INTELLECTUAL PROPERTY LAW AND The Tort of PASSING OFF

INTELLECTUAL PROPERTY LAW

Intellectual Property Rights are rights awarded by society to individuals or organizations principally over creative works. They give the creator the right to prevent others from making unauthorized use of their property for a limited period of time.

What is Intellectual Property?

Intellectual property refers to creations of the mind: inventions; literary and artistic works; and symbols, names and images used in commerce. Intellectual property is divided into two categories:

        i.            Industrial Property Includes patents for inventions, trademarks, industrial designs and geographical indications.

      ii.            Copyright covers literary works (such as novels, poems and plays), films, music, artistic works (e.g., drawings, paintings, photographs and sculptures) and architectural design. Rights related to copyright include those of performing artists in their performances, producers of phonograms in their recordings, and broadcasters in their radio and television programs.

Intellectual property rights are like any other property right. They allow creators, or owners, of patents, trademarks or copyrighted works to benefit from their own work or investment in a creation.

The value of Intellectual Property

This section explains the value of intellectual property and why it is important to Kenya’s integration into the global economy. It explores the benefits of IP protection in strengthening national economies, driving innovation and technology, fostering new ideas, and enhancing society and culture:

        i.            IP benefits the economy: IP protection benefits the economy in terms of GDP, employment, tax revenues, development and competitiveness. IP rights (IPR) also promote foreign direct investment (FDI) and technology transfers in developed and developing countries, driving development and economic growth.

      ii.            IP attracts FDI: The strength of a country’s IPR regime is one of the factors influencing decision of producers and firms to transfer technology or invest in a country. FDI is important because it supports economic development through the transfer of technology and managerial skills and through the creation of employment opportunities. For developing countries, particularly for those in the early stages of development, technology transfer from foreign high-income economies and the spill over effects from FDI have been considered the most important sources of innovation, since most such countries lack the capital and the skills to conduct state-of-the-art research.

    iii.            IP promotes innovation: Innovation is a key ingredient of sustained economic growth, development and better jobs. Effective IP protection increases research, development and innovation. It attracts venture-capital investment for R&D and for the commercialization of innovative products and services. IPR promotes cultural expression and diversity, promotes the dissemination of new technologies, and promotes development.

    iv.            IP helps firms monetize their inventions and grow: Firms use IPR to help develop, create value, conduct trade and benefit from their works and inventions. A firm’s ownership of IP rights helps to reassure investors that they should inject money into the company. The use of IP in fostering investment is not only important for established firms that are already reliant on patents, trademarks and copyrights—protecting their value, innovation and reputation—but even more so for new firms seeking to establish a secure stream of investment and innovation. Firms also can use their IP to penetrate new and profitable markets, to develop products, services and processes and to collaborate through licensing or establishing strategic alliances.

      v.            IP protection helps small and medium enterprises: SMEs that rely on IP of all sorts reported higher growth, income and employment than those that do not – in some cases as much as 20% more.

        i.            IP benefits consumers and society: IPR supports the development of a continuous stream of innovative, competitive products and services that benefit consumers. IPR promotes consumer trust and more effective protection against counterfeit and pirated goods– and helping protect consumers from inferior and dangerous counterfeits. IPR is helping to address many of society’s most important needs, – and helping protect consumers from inferior and dangerous counterfeits to a truly ‘digital economy’.

Just as adequate IP protection and enforcement mechanisms support the numerous societal, consumer and economic benefits described in this section, inadequate IP protection and inadequate enforcement against IPR violations have the opposite effect.

PATENTS

What is a Patent?

A patent is an exclusive right granted for an invention – a product or process that provide a new way of doing something, or that offers a new technical solution to a problem.

A patent provides patent owners with protection for their inventions. Protection is granted for a limited period, generally 20 years.

Why are patents necessary?

Patents provide incentives to individuals by recognizing their creativity and offering the possibility of material reward for their marketable inventions. These incentives encourage innovation, which in turn enhances the quality of human life.

