Copyright Infringement
Mhubiri Productions Ltd v Safaricom Ltd & another [2020] eKLR.
Facts
The case involved issues of ownership of music copyright and infringement. Gaudencia, doing business as Mhubiri Productions (Appellant) had an agreement with Upendo Nkone in April 2009 for the rights to music in an album titled Hapa Nilipo. Later, Gaudencia formed a company and made a similar agreement with the same artist for another album, Zipo Faida in July 2010. In 2011, the Appellant found out their music was being used without permission on 1st Respondent’s Skiza Portal, uploaded by the 2nd Respondent.
The 1st Respondent argued against the appeal, they claimed that the Appellant did not prove ownership of the copyright because the certificate of registration was issued to Gaudenecia Mkakeni and not Mhubiri Productions Ltd. Furthermore, the author of the album, Upendo Nkone was Tanzanian and there should have been a verification certificate from Tanzania according to Section 33 of the Copyright Act of Tanzania. The 2nd Respondent held similar arguments
Issue
Whether the requirement for a verification certificate proving copyright in Tanzania was a mere technicality?
Whether the rights that accrued to a founding director and shareholder could be taken to accrue to the appellant?
Rule
Whether the requirement for a verification certificate proving copyright in Tanzania was a mere technicality?
Section 33 (3) of the Copyright Act of Tanzania - No assignment of copyright and no exclusive licence to do an act the doing of which is controlled by the copyright shall have effect unless it is in writing signed by or on behalf of the assignor, or by on behalf of the licensor, as the case may be and the written assignment of copyright shall be accompanied by a letter of verification from the Board in the event of an assignment of copyright works from outside Kenya.
Whether the rights that accrued to a founding director and shareholder could be taken to accrue to the appellant?
Gilgil Telecoms Industries Ltd v Duncan Nderitu - ‘.... a limited company has a legal existence independent of its members and that a company is not an agent of its members. However, in order to determine whether the benefits under the revised terms extended to the respondents, in our view, entails consideration of the character, nature and most importantly dealings between the appellants’.
Analysis
Whether the requirement for a verification certificate proving copyright in Tanzania was a mere technicality?
The Court held that Section 33 (3) of the Copyright Act of Tanzania. was a statutory requirement and must be observed.
Whether the rights that accrued to a founding director and shareholder could be taken to accrue to the appellant?
The Court reasoned that copyright was issued to Gaudenecia before the appellant, Mhubiri Productions was formed as a company. In law companies have a separate and distinct personality from its members, founders and promoters. There was no agreement submitted as evidence that proved Gaudencia transferred her rights to the company. The Court agreed with the Trial judge that the company could not claim Gaudencia’s rights as their own.
The Court’s strict adherence to Section 33 of the Copyright Act, which mandates a verification certificate for the assignment of foreign copyright works, reflects a rigorous interpretation of copyright law. This approach is rooted in the need to ensure that copyright assignments are verifiable and legitimate, protecting the interests of original creators and copyright holders. The insistence on this requirement, far from being a mere technicality, serves a significant purpose in the realm of international copyright transactions, providing a clear, authenticated trail of ownership that is crucial for enforcement across borders.
The Court's ruling that intellectual property rights held by a founding director do not automatically transfer to the company she/he forms is a fundamental tenet of corporate law, which recognises a company as a separate legal entity from its shareholders or directors. This principle protects the interests of creditors and other third parties who engage with the company as a distinct entity. The court rightly pointed out the absence of any formal transfer of copyright from Gaudencia to Mhubiri Productions Ltd, underscoring the necessity for explicit actions to assign rights from individuals to their companies.
This decision is a critical reminder of the need for clarity and formal processes in the transfer of rights within corporate structures. It is a safeguard against the assumption that personal rights of a founder automatically become assets of the corporation, potentially preventing confusion and legal ambiguity about ownership and control of copyrights.
Conclusion
The appeal lacks merit and is dismissed.
Judgement available here.