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NOMENCLATURE OF INTELLECTUAL PROPERTY AND TRANSFER OF TECHNOLOGY

Intellectual property law is interested in protecting the product of human mind or product of

creation. IP is sometimes regarded as protecting the physical embodiment of an otherwise

intangible asset.

Manifestations of IP

1. Patents – the certificate that you get from the patent office after you have made an invention.

The relationship that exists between an inventor on one hand or patentee and the patent office,

the estate or society. It is a juridical relationship between an inventor or patent owner on one

hand and on the other hand the patent office or the state or society in general. The inventor is

that person who has brought out a new process or a new invention. A patent owner is the

person who holds the rights. The state here is Kenya and the office is Kenya Intellectual

Property Institute (KIPI). To get a patent one must have an invention, it must be new (novel). In

the case of Windsurfing v Tabur Marines – a boy used to play with a play boat, later on a

company made a similar play boat and wanted a patent on it, they were denied because it was

not new. It must constitute an inventive step – this is the doctrine of non-obviousness i.e. is it

obvious to PHOSITA (person having ordinary skill in the art), an invention need not be complex

for it to constitute an inventive step, it may be simple but not obvious. Patents must be useful

(doctrine of utility), it must be capable of industrial application this is the same as utility.

2. Utility Models – these are sometimes called petty patents. The concept is that there are

certain innovations that don‟t need to be entirely new, it might be new in Kenya but not

necessarily elsewhere, the newness need not be absolute and there need not be an inventive

step, it must be useful. Kenya has both patents and utility models, Kenya Ceramic Jiko (KCJ)

from the metal jiko we realised the need to conserve energy, the idea was that metal was

making energy disappear but ceramic would conserve energy. Utility Models can be used to

protect Kitenges, Kikoi‟s etc which is also a case of copyrights.

3. Copyright: - protects original expressions embodied in material, tangible or fixed form. © it

starts with an idea, it is expressed and the expression is then embodied in material form. For

example a writer gets the idea to write, writes notes down on a piece of paper and then the

book, this is the idea, expression dichotomy. Ideas are not protectable in intellectual property

expressions are. Copyright is more dynamic 3 areas where copyright is useful i.e. in software,

literature and entertainment amongst others.

4. Trademarks -

5. Trade secret

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Look at the:

Industrial Property Act 2001

Trademarks Act Cap 506

Copyright Act 2001

COPYRIGHT

Copyright law is intended to protect and to reward original expressions embodied in tangible

material or fixed form. In the first category an idea does not infringe copyright but once it is

expressed in some form, then it becomes tangible when expressed, you don‟t only have the

idea in your head you have expressed it and its somehow in fixed form. Not everything that is

new is patentable unless they are original expressions and are in original form.

Subject matter of copyright is divided into two broad categories

1. Primary works; Americans call these works of original authorship. These include literally

works, artistic work, musical work ,sound recordings are physical embodiments of primary

works.

1. Secondary Works – sometimes called neighbouring related or allied.

Primary works include - These include literally works, artistic work, musical work. Literally

works are defined under Section 2 of Copyright Act as meaning irrespective of literally

quality. When a play is in writing it is a literally work but the moment you perform it is called a

performance. A treatise is a book that deals with one subject in great detail. Essays and

articles are also copyrightable. Letters are copyrightable. Reports are copyrightable.

Memorandum including MOUs are copyrightable, summons are copyrightable. Charts and

tables, computer programs or software, tables and compilation of data are copyrightable.

Literally works do not include judicial decisions and statutes. A headnote is copyrightable.

Musical works – means any musical work irrespective of musical quality and includes works

composed for musical accompaniments.

Artistic works – means irrespective of artistic qualities, paintings are artistic works, etching,

lithographs, woodcarvings and maps etc. photographs which are not comprised in audiovisual

works i.e stills, the photographer owns the copyright in a picture for exercising skill and

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judgment in taking the photo, the poser is not responsible for the composition of the

photograph.

An author is the first owner of a copyright.

Payment is not the basic issue in intellectual property, the issue is who exercises skill and

judgment. Works of architecture in the form of buildings are artistic works and are

copyrightable.

Industrial handcrafts and clothe designs.

Secondary works or neighbouring works – these works do not belong to the cathedral of

creativity. Poets, painters, musicians

2. Audiovisual works – a VHS or DVD are audiovisual they are both audio and visual or have

both qualities – it is the director who owns the copyright for audiovisual work.

3. Sound recordings - sound recordings are physical embodiments of primary works.

4. Broadcasts – this is any transmission intended to be received whether it is received or not,

What is a performance S. 30 (6) of the copyright Act defines a performance as

"performance" means the representation of a work by such action as dancing, playing, reciting,

singing, declaiming or projecting to listeners by any means whatsoever;

What is original?

Original is many times confused with the term creative but original may mean

That its not a copy; - copy – its not a reprint of another and it is not a copy version of another, it

embodies skill and judgment i.e. a work must embody skill and judgment to be copyrightable –

Feist v Rural (US) a company published a white pages directory, another company copied the

entries and published a yellow pages directory, they even copied trap entries.

In the supreme court the white pages directory said the yellow pages was infringing and yellow

pages argued that what white pages had was not copyrightable but it was only sweat and brow,

sweat and brow are not copyrightable.

What white directory had entered was mere data and was not works of skill. Feist Publications,

Inc., v. Rural Telephone Service Co., Inc., 499 U.S. 340 (1991), commonly called just Feist v.

Rural, was a United States Supreme Court case in which Feist copied information from Rural's

telephone listings to include in its own, after Rural refused to license the information. Rural sued

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for copyright infringement. The Court ruled that information contained in Rural's phone directory

was not copyrightable, and that therefore no infringement existed.

UNFAIR COMPETITION

This is a cross cutting aspect of intellectual property in the sense that it relates to patents,

copyright, trademark law and other areas. Under IP Act 2001 some regulations have been

enacted to ensure that licensors of technology or patents do not include inequitable and fair or

oppressive terms in licensing agreements or contracts. For example under IPA 2001 if a

licensed agreement compels a licensee to acquire technology from abroad and yet that

technology is available locally that is regarded as unfair technology, or importing expensive

technology where alternative technology is available and cheaper.

Unfair competition in area of passing off – whenever someone passes-off your property that is

unfair competition. Section 5 of the Trade Marks Act.

Contracts in restraint of trade – unfair competition – Cassman Brown

Contract in Restrain of Trade Act

To what extent can you limit an employee or competitor from competing with you?

Geographical Scope – what radius

Duration – For how long can you restrict trade?

Scope of Business – being prohibited from doing two similar things for two rival companies.

There was a big issue with Saachi and Saachi.

Restrictive or Unfair Trade Practices

they are closely related to passing off. When one enters into a contract, in software Microsoft

has been accused of bundling products (bundling means for example buying sugar must go with

bread) to buy one item you are bundled with another item. Whenever one buys Windows

software, one gets Explorer, Netscape existed and they had Nestcape Navigator for exploring

the net , Microsoft was forcing people to use Explorer because it came with the Windows

package which was unfair because in a way it was locking Netscape out, even where it is

offered to free it is still bundling, taking unfair advantage of market dominance.

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Cap 504 – The Restrictive Trade Practices Monopolies and Price Control Act – this Act does not

sufficiently deal with intellectual property. it does not sufficiently understand intellectual property

technological issues, there is a technology and IP deficit.

The following instruments have tried to deal with the problems of unfair competition

1. Paris Convention on the Protection of Industrial Property 1883

2. There were negotiations in the 70s through 1980s for an international code of conduct on

Restrictive Trade or Business practices (RBTs) there were arguments that Trans-national

Corporations like Microsoft, Nation Media Group were engaged in restrictive business practice

or unfair competition. For example price fixing.

3. In 1970 – 1985 there were concerted discussion for a draft international code of conduct on

transfer of technology hereinafter called the Draft Tot Code.

Last aspect of Unfair Competition is advertising which is an arena for providing information to

customers or consumers as well as developing and selling a brand. This issue play out in the

realm of comparative advertising, misleading advertising and unfair advertising. These are

problems in the realm of economic torts as well as intellectual property particularly Unfair

Competition. In comparative advertising one company advertises its product and compares it

with the competition i.e. that it is cheaper, better quality, long-lasting in relation to the

competition which mostly is identifiable competition. Compaq v Dell. One company insisting

they are cheaper than the competition.

