Kenya Set to Earn Millions in Individual Fees from WIPO Madrid System

Kenya Madrid Declaration 2014

Beginning June 12, 2014, Kenya became entitled to receive individual fees from the World Intellectual Property Office (WIPO) through its international registration system for trade marks known as the Madrid System. This is as a result of Kenya’s Declaration (pictured above) in which it notified WIPO of its intention to receive specific fees known as ‘individual fees’ from applicants designating Kenya in Madrid system applications. This blogpost looks at this new development in the administration of trade marks and its impact for local and foreign trade mark practitioners.

Kenya joined the Madrid System in the year 1998. Since 1998, both trade mark practitioners and administrators have voiced their complaints about Madrid. For practitioners, the bone of contention has remained the fact that Kenyan trade mark agents are losing clients who would ordinarily be required to file applications through the agents. For administrators, the central complaint was that Kenya was making losses with regard to fees. This is because the fees that a member state earns under the Madrid System are lower than the fees that a member state would ordinarily earn under the national fees schedule.

As many may know, the formula for distribution of the supplementary and complementary fees for each designated country is provided for under Article 8 (5) and (6) of the Agreement and Article 8 (5) and (6) of the Protocol as well as Rule 37 of the Common Regulations under the Madrid Agreement Concerning the International Registration of Marks and the Protocol Relating to that Agreement. In the case of Kenya, KIPI has been earning approximately 20 Million Shillings (Kshs. 20,000,000/=) annually from WIPO through the Madrid system.

In 2013, the management of Kenya Industrial Property Institute (KIPI) decided that in accordance with Article 8(7)(a) of the Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks, a declaration should be made to have Kenya receive individual fees. The decision was forwarded to the KIPI Board of Directors and upon approval, the matter was forwarded to the Ministry of Foreign Affairs and International Trade through the Ministry of Industrialization and Enterprise Development for submission to WIPO.

While we do not know exactly how much Kenya stands to gain from individual fees, it is hoped that the fees will be much higher than the Kshs. 20,000,000/ received before the declaration was made.

From a local trade mark practitioner’s perspective, the declaration does not affect applications made under Madrid System. This is because the practitioners making such applications would be representing Kenyan residents who according to the Madrid Agreement require a basic registration of the respective mark in Kenya and according to the Madrid Protocol require a basic application for registration of the respective mark in Kenya. This means that the fees payable would be equivalent to the individual fees that would be payable under the new system, apart from the publication fees which the declaration did not include.

The effect on foreign trade mark practitioners making applications designating Kenya under Madrid System is that they would need to advise their clients on the new fees as indicated in the declaration. In accordance with the provisions of Article 8 (7) (a) of the Protocol, the fees indicated in the declaration are identical to the fees payable under the Trade Mark Rules for Kenyan non-residents. The declaration states as follows:

Designation of KENYA (in an international application or subsequent designation)

– for one class of goods or services $350 (three hundred and fifty)
– for each additional class $250 (two hundred and fifty)

Where the mark is a collective or certification mark

– as above

Renewal of an international registration containing a designation of KENYA:

– for one class of goods or services $200 (two hundred)
– for each additional class $150 (one hundred and fifty)

Where the mark is a collective or certification mark

– as above

High Court Orders Stay of Tribunal’s Invalidation of Sanitam Sanitary Bin ARIPO Patent No. 773

Sanitary waste disposal bin. US 2593455 A. Images. Patent Drawing

In the recent case of Sanitam Services (E A) Ltd v Rentokil (K) Ltd & another (K) Ltd [2014] eKLR, the High Court has issued a stay order against the ruling of the Industrial Property Tribunal (IPT) delivered on 21st January 2014 which invalidated with costs on the higher-scale Sanitam’s Patent Number AP 773 registered with the African Regional Intellectual Property Organization (ARIPO) on 15th October 1999.

H.P.G Waweru, J ruled that Sanitam was entitled to the stay pending hearing and determination of its appeal in accordance with section 115 (1) of the Industrial Property Act, 2001 (IPA) which provides –

“(1) Any party to the proceedings before the Tribunal may appeal in accordance with the rules made under this Part from any order or decision of the Tribunal to the High Court..”

In making his ruling, the learned judge examined the effect of invalidation of Sanitam’s patent as provided in Section 104 of the IPA Act, which reads:

“104. Effect of revocation or invalidation

1)Any revoked or invalidated patent, utility model or industrial design or claim or part of a claim of a registered industrial design shall be regarded as null and void from the date of the grant of the patent or certificate of registration of the utility model or the industrial design.

