LEGAL CORNER

Techprenuers need to understand IP rights

Kennedy Ng’ang’a’s story is familiar to many tech-prenuers

In Summary

• Infringing on the intellectual property of others is a costly affair if sued

Copyright is a legal term used to define works of intellectual property – music, writing, design, photographs, inventions, symbols, etc.
Copyright is a legal term used to define works of intellectual property – music, writing, design, photographs, inventions, symbols, etc.
Image: COURTESY

Recently, activist Boniface Mwangi shared the story of Kennedy Ng’ang’a and Safi Analytics. Ng’ang’a says he launched Safi Analytics in 2017 with the help of Lauren Dunford. Safi is a start-up whose initial goal was to push for the generation of clean electricity but later found its niche in employing data analytics to manage energy and monitor electricity consumption.

Ng’anga alleges that as one of Safi’s founders, he played a major role in steering the company towards its current vision during its early years. He claims he developed a big part of the company as well as conducted initial pilot tests of the technology at the core of the company’s success at various factories. While he was putting work and sweat into the startup, Dunford was still pursuing her MBA studies at Stanford University.

Eventually, the company become successful and it was at this point that Dunford recommended that they bring onboard Weston McBride to help with securing funding. In 2018, it is alleged they successfully raised over Sh200 million in venture capital. At this point, Dunford was completing her studies at Stanford and was at the helm of the company as its CEO. According to Ng’ang’a, the plan was then for her business partners to come to Kenya, set up shop and move the company forward. They had secured funding and had a ready market for their product. Things were looking up, or so, thought Ng’anga.

Things soon turned sour. Ng’ang’a claims it was at this point that his partners started to persuade him to relinquish his position and give up his shares for an offer which, according to him, was unsatisfactory in relation to the amount of work and effort he had put into the company. He would later refuse this offer, which eventually led to his firing after Dunford allegedly brought trumped-up charges against him. Ng’ang’a later decided to seek redress in court.

 

In response to these allegations, which she deems false, Dunford alleges among other things that Ng’anga was a contracted employee and not a co-founder of the company. She claims the company was registered by herself and Jason Dunford in the US in March 2017, with Ng’anga later being employed in September of 2017 only to be given the title of co-founder as a way of ‘appreciating’ his ‘passion for data analytics’, and not because he was one of the co-founders. Right.

It is reported that the matter is currently in court and as a result, we cannot comment further about it until it exits the legal corridors.

To many local tech-prenuers, this might read like an all-too-familiar story. More like the ninth sequel to an overdone movie franchise that everyone has got tired of at this point. No one wants to see 'Fast and Furious 9'. Please, Hollywood. Please.

However, the law provides various ways that a tech-prenuer can use to protect their million-dollar ideas and avoid becoming part of this bad sequel. Below are a few common ways.

COPYRIGHTS

Copyrights protect an expression of an idea and are generally associated with a variety of creative works, including books, music, movies, magazines, paintings, sculptures and any other expressive work. In the case of software, copyright law would protect the source and object code, as well as certain unique original elements of the user interface. Under the Copyright Act of Kenya, copyright protection arises automatically upon the creation of an original work of authorship. There is no need to “apply” for a copyright or register the copyrighted work for protection to exist.

A copyright gives the holder the exclusive right to reproduce, adapt, distribute, perform and display the work. With copyrighted software, an owner would have exclusive rights, including (with some exceptions): the right to copy the software, create derivatives or modified versions of it and distribute copies to the public by license, sale or otherwise.

 

Copyright protects the rights of the legal owner and provides them with recourse against an unauthorised user.

PATENTS

A patent is the grant of a right, privilege or authority to exploit or pursue an invention. The Industrial Property Act of Kenya defines an invention as a solution to a specific problem. The invention may be or may relate to a product or a process. Software patents can protect features of a programme that cannot be protected under copyright or trade secrets.

Patents can be obtained for ideas, systems, methods, algorithms and functions embodied in a software product: editing functions, user-interface features, compiling techniques, operating system techniques, program algorithms, menu arrangements, display presentations or arrangements and programme language translation methods. Patent rights are exclusive, meaning anyone making, using or selling the patented invention without the patent owner’s authorisation is liable for infringement.

TRADE SECRETS

A trade secret is any formula, pattern, compound, device, process, tool, or mechanism that is not generally known or discoverable by others, is maintained in secrecy by its owner, and gives its owner a competitive advantage because it is kept secret, for example, Coke’s ‘secret formula’. Many features of software, such as code and the ideas and concepts reflected in it, can be protected as trade secrets. Trade secret protection will, however, not extend to elements of software that are readily ascertainable by lawful means, such as reverse engineering or independent development.

CONCLUSION

An understanding of intellectual property rights is crucial for techpreneurs. Not only would they know how to address scenarios where they are victims of infringement, but they would also know to avoid infringing on the intellectual property of others unknowingly, which might be costly if sued. Just ask Samsung.