Paper Warui is alleging to have been breached by Safaricom. Therefore the court makes the correct judgment call by stating as follows:-

“…In the absence of oral evidence which can be tested by way of cross examination, it would be difficult to ascertain whether the Defendant [Safaricom] has infringed on any intellectual property rights of the Plaintiff [Warui] in the Med Dispenser innovation by introducing the Safaricom Health Care Presence platform in conjunction with Cisco Limited. From the material before the Court, the Plaintiffs did not quite navigate the mix in this matter arising from the circumstances of the case, and thus, did not establish a prima facie case with a probability of success. The upshot is that the application before the court fails. However, the suit should be set down for hearing on a priority basis so that the substantive issues which are of great significance in the field of intellectual property law are resolved once and for all.”

Unanswered Copyright Issues as Musician JB Maina Agrees to Sh15.5m Settlement with Safaricom

jb-maina

Media reports here and here indicate that musician JB Maina has accepted Safaricom’s out-of-court settlement offer of KES 15.5 Million in the case of John Boniface Maina v Safaricom Limited [2013] eKLR. To recap briefly, 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, particularly its caller ring back tone service known as ‘Skiza’.

Prior to the reported settlement, the court had already 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. Thereafter the court allowed JB Maina’s application for Anton Piller orders against Safaricom. These orders allowed JB Maina 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 of copyright infringement. The final straw in the JB Maina case was an application filed by JB Maina for Safaricom Chief Executive Officer to be held in contempt of the anton piller orders issued by the court and committed to civil jail. This move prompted Safaricom to seek the leave of the court to allow for an out-of-court settlement of the suit with JB Maina.

With above information in mind, it comes as no surprise that Safaricom would be keen to pursue and conclude an out-of-court settlement in this matter with JB Maina. However this blogger argues that this settlement has left several critical issues unanswered:

1. The Separation of Infrastructure Provision from Content Provision

In this regard, Safaricom’s position has always been that it is an infrastructure provider that enables rights owners and their licensees to avail their music to end users. In the present case, the licensees are Content Service Providers (CSPs) who are duly licensed by the relevant collective management organisations (CMOs) to avail music. In this regard, Safaricom maintains that where licensed CSPs provide music using Safaricom’s infrastructure, it is enough that the CSPs produce to Safaricom all the required copyright licenses issued to it by the CMOs. It is on this basis that Safaricom enters into Content Provision Agreements (CPAs) with CSPs whereby the latter undertake to obtain all necessary licenses, rights of use, assignment and approvals from any relevant authorities and copyright owners for the provision of the Content and ensure that such licenses and approvals are updated and valid throughout the term of the CPAs. Critically, the CPAs state that CSPs undertake to defend and/or settle all intellectual property (IP) infringement claims brought against Safaricom and keep the latter fully indemnified.

In light of the above, Safaricom argue that as an infrastructure provider, it need not be licensed by CMOs or rights owners since the CSPs availing the music to end users are already licensed by CMOs and/or rights owners.

However, this blogger contends that the above argument is problematic for two main reasons, namely it betrays the widely accepted understanding of “communication to the public” and “infringement” under domestic and international copyright laws. In this regard, it is submitted that both functions of infrastructure provision and content provisions entail an exploitation of the right of communication to public and/or making available as defined under Article 8 of the WIPO Copyright Treaty and Section 2 of the Kenya Copyright Act. With regard to the issue of infringement, section 35 clearly contemplates two levels of infringement namely primary and secondary or direct and indirect. It is submitted that Safaricom may be liable for secondary or indirect copyright infringement as an infrastructure provider since it causes to be done or furthers the doing of an act which is controlled by the rights owners.

2. The Role of Content Service Providers

Safaricom advances two main reasons why it is averse to dealing directly with rights owners like JB Maina. Firstly, it argues that under the Kenya Information and Communication Act (KICA) read together with the Unified Licensing Framework gazetted in 2008, only CSPs who hold a current license from the Communications Authority of Kenya (CAK) are mandated to provide music to end users. Therefore Safaricom would only deal with CSPs and/or rights owners once they are duly licensed by CAK. Secondly, Safaricom appears to suggest the current arrangement of CSPs as middle-men is consistent with the provisions of the Kenya Competition Act i.e. preventing the monopolisation of content provision by a handful of CMOs or rights owners.

This blogger argues that this arrangement do not always work to the advantage of CMOs and rights owners since the CSPs are at liberty to under-state royalty payments received from Safaricom. Therefore, rights owners like JB Maina and CMOs like MCSK, KAMP and PRiSK must insist on dealing directly with Safaricom or at least having tripartite agreements where the copyright owners can be on the same level as the CSPs.

It is clear that JB Maina’s case raised important issues regarding rights owners that are not members of any of the music CMOs. However there are two other likely scenarios that would require Safaricom to deal directly with a rights owner. Firstly, where the rights owner is a member of a CMO but has selectively limited its assignments to the latter and/or the works to be administered by the latter. Secondly, where the rights owner has assigned all rights exclusively to both the CMOs and the CSPs (A frequent occurence!).