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Effective Ways For Footballers In Nigeria to Recover Remunerations Owed Them By Clubs

by Legalnaija | Feb 11, 2020 | Uncategorized

It is common occurrence in the Nigerian
football industry for Footballers to be heavily owed salaries. In fact, it has
almost become the norm. That is saddening, but even more saddening the manner
the footballers in the Nigerian leagues go about the recovery of salaries being
owed them by the football clubs they play(ed) for; usually known as “overdue
payables“.

It is baffling why most of them go about
begging their Club Chairman, the Governor and/or Commissioner for Sports of the
state? Why do they beg for the money like it were some loan or gift they are
asking for?

Players having a sit-out to protest
non-payment of their salaries.

This article seeks to address this perception
of players, especially the mindset that sports employment-related disputes
cannot be tabled before civil courts.

Below is what players can do:

1. Non-Nigerian Players in the Nigerian
league.

For a non-Nigerian player owed by a Nigerian
football club, his or her claim can be filed at the Dispute Resolution Chamber
(DRC) of FIFA. The DRC will accept such a case because it is of “international
dimension”, as stated in Article 22 (b) of the Regulations on the Status and
Transfer of Players (RSTP).

It may interest you to know that the DRC does
not charge players filing fees for such employment disputes. The only cost the
player may incur is the professional fess the Attorney or Representative may
charge; which is sometimes paid after judgement has been obtained – known as
“contingency fees”.

Our firm has had the opportunity to be
involved and/or personally represent a few players from countries such as
Ghana, Mali, Benin Republic, etc; so it can be recommended as a reliable avenue
to recover the entitlements of players. (Note that such a claim must be filed
within two (2) years of the cause of action, to avoid it being statute barred).

After the player has obtained judgement
against the Nigerian club, the DRC gives the club an ultimatum (usually 30
days) within which the club must pay the judgement sum (money). Before now, in
the event that the club fails to pay within that period, the defaulting club
used to be referred to the FIFA Disciplinary Committee which may then fine the
cub, ban the club from signing players, deduct points from the club’s accumulated
points, or even ban the club from football competitions until the club
complies.
However, pursuant to the latest RSTP which became effective from June 2018, the
DRC now has the power to include sanctions in its decisions without the need to
refer the case to the Disciplinary Committee upon the non-compliance of a club.

2. For a Nigerian player who has a
claim against a Nigerian club, the DRC would reject it as it is expected to
be adjudicated on by the NFF Arbitration Committee; being an “internal
dispute”.

Thus, such a case can be submitted to the NFF Arbitration Committee which would
give an arbitral Award (a decision) and order the defaulting club to pay the
player, or face sanctions similar to those earlier-mentioned that FIFA dishes
out.

However, in reality, many Nigerian players at
left stranded because the NFF often fails to enforce the decisions, by
sanctioning defaulting clubs.

In fact, there are arbitral awards that were
delivered as far back as 2010 which have not been complied with by Nigerian
clubs till now.

So if a player has, or is subsequently able
to get an arbitral award at the NFF Arbitration Committee, he/she can approach
the regular court (National Industrial Court) to have it enforced.

Note that this must be done within 6 years from the date the arbitral award was
obtained. There are players who have lost their entitlements because they
failed to enforce such arbitral awards within 6 years as stipulated by the
Statute of Limitation. It is better to enforce compliance rather than beg.

Meanwhile, Some may ask the question of what
to do in the face of inefficiency by the NFF Arbitration Committee; especially
that the committee is not constituted at the moment.

In this circumstance, a player may get an
Attorney to file an employment dispute on his or her behalf at a civil court.
The civil court vested with jurisdiction on employment disputes is the National
Industrial Court (NIC). This is by virtue of the provisions of Section 254 (c)
of the 1999 Constitution (as amended) and the National Industrial Court Act
2006.

You may wish to note that although Article 68
Para 2 of the FIFA Statutes stipulates that recourse to ordinary (civil) courts
of law as regards disputes is prohibited, employment disputes do not fall under
this prohibition.

A player can decide to file an
employment-related dispute at a competent ordinary court, because the choice of
judge is a fundamental right that cannot be denied. (See FIFA Commentary,
explanation Article 22, page 64)

In fact, there are some employment disputes
which the FIFA DRC rejected on the ground that the parties had already
submitted the dispute before the regular courts in their country, and that such
courts have jurisdiction to hear the cases.

Thus, except the contract a player signed
with a club expressly states that disputes cannot be referred to
ordinary courts, or it states that the NFF Arbitration Committee/FIFA DRC/Court
of Arbitration For Sport shall have jurisdiction on disputes; then a player can
approach the National Industrial Court to recover his/her entitlements.

Written by:

Tosin Akinyemi, Esq.

Source : Sportlicitors

Why you should consider impact investment in Nigeria – Sandra Eke

by Legalnaija | Feb 11, 2020 | Uncategorized

If you have ever clamoured against the
increasing socio-economic and environmental problems in Nigeria or wondered how
you can generate profitable returns from your investments while simultaneously
contributing to the development of the society, you should consider impact
investment.

With a population of over 190 million people,[2] the second largest and fastest
growing economic market in Africa, Nigeria is an ideal place for impact
investment. The socio-economic and environmental challenges in Nigeria create
an opportunity for impact investors.

What is Impact Investing All About?

Impact investing refers to an investment that
aims to generate measurable beneficial social or environmental returns in
addition to financial gain.[3] It is centred on making a positive
impact through investments in projects that better the community.^[4] Impact
investing is usually categorised under sustainable investing, which also
encompasses socially responsible investing (SRI).[5]

The role of the impact investor is
different from a classic investor. Firstly, the impact investor expects real
and tangible social impact from its investments, without which the goal of
financing won’t be achieved.^[6] Secondly,
unlike the classic investor who is motivated by maximization of profit and
therefore anticipates returns above market average on capital invested, an
impact investor is driven by the need for a significant social impact. An
impact investor may accept below market returns – provided the projects
invested in follow through on their promises of social and environmental
change.[7]

The development of impact investment was
necessitated by the Sustainable Development Goals,[8] adopted by the United Nations in
2015 which called for a collaboration of the private, public, and philanthropic
sectors to end poverty and ensure environmental sustainability by 2030.

Legal Regime for Investing in Nigeria

There are a plethora of laws and regulations
governing investments in Nigeria. They include: The Companies and Allied
Matters Act,[9] the Nigerian Investment Promotion
Act,[10] the Investments and Securities Act,[11] Consolidated Rules and Regulations
of the Securities and Exchange Commission, the Foreign Exchange (Monitoring and
Miscellaneous Provisions) Act,[12] the Industrial Inspectorate Act,[13] National Office for Technology
Acquisition and Promotion Act,[14] the Rulebook of The Nigerian Stock
Exchange 2015 etc.

The Corporate Affairs Commission (“CAC”) oversees
the formation and administration of all business entities in Nigeria. Every
investor who seeks to set up a business in Nigeria which does not fall under
any of the categories of business exempted from registration must register
his/her business in Nigeria with CAC. The Nigerian Investment Promotion
Commission (“NIPC”) is the principal body that regulates all foreign
investments in the country and a foreigner seeking to invest in Nigeria is also
required to register with the NIPC.

Due to the number of regulatory compliances
expected to be met by a foreigner who seeks to do business in Nigeria, there is
a One Stop Investment Centre (OSIC),[15] which houses all the relevant
regulatory bodies.[16] Prospective investors who wish to
do business in Nigeria can visit the OSIC to obtain all regulatory permits and
registrations required to invest in Nigeria.

Operating Principles for Impact Investing

The International Finance Corporation, World
Bank Group, recently launched some operating principles for Impact Management.
The nine (9) principles identify the key characteristics of investment fund
management, with the aim to positively contribute to measurable socio-economic
or environmental impact.[17] The goal behind the principles is
to ensure that investing decisions are made with consideration to
socio-economic impact.[18] The principles include: definition
of strategic impact objective(s) consistent with the investment strategy;
management of strategic impact on a portfolio basis; establishment of the Manager’s
contribution to the achievement of impact; assessment of the expected impact of
each investment, based on a systematic approach; assess, address, monitor, and
manage potential negative impacts of each investment. Others are: monitoring of
the progress of each investment in achieving impact against expectations and
respond appropriately; conducting exits considering the effect on sustained
impact; reviewing, documenting, and improving decisions and processes based on
the achievement of impact and lessons learned; and publicly disclosing
alignment with the Principles and provision of regular independent verification
of the alignment.[19]

Why Impact Investment Matters in Nigeria

Nigeria is a country faced with an avalanche
of socio-economic challenges like hunger, poverty, unemployment, poor
healthcare, poor/inadequate infrastructural facilities, illiteracy, among
others, which largely affects its growth and development. However, these
challenges create an opportunity for impact funds and impact investment.

