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How Creatives Can Protect their Intellectual Property Rights | Adedunmade Onibokun

How Creatives Can Protect their Intellectual Property Rights | Adedunmade Onibokun

by | Feb 2, 2018 | Uncategorized

 As an Artist,
Inventor, Photographer or a member of the creative industry, it takes a lot of
effort, skill and hard work to do what you do and it is a reasonable expectation
to be paid for your work. However, once work is made available to the public,
the chances of someone claiming the work as their own or reproducing it without
giving proper credit is extremely high in today’s technologically advanced and
share-friendly culture. Nothing is more infuriating than discovering that your
creative ability is being exploited by someone who has neither the permission
nor the right to do so.

Adequately
curbing piracy in Nigeria still requires a lot of effort despite the spirited actions
of several government agencies. Truth is, there really is no actual patent or
copyright police, roaming the streets on behalf of Creatives and looking to
investigate piracy, except for the few police raids on centers known for
selling or making pirated works.  Most Creatives
therefore usually enforce their rights, themselves though our non – evolving laws
and the inadequacies of judicial enforcement are not encouraging.  
To protect your
Intellectual Property Rights (IPRs), the first thing to note is registration with
the relevant authority. IPRs are governed by the Trademarks Act, the Patents
and Designs Act, the Merchandise Marks Act and the Copyright Act, in
addition to the principles of common law.
The Trademarks Act
A trademark
consists of any word, symbol, or device used to distinguish the company’s goods
or services. A trademark is a recognizable sign, design, or expression which identifies
products or services of a particular source from those of others. The Act
provides that no
person shall be entitled to institute any proceeding to prevent, or to recover
damages for, the infringement of a trade mark except it is registered.
The Patents and Designs Act
The Act
provides that an invention is patentable if it is new, results from inventive
activity and is capable of industrial application; or if it constitutes an
improvement upon a patented invention. Patents protect ideas that are novel,
useful, and non-obvious. When a patent expires which is usually about 20 years,
the item or process enters the public domain. Until that time, a patent holder
can prevent unauthorized use, manufacture, or sale of the invention. 
The Merchandise Marks Act
The Act relates
to fraudulent marks on merchandise and provides in Section 3, that anyone who
forges a trademark or assigns on goods a false trademark with intent to deceive
or has in his possession forged goods for sale shall be liable- on conviction before a High Court to imprisonment for a term of two years,
or to a fine, or to both and on summary conviction before a magistrate court to
imprisonment for a term of six months or to a fine.
The Copyright Act
Copyright law
protects the creative expression of ideas. Ideas themselves may be protected by
patents, not copyrighted. Any creative work that has been fixed in a tangible
medium of expression, such as paper, software, or film, and that can be
reproduced or otherwise communicated exactly is automatically protected by
copyright law. Examples include art, songs, movies and writings. The digital
world is boundless and to protect a copyright, an artist may have to use
digital watermarks on their creations and put up a copyright notice on the web
page where your work is displayed.
How to enforce IPRs
Having
registered your intellectual property, whether trademarks, copyrights or
patents; enforcing your legal rights against any person who may have infringed
on them is the second step to protecting your IPRs. IPRs are protected through
the registration of rights with the relevant registries and regulatory bodies
established by the Nigerian Government, such as the Trademarks, Patent and
Designs Registry. the Nigerian Copyright Commission (NCC), as well as other
related offices, such as the National Office for Technology Acquisition and
Promotion (NOTAP), the Standard Organization of Nigeria, and the National
Agency for Food and Drug Administration and Control (NAFDAC). All these offices
run their independent registries and often interface in the discharge of their
mandate.  

·       
National Agency For
Food And Drug Administration And Control (NAFDAC)
NAFDAC is
empowered to regulate and control the importation, exportation, manufacture,
advertisement, distribution, sale and use of food, drugs, cosmetics, medical
devices, packaged water and chemicals, generally known as regulated products. Under
the provisions of various regulations and guidelines on registration, the
submission of evidence of ownership of trademark is a condition precedent for
the registration of branded regulated products. Where an infringed trademark is
used in respect of a product that is within the purview of NAFDAC powers, a
petition can be presented to NAFDAC in that respect.
·       
 The Nigeria Copyright Commission (NCC)
The role of the
NCC is limited to works which are eligible for copyright protection under the
Act. It is the agency responsible for the enforcement of the Copyright Law in
Nigeria, carrying out raids and seizing items that are pirated, prosecuting
perpetrators and convicting them with copyright infringement. If a copyright is
infringed, a petition can be made to the NCC on registered copyrights.
·       
 Nigerian Customs Service
The new fiscal
policy of Nigeria, as contained in the Common External Tariff for 2008–2012
Schedule 4, provides the list of goods which are absolutely prohibited from
being imported. Specifically, Item 3 prohibits the importation of “all
counterfeited/pirated materials or articles including base or counterfeit coin
of any country.”
·       
 The Nigerian Police
Section 4 of
the Police Act provides for the general duties of the police and one of such
duties is the prevention
and detection of crime and the apprehension of offenders. As such crimes
bothering on criminal infringement of IPRs can be reported to the Police.
·       
 The Nigerian Intellectual Property Office (IPO)
The IPO is an
arm of the Commercial Law Department under the Ministry of Trade and
Investment, and is also known as the Nigerian Trademarks, Patent and Designs
Registry. Applications challenging the grant of Trademarks either before or
after such registration can be made to the IPO.
·       
The Federal High Court
The Federal High
Court is the court with jurisdiction to enforce IPRs and civil proceedings for
infringements can be instituted at the Federal High Court against any offender.
The Federal High court is also vested with the authority to hear criminal
matters bothering on the infringement of IPRs.
It is
important that in Nigeria, there are several pieces of work that do not fall
under the protection of IPRs in Nigeria, including the style designs of fashion
designers, therefore a designer such as Ugo
Monye who made the popular native attire Ebuka Obi-Uchendu wore
cannot claim damages or infringement against any other designer who recreates
the outfit.
There
continues to be a call for a reform of Nigeria’s IP laws as most of the current
legislations are old and do not conform with today’s reality.
If you will like to read further on how to
legally protect your business or startup, here are 10
tips.

