Kenya Copyright Board Bruised in IP Fight over ‘My Skool’ TV Show

MY SKOOL TV SHOW copyright registration KECOBO Kenya

Presently the Copyright Register (pictured above) shows that the same audiovisual work called “MY SKOOL TV SHOW” has two separate owners who registered it almost a year apart. In a recent High Court judgment in the case of Republic v Executive Director, Kenya Copyright Board & another Ex-Parte Sugarcane Communications Ltd [2018] eKLR, the court quashed a decision by Kenya Copyright Board (KECOBO) to cancel the copyright registration of “MY SKOOL TV SHOW” by the ex parte Applicant (Sugarcane Communications Limited). This judgment is perhaps a wake-up call for KECOBO which, unlike the Registrar of Trade Marks at Kenya Industrial Property Institute (KIPI), is not accustomed to having its decisions regarding registration of intellectual property (IP) rights challenged by courts of law.

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Trade Mark vs Company Name Registration: Innscor Int. Battles Rwandan Companies, Pizza Inn Ltd and Chicken Inn Ltd

innscor-international-rwanda-trademark-pizza-inn-chicken-limited-image-by-nlipw

In a recent media report here, the Commercial Court of Nyarugenge in Rwanda has ruled that it will not proceed with a case filed by Innscor International accusing two local companies Chicken Inn Limited and Pizza Inn Limited of trademark infringement in Rwanda. The basis of this ruling was reportedly that Innscor had not demonstrated to the court that it had “legal status according to the law governing registered entities in Rwanda”. Technicalities aside, it is clear that once Innscor produces its certificate of incorporation in court, this case would proceed to consider the merits of Innscor’s claim (as illustrated by the picture above), namely that registration of a name as a company name by entity A should not trump any rights in such a name acquired previously by entity B through trade mark law.

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Demystifying the Role of Copyright as a Tool for Economic Development in Africa: Tackling the Harsh Effects of the Transferability Principle in Copyright Law

samro---guitarist

“It is…submitted that the system of alienable copyright is not conducive for countries in Sub-Saharan Africa and cannot, unless the legislatures of these countries intervene, ever give rise to a sustainable, home-bred and poverty alleviating industry.” – JJ Baloyi, 2014.

This blogger has recently come across a compelling article titled “Demystifying the Role of Copyright as a Tool for Economic Development in Africa: Tackling the Harsh Effects of the Transferability Principle in Copyright Law” written by JJ Baloyi in the South African Potchefstroom Electronic Law Journal. A copy of the article is available here. The central argument in Baloyi’s article is that the transferability principle in copyright law has had the inadvertent effect of stifling copyright-based entrepreneurship, and thus economic development in Sub-Saharan African countries that inherited copyright laws from their erstwhile colonial masters, England or France.

This blogpost discusses Baloyi’s well-written article and examines its implications for Kenya especially in light of the possible solutions put forward to tackle the ‘harsh effects’ of the system of assignment under copyright within Africa.

Baloyi’s article asks the question why many Sub-Saharan African countries, though having copyright and related rights laws and though generally endowed with rich cultural resources, have not been able to realise significant economic development and growth from the economic exploitation of intellectual property (IP) works and legally-protectable expressions emanating from such resources. Baloyi, former General Counsel at SAMRO, attempts to answer this question with a focus on the music industry where he draws most of his insights, observations and experience.

The article submits that there are several sets of barriers hindering musical entrepreneurship in Africa including psychological barriers, barriers in relation to the business environment, barriers relating to external ability and barriers in relation to the influence of demographics.