Some distinctive attempts at impact investing
in Nigeria can be seen in the growing focus of the Federal and State government
on bond issuance projects centred on solving socio-economic and environmental
challenges and the increasing emergence of small and medium scale enterprises
(SMEs) which are significant contributors to social and economic growth and
development. Entrepreneurs are more aware of social and environmental challenges
and are innovating ways to tackle them. Examples include LifeBank, an SME that
saw an important opportunity in making sure patients who need blood can get it
in due time. LifeBank developed proprietary software to tackle blood shortages
and quick access to medical products in hospitals in Lagos.[20] Wecyclers, a company that powers
social change in the environment, provides household recycling services with
the use of low-cost cargo bikes, which allowes people in low-income communities
to capture value from their waste.[21] Andela, a technology company,
recruits and trains local software developers at little or no cost, who in turn
work remotely for them for various international companies, thereby generating
employment opportunities for thousands of the unemployed populace in Nigeria.[22]

Furthermore, a good number of impact
investing funds have been made available by some foreign development
institutions and bodies. For instance, the African Development Bank invested in
the Africa Food Security Fund (AFSF) to boost agri-business SMEs and enhance
food security in some African countries like Nigeria.[23] Also, the International Finance
Corporation made an investment in Hygeia Nigeria Limited to improve the
healthcare infrastructure in Nigeria and to facilitate access to quality
healthcare services.[24] Locally, the Nigerian Capital
Development Fund (NCDF) launched an Impact Investment Note and Fairshares
investment platform to enable impact investors make investments and become
stakeholders in NCDF, to drive sustainable impact projects in the country.

A couple of Federal and State government
bonds which can be characterised as social impact bonds are additions to impact
investment funds in Nigeria. For example:

1. Issuance of Sukuk
(Islamic Bonds)

Sukuk or Islamic bonds are structured in such
a way as to generate returns to investors without infringing the tenets of
Islamic law that prohibits “riba” (interest). As an investor your money is put
into the assets of a project or investment in order to generate profits and not
interests. However, the Federal Government of Nigeria and a State government
have been involved in the successful issuance of Sukuk Bonds as impact
investment. Osun State government through a wholly owned Special Purpose
Company, (Osun Sukuk Company Plc) was the first in sub-Saharan Africa to issue
Sukuk bonds worth N11.4 billion as an education project to finance construction
of some High Schools in the state.[25] More recently, the Federal
government issued a N100 billion Sukuk bond for the construction of federal
roads across the six geopolitical zones in Nigeria.[26]

2. Issuance of Sovereign
Green Bonds

A sovereign green bond is a debt security
issued by a national government for climate and environmental projects. They
can be denominated in a foreign currency or the government’s own domestic
currency. In 2017, the Federal Government of Nigerian issued a climate bond
certified sovereign green bond worth N10.69bn, making it the first issuer of
sovereign green bonds in Africa and the 4^th in the world.[27] The bond was issued to finance
three (3) major projects: the energy education programme, renewable energy
micro utilities, and afforestation.[28] In 2019, a second tranche of the
bond was issued.[29]

3. Euro Bonds

Eurobonds are bonds that are issued in a
currency not native to the country where it is issued, e.g., where the Federal
Government of Nigeria issues a bond denominated in US Dollars in Nigeria and
invites investors from all over the world to subscribe to it. Nigeria issued
its 6^th Eurobond in 2018 worth $2.86 billion, following
issuances in 2011, 2013, and 2017 in different tranches.[30] The Eurobond was issued to help
fund Nigeria’s budget deficit, reduce the risk of inflation and to improve the
financial health of the country. Its sale was said to have been three times
oversubscribed.

4. Corporate Green Bonds

A corporate green bond is a bond issued by a
corporation other than a government or municipality, in order to raise
financing for climate and environmentally friendly projects. In March 2019,
Access Bank Plc., issued a 5-year fixed rate senior unsecured green bond,
making it the first ever Climate Bonds Standard Certified Corporate Green Bond
to be issued in Africa.[31] The bond issued was worth N15bn and
was for the financing of new loans and refinancing of existing loans in
accordance with the Bank’s Green Bond Framework and the Climate Bonds
Initiative standards, and to support projects directed at flood defence, solar
generation facilities and agriculture.[32]

5. Housing Funds

These are funds established by private or
government agencies to support the preservation and production of affordable
housing, particularly for low income earners to access decent and affordable
homes. A good example is the National Housing Fund and Family Homes Fund. The
Family Homes Fund is a social intervention program that provides access to
affordable housing, home loan assistance funds, rental housing funds and
infrastructure development funds for millions of Nigerians within the low to
medium income bracket, through strategic partnerships with various categories
of investors.

From the foregoing, it can be deduced that
the future of impact investing in Nigeria is very bright. More recently, the
Bank of Industry, African Capital Alliance, Business Day Media Limited, Ford
Foundation and Dalberg Advisors formed the Impact Investors Foundation (IIF).
The foundation was registered as a non-profit entity to foster the development
of impact investing in Nigeria and promote cooperation amongst relevant
stakeholders active in the sector.[33] It is anticipated that this
strategic collaboration would boost the growth of impact investing in Nigeria.

Challenges Faced by Impact Investors

Regardless of the potential to boost the
development of critical infrastructure and supplement government spending,
several fundamental challenges exist that have slowed investment activity. To
grow the sector in Nigeria, these obstacles would need to be addressed. Some of
these challenges include: difficulty sourcing viable investments that meet both
financial and social or environmental objectives; negative perception about
sustainable investing that value must be sacrificed for profit and that these
funds underperform compared to traditional funds; shortage of high-quality
investment opportunities with strong track records; limited innovative funds
and deal structures; lack of appropriate capital across the risk/return
spectrum; difficulty exiting investments due to foreign exchange control, are
some of the major challenges.

Conclusion

While impact investments have continued to
grow in Nigeria, its impact might not be significant amidst the plethora of
challenges faced across the country. This myriad of challenges impedes the
expansion and maximum realisation of its potential to deliver social, economic
and environmental returns at scale.

Nevertheless, these perceived challenges
shouldn’t serve as an excuse to bury the idea of impact investment. On the
contrary, it is a time for us to revaluate our guiding principles and
collaborate to build a strong socio-economic society. We need to consider
impact investment and ask ourselves these questions: What if we redefine wealth
and prosperity not in terms of how much money we are able to amass but how much
positive impact we are able to make in our community and in the lives of
others? What if we changed our perception of investment from a principal goal
of yielding profit to one of contributing to reduce deficits in social
infrastructure? The new world we have dreamt about is possible; one where
impact investing provides some of the answers to changes we have long desired.

For further information on this article and
area of law, please contact Sandra Eke at: S. P.A. Ajibade &
Co., Lagos by telephone (+234 1 472 9890), fax (+234 1 4605092)
mobile (+234 8112491286) or email (seke@spaajibade.com).

www.spaajibade.com

[1] Sandra
Eke, Associate Intellectual Property & Technology Law, SPA Ajibade &
Co., Lagos, Nigeria.

[2]
World Bank, “World Development Indicators: Google Public Data Explorer”
available at: https://www.google.com/search?q=population+of+nigeria&rlz=1C1CHBD_enNG735NG736&oq=population+of+&aqs=chrome.1.69i57j0l5.6662j0j7&sourceid=chrome&ie=UTF-8 accessed
6^th November 2019.

[3] Global Impact
Investing Network, “Impact Investment in Africa” available at: https://www.impactatafrica.org/sites/default/files/publications/impact_investment_in_africa_action_plan_2016_english.pdf accessed
on 20th April 2019.

[4]
Investopedia, “What is impact investing” available at:
accessed on 18^th April 2019.

[5]
Bloomberg, “Quick take: Sustainable Investing” available at: https://www.bloomberg.com/quicktake/sustainable-investing accessed
10th September 2019.

[6]
Optimy Wiki, “Impact investment” available at:https://wiki.optimy.com/impact-investing/ accessed
18^th April 2019.

[7]
Ibid

[8]
Common Fund for Commodities, “The Sustainable Development Goals and Impact
Measurement – A CFC Journey” available at: http://www.common-fund.org/wp-content/uploads/2019/01/AR-2017-Sustainable-Development-Goals-and-Impact-Measurement.pdf accessed
12th October 2019.

[9]
CAP C20 Laws of the Federation of Nigeria 2004.

[10]
CAP N117 LFN 2004.

[11]
CAP T22, LFN. 2004.

[12]
CAP F34 LFN 2004.

[13]
CAP I8 LFN 2004.

[14]
CAP N68, LFN 2004.

[15]
NIPC, “Guide to investing in Nigeria: Getting started” available at: https://nipc.gov.ng/iguide/getting-started/#osic accessed
12^th December 2019

[16]
ibid

[17] IFC, World Bank
Group, “Investing for Impact: The Principles” available at: https://www.ifc.org/wps/wcm/connect/Topics_Ext_Content/IFC_External_Corporate_Site/Impact-investing/Principles/?utm_source=hootsuite&utm_medium=&utm_term=&utm_content=&utm_campaign= accessed
12^th September 2019.