Adedunmade Onibokun
www.adedunmadeonibokun.com
info@adedunmadeonibokun.com
Adetola Adeleye. (2016). INTELLECTUAL
PROPERTY RIGHTS ENFORCEMENT IN NIGERIA: REGULATORY AGENCIES TO THE RESCUE.Available:
http://pennjil.com/intellectual-property-rights-enforcement-in-nigeria-regulatory-agencies-to-the-rescue/.
Last accessed 2nd Feb, 2018 .
 Ray
Dickinson. (2017). What Can You Protect? Types of Intellectual
Property. Available: http://edwardlowe.org/what-can-you-protect-types-of-intellectual-property/.
Last accessed 2nd Feb, 2018.
Photo Credit – Pic 1 – www.guardianng.com ; Pic 2 – www.lindaikejisblog.com 

NOTE: Please
note that this article is strictly for educational purposes and not for
commercial purposes. If you have any comments or remarks you may contact the
author. 
Franchising: A Pathway To Entrepreneurial Success In Nigeria – Franklin Okeke

Franchising: A Pathway To Entrepreneurial Success In Nigeria – Franklin Okeke

by | Sep 5, 2016 | Uncategorized



Franchising is a
business model that businesses use to expand their brand and operational
footprint. A franchisor is a company, business or person that has developed a
system/name and grants a third party the right to operate a business under the
system and name in consideration of fees from the third party. According to the
International Franchise Association, a franchise is “the agreement or license between two legally independent parties which
gives: a person or group of people (franchisee) the right to market a product
or service using the trademark or trade name of another business (franchisor);
the franchisee the right to market a product or service using the trademark or
trade name of another business.’’ The essence is to enable the franchisee
enjoy commercial success in his business by ‘riding on the coat tails’ of the
franchisor. There is usually a fee (the ‘franchise fee’ or royalty) attached to
the use of the system.  