TRADE SECRETS

Trade secrets are sometimes called undisclosed information as TRIPS calls them then they can

also be called confidential information, know how. Trade secrets have 3 major characteristics

1. Information must be secret or confidential – not disclosed to other people;

2. Information must have commercial value – commercial value by reason of its confidentiality;

3. There must be an obligation to keep that information secret – confidential obligation. This is

done through non-disclosure agreements NDA or the confidentiality clause in the contract of

employment. Coca cola is a good example in discussing trade secrets law, the black syrup base

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of Coca cola is not patented but protected by Trade Secret Law. If it was protected by

trademark, it would have expired by now.

Diana Princess of Wales as a Trade Secret – character merchandising, Diana dolls, Diana‟s

portrait on plates etc. Diana‟s letters to Major James Hewitt were a trade secret.

David Beckham – David Beckham merchandise -

TRADE SECRETS: protect your trade secrets through patents other than trade secrets.

Trade secrets are not sustainable if leaked or if the owner of a trade secret dies, they die with it,

this is the problem with traditional knowledge. Traditional Medicinal Knowledge. Whenever an

elder dies in a village a section of the African Library is burnt because most of the information is

committed in memory and rarely disclosed.

TECHNOLOGY TRANSFER

For a long time there has been an argument whether IP enhances or stifles innovation

(creativity), technological transfer and development. On the one hand it is argued that IP acts

as a protective and reward mechanism to creators. In sectors such as the pharmaceutical

industries for instance there is evidence to suggest that investment and development would be

seriously limited if patent protection were to be removed. Part of the reasoning is that there are

usually heavy upfront or sunk costs or investments before a drug can be developed. Examples

of this sunk costs include initial research, initial development of the drug, clinical and related

trials.

It has been argued that intellectual property especially patents stifles innovation, access and

development. Some have argued that the Swiss Pharmaceutical Industry development without

pharmaceutical patents. Secondly relatedly it has been argued that IP and particularly patents

increase the cost of medicines because loyalties have to be paid. HIV drugs have been very

expensive because of patents. When one takes an example of painkillers the active ingredient

is Paracetemol but the moment it is given a brand name, they start charging for it. It does not

necessarily mean that a generic drug is fake, it just doesn‟t have brand name.

Modes or channels of technology transfer:

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From 1960s through 1980s there was a debate regarding technology transfer. Developing

countries argued that there was limited transfer of technology to developing countries and that

most of the technology was controlled by the West and Transnational Corporations. Developing

countries persuaded UNCTAD to initiate a process for drafting an international code of conduct

for technology transfer (ToT Code). This draft instrument was negotiated up to about 1985

when it ended in a stalemate. Some of the core perspectives were as follows:

Developing countries argued for concessions or preferential treatment in technology transfer

transactions e.g. more favourable pricing and generally easier and more favourable terms in

transfer of technology. On the other hand developed countries preferred a market-based

approach whereby ToT transactions would be based on market or arms length bargains and

therefore a limited role for the state in regulating ToT. They argued that most of the technology

was developed by private enterprises and was therefore proprietary i.e. they were not within the

control of the State and so the State could not make decision on their transfer.

Socialist countries especially of Eastern Europe or the Soviet Satellites ideologically agreed

with the developing countries because they were opposed to Western Imperialism. But when it

came to voting on the draft, Soviet Satellites voted with the Western World. This was because

most of these countries had developed some technology and they needed a market and

therefore to them the idea that they could give their technology for free was unthinkable. Some

of the most important export from the Soviet Systems were wine arms and liquor. The Soviet

empire was not too keen on transfer of technology.

The negotiations on the draft International Code of Conduct on Technology Transfer

ended in a stalemate in 1985. However 2 major lessons were learnt from this process

Promulgation of laws

Many developing countries including Kenya have since promulgated laws to regulate technology

(ToT). Most of these laws begin with a market based approach to ToT e.g. the laws will saying

that the parties who are negotiating the transfer should decide the terms of the transfer and if

there is a problem with the transfer then the state can come in. Part X S. 64 onwards of IPA

2001 has provisions on contractual licensing. It gives party the freedom to determine the terms

of the licence. However it indicates about 33 terms which may make a contractual licence

voidable and therefore unregistrable by the MD of KIPI. The 33 terms may render a licence

voidable because the are oppressive, inequitable or

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Four pronged typology

If the price is unreasonably high then that price shall not be registered by KIPI. For a long time

KIPO as KIPI then was and CBK emphasised a lot on the price clause partly because there was

the argument that Kenya was losing a lot of money. After 1995 CBK and KIPI are no longer

keen on scrutinizing licensing agreements although they are responsible for scrutinizing what

technology is being brought into Kenya. They had only focussed on foreign exchange which

was a narrow perspective.

- if the contract requires one to import technology that is already available in the country, KIPI

can refuse to issue a contractual licence. This clause also helps us in deepening our own

technology and helps in building linkages i.e. forward and backward linkages

Choice of Law: What law shall apply to the transaction. It the law to apply is foreign, then it

is voidable because they want you to use Kenya Law. if the forum for resolving the dispute is a

foreign forum then the contract is voidable.

It is in this context that Osunbor argues that it is important that we regulate and strengthen the

regulatory systems.

Copyright Act 2001 Section 33 – provides … for licensing, assignment and ToT for copyright

works. It provides thus:

33. (1) Subject to this section, copyright shall be transmissible by assignment, by licence,

testamentary, disposition, or by operation of law as movable property.

(2) An assignment or testamentary disposition of copyright may be limited so as to apply only to

some of the acts which the owner of the copyright has the exclusive right to control, or to a part

only of the period of the copyright, or to a specified country or other geographical area.

(3) No assignment of copyright and no exclusive licence to do an act the doing of which is

controlled by copyright shall have effect unless it is in writing signed by or on behalf of the

assignor, or by or on behalf of the licensor, as the case may be and the written assignment of

copyright shall be accompanied by a letter of verification from the Board in the event of an

assignment of copyright works from outside Kenya.

(4) A non-exclusive licence to do an act the doing of which is controlled by copyright may be

written or oral, or may be inferred from conduct, and may be revoked at any time, but a licence

granted by contract shall not be revoked, either by the person who granted the licence or his

successor in title, except as the contract may provide, or by a further contract.

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(5) An assignment, licence or testamentary disposition may be effectively granted or made in

respect of a future work, or an existing work in which copyright does not yet subsist, and the

prospective copyright in any such work shall be transmissible by operation of law as movable

property.

(6) A testamentary disposition of the material on which a work is first written or otherwise

recorded shall, in the absence of contrary indication, be taken to include the disposition of any

copyright or prospective copyright in the work which is vested in the deceased.

(7) Where an agreement for assignment of copyright does not specify the period of assignment,

the assignment shall terminate after three years.

(8) In the case of agreements regarding future works which are not specified in detail, either

party may, on giving not less than one month's notice, terminate the agreement not earlier than

three years after it was signed or such shorter period as may be agreed.

(9) A licence granted in respect of any copyright by the person who, in relation to the matters to

which the licence relates, is the owner of the copyright, shall be binding upon every successor in

title to his interest in the copyright, except a purchaser in good faith and without notice, actual or

constructive, of the licence, or a person deriving title from such purchaser and any reference in

this Act to the doing of anything in relation to any copyright, with or without the licence of the

owner of the copyright, shall be construed accordingly.

(10) Where the doing of anything is authorised by the grantee of a licence or a person deriving

title from the grantee, and it is within the terms, including any implied terms of the licence for

him to authorise it, it shall for the purpose of this Act be deemed to be done with the licence of

the grantor and of every person, if any, upon whom the licence is binding.

This is essentially a market based approach, however under Section 48 of the Act a compulsory

license may be avoided in at least two contexts

1. Where the copyright owner or holder does not produce sufficient materials to supply the

relevant market; or

2. Where the copyright holder refused to grant a licence or grants a licence on inordinate or

inequitable terms.

After 1995 there have been two major reports the issue of law reforms captured by the Industrial

Property and even trademark law has been reformed to assist licensing. There have been

institutional reforms and policy reforms. You can licence the business without the mark or the

Mark without the business – this only means that if for example you are running Nandos

Restaurant, if one wanted to carryout other business but not Nandos business with the consent

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of the Nandos Business owner, they have licensed the premises and not the mark, but if they

say fine you can go open a Nandos premises in another premises, they have licensed the Mark

but not the business.