[18]
ibid

[19]
ibid

[20]
Desola Ososami, “How Impact Investments can develop Nigeria?” available

at:https://www.stearsng.com/article/how-impact-investments-can-develop-nigeria accessed
20th April 2019.

[21]
ibid

[22]
ibid

[23]
African Development Bank, “African Development Bank, partners support
smallholder farmers with 17 new project grants” available at https://www.afdb.org/en/news-and-events/african-development-bank-partners-support-smallholder-farmers-with-17-new-project-grants-19222 accessed
8th November 2019.

[24]
IFC, “IFC, IFHA II, Swiss Re and CIEL Healthcare Invest in Hygeia Nigeria to
Expand Access to Quality Healthcare” available at: https://ifcextapps.ifc.org/ifcext/Pressroom/IFCPressRoom.nsf/0/C1481BDFE4A7586185257F33003E3183 accessed
5th November 2019.

[25]
The Nigerian Observer “Osun Sukuk: Driving National Fund for Development
Projects” available at: https://nigerianobservernews.com/2019/02/osun-sukuk-driving-national-fund-for-development-pojects/ accessed
5^th April 2019.

[26]
Debt Management Office, “Press Release on The Second N100 Billion Sovereign
Sukuk Issuance.pdf” available at: https://www.dmo.gov.ng/news-and-events/circulars-releases/2672-press-release-on-the-second-n100-billion-sovereign-sukuk-issuance accessed
8th November 2019.

[27] Debt
Management Office, “FGN Green Bond Offer for Subscription” available at: https://www.dmo.gov.ng/fgn-bonds/green-bond/2289-fgn-green-bond-offer-for-subscription/file accessed
8th November 2019.

[28]
ibid

[29]
The Federal Government of Nigeria embarked on an issuance of N15bn Series II
Green Bond. The law firm of SPA Ajibade & Co and Austen Peters & Co
acted as joint solicitors to the bond issuance project. A subscription level of
over 220% was recorded. See: Debt Management Office, “FGN N15bn Green Bond
Series II Prospectus” available at: https://www.dmo.gov.ng/fgn-bonds/green-bond/2810-fgn-n15bn-green-bond-series-ii-prospectus/file
accessed 8th November 2019.

[30] Nairametrics,
“Over $17bn raised from bonds by Nigeria and other African countries – World
bank” available at: https://nairametrics.com/2019/05/02/over-17bn-raised-from-bonds-by-nigeria-and-other-african-countries-world-bank/ accessed
5^th June 2019.

[31] Access Bank Plc
,”Proposed Bond Issuance” available at: https://www.accessbankplc.com/AccessBankGroup/media/Documents/Proposed-Issuance-Of-Green-Bond.pdf accessed
8th November 2019.

[32] ibid

[33] Impact
Investors Foundation, “About Us” available at: https://impactinvestorsfoundation.org/iifconvening2019/

accessed 8^th November 2019.

Source: SPA Ajibade & CO.

Does a certifying organization require more than a trademark? | Infusion Lawyers

by Legalnaija | Feb 11, 2020 | Uncategorized

Dear IP ABC

I am Mfon Udofia, owner of Emperocrest Hotel in Nigeria. Recently, my fellow hoteliers and I decided to form Hospitality Gate, a body that will have the self-regulatory responsibility of certifying standards in the hospitality industry in Nigeria. Hotels that meet the body’s standards would be certified by us and be required to pay certification fees. Only certified hotels would be entitled to use our mark of quality in their locations. We registered Hospitality Gate’s mark of quality as a trademark in Nigeria.

Six months into operations, a hotelier has threatened to report our activities to relevant authorities. According to the hotelier, Hospitality Gate has no right to use its logo as a mark of quality in the hospitality industry in the country. As a certifying organization, do we require more than a trademark?

Image Source: Remarkable.be

Answer

Dear Mr Udofia

If you registered Hospitality Gate’s mark-of-quality logo as a trademark and not a certification mark, the answer is TRUE–merely registering the mark of quality as a trademark is inadequate. A trademark is not the same as a certification mark. They perform different functions.

For Hospitality Gate to be legally entitled to use its logo as a mark of quality that certifies hotels as meeting the requirements for standards and quality in Nigeria, the logo must have been registered under Part A of the Trademarks Act as a certification mark.

So what is a certification mark?

As the name implies, a certification mark is a type of mark that is used to certify goods or services as meeting certain minimum standards set by the certifying body. Certification marks show consumers of goods or services that particular goods or services (products) or their providers (product owner) have met certain standards. Having met these standards, product owners are permitted to use the certification mark approved by the certifying body for this self-regulatory purpose and nothing more.

Under section 43 of Nigeria’s Trademarks Act, a certification mark or ‘certification trade mark’—as it is called under the Act—is described as a “mark adapted in relation to any goods [or services] to distinguish in the course of trade goods certified by any person in respect of origin, material, method of manufacture, quality, accuracy or other characteristics, from goods not so certified”.

Therefore, a certification mark is neither a trade mark nor a service mark. It is not used by the owner in connection with any of the owner’s goods or services.

Certification marks serve 3 major purposes.

Geographical Origin: that the goods or services come from a particular geographic region. For example, that a particular cow milk is from Holland;
Standard of Quality: that the goods or services meet certain standards of quality. This may involve the materials used to manufacture the goods or the compliance-control processes a service has passed through. For example, Standards Organization of Nigeria’s (SON) Mandatory Conformity Assessment Program (MANCAP) for locally manufactured products, and the Offshore Conformity Assessment Program (SONCAP) for imported products and the Electronic Product Registration scheme for traceability and quality verification; and
Accredited or Verified Members, Agents, or Experts: that the work on the goods or services was performed by an accredited member of an organization. For example, an organization with the qualification “ISO 9001 Certified”. This means that the the organization has met the International Organization for Standadization’s (UlISO) requirements in ISO 9000 Quality Management System (QMS).

Hospitality Gate’s mark of quality concerns standards. You are therefore required to register it as a certification mark, not a trademark.

There are 2 major differences between a certification mark and a trademark.

First, while a certification mark indicates that goods, services, or providers of those goods or services have met certain standards, a trademark indicates the source of goods or services in connection to trade and commerce.

Second, while a certification mark is owned and controlled by the certifying body, the body does not use the certification mark with its own goods or services, a trademark is owned and used by the proprietor to distinguish its brands from those of others. This is why under section 43 of the Trademarks Act, a certification mark is prohibited from being registered in the name of a person who carries on a trade in goods of the kind certified. In other words, a regulator cannot also be a player.

Therefore, for Hospitality Gate’s purpose, its trademark registration should have been a certification-mark registration. You are not trading any goods or services.

For Hospitality Gate to register a certification mark, it must meet two statutory requirements.

First, under section 43(5) of the Trademarks Act, conditions or limitations regulating the use of a certification mark must be registered at the Trademarks, Designs, and Patents Registry.

Second, under section 43(6) of the Act, the rules governing the use of the certification mark must be deposited at the office of the Registrar and get ministerial approval. This is because certification marks generally serve a consumer-protection function in trade and commerce. Of course, since a certification mark is usually for compliance with a defined standard, the Minister has to be satisfied that Hospital Gate as a self-regulatory body for hoteliers is ‘competent to certify’ hospitality-services providers in the country.

Therefore, apart from corporate registration as an organization or association, Hospital Gate must have a document containing the conditions or limitations that regulate the use of the certification mark. It is these requirements that the Minister of Industry, Trade and Investments is required to review and approve accordingly.

For professional guidance or assistance with registering certification marks, consult your IP lawyer or law firm.

IP ABC

Protection of Intellectual Property Rights in a Franchise Agreement – Sandra Eke

by Legalnaija | Feb 11, 2020 | Uncategorized

1.
Introduction

Intellectual Property Rights
(IPRs) are very valuable business assets which do not only contribute to the
general profitability of a business but also leads to the advancement of the
innovative and technological sectors of every country.[2] A Franchise is a form of licensing
arrangement between a franchisee and franchisor which grants the franchisee,
through a franchise agreement, access to use the proprietary knowledge,
processes, technical know-how and other intellectual property rights of the
franchisor, to enable the franchisee trade in the product or service of the
franchisor under the trade name of the franchise. In a franchise agreement
several intellectual property rights are exploited since the transfer of those
intangible rights appears to be the bane of Franchise arrangements.

These rights include
trademarks, trade secrets, patents, copyrights etc. There is often a mutually
beneficial relationship between a franchisor and franchisee, the franchisor
seeks to expand its business and brand name beyond its territorial borders
while the franchisee on the other hand seeks profitable return by exploiting
the existing brand reputation of the franchisor while remitting fees to the
franchisor. In the licencing and transfer of intellectual property rights in a
franchise agreement, it is very important that necessary steps and measures are
taken to better protect certain proprietary intangible rights from unauthorised
uses and exploitation by franchisees.