What kind of protection do patents offer?

      ii.            Patent protection means an invention cannot be commercially made, used, distributed or sold without the patent owner’s consent.

    iii.            Patent rights are usually enforced in courts that, in most systems, hold the authority to stop patent infringement.

    iv.            Conversely, a court can also declare a patent invalid upon a successful challenge by a third party.

What rights do patent owners have?

        i.            A patent owner has the right to decide who may – or may not – use the patented invention for the period during which it is protected.

      ii.            Patent owners may give permission to, or license, other parties to use their inventions on mutually agreed terms.

    iii.            Owners may also sell their invention rights to someone else, who then becomes the new owner of the patent

    iv.            The right to receive royalties in the event of compulsory licensing

      v.            Once a patent expires, protection ends and the invention enters the public domain. This is also known as becoming off patent, meaning the owner no longer holds exclusive rights to the invention, and it becomes available for commercial exploitation by others.

What kinds of inventions can be protected? (Patentability)

An invention must, in general, fulfil the following conditions to be protected by a patent.

        i.            It must be of practical use;

      ii.            It must show an element of “novelty”, meaning some new characteristic that is not part of the body of existing knowledge in its particular technical field. That body of existing knowledge is called “prior art”.

    iii.            The invention must show an “inventive step” that could not be deduced by a person with average knowledge of the technical field.

    iv.            Its subject matter must be accepted as “patentable” under law i.e. the invention must not be excluded by statute e.g. because of “national security”.

In Kenya the inventor must apply to KIPI and the patent may be granted or declined.  If a patent is granted, there should be an application to register it whereby the patentee must disclose the patent to the state.

Steps to Obtain a Patent in Kenya

1.         Prepare a patent application

2.         File the application

3.         Request for examination (within 3 years from the filling date)

4.         Search and examination is done

5.         Examiner either approves or rejects application

6.         Respond to examiner’s objections and requirements.

7.         Examiner reconsiders and either approves or calls for further amendments.

8.         If final decision is rejection you may appeal.

9.         If final decision is approval then a patent is granted

10.       Publication of the contents of the patent in the Kenya Gazette or the Industrial property Journal.

The application for a patent should contain:

1.         Request

2.         Description: The description should disclose the invention and at least one mode for carrying out the invention;

3.         One or more claims: The claim or claims should define the matter for which protection is sought and should be clear and concise and fully supported by the description;

4.         One or more drawings (where necessary); and

5.         An abstract: The abstract should merely serve the purpose of technical information; in particular, it should not be taken into account for the purpose of interpreting the scope of the protection sought

A patent may be obtained/owned by a natural or juristic person.

Inventions made by scientists in research institutions established under the Act (e.g. KEMRI) are patented by favour of the research institute and not the individual inventor but the inventor must be named.

Compulsory Acquisition

This may be done by the government where:

•           The patentee has refused to work the patent

•           The patentee has refused to licence other persons to work the patent on equitable terms.

•           The owner of the patent has been promptly and adequately compensated.

The inventor’s employer may also own a patent regarding the employee’s invention but the invention must have occurred in the course and within the scope of the employment.

Obligations of the Patentee

1.         Disclose the invention to KIPI

2.         Give information on concerning foreign corresponding applications and grants.

3.         Duty to pay the prescribed fees.

4.         Obligation to refrain from unfair

5.         Abusive and uncompetitive terms and provisions in contractual terms and licenses, assignments or patent applications.

Patent Infringement

This is the unauthorized use of or dealing with a patented product or process contrary to the interests of the patentee, with or without his consent, licence or permission.

It is conduct which goes against the claims as stated in the patent application and in particular, the final grant.

A case on patent infringement may be brought by the patentee or his personal representative.

An inventor whose patent is infringed is entitled to an injunction, delivery of the infringing articles and damages, which may be assessed on a loss of profits or royalty basis.  He will also be given ‘certificate of contested validity’ which entitled him to larger costs in any future infringement action. If the patentee loses the grant of enough to convert the defendant’s products or process.

