JIPLP Vol 11 No 4

Dr. Isaac Rutenberg (CIPIT Director) and Ms. Jacquelene Mwangi (CIPIT Researcher) have co-authored a new peer-reviewed article titled: “Do patents and utility model certificates encourage innovation in Kenya?” recently published in Oxford’s Journal of Intellectual Property Law & Practice. A copy of the article is freely accessible for a limited period here. In the article, it is observed that traditional measure of innovation at the country level is the number of patents filed and granted. However it is argued that this may not be an appropriate method for measuring innovation in developing countries in Africa, particularly since many patent offices on the continent are ineffective or inactive. However an exception is Kenya, which has a patent office equipped with a corps of examiners and more than two decades of experience in substantively examining patent applications.

The authors examined data obtained from Kenya Industrial Property Institute (the national patent office) to gather insights into innovation, research and development (R&D) happening in Kenya. The analysis presented in the paper shows that, despite a relatively large number of applications filed by a large number of applicants, the number of granted patents and Utility Model Certificates (UMCs) remains extremely low. Furthermore, the vast majority of applications are filed in the name of individuals as applicants, demonstrating that traditional centres of R&D such as the corporate sector and universities are relatively inactive in terms of filing patent and UMC applications in Kenya.

Existing research shows that intellectual property rights (IPRs) are of importance to the innovative activities of companies. A reported 86.2% of the companies own a form of IPR with trade marks being the dominant IPR at 25.5%. It has been found that 7% of companies own a utility model, 12.1% own copyright, 10.5% had an industrial design, 18.1% had secured patents locally and 5.9% had applied for patents outside Kenya.

According the article, there exist approximately 725 granted patents and 108 granted UMCs in Kenya as of August 2016. Of the 725 total patents granted by KIPI, 168 patents (23%) were filed first in Kenya (ie, ‘National Applications’), of which 86 were by local applicants. The remaining 557 (77%) patents were filed first in the Patent Cooperation Treaty (PCT) and entered Kenya as a national phase application (ie, ‘PCT applications’). Only two PCT applications were by applicants with a Kenyan address, indicating that local applicants do not typically obtain local patents via the PCT route. Overall, 87 granted patents in Kenya (12% of the total of 725 patents) are local patents.

Compared with patents, the system of UMCs is intended to be friendlier to developing countries, where innovations are thought to be more incremental. Given the data and analysis above that indicate that the Kenyan patent system is virtually unused by local applicants, we sought to determine similar insights for the UMC system. Of the 108 granted UMCs, local applicants filed 94, a foreign entity filed one and no data was available for the 13 remaining. The article’s analysis of UMC applicants is thus based on a dataset of 95 granted UMCs. The 95 granted UMCs originated from 58 distinct entities; only 10 entities (14%) have obtained more than one UMC.

Despite the low number of granted patents and UMCs, the numbers of applications for patents and UMCs are rising steeply. Between 1990 and August 2016, local applicants filed a total of 609 UMC applications and 1,313 patent applications.

The article concludes that the progress in Kenya towards becoming a hub of innovation is not evidenced in the numbers and duration of granted local patents and UMCs. Nevertheless, the number of local applications is quite substantial and contradicts (somewhat) the conclusions that can be drawn by looking only at granted patents and UMCs. Furthermore, as evidenced by the lack of any local patent protection for MPesa, the authors conclude that innovations in Kenya often exist without formal IPR. Therefore, it is concluded that formal IPRs in the form of patents and utility models have not been a driving force for innovation in Kenya.

According to the data analysed in the article, it also appears that individuals are far more substantial users of the patent and UMC systems compared with local businesses and universities. Since patent filings are one measure (albeit an incomplete one) of the level of innovation and industrial R&D in an economy, the authors argue that their analysis supports the conclusion that the patent system and the corporate/industrial innovation system are not in harmony. Those entities that should be carrying out substantial amounts of research and development resulting in innovations that drive economic growth are not doing so, or are at least not making substantial use of the local patent system when they do. According to the authors, this observation has important implications from the perspective of government policy, and it is recommended that government policies be revisited in view of these findings. Government policy should be revised to encourage research and innovation by industry and universities, while maintaining an environment that continues to encourage innovation by individuals.