KENYA: GOOGLE AND MICROSOFT SET UP TECH DEVELOPMENT HUBS IN KENYA

By John Syekei Tuesday, May 10, 2022
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Welcome to the latest issue of the IP & Technology Digest.

We hope that you will find the features in this Digest informative.

Snapshot of Our Practice

Our IP & Technology Practice, which includes a vibrant Telecommunications practice, has been busy advising on a range of transactions in IP and technology over the past month, and we have been briefed on several IP transaction and advisory matters as well as Fintech, Crypto and payments matters.

For assistance on any IP, Technology and Telecoms matter, please do not hesitate to contact John Syekei.

Technology, Media and Telecommunications

Kenya

Google to open tech hub in Nairobi as part of Sh115.5bn Africa investment

Google is investing in its first-ever African product development hub in Nairobi as part of the tech firm's KES 115.5 billion investment on the continent over the next five years.

The company announced in a statement on Tuesday that the new product development centre will help to create transformative products and services for people in Africa and around the world and will offer job opportunities to visionary engineers, product managers, UX designers, and researchers to lay the foundation for significant growth in the coming years.

The announcement follows last year's commitment from Google CEO Sundar Pichai that the firm plans to invest KES 115.5 billion as part of its Africa digital transformation programme.

Google said that the programme will increase access to cheap and fast internet, support local entrepreneurs and SMEs and help non-profit organisations.

To read more, click here.

Source: Business Daily (20 April 2022)

Bowmans comments: Google’s new investments in Nairobi, together with the recent announcement by VISA of its plans to set up its first innovation center in Nairobi and Google’s 2019 investment in an AI centre in Ghana highlight the continuing interest in Africa’s innovation ecosystems.

Kenya to double tax on big Tech

Kenya plans to double tax on foreign tech giants like Amazon, Netflix, Twitter, and PayPal, which use the internet to market and sell products, a signal that Nairobi is hardening its stance against the US-backed global minimum rate on multinationals. The Treasury has proposed to increase digital service tax (DST) to three percent of the gross value of online transactions in the financial year starting July from the current 1.5 percent through the Finance Bill 2022.

The Kenya Revenue Authority has identified foreign firms that derive income in Kenya through digital marketplaces — selling exclusively online or providing platforms for such deals — as a major driver of tax receipts in a highly digitalising global economy.

To read more, click here.

Source: Business Daily (12 April 2022)

Bowmans comments: This agreement marks a crucial part of the ongoing privatisation exercise by the Ethiopian Government and paves the way for the creation of a competitive telecommunications sector in the country. However, it is important to note that privatization raises certain political, economic, employment, distributional, security, and regulatory concerns, and if not implemented correctly, could lead to limited investment, increased service tariffs or the continuation of the present poor quality of service levels.

Africa

Microsoft Opens 2 New Offices for ADC in Africa

Microsoft has announced that they have opened two new offices for the ADC in Nairobi, Kenya and Lagos, Nigeria. The two new offices for the African Development Center (ADC) are part of Microsoft’s way of reinforcing its commitment to developing tech talent in Africa. Nairobi will host a new research institute, the Microsoft Africa Research Institute, which is the first on the continent.  In Kenya, ADC is now based at Dunhill Towers along Waiyaki way in its new ultra-modern state-of-the-art facility, the first of its kind serving the East African region. The facility will house the engineering, design, research and innovation teams, as well as the Microsoft Garage, an incubation hub launched as part of the ongoing efforts to scale tech innovation on the continent.

To read more, click here.

Source: TechAfrica News (31 March 2022)

Bowmans comments: The setup of the Microsoft office locally will be a great boost to the economy through the hiring of staff in the offices as well as legal support to integrate their work into local legal requirements.

Updates from Regulatory Bodies

Office of the Data Commissioner

Data Protection Regulations now approved

The Data Protection (General) Regulations, 2021, the Data Protection (Complaints Handling and Enforcement Regulations), 2021 and the Data Protection (Registration of Data Controllers and Data Processors) Regulations, 2021 (“Registration Regulations”) have now been approved by the National Assembly.

Considering this confirmation, it is important to take a closer look at the Registration Regulations with a view to highlighting certain key points in the registration process.

