Image is from Depositphotos

Introduction

Infringement can generally be defined as an unauthorized act, a violation or a breach of the right of another.¹ Intellectual property (IP) infringement occurs when a party, intentionally or otherwise, utilizes the IP subject without authorization or where a party uses the IP beyond the scope of authorized use e.g. breaching a license. Other forms of infringement include counterfeiting and piracy.

IP infringement results in economic and other harms on the IP system. It prevents the IP holder from being able to effectively exploit their intellectual property rights (IPRs) in order to generate income from their creations. It also affects innovators’ incentive to innovate that is tied to the exclusivity of their rights. However, due to the complex nature of IP disputes in reality, an important factor to take into consideration is deciding which judicial approach would be appropriate to address such acts. There are two general methods of addressing infringement through judicial means: pursue infringement as a civil claim or prosecute the act as a criminal offence.²

In this regard, this blogger has noted that the Intellectual Property Bill, 2020 adopts a preference for the latter in terms of creating offences for different instances of infringement. Since the Bill strives towards unifying separate IP legislation into one statute, it is important to generally analyze certain reasons why a preference towards criminal avenues may not be appropriate with regard to IP and why civil remedies should be preferred.

Availability of interim remedies

In civil proceedings, immediate remedies such as injunctions and other interim orders are available to IP holders. These remedies serve to specifically prohibit the adverse party from carrying on with the infringing act thereby protecting the commercial and other interests of IP holders. These interim remedies are most important in practice as infringement of IPRs have immediate and continuing repercussions whose impact cannot be adequately compensated after determination of the proceedings.

By contrast, criminal proceedings generally do not offer any interim remedies aside from physically restraining the infringing party e.g. through detention³ or fines directed at the accused. Such remedies however do not arrest any ongoing infringement activities that the accused or parties acting through them may still be engaging in. As such therefore, the absence of provisional remedies means that criminal litigation does not offer immediate protection for the interests of IP holders.

Compensation for infringement

In civil litigation, remedies available to the IP holder include compensation for unauthorized use in form of award of damages. In criminal proceedings, a successful outcome usually involves criminal sanctions such as imprisonment or fines being imposed upon the accused person. Whereas such sanctions deter future infringing acts, they fail to compensate for the harm suffered by the IP holder. Where an IP holder desires restitution or compensation for harm suffered, they’d have approach a Civil court to have the matter adjudicated and award of damages given. In this way, criminal litigation serves the long term needs of the State in deterring infringement as opposed to the immediate needs of the IP holder to be restored to their previous state.

Burden of proof and other evidentiary challenges

Another reason to prefer civil avenues over criminal litigation relates to one of the fundamental legal principles that distinguishes the two systems i.e. the burden of proof. In civil matters, the Plaintiff bears the burden of adducing evidence to prove their case on a balance of probabilities. However, criminal standard of proof is that infringement has to be proved beyond reasonable doubt. This higher evidentiary threshold in criminal litigation may not be appropriate when it comes to IP cases. One of the reasons for this derives from the general difficulty in proving an infringement claim. This partly originates from unclear legal provisions which lead to differing interpretations of what constitutes infringement.

These instances lead to burdensome requirements and, at times, conflicting determinations. For instance, one of the common grey areas with regard to copyright infringement is determining whether an otherwise infringing act can be deemed to fall under the ‘fair use/fair dealing exception’. This uncertainty was captured by Lord Denning in the case of Hubbard v Vosper (1972) where he stated, “It is impossible to define what is ‘fair dealing’. It must be a question of degree.”

Further, the Copyright Act (2001) exempts (infringing) acts done by way of ‘fair dealing for purposes of scientific research, private use, criticism or review or the reporting of current events subject to acknowledgement of the source.’⁴ Although the text of this provision seems to suggest that this is a closed list of purposes, the Kenyan Supreme Court interpreted it differently. In the case of Communications Commission of Kenya & 5 others v Royal Media Services Limited & 5 others, the Court held that the ‘must-carry’ rule contained in Regulation 14 (2) (b) of the Kenya Information and Communications (Broadcasting) Regulations, 2009 also fell under the fair dealing purposes thereby interpreting the list as an open list.⁵

Further, proving infringement in certain IP fields, may by itself produce a number of evidentiary challenges. For example, proving allegations of copyright infringement in literary works may often prove challenging for litigants. In the South African case of Media 24 Books (Pty) Ltd v Oxford University Press Southern Africa (Pty) Ltd 2017 (2) SA 1 (SCA), the Court underlined that the onus of proving copying is not discharged on the basis of similarity alone.⁶ Rather, it stressed that in order to prove infringement, all evidence has to be examined and not only that evidence showing similarity between the two works.⁷