Defences to Patent Infringement

1.         That the invention had been published and therefore lacked novelty

2.         Absence of specificity in the claims i.e. the claims are not specific enough

3.         Non-patentability of the subject matter because of exclusions

Remedies

1.         Injunctions

2.         Damages

3.         Account of profits

4.         Delivery up – an order that requires the defendant to deliver up all infringing material including all equipment and contraptions.

5          Criminal Sanctions

They are available under the Intellectual Property Act and the Trade Marks Act.  They may take the form of fines, imprisonment and forfeiture (delivery-up)

Fundamental Weaknesses in the Enforcement of Criminal Sanctions

•           Lacklustre government attitude towards IP and IP rights

•           General public ignorance

•           Lack of resources

•           Limited knowledge by judges and magistrates

TRADE MARKS

What is a trademark?

A trademark is a distinctive sign that identifies certain goods or services produced or provided by an individual or a company.

The system helps consumers to identify and purchase a product or service based on whether its specific characteristics and quality – as indicated by its unique trademark – meet their needs.

What do trademarks do?

        i.            Trademark protection ensures that the owners of marks have the exclusive right to use them to identify goods or services, or to authorize others to use them in return for payment. The period of protection varies, but a trademark can be renewed indefinitely upon payment of the corresponding fees.

      ii.            Trademark protection is legally enforced by courts that, in most systems, have the authority to stop trademark infringement.

    iii.            In a larger sense, trademarks promote initiative and enterprise worldwide by rewarding their owners with recognition and financial profit.

    iv.            Trademark protection also hinders the efforts of unfair competitors, such as counterfeiters, to use similar distinctive signs to market inferior or different products or services.

      v.            The system enables people with skill and enterprise to produce and market goods and services in the fairest possible conditions, thereby facilitating international trade.

What kinds of trademarks can be registered?

A trademark can be anything Trademarks may be one or a combination of words, letters and numerals.

They may consist of drawings, symbols or three dimensional signs, such as the shape and packaging of goods. In some countries, non-traditional marks may be registered for distinguishing features such as holograms, motion, colour and non-visible signs (sound, smell

or taste).

In addition to identifying the commercial source of goods or services, several other trademark categories also exist. Collective marks are owned by an association whose members use them to indicate products with a certain level of quality and who agree to adhere to specific requirements set by the association. Such associations might represent, for example, accountants, engineers or architects.

Certification marks are given for compliance with defined standards but are not confined to any membership. They may be granted to anyone who can certify that their products meet certain established standards. Some examples of recognized certification are the internationally accepted “ISO 9000” quality standards and Ecolabels for products with reduced environmental impact.

Registration of Trademarks

Trademarks must be registered to be protected.  However, notorious, famous or well-known marks may be protected even if unregistered in a particular country or area.

The proprietor must use it in order to continue to enjoy protection.  Trademarks exist infinitely but one has to renew registration after certain periods of time.  In Kenya it is 10 years.

The registration procedure is as follows:

1.         Preliminary search – an application should conduct a search to find out whether the trademark is registerable or not and also whether there exists in the records a trademark which could be confused with the intended trade mark.  It is advisable since;

•           It will help one in determining whether the application has a chance for success, or whether it would be a waste of time and money to try and register it in its present form.

•           It will also help one avoid trade-mark infringement and potential lawsuits if one went straight ahead in applying for registration.

2.         Applying for registration – such application should be accompanies by seven (7) representations of the mark.

3.         Examination – this includes a formal and substantive examination.

4.         Advertisement – if the examiner finds no grounds to refuse a trade mark application, then the Trade mark is advertised in the Industrial Property Journal or Kenya Gazette to allow any interested party an opportunity to raise objections to the pending application prior to registration.  The information included in the gazette notice include; the number and filing date, the representation of the mark, the class, the specification of the goods or services, the name and address of the applicant, any other claims (Colour, claims, disclaimers).