One of the key points to note from the Registration Regulations is the six (6) month grace period for data controllers and data processors to be registered with the Office of the Data Protection Commissioner (the ODPC). The requirement to register will therefore take effect from 14 July 2022. For more information on the General Regulations, please access our recent insight here.

However, it is important to note that data controllers or processors with an annual turnover /revenue below Kshs 5 million (approx. USD 50,000) for the year immediately preceding registration, and with less than ten (10) employees are exempted from registration. For more information on the exemption thresholds and mandatory registration requirements, please access our update here.

Anti-Counterfeit Authority

Commencement of recordation of Intellectual Property Rights

The Anti-Counterfeit Authority (ACA) has by public notice announced the commencement of implementation of recordation of Intellectual Property Rights (IPRs) effective 1 July 2022. The significance of this notice is that prospective importers must now declare the particulars of IPRs on all goods to be imported into Kenya for commercial use prior to the deadline. Failure to adhere to this requirement will attract prosecution and penalties. Any goods imported into Kenya without a valid recordal will also be seized at the port of entry.

The notice marks the second phase of the ACA’s proposed plan to implement and operationalize the recordal process. In order to submit applications for the recordal of IPRs, IPR owners can declare their associated IPRs by using the ACA’s Integrated Management System. For more information on the phases of the recordation process, please access our previous insight here.

To read more, click here.

Source: Anti-Counterfeit Authority Website (26 April 2022)

WIPO

World Intellectual Property Day – April 26, 2022

The global intellectual property community celebrated the world intellectual property day on 26 April 2022. The theme selected by WIPO for this year’s celebrations was ‘IP and Youth innovating for a Better Future’. This theme was selected to highlight how young inventors, creators and entrepreneurs can use intellectual property rights to achieve their goals, generate income, create jobs, tackle local and global challenges and support community and national development.

As part of the World IP Day events, WIPO also organized the first World IP Day Youth Video Competition. The winning entries were announced during an event at WIPO’s Geneva headquarters in Switzerland on “Innovating for Better Health: Supporting Young Innovators Through IP.”

To read more, click here.

Source: WIPO Website

ARIPO

ARIPO’s commitment to promote IP and innovation among youth

As part of its 2022 World IP day celebrations, ARIPO’s through its Director General Bemanya Twebaze posted an update on ARIPO’s initiatives to promote innovation, IP protection, and commercialization among the youth, in line with this year’s theme ‘IP and Youth: Innovating for a better future.’

ARIPO noted that it partners with universities in its member states to jointly offer a master’s program in IP. The objective is to create a human resource pool in IP for Africa as a continent. Specifically, ARIPO highlighted that it partnered with Africa University in Zimbabwe, Kwame Nkrumah University of Science and Technology in Ghana, and the University of Dar es Salaam in Tanzania, where young people enroll to study for a master’s degree in intellectual property. ARIPO offers scholarships to some of the students to allow them to undertake their studies in IP.

To read more, click here.

Source: ARIPO Website (25 April 2022)

OAPI

OAPI geographical indication protection granted to the producers of the Saponé hat

On 12 April 2022, OAPI hosted a ceremony for the presentation of the certificate of registration for geographical indication protection (IGP) of the Saponé hat. The event marked a historic moment for the recognition of the specific know-how of the craftsmen who produce the Saponé hat.

The Saponé hat is a symbol of peace and harmony in Burkina Faso. The economic value of the hat is expected to increase on the market, thereby allowing hundreds of craftsmen in the village of Saponé to obtain substantial income, especially since the possession of the IGP logo will allow them to protect the product against counterfeiting. 

To read more, click here.

Source: OAPI Website (12 April 2022)

Developments in the Intellectual Property Arena

Trademarks

Zion Williamson Seeks to Stop Use Of ‘Zion’ in New Trademarks

The United States Patent and Trademark Office (USPTO) granted Zion Williamson, a popular basketball player in the United States (US) (Williamson) trademark registration for the ‘Zion’ and ‘Zion Williamson’ marks about one (1) year ago. Williamson appears ready to assert rights over those trademarks in a new trademark opposition filed against  an application for “Zion Influencers.”

