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Essential Intellectual Property Rights Protection for E-Commerce Companies in Nigeria - Bisola Scott

posted 4 years ago

INTRODUCTION

The internet has
transformed the conventional way of trading, and businesses trade over the
internet, either exclusively or in addition to having physical stores. This
mode of trading is referred to as e-commerce, with the added functionality of
electronic transfers of money and data to execute various business
transactions.  With the introduction of online retail stores such as
Konga, Alibaba, and Jumia, Nigerians, like consumers elsewhere, are rapidly
embracing online shopping. Currently, the amount that has been expended on
e-commerce transactions in Nigeria is estimated at $12 billion and projected to reach $75
billion in revenues per annum by 2025. Some of the advantages of
e-commerce include convenience in purchasing and subscribing to services, the
provision of an array of products or services to choose from, and discounted
prices as it is usually less expensive to operate.

Intellectual property
rights are the highest value-bearing component of e-commerce companies and
are protectable under intellectual property laws in Nigeria through the avenues
of trademarks, copyrights, patents, trade secrets and confidential information.
These rights are valuable assets which may generate income and enable a company
acquire or maintain a competitive edge in the marketplace. It is vital that
e-commerce companies protect their intellectual rights to prevent infringement
and theft by third parties, which may result in reduction in revenue generated
and sometimes affect the integrity of their brand. The key intellectual
property rights in e-commerce businesses are highlighted below.

 

1.      Trademark
Protection

The brand name, logo and
slogan of an e-commerce company represent its trademark, which as they are
usually employed to promote their brand. Exclusive right to a trademark can be
acquired either by use in Nigeria and/or registration of the mark at the
Nigerian Trade Marks Registry. Upon registration, the proprietor’s right in a
trademark subsists for 7 years and is subject to
renewals at 14-year intervals. A trademark would give a company exclusive
rights to use the mark in connection with the product or service they provide
and enables users to distinguish the product or service from others. It also
promotes the brand and may prevent third parties from marketing their company
under an identical or confusingly similar trademark. They are registrable
as trademarks in Nigeria under class 35 of the international classification of
goods and services.

Also, e-commerce
companies who produce their own products may also protect the trademark for
each of the products by either using or registering them with the Nigerian
Trade Marks Registry. An unregistered trademark may acquire protection by use
and a proprietor or registered user of a trademark cannot restrain another
proprietor from interfering or restraining the use of a similar or identical
mark if its use precedes the proprietors use or registration of his mark. Similarly,
in American Cyanamid Co. v. Vitality Pharmaceutical Ltd., the
Supreme Court held that the proprietor or registered user of a trademark is not
entitled to interfere with an existing trademark even if identical or nearly
resembling his own, if that other mark has been in continuous use before the
registration of his own trademark. Although the proprietor of an unregistered
trademark cannot   institute an action for trademark infringement, he
may institute and passing off under common law where its trademark had been
infringed.

 

2.      Copyright
Protection

E-commerce operates over
the internet either through a website and or computer/mobile applications. The
website and computer/mobile applications including the creative website content
and graphics are protectable under Nigerian Copyright Act (NCA) as
copyrightable materials. Copyrights protect the unique expression of a computer
programme as described in the source and object codes. The author of the
computer programme is guaranteed automatic copyright protection in his source
and object codes used in creating the website or application, if it is his
original work and has been fixed in a definite medium of expression now known
or later to be developed from which it can be perceived or reproduced either
directly or via a device. Although there is no statutory requirement for
registration of copyright, the Nigerian Copyright Commission (NCC) established
a voluntary copyright notification scheme for owners of copyrights to
notify the Commission of its creation and existence in order to maintain
an effective databank of their copyrighted works.

Where an e-commerce
company is not the author of the copyright in a website, and has appointed
either its employee or an independent contractor to develop the website, the
copyright in the website or application will belong in the first instance to
the employee or independent contractor respectively, except it is otherwise
stipulated in writing under contract. If an e-commerce company intends to
retain ownership of the copyright in its website, this should generally be
stipulated in the employment or service contract. In addition, the
e-commerce company may also request for an assignment of the computer programme
from the employee. This principle applies to all the forms of copyright on a
website or an application, including the website content and graphics. The
company must ensure that the assignment or exclusive licence in a copyright is
in writing as section 10(3) of the NCA stipulates that  ”No
assignment of copyright and no exclusive licence to do an act the doing of
which is controlled by copyright shall have effect unless it is in writing.”