Institutional policy reform – many countries have reformed their institutions and policy to

enhance licensing and other forms of transfers especially on market oriented principles.

Section 48 and Section 64

A licence is the permission that which would otherwise be unlawful if the licence was not

granted. A license may take 3 forms

1. A sole licence – this is whereby the licensor licenses only one licensee however the licensor

may compete with the licencee;

2. Exclusive Licence – this is where the licensor licenses the licensee exclusively and even the

licensor cannot compete with the licensee.

3. Non-exclusive Licence – this is where the Licensor licenses one or more licencees and the

licensor can also compete.

ASSIGNMENT:

In most assignment transaction the assignee replaces the assignors for most intents and

purposes. It is recommended that the contract should be the assignor should sign the

assignment, the assignor‟s is the most important.

Anything under the sun made by man is patentable. This doctrine helps stimulate investments

in bio-technology in the 80s-90s. there has been a lot of investment in Genetics and

informatics. (Genomics – genetic engineering and informatics.

In 1994 – TRIPS adopted the standard that all inventions are prima facie patentable and that no

invention should be excluded by state parties without sufficient justification.

INDUSTRIAL DESIGNS: Section 84 of IPA – an industrial design means any composition of

lines or colours or any three dimensional form, whether or not associated with lines or colours.

2. The protection under this Act shall not extend to anything in an industrial design which serves

solely to obtain a technical result.

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IDs are compositions of lines or colours or any 3 dimensional form. They are protectable on the

basis of special appearance or aesthetics and not on the basis of their technical effect or

technical result. Most perfume bottles have elegant shapes. Aesthetics other than utility or

functionality. When does utility override aestheticity – when one wants patents, they ask if it is

useful and if it is new i.e. viagra. Patents are all about utility it is in the extreme utility end.

Trademark is in the middle and is for both utility and aesthetics and Industrial Designs is more to

do with aesthetics. It depends on what one wants, some may have both utility and aesthetic,

Jean Paul Gautier Woman form perfume bottle is a good example for me.

Technovations related to industrial designs, they relate to arrangements of things. Section 94

of IPA

Character Merchandising: this occurs when the owner of the rights some popular

character grants licence to others …

Character Merchandising is the process of licensing and utilising representations of popular

characters in goods or services. Most of these characters are derived from fictitious characters

made famous through T.V. films or books for example like Harry Porter, Mickey Mouse etc

some of the characters are real life for example Diana Princess of Wales in Dolls, Plates etc.

Character merchandising constitutes between fiction and faction. When you can trace fictitious

material or character to the real one you call it factual between fictitious and factual it is a thin

line, the more fictitious a novel is the more protected in copyright (thick copyright as in

protecting poetry) as it is work of the imagination.

Right of Publicity: seeks to protect the image, voice and likeness of famous people especially

celebrities. These should not be copied or imitated without their permission. Paul Goldstein

talks of Johnnie Carson in the way he used to enter the stage and say Heeeere comes

Johnnie! and Vorna White who had her own style of spinning the wheel of fortune. Right of

publicity does not extend to protect the individual from satirical commentary. Satirising is not

property but is in the area of freedom of expression.

Discuss forms of IP that may be used to protect a Coke bottle and its contents

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Many scholars have argued that in a perfect market where transactions are efficient intellectual

property (IP) may not be justified. They have thus argued that (I)P should be created only

where there is market failure. The best arguments have been made by Stanford Law Professor

John Barton. He argues that trade presupposes freedom. On the other hand property or IP

presupposes restriction or control. Indeed property includes the right to use abuse and the right

to exercise exclusive control. John Barton‟s arguments underscore the tensions within TRIPs.

He is more convincing than activists and others who have argued that trade has nothing to do

with IP. Many of our communities have pots, whenever they made posts they would put their

marks, that was a sign of trademark. In the area of music many people were identifiable with

the music that they had sung or written which is an issue of copyright. It is not created by TRIPs

but trademarks have there.

WHY DO MARKETS FAIL

Markets fail for four reasons

1. Abuse of market power – having market power is not a problem, the problem is abusing it. It

is abused through monopolies and monopsonies, a monopolist is a single provider of a service

for example KBS TV in the 70‟s while a monopsony is a single consumer. In Kenya when one

wants to use software, they buy it from Microsoft so this is a Monopoly. It has been argued that

Microsoft has been abusing its Monopoly power. When it got into the market it was giving

windows explorer for free so as to kill Netscape Navigator, they killed navigator through

bundling ( putting many products together so that to use one you need the other)

2. Asymmetrical information – one party to a transaction has more party than the other party.

In IP and computer products, the supplier is likely to have more information than the buyer e.g.

the software seller is likely to know more about the software than the buyer. In second-hand

markets, this also happens a lot. For example the seller of a second hand car is likely to know

more about the car. Need to create property rights to correct this anomaly.

3. Negative Externalities: the opposite of this is the Network Effect: It has been argued

that whenever an individual cannot internalise certain costs, they are not going to internalise the

cost unless there is a tax or penalty. There will be a moral hazard. In 1980s – 90s WM/IMF

there was the argument that education, health service should be cost based, education should

not be free because people are not likely to internalise the cost, they will abuse it.

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Novels are good places from which one can do character merchandising e.g. Harry Porter – one

can merchandise Harry.

Characteristics of “Network Effect” – examples tv programs and novels

Public goods problems:

Non-rivalous products

If the cost of producing an extra unit of a product is limited. Book publishing- Aminata – Prof

Imbuga – for Prof to publish Aminata he has to start with Research about the cultural practices.

He has to spend time on writing the book

The book has to be edited, printed, Published, Advertised or promoted and distributed to

bookshops

The processes are costly and time consuming,

This work can be destroyed by a counterfeiter who does not need to go through all the

processes that the author has gone through. Where the book has a captive market, the

counterfeiter does not pay any royalties.. this is the problem of freeloading.

Freeloading is a problem because the extra cost of producing of an IP product is costly. Stop

free riding be a fair follower. The phenomenon of non-exclusive – if there is a tv program

showing , it is difficult to exclude others from watching. It is non-rivalous and non-excluding, if

you light your cigarette from mine, I don‟t lose and you benefit. Theory by Yochai Benkler

Once an article of a public good is created, it is non-rivalous – it is non-exclusive. Because of

that once a product is created it becomes much cheaper to reproduce, e.g. publishing Aminata,

counterfeiters come to cash in. Problem of IP first copy difficult to produce but you cannot

exclude others from enjoying it. There are two approaches to IP

Human Rights Approach – Continental Europe

Utilitarian – Anglo American –based on the work of Jeremy Bentham, innovation is not

protectable and not intrinsically valuable so as to be valuable, one has to prove that IP is good

for it to get protection, is it useful. Utilitarianism finds expression in Article 1 of he American

Constitution, the idea is that for copyright and patents to be protected they must be able to

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promote useful art and science. The question is which comes first, the promotion of useful arts

and science or is it the protection of IP? The whole debate of incentive regimes.

There are two broad typologies of incentives. They may be ex post facto or they may be ex

ante, they may be to the creator or innovator or they may be to others.

Ex post facto are things like Oscar Awards all these are post facto.

Rival publicity issues:

Ex ante - this is where the award is given before the product to give incentive. It is used to

identify talent. University of Nairobi giving grants for research up to KShs. 400,000/-. Kenya

Medical Research Institutes gives money as incentives for research on medicines for things

such as AIDS, and in Biotechnology. Tusker Project Fame giving incentives to people with

musical talent - ex ante, Face of Africa . In Eldred v Ashcroft (John Ashcroft was the AG

America) Eric Edred had a school going daughter and the daughter where she was going to

school were always being asked to read some very old books.

Eldred being a computer geek started reducing the books into digital format so that his daughter

could enjoy reading the old books. One day the US Government decided they were going to

extend copyright by 20 years which meant that what Eldred was turning into digital information

was going to be copyrightable because the period was going to be retroactive.

Eldred went to Harvard at the Backman Centre and told the professors that he wished to

continue digitising the books inspite of what Congress had decided. In the meantime the US

Congress passed the Sonny Bono motion on Extending Copyright to 700 (CTEA) Copyright

Time Extension Act. People started criticising the Act which meant that copyright would last for

life plus fifty.

