How can I make money from my Trademark in Kenya?

January 30, 2023

A trademark is a recognizable sign which identifies products or services of a particular source from those of others. It can be a word, phrase, symbol, or design that distinguishes the products or services of one business from those of another. It one of the three basic forms of intellectual properties. Trademarks can be a valuable asset for businesses, as they can be used to protect the company’s brand and reputation. In addition to this, trademarks can also be a source of income for businesses. Trademark commercialization facilitates business operations and access to export markets. Commercialization can be in form of licensing and/or assignment. Licensing: In trademark licensing, the proprietor of a trademark, otherwise known as the licensor, grants permission, on an exclusive or non-exclusive basis, to a third party, the licensee, to use that trademark on mutually agreed terms and conditions. For example, if you own the trademark for a popular clothing brand, you can license the use of your trademark to a manufacturer who will produce and sell clothing items bearing your trademark. In return, you will receive a licensing fee/royalty for each item sold. An exclusive license means that only a particular licensee can use the trademark, and no further licenses for the good or service could be granted to other parties in relation to the same territory. A non-exclusive license is a license under which the licensor may allow more than one party to use the same trademark in the same territory, and in relation to the same goods or services. Because the license transfers some of the goodwill (the consumer perception of the brand) associated with the mark, the TM owner must maintain quality control over the IP asset. Without such control, the agreement is called a “naked license” and it may be argued that the owner has abandoned trademark rights. Therefore, all provisions for the licensing of trademarks should provide some means of regulating the nature and quality of the licensee’s goods or services associated with the mark experience. While franchises such as KFC, Mc Donalds, MINISO etc. are the best-known examples of commercial agreements reinforced by trademark licenses, various other commercial agreements also contain, or may contain, detailed provisions related to the use of TM. These include agency, distribution and manufacturing contracts. Such trademark license agreements can cover: The licensing of trademarks, designs, artwork as well as fictional characters and real personalities is broadly referred to as merchandising. Allowing manufacturers of ordinary consumer goods such as plates, mugs, towels, caps, clothes, to name a few, to physically apply to their products, known as creative trademarks, can add value and appeal to an otherwise commonplace object. Merchandising via creative trademarks is also a means of distinguishing oneself in the marketplace. An example of a company that utilizes merchandising is MINISO. Brand extension. This option enables a trademark business owner to team up with another company which may be provided with the right to apply the trademark on a new product, and expand the customer perception of a company’s presence in new markets. Co-branding. When two or more reputed trademarks are joined together in one […]

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How to protect your business secrets as a Small and Medium-sized Enterprise in Kenya

January 30, 2023

In a business setting, secrets are confidential information that give a business a competitive edge in the market. These business secrets are also known as ‘trade secrets’. Trade secrets can be formulas, practices, designs, patterns, data compilations, devices or instruments, processes, physical devices or ideas. They can be marketing plans, product formulas, financial forecasts, employee rosters, logs of sales calls, and similar types of proprietary information. Currently, Kenya does not have statutory protection for trade secrets, however, protection is granted locally under Articles 2(5) and 2(6) of the Constitution of Kenya, which recognize general rules of international law, treaties and conventions ratified by Kenya as part of the Laws of Kenya. The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement) to which Kenya is a party, grants protection to trade secrets. Trade secret protection can also be inferred from common law protection of confidentiality. Owners who safeguard their trade secrets have the right to stop others from using the information in a manner contrary to honest commercial practice or from being disclosed, obtained, or utilized without their permission. Owners of trade secrets have the right to sue those who violate these rights for damages as well as for the financial harm they have endured. Trade secrets are considered a form of intellectual property and can be licensed or assigned to third parties. The right to grant access to and use of the trade secret information by a third party belongs to the trade secret’s owner. The potential licensor and licensee must execute a non-disclosure or confidentiality agreement. Additionally, non-disclosure and confidentiality agreements are generally employed to safeguard trade secrets. Many SMES may be unaware that they hold IP Rights such as trade secrets or that these IP rights are valuable. This means, many are missing out on opportunities to improve their business and grow. Requirements for Trade Secret protection Three key requirements must be satisfied for secret/confidential information to qualify as a trade secret; Secrecy: the information must be secret in that it is not generally known to the public e.g., Coca-Cola’s secret formula, McDonald’s special sauce, Google’s search algorithm, KFC’s secret recipe etc. Commercial Value: the information provides the owner with a competitive advantage over his/her competitors in the marketplace. Reasonable Measures: reasonable steps must have been taken to safeguard the information i.e., security measures or the use of confidentiality agreements for employees and business partners. Advantages of Trade Secrets SMEs use trade secrets instead of a patent/utility model due to the high costs of obtaining a patent/utility model. Protection through trade secrets also helps in avoiding having to disclose the business technologies through the patent/utility model process. Trade secrets allow you to protect your secrets longer than the period for protection of a patent/utility model. Trade secret protection lasts forever as long as the information remains secret e.g., the Coca-Cola formula Disadvantages of Trade Secrets Trade secrets are weaker protection than patents/utility models and anyone with a similar trade secret developed independently can go ahead and use it and apply for a patent/utility model. A competitor can still independently develop your idea, secret or technology and […]