2)As soon as the decision of the Tribunal is no longer subject to appeal, the Chairman of the Tribunal shall inform the Managing Director who shall register and publish it as soon as possible in the Kenya Gazette or in the Industrial Property Journal.”

The court found that the implied effect of s104(2) was that an appeal to the High Court would act as a stay of registration and publication of the decision of the Tribunal in the Kenya Gazette or the Industrial Property Journal. Therefore all Sanitam needed to do was to inform the Chairman of the Tribunal that it had appealed against its order of 21st January 2014 and provide evidence of such appeal.

The court stated as follows:

“Upon a closer look at that wording of section 104(2), there cannot be any doubt that the intention of the legislature was that an appeal once duly lodged, and as long as it remains undisposed of, shall operate as a stay of the decision of the Tribunal, which decision may not be registered or published in the Kenya Gazette or the Industrial Property Journal pending disposal of the appeal.”

However the court allowed Sanitam’s application for a stay as it was necessitated by the fact that the wording of section 104(2) was not express enough and therefore Sanitam made the application ex abundante cautela i.e. out of abundance of caution.

Therefore the focus now shifts to the High Court who will review the decision of the IPT in Nairobi IPT Case No. 5 of 1999. In this matter, Rentokil Initial (K) Limited and Kentainers (K) Limited (the requesters) applied for revocation of the sanitary bin patent by Sanitam (the respondent) on two main grounds:-

1. The subject matter of the invention lacked novelty as it was anticipated by prior art and available for public use. In this regard, the requesters argued that the patent was a mere adaptaion or replica of products which were at the time of grant already in the market in Kenya and elsewhere in the world for a considerable number of years.

2. The subject matter of the invention was obvious and lacked an inventive step.

On its part, the respondent opposed the requesters’ application on the following grounds, as summarised by the IPT:

1. That ARIPO whose mandate extends to Kenya must have considered competing applications or oppositions before registration of the patent in issue.

2. That in spite of the requesters having been notified of the impending application before ARIPO, they did not take any action in opposition thereto and therefore should be stopped from taking the present action.

3. There are no valid grounds in law or in fact to support the present application for revocation.

According to the IPT, several issues arose for determination:

“i) What are the powers of the Tribunal in an application for revocation or infringement
ii) Whether the invalidity of the registration of a patent can be a defence to a claim for infringement
iii) When can the decision of registration of a patent be revoked
iv) What is the test of prior art and what geographical span is applicable”

With respect to (i), (ii) and (iii), we find it curious that the IPT would set out to determine issues that are already clearly provided in the law.

With respect to iv), the IPT stated as follows on the issue of prior art:

“The Applicant [requesters] in their quest to demonstrate that the patent is anticipated by prior art has exhibited other very similar design No. 2042739 in use as far back as 1994. The shape and design of the exhibit is remarkably similar if not the same as the Respondent’s registered patent. The design was demonstrated to be in existence well before the Respondent applied to register the patent.”

However we are puzzled that the IPT failed to conduct any comparison of the respondent’s claims against those of the prior art. In this connection, the IPT also seemed to suggest that the patent examiner ought to have been called by the Respondent to explain whether in light of design No. 2042739 the examiner would still consider the patent as new and not anticipated by prior art. This would be akin to a Magistrate being required to explain his/her decision at the High Court!

Nevertheless, the IPT maintained that it was incumbent upon the respondent to distinguish its patent from the design no. 2042739 and particularly demonstrate an inventive step and research done to rule out existence of prior art.

In this regard, the IPT observed as follows:

“The Respondent seems to argue that the examiner’s decision is what matters and that only an expert can determine the similarity or otherwise of the designs with regard to prior art… They have neither offered any evidence to demonstrate that an attempt was made to establish that the patent was not anticipated by prior art or made any submissions as ordered…The Respondent instead focused their energies and arguments on challenging the jurisdiction of the Tribunal to hear the matter by filing up to Five (5) applications in the High Court…which were duplications of the same prayers and suffered the similar fate of failure. It was in this diversionary trend that the Respondent probably failed to even file affidavit evidence or submissions in the very matter that mattered most to its patent namely these proceedings.”

From the above, the IPT went on to find that there was indeed evidence that the Respondent’s patent was anticipated by prior art in the form of Design No. 2042739 and that the Respondents failed to demonstrate otherwise.

Although the IPT’s ruling was hard to follow at times and wrought with numerous discussions of irrelevant considerations, the decision to revoke Sanitam sanitary bin patent AP773 is now being heard on appeal before the High Court and we shall update readers on the progress and outcome of the case. In the meantime, our review of the previous cases involving Sanitam’s patent is available here.