In the Supreme Court Eldred lost 7 to 2. The argument at the Supreme Court for Eldred were

that for a long time Congress had extended copyright time which was contrary to the

Constitution which states that Copyright should have limited time. But the other were arguing

that limited could mean eternity minus a day. The other argument was on incentives and the

question was who was getting the incentives, the creator or their dependants. Experts were

brought to bring in their opinion.

The question is what is the optimal, or efficient copyright duration.

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TRANSACTION COST THEORY:

This theory is associated with neo-classical economists and helps elaborate the Utilitarian

approach to IP. The economist in this league include people like Professor … The major

argument is that states should focus on creating property rights and enforcing copyrights. The

government should not bother too much about who is poor or rich but should bother about

property rights and contracts as this would help allocate resources in the most efficient

manner.

What are transaction costs:

The cost of identifying the parties.

There are costs incurred in transacting when one is negotiating

A poacher‟s fee –

There are transaction costs associated with enforcement and this is costly. Some quarters are

arguing about efficient breach – contracts are an issue of economic efficiency. Richard Posner

has argued that there are costs as transaction costs

1. That the cost of enforcement include the cost incurred by courts and police in preventing

infringement or addressing piracy;

2. Cost of restricting a good property when it has a public goods character.

These are just some of the transaction costs.

Over the years transaction costs have been criticised by assuming that they can be zero or

minimise. The idea is to fight to reduce transaction costs. The transaction cost theory is

powerful and professors such as Godwin. These scholars have argued that the exception or

limitation to copyright such as criticism or review and private use are based on transaction use

theory, that it is costly to monitor the use of intellectual property in private area, for example

would it be possible for a lecturer to call Daily Nation every time they wanted to quote from an

article that was on that day‟s newspaper? It would be practically impossible.

Prof Goldstein in Copyrights highway has argued that transaction costs are being reduced by

the internet. There was a time that it would take a long time for one to get a book or a piece of

music. The internet facilitates a quicker way of getting these items especially music, books and

software.

Transaction costs involved other issues, opportunity costs, money etc.

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NATURAL RIGHTS, HUMAN RIGHTS PERSPECTIVE

The natural right perspective to intellectual property is based on natural rights theories or

epistemology of human rights. the conceptual basis of IP is that you have the right because you

are a human being. There is a strong argument that the rights that one has are not a reward but

a recognition of ones nature such that everybody has those rights. Philosophers like Emanuel

Kant have argued that IP should be protected because it is an extension of human persona.

There has been debate on distinction between utilitarian approach to IT and natural rights

tradition approach however UDHR encompasses both traditions.

Article 17 protects property article 27 (1) focuses on access to information and access to

cultural rights. Access and participation

27(2) focuses on property – issue of exclusive rights. This focuses on property exclusive

rights both material and moral right of a creator or innovator. Economic rights tend to have a

utilitarian connotation to them. For example Nyambane has a right to economically benefit from

playing the character Moi in Red Corner, he deserves a cheque and this is an economic right.

The right to benefit financially from creativity.

Any singer has the right to be named as the writer of a song, this is a moral right. an actor has

a right to have his name on the credits, this is a moral right, receiving money for acting is the

economic right. 27(1) and 27(2) when read together constitute a balance in Intellectual

Property, you want to ensure that those who have produced cultural products are rewarded.

John Locke argued from a labour theory of IP of property, he argued that if any individual finds

land which is farrow and they apply their labour to improve the land they make the land useful

and ought to claim ownership of that land this is usufructuary. This theory in IP says that IP

ought to be protected where one has made a creation.

The other angle to John Locke‟s argument is that one can appropriate that which was pre-

existing so long as one leaves enough and as good for the public domain. This is related to the

argument of common use.

MORAL RIGHTS

© is divided into 2 broad categories

1. Moral rights

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2. Economic or material rights

Morals rights or authors rights are many times read in opposition to copyright and the economic

rights are mainly focused on owner rather than author. There are at least four examples of

moral rights. in Kenya we emphasize on two:

1. The right to paternity (right to be named as the person who has given rise to an IP product;

one has a right to be named and a negative right not to be named. The author also has the

right to claim authorship and ownership (when not credit) Right of Attribution or

acknowledgment.

2. The author has the right to object to distortion, mutilation or other modification, as well

as any derogatory or disparaging reference to the work. This right may be claimed where the

work has been adversely reviewed. Moral rights here relate very closely to defamation.

RIGHT TO INTEGRITY & FREEDOM FROM FALSE ATTRIBUTION. Right to integrity. No one

has right to modify other people‟s creation without their permission. Psalm 23 – a Poet from

Uganda called Timothy Wangusa wrote a poem called Psalm 23 part 2 he satirised Psalms, one

has a right to satirise textual satire like Wangusa writing a poem to satirise a written text. Social

satire is like Imbuga writing Betrayal in the City to satirise society.

The first person to own copyright is the publisher until the author is identified.

Moral rights live and die with the author. These are covered under S. 32(1) of the Copyright

Act, 2001.

Duration of anonymous works is 50 years since there is no author, for audiovisual work it is 50

since creation or being published. After the end of the year in which the author dies.

Right of Integrity – this is protection against disparagement alternation of mutilation.

Imitative Innovation – people who mutilate other people‟s songs and come up with their song

e.g. Mercy Myra borrowing a little here a little there to make a song, or Kajairo totally mutilating

a song to come up with his own. The amount of material in terms of quantity and quality

matters. An example is Gerry Ford‟s Memoirs - Gerry was being asked questions on the

Watergate Scandal whether he wanted to forgive Nixon or take him to trial as the Vice

President. He decided to forgive Richard Nixon.

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The dilemma had been to forgive and be seen as condoning political corruption or trying Nixon

and being seen as a callous person. Harper agree with The Time Magazine agrees that they

will get the scoop but before the Memoirs hit the streets, Nation steals the book and they publish

300 words from a volume – the issue is do 300 words out of about constitute copyright

infringement? This is based on the right to modify, alter or mutilate. The court held that there

was infringement as the words were Jerry Fords own words.

Right of integrity or freedom from disparaging is closely related to the law of defamation. Like

book reviewers who review the author instead of reviewing the book, the author can sue under

moral rights section

TRIPS and the context of Berne Article 6(b)

Why do moral rights matter? They are serious in areas of films and publicity. When TRIPS was

being negotiated the American Film Industry argued that moral rights ought not to be protected

and they succeeded so TRIPS does not protect moral rights. If one was to protect moral rights,

it would mean that whenever one wanted to use a film clip, one would have to call up the actor

or actress every time they wanted to use the clip which would be a very expensive and tedious

exercise – whenever one is acting it is assumed that it is hired work, it is an artificial agreement

that all actors and actresses are treated as if their work is on hire.

American quarrel with moral rights- suppose one removes from Titanic the scene where

Leonardo Di Caprio is drawing and put it on t.v. two issues will arise, Di Caprio may have a

problem with that.

Does IP stimulate or stifle innovation, technology transfer or development

There have been arguments on whether IP stimulates or stifles innovation. In the 1980s this

debate was taken up by US EC and Japanese trans-nationals with the support of their

governments to argue that non-protection or weak protection of IP stifled innovation and

hindered Trade, ToT and development. They gave some data to suggest that billions of dollars

were being lost especially in the pharmaceutical industries (Pharmaceutical companies Merck

Inc., Glaxo, software industries (Microsoft) Entertainment Industries (Sony). They argued that in

the area of IP they tend to be monopolistic and do not allow competition. It has also been argue

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that IP enhances transaction cost, i.e. before one acquires an IP product one is supposed to

negotiate or even pay a royalty and this is argued that it enhances transaction costs.

Newspaper houses stifle stories by using the stories without sufficient acknowledgement. In IP

the meaning of the word correspondent will mean that the publisher will own the copyright.

Too much of research conducted on IP and Patent Law are

There are problems on research that has been conducted with IP and Patent Law

The role of IP in innovation has fundamental weaknesses

1. Most of the research focuses on patents; very little has been done on © and Trademark

2. Most of research is in developed countries

3. Most of research is based on interviews with corporate executives rather than consumers,

academics and so on meaning the research is not entirely empirical but is largely intuitive and

speculative.

Refer to Casper Primo Brage , Keith Mascus, studies by WIPO, UNDP and Cultural

Industries, Edwin Mansfield

IP and TRIPS

UNCTAD – poor man‟s cushion – for helping developing countries in their trade interests.

