Analysis of the Effectiveness of Technovation Law in Kenya.

Chapter 1: Introduction

A technovation is a solution to a specific problem in the field of technology, proposed by an employee of an enterprise in Kenya for the use of that enterprise and which relates  to the activities of the enterprise but which, on the date of the proposal, has not been used or actively considered for use by that enterprise^[1].

The employment relationship is the key point of reference for determining the nature and extent of employers’ rights and obligations towards their employees^[2].

Research Background.

Innovation is a key ingredient in sustaining economic growth, development and creating better jobs. It has been estimated that innovation accounts for as much as 80% of economy-wide growth in productivity in high-income countries. Effective IP protection increases research, development and innovation.^[3] 

It is important to note that material technology for consumer products and manufacturing no longer dominate the innovation paradigm. Innovation now covers modifications of processes and organizational models toward greater efficiency, productivity, and competitiveness.^[4]

One of the most popular case studies was brought before the High Court of Nairobi involving the claimant, Samson Ngengi and the defendant ,Kenya Revenue Authority. The case is about the invention of a rental tax mapping and collection system by the claimant; who is fighting for his efforts in developing the system to be recognized and adequately compensated.

Mr Ngengi stated that he developed the software that maps property location, ownership and building details, as well as the tax status of a taxpayer hence providing an effective tool for collecting rental income levy. This invention was a very significant asset for the company considering the fact that it had never been used nor had it ever been actively considered for use in the company. The invention gave assurance of more precise follow ups and recordings of revenue collection which was useful to KRA due to the massive lose they were incurring. KRA had lost billions in uncollected rental income tax in the past account and were willing to have a lucrative deal with the individual or company who would develop a system to solve this issue which they would adopt.

The KRA commissioner general, Mr. John Njiraini however said that the authority cannot do business with its own employees and asked Mr Ngengi to resign and tender for the provision of the service as an independent developer.

This case is a classic example of a situation where an employee (inventor) is forced to juggle intellectual property considerations and their loyalty towards their employer.^[5] Ngengi claimed that he has a right to be awarded a technovation certificate by KRA as it was not part of his job description to create the system.
The right to a technovation certificate is covered under section 95 of the Act, which has certain requirements which must be met, namely:

1. Ngengi must have filed a request and signed it so as to acquire a technovation certificate.
2. Ngengi must prove that his duties as a KRA employee do not comprise the making and proposing of technovations which pertains to the field of activities for which he is employed.
3. Despite of the requirement under point 2, Ngengi can argue he is entitled to a technovation certificate where the degree of the creative contribution inherent in the technovation exceeds that which is normally required of a KRA employee in his position. This can be said to be difficult to prove as there is no objective way to do so and hence may be considered to be disadvantageous to the employee to some extent.

Another remedy can be found under section 99 of the Act which deals with the question of sufficient remuneration for a technovator where the technovation has been exploited by the enterprise. This is dependent on whether the enterprise issues a technovation certificate. In section 97 (2) of the Act , the enterprise can to refuse to issue the certificate if it is satisfied that the requirements of section 95 have not been met^[6]. In that case they must notify the employee of the said reasons within three months for the date of the proposal. This makes the awards of the employee to be highly dependent on the discretion of the employer and hence leaves the employee at his mercy.

The case was referred to a tribunal which is still ongoing pursuant to the provision in section 101 of the Industrial property Act^[7].

Statement of the problem

Many employees are not aware of their rights with regards to invention. Those who may be aware, may not feel that the remuneration offered by the law is adequate enough to encourage them to move towards the inventive step during employment. Also the technovation rights currently under the law have not been fully embraced in the employment realm in terms of having defined clauses in the Employment Act in terms of technovation rights and also the inclusion of the clauses in employment contracts  and company policies. The focus of this research will be to assess the extent to which employees have been made fully aware of their rights with regards to invention during their employment term, how the laws and companies have incorporated technovations and recommendations of the same and also to weigh the clause provided for in the intellectual property act to prove if the remuneration to be awarded is adequate enough to encourage employees to keep inventing.

Justification of the study.

Since technovation rights were introduced to Kenya, we have seen relatively positive progress with regards to the response in the industry. This however is not adequate as many employees are not aware of their rights with regards to innovation while in employment. Another issue is that the provision for technovations has not adequately been provided for in statute, employer contracts  and company policies. This research will enable some of these issues to be highlighted and recommendations shall be given on the same based on statistics in Kenya as well as other countries that do not have technovations.

Statement of Objectives

The following are my objectives:

1. To determine how effective technovations are in the workplaces in Kenya and compare with other states that have different laws governing technovations.
2. To assess the awareness among employees of their rights with regards to technovations and the drive of employers to make known to employees these rights as well as make provisions for them in contracts and policies.

Research Questions.

In this research I would like to focus on the following areas^[8]:

1. Are technovations a necessary addition in the Kenyan laws in comparison to countries where laws are applying a different approach towards the same?
2. In comparison to other countries, what are the legal provisions that Kenya can adopt to improve its law on technovations?
3. To what extent are employers and employees in Kenya aware of technovation rights in Kenya?
4. What are the recommendations that would best improve the implementation of technovation rights in Kenya?
5. Does the law on technovations in Kenya encourage innovation activity?

Literature Review.

Several writers have made commentaries and recommendations on technovation rights. Innovation is crucial if an organization is focused on staying at the pinnacle of the industry with regards to new products or forward-thinking business models. In whatever department in the organization, innovation plays an integral role in bringing up new and fresh ideas, building new approaches that will make the organization more effective and in setting new business trends^[9].