Is Litigation a Rational Cost? Assessing ADR as an appropriate means of addressing Copyright Infringement Cases

Introduction

Intellectual Property Rights (IPRs) derive their value from the ability to enforce them.¹ Thus, IPRs have been safeguarded through enforcement powers granted to them by their “respective constitutive legislation.”² The courts play a vital role as ‘enforcers’ and ‘protectors’ of IPR as they are held to be, the most effective means of measurement when it comes to assessing the efficacy of IPRs. ³ Assessing copyrights in particular, various scholars have alluded to the issue of a “small claims problem”. ⁴ Litigation as a means of redress has been questioned due to the costly nature of the process, which imposes variable costs including time, effort and legal costs of initiating and defending a suit.⁵ Therefore, the cost of litigation is not a ‘rationally justified cost’, as it outweighs the resources available to copyright holders, especially in view of the “modest amounts at stake” during most disputes. ⁶ Appreciating this, the following blog seeks to explore how litigation costs impede the “pursuit of valid infringements claims”.⁷ To illustrate this pressing issue, the blog will seek to explore the Kenyan copyright litigation landscape, where discussion will highlight the costly nature of copyright litigation in terms of time, effort and legal costs.

Kenyan Copyright Litigation Landscape

Assessing the current trend of Kenyan copyright litigation, one observes the rise of copyright infringement cases that range from infringement of musical and artistic works. ⁸As earlier mentioned, the cost of litigation may not be a justified cost nor sustainable in the long run. The recent Bamboo case serves as an illustration of the above point. Recently, the High Court ruled that Safaricom was guilty of utilizing three songs by the rapper Timsimon Kuria Kimani, also known as ‘Bamboo,’ without his authorisation. Initially, Safaricom had selected three of Bamboo’s songs and placed them on its Skiza platform, gaining revenue from the songs from the years 2009 to 2014, without remunerating the rapper.⁹ The telecommunications company only refrained when the artist issued a demand letter.¹⁰

The rapper filed a suit and after nine years, a ruling was issued with general damages worth Kenyan Shillings 4.5 million for the three songs used. ¹¹ The above is illustrative of the ongoing issues regarding the efficiency of litigation as a means of redress. Procedural court rules are a major restraint on judges. They quite often incorporate ample time restraints that affect the operational efficiency of the entire process. In general, litigation is perceived to be “antagonistic”, as it does not provide for a conducive commercial environment where preservation of commercial relationships is prioritized. ¹² Therefore, against this backdrop we assess the role of Alternative Dispute Resolution (ADR) as a means of addressing the gaps present in the litigation process.

ADR an appropriate means of redress?

Starting off with the duration of time, nine years is a substantial amount of time to settle a case (Bamboo case). Within such a period, the accumulation of legal fees that cuts across representation fees and court fees is an irrational cost to bear for the average litigant. Consequently, it leads to disproportionate investment of resources on the litigants’ part, therefore denying them the opportunity cost to allocate their resources to other priorities. Furthermore, it affects any potential relationship between the litigants, specifically in this case Safaricom and Mr Kimani (Bamboo), the potential of a working commercial relationship as it may be limited due to the litigation history they share. Essentially, traditional litigation mechanisms are failing to provide “fast flexible, economical and comprehensive solutions” that creators would desire. ¹³ This contradicts the objective of courts providing expeditious and affordable dispute resolution.¹⁴ADR potentially addresses this gap with the forms of dispute resolution it offers. The use of ADR within the IP ecosystem may be trivial, as the mechanism advocates for “consensual resolution” of the disputes.¹⁵ However, in contrast IP related disputes usually involve a breach of consent where there is “unauthorized use of protected subject matter” by parties that lack a contractual relationship with the IPR holders.¹⁶ Despite this, ADR is increasingly becoming a popular means of IP dispute resolution due to the benefits it boasts of.

ADR is a broader term that includes dispute resolution mechanisms such as mediation, arbitration and negotiation. Starting off with mediation, it is an “out of court” forum that aims to resolve disputes with the use of a neutral and impartial third person, also known as the mediator.¹⁷ The process is held to be ‘non- confrontational’ as the aim is to establish a working solution that is reflective of a compromise between the two disputing parties. This allows for an “imaginative approach to solutions” that results in a “win for all” outcome.¹⁸ Additionally, the forum allows for the maintenance of a cordial relationship between the two disputing parties. Negotiation on the other hand is a similar process but does not involve the use of a third person to resolve the dispute. The method involves parties directly communicating and reaching an agreement. This method is commonly used for minor disputes, where an agreement can be reached without the need for litigation.

Arbitration is held to be akin to litigation, as it is adversarial in nature. It involves the use of an arbitrator to adjudicate disputes on the factual bearing of the case. The final outcome is an arbitral award that is legally binding. Therefore, to appeal an award, parties would have to pursue litigation as a means of redress. There is party autonomy to decide on the law applicable to the arbitration process as well as choosing the arbitrator themselves. Inherently, the unique selling point of the forum is the design of the process as it allows for flexibility and exercise of party autonomy. ¹⁹ However, it’s acknowledged that autonomy essentially rests on the parties’ contractual and financial capacity.²⁰

Suitability of Mediation in the Bamboo Case

Having provided a descriptive discussion on ADR, this section deals with the practical application of ADR in the Bamboo case. We start off with assessing the suitable ADR forum. Appreciating the variety of ADR mechanisms, mediation would be suitable and compatible with Bamboo’s case. Mediation offers substantial benefits for parties, the benefits range from flexibility, time and cost savings, confidentiality and diverse solutions. ²¹ Applying this within Bamboo context, we start off with flexibility. Considering the parties would have freedom to agree on the conduct of the proceedings and decide the appropriate procedural rules,²² this would allow for flexibility that results in less administrative costs that are associated with litigation. Mediation prioritizes parties’ motivations not necessarily legal rules and positions; thus, it provides for flexibility and simplicity as parties can focus on their shared interests rather than their legal positions.²³ Within the Bamboo context, flexibility would allow prioritization of Bamboo’s and Safaricom’s interests of compensation and a potential commercial relationship between the parties.

The use of mediation provides for time savings which naturally translates into cost savings.²⁴ This can be attributed to less time spent on the “explanation of the technical and legal issues at stake,” therefore the forum allows for disputes to be “swiftly resolved” as there are no lengthy procedural hurdles present. ²⁵Assessing the Bamboo case, the case commenced in 2015 and judgment was issued 8 years later, comparing this to the mediation process, a shorter time would be probable as the flexibility and simplicity of the process allows for time and cost savings.

Confidentiality is another added benefit of the forum, as parties can effectively manage the disclosures and access to sensitive information. This would be beneficial in Safaricom’s situation, as it would assist in mitigating reputational damage. Lastly, the forum allows for diverse solutions as the use of a mediator would assist the parties to formulate a ‘working solution’ that would benefit both parties. This would involve a solution that allows for Bamboo to receive adequate compensation for the unauthorized use of his musical works as well as provide an opportunity for Safaricom to potentially pay for a license to utilize his musical works in the near future, laying the groundwork for a commercial working relationship between the parties.

In conclusion, this blog has delved into the efficacy of Alternative Dispute Resolution (ADR) compared to traditional litigation in resolving disputes. With its growing recognition and adoption, ADR emerges as a superior method for resolving conflicts, offering a multitude of benefits. Therefore, advocating for its integration into intellectual property (IP) matters becomes imperative. By embracing ADR, parties can harness its advantages to navigate IP-related issues more efficiently and effectively. Thus, promoting the widespread adoption of ADR stands as a compelling call to action in the realm of dispute resolution.

 

 

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