On psychological barriers, the article starts by appreciating the stress and hard work involved in giving us great musical pieces that we, as society, have become accustomed to. In this regard, the copyright regime demands that musicians exert themselves through their skill, time and judgment in order to create works that are original originating from their own efforts rather than slavish copies of works produced by the efforts of others. Therefore the article submits that expecting musical artists to be entrepreneurs in addition to being creators, is requiring more than the ordinary from them! Nonetheless these creators should be encouraged to be entrepreneurs even though it is accepted that not all artists will be entrepreneurs, just as not all lawyers can be entrepreneurs, for instance! Therefore artists who surround themselves with good advisors, would only need to display an entrepreneurial mind-set and leave the entrepreneurial activities to others.

left-brain-right-brain

Still on psychological matters, the article argues that the possession of IP within an environment where there is a strong IP protection regime is a strong determinant of entrepreneurial growth aspirations. Therefore, ownership of copyright in such an environment should be a strong motivation for artists to be involved in entrepreneurial activities.

Regarding barriers in relation to the business environment, the article observes that the lack of social networks becomes crucial in two instances, firstly collaborations where an artist seeks to jointly author a musical work with artists endowed with different skills and secondly marketing where an artist decides to market his own musical works.

The article gives primary focus to the lack of resources which it maintains is the main difficulty experienced by artists in Africa in respect of securing funding for their music entrepreneurial endeavours. In this regard, the article observes that most authors of musical works find themselves with no option but to assign i.e. transfer ownership in, their copyright to music publishers under terms that are highly unfavourable to the authors. It follows that once these authors have accumulated enough savings over time (due to the barriers relating to demographics) to incorporate and market their own publishing and recording companies, they find it difficult to engage in entrepreneurial activities relating to their copyrights as these rights have long been assigned to others. This so-called “endless cycle” is the main problem Baloyi seeks to address through his article.

Therefore the article argues that the artists’ lack of resources necessary to engage in entrepreneurial activities vis-a-vis their copyright works denies them the enjoyment of the rent-creation benefits under copyright licensing whereby the copyright owner may grant either an exclusive or a non-exclusive license to a user, in exchange for payment or compensation. Therefore these licenses would be able to earn the artists (and their heirs in title) income in the nature of rents (i.e. royalties) for the duration of the copyright.

thelionking

In light of the above, the article argues that Sub-Saharan African countries should develop its copyright laws to address concerns relating to the internal conditions and developmental needs of their countries. This article points out the examples of United States, Canada, the European Union and India which have moulded their copyright laws in light of their unique prevailing circumstances to produce home-grown solutions. In this regard, the article submits that beyond the minimum standards required in Berne and TRIPs, African nations can craft provisions that would safeguard the interests of their creators while not offending their international obligations.

The article is categorical that the dualist systems in common and civil law traditions of African countries result in the “endless cycle” where authors cannot exploit their copyright works as explained above. In this regard, the article refers favourably to the German system of author’s rights (a monist system) where the economic rights are seen as being interwoven with the moral rights and thus cannot be separated out, making them incapable of being assigned. The article argues that the monist concept of authors’ rights is consistent with the human rights approach to intellectual property rights espoused in South Africa and other Sub-Saharan African countries.

The legislative and policy solutions put forward in the article include, the use of reversionary provisions in copyright legislations, structuring music business contracts to safeguard the interests of artists and strengthening the role of collective management organisations (CMOs). In conclusion, Baloyi appeals to the legislatures in Sub-Saharan Africa to take advantage of the evolutionary nature of copyright and its changing paradigm internationally:-

“Rather than holding to the tenets of a system that has so far failed their countries, it would be responsible for the legislators of these countries to start thinking of those elements in other copyright systems that they can incorporate into their laws to unshackle their authors from the harsh effects of the transferability rule.”

Unilever [Omo] vs Procter & Gamble [Ariel]: Regulation of Advertising under Kenya’s Competition and Intellectual Property Laws

“What is goodwill? It is a thing very easy to describe, very difficult to define. It is the benefit and advantage of good name, reputation, and connection of a business. It is the attractive force which brings in custom. It is the one thing which distinguishes an old-established business from a new business at its first start. Goodwill is composed of a variety of elements. It differs in its composition in different trades and in different businesses in the same trade (….) The goodwill of a business is one whole.” – Lord MacNaughten in The Commissioners of Inland Revenue v Muller & Co’s Margarine Limited [1901] AC 217 223-224.

