[2017] KEHC 10048 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA AT NAIROBI

COMMERCIAL AND TAX DIVISION

CIVIL SUIT NO.512 OF 2016

J.W. SEAGON & COMPANY INSURANCE BROKERS (KENYA) LIMITED....PLAINTIFF

VERSUS

LIAISON GROUP (I.B) LIMITED..............................................................1ST DEFENDANT

JUBILEE INSURANCE COMPANY LIMITED.........................................2ND DEFENDANT

SATIB INSURANCE BROKERS (PTY) LIMITED...................................3RD DEFENDANT

RULING NO.3

1. The plaintiff‘s application dated 16th December 2016 is for interlocutory injunctions pending the hearing and determination of the suit.

2. The plaintiff asks the court to restrain the defendants from dealing with, using, copying, selling, offering for sale, publishing, distributing, or making available to the public, the Defendant’s SAFARI SHIELD INSURANCE POLICY and ANY INSURANCE PRODUCTS ANCHORED ON THE SAFARI SHIELD INSUANCE POLICY, in their current forms.

3. The plaintiff also asked the court to restrain the defendants from infringing its Copyright in the SAFARI PLAN POLICY, and any insurance products anchored the Safari Shield Insurance Policy, in their current forms.

4. According to the plaintiff, the Safari Plan Policy, which it had developed, was one and the same thing as the defendants’ Safari Shield Policy.

5. The development of the plaintiff’s product was undertaken by one of its employees, Mr. Jeremy Clayton.

6. Jeremy Clayton is said to have begun the process of drafting the policy in late 2014.

7. The process is said to have involved the initial drafting, and several redrafts. The plaintiff exhibited the various stages of the drafts and the redrafts.

8. The need to continually work on the original draft was occasioned by the comments provided by various stakeholders.

9. The plaintiff’s case is that the final version of the Policy was produced in early 2015, after which it was then rolled out into the market.

10. Meanwhile, on 31st March 2015, the 1st defendant, LIAISON GROUP (I.B) LIMITED and the 2nd defendant, SATIB INSURANCE BROKERS LIMITED entered into a partnership, through which they purportedly developed the product which the plaintiff is complaining about.

11. As far as the plaintiff is concerned, the contents of the policy produced by the defendants are substantially similar to the plaintiff’s product.

12. And because the plaintiff’s employee (Jeremy Clayton) had developed the product, the plaintiff claims ownership of it. Therefore, as the plaintiff had not permitted the defendants to utilize the said product or an adaptation of it, the plaintiff says that the defendants had infringed its copyright.

13. But the defendants reason that Jeremy Clayton did not develop any novel idea or product. He is said to have simply been involved in cutting and pasting words, terms and expressions from insurance policies which were already in use in the industry.

14. However, the defendants did not make available any product which could be said to incorporate a substantial portion of the product put together by the plaintiff.

15. On the other hand, the plaintiff has shown that the Safari Shield Policy bears a significant resemblance to the plaintiff’s Safari Plan Policy.

16. In my understanding, nobody can be permitted to claim a copyright in respect to any word, phrase, term or expression which is already in ordinary use.

17. Nonetheless, it may be possible to have a situation in which a person puts together such words, terms, phrases or expressions, (which in themselves are not copyrightable), and thus give rise to a product. In my considered opinion, it may be possible for that person to lay claim to a copyright over the product.

18. The same reasoning would apply to situations in which there had been some cutting and pasting of words from other sources; such words may not be original in themselves. However, the final product of such cutting and pasting may be copyrightable.

19. The question about whether or not the plaintiff, expended tremendous skill, labour and good judgement, when he developed the product, is to be determined after receiving further evidence from the parties. But on a prima facie basis, I find that the product did not simply come about without the plaintiff undertaking some work to put it together.

20. The 2nd defendant submitted that the plaintiff wished to have the court restrain anyone who had an identical or similar policy to that which the plaintiff had developed.

21. To the extent that insurance policies covering a category of risks may be similar, it would be wrong to bar persons from offering such policies simply because the plaintiff was the first person to issue them.

22. In this case, the plaintiff’s application does not target anyone who may be using, selling or distributing insurance policies similar to the one it had developed. The plaintiff has targeted the defendants because the policies they were issuing contained material which was substantially similar to the plaintiff’s product.

23. The extent of the similarity can be appreciated from the fact that the defendants’ product had, word for word, the very same words used by the plaintiff, including the typographical and referencing errors.

