Country: Kenya: Coulson Harney LLP

In today’s highly competitive commercial landscape, marketing campaigns are essential tools for brand positioning, consumer engagement, and market share expansion. While traditional methods like TV ads once dominated the landscape, the rise of digital storytelling and influencer-driven marketing has transformed digital advertising, allowing brands to build more immediate and authentic connections with their audiences. Now more than ever, brands are pushing creative boundaries to connect authentically with audiences across Africa.

As South African and Kenyan brands increasingly collaborate, share markets, and engage regional influencers, and as multinational brands frequently choose to launch first in either South Africa, Kenya, or both, the legal terrain around intellectual property (IP) rights has become both more complex and more critical. In the race to stand out, marketing efforts often push creative limits, but this can sometimes stray into legally risky territory.

Catchy campaigns, costly mistakes: IP risks to watch for

• Trade mark infringement

Trade mark infringement occurs when a brand uses a mark that is identical, or so similar to, a registered trade mark that it is likely to mislead or confuse consumers during trade. In such cases, the owner of the original trade mark can take legal action to stop the use and protect their brand.

Both South African and Kenyan trade mark laws and in most cases other trade mark laws on the African continent prohibit the unauthorised use of identical or confusingly similar marks on similar goods or services where there is a likelihood of deception or confusion. These laws also provide enhanced protection for well-known registered trade marks, even when there is no likelihood of deception or confusion, if the use unfairly takes unfair advantage of, or harms, the reputation or distinctiveness of that well-known mark.

Both South African and Kenyan legal frameworks align with international treaties and standards, allowing proprietors of well-known marks to restrain use that may cause confusion or interfere with the distinctiveness of their marks[1].

There are two common intellectual property risks that often arise in marketing campaigns:

• Using a registered trade mark without permission: This can happen when launching a new product or campaign that uses a name already registered and owned by someone else. If challenged, this could result in legal action and even a full product or brand re-launch.
• Referring to a competitor’s trade mark in a marketing campaign: Whether through direct comparison or creative reference, this can trigger infringement or passing off claims, especially if it misleads consumers or unfairly capitalises on the competitor’s reputation.

In practice, it’s common for brands to refer to, or subtly allude to, competitors in their advertising. Notably, South African courts have held that mere reference to a competitor’s trade mark in advertising does not automatically amount to infringement. The legal test is whether the advertisement or campaign makes it seem like there is endorsement from the competitor. Well-known brands in South Africa or Kenya can take legal action if they believe their reputation is being unfairly used without permission.

These “anti-dilution” legal safeguards are designed to protect strong brands from being exploited. If a well-known brand in South Africa or Kenya is referenced in an advertisement without the proper authorisation, it may argue that the advertiser is either:

• free-riding on its reputation to boost its own visibility, or
• diluting its distinctiveness by associating it with unrelated products or services.

Careful consideration should also be given to how competitor brands are referenced in one’s campaigns, ensuring that comparisons are fair, accurate, and unlikely to mislead.

• Passing off

Passing off is a vital common law remedy that protects a business’s goodwill, reputation and market identity. It stops others from misleading customers into thinking their products or services are connected to a well-known brand, which can cause confusion or harm the original brand, potentially diverting sales or damaging the original brand’s reputation.

To succeed in a passing off claim, a competitor must generally establish:

• Goodwill or reputation in their brand or business;
• A misrepresentation by the other party that is likely to deceive the public into believing that there is a connection between the two businesses; and
• Damage, or a likelihood of damage, to their goodwill as a result of the misrepresentation.

In advertising and brand campaigns, passing off often arises when one brand borrows cues such as name, visual identity, or tone, that are distinctive of a competitor, in a way that leads to confusion. This risk is particularly high in industries where companies offer similar products or services and target overlapping markets.

Using elements of a well-known brand, directly or indirectly, can lead to a passing off claim. To avoid confusion and legal disputes, advertisers should be careful with creative references and seek thorough legal review where needed.