There is a popular
saying that owning a franchise allows you to
go into a business for yourself, but not by yourself. The advantages of
franchising includes – access to an established product or service which
already enjoys widespread brand-name recognition, effectively  giving the franchisee the benefits of a
pre-sold customer base which would ordinarily take years to establish, thereby significantly
increasing his prospect  of success. It provides
franchisees with a certain level of independence where they can operate their
business, and offer consumers the attraction of a certain level of quality and
consistency mandated by the franchise agreement. The franchisee is willing to
pay for association with time tested and trusted products and methods (which
would otherwise take him years to create), through the franchise arrangement.
Some examples of
franchises in the quick service restaurant (QSR) sector in Nigeria include: Mr.
Biggs’, Domino’s Pizza, Chicken Republic, Kentucky Fried Chicken (KFC),
Debonair’s Pizza, Tastee Fried Chicken (TFC) and Tantalizers. Four of the above
examples are homegrown Nigerian brands.
STRUCTURE
AND CONSTRUCT OF A FRANCHISE AGREEMENT
A franchise
agreement (FA) by its complex and technical nature is accompanied by a bundle
of Intellectual Property (IP) rights (trademarks, service names, patent,
designs, technological know-how etc.), which are protected and regulated not
only by the FA between the parties, but also by relevant laws regulating the
transfer of such, especially where there are cross border dimensions. The IP
rights are the basis upon which the FA is built because a franchisor would be
unwilling to enter into an FA if it feels its IP rights would not be adequately
protected.
Issues can arise regarding
the impact of a franchisor’s bankruptcy or liquidation on the FA and its
resultant effect on the franchisee. What would be the fate of the IP rights vis-à-vis the franchisee’s interest? If
a liquidator is appointed over the franchisor company, the liquidator takes
control of the company and can enforce its rights against franchisees. The
franchisee must continue to pay the agreed fees and adhere to the franchise
system. 
The role of the Liquidator
would be to sell the franchisor company to a third party or in the alternative
sell the assets of the franchisor which includes the IP rights. If the franchisor
company is sold to a third party (which is more preferable), then the FAs could
be assigned to the new owner and the franchisees can continue to do business as
usual. On the other hand, if the assets of the franchisor are sold, nothing
prevents the franchisee(s) from acquiring the IP Rights. It must be stated that
an FA does not terminate simply because the franchisor has gone into
liquidation. This is however subject to the express terms of the Agreement.
Franchise lawyers
spend a considerable amount of time drafting and negotiating FAs, since the FA is
the cornerstone of the franchise relationship and is likely to be in place for
a number of years. While no two FAs may be  identical, most include provisions such as the
grant of a trademark license, the right to operate the franchised business,
payment of fees, terms of the rights granted, limitations on how the franchisee
can use the franchisor’s trademarks, indemnity clauses, operational standards
and specifications, reporting requirements, default, termination,
post-termination obligations, non-compete clauses and disclosure of
confidential information, and procedures for dispute resolution.
However, these
clauses are subject to judicial interpretation. In Canada, the court recently
held that a ‘non-compete’ clause in an FA may not be enforceable in all
circumstances against the franchisee. A non-compete clause is a clause which
estops a party from engaging in a business similar in nature to that which the
particular agreement is centred upon. In an FA, these clauses are used to
ensure that the franchisee does not, with the know-how obtained from the
franchisor during the course of the relationship, operate a business which
would be in unfair competition with the franchisor and other subsequent
franchisees. However, a recent Canadian decision seem to suggest that the fact
that there is a non-compete clause in a franchise agreement, does not make it
enforceable. The Ontario Court of Appeal, in MEDIchair LP v DME Medequip Inc, 2016 ONCA 168, refused to enforce
a franchisee’s non-compete covenant because the evidence demonstrated that the
franchisor did not intend to open a franchised store within the restricted
territory.
The Court concluded
that non-compete covenants must protect “the legitimate interest of the
franchisor”, but cannot extend beyond that. In this case, the franchisee had
de-identified its franchise and opened a similar business in the same location;
however, because the franchisor did not intend to operate in the protected
territory after the franchise relationship ended, the franchisor was found not
to have the requisite legitimate interest to restrict competition by the
franchisee within that territory. However, where a franchisee is declared to be
in breach of these provisions, the franchisor can take out injunctions in order
to protect its position.  In the Nigerian
case of Andreas Koumoulis v. Leventis
Motors Limited, (1973) ALL NLR 789, the appellant was sued for breach of
his contract of service as spare parts Sales Manager. Clause 6 of the contract
provided that the appellant shall not for at least a year, after leaving the
employment of the respondent, operate a similar business as that of the
respondent within a 50 miles radius from any trading station owned by the
respondent. The Supreme Court affirmed the decision of the trial court and held
that the clause was enforceable against the appellant.
Finally, as with
any business relationship, there is a dispute resolution component to franchise
arrangements. Franchise litigation lawyers typically deal with claims such as
violations of franchise sales laws or franchise relationships laws,
misrepresentations during the franchise sales process, failure to pay amounts
due, failure to make required refunds, and failure to provide contracted support.
Franchisors typically try to control litigation somewhat with contractual
provisions that require the franchisee to submit certain claims to mediation or
arbitration or require the franchisee to litigate only in a specific forum. In
2013, an Australian franchise, Pie Face,
was on the wrong end of series of legal action from its franchisees for
misleading representation about potential sales and profitability. In order to
avoid litigation, it is essential that the franchisor and the franchisee
clearly lay out the duties and obligations of both parties, warranties (if any)
and expected timelines for the performance of the said duties.
LEGAL
FRAMEWORK FOR FRANCHISING IN NIGERIA
Till date, there is
no specific franchising legislation in Nigeria. However, it must be stated that
there are several regulatory provisions, existing in bits and pieces that affect
franchising in Nigeria. An example is the National
Office for Technology Acquisition and Promotion (NOTAP) Act Cap. N62 LFN 2004
which established NOTAP. It would however be erroneous to state that NOTAP Act
is the regulatory Act for franchising in Nigeria. This is because NOTAP deals
only with the transfer of technology from foreign entities. Arguably, if an FA
was to be executed between local entities there would be no need for NOTAP registration.
However, there are still some legal issues to be sorted such as trademark