344-345

Historically WIPO and UNESCO were the major regimes regulating trade regimes and

Intellectual Property. UNCESCO was administering Universal Copyright Convention of 1952

(UCC)which had partly been passed to accommodated America. America for a long time was

not a member of Berne but was using Berne.

Over the years WIPO had been criticised and it lacked resources to deal with IP it had limited

personnel and more recently it has sent limited materials to address IP. In order to continue

being relevant WIPO has now moved to Dispute Resolution since most of its mandate has been

taken over by WTO/GATT.

WIPO lacked a clear mechanism and sanctions as there was nowhere to address disputes if

one was aggrieved. The major magic of TRIPS is that it has a clear dispute resolution

mechanism that if you infringe another country‟s IP there can be sanctions. WIPO did not

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contextualise IP and developed countries led an onslaught to WTO criticising WIPO. BY 1996

WIPO Copyright Treaty etc were passed.

Evolution of IP within GATT

The argument relating to America is that from around 1974 America was clear about its Trade

Diplomacy and had its Trade Act of 1974 and amended it in 1988 which had Section 301

generally called super 301 which was a clause that said that if any country undermines or

comprises American trade interests, they will take any appropriate sanctions and the sanctions

could be unilateral. It took the following formats

1. Aggressive Unilateralism

2. Bilateralism – America dealing with countries one on one

3. Multilateralism through GATT

How did IP develop within GATT

“Whether GATT could play a role in IP … only in the Uruguay round has the idea gained

ground.

The idea of putting IP within GATT regime is traceable to the Kennedy Round in 1964 where

there was a major issue that trade is not only restricted by tariffs but there are other non-tariff

barriers to trade with the same consequences to trade. For example Sanitary and Phytosanitary

Services and quotas, America suggested that if a country does not protect International

Property, counterfeiting was another NTB. In 1986 Ministers met in Punta Del Este in Uruguay

and TRIPS was on the Table that it ought to be included in the GATT regime. TRIPS first

started its life due to trademark counterfeiting. It relocation in TRIPS was therefore a natural

consequence since trademarks are very trade related and later on expanded to include patents

and copyright.

The debate in WTO was whether TRIPS should be mandatory, TRIPS is essentially an

agreement and one is therefore not bound by TRIPS per se. By 1994 once a state signed as a

member of WTO then they became bound by TRIPS, TRIMS and GATS agreements. 15th April

1994 Marrakesh Morocco TRIPS agreement was signed and countries were given Special and

Differential Treatment to be compliant.

America has two systems of dealing with States that are not TRIPS compliant

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1. Watch list –

2. Priority Watch List – South Africa most Asian countries that were counterfeiting which meant

that measures were likely to be taken.

COPYRIGHTS UNDER TRIPS

Article 9 provides foundation for implementing Berne but not the administrative provisions only

the substantive provisions.

Article 9(2) – makes it absolutely clear that copyright does not extend to idea procedures, the

clearest statement on this

Article 10 – deals with computer programs and software and not literally works

10(2) – protects databases in machine readable forms.

Article 12 deals with the term of copyright and it is at least life plus 50 Europeans life plus 70.

There can be exceptions to copyright

Article 14 protects performance.

1939-1945 – countries argued that the 2nd world-war was caused by a trade after, that Germany

went to war over trade restrictions.

In 1947 there were meetings to try and secure international peace and to regulate economic

activities and development and balance of payments issues. There was a problem that some

countries were imposing quantitative restrictions or quotas on imports. They established the

World Bank to help countries in reconstructing and the IMF to help countries facing balance of

payments problems.

To regulate international trade there was a suggested to establish the International Trade

Organization but in the Havana Charter the ITO was rejected. GATT has a three prong identity

one it was a forum for countries to discuss on how to regulate tariffs but it was not very

organized like the UN for example. It was just a forum with rounds like the Havana Round. It

also had the character of Rules – the GATT deals on how to deal with tariffs the other prong

was about its being an organization and a Club. It was referred to as the rich countries‟ club.

Around 1964 during the Kennedy Round of GATT some countries argued that tariffs and

barriers were not the only barriers to trade but there were other Non-tariff barriers to trade such

as Sanitary and Phyto sanitary standards SPS and technical barriers referred to as NTBs

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sanitary standards are used for example when the EU puts a ban on importation of fish from

Kenya saying they are not handled well, this becomes an SPS barrier to trade.

1979 Japan Round – the US and other countries started talking about counterfeiting that when

you counterfeit other peoples works, you deny the countries the right to trade, allowing copying

of others trademark was trade distorting

In 1974 US enacted its Trade Act Section 301 that any country that undermined US Trade

would face sanctions. Infringing copyrights a country could be put on the Watch List and if they

continued they would be put on a Priority Watch List and a country could face sanctions. The

US adopted unilateral measures on countries that continued to infringe on its copyrights.

America also adopted bilateral measures and negotiated the US Canada Free Trade Agreement

USCFTA among other agreements with Intellectual Property clause USCFTA was later

transformed into North America Free Trade Agreement NAFTA after they signed multilateral

agreement with Canada and Mexico.

In 1986 – 1994 the Uruguay Round took place and the foreign Minister met at Punta del Este

and at this round the main issue was reforming the trade in goods and adding services such as

banking, telecommunications, legal services etc there should be no restriction to offering

services if AT&T wants to come and invest in telecommunications in Kenya then there should

be no barriers into their doing so.

In April 1994 the deal was sealed in Marrakesh Morocco and Intellectual Property became part

of GATT. A General Agreement on Trades in Services (GATS) also became part of GATT.

Intellectual Property was allowed in GATT as Trade Related Aspects of Intellectual Property

(TRIPS) and intellectual property was allowed into WTO. WTO became a specific institute that

was born in Marrakesh Morocco. Developed countries were to be bound by the year 2000 and

LDCs like Uganda and Tanzania were to be bound in 2016.

Trademarks under TRIPS

Historically trademarks were about goods but now services are specifically being included.

Article 15 recognizes the Paris Convention on protection of trade marks which gives as the idea

of well known marks or notorious marks.

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Article 16 marks must be protected for at least 7 years. TRIPS gave minimum standards to

trademarks. It conferred certain rights to trademark owners.

Article 17 – allowed limited exceptions to the exclusive rights

Article 21 – provided general framework for licences and assignments and emphasises that

there can be no compulsory licensing in the case of trademarks. The rationale here being

trademarks are about trade and to allow compulsory licensing in this area is to undermine the

trademark owner. It also confirms that one can transfer their business without necessarily

transferring their mark.

Trademark became a precondition of maintaining registration. If one does not use a mark for 3

years it can be expunged. Case of Drum Magazine.

In defence of abandoning a trademark, one can argue that where a mark had been notorious

and therefore state protected. On the other hand if the mark has not been used for 12 years,

the owners have slept on their rights and equity does not protect the indolent but protects the

diligent and therefore abandonment is as good as cancellation. There can be arguments on

both sides.

Trademark, copyright, patent are territorial so for example if Drum was not being used in Kenya,

it can be said to have died in Kenya.

Kenya imposes trademark protection for 10 years. TRIPS sets a minimum protection time of 7

years. In PATENTS it is 20 years in Kenya and in copyright it is indeterminate it is for life.

Undisclosed information – this trade secrets related to undisclosed information under Article 39.

It is also closely related to the idea of controlling Intellectual Property

Article 40 –

Geographical Indications – GIs are being debated quite a lot. TRIPS issue that are

controversial are patents and Geographical Indications this is partly because countries have

realised that they did not take interest to protect their own interests.

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Article 25 –

Goldstein sees a lot of advantages in TRIPS in that it seeks to address a lot of mischief in

International IP law since before 1991 there were no substantive binding minimum standards in

Patent, copyright, Trademark and IP Law.

Paris Convention did not bind states to have specific standards in patents. It was not strict on

issues of patent rights and we had a chaotic regime, some countries like US had 17 years

before TRIPS after TRIPs it became 20 years, US added 3 years the time they estimated it

would take from application of a patent to grant. There were no substantive issues on

patenting, Japan could refuse to patent explosives but after Diamond and Chakrabaty things

changed.

TRIPs has provide to criminal and civil enforcement procedures which were lacking before.

before TRIPs, if ones patent was infringed by other countries one could only try to take the

matter to the UN where UN could use diplomacy to try and resolve the issue. One could also

take the matter to the ICJ but decisions of ICJ matter if all parties are willing to be bound.

