IP Case Law library

Facts

This suit is a claim by the plaintiff for copyright infringement and breach of contract by the defendant. The defendant is a company incorporated in Kenya whose function is to finance the provision of airtime to the customers of various telecommunications companies across Africa and the Middle East.

The defendant engaged the plaintiff to provide consultancy services and assist in development of a software, Cubes Solution Software, to help ascertain the payments to be paid to the defendant by telecommunication companies.

The contractual relationship between the plaintiff and defendant fell apart and was subsequently terminated. The plaintiff's access to the defendant's servers was halted, disabling its capacity to disconnect the software from being used by the defendant. The plaintiff alleges that this termination was used for the nefarious purpose of reverse engineering the software without permission.

The contractual relationship between the plaintiff and the defendant was stipulated in a draft Consultancy Services Agreement but was never executed by the defendant.

Issues

Whether an injunction against the defendant may be granted.

Rule

In Geila v Cassman Brown, for an interlocutory injunction to be granted, the plaintiff must demonstrate that it has a prima facie case with probability of success, demonstrate irreparable injury which cannot be compensated by an award of damages, and that the balance of convenience is in the plaintiff's favour.

Analysis

The Court relied on a memorandum between the parties to establish that the parties were aware of and consented to a contractual relationship where the plaintiff was to provide software to the defendant. The Court determined that the Defendant had the intent of purchasing the software solution created by the Plaintiff.

Based on these facts, the Court found that the Plaintiff had a prima facie case with a probability of success. Assisted by email correspondence, the Court further reasoned that the Defendant was acknowledged to owe the Plaintiff fees amounting to USD 264,770.00, covering monthly support fees from March 2020 and software support costs. Despite the Plaintiff quantifying damages, this did not prevent them from seeking an injunction. The Plaintiff presented emails from 2019 and 2020 demonstrating payment demands, with no evidence of payment to date. The Plaintiff established a prima facie case regarding software ownership, making it unfair for the Defendant to benefit without payment, and contended that the software's reverse engineering could harm its interests.

The court's consideration of irreparable injury, which cannot be adequately compensated by damages, was crucial. Although the defendant owed the plaintiff a substantial amount in fees, the potential for reverse engineering the software posed a risk that went beyond mere financial loss, including loss of business opportunities, competitive advantage, and potential market saturation with similar products. This underscores the understanding that certain types of harm, particularly those involving intellectual property, cannot always be rectified through financial compensation alone.

By stopping the defendant from using or reverse engineering the software, the court effectively prioritised the protection of the plaintiff's intellectual property over the operational inconvenience that the defendant might experience due to the injunction, finding the potential damage to the plaintiff, should the injunction not be granted, to outweigh any inconvenience to the defendant.

Conclusion

Pending determination of the suit, the defendant was ordered to stop utilising, applying, running or in any other way benefitting from, or otherwise reverse engineering, the Cubes Solution software developed by the plaintiff.

Ruling available here.