registration, incorporation of entities etc. For example, a company considering
franchising may wish to form a new entity to offer franchises and must decide
what type of entity to form, how to organize it, and what organizational
documents are necessary. Due to the fact that franchisees buying into a system
will want the unrestricted right to use the name and mark used by the system, a
franchise lawyer will work with the franchisor to obtain registration of the
trademarks. Section 4(d) and (e) NOTAP
Act grants NOTAP the power to register franchise agreements involving foreign
franchisors. The section goes further to state that the agreement shall be
registrable if in the opinion of NOTAP, it involves the use of trademarks, the
right to use patented inventions, the supply of technical expertise in the form
of the preparation of plans, diagrams, operating manuals or any other form of
technical assistance of any description whatsoever, the provision of operating
staff or managerial assistance and the training of personnel etc.
By virtue of Section 7 of the NOTAP Act:
‘…no payment shall be made in Nigeria to
the credit of any person outside Nigeria by or on authority of the Federal
Ministry of Finance, the Central Bank of Nigeria or any licensed bank in
Nigeria in respect of any payments due under a contract or agreement mentioned
in section 4(d) of this Act, unless a certificate of registration issued under
this Act is presented by the party or parties concerned together with a copy of
the contract or agreement certified by the National Office in that behalf.’
Regulation
4 of the Income Tax (Transfer Pricing) Regulation 1, 2012, states
that where a connected taxable person has entered into a transaction or a
series of transactions to which the Regulation applies, the person shall ensure
that the taxable profits resulting from such controlled transactions are in a
manner consistent with the arm’s length principle otherwise the FIRS shall make
necessary adjustments. Arm’s length principle simply means that the conditions of a
controlled transaction should not differ from the conditions that would have
applied between independent persons in comparable transactions carried out
under comparable circumstances. The arm’s length principle is relatable to
franchising in that it seeks to guide the relationship between connected parties
(companies that share common control or participate directly or indirectly in the
management, control or profit of one another). For example, agreements between
Group and Holding companies, subsidiaries, companies with the same directors
etc. However, this provision would arise in the event of future collaborations/transactions
(JVs, Technical Services Agreement etc.) between the franchisor and the
franchisee as a means of preventing unfair advantage in the dealings of related
entities. There are other provisions of the NOTAP Act which deals with
franchising such as section 6 providing
for the basic requirements which must be included in the service agreement
(including FAs) for it to be approved by NOTAP.
The basic
problem with NOTAP regulating FAs between local and foreign entities is its
lack of transactional focus. Some of the provisions in the NOTAP Act are too
bureaucratic in nature without paying particular demands to the tenets and
dynamics of the franchise Industry. Unfortunately, the same lack of
transactional mindset is exhibited by many Nigerian regulatory agencies, whose
consequent poor performance weighs businesses down, and negatively impacts
competitiveness of Nigerian businesses.
INTERNATIONAL PERSPECTIVES
Other
jurisdictions have already begun to enact and amend their laws in order to maximise
the advantage of franchising. In the United States, some provisions of the California Franchise Relations Act (CFRA)
were revised through the California Bill AB-525 which was passed into law in 2015.
This sweeping new law gives franchisees across California more protections when
purchasing, transferring and terminating their FAs. Sponsored by the Coalition
of Franchisee Associations (CFA), the law affects new franchisees (i.e., those
who are granted or renew an agreement after January 1, 2016) and current
franchisees upon sale, transfer or termination of their FA. Specifically, the
law amends the CFRA to generally make FAs, more franchise friendly. The changes
made were more significant in the sale, transfer and termination of FAs. For
instance, the law changed the 30 day notice and cure period required before a
franchisor can terminate an FA to a 60 day notice and cure period.
The
franchise industry within the United States is showing no signs of slowing
down. Franchising and distribution continue to make up a large part of the
United States’ economy. According to The
Franchise Times of 2014, the top 200 franchise systems on its rankings had
total annual sales in 2013 of $590 billion.
In South
Africa (like Nigeria), there is also no singular law regulating franchising.
However, franchising is adequately provided for in South Africa’s Consumer Protection Act 2008, which defines
franchising and its various concepts. It also covers provisions on certain
consumer rights which afford protection to potential franchisees, chief among which
are:
(a)The
right to obtain a disclosure document when assessing a franchise opportunity fourteen
days before signing the franchise agreement. The disclosure document should
contain the number of franchise outlets, list of current franchisees,
franchisor’s turnover and net profits etc.; (b) the right to cancel the
agreement with no penalty within 10 business days of signing it (cooling off
period); and (c) Protection against unfair discrimination by suppliers; and (d)
protection against a franchisor receiving a direct or indirect benefit or compensation
from suppliers to its franchisees or its franchise system unless the fact
thereof is disclosed in writing with an explanation of how it will be applied.
CONCLUSION
In order
for Nigeria to fully leverage franchising as a tool for economic development,
it would be necessary to enact laws to guide franchise transactions. Franchising,
as a form of strategic alliance holds a lot of promise for economic development
by building up entrepreneurial capacity of local business people, indigenising
the economy, and contributing to halt capital flight; hence, it should receive
institutional support. FAs are more often than not, one-sided in favour of the
franchisor and as such, most franchisees would require protection through specific
laws. General contract law cannot fully embrace the challenges therein. An
example can be drawn from the Landlord-Tenant relationship. Before the passing
of the Tenancy Law of Lagos State 2011, it was the norm for Landlords to
collect multiple years rent in advance. Section 4 of the Law put a stop to this
oppressive act (although it is yet to be seen whether compliance has been as a
result of the positive impact of the law or due to the commercial
impracticability which has made such practice financially disadvantageous).
Nigeria should take a leaf in franchise regulation from United States and South
Africa. The Disclosure Document and ‘cooling off’ period that are required in
South Africa are additional points aiding the cause for franchise regulation in
Nigeria. This would be particularly important where the franchisor is a foreign
company; the franchisee needs to be adequately protected in a fair and balanced
FA. Proper franchise regulation would go a long way in unleashing the
entrepreneurial energy of Nigerians and also in creating an atmosphere which while
inviting investment is also conducive for growth.
 