In the opposition filing, Williamson claims that registration of the opposed trademark will result in a likelihood of confusion. He also stated that registration of the term would create a false suggestion in the public’s mind that he is connected to the brand.

Williamson seems to be claiming trademark rights outside of the industry and natural zone of expansion of the registered marks. This is because the filing for “Zion Influencers” states the trademark will be used for marketing services, which is not one of the trademark classes listed on Williamson’s filings. The decision may have major ramifications for current and future brands with “Zion” in their names.

To read more, click here.

Source: Mandour & Associates (19 April 2022)

Bowmans comments: While Williamson has exclusive rights over his registered marks, the case marks one of the few instances where the Trademark Trial and Appeal Board must consider whether trademark rights could be deemed to apply outside of their registered classes. In addition, the fact that several other ZION trademarks have been registered in other classes also forms a key issue to consider in this case.

US Federal Judge tosses Girl Scouts’ recruitment suit vs. Boy Scouts

A US federal judge rejected claims by the Girl Scouts of the United States of America (Girl Scouts) that the Boy Scouts of America (the Boys Scouts) created marketplace confusion and damaged their recruitment efforts by using words like “scouts” and “scouting” in recruitment drives. Judge Alvin K. Hellerstein ruled that the Boy Scouts can describe their activities as “scouting” without referring to gender and that the matter did not need to be put to a jury.

In his decision, Judge Hellerstein noted that the Boy Scouts adopted the Scout Terms to describe accurately the co-ed nature of programming, not to confuse or exploit Girl Scouts’ reputation. The Judge stated that he was siding with the Boy Scouts in part because the Girl Scouts could not prove that a likelihood of confusion was caused by the Boy Scouts’ use of the term “scout.” The Judge also added that the term “scout” was descriptive of both the Boy Scouts’ and Girl Scouts’ programming and that the choice to join one organization, or the other is made after several interactions with the organization, by children’s desires to join a group siblings or friends have joined, or other factors unrelated to trademarks and branding.

To read more, click here

Source: AP News (8 April 2022)

Bowmans comments: This ruling highlights the evidentiary threshold that must be met when claiming that a trademark causes a likelihood of confusion. In such claims, it is not sufficient to simply adduce testamentary evidence from witnesses who claim to have been confused by the marks in dispute. Rather, a claimant must prove sufficient similarity in the marks that may lead an ordinary consumer to believe that the respective goods or services originate from the same undertaking. This can then be corroborated by witness evidence to prove such a likelihood of confusion.

Patents

Kaspersky patents blockchain technology for secure personal data transfer

On 22 February 2022, Kaspersky received a patent for its new blockchain technology, which is expected to ease the data management process and ensure the lawful sending and processing of information. The technology is also designed to ensure information confidentiality and guarantee the authentication reliability of parties involved during data transfers. Accordingly, the patent contains methods for protecting personal data from illegal transfer and processing, thereby allowing businesses to comply with their legal obligations under the data protection laws and regulations within their jurisdiction.

To read more, click here

Source: Zawya by Refinitiv (7 April 2022)

Bowmans comments: With recent increases in the collection of personal data, corporations should be mindful of compliance requirements under the relevant data protection laws. Data management technologies can provide useful solutions to protect personal data from unlawful processing, thereby ensuring that corporations are able to comply with applicable legal requirements.

Trade Secrets

Boeing Loses Bid for Rehearing on Trade Secrets Claim Decision

The U.S. Court of Appeals for the Eleventh Circuit held that Boeing Co. (Boeing) failed to convince it to reconsider the revival of a claim that could expose the Company to up to United States one hundred million dollars ($ 100,000,000.00) in damages for allegedly misappropriating trade secrets when it worked with Alabama Aircraft Industries Inc. (AAI) on a U.S. Air Force contract bid. The parties had entered into a teaming agreement in 2005 to submit a joint proposal for the KC-135 Stratotanker maintenance contract whereby AAI would perform as Boeing’s subcontractor. Boeing terminated the agreement a year later, after the Air Force changed the solicitation. The parties then submitted individual proposals and the Air Force selected Boeing in September 2007. AAI filed a suit in 2011 claiming breach of trade secrets.