The franchisors have a
general duty of brand reputation management of its franchise especially as it
relates to the way the franchise business is run, the use of its trademark,
inventions and confidential information, and the promotional materials
utilised.[3] Sadly, there is no specific
regulatory agency or legislation regulating franchise arrangements in Nigeria.
In ensuring the adequate protection of the intellectual property rights covered
in a franchise arrangement, recourse is made to other existing laws and
regulatory agencies.[4]

For instance, the National
Office for Technology Acquisition and Promotion (NOTAP) Act, requires that all
agreements for the transfer of foreign technology to Nigerian parties should be
registered with NOTAP not later than sixty days from the execution of the
agreement,[5] it also states other requirements
that should be satisfied before an agreement can be registered,[6] and prescribes the percentage of
fees approvable as royalty earnings for registration in a franchise agreement.[7] We will examine some relevant
intellectual property rights deserving attention and protection in a franchise
arrangement.

2.
Trademarks

Trademarks are an essential
intellectual property right in a business enterprise or going concern which can
be licenced via a franchise agreement. A trademark is a signifier which is
capable of distinguishing the goods and services of one company [8] from those of another. It comprises
of logos, designs, drawings, symbols, taglines, numbers, three-dimensional
features, or a combination of any of these.[9] They are a very integral part of
Intellectual Property because they act as source identifiers by drawing the
attention of the consumers to the origin and source of the product or service.
In a Franchise agreement, the franchisor usually licences the use of its
trademark to a franchisee that in turn pays a fee or royalty for such use.
Examples of some popular franchise brands in Nigeria include: Chicken Republic,
Domino Pizza, Debonairs Pizza, Kentucky Fried Chicken (KFC), Coldstone
creamery, Slot, Mr. Biggs, Tantalizers etc.

However, the modality of
usage of a franchisor’s trademark should be clearly stipulated in a franchise
agreement because if the use of such trademark is not properly managed, the
franchise could face some serious reputational damage to its brand. For
instance, a franchisee that purchases products bearing the trademark of the
franchisor from a counterfeit supplier and distributes such fake products in
its jurisdiction, could tarnish the image of the franchise.[10] Consequently, the franchise agreement
should contain certain obligations required of the franchisee while utilizing
the trademark and brand name of the franchise. The obligations could entail in
addition to the franchisor acknowledging ownership of the Franchise trademark
by the franchisor, that all products distributed by the franchisee be sourced
from a verifiable third-party or the franchisor itself, and that any
unauthorised use or modification of the trademark or the sale of third-party
goods (under the franchise brand) without prior written approval of the
franchisor, may result in the repudiation of the franchise agreement. It is
important to note that, as opposed to some jurisdictions there is no statutory
requirement, asides those that may be implied from persuasive foreign case laws,
for a trademark licensor/franchisor to ensure that specific standards are met
by the licensee/franchisee in Nigeria. Likewise, there is no requirement that a
trademark must be transferred along with the goodwill in the business.[11]

Also, it is important that
the Franchisor obtains legal protection for the trademark of its franchise in
the jurisdiction [12] of the franchisee since trademark
registrations are territorial in nature with the exceptions of some regional
registration bodies.[13] Registration will give the
franchisor exclusive rights and protection of its trademark in the jurisdiction
of the franchisee. There are instances when the trademark of a franchisor is
already in use in the franchisee’s jurisdiction and sometimes the owners of
such mark could have registered the trademark mischievously to take advantage
of the goodwill and brand name of the franchise and to pre-empt a legitimate
claim. This was the unfortunate experience of a few famous franchise chains
like Burger King and Taco Bell when they
decided to expand their brand into new territories; only to discover that some
unrelated third parties were already making use of their trademarks.[14] Registration is very important in a
franchise agreement as it prevents the unauthorised use of the trademark of the
franchisor. However, apart from the registration of the franchisor’s trademark
in Nigeria, there is a need for the franchisor to grant a right of use (i.e., a
licence) to the franchisee to use its brand name in Nigeria and such licence
must be recorded at the Nigerian Trade Mark Registry to avoid objections by
interested parties seeking a declaration of abandonment for non-use.[15]

3.
Trade Secrets/Confidential Information

There is a temptation to
categorize confidential information as trade secrets since both require the
protection of some sensitive information, but they are not exactly the same.
Trade secrets are basically confidential in nature but it is not all
confidential information that is a trade secret. For an alleged confidential
information to transit into a trade secret, there are certain characteristics
identical to a trade secret that it must possess. For instance, such
information should possess some commercial value and certain reasonable steps
should be taken to protect such information from public access.[16] A franchise agreement usually
involves the transfer of valuable confidential information to the franchisee
and it is essential that such information is protected from general public
knowledge in order not to deprive the franchisor of the benefits of its
creations. In comparison to other intellectual property rights like trademarks
and patents, trade secrets are not territorial in nature and do not require
registrations, periodic renewals or maintenance to be protected. However, once
they get into the public domain, they lose their protection. Therefore,
appropriate measures and relevant provisions should be clearly stipulated in
the franchise agreement to restrict the dissemination of proprietary
information.[17] In a franchise agreement, the
confidential information or trade secrets of the franchisor could be in the
form of any of the following; financial or technical know-how, business plans,
implementation strategies, distribution techniques, operation manuals, pricing
technique, recipes, customer lists, chemical formula etc. It should be noted
that the franchisee has a duty of ascertaining the precise value of the trade
secrets because certain proprietary information could be of doubtful legitimacy
and value.[18]

Furthermore non-compete
clauses and provisions restricting the franchisee from taking advantage of the
trade secrets of the franchisor should be laid out in the franchise agreement
to prevent the franchisee from rescinding the agreement in order to establish a
business based on protected information or from furnishing such information to
the competitors of the franchisor upon termination of the agreement. This was
the situation in the case of Gold Messenger v Mc Guay,[19] where confidential information
belonging to the franchisor was given to the franchisee and the franchise
agreement stipulated a provision disallowing the franchisee from competing with
the franchisor for three years and within 50 miles of the franchisor’s
franchise territories. At the termination of the agreement the franchisee
utilized the confidential information to set up his own enterprise and the
court held that the franchisee cannot use the confidential information he
obtained during the period of his contract with the franchisor to compete
unfairly with the franchisor. Consequently, it is important for every franchise
agreement to clearly define the franchisor’s trade secret, require the franchisee
to execute non-disclosure agreements with its employees who may become aware of
the franchisors trade secret only on a need to know basis, prescribe
confidentiality clauses that protect the trade secrets of the franchisor from
unauthorised use both during the lifespan of the franchise agreement and post
termination of the agreement.

4.
Copyrights

This is another important
intellectual property right that can be impacted in a franchise agreement and
would thus require sufficient protection. A copyright is a legal protection
that avails creators and originators of works eligible for protection.[20] It confers an exclusive and
assignable right to the originator of various kinds of creative expressions,
whether literary, Musical, Artistic or Cinematographic works or adaptations of
any of the aforementioned works.[21] Nigerian law requires that the
author must have expended sufficient effort to give the work an original
character and the work must be fixated in a definite medium of expression.[22] Copyrightable works in a franchise
agreement include literary works like operation manuals, recipes, source codes;
musical, audio-visuals and sound recordings like radio jingles and television
commercials; architectural works like the template plans and designs of the
franchised buildings, sculptural works like Mascots etc.[23] As discussed under Trademarks,
Copyright registration is also important in obtaining protection in the
jurisdiction of the franchisee. Although copyright subsists in a work upon
creation, most jurisdictions possess a voluntary national registration system
where rights holders can lodge copies of their work.[24] In some jurisdictions, like the
United States, copyright registration entitles a claimant in a copyright
infringement action to statutory damages. It is important for franchisors to
register or lodge their copyrighted materials in the depository of the
prescribed bodies within the jurisdiction of the franchisee to obtain better
protection or in order to facilitate enforcement proceedings.

Also, it is pertinent for
franchise agreements to contain clauses on the copyright ownership of creations
of the franchisee or employers of the franchisee which were developed during
the course of the franchise, including developments in other forms of
intellectual property.[25]

5.
Patents

A patent is an exclusive and
assignable intellectual property right granted to an inventor over his/her
patentable invention for a specified period of time.[26] In Nigeria, for an invention to be
patentable it must be new or constitute an improvement of a patented invention,
result from inventive activity and be capable of industrial application.[27] Some franchisors possess patented
inventions that are licensed to franchisees in a franchise agreement. These
inventions could be in the form of business methods, computer software
application, and equipment hardware. As has been sufficiently buttressed above,
the protection granted by a patent is territorial in nature, therefore there is
a need for the registration of these rights in the various jurisdictions where
the franchisees operate, in a bid to secure maximum protection over the patent.
Franchise agreements should prescribe the mode of utilization of the patented
inventions of the franchisee in order to prevent unauthorized exploitations. In
addition, it should include specific provisions on the ownership of inventions
created during the course of the franchise arrangement, especially if the
franchise agreement empowers the franchisee to undertake any inventive activity
for the overall benefit of the franchise.[28]

6.
Conclusion

Intellectual Property Rights
(IPRs) are the main stock-in-trade in a franchise. They avail franchisors an
opportunity of business expansion while simultaneously making profits through
the collection of fees or royalty payments from their franchisees. The
nature of a franchise exposes the franchisor to a high risk of possible
misappropriation of its trade secrets, misuse of its brand reputation, goodwill
and other intellectual property rights. There are very crucial provisions that
must be inserted in a franchise agreement to ensure that the IPRs of the
franchisor are adequately protected. In this regard, it is advisable for a
prospective franchisor or franchisee to retain the services of an IP lawyer
before venturing into a franchise arrangement to ensure that all requisite
bases are covered.