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Key Intellectual Property Agreements for SMEs in Kenya

January 30, 2023

The Kenyan economy is largely composed of small and medium-sized businesses (SMEs). These days, intellectual property rights are a crucial consideration for SMEs involved in the production of many kinds of goods and services. Understanding intellectual property (IP) may boost SMEs’ competitiveness and help them control risks associated with IP. IP Assignment/Transfer Agreement An IP Assignment is the transfer of ownership of Intellectual property rights from one party to the other. The person transferring the ownership (assignor), ceases to be the rightsholder and the person to whom the ownership is being transferred (assignee), becomes the owner. This needs to be in written form hence the need to sign an IP Assignment Agreement. This agreement is used to transfer ownership of a creative work/invention created for a company/organization by an employee or consultant, to the company/organization. This is usually completed by having an employee or consultant sign an agreement assigning all the IP created during the course of their services to the company/organization. Licensing Agreement A license is a permission to use or do something. In IP, licenses are used to grant people permission to use Intellectual Property rights (copyright, patent, industrial design, trademarks, trade secrets, geographical indications etc.) for a fee. One can license all or part of his/her IP rights. It is important to note that a license is not a transfer of ownership of the IP rights but mere permission to use the IP. It is therefore important to enter into an agreement, which is what is referred to as a licensing agreement. Non-Disclosure Agreement This Agreement is used when confidential information needs to be shared between parties. It defines limits to the use of confidential information and protects confidential information such as formulas for producing products, the technical composition of products, manufacturing methods, computer codes, list of suppliers and clients, sales methods, distribution methods, and price lists, among many others. One is not allowed to disclose such confidential information to anyone else the moment they sign this Agreement. This Agreement is useful, especially when interracting with third parties such as employees, partners, investors or contractors. Franchising Agreement This is an Agreement between a franchisor and a franchisee. It is used when a company/business (the franchisor) licenses its know-how, intellectual property, business name, brand, procedures and the rights to sell its branded products or offer its services to another company/business/individual (the franchisee). In return, the franchisee pays royalties to the franchisor as agreed by both parties. A franchising agreement lays out the rights and obligations of both parties and ensures both parties are protected. Examples of franchises include KFC, Miniso, Subway, Domino’s pizza, and Starbucks among many others. Work for Hire Agreement Work for hire is work done by an independent contractor for another individual/SME. For example, if a company hires a software developer to create an app for them, that will be a work for hire. Before one starts any project with an independent contractor, it is important to sign a work-for-hire agreement. Intellectual property is created in such projects, the Agreement should specify who owns such Intellectual Property rights to avoid future disputes. Joint Venture Agreement […]

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Use it or lose it! – How to maintain your Trademark rights in Kenya