 

3.      Patent
Protection

E-commerce platforms are
software or computer programmes which may be protected as patent under patent
law in Nigeria, if they satisfy the basic requirements of patentability. Unlike
copyright which protects source and object codes in software, patent protects
the software invention including the method and processes used in developing
the software, once they have been fixed in a tangible format. A patent cannot
protect the source or object codes in software as these codes do not meet the
requirement of patentability. Not all software is eligible for patent
protection and software is only eligible for patent protection, if it is new,
involves an inventive step that is not obvious to people knowledgeable in the
field and is capable of industrial application.

Software
is eligible for protection if it consists of an improvement on previously
patented software and it is also new, involves an inventive step and capable of
industrial application. It is also eligible for
protection if it consists of an improvement on previously patented software and
it is also new, involves an inventive step and capable of industrial
application.
 It
is new if it has not been made available to the public before the date of
filing of the patent application.
It would not be deemed
to have been made available to the public if the developer had exhibited it in
an official or officially recognized international exhibition, six months
preceding the filing of the patent application. However, where it exceeds six
months, it would be deemed to have been made available to the public. It must
involve an inventive step which must not be obvious to a person in the same
field either as to the method, the application, the combination of methods, or
the product which it concerns, or as to the industrial result it produces and
it must be capable of being used in any kind of industry including agriculture.

An application for grant
of patent is filed at the Patents and Designs Registry. The Patents and Designs
Act (PDA) stipulates that the application shall contain the applicant’s full
name and address, a description of the relevant invention with any appropriate
plans and drawings including a claim or claims of the software. A patent
is granted for 20years and at the risk of the patentee
without guarantee as to their validity. During the period of 20years, the
inventor maintains exclusive right to use, assign or license the software, and
can prevent the recreation and imitation of the software application. Issued
patents are subject to an annual renewal obligation in the form of annuity payments
to ensure their continued validity over the lifespan of the patent.

Unlike
the NCA, the PDA stipulates that inventions made in the course of employment
vest in the employer, and does not specifically provide for the use of
contracts to determine or transfer ownership of an invention. In practice,
however, the actual/true inventor (in most cases the employee) would effect an
assignment of his rights to the employer to back-up the application for the
issuance of letters Patent.

Where
an e-commerce platform is developed by an employee or an independent
contractor, the software or application would belong to the e-commerce company
as having been made in the course of employment. However, it is essential that
an e-commerce company request for an assignment of the patent in the software
from the employee or independent contractor to back-up the application for the
issuance of letters Patent. An e-commerce company may also obtain a
licence to the software based on the terms agreed by the parties.

 

4.      Trade
Secrets and Confidential Information

Trade secrets and
confidential information are also essential intellectual property rights
relevant to e-commerce companies. They include anything that is used in a
business which gives it a competitive edge over competitors who do not know or
use them. For instance, the Coca Cola recipe and Google search algorithm
are of substantial value and these companies recognized that protecting their
trade secrets can help maintain their competitive edge in the marketplace. An
e-commerce company may possess trade secrets, such as marketing techniques,
business methods, business practices, and supplier lists. Trade secrets
may also include hidden aspects of a website/application such as source codes
and object codes, and algorithms which have commercial value and give the owner
a competitive advantage over competitors in the market.

Although trade secret
protection is not a statutorily recognized right in Nigeria it is recognized
and enforceable under the common law. E-commerce companies have to take
reasonable measures to maintain their secrecy by signing non-disclosure
agreements, restraining employees’ access to very sensitive information and
taking steps toward preventing access to the public. Trade secrets can be
maintained indefinitely as long as their secrecy is preserved and kept from
becoming public knowledge. In addition to copyright and trademark protection,
this mode of protection is recommended for software that is not eligible for
patent protection in Nigeria, or as a commercial strategy to withhold related
proprietary data for the application of the software.

 

CONCLUSION

It is important that ecommerce companies protect their
intellectual property rights as protection enables them exercise their
exclusive rights to use and restrict third parties from infringing on their
rights. This is also important because the intellectual property rights may
also be a major source income for the company and the company may decide to
licence such rights to generate additional income.  These rights also
increase the valuation of a company, which are important in financing and
merger and acquisition transactions. It is also essential that e-commerce
companies do not infringe on other companies intellectual property rights, and
only use third-party rights after obtaining the required permission.

For further information
on this article and area of law,

please
contact Bisola Scott at S. P. A. Ajibade & Co., Lagos by

Telephone
(+234.1.270.3009; +234.1.460.5091) Fax (+234 1 4605092)

Mobile
(+234.811.389.8102, +234.817.939.0319)

Email: [email protected]

www.spaajibade.com

 

Author

posted 5 days ago

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