Franklin
Okeke, Esq.  is a commercial lawyer focusing
on franchise arrangements and practices with Messrs LeLaw Barristers & Solicitors, Lagos
Abimbola Balogun – Position Of Commissioned Photographers under The Nigerian Copyright Law

Abimbola Balogun – Position Of Commissioned Photographers under The Nigerian Copyright Law

by | Aug 4, 2016 | Uncategorized



So I somehow walked into
an argument with a friend of mine the other day of which the true and current
position on the topic has been on my mind for a few days now. I really Don’t
remember how that happened but the issue sent me into a frenzy as I really hate
to loose arguments. Here is how I got myself into the argument.  So I just
finally got my wedding album from my fantastic photographer and I was really
impressed with the turnout as I was frankly scared that it would not look as
dreamy as I had pictured in my mind (brides and their outlandish fantasy ideas
right) so I didn’t waste any time to whip out my new priced possession albums
for my guests to view on one fine Thursday evening. 

To my greatest pleasure,
my guests were as impressed as I was when I first saw the albums. As they
flipped through the pages of the albums many different topics ensued from each
picture. From how hilarious a particular picture turned out; to how the
photographer’s skills were beautifully displayed when she captured “emotions”.
All small talk was warm and very welcome to massage my growing ego until one of
my guests said and I quote “do you know that the photographer owns the
copyright on your pictures?” basically she could do what she pleases with my
pictures. I thought that idea was ridiculous and I did not hesitate to mouth
out that fact. I knew that we had moved from small talk to big business. The
room was instantly heated up in arguments and legal talk on what does or should
apply. I against guest and my husband trying to be diplomatic by trying to see
the sense in both views. Of course myself and guests did not budge on our own
lawyerly opinions on the issue.
 My Guest opined that
when a photographer takes shots, he/she as the author of that image has the
copyright on the pictures over and above any other. This is regardless of if
the pictures have been paid for. I thought this idea was weird and ridiculous.
How can I pay for someone to do a job and the person still can hold on to
rights of my own personal images that I paid to be taken?
 The night ended
quite pleasantly; warm hugs and kisses goodnight, but silently I knew this
argument was definitely not over.
I tried to forget about
the argument for a couple of days, but as I said I really hate to loose
arguments. So I went on my own literal photobomb expedition.
While on my research I
stumbled on the American copyright article which agreed 100% with my guest’s
position[1]. The author states that Under U.S. copyright law, the original
owner of a created work is exclusively the creator, unless it’s a ‘work for
hire’. The author therein stated that in the wedding scenario, a photographer
is hardly ever ‘for hire,’ Even though married couples spend thousands for a
photographer to cast their most memorable moments in just the right light, they
may never actually own the results and also, the fact that the photographer
hands you a cd, hard copy, or soft copy of pictures taken of you does not mean
he has handed you the rights to those pictures. Hmmm interesting I thought to
myself, but still confused; plus, that one is the Americana situation; so back
to Nigerian scenario to find something that makes more legal sense to me or at
least someone or something that could explain this crazy phenomenon to me.
It also occurred to me
that I have come across this topic a number of times in the past but I lazily
brushed aside the thought of researching the crux of the matter. For instance,
the 2face and Annie Idibia suit of 2013, where the an un-commissioned and
uninvited photographer took wedding photos of 2face and his bride[2]. Secondly;
a client of mine who also happens to be in the entertainment industry had
complained to me about his photographer who had uploaded pictures recently
taken on social media as publicity for his photography career. This was done
without any recourse to my client and even before he had seen the said
pictures. And oh thirdly, back to my wedding album, one of my photographer’s
crew members had uploaded some very nice shots of the wedding for publicity on
her Instagram page (Of course I immediately demanded that he takes down the
shots before I blink my eyes). These are only a few incidents out of the
thousands that occur on a daily basis in the new era of the growing photography
sector.
So now to answer this
lingering question of where the copyright stands with commissioned/hired/paid
photographers in Nigeria, I have cast away the spirit of laziness and
procrastination and buried my face first to the copyright act itself, my
findings made me smile in 8 different ways. inside smile, outside smile, evil
smile, happy smile, confused smile, wide smile, one sided smile, haahahaaa I
told u so smile. (yes, 8 different types of smiles).
(1)Copyright
conferred by sections 2 and 3 of this Act, shall vest initially in the author.
(2) Notwithstanding
subsection (6) of section 10 of this Act where a work-
  • is commissioned by a person who is not
    the author’s employer under a contract of service or apprenticeship; or
  • not having been so commissioned, is
    made in the course of the author’s employment,
the copyright shall
belong in the first instance to the author, unless otherwise stipulated in
writing under contract.
(3) Where a
literary, artistic or musical work is made by the author in the course of his
employment by the proprietor of a newspaper, magazine or similar periodical
under a contract of service or apprenticeship as is so made for the purpose of
publication in a newspaper, magazine or similar periodical, the said proprietor
shall, in the absence of ]any agreement to the contrary, be the first owner of
copyright in the work in so far as the copyright relates to the publication of
the work in any newspaper, magazine or similar periodical,; or to the
reproduction of the work for the purpose of its been so published; but in all
other respects, the author shall be the first owner of the copyright in the