TRIPs brought in procedural requirements regarding how one could acquire, maintain and

register patents, trademarks etc.

Goldstein has argued that the magic or wisdom of TRIPs was that before there were no clear

enforcement mechanism, now there is a Dispute Settlement Mechanism and even an Appeal.

Sihanya‟s issues – some of the issues are that TRIPs is only enforcing Western Standars and

Patent terms are American Standards, where is forklore, Traditional Knowledge? There are no

utility models under TRIPs. This is partly because America said that utility models are a dilution

of patents.

TRIPs is a patchwork of various agreement, articles 9, 10, 11, 12, 13 14 dealing with © deal

with Berne Principles and does not say what they want to protect, they borrow some of the

Berne principles but reject moral rights. in Patent law they adopt some of the articles of Paris

but not others, it is truly a patchwork.

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When TRIPs comes to form in Kenya (January 2000) developing countries argue that they

have other challenges facing them that they have to sort out before they can comply with TRIPS

requirements. They were asking for realistic standards that all countries could easily comply

with instead of graduated compliance. There has been a huge debate in the idea of compliance

in that the terms of TRIPs are onerous and burdensome, they should be made less onerous to

developing countries but US is saying they can only review how TRIPs can be implemented

while developing countries are saying that they should make compliance less onerous. Western

want review of TRIPs and they want to add new issues.

Implementation of TRIPs have serious implication, it requires administrative reforms and these

are debatable issues, sovereign countries do not want to be told how to reform their

administrative and judicial systems. Trying to direct a country on political and judicial decision

making is not easy it is tantamount to interfering with the sovereignty of a country.

PATENT AND RELATED DOCTRINES

Patents are regarded in two ways, as a certificate and as a juridical relationship. The inventor

or patentee gets licensed by KIPI, there is a legal relationship between Inventor or Patentee and

on the other hand one has KIPI representing the state. Article 27 of UDHR says that Intellectual

Property should have a balance. Patents started their lives not as IP but as a system of helping

free trade, one receives letters patentes to assist one in trading.

When one wanted to participate in trade, one required patent. The modern patent law is

traceable to UK and the system of Monopoly, patents were granted at the discretion of the

Monarch. Now it has become an IP issue rather than a business issue. In 1789 it was

incorporated into the US Constitution Article 1881. A Patent is a bundle of rights that can

protect an individual and it carries duties and obligations, duties to disclose to the patent office,

on payment office on grant of registration and renew etc. there is also the obligation of

compulsory licensing if one does not meet the conditions.

Is Patent a Monopoly? This is a controversial issue because for one to be granted a patent,

one has to meet many standards. It is not really a monopoly like in other sectors but in this

case one has to invent something. Secondly besides being intelligent and meeting the basic

standard, one has to be good in business to secure market presence. When ones patent

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exclusive rights is limited in scope in terms of duration a patent is not a perpetual monopoly and

is only protected for 20 years and the protection is not even exclusive.

One may suffer compulsory licensing anytime which means it is not exclusive.

Patents in the IP Monopoly

It has been argued that patents are the most important in IP and in many universities it is taught

in a lot of lectures as opposed to only about two for trademarks and copyright. The argument is

because patents involve inventions and the most sophisticated technologies. They also require

long procedures and thirdly it has been argued that protection of Patents if very high partly

because of its sophistication. There is a lot of protection for patents. Patents generally have

the tendency to secure very high revenues for the inventors, for example if somebody invented

a vaccine for HIV this would be a goldmine. It is unlike some areas of copyright. Patents are

the most controversial and notorious because in most cases it deals with life and death issues

as in HIV drugs.

PATENT LAW IN KENYA

Trademark Independence came in 1966 – before that we applied 1911, 1956 UK Trademark Act

Patent Independence came in 1989

A dependent Patent System had the following problem

1. An inventor had to apply for protection in the UK, this undermined Kenya‟s security and

sovereignty;

2. We expended or Kenya‟s inventors expended a lot of money in seeking patent grant in the UK,

the lawyer had to travel to the UK and had to pay money;

3. There was a problem with technology transfer in the sense that once one disclosed their

information in UK, information was more available in UK than it was in Kenya so it was only

people in the UK who could easily access the information while Kenyans had to travel there.

4. The UK Patent System especially UK Act 1977 was regarded as largely inappropriate to the

interest of Kenya and other developing countries;

(a) UK Patent Act 1977 did not provide for protection for Biological innovations; there was a hot

debate on non-patentability of life forms, research by 1989 had shown that Kenya was making

headway in the area of Research and Development evidenced by the fact that KARI had done a

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lot of research on crops and so had JKCAT, Life form was Kenya‟s Forte where they felt that

they had made a lot of innovations;

(b) It was also argued that UK Patent Act 1977 did not protect Jua Kali utility models and Kenya

needed its own independent system to do this and this is in 1989. In 1988 we had exhibited

what Kenya was producing in the Jua Kali Sector the Nyayo Era Exhibition which coincided with

Kenya enacting the Intellectual Property Act

WHAT IS PATENTABILITY

What is a patentable invention – under IPA a patent is defined as a solution to a specific

problem in technology. It may be of two forms

1. Product e.g. aspirin which means that a person can repackage and recreate aspirin for other

purposes and patent it, may be one discovers a new use of aspirin for eg cancer, they can

patent aspirin as a cure for cancer and Bayer can still be manufacturing aspirin for the other

diseases that they invented it for like heart defects, one has to discover a new way of using a

known product, you can have the patent for the process.

Section 21 says that certain things are excluded from patents ab initio, plants are not

patentable. Discovery in America patent law means invention. Scientific theories are not

patentable, for example discovering a universal law of nature like the fact that water boils at a

100 degrees Celsius is not patentable. Energy is neither destroyed or created but transferred.

2. Schemes, Rules, Methods of doing business – schemes of playing games such as soccer or

performing mental acts are not patentable, the utility is doubtful. For a long time the Law in US,

UK and Kenya used to argue that u cannot patent business methods. For example mali kwa

mali is not patentable. The argument is if one has a new way of doing business, they can be

protected under trademark. Around 1980 there was a lot of debate and mostly people wanted

to be allowed to patent business methods. There was a convergence of computer science and

there was development of software and internet business. In the case of Diamond v Diehr

(1980) there were so many developments in software engineering and people wanted their

inventions in software protect and the US was saying that no you cannot patent software which

was classified as a logarithm you could only copyright software. After 1980 they were allowed

to patent software in Kenya it was in 1989 saying that a logarithms and computer programming

were not patentable. Diamond & Diehr were insisting that software could be patentable and

Diamond v Chakarbaty were saying that anything was patentable, in 1989 Kenya Industrial Act

said that one could not patent software but in 2001 the Kenya Act is saying that it is possible to

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both copyright and patent software in Kenya. The one click patent was given to Amazon.com

this was a way of clicking once to access what you want.

3. Methods of treatment of human bodies or animals, these are not patentable, mere

representation of data or information is not patentable, public health using of molecules to cure

disease is not patentable and neither is gene therapy. Standard information is not patentable

e.g. Ghai and Mcauslan cannot patent Kenya‟s getting Independence in 1963 though they have

written about it.

2. the reason why one does not want to protect the above list is because most of them are

protected under different regimes or other systems of law, discoveries of plants are protected by

Plant Breeders Rights, trade secrets are protected by Industrial Property etc.

novelty must be absolute. How is novelty determined. There are three ways in Kenya.

(a) General Data Base of research at KIPI where one can research and see whether what one has

invented can be protected or whether it has been patented in Kenya;

(b) ARIPO based in Harare has another data base on what has been patented somewhere and it

helps member states with access to the database so that they can know what has been

patented

(c) Patent African Cooperation Treaty entered into under the auspices of WIPO and where one

wants their invention to be protected in Kenya, KIPI will do but when one wants to patent in

many other countries ARIPO will protect one in English speaking Africa, Patents are territorial

and is only protectable only where it has been registered when one wants patent in Europe they

can go to PCT. All these organizations help the inventor with the data and also help patent

offices with information to avoid duplicating research. There is no worldwide patent and one

has to designate the countries where they are protected.