24. In my considered opinion the defendants failed to provide any explanation for incorporating into their insurance policy, the typographical and referencing errors which the plaintiff had incorporated into its product. In the circumstances, I find, on a prima facie basis, that the defendants product was a result of copying the product which the plaintiff had put together.

25. And as the plaintiff had not given its consent or authority to the defendants to use its product, the actions of the defendants cannot be deemed lawful.

26. At this moment in time, it is necessary to spell out the roles of each of the defendants in the matter.

27. The 1st defendant is an Insurance Broker based in Kenya. The company was incorporated in the year 1981.

28. Meanwhile, SATIB INSURANCE BROKERS (PTY) LIMITED,(the 3rd defendant) is described as a Specialist Broker in tourism, hospitality and Wildlife industry. The said company is based in South Africa.

29. It is the case of the 1st and 3rd defendants that on 31st March 2015, they formalized a long association by entering into a 3 year joint venture, to grow short term insurance business in the tourism industry in Eastern African.

30. The said 2 defendants asserted that they had developed a Single Policy known as SATIB Safari Shield Policy, which bundles together, all the basic products of a tourism policy.

31. However, as the plaintiff did point out, the 1st and 3rd defendants did not specify who exactly developed their said policy, or even the date when it was developed.

32. The 2 defendants did not have the onus of proving that they actually developed their Satib Safari Shield Policy. However, if they had led evidence which showed that it is they or one of them who developed that product, and that it had been developed before the plaintiff had developed its own product, such evidence may have had some impact on the application before me.

33. In the absence of such evidence, and because the plaintiff has made available evidence to show when its product was developed, I find, on a prima facie basis, that the plaintiff’s product was developed prior to that of the 1st and 3rd defendants.

34. That finding is fortified by the fact that the product of the 2 defendants contains typographical errors and also referencing errors which had been made by the plaintiff.

35. Meanwhile, the 2nd defendant, JUBILEE INSURANCE COMPANY LIMITED, is an Insurance provider. Its role in the matters in contention was that of providing insurance cover for the policy which had been allegedly developed by the 1st and 3rd defendants.

36. It was the case of the 2nd defendant that the insurance policy to which the plaintiff claimed copyright ownership had been in use in the Insurance Industry for many years. Therefore, even though the said policies, (which had been in the market), were offered under different names, the 2nd defendant submitted that the plaintiff’s product had nothing unique, original or novel about it.

37. There is evidence that the 2nd defendant had, for long, been offering its own TOUR OPERATORS LIABILITY POLICY to cater for risks in the tourism and travel sector.

38. That would imply that the plaintiff was not right to have concluded that the insurance industry had previously ignored the tourism and travel sector.

39. However, as the 2nd defendant stated in the Replying Affidavit of PATRICK TUMBU;

“14. The document referred to as the “Safari Shield Policy”, which the plaintiff claims is substantially similar to its “Safari Plan Policy” is not the 2nd Defendant’s document. The 2nd Defendant’s “Tour Operators Liability Policy” bears no resemblance to the plaintiff’s Safari Shield Policy”.

40. Of course, the plaintiff has never complained about the 2nd defendant’s Tour Operators Liability Policy: The reason for that is, that the plaintiff’s product and that product of the 2nd defendant are not similar.

41. However, when the 2nd defendant begun offering the “Satib Safari Shield Policy; which contained significant similarities to the plaintiff’s “Safari Plan Policy”, the plaintiff was entitled to complain.

42. The 2nd defendant has stated that it would have no reason to copy the plaintiff’s product, because the 2nd defendant already had very successfully offered insurance policies for over 80 years.

43. Whilst it may be true that the 2nd defendant had nothing to benefit from, by copying the plaintiff’s product, it is equally true that the product allegedly developed by the 1st and 3rd defendants, and which the 2nd defendant was now offering, did contain significant portions which were lifted from the plaintiff’s product.

44. Whether or not the 2nd defendant was aware of the similarities between the plaintiff’s product and the product allegedly developed by the 1st and 3rd defendant is, at this stage, unknown.

45. And whether or not the 2nd defendant derived benefits from the Safari Shield Policy, is, currently, immaterial.

46. The position remains that the plaintiff developed a product, and the product was copied, in material particulars, by the 1st and 3rd defendants. The said copying, was not authorized by the plaintiff. Therefore, none of the defendants has demonstrated to the court that they had any lawful reason for copying or for adapting the plaintiff’s product.