For further information
on this article and area of law, please contact

Sandra Eke at:
S. P. A. Ajibade & Co., Lagos by telephone (+234 1 472 9890),

fax (+234 1 4605092) Mobile:
+234.7033442333 or Email: seke@spaajibade.com

www.spaajibade.com

[1]
Sandra Eke, Associate Intellectual Property & Technology Law Department,
SPA Ajibade & Co., Lagos, NIGERIA.

[2]
Yetunde Okojie (2018) “The Importance of IP Due Diligence in Mergers and
Acquisition” available at: http://www.spaajibade.com/resources/the-importance-of-ip-due-diligence-in-mergers-and-acquisition-article-okojie/ accessed
12^th October 2019.

[3]
Brand Protect, “Why IP protection is vital to franchisors” available at: https://www.bptm.co.uk/franchising/why-ip-protection-is-vital-to-franchisors/ accessed
13^th December 2019.

[4]
The NOTAP Act, Chapter N62, LFN 2004 through its agency, NOTAP (National Office
for Technology Acquisition and Promotion) regulates the importation of all
foreign technology into Nigeria; the Patents & Designs Act, Cap P2, LFN
2004, makes provisions for the registration of patentable inventions in
Nigeria. The Government agency that manages the grant of patents is the
Trademarks, Patents and Designs Registry; the Trade Mark Act, Cap. T13, LFN
2004 makes provisions for the registration of Trademarks in Nigeria etc.

[5]
S.5(2) NOTAP Act. Although, as decided in the recent landmark case of Stanbic
IBTC v. FRCN & Anor

(2018) LPELR-46507(CA), the
court held that the non-registration of a technology transfer agreement under

the NOTAP Act neither
renders such agreement invalid nor unenforceable.

[6] For
instance, there must be evidence of registration of intellectual property e.g.
trademarks and patents;

In the case of retail shops,
there should be evidence of the local sourcing of the raw materials from local

producers; the scope of the
agreement should specify the object of the agreement, obligations and

services to be rendered by
the technical partner, training and capacity-building, detailed information of

technical experts etc.

[7] The
fees approvable are: Initial/Basic fee: A lump sum (to be reasonably fixed);
Franchise/Continuing fee:

0.5%- 2% of net Sales or
revenue and Marketing/ Advertising fee: which should not exceed 1% of net sales

or revenue.

[8]
In this instance, it is a source identifier capable of distinguishing one
franchise from another.

[9]
See generally, Sandra Eke “Why you need to Protect your Business Hashtags and
Catchphrases” available at:http://www.spaajibade.com/resources/why-you-need-to-protect-your-business-hashtags-and-catchphrases-sandra-eke/ accessed
13^th December 2019.

[10]
Op. cit. n.1.

[11]
Section 26(1) and (4) Trade Marks Act.

[12]
To obtain a trademark protection in Nigeria, the trademark is required to be
registered with the Trademarks,

Patents and Designs Registry
in Nigeria.

[13]
Like the African Regional Intellectual Property Organization (ARIPO) and
Organisation Africaine de la Propriété Intellectuelle (OAPI).

[14]
Baybridge, “Intellectual Property in Franchising” available at: https://www.baybridge.com.au/blog/intellectual-property-franchising-why-does-it-matter/ accessed
13^th December 2019.

[15]
See Sections 31 and 33(3) Trade Mark Act.

[16]
WIPO, “Managing Trade Secrets in a Franchising Arrangement”
available at: https://www.wipo.int/edocs/mdocs/sme/en/wipo_smes_lhe_2_07/wipo_smes_lhe_2_07_topic04.ppt accessed
13th December 2019.

[17]
SPA AJIBADE & CO, “The Role of Trade Secrets in the Protection of IP
Rights” available at: http://www.spaajibade.com/resources/the-role-of-trade-secrets-in-the-protection-of-ip-rights/ accessed
14^th December 2019.

[18]
Ibid

[19]
No. 96CA1619, 937 P.2d 907 (1997).

[20]
Sandra Eke, “Fundamental elements of copyright ownership and protection under
Nigerian Law” available at: http://www.spaajibade.com/resources/fundamental-elements-of-copyright-ownership-and-protection-under-nigerian-law-sandra-eke/ accessed
14^th December 2019.

[21]
Ibid.

[22]
Ibid.

[23]
International Franchisors Association, “Basics Track: Franchisor’s Intellectual
Property and how to protect It”

available at: https://www.franchise.org/sites/default/files/BasicsTrack_Franchisor%27sIP.pdf accessed
14^th

December 2019.

[24]
In Nigeria, copyrighted works can be lodged in the robust depository of the
Nigerian Copyrights Commission.

[25]
Op. cit., n.13.

[26]
The duration of a patent in Nigeria is 20 years. A patent expires at the end of
the twentieth year from the date of the filing of the relevant patent
application after which it falls into public domain.

[27]
S.1 Patents and Designs Act.

[28]
S.2 (4) Patents and Designs Act stipulate that “where an invention is made in
the course of employment or in

the execution of a contract
for the performance of specified work, the right to a patent in the invention
is vested in the employer or, as the case may be, in the person who
commissioned the work.”

Patentee’s refusal to grant licence on reasonable terms. Any remedies? | Infusion Lawyers

by Legalnaija | Feb 11, 2020 | Uncategorized

Question of the Day –

I am Jude Ogbeide, CEO of Ivory Mask Innovations Ltd, a mobile-phone technology
company registered in Nigeria. In February 2018, we developed BatteryBuddies, a
new technology that will enable mobile-phone users charge their batteries by
using the battery power of paired mobile phones, as long as both phones are by
the same manufacturer. We introduced BatteryBuddies to a Nigeria-based mobile-phone
manufacturer. They loved it. After getting all paperwork done and licensing
arrangements were concluded, the mobile-phone manufacturer launched a new
mobile phone powered with BatteryBuddies.

On Christmas eve, TechFusion, a technology
lab, sent us a cease-and-desist letter, demanding that Ivory Mask Innovations
stop making, marketing, distributing, licensing, or selling BatteryBuddies in
Nigeria because it allegedly infringed on its patent in a similar
technology, PowerFusion 3000. TechFusion made the same demand to our
phone-manufacturing client. According to TechFusion, it developed tPowerFusion
3000 in 2014 and the invention was patented in December 2016. TechFusion
has threatened to take legal action against us if we failed to cooperate.

Because we have invested so much in BatteryBuddies, we had to contact 3 patent
experts to assess both inventions. After independent expert assessments, it
turned out—sadly—that indeed TechFusion had developed and patented the same
invention. Consequently, we decided to cooperate.

But here’s the problem we have: We applied to
TechFusion for licence but TechFusion refused to license its technology to us.
After another try, TechFusion eventually agreed but offered to license the
patented invention under most unreasonable terms, including a most ridiculous
licence fee. Meanwhile, since TechFusion got patent for PowerFusion 3000
in Nigeria, the product has remained unused in the mobile-phone industry
in the country. Yet, TechFusion has prevented us from manufacturing BatteryBuddies.
This is unfair and most frustrating! Under Nigeria’s patent law, if a
patentee refuses to grant licence on reasonable terms, does the applicant have
any remedy?

Answer

Dear Mr Ogbeide

The answer is YES; applicant for a licence to a patented invention who is
unable to obtain from the patentee a licence on reasonable terms may
apply to the Federal High Court for a compulsory licence. If the
court determines that there is a ground for granting a compulsory licence in
accordance with the requirements of Nigeria’s Patents and Designs Act, it
would grant it.

Compulsory licences are lawful under the Patents and Designs Act.

The drafters of the Patents and Designs Act
contemplate that there may be a situation where there is need for compulsory
licences. Section 11 of the Act allows compulsory licenses to be granted.
Application for and grant of a compulsory licence is governed by the
provisions of the First Schedule to the Act.

By virtue of Part I paragraph 1 of the First
Schedule of the Act, a person may apply to the Federal High Court for the grant
of a compulsory licence. But an applicant for a compulsory licence is not
qualified to apply for one until (a) a period of 4 years has expired after
the patent application was filed or (b) a period of 3 years has expired after
the patent was granted, whichever period comes first.

