The economic transformation of Kenya over the last fifteen years has seen a phenomenal proliferation of shopping malls and trading centres all over the country, characterised by the entry of famous global brands that were hitherto unknown in Kenya. World-class multinationals in virtually all commercial sectors have also set up shop in Kenya, bringing along their coveted brands.
One of the most unwelcome shocks that greets the arrival of such businesses in Kenya is the realisation that they cannot use their valued brands here for the reason that, unbeknown to them, some ‘enterprising’ Kenyan has already obtained trade mark registration for the same brand. What follows thereafter is either a bruising and expensive court battle or a negotiated settlement involving the re-purchase of the brand by its legitimate owner at a price that can only be described as extortionist or a ransom.
The protection of brands through registration is therefore an urgent imperative for any business contemplating doing business on our soil.
Kenya being a ‘first-to file’ country means that registration of trade marks is done on a ‘first come first served’ basis irrespective whether the mark is registered, owned or used by another party outside Kenya. It is all depends on who gets to the door of the Trade Marks Registry first. This is why the Registry normally indicates in its data base the precise time of the day when an application was received and paid for.
Kenyan law provides some respite to owners of what are called “well-known” trade marks. These are brands which have acquired such a high degree of distinctiveness that they have become household names in the country. Examples of such marks include “Olympic”, ‘Google”, “Coca Cola”, “McDonalds”, “Nike”, among others. Such brands enjoy protection under the law even if they are not locally registered.
The proprietor of a well known mark can successfully challenge the prior registration of the mark by a third party or resist attempts by such registered proprietor to stop the legitimate owner from using the mark in Kenya. The burden of proving that one’s mark is well known lies upon the person claiming that the mark is well-known.
The World Intellectual Property Organisation (WIPO) has developed an elaborate criterion for determining whether a mark meets the required threshold of well-knownness. Some of the factors for consideration include the degree of recognition of the brand by the relevant segment of consumers, level of advertising, promotion, sales volumes, among others. It must be a brand that requires no introduction to the relevant consumer.
The Achilles heel for owners of well known brands is that the alleged notoriety of the mark must be within Kenya. The reputation of the brand outside Kenya is irrelevant. Therefore, a brand that has never been used in Kenya will not enjoy this privilege. However, with the advent of internet and online shopping, this has become a spurious requirement considering that consumers in Kenya frequently encounter these brands online through advertisements, promotions and even purchases.
Courts in some jurisdictions like India have recognised the out-datedness of this threshold and determined that strong online presence of a brand would justify the recognition of a well known trade mark based on evidence that consumers in the local jurisdiction know the brand well even if the online sales in the country may not be significant. Kenyan trade marks law should be amended by removing the local notoriety requirement. This will adjust the law to the current business realities presented by technological advancement.
Apart from well known marks there is another breed of brands, currently unknown under Kenyan law, called ‘famous marks”. These are brands that are a notch higher than well known marks. They are superstar brands whose reputation is so high that their use by anyone in respect of any goods or services is likely to mislead consumers into believing that the product or service is provided by or associated with the owner of the famous brand. The use of such mark on any goods or services amounts to taking an unfair advantage of the famous brand.
The protection of famous marks entitles their owners to ward off not only competitors who deal in similar goods/services but practically anyone else using the brand for any purpose whatsoever. The logic here is that such use dilutes the value of the brand.
In jurisdictions where famous trade marks are protected by legislation such as the US and the EU, the brands enjoy a broader degree of protection than well known marks to the extent that their protection is not limited to any specific goods or services and do not need to have been used locally. The law acknowledges that their fame transcends geographical boundaries.
Kenya has made the first baby steps in the right direction by introducing a provision in the Companies Act, 2015 which prohibits the incorporation of a company under a name that constitutes the registered trade mark of a third party. This law, while laudable, does not address the full spectrum of the challenges faced by the owners of global brands that are routinely registered by pirates in Kenya prior to the arrival of the legitimate brands in the Kenyan market.
The enactment of a law that provides for the protection of famous marks would save Kenya from fast becoming a pirates’ den for global brands.
The article was featured in the Business Daily on 30th April 2018 and can be accessed here.