DOCTRINE OF DISCLOSURE

Duty to disclose invention to the Patent Office to get patent protection: The disclosure must be

full disclosure and must enable the PHOSITA to use the product. Where one discloses in a

journal or newspaper without seeking protection, in some cases one may lose novelty and at

other times not due to full and enabling disclosure. Some of the scientific journals for purposes

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of disclosures such as Lancet the Journal of Medicine is taken seriously, Nature Journal , New

England Journal of Medicine - A patent lawyer has to read these journals. Suppose one

discloses in the context of delivering samples in a confidential context? When one sends a

colleague material under confidential cover, is that disclosure? No it is not. The first person

with an invention to get to the Patent Office is the one who gets the Patent – in Kenya they have

first past the post – philosophy and in some countries researchers try to outsmart each other.

In Kenya we do not have the equivalent of the Section 6 of the Lesotho Patent Act under which

all officers of the patent office are bound not to disclose the information and that in case they do

they will suffer imprisonment, fine or both. The fear is also well-placed because the Public

Officer Ethics Act and the Common Law Rules on privacy and protecting information and

Copyright, Trade Secret, the Official Secrets Act all of these Acts do not have a firm basis for

protecting information disclosing to a Patent Officer by an Inventor. On the other hand The

Official Secrets Act, Public Officer Ethics Act, Common Law Rules as well as copyright can

actually be used to protect patent information. A patent can have two forms of protection

1. Patent or product process – protected..

2. Disclosure of information, the claim, the description, the drawings which are all protected under

copyright.

One can argued both ways about protection of an invention.

Inventive Step

This is sometimes called non-obvious – it is not obvious to PHOSITA. Inventive step is UK-

Kenya term and for US it is Non-Obivousness. Non obvious does not mean that it must be

complex, it could be a very simple process. PHOSITA need not be a complicated scientist, he

need not be Einstein he can be of a lower standard than the inventor. PHOSITA can even be

an unimaginative unskilled worker. But some people like Lord Morton have argued that

PHOSITA must not be a mechanical idiot but a mechanical genius and this was the case in

Gillette Razor. The halfway house is that PHOSITA must be a cross between the genius and

the idiot, intelligent enough who has some expertise in that specific field.

Industrial Applicability

Utility is the convergence between the intellectual and the property or commercial in Intellectual

Property, it brings the issues home. After we have invented, there is emphasis on utilitarianism

and one has to prove that an invention is useful. Something may appear useful but it may not

be patent, moneychangers, cannot patent their con-game, issues.

Reproducibility

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This means that it is not good enough to reproduce a prototype or model, a product must have

the ability to be mass-produced to be useful to Kenyans and the world. It may be difficult to

develop biological models.

Exclusion

Section 37 – Right of Priority – the right of priority, one has duty to disclose whether there are

other inventions that are in the field that you have applied for. all the applications have to be

sent within 12 months, one can seek priority to be granted a patent where they live even though

they are aware that it is patented elsewhere by somebody else. When one is an inventor they

must disclose what other inventions close to theirs that people have made and gotten protection

elsewhere, an inventor buys time before one comes to their market to file for patent. A Kenya

may seek priority to be protected in Kenya even though another inventor has filed papers

somewhere

PATENT PROCEDURE

One has to name the Inventor

Name the Applicant

Description – the inventor must specifically describe their invention, give background art or

background technology.

Designation of the State

The best mode of working the patent must be stated. The cheapest, easiest most efficient way

of working the patent. How best can it be done. Include specifications and be clear on what

you are claiming. Specification should be accompanied by a drawing where appropriate,

sometimes it may not be easy to have a drawing. The significance of drawing is related to the

Chinese Proverb that a picture is worth a thousand words.

CLAIM

What exactly does one want to protect? East African Breweries v Castle

A claim may be broad or narrow and most inventors tend to make their claims very broad and

use words like all rights etc. this is not acceptable in many countries, in US they allow broad

patent claims for certain reasons

UNITY OF INVENTION

One is allowed to make as many patent applications as possible but each application must have

a unity of claim, if it is a writing instrument, patent it for writing but not as a beverage.

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PATENT INFRINGEMENT

What constitutes infringement?

The infringement can be strict/narrow or purposive/broad. In our Act we look at primary and

secondary infringement. Primary is where one counterfeits a process e.g. where Smithkline has

panadol another person makes a paracetemol and calls it paranol this is outright infringement.

Secondary is where one actually encourages someone else to use a process that has already

been patented. In the case of Catnic. Secondary infringement is where there is already a

registered patent or a patent waiting to be patent and another person wants to patent the same

kind of product.

REMEDIES/DEFENCES & SANCTIONS

More often than not these are clearly set out in the IP Act of 2001 and there are civil, criminal

remedies. The first thing a person does is to get an injunction either interim or permanent.

Permanent if the infringement is found to be subsisting.

Damages

Under Section 106(b) of the IP Act of 2001 the main purpose of granting damages is to

compensate the Plaintiff done by the patent infringor, punitive damages are only awarded where

the act amounts to criminal activity but courts usually give compensatory damages. The plaintiff

is entitled to any other remedy provided by the law.

Delivery up – is when the infringer is ordered to deliver all the counterfeit or infringing material

to the court and the court disposes the infringing material as it deems fit.

Criminal Sanctions:

This are all available under the IP Act and in Kenya what we have for example the find of KShs.

50,000/- the amount the infringer makes is much more than the fine and therefore it does not

seem to be a deterrent. One of the issues that have been raised in this regard is that the fines

and the sentences which are between 3-5 years don‟t act as a deterrent. This is an Act passed

in 2001 and we hope KIPI will address this issue.. it is noteworthy that a lot of jurisdiction do not

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criminalize Intellectual Property but in Kenya there has always been criminal sanctions for

infringement. There is a big problem however with the enforcement of these rights probably

because of the intangible nature if Intellectual Property.

Bio-technology

This has in the recent past assumed a significant role with regard to medicine, agriculture where

one can modify organisms to increase the yield of plants etc. the IP Act has certain things

excluded from patentability and one of them is the issue of life forms. In the US practically

anything under the sun can be patented. O ne of the leading cases is Diamond v Chakarbaty

and one of he main issues here was whether artificially created life forms can be patented. At

first they agree to patent the process that created the bacteria but refused to patent the

bacterium itself at appeal they did agree to patent the bacterium that was being created from the

process.

Plant Varieties are protected under the Seeds and Plant Varieties Act, to patent a new breed of

plant, it has to be new, it has to be distinct meaning it has to be distinguishable from any other

existing variety. It has to be uniform so there cannot be variance in the new breed. It has to be

stable meaning every time it is propagated it does not mutate i.e. it maintains the same

characteristics. The opposition of patenting life forms is a moral, religious and ethical reason

and not legal.

Bio-tech companies rely on genetic resources that are found within the tropics so essentially

they take a life form from here and go to the US and patent it stopping people from the tropics

who can patent it. For example they took the Basmati seed, modified it and patented it in the

US amid protests from Asia. How do we share benefits that accrue from genetic resources?

Who gets paid? One of the most interesting cases is the Hoodia case of South Africa SCIR

carried out some research on the Hoodia Plant that had hunger depressant properties and

came up with an anti-obesity drug that were used by the Koikoi of the Kalahari. SCI have now

agreed to give 10% to the Sun and Koikoi. Patenting of life forms is complex. At the moment

WIPO has created a forum where they meet once a year where the various country are

supposed to come up with ways to deal with issues of genetic resources and traditional

knowledge.

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TRADE MARKS

™ - What is the difference between a trade mark and a trade name? trademark falls under the

realm of Intellectual Property. Since colonial times we have had trademark registered from as

early as 1901 but the system then was to register your trademark in UK for it to have value in

Kenya.

™ Can be anything, combination of names, combination of colours, designs all these can make

a trademark. Difference between ™ and ® some people will register a mark and not necessary

for the purpose of trademark. Trademarks are normally territorial for the reason that they are

registered in each country. If one registers Mwarsie for shoes, someone else can go and

register the same trademark in Ethiopia. A trademark like Coca cola is universal to the point of

being generic.

Trade names are registered with the registrar of companies to use in the course of trade. One

can register a trade name if they have used it for a while as a trademark. Certification marks

give certification as to the quality of the work for example the KBS logo shows that the quality is

approved by Kenya Bureau of Standards.

Use of Trademark

1. To distinguish the goods of one traded from those of another.

2. It refers to a particular quality more so like designer quality, like Gucci, Channel etc, the

trademarks are associated with quality.