• Copyright infringement

Copyright infringement occurs when someone uses or exploits a work, such as music, images, video, or written content without permission of the copyright holder. This includes acts like reproduction, distribution, or making the work available to the public in a marketing campaign or online platform.

In South Africa and Kenya, copyright protection arises automatically upon creation, automatically vests with the author and does not require registration. In Kenya, while registration with KECOBO (Kenya Copyright Board) is not mandatory for copyright protection, it can be useful as evidence of ownership in the event of a dispute. In the context of advertising, copyright infringement may occur when brands or their creative partners use content such as background music, stock photos, or video clips, without securing the necessary licences or permissions. Short clips, memes, or popular soundtracks shared via social media can trigger legal claims if used without authorisation.

A recent example in Kenya highlighted the risks of unauthorised content use. Kenyan hip-hop group ‘Wakadinali’ accused a social media influencer of copyright infringement for using their song ‘Geri Inengi’ in a video promoting a bank’s services without securing the necessary permissions. The case underscored the importance of synchronisation licences when incorporating copyrighted music into video advertisements, especially in the digital space, where content is widely shared and easily accessible. As the rightful copyright holders, Wakadinali has the legal authority to pursue civil action against any party that unlawfully exploits their work for commercial gain.

For advertisers, the takeaway is clear: risks can be significantly reduced by using or creating original content or securing the appropriate contracts and licences in advance, thereby protecting both the campaign and the brand’s reputation from potential legal and financial fallout.

Who owns the content? IP in collaborations and campaigns

Copyright law generally grants the initial ownership of creative works, such as photos, videos, text, and music, to the person who created them. However, in advertising collaborations involving influencers, artists, or partner brands, determining ownership can become complex.

To avoid disputes down the line, brands must establish clear contractual agreements that explicitly sets out who owns the intellectual property created during the campaign. This includes copyright in the content and any associated trade marks developed or used.

Additionally, when using an individual’s image or likeness for commercial purposes, it is essential to obtain their explicit and informed consent. This is not only a best practice, but also a legal requirement under the Kenyan Data Protection Act 2019, given that Kenyan courts are increasingly upholding image rights and may award damages for unauthorised use. By securing well-structured contracts that address both IP ownership and image rights, brands can effectively manage legal risks in collaborative marketing campaigns while also protecting the integrity of their relationships with creatives, influencers, and partners.

The legal fine line of parody in brand campaigns

A parody can be a powerful creative tool in advertising. It may be used to entertain, provoke thought, or critique industry norms. However, from a legal standpoint, it carries risk, especially when it involves trade marks or copyrighted material.

Under copyright law in both South Africa and Kenya, parody may be recognised as fair dealing in certain contexts, such as criticism or review. This can provide some protection for creatives, provided the use is transformative and not purely commercial. However, where a parody campaign uses another brand’s trade mark such as its name, slogan, or logo, the legal risk increases significantly.

Trade mark law focuses on consumer perception. If the parody creates confusion about the origin or affiliation of goods or services, it could be considered infringement, even if the campaign is intended as a joke or social commentary. Parody that undermines or dilutes the distinctive character of a well-known brand may also run afoul of anti-dilution protections in both South Africa and Kenya. Given the absence of explicit legal precedent, advertisers should approach parody campaigns cautiously and seek legal advice to mitigate potential trade mark risks.

While parody may be clever and culturally relevant, it can expose a campaign to legal challenge if the advertiser is not alive to the risks and the steps needed to minimise these risks.

Finally, in the dynamic world of marketing, creativity often pushes boundaries, and rightly so. While bold and memorable campaigns can deliver significant brand value and deepen audience engagement, they also risk triggering legal disputes and reputational damage if they make unauthorised use of competitors’ intellectual property. By understanding the IP risks in advertising and taking proactive steps to mitigate them, such as getting clearance opinions from IP lawyers, brands can strike the right balance between innovation and compliance, ensuring their campaigns make headlines for the right reasons.

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[1] : Trade mark rights are territorial. This means a trade mark is only protected in the country where it has been registered—unless it qualifies as a well-known mark entitled to protection under the Paris Convention, which enjoys broader protection even without registration.