The Madrid Trade Marks Registration System From A Kenyan Perspective

quail-advanced-regular-strength

Editor’s note: For more on the Quail farming craze in Kenya, see here.

As many are aware, the system of international registration of trademarks facilitates the obtaining of protection for marks (trademarks and service marks) and since an international registration is equivalent to a bundle of national registrations, the subsequent management of that protection is made much easier. During KIPI‘s two-day Trade Marks Law and Practice Training Course (featured here), Sudi Wandabusi, this blogger’s friend and trademarks examiner at KIPI devised a great practical scenario on the international registration of trademarks.

For purposes of the scenario, a local manufacturer, Isindu Financial Limited is the owner of the trade mark “Quail Advanced Strength” (TM No. 95229) registered at KIPI on 07-07-2013. Isindu now instructs IPKenya to advise on how its trade mark can be protected in the following territories: Zambia, Italy, U.S.A, Japan and Ireland, where its products are already being marketed and sold by authorised distributors.

Why use the Madrid System?

Since Isindu’s trade mark is present in countries outside Africa, the Madrid System is the obvious choice for registration. This system makes it possible for owners to obtain and maintain registration in a number of countries through a simple and cost effective procedure. Therefore Isindu only needs to file one international application, in one language, and pay one fee, in one currency – no translation, currency exchange, legal fee costs.

Is Kenya a member of the Madrid System?

Kenya joined the Madrid Union in 1998. It brought into force both the Agreement and the Protocol on June 26 1998.
The system is administered by the International Bureau of WIPO. There are a total of 92 contracting parties to the Madrid Union. A full list of members can be found here.

Is Isindu eligible to use the system?

Any natural person or a legal entity which has a real and effective industrial or commercial establishment in, or is domiciled in, or is a national of, a country which is party to the Madrid Agreement or the Madrid Protocol can use the system.

Therefore Isindu’s entitlement to file the international registration would be that it has a a real and effective industrial or commercial establishment in the territory of the Kenya.

Can Isindu claim priority?

From the scenario above, it is stated that TM No. 95229 was registered at KIPI on 07-07-2013. An applicant can claim priority
when filing within six months of the date of an earlier filing.
Therefore, Isindu is still within time as at the date of this blogpost and can claim priority.

How much does it cost?

The international registration fees payable to the International Bureau are available online here. This page also has a ‘fee calculator’ which is very helpful in establishing exactly how much is to be paid. The standard fee is CHF 903 for coloured marks and CHF 653 for black and white with a complementary fee of CHF 100. In addition, there is a handling fee of KES 1000 or USD 13 payable to KIPI.

How do the applicants or agents interact with the Bureau?

Several online services have been introduced by the International Bureau. They enable faster, easier communication between the applicant/agent and the bureau, namely:

1) Madrid Goods & Services Manager is a nifty tool that assists TM applicants/agents in compiling their lists of goods and services to file national and international applications. It is available in several languages and helps avoid irregularities in filing. The tool is indispensable as it enables one see which terms are acceptable by International Bureau and different designated contracting parties

2) Madrid Real–time Status (MRS) is a stand-alone tool that provides the status in real time of trademark documents being processed by WIPO. It enables applicant/agent to see what’s happening to their request at any point in time.

3) Madrid Electronic Alert (MEA) is a free ‘watch service’ that informs anyone interested in monitoring registration status of international marks. It is a subscription-based daily e-mail alert system that alerts when changes are recorded in the International TM register.

4) Madrid Portfolio Manager (MPM) is a web service that allows holder of international registrations and there reps access their international trademark portfolios. It comes in handy when submitting new requests for recordal in WIPO international TM Registry.

Comments:

This blogger notes that despite the fact that Kenya is signatory to the Madrid Union, other neighbouring countries within the East African Community (EAC) are not members, with the exception of Rwanda. Within the African continent, less that 11 countries are members of the Madrid system. It has been argued that the reason for the low number of signatories is that the Madrid system is not attractive to African states. It is indeed noteworthy that the larger economies in Africa are not members of Madrid, including South Africa, Egypt and Nigeria. The strongest resistance has come from trade mark practitioners who have lobbied against this system arguing that they stand to lose revenue (agent fees) under the Madrid system.

In contrast, the national trade marks office, KIPI, would prefer the Madrid System as it provides an extra source of revenue. The 35% revenue sharing provision under Madrid almost guarantees the member states an extra added income of CHF 10, 000 and this sum could be higher depending on the designation. KIPI receives an average of CHF 300,000 annually through the Madrid System, whereas a country such as Botswana receives an average of CHF 500,000 annually.

For information on the Madrid System, check out the WIPO website here and WIPO also has a database of all trade marks registered under the Madrid System available here.