47. Of course, the plaintiff’s product had not been registered as a copyright. Initially, the defendants reasoned that in the absence of registration, the plaintiff’s product could not be protected as a copyright. However, in the 1st and 3rd defendant’s Reply to the plaintiff’s Supplementary Submissions, they said;

“5. It is not in contention that a copyright need not be registered to exist, however, a certificate of registration is prima facie evidence of absolute and indefeasible ownership of a subsisting copyright. No such evidence is before the court”.

48. Registration of a copyright is, as the 1st and 3rd defendants have stated, only prima facie evidence of such copyright.

49. The Berne Convention for the Protection of Literary and Artistic Works conceived copyright as;

“….a property flowing ‘naturally’ and without formality from the act of creation…;

Neither registration nor any formal notification of the claim to copyright on copies of Berne Convention Works has been a prerequisite either of the copyright itself or of the entitlement to institute proceedings for infringement”.

50. It therefore follows that the absence of registration of the copyright did not preclude the plaintiff from instituting these proceedings for infringement.

51. Pursuant to Article 2 (3) of the Berne Convention;

“Translations, adaptations, arrangements of music and other alterations of a literary or artistic work shall be protected as original works without prejudice to the copyright in the original work”.

52. Therefore, even though the Safari Shield Policy may have some differences from the Safari Plan Policy, the court would be wrong to allow the defendants to continue using it, because that would deprive the plaintiff of the legal protection it is entitled to.

53. At this interlocutory stage, the most appropriate relief available is an injunction. In SAPRA STUDIO Vs TIP-TOP CLOTHING Co. [1971] E.A. 489, at page 492, Chanan Singh J. quoted with approval, the following words from Vol. 8 HALSBURY’S LAWS of ENGLAND at page 444-5;

“The general principles upon which injunctions are granted for the protection of copyright do not differ from those upon which they are granted for the protection of other property. The nature of copyright property, however, makes an injunction peculiarly suitable, and indeed the normal remedy”.

- I have added the emphasis.

54. Incidentally, in the case of Sapra Studio Vs Tip-Top Clothing Co., the copyright was not registered. However, the court noted that the absence of registration did not deprive the plaintiff’s copyright from whatever protection if would be entitled to under the Copyright Act.

55. In this case the plaintiff has satisfied me that it has a prima facie case with a probability of success.

56. Secondly, I am satisfied that unless an interlocutory injunction was issued pending the hearing and determination of the suit, the plaintiff would suffer irreparable loss.

57. The 2nd defendant, who is offering the offending product, has been in existence for over 80 years, and by its own assessment, it is extremely successful.

58. Secondly, the defendant already had its own policy, which it said addressed the needs for the market segment which the plaintiff’s policy was designed for.

59. Therefore, I hold the considered view that the 2nd defendant would not be unduly prejudiced if they were stopped from issuing any more policies which infringe upon the plaintiff’s copyright.

60. When a plaintiff introduces a new product into the market, it is not possible to know whether or not the product would be received enthusiastically by the consumers. However, when the said product is embraced by an established competitor, I hold the view that the chances which the plaintiff may have had to promote its product and to thereby derive benefits from the product, become highly compromised. I do not consider such an eventuality as being speculative or one which was based on unfounded fear or unfounded apprehension.

61. Accordingly, I now grant an injunction to restrain the 1st, 2nd and 3rd Defendants from using, copying, selling, offering for sale, publishing, distributing or making available to the public the Safari Shield Policy, until the suit is heard and determined.

62. This order relates to the future, so that as soon as it takes effect, the defendants will be duly restrained from infringing the plaintiff’s copyright.

63. However, in relation to such Safari Shield Policies as the 2nd defendant has issued, the court directs that the said defendant shall, within the next 14 days provide the plaintiff and the court with details of the policy-holders; the dates when each policy was issued; its value; and the duration.

64. Meanwhile, the plaintiff is directed to provide an Undertaking to the defendants, that in the event that the interlocutory orders herein cause or result in loss and damage to the defendants, (or any of them), the plaintiff would indemnify the defendants for such loss.

65. The said undertaking should be accompanied by a Bank Guarantee for a sum not less than Kshs. 10,000,000/-.

66. The costs of the application dated 16th December 2016 are awarded to the plaintiff.

DATED, SIGNED and DELIVERED at NAIROBI this1st dayof November2017.

FRED A. OCHIENG

JUDGE

Ruling read in open court in the presence of

Miss Mwango for the Plaintiff

Miss Kidunduhu for the 1st Defendant

Mbaluto for the 2nd Defendant.

Miss Kidunduhu for the 3rd Defendant.

Collins Odhiambo – Court clerk.