According to a recent Consumer Insight survey, Ariel by Procter & Gamble East Africa (PGEA) enjoys a market share of 25 per cent, Omo by Unilever Kenya (UK) is at 18 per cent, Sunlight also manufactured by UK is at 17 per cent, Toss by Kapa Oil Refineries is at 6 per cent and Ushindi by PZ Cussons is at 6 per cent. According to this survey, despite Ariel’s re-entry into the Kenyan market, it has become “the leading brand” and has “successfully captured a loyal following” thanks to it’s Enzymax formula and ‘one wash’ campaign which has really “connected with consumers”.

The Business Daily now reports that PGEA has been sued by UK with respect to its “one wash” detergent advertising campaign for Ariel which the Omo manufacturer alleges is non-factual. The adverts in question (an earlier version of which is available above in Swahili) promote Ariel as the best stain removal detergent “in one wash” and is compared as a superior choice to the “other popular powder detergent in the market” (an alleged reference to UK’s Omo detergent). UK contends that the adverts thus depict Omo as incapable of removing the stains in “one wash”, arguing that the claim is not based on any independent research. Therefore UK alleges that PGEA’s ‘one wash’ advertisements are unlawful. From an intellectual property (IP) perspective, advertisements are important mode of building and promoting IP rights.

The High Court last month granted UK interim orders restraining PGEA from “running or airing the Ariel One Wash campaign advert in its current form at all media houses and all forms of print and electronic media” until the matter is back in court. Subsequently, it was reported that the court directed that the suit be referred to a Tribunal of the Advertising Standards Board of Kenya.

Comment:

The central question which arises in the present case is whether one manufacturer may compare its product in an advertisement with that of his competitor and indicate that its product is better or that there are defects in its competitor’s products.

This practice is known as comparative advertising.

According to Prof Owen Dean, IP Chair at Stellenbosch University, a trader who resorts to comparative advertising is “attempting to “ride on the back” of a well known and successful product and to use the repute of that product as a platform from which to generate sales of his own product.”

Kenya has a broad framework of national and international legal frameworks that have a direct impact on the regulation of comparative advertising. First and foremost, the Paris Convention, signed and ratified by Kenya, contains important provisions on competition. Article 10bis reads as follows:

“(1) The countries of the Union are bound to assure to nationals of such countries effective protection against unfair competition.
(2) Any act of competition contrary to honest practices in industrial or commercial matters constitutes an act of unfair competition.
(3) The following in particular shall be prohibited:
– false allegations in the course of trade of such a nature as to discredit the establishment, the goods or the industrial activities of a competitor;
– indications or allegations the use of which in the course of trade is liable to mislead the public as to the nature, the manufacturing process, the characteristics, the suitability for their purpose, or the quality, of the goods.”

In addition Article 2 of the TRIPs Agreement requires members of the WTO to comply with the substantive provision of the Paris Convention as highlighted above.

Nationally, comparative advertising is regulated through common law and statute.
Kenya’s principal legislation governing false or misleading advertising is the Competition Act. For our present purposes, it is important to note the definition of asset in this Act which includes both “asset” includes both “intellectual property” and “goodwill”.

Most notably, section 55 of the Act makes it an offence to engage in false or misleading advertising. The section reads as follows:

“55. False or misleading representations
A person commits an offence when, in trade in connection with the supply or possible supply of goods or services or in connection with the promotion by any means of the supply or use of goods or services, he―
(a) falsely represents that—
(i) goods are of a particular standard, quality, value, grade, composition, style or model or have had a particular history or particular previous use;
(ii) services are of a particular standard, quality, value or grade;
(iii) goods are new;
(iv) a particular person has agreed to acquire goods or services;
v) goods or services have sponsorship, approval, performance characteristics, accessories, uses or benefits they do not have;
(vi) the product has a sponsorship, approval or affiliation it does not have;
(b) makes a false or misleading representation—
(i) with respect to the price of goods or services;
(ii) concerning the availability of facilities for the repair of goods or of spare parts for goods;
(iii) concerning the place of origin of goods;
(iv) concerning the need for any goods or services; or
(v) concerning the existence, exclusion or effect of any condition, warranty, guarantee, right or remedy.”

