Optima Sports Management vs KBC: A Goal in One?
- CIPIT |
- April 22, 2020 |
- Intellectual Property
By Joanna Kahumbu
Soccer. A game enjoyed by many from the comfort of their homes or the now decried social gatherings. While enjoying a good match or criticising the skill of players, ever think of the legalities behind bringing the game to your screen was able to reach your screen? The case of Optima Sports Management (UK) Limited v Kenya Broadcasting Corporation  gives us a sneak preview of what happens or may happen before the game is aired, albeit through litigation. The case involves the lucrative business of broadcasting rights over the La Liga and Copa del Rey and the English Premier League matches. Ideally, entities bid for licences from the official broadcasters who sub-licenses them to air the game in specific territories ensuring the game is enjoyed by many of its fans.
In the 2008/2009 football season, Optima Sports Management secured exclusive rights to broadcast some matches in the La Liga and Copa del Rey and the English Premier Leagues in Kenya. Optima in turn entered into two sublicense agreements with the free to air network in Kenya, Kenya Broadcasting Corporation (KBC) to air the matches. Why KBC, a free to air TV in Kenya you may ask? The strategy for the Premier League is to ensure the widest possible access to their competitions for the many passionate fans across Africa. The free to air television have wide coverage in the countries and are accessible without a fee. This provides the Premier League with an opportunity to create and maintain a wide fanbase, their geographical location notwithstanding.
Back to the Optima-KBC Case, the agreements were not signed or executed as a sign of completion of the contracting process. Despite this and based on their previous engagements, Optima provided KBC with the required access codes to enable them to broadcast the matches during that season. After KBC obtained the access codes from Optima they effectively gained the right and capacity to exploit the broadcast rights in the matches. They broadcasted the matches on various dates within the same football season as in their agreement with Optima. Unfortunately, when the consideration for this exploitation fell due from KBC, they never paid forcing Optima to seek legal redress from court. Optima instituted two cases, Civil Suit No 686 of 2009 and Civil Suit No 687 of 2009, which were, by order of the Court, consolidated into one as the facts and the parties were same/similar.
In both cases, the primary question for the court was if a there existed a license agreement between the two parties and where liability fell. Optima’s case was that KBC had exploited their (Optima’s) intellectual property without paying their due consideration. KBC on the other hand argued that there was no agreement between them and Optima therefore nothing to pay for. All the while, KBC had placed advertisements in the local dailies such as Daily Nation with images of the Leagues’ players announcing that they would be airing the matches. They did not produce proof that they had the rights to the images of the soccer players other than through Optima’s sublicense. The adverts also contained the broadcast times for the matches in Kenya. Once again, KBC did not produce proof that they had the right to broadcast these matches otherwise than through Optima especially because the latter had the exclusive rights to broadcast in Kenya.
In its ruling delivered on 6th February 2020, the High Court concluded that KBC; had held out to the world at large, through the advertisements, that it had the rights to broadcast the matches; had seemingly received advertising revenue from advertisers such as Sports Pesa; received a benefit from Optima-in the form of access codes to air the matches; it was aware it was not receiving a gift but a service whose payment was due; it received broadcast rights over the matches which could have only been obtained from another person-Optima; and finally it (KBC) was then not allowed to deny the existence of the license agreement between them and Optima. To the court, the only other conclusion that the court could have come to, this being the interpretation offered by KBC, was that a State Corporation was justified in exploiting the valuable intellectual property of another without permission and without paying a licensing fee. Based on this, the court ordered KBC to pay the full consideration of the contracts that were not executed, to Optima which constituted the market price for the use and exploitation of intellectual property.
From this case, one can glean key insights on the legal agreements, ramifications and parties involved in broadcasting a football match in Kenya. Most importantly, the import of intellectual property which should be respected by all, State Corporations included regardless of whether or not contractual formalities are concluded.