From the above, Ivory Mask Innovations Ltd is
not yet qualified to apply for a compulsory licence for TechFusio’s PowerFusion
3000 patent. This is because the patent was granted in December 2016, one year
shot of the 3-year period required for filing for compulsory licences after the
patent was granted. But if TechFusion filed for the patent more than 4 years
ago, Ivory Mask Innovations Ltd is qualified to apply.

Therefore, based on the year the patent as
granted, Ivory Mask Innovations Ltd may apply for a compulsory licence by
December 2019.

Apart from the time factor above, there are 4 separate statutory grounds for
a grant of compulsory licence in Nigeria.

Compulsory licences are granted by the
Federal High Court upon an applicant’s fulfillment of the statutory
requirements under Part I paragraph 1(a)-(d) of the First Schedule of the Act.
By virtue of this provision, the court has the power to grant a compulsory
licence “on one or more of the following grounds”:

The patented invention, capable of being
worked in Nigeria, has not been so worked [emphasis ours];

1. The existing degree
of working of the patented invention in Nigeria does not meet on reasonable
terms the demand for the product;

2. The working of the
patented invention in Nigeria is being hindered or prevented by the importation
of the patented article; and

3. By reason of the
refusal of the patentee to grant licences on reasonable terms, the
establishment or development of industrial or commercial activities in Nigeria
is unfairly and substantially prejudiced [emphasis ours].

These for grounds are not cumulative
requirements. Once Ivory Mask Innovations Ltd can prove one of the grounds, the
court is required to grant the compulsory licence.

Of the 4 grounds above, 2 grounds may favour Ivory Mask Innovations Ltd if
it applies to the court for a compulsory licence.

To convince the court, Ivory Mask Innovations
Ltd must either prove that TechFusion has failed to work the patented invention
or has the establishment or development of industrial or by refusing to grant
licences on reasonable terms, TechFusion’s refusal will unfairly and
substantially prejudice the establishment or development of industrial or
commercial activities in Nigeria.

First, regarding the first ground i.e working
the patented invention, paragraph 14 of the First Schedule to the Act directs that
“references to the working of a patented invention” are to be construed to
mean: “(a) the manufacture of a patented article; or (b) the application of a
patented process; or (c) the use in manufacture of a patented machine, by an
effective and serious establishment existing in Nigeria on a scale which is
adequate and reasonable in the circumstances.” If all TechFusion has got is a
patent and not the manufactured product 2 years after being granted patent, the
court may treat this as a ground for granting a compulsory licence.

Second, regarding the last ground i.e
TechFusion’s refusal to licence the patented invention in reasonable terms, the
court will form an opinion on whether the terms are indeed reasonable. If found
unreasonable, the court is required to find whether by reason of the
unreasonable terms, industrial or commercial activities in Nigeria concerning
the establishment or development of the patented invention have been unfairly
and substantially prejudiced.

If the court founds that TechFusion has
failed on either of the 2 grounds discussed above, it will grant a compulsory
licence to Ivory Mask Innovations Ltd on the court’s terms.

Patents are granted by the state based on
valuable consideration by the patentee—disclosure of all the details of how the
invention works. For this reason, the same state is not in a hurry to grant
compulsory licences except the patentee’s monopoly conflicts with public
interest—industrialization and commercialization.

Before obtaining a grant of patent, a patentee
must have typically invested a lot of resources into this. Also, the patentee
may have structured its proprietary business in a way that enables him or her
exploit the patent exclusively without any licences. The patentee may want to
be a category-king. Patent law protects this proprietary and commercial
interest. And because patents are exclusive rights, they necessarily create
monopolies.

So by twisting the hands of a patentee with
the force of law to issue a compulsory licence to an interested person, it may
destroy the exclusive rights that a patentee is otherwise entitled to. The
effect of this compulsory licence portend a great risk to the patentee’s
legitimate expectations and commercial interest.

This is why compulsory licences are only
granted by the court after it has considered that at least one of the grounds
for this grant is present in any application.

For legal advice and assistance with
negotiations with TechFusion and application for a compulsory licence, consult
your IP lawyer or law firm.

IP ABC

The Statutory Tort of Invasion of Privacy under the Law Reform (Torts) Law of Lagos State, Ch. L82 of 2015 and the recent spate of data breaches in Lagos State

by Legalnaija | Feb 11, 2020 | Uncategorized

When towards the end of the last decade,
tax payers in Lagos state, Nigeria woke up to the sensational news of the
admitted data breach on the payment portal of Lagos Internal Revenue Service –
the state’s tax collection agency – one would have thought that, the Service
would have been bombarded with a myriad of law suits for such unprecedented
“invasion of privacy” but the Country’s extant laws, with the exception of the
Nigeria Data Protection Regulation (NDPR), which is, at best, fairly managing
to gain traction, is largely believed to
be devoid of express provision on “invasion of privacy”

Having reviewed a couple of legal
articles and papers on the tort of invasion of privacy in Nigeria, the common
denominator seems to be the unconscious omission of the provisions of our local
statutes on torts, in exclusive favour of the common law of England from where
we inherited our jurisprudence on tort.

This repeated snub may however not be
unconnected with the widespread misconception that, the solitary source of our
law of torts is the common law of England thereby leading to the under-utility
of the texts of indigenous statutes that expressly and comprehensively make
provision for the tort of invasion as far back as 1961 when the Torts
Laws of Western and Eastern Nigeria were enacted.

On the consciousness of our courts to
statutory (general) torts, as early as 1986, the Supreme Court in the decision
in Nasiru Bello v A.G. Oyo State (1986)
5 NWLR at page 828 took cognizance of the Torts Laws of Western Nigeria
which has now been codified into the Torts Law of Oyo State 1978. The

Worthy of mention however, is the recent
decision in Portland Paints &
Product Nig. Ltd v Mr. Jimmy Olaghere (2019) 2 NWLR (pt. 1657) 569 where
the Respondent sued the Appellant before the High Court of Lagos State for
breaching his privacy as a tort, but neither cited nor relied on the only law
that provides for “invasion of privacy” as a tort in Lagos State, although
trial court and Court of Appeal ruled in the Respondent’s favour, the golden
opportunity to utilize the Law of Lagos State on invasion of privacy was
momentarily lost.

For the avoidance of doubt, section 29 of
the Law
Reform (Torts) Law, Ch. L82 Laws of Lagos State 2015 provides that:

29. Invasion of privacy                                                                             “(1)
Anyone who intentionally intrudes, physically or otherwise, on                           the solitude or
seclusion of another or private affairs or concerns,                            is liable for invasion of privacy, if the
intrusion would be highly                         offensive
to a reasonable person.

(2) Anyone who
uses the name or likeness of another in a manner and to an extent which
suggests to a reasonable person an intention to appropriate the name and
likeness of another or that is associated with another is liable to damages.

(3) Anyone who
publicizes a matter concerning the private life of another
is liable for invasion of privacy, if the matter publicized is of a kind that:

(a)
Would be highly offensive to a reasonable person and (b) is not of legitimate concern to the
public.”

The law goes further in section 31 by
providing for remedies thus:

31. Remedies
“The remedies that a Court may grant in an action for invasion of privacy includes:

(a) Injunction.

(b) Damages

(c) Order directing
the defendant to account to the claimant profits that have accrued or may later
accrued to the defendant because of the invasion of privacy:

(d) Order directing
the defendant to deliver to the claimant any material, article, photograph or
documents that have come into the defendant’s possession because of violation
of privacy and

(e) Any other
appropriate order or relief.”

While reading subsection 3 of section 29
above, what readily came to mind was the wanton exposure of tax payers’ data by
the Lagos State Internal Revenue Service
and the data breach allegedly suffered by SureBet 247 which all seemed to have
gone without consequences, either under the extant Nigeria
Data Protection Regulation (NDPR) or other relevant legislations.

This author is of the view that with or
without the Nigerian Data Protection Regulation (NDPR), the provisions of
sections 29 and 30 are comprehensive enough to be taken advantage of, for tortious
claims bordering on all kinds of privacy invasion (including data breach), and
same could be used to supplement and/or complement the new privacy regulations issued
to cater for the increasing privacy concerns in Lagos State and Nigeria as a
whole.

Olumide
Babalola,
the managing partner of Olumide
Babalola LP (a licenced Data Protection Compliance Organization) writes
from Lagos State, Nigeria.

olumide@olumidebabalolalp.com

Intellectual Property Issues in Fintech – Oluwafunmilayo Mayowa

by Legalnaija | Feb 11, 2020 | Uncategorized

Introduction

Over the last three years, there
has been a rapid rise in the number of Financial Technology (“Fintech”)
companies in Nigeria. Within the last three years the number of Fintech
companies in Nigeria has grown to over 60.[2] The growth in recent years is mainly
due to the introduction of modern and convenient payment services which is a
much-needed improvement to customer experience in the digital space.