In common law, the torts of passing off and injurious falsehood relate to forms of conduct which constitute an infringement of a competitor’s right to attract custom whose object is the trader’s goodwill. The common law action of passing off is expressly recognised in section 5 of the Trademarks Act. Whereas the common law tort of injurious falsehood seems to have received tacit recognition in section 6 of the Trade Descriptions Act which states as follows:

“6. (1) It shall be an offence for any person, in the course of any trade-
(a) to make a statement which he knows to be false; or
(b) recklessly to make a statement which is false, as to any of the following matters-
(i) the provision in the course of any trade of any services, accommodation or facilities;
(ii) the nature of any services, accommodation or facilities provided in the course of any trade;
(….)
(2) For the purposes of this section-
(a) anything(whether or not a statement as to any of the matters specified in subsection (1)) likely to be taken for such a statement as to any of those matters as would be false shall be deemed to be a false statement as to that matter; and
(b) a statement made regardless of whether it is true or false shall be deemed to be made recklessly, whether or not the person making it had reasons for believing that it might be false.”

Thus far, it appears that the relevant law cited is in favour of UK’s claim of false, misleading advertising. However PGEA may seek to refute UK’s claims by relying on the Constitution of Kenya, 2010 as well as non-binding/persuasive jurisprudence from South Africa.

In South Africa, the question of comparative advertising arose in the case of Post Newspapers (Pty) Ltd v World Printing & Publishing Co Ltd 1970 where both parties were publishers of two newspapers – Post and The World. Both papers targeted the same potential readership and so they competed for advertising. Under the cover of a circular letter, the respondent sent a market review to some advertising agents. In it, Post was unfavourably compared with The World as an advertising medium. The applicant sought an interdict prohibiting the dispatch of those documents. Nicholas J referred with approval to some English cases, in which it had been said: “The general position in law is: comparison – yes; but disparagement – no.”

In refusing the application, the court held that:

“To the extent that the statements complained of involved merely a comparison of The World and Post, they are not actionable. There are, however, statement which amount to a disparagement of Post as an advertising medium. If these statements were shown prima facie to be untrue, the applicant would be entitled to relief. The applicant does not, however, say that these statements are untrue, nor is there any evidence that they are untrue.”

Therefore in terms of South African case law, purely comparative advertising is not unlawful – unlawfulness only occurs if the competitor is discredited by untrue allegations. This precedent would bolster PGEA’s case against UK. However South African scholars in the law of torts, Van Heerden & Neethling disagree with the holding in this case. They argue that comparative advertising always entails a disparagement of a competitor’s goods and therefore it constitutes an impairment of the latter’s goodwill and it is unlawful unless there are grounds for justification.

Aside from reliance on South African precedent, the makers of Ariel may chose to focus on the protection of intellectual property rights expressly guaranteed under the Constitution. In this connection, counsel for PGEA would argue that the state must balance consumer rights (Article 46) as advanced by UK together with the IP rights of PGEA in its advertisements (Article 40). Connected to this right to property is PGEA’s constitutional right to freedom of expression which is also enshrined in Article 32.

This blogger has previously discussed here and here the various intellectual property rights that may be owned within the context of advertising, most notably copyright in all literary, artistic and audio-visual works and trademark rights with respect to brand names, logos and slogans. In this regard, it is important to note that UK has not disputed PGEA’s IP rights relating to the adverts. Therefore by ordering that the Ariel ‘One Wash’ adverts be removed from media circulation, it may be argued that the courts have infringed on PGEA’s IP rights in the adverts. Article 40(5) compels the courts to support, promote and protect the IP rights of the people of Kenya. Any limitation of rights under the Constitution must be justified under Article 24 of the Constitution. PGEA would also argue that the restraining order by the court is a deprivation of property and therefore would have to comply with Article 40(3) of the Constitution.