Further, it may also be argued that criminal avenues are not suitable because defining and establishing ‘mens rea’ (mental element), a requirement in most offences, may prove complex when it comes to IP infringement matters. This arises out of the difficulty in adducing evidence to prove motive/willfulness on the part of the infringing party. For instance, in cases involving copyright and trade mark infringement, proving an intention to infringe may impose burdensome requirements as Prosecutors may have to prove other related elements e.g. that the infringing party had initial access to the original mark or work etc and that they intended to use it for commercial gain without resort to the IP holder.

Consequently, this high threshold may make a number of valid infringement cases go unprosecuted or unconvicted. As such, the goal of greater deterrence may be ineffective since infringers may proceed with infringing acts if the chances of being prosecuted and convicted are minimal.⁸

Opportunity for settlement and other collaborations

Civil litigation allow parties to settle out of court which is appropriate for IP cases especially where the infringement was committed inadvertently. This allows parties to save on litigation expenses as well as potentially offering an opportunity for collaboration e.g. by concluding licenses. The latter is especially gaining relevance given the preference for collaboration exhibited by some entrepreneurs in the conversation organized by CIPIT during this year’s World IP day celebrations.

Varying trends in infringement

Uniform adoption of criminal sanctions across all IPR forms as noted in the IP bill may not be appropriate. It has been argued that the goal of deterrence through criminal sanctions may not achieve consistency due to the varying trends of infringement. This is because for IPR forms such as copyright, infringement is more likely to be committed by private individuals who may be deterred by the threat of criminal penalties. However, patent infringement, due to its technical nature, is more likely to be committed by legal entities such as corporations. These entities are not only less likely to be affected by the applicable sanctions i.e. fines,⁹ but also cannot receive certain criminal sanctions e.g. imprisonment.

Indirect benefits related to infringement

Although using criminal sanctions to deter infringing behaviour is generally beneficial for the IP ecosystem, it can be argued that this may also eliminate certain positive elements that arise out of infringement. In certain instances, cases of alleged infringement have certain value e.g. it may lead to the re-evaluation/re-examination of IP that was granted improperly e.g. patents, trademarks.

Effect on innovative activity

Lastly, criminal sanctions, due to their punitive nature, may indirectly affect innovation by discouraging creative individuals from freely engaging in innovative activities due to fear of imprisonment. In this vein, CIPIT has observed that innovation activities in Africa favour open collaboration models. Due to the challenges faced, firms in Sub-Saharan Africa mainly engage in ‘constraint-based innovation.’ In this form of innovation, firms rely upon adaptation and absorption of technologies as well as technology spillovers from established entities in order to jumpstart innovative activities.¹⁰ In such a setting, individual punitive sanctions such as imprisonment may lead innovators to avoid engaging in ‘legal’ innovative activities out of the fear.

Benefits of a criminal approach

Although there are a number of reasons to prefer civil remedies over criminal sanctions when it comes to IP infringement, it is important to note that there are also certain reasons for choosing a criminal litigation approach.

First, criminal litigation reduces the legal costs incurred by the IP holder by shifting enforcement expenses to the State. In criminal litigation, the State has the responsibility of prosecuting infringement while the IP holder’s role is limited to that of a complainant and/or a witness. In civil claims, the IP holder has the burden of catering for all costs involved including court fees and often for legal counsel.

Second, there is the argument that criminal litigation serves to hinder vexatious and frivolous IP infringement suits from being brought against innocent third parties. Since criminal matters are predominantly instituted and prosecuted by State, it reduces chances of unfounded infringement claims through this avenue. It is worth noting that private prosecution proceedings may still be brought by private parties. However, these applications are subject to the leave of the court¹¹ thereby ensuring a level of control to prevent baseless claims.

Conclusion

In conclusion, we reiterate that despite certain reasons to prefer a criminal approach, these reasons are outweighed by the considerations favoring civil remedies in IP infringement matters. For this reason, we submit that since the IP Bill 2020 unifies a number of statutes governing the different IP forms, different considerations should be taken into account when considering the approaches to infringement. Specifically, we advocate for a civil litigation approach to handling infringement actions or at the very least, the adoption of a case-based analysis which takes into account the specific IP form involved and the contextual realities of infringement therein.