From transaction payments to
lending, to insurance, virtual currencies and Blockchain, Fintech services are
redefining the way businesses and consumers carry out routine transactions. The
increasing adoption of these trends is positioning Nigeria as an attractive
market worldwide.[3] The industry has also experienced a
rise in its Investment opportunities, for example, Paystack and Piggybank.ng,
(two prominent Fintech companies in Nigeria) recently received both foreign and
local investments worth over $9 million.[4]

There are various intellectual
property (IP) rights associated with Fintech and like every other business it
is essential that Fintech companies adopt appropriate IP strategies to protect
their core innovations. Having a good IP portfolio does not only assist in
protecting technical innovations, it also helps to boost the image and value of
the company which in turn plays a critical role in attracting investors.[5] Some of the various IP aspects of
Fintech companies are briefly discussed below:

Patent

A Patent is an exclusive monopoly
granted by a country to an inventor for his or her ingenuity/invention for a
limited period of time usually 20 years.[6] Patents are considered to be one of
the core assets of technology related companies because it enables the company
to exploit the patented invention exclusively within the stipulated time before
releasing to the public domain and it precludes another person(s) from
exploiting the invention without the inventor’s consent or authorization.

Fintech companies often utilize
patent rights to protect the core of their inventions. It can be used to
protect devices such as ATM,[7] POS,[8] MPOS,[9] tokens, etc. as well as the
inventive steps or methods involved in the invention as well as the computer
programmes that drive these innovations.[10]

One of the major benefits of
patenting one’s invention is that it helps to create market monopoly over that
invention thereby providing the company the avenue to build its brand, attract
customer confidence in the product and simultaneously increases the income and
profit margins of the company. It also helps to boost a company’s profile,
making it more attractive to investors.

In Nigeria, for an invention to
be patentable it must be new or an improvement on an existing invention;
consist of an inventive step; must be capable of industrial application and
must not be specifically excluded under the law.[11] To obtain a patent, an application
will be submitted to the registrar of the patent registry together with the
prescribed fee. Upon careful examination of the application, if the registrar
is satisfied that the statutory requirements are met, the patent over that
invention will be granted. Once granted, the patent holder can enforce its
rights against infringers.[12]

Copyright

Typically, computer programs and
software are categorized and protected under copyright law.[13] Software such as computer codes,
mobile banking applications, audio and visual guides, application programming
interface structures etc., are some of the copyright assets of FinTech
companies. Copyright over these computer programs subsists automatically the
moment they are created and require no form of registration before it is
enforceable. However, owners of copyright may take further steps to lodge their
copyright with the Nigerian Copyright Commission (NCC) under its
Notification/Depository scheme.[14] This serves the purpose of bringing
the existence of the work to the notice of the NCC and it also serves as proof
of ownership in court when there are competing interests.

Furthermore, in order to better
protect the copyright over their works, Fintech companies are advised to
inculcate the practice of placing digital locks on copies of their works to
provide additional security. Circumvention of digital locks is an offence in
some jurisdictions and may provide relief against unauthorized parties.[15] The Nigerian Draft Copyright Bill
2015 also prohibits circumvention of technological protection measures
protecting a work and entitles the aggrieved owner to reliefs such as damages,
injunction and accounts for profit. The companies should take more caution in
drafting the provisions of its contracts with developers especially when
incorporating third-party copyright, as this may affect the ownership of the
technology and freedom to operate.[16]

Trademark

The word mark, logos, domain
names, icons etc., which forms the brand of a business should be registered and
protected as trademarks because a good brand helps to distinguish a Fintech
company from its competitors. Registration of the trademark of a company
enables the company to successfully bring an infringement action against its
competitors for passing off or for damaging or diluting the goodwill and
reputation of the company.[17]

Trade Secrets

Trade secrets are confidential
business information that have economic or commercial value. Confidential
backend server processes, algorithms, business methods, ideas, client details,
code and secret recipes are some examples of trade secrets of a Fintech
company. It is pertinent that a company takes reasonable and deliberate actions
to protect its trade secrets especially those which gives it economic advantage
over competitors.

Unlike other IP assets, trade
secrets can offer perpetual protection so long as the secrecy is preserved,
because the value of a trade secret is in its secrecy, and once it is revealed
to the public or independently discovered by competitors, the right is lost.

A Fintech company can protect its
trade secrets by entering into Non-Disclosure Agreements (NDAs) with potential
clients, contractors or investors before providing them with any confidential
information. It can also have confidentiality, exclusivity, non-competition /
non-solicitation and intellectual property clauses in the agreements with its
employees. Likewise, the company can implement an enforceable data security
policy which will among other things restrict access to vital business
information to a need-to-know basis.

Industrial Designs

Industrial designs refer to the
physical/aesthetic outlook of a product offered by a company. The designs on
electronic cards, computer or machine interfaces are also protectable IP assets
of the Fintech companies. Industrial Designs may also contribute to the
distinctiveness of the brand.

Conclusion

Intellectual property forms the
bulk of the value of any business and is recognized as the most important asset
of a business.[18] It is the foundation for the market
dominance and continuing profitability of leading corporations.^[19] Fintech
companies that desire to expand and increase income, market visibility,
clientele and investment portfolio must endeavor to manage and protect their IP
portfolio as a form of business strategy because IP increases the
competitiveness of a company and in turn affords it both economic and social
advantages over its competitors.

The licensing and assignment for
these IP rights to third parties will also provide a significant and valuable
income stream. With the constant rise in M&A transactions in the Fintech
space, having a strong IP portfolio increases the value of a firm when it is
being evaluated during a potential merger or acquisition.[20] Therefore, in addition to the
protection accorded to the tangible assets and technical financial services of
fintech, adequate attention must equally be directed towards protecting the
intellectual property assets of the company. A company can adopt either one or
a combination of the above-mentioned forms of IP protection for its business.

For further information on this
article and area of law, please contact

Oluwafunmilayo Mayowa at:
S. P. A. Ajibade & Co., Lagos by telephone

(+234 1 +234.810.952.8293
or 234.12703009;
14605091; 14605092)

omayowa@spaajibade.com

www.spaajibade.com

[1] Oluwafunmilayo
Mayowa, NYSC Intern, SPA Ajibade & Co., Lagos, Nigeria.

[2]
Medici, “56 Fintech Companies in Nigeria Enabling Inclusive Growth” available
at: https://gomedici.com/56-fintech-companies-nigeria-extending-access-to-financial-products-for-inclusive-growth accessed
2nd November 2019.

[3] Boye
Ademola, “Fintech in Nigeria” available at: https://assets.kpmg/content/dam/kpmg/ng/pdf/ng-fintech-in-nigeria-understanding-the-value-proposition.pdf accessed
29th October 2019.

[4] Emmanuel Benson, “Fintech
companies to watch out for in 2019” available at: https://nairametrics.com/2019/01/22/fintech-companies-to-watch-for-in-2019/
accessed 4th November 2019.

[5] Finance
Monthly, “Intellectual Property: How to Protect Your Fintech Innovation” available
at

https://www.finance-monthly.com/2017/07/intellectual-property-how-to-protect-your-fintech-innovation/ accessed
28th October 2019.

[6] See
section 7(1) Patents and Designs Act (PDA) 1970 cap P2 LFN 2004.

[7] Yetunde Okojie and
Oluwasolape Owoyemi, “How do I Register an Invention in Nigeria? Substantive
and Procedural Requirements for Registration of an Invention” available
at: http://www.spaajibade.com/resources/wp-content/uploads/2019/01/How-do-I-Register-an-Invention-in-Nigeria-by-Yetunde-Okojie-and-Oluwasolape-Owoyemi.pdf accessed
21^st November, 2019.

[8] Ibid

[9] Ibid

[10] The Canadian
Federal Court of Appeal in Amazon.com, Inc. v. Canada (Attorney General) 2011
FCA 328, held that Amazon.com “one-click” buy interface feature is patentable.

[11] Section 1 PDA
Supra.

[12] Yetunde Okojie and Oluwasolape
Owoyemi, supra.

[14] Federal Ministry of
Communications AND Digital Economy, “NCC unveils E-Registration Platform to
Check

Piracy” available at https://www.commtech.gov.ng/news-and-media/daily-news-report/118-ncc-unveils-

e-registration-platform-to-check-piracy.html
accessed 21st November 2019.

[15] Financier
Worldwide Magazine “Intellectual property strategy for FinTech” available
at:

https://www.financierworldwide.com/intellectual-property-strategy-for-fintech#.XbxSDZpKjIU accessed
27th October 2019.

[16] Ibid.

[17] John Onyido, “Understanding
Trademarks”, Presentation to the IP LAW CLUB Obafemi Awolowo University”

2018, available at: http://www.spaajibade.com/resources/wp-content/uploads/2018/09/
Understanding – TrademarksIP-Club-Presentation-Obafemi-Awolowo-University-updated.pdf,
accessed 21^st November 2019.