work.
(4) In the
case of a cinematograph film or sound recording, the author shall be obliged to
conclude, prior to the making of the work, contracts in writing with all those
whose works are to be used in the making of the work.
Now here’s were the
confused smile and happy smile came in. I had to read this provision about 10
times to get the gist. (legislative drafters right). So here’s how I see this
provision:
In Nigeria the
photographer owns the copyright to pictures he has taken as a general rule.
However, the following situations are exceptions to this rule.
1.    
CONTRACT OF APPRENTICESHIP:
where a photograph is taken under an apprenticeship relationship, the rights of
the photograph belongs to the trainer or master.
2.    
CONTRACT OF EMPLOYMENT WITH A
NEWSPAPER MAGAZINE OR SIMILAR PERIODICAL: in this case
section 10(3) of the copyright act stipulates that the rights to such works
belong to the proprietor in the absence of any contrary agreement in so far as
publication is concerned.
3.  CONTRACT OF EMPLOYMENT:
reference to section 10 (1)(2)(a) (which I had to read really
slowly, and aloud several times). And here is where I had my fifty shades
of smiles; “… commissioned by a person who is not the author’s employer
under a contract of service or apprenticeship; or… the copyright shall belong
in the first instance to the author, unless otherwise stipulated in writing
under contract.” Where a photographer is an employee of a company
instructed to take the photos or is an employee whose duties include or require
photography, the photographer will be acting on behalf of his employer, and as
such the copyright in photographs taken by the employee in the normal course of
business will belong to the employer. In simpler words, a work done by a
commissioned person or employee belongs to the employer or
commissioner[3].
4.    
ASSIGNMENT: A
photographer may assign his copyright by written agreement. This will supersede
the provisions of the law. If there is a written contract or an agreement
signed by the photographer assigning copyright to another party, then the
rights will be deemed to belong to the assignee.
5.    
GOVERNMENT COMMISSIONING: Section 4.(1) Copyright
shall be conferred by this section on every work, which is eligible for
copyright and is made by or under the direction or control of the Government, a
State authority or prescribed international body. Such rights are conferred on
the Government on behalf of the Federal Republic of Nigeria.
6.    
LAPSE OF TIME.
The 1st schedule to the copyright act provides that an author of a photograph
can exercise exclusive rights on his photo for a period of 50 years after the
end of the year in which the work was first published., after which he looses
the exclusive right on the said work.
7.    
CONTRACT FOR SERVICE:
where I have commissioned the services of the photographer, I am the employer
of the photographer’s services under a service agreement, the rights on my
photographs and album belongs to me. And yes I had to ponder on the issue of
the; “Of or For Service”. I found the key word to be
“Commission” as contained in Section 10 of the Copyright Act; my
interpretation is that once someone has paid for the service of the
photographer under a contract of any nature, without an agreement stating that
the right will belong to the photographer, such rights will be vested in the
commissioning party. Therefore, whether you employ the photographer under a
contract of service or employ the services of the photographer for a specific
purpose, this law will apply[4].
Nigerian case law further
buttressed this point in the case of Joseph Ikhuoria v. Campaign Services
Ltd and Anor[5], the court noted that when a person commissions the
taking of a photograph or the painting or drawing of a portrait or undertakes
an engraving and pays or agrees to pay for it in money’s worth and the work is
made in pursuance of that commission, the person who so commissioned the work
is entitled to any copyright in it as an original work. See also Kolade
Oshinowo v John Holt Group Co [1986] FHCR 308.
On this same point in my
research journey, I also found a very interesting post online which I totally
align myself with. It said in summary that although when the photos are taken,
the photographer owns the copyright to the photos. The writer further made a
distinction between license and other rights. He stated that the licence
represents the leave to reprint (i.e., use the photos for personal use, such as
on Christmas cards or in a wedding photo book), for which the photographer may
charge an extra fee. This is so for the sole reason that the photographer will
lose out on the money that you would have paid for the prints. All other rights
are purchased off the photographer upon the payment of the fees. The
photographer however is free to charge an extra and separate fee for the
release of all the rights as mentioned in a contract[6]. But to me, I know I
will only agree to a payment of extra charges if the photographer is Madame TY
Bello!
As regards the 2face and
Annie Idibia matter mentioned above, I think this is an issue of facts which
will be discussed another day where the issues for determination will be
whether or not a photographer can claim copyright on an unauthorised or
illegally acquired photograph, or the copyright for paparazzi, I’ll find a
catchy name (Watch out for part 2).
Therefore, ladies and
gentlemen, it is with great pleasure that I state that in my firm opinion that,
my husband and I own our beautiful wedding photos, album, and all rights
connected thereto. As I said, I hate to lose an argument.
[3]http://www.academia.edu/4673044/Who_Owns_Copyright_under_the_Nigerian_Copyright_Act;
viewed 13th July 2016. Who Owns Copyright under the Nigerian Copyright Act; by
Meshack Okezi
[5] F.H.C.R. 308 1986, http://news.nlipw.com/?p=19254
viewed 11th August 2012,
Impact of the World Trade
Organisation TRIPS Agreement on the Intellectual Property Law of Nigeria; by
Temitope Oredola Oloko; http://repository.up.ac.za/dspace/bitstream/handle/2263/53216/Oloko_Impact_2015.pdf?sequence=1&isAllowed=y;
viewed 11th August 2013
[6]http://apracticalwedding.com/2015/09/wedding-photography-contract/;
by steven Portland; viewed 11th august 2016.