The concept of goodwill as property is often confusing as it is intangible, often impossible to separate from the underlying asset, difficult to value and legally ambiguous. Unlike real property which can be seen, touched or independently valued, the value of goodwill is intrinsically linked to the reputation of a business, and, in particular, the likelihood that existing customers will continue to engage with the goods or services of the business.

Last year, we saw the Court of Appeal in Heineken East Africa Import Company Limited & Another v. Maxam Limited (the Heineken Decision) hold that investments made by distributors in Kenya may give to irrebuttable goodwill, which would then qualify as property. Now, the Supreme Court has addressed itself to when goodwill gives rise to a clearly identifiable and constitutionally protected property right, clarifying the intersection of constitutional law and commercial principles, particularly in the context of distribution, investment, franchising and termination of business relationships.

Brief facts

Bavaria N.V. (Bavaria) entered into a distribution agreement with Jovet (Tanzania) Limited (Jovet Tanzania) giving it the right to exclusive distribution of its branded non-alcoholic beverages in Kenya and Tanzania. Between 2006 and 2015, Jovet (Kenya) Limited (Jovet Kenya) entered into a private arrangement with Jovet Tanzania which saw it market and distribute Bavaria’s products in the Kenyan market.

In 2015, when Bavaria did not renew its distribution agreement with Jovet Tanzania in relation to the Kenyan market, Jovet Kenya filed suit seeking exclusive distributorship of Bavaria’s products in Kenya and orders that it had acquired goodwill in relation to the products in Kenya.

Jovet Kenya claimed to have developed a market for Bavaria’s brand locally by investing in infrastructure such as warehouses, branded outlets, delivery trucks, marketing campaigns and sales staff. Jovet Kenya argued that its sustained efforts had acquired significant goodwill for Bavaria’s products in the Kenyan market, and consequently, it claimed sole rights to market and distribute the products in Kenya.

The High Court held that there was no contractual relationship between Jovet Kenya and Bavaria. As a result, the Court dismissed Jovet Kenya’s claim, without addressing itself on whether or not goodwill constitutes a form of constitutionally protected intangible property. At the appeal stage, the Court of Appeal affirmed the High Court’s position finding that the dispute was purely commercial, but equally did not see merit in addressing the underlying claim for goodwill.

The Supreme Court, while affirming the decisions of the two lower courts on the basis that there was no contractual relationship between Bavaria and Jovet Kenya and consequently no proximate connection to establish constitutional violations, nonetheless went ahead to determine whether or not goodwill is property and ought to be protected under Article 40 of the Constitution of Kenya.

Key takeaways

In its determination, the Supreme Court highlighted the following principles:

• Goodwill is a form of property entitled to protection under Article 40 of the Constitution of Kenya.
• Goodwill qualifies as property when it is identifiable, whether independently or alongside other assets, and when a measurable value can be attributed to it.
• A sub-distributor cannot claim goodwill through its parent company unless expressly stated in the principal agreement with the manufacturer.

What this means and notes for the future

This decision has the following implications:

• As goodwill is now a recognised property right that may be assigned a measurable value and transferred with the business to which it relates, it is imperative for businesses to be cognisant of the fact that claims for goodwill are no longer purely commercial in nature and any allegations of interference with goodwill may also be addressed as constitutional violations.
• Businesses should endeavor to formalise their commercial relationships through clear written agreements. The concept of privity of contract limits contractual rights and obligations to the parties directly involved in the agreement. Without a direct contractual link, claims for goodwill may not be enforceable.
• The terms of distributorship agreements should clearly define the legal consequences of any private arrangements with sub-distributors and agents. Such agreements should also define the rights and obligations of both the manufacturer and the distributor or its agent, including provisions related to goodwill.
• Given the prevailing view from Kenyan courts that the unilateral termination of distributorship agreements is unavailable to manufacturers due to the inherent power dynamics in their contractual relationships with distributors, the principles of Article 10(2) of the Constitution of Kenya on equity and fairness should inform business relations where a dispute with respect to either termination or goodwill arises.

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