[18] Nexsen Pruet, “Intellectual
property is 80% of the value of a business” available
at: https://www.lexology.com/library/detail.aspx?g=6f7dd161-e101-4809-9cb6-af37b853aae8 accessed
27th October 2019.

[19] WIPO, “The
value of Intellectual Property, Intangible Assets and Goodwill” available
at: https://www.wipo.int/sme/en/documents/value_ip_intangible_assets_fulltext.html accessed
27th October 2019.

[20] Yetunde Okojie, “Importance of
IP Due Diligence in Mergers and Acquisition” available at: http://www.spaajibade.com/resources/wp-content/uploads/2018/09/THE-IMPORTANCE-OF-IP-DUE-DILIGENCE-IN-MERGERS-AND-ACQUISITION-ARTICLE-Okojie.pdf accessed
20th November 2019.

Names of Counsel that should appear in judgement of court; highlighting the Court of Appeal’s decision in Elias v Ecobank Nigeria Plc (2017) 2 NWLR (Pt. 1549) 175

by Legalnaija | Feb 11, 2020 | Uncategorized

Ordinarily,
the concerned part of the decision of Lagos division of the Court of Appeal in
Elias v Ecobank (supra) ought not be of immense interest to practicing lawyers
but for the requirement of a certain number of Court of Appeal judgments in an
application for the prestigious rank of Senior Advocate of Nigeria, which might
have prompted the learned senior lawyer to make such an audacious application
as would be seen later hereunder.

As
it is my style, I will once again, lead my audience into the facts of the case
under this spotlight for the necessary appreciation of the court’s ratio as to
the names that ought to appear in judgment of courts.

As
borne by the judgment, during the pendency of Appeal Number: CA/L/873/2013, Dr.
Charles Mekwunye’s clients (the appellants) demolished the property subject
matter of the suit and when delivering the judgment, although the name of the
counsel who adopted the appellants’ brief was not reflected in the end of the
judgment and in the judgment itself,
Obaseki – Adejumo JCA held thus:

“In his brief of
argument, appellants’ counsel was silent on the contemptuous conduct of the
appellants by demolition of the property. It is the duty of counsel to exhibit
high level decorum and candour and fairness to the court and to other lawyers …
counsel appearing before any court owes a bounden duty to be diligent, treat,
the court with respect, honesty and mutual courtesy…”

Dissatisfied
with the omission of their counsel’s name in the judgment and the
uncomplimentary remark of the presiding Justice, the appellants filed an
application at the same court, for an order “reviewing and/or varying and/or
annulling part of the judgement” to show that Mr. E. Nwonu holding the brief of
Dr. Charles Mekwunye was in court and adopted the appellants’ brief and to
“delete the said remarks made by Obaseki – Adejumo, JCA against their counsel
to show that Dr. Charles Mekwunye appeared for them when judgement was
delivered.

In
ruling on the application, Augie, JCA (now JSC) held thus:

“Now
the applicants are urging us to review and/or vary and/or annul part of the judgment
to reflect three things… The third which is to vary the judgement to show that
the said Dr. Charles Mekwunye was in court when the judgment was delivered, is
out of the question because, as the respondent said, it is the names of
counsel who argued the appeal itself that are listed in the judgment, not the
name of counsel who merely appeared on the date of judgment…..so the Constitution
recognizes that delivery of a judgment is a different process entirely from the
writing of the judgment, wherein the names of counsel who adopted the briefs of
argument at the appeal are listed.” (Emphasis mine)

From
the foregoing decision which, to my knowledge, is yet to be set aside by the
Supreme Court, the prevalent practice in judgment writing which lists the name
of counsel present at judgment delivery at the expense of counsel who conducted
the case or adopted the final address, ought to be relegated to the background
on the strength of this 2016 but extant position of the Court of Appeal.

I
however hope this decision doesn’t open a floodgate of applications for the
correction of judgments and rulings which have omitted the names of counsel who
argued the briefs or adopted the final addresses at the respective courts.

Olumide Babalola writes from
Lagos State.

Justice Reforms: Dele Adesina SAN Calls for Federalization of the Judiciary

by Legalnaija | Feb 11, 2020 | Uncategorized

The commissioning of the Court of Appeal Divisions in Asaba, Delta State on Monday, February 3rd; Awka, Anambra State on Wednesday, February 5th; Kano State on Monday, February 10th and Yobe State, by the Presiding Justice of the Court of Appeal, Honourable Justice Zainab Adamu Bulkachuwa, has brought into focus Mr. Dele Adesina SAN’s proposal for the federalization of the Nation’s Judiciary. This proposal posted on his social media handles on Tuesday, 3rd of February, 2020 was made on 11th of June 2018 while presenting a keynote address at the Nigerian Bar Association (NBA), Benin Branch Law Week on the theme – THE ROLE OF LAW IN ECONOMIC DEVELOPMENT AND NATIONAL SECURITY.

In the said presentation, Mr Adesina SAN proposed “the total federalisation of our Judicial System.” According to him, “if the federating States can have their own Executives and Legislatures, the States are entitled to have a full complement of the State Judiciary to be made up of the High Court, the Court of Appeal and the Supreme Court of the State to take charge of all matters that are on the Concurrent and Residual Legislative Lists while only matters of exclusive nature and on the Exclusive Legislative List shall go through the Federal High Courts, the Federal Court of Appeal and terminate at the Federal Supreme Court.”

Mr Adesina SAN also in the same presentation reemphasised the need to terminate interlocutory appeals at the level of the Court of Appeal. He is not done yet. He also made a strong case for the amendment of the Arbitration and Conciliation Act Cap. A18 Laws of Federation of Nigeria 2004, to make it legally obligatory for any party where a dispute has been referred to and settled by a competent arbitral panel leading to an arbitral award for obedience of the terms of the award; for example, depositing the award into an interest yielding account as a precondition for any application to set-aside or appeal. It is his contention that this will also go a long way to reduce frivolous applications and appeals inundating the High Courts and Appellate Courts.

The statement of the Chief Justice of Nigeria, Honourable Justice Tanko Muhammad that the Supreme Court “is daily inundated and suffocated with cases of different types” buttress the position that Mr Adesina SAN made at the Nigerian Bar Association (NBA), Benin Branch Law Week in 2018.

Mr. Adesina SAN further stated that “It is common knowledge that there are thousands of matters before the various Divisions of the Court of Appeal and the Supreme Court and clearing the backlog of these cases will take almost 5 years, not to mention the pressure mounted by the daily filing of more appeals before these superior courts.”

Mr Adesina SAN believes that stakeholders in the administration of justice, members of the Nigerian Bar Association and all Nigerians should begin to engage on promoting discuss of the total federalization of our Court system and creating State Court of Appeals and Supreme Courts for the State. According to him, “the judiciary as an institution is indispensable. The task of re-building the institution is a great one. The responsibility is enormous, and the duty is very imperative.”

On the commissioning of the Court of Appeal Divisions in Asaba, Delta State, Awka, Anambra State, Kano State and the other one to be commissioned soon in Yobe State, Mr Adesina SAN congratulated the President of the Court of Appeal, Honourable Justice Zainab Adamu Bulkachuwa, the Justices of the Court of Appeal, the entire Judiciary of the Federal Republic of Nigeria, the President of Nigerian Bar Association, Mr. Paul Usoro SAN, all the Branch Chairmen and members of the Bar in the four States for this giant and historic feat at proactively addressing one of the fundamental challenges of delay and congestion facing our Courts. No doubt, the commissioning and the inauguration of the additional four Divisions of the Court of Appeal will bring justice closer to the people.

Chairman Egbe Amofin ni Eko backs Dele Adesina’s Adoption

by Legalnaija | Feb 11, 2020 | Uncategorized

I have received several calls and messages asking me to refute or clarify the information related to the Adoption of Dcn Dele Adesina,SAN by Egbe Amofin Oodua.

For the avoidance of doubt, both Messrs Ajibade,SAN & Adesina,SAN were in attendance at Egbe Amofin ni Eko meeting yesterday.

It is an indisputable fact that Egbe Amofin Oodua did adopt Deacon Dele Adesina SAN as its candidate for OPNBA 2020.

It is also indisputable that *Egbe Amofin ni Eko is an affiliate of Egbe Amofin Oodua* . Recall that we hosted Egbe Amofin Oodua meeting in February 2019 here in Lagos.

It is therefore correct that Egbe Amofin ni Eko stands by, and is indeed bound by the decision reached on December 14, 2019 in ibadan.

It is correct that I did pronounce that any departure from that decision could only be discussed at Egbe Amofin Oodua meeting and not at Egbé Amofin ni Eko.

I am aware that another meeting of Egbé Amofin Oodua comes up on February 22 at ibadan and I encourage our members to attend.

Finally I remind our members that irrespective of our personal preferences, Article 10 of the Constitution of Egbe Amofin ni Eko enjoins us to prioritize the groups interest in our quest for NBA offices.

I thank you for your time.

*Otunba Martin Ogunleye*
Chairman

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