Moses Dennis Lutalo, the Country Manager of Broll Uganda, a subsidiary of Broll Property Group, a pan-African commercial property services company, is in the eye of the storm following a court ruling that found that he helped his employer, Broll Uganda, to infringe on the moral rights to the copyright of an industry Retail Market Study Report by Knight Frank Uganda, his former employer.
During his employment at Knight Frank, Lutalo had unrestricted access to the Retail Market Study Report, which included confidential information, such as details about upcoming commercial projects in Kampala. A year after Lutalo joined Broll, the Map Extract from the report appeared in valuation reports prepared by Broll.
During the court hearing, Roger Long, a director of Broll, admitted that the Map Extract originated from Broll Uganda, Lutalo’s new employer.
Testimony by Knight Frank’s executives, Marc Du Toit, the Head of Retail at Knight Frank Uganda, and Judy Rugasira Kyanda, the Managing Director, indicated that Lutalo was the only third person with access to the report. He was suspected of having facilitated the transfer of Knight Frank’s proprietary information to Broll, either by directly sharing the report or enabling access to it.
Commercial Court Judge Patricia Mutesi declared that Broll Uganda infringed when it assisted a sister South African company, Broll Valuation & Advisory Services (PTY) Ltd, in accessing and including vital parts of Knight Frank’s Retail report in work done for Acacia Mall and Metroplex Shopping Mall in 2018 and 2019, respectively.
Mr. Lutalo left Knight Frank Uganda Ltd’s employment in June 2017 and immediately became Broll Uganda’s Managing Director.
She, however, declined to grant prayers by Knight Frank and also to find Broll Uganda and Broll Valuation & Advisory Services (PTY) Ltd guilty of the more serious offences of infringing on commercial rights and trade secrets.
The court ordered Broll Uganda, Knight Frank’s main competitor in Uganda, UGX70 million for the infringement. She also issued a permanent injunction restraining Broll Uganda and its employees or agents from reproducing any part of the report in their works without honouring Knight Frank’s authorship.
Background to the case
In 2021, Knight Frank Uganda, a subsidiary of the London headquartered global real estate consultancy and estate agency Knight Frank LLP, jointly sued Broll Uganda and its sister company, Broll Valuation & Advisory Services (PTY) Ltd), asking the court to declare that the distribution and/or use of the Knight Frank’s Retail Market Study Report or parts thereof is an infringement of the Plaintiff’s copyright and trade secrets.
Knight Frank also sought general damages of USD 65,000, interest on the sums awarded at the rate of 24% per annum from the date of judgment until full payment, and costs of the suit.
Knight Frank Uganda Ltd averred that sometime in December 2019, Lexington Properties Ltd retained the services of Broll Valuation & Advisory Services (PTY) Ltd to conduct a valuation of Acacia Mall, one of its properties.
At the hearing of the suit, Mr. Marc Du Toit, the Knight Frank Uganda Head of Retail, told the Court that in 2018, Standard Chartered Bank engaged Broll Valuation & Advisory Services (PTY) Ltd, to conduct the valuation of Acacia Mall, a property being managed Knight Frank at the time. However, when Broll Valuation & Advisory Services (PTY) Ltd submitted its valuation to Lexington Properties Ltd, the property owners were concerned about the value attached to the mall, which was far less than the previous values. Mr. Sivakumar Vizhavil, the General Manager of Acacia Mall, asked Knight Frank to review the valuation. During the review of the valuation report, Marc Du Toit became curious about how Broll Valuation & Advisory Services (PTY) Ltd, a South African company, had conducted valuation services in Uganda, yet it wasn’t licensed to do so. Upon further scrutiny, it was found that Broll Valuation & Advisory Services (PTY) Ltd had illegally copied and pasted contents from a “Retail Property Investment Prospects” section in a Retail Report by Knight Frank, which contained private information that was only known to Knight Frank.
Marc du Toit further told the Court that the Retail Report was stored on Knight Frank Uganda Ltd’s servers due to its confidential nature. Only three people had unrestricted access to it: himself, the company’s Managing Director (Mrs. Judy Rugasira Kyanda), and its former Head of the Commercial and Residential Portfolio (Mr. Dennis Lutalo).
Mrs Judy Rugasira Kyanda, Knight Frank Uganda Ltd’s Managing Director, further told the court that Broll Valuation & Advisory Services (PTY) Ltd was not licensed to undertake a survey as defined by Ugandan law. At the same time, Broll Uganda did not have any locally registered valuers. She further said that she believes, in coming up with the report, Broll Uganda relied on valuers from its partner office in South Africa (Broll Valuation & Advisory Services (PTY) Ltd), that is, Roger Long and Mwangala Elham Shamaila who are not legally authorised to undertake valuation work in Uganda. She further told the Court that data from company servers showed that Moses Denis Lutalo had unlawfully taken and disclosed the report to his new employers.
After the discovery, Knight Frank then raised its concerns to Malcolm Horne and Roger Long (both directors of Broll Valuation & Advisory Services (PTY) Ltd), who, on 15th January 2020, withdrew the valuation report for Acacia Mall on the grounds that the Map Extract was Knight Frank Uganda Ltd’s intellectual property. On 12th March 2020, Judy Rugasira Kyanda emailed Mr Malcolm Horne to express her disappointment over the defendant’s unprofessionalism. On the same day, Mr Horne admitted to her that the Defendants had “inadvertently” used Knight Frank Uganda Ltd’s intellectual property.