5.         Opposition – Any aggrieved party with valid grounds may oppose the registration of a trade mark so advertised in the Kenya Gazette.  An opposition must be within 60 days of the publication date, by filing a statement of opposition.

6.         Registration – If there is no opposition to the trade mark after the statutory 60 days period from the date of advertisement, or if an opposition has been decided in the applicants favour, the application will be registered and the Institute will issue a Certificate of Registration and enter the registration in the Trade Marks Register.

7.         Fees

Use/Importance 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 (read worse) chicken from the Nandos in South Africa.

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

TM Infringement

This is the use of TM in the TM sense without license from the TM owner.

Defences to TM infringement

1.         Lapse of the title to the TM

2.         Non-use of the TM

3.         Confusion – the plaintiff’s TM is neither distinctive nor distinguished

4.         Innocence – however, this is not an absolute defence as the defendant has constructive notice by reason of the TM being registered.

Remedies to TM infringement

1.         Damages

2.         Accounting of profits or gains

3.         Destruction of the infringing material

4.         Self-help remedies e.g. advertisement or promotional campaigns.

COPYRIGHTS

What are Copyright and Related Rights?

Copyright laws grant authors, artists and other creators’ protection for their literary and artistic creations, generally referred to as “works”. A closely associated field is “related rights” or rights related to copyright that encompass rights similar or identical to those of copyright, although sometimes more limited and of shorter duration. The beneficiaries of related rights are:

        i.            Performers (such as actors and musicians) in their performances;

      ii.            Producers of phonograms (for example, compact discs) in their sound recordings; and

    iii.            Broadcasting organizations in their radio and television programs.

Works covered by copyright include, but are not limited to: novels, poems, plays, reference works, newspapers, advertisements, computer programs, databases, films, musical compositions, choreography, paintings, drawings, photographs, sculpture, architecture, maps and technical drawings.

What rights do copyright and related rights provide?

The creators of works protected by copyright, and their heirs and successors (generally referred to as “right holders”), have certain basic rights under copyright law.

They hold the exclusive right to use or authorize others to use the work on agreed terms. The right holder(s) of a work can authorize or prohibit:

        i.            Its reproduction in all forms, including print form and sound recording;

      ii.            Its public performance and communication to the public;

    iii.            Its broadcasting;

    iv.            Its translation into other languages; and

      v.            Its adaptation, such as from a novel to a screenplay for a film.

Copyright and the protection of performers also include moral rights,

        i.            the right to claim authorship of a work, and

      ii.             The right to oppose changes to the work that could harm the creator’s reputation.

Creators often transfer these rights to companies better able to develop and market the works, in return for compensation in the form of payments and/or royalties (compensation based on a percentage of revenues generated by the work).

The economic rights relating to copyright are of limited duration beginning with the creation and fixation of the work, and lasting for not less than 50 years after the creator’s death.

This term of protection enables both creators and their heirs and successors to benefit financially for a reasonable period of time. Related rights enjoy shorter terms, normally 50 years after the performance; recording or broadcast has taken place.

What are the benefits of protecting copyright and related rights?

        i.            It is an essential component in fostering human creativity and innovation.

      ii.            Giving authors, artists and creators incentives in the form of recognition and fair economic reward increases their activity and output and can also enhance the results.

    iii.            By ensuring the existence and enforceability of rights, individuals and companies can more easily invest in the creation, development and global dissemination of their works.

    iv.            This, in turn, helps to increase access to and enhance the enjoyment of culture, knowledge and entertainment the world over and

      v.            Stimulates economic and social development.

Copyright infringement

This is the dealing with a work controlled by copyright in a manner contrary to the interests of the owner of the copyright without the owner’s consent, authority, licence or permission.

Remedies to copyright infringement

        i.            Civil action suits,

      ii.            Administrative remedies,

    iii.            Criminal prosecution.

    iv.            Injunctions,

      v.            Orders requiring destruction of infringing items,

    vi.            Inspection.