Ed’s Note – This article
was originally posted here
Photo Credit – www.guardian.ng
Intellectual property as an asset: How valuable are our ideas? by Jerry Chiemeke

Intellectual property as an asset: How valuable are our ideas? by Jerry Chiemeke

by | Mar 31, 2016 | Uncategorized

 
 
The term “intellectual property” is broad, and is widely used
to refer to intangible assets. Intellectual property differs from other forms
of property because it is intangible—that is, it is a product of the human
imagination.
There are various classes of intellectual property: Patents, Copyright
and Trade marks are perhaps the most prominent. Patent law protects inventions
that demonstrate technological progress. Copyright law protects a variety of
literary and artistic works, including paintings, sculpture, prose, poetry,
plays, musical compositions, dances, photographs, motion pictures, radio and
television programs, sound recordings, and computer software programs.
Trademark law protects words, slogans, and symbols that serve to identify
different brands of goods and services in the marketplace. 

 The question of valuation of intellectual property is a very vital
one for a number of reasons. Firstly, it greatly strengthens the perception of
the importance of intellectual property in contemporary business environment.
Secondly, it lends credence to the idea of intellectual property as any other
property and reinforces the property rights of the owner. For example, a
clearly valued intellectual property gives unambiguous signals to a third party
of its value and the repercussions of violations of such rights.[1] This
article will attempt to analyze the concept of valuing Intellectual Property,
the prevalent approach to Intellectual Property valuation in Nigeria, a world
view of Intellectual Property Valuation, and the way forward.
 Methods of Intellectual Property Valuation
 There are three generally accepted ways to value Intellectual
Property. These include: the Cost Approach, the Market Approach, and the Income
Approach. 
Cost Approach: A valuation analyst who values
Intellectual Property using the cost approach looks at what it cost to produce
the Intellectual Property, or what it would cost to reproduce the Intellectual
Property on a given effective date. These costs include things like labor,
materials, applied overhead, and capital charges. Depending on the effective
date of the valuation, the valuation analyst may trend costs from a historical
reference point to the effective date.[2]
 
2.Market Approach: The valuation analyst who values IP using the market
approach looks for comparable transactions in the same industry and of the same
relative size that recently occurred in the open market. Value is determined
indirectly using the comparable IP transaction as a proxy for value of the
target IP. The reasoning is logical: if the market paid X for rights to the use
or own that IP once, then one would expect that the market would reasonably pay
a similar amount again.[3] 
Income Approach: This method is the most
principled, requires the most discipline and insight into value-creating
features of the Intellectual Property to complete, and is what valuation
analysts use commonly for Intellectual Property valuation assignments. A
valuation analyst using the income approach bases their opinion on the
Intellectual Property owner’s business plan, marketing and operational inputs,
and other external references. Using this method, the valuation analyst
projects the economic income generated solely from the Intellectual Property
over a discrete period, known as the remaining useful life (RUL) as well as any
residual value after the remaining useful life.[4]
 In What Manner Can Intellectual Property Can Be Used As A
Security?
 As earlier mentioned, Intellectual
Property differs from other forms of property, due to the fact that it is
intangible in nature. Nevertheless, it remains one of the most valuable forms
of assets, and can indeed serve as security when required.
 Intellectual Property could be used as a security by way of either
a legal mortgage, a fixed charge, or a floating charge. The decision as to
which security option is to be exercised over the borrower’s portfolio will be
largely determined by whether security is being granted over registered or
unregistered Intellectual Property. When dealing with registered Intellectual
Property, security will usually be taken through the creation of a fixed
charge.[5]
 Fixed charges are equitable (as they grant a beneficial but not
legal interest in secured Intellectual Property) and attach themselves to the
Intellectual Property in question. The lender acquires an equitable interest in
the Intellectual Property but no legal title is transferred. While the wording
used to create the fixed charge is not governed by any statutory or common law
requirements, it is prudent to expressly state that the Intellectual Property
is charged as continuing security for the loan and other obligations set out in
the underlying finance documentation. Ideally the charge should also be granted
by the borrower with full title guarantee; the implication is that the borrower
guarantees that it has the right to grant a charge over the Intellectual
Property in favour of the lender  and that the Intellectual Property is
free from other charges, encumbrances, and other rights exercisable by third
parties other than charges, encumbrances, or rights that the lender could
reasonably be expected to know about (such as interests registered against the
Intellectual Property at the Patent Office).[6]
 In the event of the borrower’s default, the lender could wish to
sell the secured Intellectual Property to pay off any existing loan obligations
of the borrower. Ideally, the underlying security agreement should expressly
give the lender a power of sale and power of attorney to deal with the
Intellectual Property in place of the borrower (for example, to enter into an
assignment agreement with a third party purchaser). Without an express power of
sale, the lender will have to apply to Court for an order of sale or the
appointment of a receiver. If however, security has been granted by way of a
deed, the lender will have a statutory power of sale and right to appoint a
receiver, exercisable without the need to apply to Court. While the Intellectual
Property remains subject to the fixed charge, the lender should impose
restrictions on the borrower’s ability to deal with the asset (for example, the
grant of licences over the Intellectual Property).
 As title to the Intellectual Property secured by the fixed charge
will remain vested in the borrower however, maintenance of the Intellectual
Property will continue to be the responsibility of the borrower. It is
therefore important that the security agreement obliges the borrower not to do
or omit to do anything which may put either the enforceability or validity of
the Intellectual Property in jeopardy (including failing to pay renewal fees or
take action against infringers)
 In transactions where the unregistered Intellectual Property of
the borrower is of little commercial value, security will usually be taken by
including these rights under the umbrella of the general list of assets of the
borrower secured by a floating charge. Fixed charges grant to the lender an
interest in specific assets of the borrower, and as such, the borrower is
prevented from dealing with the charged asset without the consent of the
lender. In contrast, a floating charge usually grants to the lender security
over a general list of assets of the borrower that the borrower is free to deal
with.[7]
 What is The Situation In Nigeria With Respect To Intellectual
Property Valuation And The Use of Intellectual Property as Security?
 In Nigeria, it is fair to say
that the idea of relying on Intellectual Property as a security in a manner similar
to real property, if it exists at all, is yet to be fully embraced by
individuals and corporations alike. The paucity in the use of Intellectual
Property as a security, particularly for debts, is not without cause.
 A major challenge in the use of Intellectual Property as security
remains the value to be attached to the Intellectual Property. Unlike tangibles
that can be subjected to easy valuation based on the physical attributes of the
security, Intellectual Property unfortunately cannot pass this test with same
ease. The owners of the Intellectual Property do not always understand the
commercial value of the Intellectual Property assets of their enterprise, and
professionals have still not found a way to subject Intellectual Property to
proper valuation.
 The risk and complication that trails the use of Intellectual
Property  as a form of security has made it a non-attractive form of
security in Nigeria. The nature of the uncertainty in the use of intellectual
property as collateral is something that cannot be wished away. At present, it
is difficult to assure lenders taking intellectual property as security that
their interest has, in fact, been properly perfected or secured. The reason is
that there is apparently uncertainty among practitioners as to where and how to
file notices, what constitutes notice of a security interest, who has priority,
and what property is covered by a security interest.
Intellectual Property owners are disadvantaged when it comes to
attracting external financing since they do not usually have the track record
or collateral often required by banks. This challenge arises because the loans
secured with intellectual property are more costly to negotiate and administer,
if they can be arranged at all. Furthermore, there is still insufficient
knowledge and education about the unique nature of Intellectual Property
rights, thus it can be understood why Nigerians are reluctant to base loan
agreements on Intellectual Property being the existing collateral.
 What Is The Attitude From The Rest Of The World?
While it is admitted that Nigeria has been seemingly hesistant in taking
up Intellectual Property as a form of security, the same cannot exactly be said
of other countries of the world, and developed nations in particular. In other
words, persons in various parts of the world, natural and artificial persons
alike, have recognized and exploited the relevance of Intellectual Property as
a valuable asset, and have moved with the times to good effect. Many
industries, notably the electronics, software, healthcare, consumer goods,
telecommunications, media and entertainment are substantially dependent upon
this intangible asset.
 