Testimony by Mr Andre Janari, Chief Investment Officer, Gateway Real Estate Africa, also showed that Broll Valuation & Advisory Services (PTY) Ltd had used the same stolen information to prepare a valuation of Metroplex Shopping Mall, owned by Gateway Real Estate Africa. The Metroplex report was prepared and submitted by Roger Long (Director & Head of Valuations) and Mwangala Elham Shamaila (Chartered Valuation Surveyor), both working for Broll Valuation & Advisory Services (PTY) Ltd. On 15th January 2020, Broll Valuation & Advisory Services (PTY) Ltd later withdrew the report because it contained data illegally obtained from Knight Frank Uganda Ltd. Mr. Long apologised for using Knight Frank Uganda Ltd’s intellectual property in the valuation report and withdrew and substituted it with a revised report.
“…I am satisfied that, as PW1 (Marc du Toit) and PW2 (Mrs Judy Rugasira Kyanda) testified, the 1st Defendant (Broll Uganda) helped Broll Valuation & Advisory Services (PTY) Ltd to plagiarise the Retail Report for financial benefit,” Lady Justice Patricia Mutesi observed in her ruling.
She also found Broll Uganda and Broll Valuation & Advisory Services (PTY) Ltd were “jointly and severally liable for breach of Knight Frank Uganda Ltd’s moral rights to the copyright in the Retail Report”.
DStv losing UGX 2.7 billion annually due to content piracy in Uganda “These rights are protected by Section 8(4) and 10 of the CNRA, and they enjoy equal treatment and protection of law with economic rights,” Lady Justice Mutesi added.
The court, however, did not find Broll Uganda and Broll Valuation & Advisory Services (PTY) guilty of the more serious case of infringing on Knight Frank’s commercial rights and trade secrets.
“A declaration is hereby issued that the Defendants’ inclusion of the Map Extract from the Retail Property Investments Prospects section of the Retail Market Study Report in their 2018 and 2018 Acacia Mall valuation reports and in their 2019 Metroplex Shopping Mall valuation report without honouring the Plaintiff’s authorship of that Report was an infringement of the Plaintiff’s moral rights to the copyright in the Report,” Lady Justice Mutesi ruled.
“A permanent injunction is granted restraining the Defendants and their employees or agents from reproducing any part of the Retail Market Study Report in their works without honouring the Plaintiff’s authorship of the same,” she further ruled, adding: “The Defendants shall jointly and severally pay to the Plaintiff the sum of UGX 70,000,000 being the general damages for their infringement of the Plaintiff’s moral rights in the Retail Market Study Report”.
She also ordered that the defendants jointly and severally pay Knight Frank interest on the general damages at the rate of 14% p.a. from the date of the judgment until payment in full. Knight Frank was also awarded one-third of the suit’s costs.
Broll speaks out, tries to save face.
Despite the court findings and Broll’s officials’ various admissions to using data from Knight Frank, apologising for it, and even withdrawing the impugned valuation reports following the ruling, Broll Uganda issued a tactically written press statement underplaying the ruling’s findings.
In the statement, Moses D. Lutalo, the Managing Director Broll Uganda Limited, downplayed the findings that he had illegally accessed and used information belonging to his former employer for the benefit of his new employer while elevating the legalistic arguments that the said plagiarism was “inadvertent” and not widespread but rather “confined to specific pages and was neither systematic nor extensive”.
Ironically, the statement also mentioned Broll’s commitment to industry standards, transparency, and compliance with Ugandan Law.
The statement was posted on Broll Uganda’s X and LinkedIn Pages.
Commenting on the LinkedIn post, Malcolm Horne, the Group CEO at Broll Property Group, drew Knight Frank’s ire.
“Thank you for being transparant Broll Uganda as your detractors will try use this judgement against you. We could have reached an out of court settlement but opted rather to settle the matter through the legal system,” Mr. Horne wrote, adding: “When we heard of the use of one map of Kampala in two valuation reports – in December 2019 – we immediately apologised to all parties involved and withdrew and replaced the reports. We are committed to growing ethical businesses across the continent and are challenging established levels of complacency and mediocrity with the aim to improve property services across Africa”.
An irate Marc du Toit responded, accusing Malcolm of disingenuity:
“Malcolm Horne, I find this comment truly offensive. You brought this into the public realm! You are being disingenuous. Your staff member stole and reproduced (our report) under his and your name. When caught, you apologised to your clients but never to the party you infringed against. Contrary to evidence, you flatly denied it, but so be it; the courts penalised your shocking behaviour. But your demeaning, condescending, derogatory and blatantly racist comments about the levels of complacency and mediocrity of property services across Africa, which you are challenging, are really unbecoming. As a property practitioner in Africa, where we strive for credibility and work with the utmost integrity, I demand on behalf of all African Property Practitioners an apology unless, of course, this was a typo/Freudian slip and you were actually referring to your own organisation, which the court judgement speaks to for itself.”
In a rejoinder, Judy Rugasira Kyanda commented, castigating Broll’s alleged “commitment to growing ethical business” while simultaneously stealing competitor’s Intellectual Property and insulting professional property practitioners across Africa as being complacent and mediocre!”
Significance of the case
This case, Knight Frank Uganda Ltd vs. Broll Uganda Ltd & Another, is significant to legal jurisprudence as it explores the interplay of copyright law, trade secrets protection, and the moral rights of creators in Uganda. It also provides clarity on the application of intellectual property laws, particularly regarding commissioned works, trade secrets, and moral rights. It emphasises the necessity of contractual safeguards in maintaining confidentiality and protecting business interests.