Proof of copyright infringement

1.         There must be similarity – the issue is that similarity is a matter of fact and similarity is difficult in music.

2.         There must be evidence of access – is there evidence that one person accessed the work of another? Dates are required.

3.         The material copied must itself be copyrightable.

DEFENCES TO COPYRIGHT INFRINGEMENT

1.         Non-subsistence of Copyright – © does not subsist in the work i.e. if it is not original and its plain news or plain facts.

2.         Fair dealing - this is defined under Section 26(1) of the Copyright Act 2001 as where one uses a work for criticism or review, private use.

3.         Consent – be it written or verbal

4.         Public interest – if the copyright is used for the benefit of the public

5.         Compulsory Licence by the State – where the issue is of public interest e.g. educational or health information.

6.         The works have fallen into the public domain and anyone can use it without infringing the © e.g. where the © has lapsed.

Compulsory licensing

In certain circumstances, the state may order the copyright owner to licence the work if it is important in the public interest e.g. health/educational interest.

This may be used where the owner has only produced or licensed few copies, is charging exorbitantly or has refused to licence it on reasonable terms.

The copyright owner is entitled to compensation at the going market rates.

The Tort of PASSING OFF

What is Passing Off?

Passing off is governed by the law of tort

Passing off relates specifically to a misrepresentation made by one party which damages the goodwill of another party. In most cases this will be achieved by one party passing off the other party’s goods or services as those of their own.

In most cases businesses will have rights under the law of passing off in relation to slogans, names, packaging and other advertising elements where the company will have accrued some form of goodwill.

What are the elements to passing off?

The goods or services in question must have goodwill attached to them.  This specifically means that the goods will have particular identifying features or specifics that will enable members of the general public or a specific section of the general public to associate with those particular goods or services.

There must be a misrepresentation on behalf of the defendant that will lead or be likely to lead those members of the general public to believe that the goods offered by him are in fact the goods or services of the other company.  Please note that this misrepresentation does not have to be intended it just has to lead the public to believe that.

This misrepresentation damages the goodwill of the claimant.

What is the link between passing off and trademarks?

Passing off is often relied upon when a something is unregistered as a trade mark.  For example a slogan or a name has not been registered as a trade mark but it has sufficient goodwill attached to it.   The legal action often involved with passing off can be much more time consuming and less straightforward than that of trade marks.  If you’re name or slogan can be registered as a trade mark then it is the best policy to register it rather than relying on the tort of passing off.

If I have already registered my trade mark can I rely on passing off?

There is existing case law where when dealing with the same facts an action brought for infringement of a trade mark was unsuccessful whereas the action brought for passing off was successful.  Passing off should therefore not be ignored as a legal remedy.

Does Passing off simply apply to Businesses to Business?

A case concerning passing off had the effect of bringing the law of passing off into the realm of celebrity endorsements and created a significant use for it where a trade mark cannot be registered.  It was held that false endorsements amount to passing off under UK law.

As it is the case for many celebrities to use their image to endorse various products if a company uses a celebrity image without permission in an advertisement for their product this may result in passing off if the following is proven:

That at the time of the acts complained of he had a significant reputation or goodwill;

That the actions of the defendant gave rise to a false message which would be understood by a not insignificant section of the general public that his goods have been endorsed, recommended or approved by the claimant (in this case the celebrity).

A once purely business to business tort following this case an individual, albeit a famous individual, is able to bring a claim of passing off against a business. 

What remedies are available for passing off?

        i.            Damages or an account of the defendants’ profits

      ii.            An order for the delivery up or the destruction of the infringing articles or products

    iii.            An injunction

    iv.            An enquiry to establish loss

Defences are available.

The following can be used as defences against a claim of passing off:

        i.            The claimants mark, slogan etc. is not distinctive

      ii.            The mark, slogan etc. has become generic

    iii.            The defendant may be innocently using his or her own name

    iv.            The claimant has given consent