January 30, 2023

As a business owner, your trademark is an important asset that sets your brand apart from competitors and helps customers identify and trust your products or services. In Kenya, like in many other countries, trademark rights are granted to the owner of a trademark through registration. However, these rights are not indefinite and can be lost if the trademark is not used or properly maintained. Under the Trade mark’s Act, Cap 506 of Kenya, owners have five (5) years from the registration date to start using their mark, failing which anyone can initiate a cancellation action against the trademark and possibly register it in their own name. A mark may become stronger and stronger and acquire higher levels of distinctiveness through extensive and consistent use. It should be noted that extensive and consistent use may also make a mark’s distinctiveness fade and even disappear through a legal phenomenon called “genericization”. If the average consumer starts using your mark not only to refer to your own products or services, but as a general term to indicate any product/service of the same category, then you may be in trouble. Examples of marks that were genericized are: Aspirin – Originally a trademark of Bayer AG, but now commonly used to refer to any brand of acetylsalicylic acid pain relievers; Escalator – Originally a trademark of Otis Elevator Company, but now commonly used to refer to any type of moving staircase or conveyor; Thermos – Originally a trademark of Thermos LLC, but now commonly used to refer to any type of vacuum insulated container used to keep drinks hot or cold among many others. Here are some tips to avoid fading or disappearance of your mark through “genericization”: Use your mark as a mark, and not as a verb, noun, or as an adjective (by way of example, Google® is fighting to prevent the genericization of its mark, by systematically opposing to the utilisation of “to Google” as a verb indicating “to research on the internet”). Use your mark consistently, without major variations as compared to the version that you originally filed. This means using the trademark as it is registered, without modifying it or using it in a way that could confuse consumers. For example, if your trademark is registered in upper case letters, you should not use it in lower case letters. If you notice your marks being used in any context (tv, newspapers, etc.) as a generic term, you should take steps to inform the party in question that the term is a registered and protected mark and should only be used as such by its legitimate owner or with his/her consent. Using the following symbols is highly advisable: ® or TM (or even “Registered Trademark”). It may work as a powerful warning message to potential good or bad faith infringers of your trademark, and it educates your consumers to the fact that your trademark is duly protected (registered or applied for). One word of caution: do NOT use the word “Registered” or the symbol ® if your trademark is simply applied for, but the registration process has not ended yet, […]

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Who owns the Intellectual Property Rights in your business? – A guide for SMEs in Kenya

January 30, 2023

Many Kenyan businesses often find themselves in disagreements over who owns the Intellectual Property (IP) rights to the inventions, creative works or product designs. Intellectual property rights are categorized into two, these being Copyright and Industrial Property. Copyright protects literary and artistic works such as books, photographs, art, paintings, software, music, films, videos, etc. Industrial property on the other hand covers: Patents, which protect processes, products, machines/apparatus etc.; Utility Models; Trademarks, which protect logos, shapes, words, numbers, letters, sounds, colors, smells or a combination of all these; and Industrial designs which protect the aesthetic appeal of a product. It is therefore important to understand who owns the IP rights to be able to commercially exploit them and even enforce where a 3rd party uses/utilizes them without permission. First ownership of IP For Copyright works, under Section 31 of the Copyright Act of Kenya, copyright vests in the author of the work. If you create a novel, song, art, painting, video, photograph, software etc., you are the owner of that work. For Patents and Utility Models, under Section 30 of the Industrial Property Act of Kenya the right to a patent/utility model belongs to the inventor. The person who invents the machine, method, apparatus etc. has the right to apply for a patent/utility model and be named as the owner of that invention. For Industrial designs, the person who created the Industrial design is the owner of the Industrial design. Where the IP is created within the course of employment Subject to any contractual agreement between the parties, IP rights created within the course of employment automatically belong to the employer. The terms of the contract and the job description are to be taken into consideration when deciding who owns the IP rights. This is because, if the IP is created outside the scope of the employment contract, using the employee’s private resources, data, means, materials or equipment, then it belongs to the employee. With regards to inventions, if an invention is of exceptional importance and the employer receives monetary benefits from it, the employee should receive equitable remuneration taking into consideration the salary and the benefits derived by the employer from the said invention. Where a business Commissions another party to create IP Where one commissions another party to create or invent something on his or her behalf, the IP rights will be owned by the person who commissioned unless there was a contract between the parties that stipulated otherwise. A good example of such a scenario is where one engages the services of a painter to have his portrait created. The Copyright in the painting will belong to the person who paid for the portrait to be created and not the painter unless there is an agreement that the painting will be owned by the painter. Since it is common for Kenyan businesses to consult or hire others to do some work for them, it should be common practice to sign IP Transfer Agreements. This is where IP experts/IP Consultants/IP Lawyers come into play to help you draft comprehensive IP Transfer Agreements. Where two or more businesses/people come together […]

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