The Court held that AAI showed that the district court erred by concluding that Alabama’s two-year statute of limitations applied to make the claim untimely. The Court noted that Missouri’s five-year statute of limitations was applicable because the claim arose from the exchange of proprietary information in connection with the parties’ teaming agreement.

To read more, click here

Source: Bloomberg (21 April 2022)

Bowmans comments: This case highlights the interplay between statutes of limitations and misappropriation of trade secrets claims. While parties may enter into agreements to govern the exchange of proprietary information, they must also bear in mind the applicable limitations in tort law to govern such claims, e.g., time limitations.

Copyright

Actors' union warns that livelihoods are at risk from artificial intelligence (AI) unless Copyright law changes

Equity, the performing arts workers’ union (the Union), recently launched a new campaign labelled, "Stop AI Stealing the Show".

The Union claimed that AI systems are now replacing skilled professional performers, citing examples such as automated audiobooks and digital avatars. The Union highlighted several different ways actors' voices and likenesses may be used. For example, actors may work with AI firms to create systems that can generate artificial voice-overs or to help them create digital "avatars". Further, AI can also be utilized to create "synthetic" performances, in some cases, even allowing deceased actors to appear in films. While AI-generated performances can be a useful creative tool, the Union raised concerns that actors may not always be able to control the use of their likeness, or their likeness may be used without consent or adequate remuneration. This is especially concerning given that AI generated "deep fake" videos of celebrities have become increasingly popular online.

To read more, click here

Source: BBC News (21 April 2022)

Bowmans comments: This recent campaign serves to highlight the growing interplay between AI and copyright law. For instance, works or expressions developed with the assistance of AI and machine learning technologies may pose certain challenges for the traditional copyright regime. Foundational concepts of copyright law such as originality, authorship, and ownership, may have to be redefined to cater to the impacts that growing AI use may pose.

Cryptos, AI, Blockchain +

Cryptocurrency: UK Treasury to regulate some stable coins

The United Kingdom Treasury has announced that it will regulate some cryptocurrencies as part of a wider plan to make the United Kingdom a leader in cryptocurrency and a hub for digital payment companies.

Although the Treasury is yet to provide clarity as to which stable coins will be regulated, the regulations are anticipated to recognise stable coins as a form of currency and bring them within the existing regulations to ensure consumer safety.

The Treasury also plans to conduct consultations on the regulation of a much wider range of digital currencies later this year.

To read more, click here.

Source: BBC News (5 April 2022)

Bowmans comments: It is important to monitor UK regulations relating to stable coins as the Central Bank of Kenya recently released a discussion paper on digital currencies for the public to comment on and submit their opinions. The experiences with UK Regulations could assist in forming productive engagements with the local regulator to ensure informed and holistic policy decisions regarding digital currency innovation.

Central Bank of Nigeria Fines 3 Banks for Facilitating Crypto Transactions

The Central Bank of Nigeria (CBN) has fined three banks a total of USD 1.9 million for allegedly facilitating cryptocurrency transactions in 2021. Access Bank, the country’s biggest lender by assets, was fined USD 1.2 million for failing to close customers’ crypto accounts. Meanwhile, Stanbic IBTC Bank received a USD 478,595 fine for two accounts alleged to have been used for crypto transactions. United Bank for Africa (UBA) was fined USD 240, 500 for digital-currency transactions by a customer. In February last year, the CBN banned all commercial banks and financial institutions from providing account services to crypto exchanges in the country because of the threat that it said they pose to Nigeria’s financial system.

To read more, click here.

Source: The Kenyan Wall Street (7 April 2022).

Bowmans comments: This recent ban forms part of the increased efforts by the CBN to crackdown on cryptocurrency use. In 2021, the CBN sought to obtain an order freezing the assets of some fintech companies. The Court, however, vacated the interim order, adding that it was not illegal to deal in cryptocurrency in Nigeria and that the CBN could not rely on a circular as the circular did not amount to a statute. Despite the opposition, cryptocurrency transactions remain popular in the country. Nigeria’s experience may therefore serve as a lesson for regulators in other jurisdictions who are considering how to regulate digital currencies.