Intellectual Property is quickly becoming the most prized asset of many
companies. In a survey conducted by the United States Patents and Trademarks
Office (USPTO) in the year 2011, Intellectual Property in the U.S. was valued
at over $5 trillion[8]. The development of new technologies and the viral
spread of communication networks have facilitated the rise of businesses that
own very few tangible assets and owe their success almost exclusively to their
Intellectual Property. The ability to use Intellectual Property rights as the
object of security interests is being recognized as an attractive prospect,
rather than a mere eccentricity.
Much of corporate wealth is now tied up in Intellectual Property. It
increasingly constitutes a larger percentage of the overall value of U.S.
businesses and can be appropriated as a form of security. In today’s business
world, the Intellectual Property portfolio of many companies forms an important
part of the company’s assets. As such, banks and other financial institutions
lending money to companies (in Western Europe, the U.S.A., Canada and other
developed countries) are increasingly taking security over borrowers’
Intellectual Property portfolios as part of a security package, particularly in
transactions where the Intellectual Property held by the borrower is of
significant commercial value.[9]
What Can And Should Be Done?
Banks could revisit their lending policies and conditions for
collateral, to provide more room for the use of intangible assets as is the
nature of Intellectual Property. An increase in collaborative efforts between
agencies designated to administer Intellectual Property in Nigeria, and
organisations such as Intellectual Property Lawyers Association of Nigeria
(IPLAN) would also be helpful. Beyond all that, there is need to create public
awareness on the value inherent in the existence and ownership of Intellectual
Property, and furthermore, encourage property valuers to expand their focus to
figuring out the worth of intangible assets.
Endnotes
[1] Singla, Ankur, “Valuation of Intellectual Property”, available at
www.indlaw.com.
[2] Pellegrino & Associates, LLC, “Valuing Intellectual Property”,
2005.
[3] Ibid.
[4] Ibid.
[5] Esomonu J, & Oloyede, A. “Intellectual Property as a Form of
Security”, Seminar Paper on  Secured Credit Transactions Presented at the
Faculty of Law, University of Lagos, 2011.
[6] Ibid.
[7] Ibid.
[9] Esomonu J, & Oloyede, A, supra, Note 5.
 Editor’s note: This article was initially posted by the author on  www.linkedin.com