3. Trademark protects the investment of the inventor, labour capital and goodwill, this attribute

has been questioned that it has no legal basis.

4. Identifying the origin of a product i.e when you see Omo you associate it with Unilever. This

issue has become redundant in scholarly terms because of the issue of franchising e.g. Nandos

in Kenya makes different tasting chicken from the Nandos in South Africa.

5. To promote the marketing and sale of a product. When one has a trademark.

According to David Bainbridge says that the purpose of a trademark are the distinguishing

aspect, protection of goodwill and to protect the consumers against confusion.

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Registrability of trademarks:

Sections 20-22 of Trademarks Act are on registerbility.

1. Absolute Grounds – there are some grounds where the registrar has no discretion i.e. Kenya

Court of Arms is not registerable not matter what you do it is not allowed to register. There are

also names that one cannot register as ™ like University of Nairobi, African Union etc.

2. Relative Grounds: the registrar may accept or refuse the registration. If the ™ is likely to

cause confusion, the registrar will refuse to register it, if it is confusingly similar the registrar will

refuse to register the mark, where the mark is misleading for example when one says

Kilimanjaro Oranges where the origin is from Meru, this is lying and confusing as to the origin of

the goods. Where the mark is descriptive the registrar will refuse to register it since it describes

what one is trying to sell and may exclude a lot of people from using the mark in future. The

case of Wagamama v city centre restaurant – Wagamama was sending some kind of cuisine

and then some Indian came up with Rajamama selling cuisine and Wagamama was arguing

that this was likely to confuse clients. The court held that there was a likelihood of confusion by

association since one is likely to associate Rajamama with Wagamama one may confuse and

thing they are one and the same people and Wagamama was given an injunction. This is

likelihood of confusion through the doctrine of confusion by association.

3. Marks Capable of Distinguishing one product from another: ExE for Flour or Vaseline for

Petroleum Jelly. These ™ can distinguish what one is buying. Distinctive marks are

registerable under Part A and Part B for those that are marks capable of distinguishing products

Registration Procedure:

Read Trademarks Act Saudi Arabia v Saudia Kenya Enterprises

Whatever ™ one registers for a certain product they cannot deviate and later register the same

™ for other goods. The use of ™ has to be in good faith. Read

Passing-Off

Brooke Bond v Chai, BAT v Cut Tobacco, Hack Babies v Oper Pharmacies

Making a trademark generic

Rights of a ™ owner

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Rights to use the ™ if a 3rd party uses the ™ to further his own interests, it amounts to

infringement.

If one uses a ™ that is confusingly similar to the ™ of another, refer to Nivea v Nivelin or for

example in Kenya we have panadol and in South Africa we have Panado if one registers

Panado in Kenya there is a likelihood of confusion.

Parallel Importation

Parallel Importation – the principle of exhaustion – once you have released your goods to the

market, you have no control and it can be used by an infinite number of people at the same

time. But the principle can be defined as National meaning once goods are sold within Kenya

one has exhausted the first right, so a 3rd party cannot take the goods and sell them in

Tanzania. International exhaustion is to the extent that once the goods are in the market, you

cannot stop other people from selling the goods, the goods cannot be reproduced but they can

be redistributed. Refer to the Silhouette Case silhouette were manufacturers of designer

shades. The Defendant was based in Vienna and used to sell discount frames, after a while

Silhouette sold some old fashioned frames to a buyer in Bulgaria and the defendant went to

Bulgaria, bought the frames and brought them to sell at a discount and Silhouette went to court.

the court held that since Bulgaria was out of the EU (regional exhaustion) the importation and

subsequent sale by the defendant amounted to infringement of the Silhouette ™.

FRANCHISE & LICENSING WITH REGARD TO ™

Oil Companies

FoodChains

Steers

Kenchic

COPYRIGHT & RELATED RIGHTS

People who compose their own music have primary rights to the copyright while those who perform have secondary derivative or related rights to copyright.

Berne Convention of 1886

Right of author to be recognized as the author of his work

Right of paternity

Parody and satire are not infringement of ©

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TRIPS Agreement incorporated articles 1-24 of the Berne Convention excluding only moral

rights. US does not recognize moral rights, they can take your music and mutilate it.

COPYRIGHT

Copyright © protects the original expression of ideas, not the ideas themselves. It is free and automatically safeguards your original works of art and literature, music, films, sound recording, broadcasts and computer programs from copying and certain other uses.

Under the © Act work has to be it has to be original and reduced to material form, does it

contradict Section 5 of the Berne Convention which says that there should be no formality.

Original means one has to show sufficient skill and judgment. Refer to the case of Fiest

Publications v Rural Rural was a telephone company and had a telephone directory Fiest a

Yellow pages company. Feist Publications, Inc., v. Rural Telephone Service Co., Inc., 499

U.S. 340 (1991), commonly called just Feist v. Rural, was a United States Supreme Court case

in which Feist copied information from Rural's telephone listings to include in its own, after Rural

refused to license the information. Rural sued for copyright infringement. The Court ruled that

information contained in Rural's phone directory was not copyrightable, and that therefore no

infringement existed. The questions for determination were can there be copyright in facts the

answer was no. Had Rural exercised sufficient skill and judgment to come up with their

directory, they had but the information in the directory was not copyrightable. This is the

definitive guide for originality. The Judges stated “The primary objective of © is not to reward

the owner to promote science and useful art. To this end © assures the author the right to their

original expression but also encourages others to built freely on the ideas and information

conveyed by the work.”

Under the Copyright Act 2001 originality is stated in Section (3) as A literary, musical or

artistic work shall not be eligible for copyright unless

(a) sufficient effort has been expended on making the work to give it an original character; and

(b) the work has been written down, recorded or otherwise reduced to material form.

Creative ideas are expressed through books, drawings, sculptures, drawings, photographs.

Computer programs are protected as literally works, why?

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Copyright protects "original works of authorship" that are fixed in a tangible form of expression.

The fixation need not be directly perceptible so long as it may be communicated with the aid of

a machine or device. Copyrightable works include the following categories:

1. literary works;

2. musical works, including any accompanying words

3. dramatic works, including any accompanying music

4. pantomimes and choreographic works

5. pictorial, graphic, and sculptural works

6. motion pictures and other audiovisual works

7. sound recordings

8. architectural works

These categories should be viewed broadly. For example, computer programs and most

"compilations" may be registered as "literary works"; maps and architectural plans may be

registered as "pictorial, graphic, and sculptural works."

DURATION OF COPYRIGHT

© Act in Kenya grants © to the © owners. It subsists for the life of the owner plus 50 years. In

case of sound records, they compute 50 years after the year in which the first recording was

made. The problem with duration is that most computer programs have a very short life span

and there is no need of protecting them for 50 years plus. Anonymous Works: © subsists for

the duration starting from the year of publication which is strictly 50 years but if the author

decides to disclose his identity before he dies, then it will persist for his lifetime and then another

50 years after the author‟s death. These are called pseudononymous works. 50 years is a short

time and there are 2 dimensional characters like Mickey Mouse and the Looney Tunes and their

time was about to expire in the 2004, what the industry leaders did was to lobby Congress to

extend the duration of copyright another 20 years which now made it the life of the author plus

70 years. Music produced in US prior to 1976 Act is already in public domain.

It does not matter what kind of work it is, it may be a fantastic paper for the law journal but the

subject matter depends on whether it falls on the category of literary, artistic or musical works.

Copyright Act 2001 Section 22.(1) Subject to this section, the following works shall be

eligible for copyright

(a) literary works;

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(b) musical works;

(c) artistic works;

(d) audio-visual works;

(e) sound recordings; and

(f) broadcasts.

A broadcast shall not be eligible for copyright until it has been broadcast.

(3) A literary, musical or artistic work shall not be eligible for copyright unless

(a) sufficient effort has been expended on making the work to give it an original character; and

(b) the work has been written down, recorded or otherwise reduced to material form.

(4) A work shall not be ineligible for copyright by reason only that the making of the work, or the

doing of any act in relation to the work, involved an infringement of copyright in some other

work.

Related rights for a long time were not included in copyright because it was argued they lacked creativity. Broadcasting Houses only get fringe rights for the investment they have made. Broadcasting Stations have copyright to broadcast their own programs. They only have primary rights in those programs that they have themselves produced like „Papa Shirandula” Citizen