Recommended Ways to Protecting Business Concepts as Intellectual Property Rights in Nigeria – Bisola Scott

Intellectual Property

7th January 2021

Bisola Scott[1]

 

Recommended Ways to Protecting Business Concepts as Intellectual Property Rights in Nigeria

Not all creations of the mind are regarded as intellectual property protectable under intellectual property laws in Nigeria,[2] as these laws stipulate the criteria that must be satisfied to guarantee intellectual property protection over creative works.[3] As a result of this limitation, it appears more challenging to protect works when they are mere ideas and during their early stage of development[4] (i.e. when they have not been fixed in tangible mediums of expression or generated into products) as these works may not fulfil all the criteria necessary to guarantee them intellectual property protection. Business concepts fall under this category being ideas regarding a product or service,[5] or the concept of a product/invention yet to be developed. These concepts require adequate intellectual property protection to prevent misappropriation by third parties, which may lead to loss of possible income that may be generated by the owner from utilizing and maintaining a commercial edge over competitors who do not know or use them. Some of the recommended options of intellectual property protection available to owners of business concepts are highlighted below.

Trade Secrets and Confidential Information

Confidential information regarding business concepts may be protected as trade secrets if they are commercially valuable, not known to the public, and reasonable steps have been taken by the owner to maintain their secrecy.[6] To prevent the information from becoming public knowledge, the owner may sign non-disclosure and non-compete agreements, introduce trade secret policy at the workplace, label certain documents as proprietary and confidential, and restrain employees’ partners’ and contractors’ access to these information.[7] Some of the items relating to business concepts that may be protected as trade secrets if they satisfy the criteria stated above include business strategies, business methods, marketing plans, advertising strategies and distribution methods.

Trade secret protection guarantees the owner automatic right over his business concepts without the need for registration. This right may be maintained indefinitely, if the secrecy is preserved and kept from becoming public knowledge.[8] Although trade secret is not a statutorily recognized right in Nigeria, it is provided and enforceable under the common law. Some of the constraints in utilizing trade secret protection are as follows:

  • Defensive protection as a prior art is not applicable to trade secrets and a third party may obtain a patent right, design right or copyright for the same concepts if the third party came up with it independently, without access to the owner’s trade secrets (through research and development, reverse engineering, or marketing analysis).[9]
  • Non-disclosure, non-compete and confidentiality agreements as viable options of protection are only binding on persons who have accepted the obligations or signed the agreements.[10]
  • Once a trade secret becomes public knowledge, it no longer suffices as a trade secret. However, the owner may maintain an action for misappropriation of trade secret where the trade secret has been unlawfully disclosed or stolen, and breach of contract[11] where the confidentiality obligations contained in a contract have been violated. The owner of a trade secret may also maintain an action by virtue of section 6(1) & (2) of the Cybercrimes (Prohibition, Prevention etc.) Act[12] which provides that persons who access a computer system to obtain data vital to national security will be held to have committed an offence and will be liable on conviction to imprisonment for a term of not more than 5 years or to a fine of not more than N5,000,000.00 or to both fine and imprisonment. Also, where the offence stated above is committed with the intent of obtaining computer data, securing access to any program, commercial or industrial secrets or classified information, the punishment will be imprisonment for a term of not more than 7 years or a fine of not more than N7, 000,000.00 or to both such fine and imprisonment.[13]
  • It is ephemeral in nature and may exist for a short period of time due to the high probability of independent creation, ease of replication through reverse engineering and likelihood of dissipation by disclosure.[14]
  • It offers relatively weaker protection when compared to patents. A patent offers monopoly over the patented invention thereby giving no room for defenses such as reverse engineering and independent creation. In Kewanee Oil Co. v. Bicron Corporation,[15] the court stated that “the possibility that an inventor who believes his invention meets the standards of patentability will sit back, rely on trade secret law, and after one year of use forfeit any right to patent protection . . . is remote indeed.” It has also been stated that patents are strong while trade secrets are weak.[16]

It has been opined that businesses that successfully protect their trade secrets also strengthen their other intellectual property assets. 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.[17]

Trade secret protection appears to be a more viable option for business concepts as it offers protection for an unlimited period of time and the owner possesses the right to prevent the information lawfully within their control from being disclosedacquired or used by others without their consent and contrary to honest commercial practice.[18]

Trademark

The name, logo, slogan, or hashtags of a business concept may be protected as trademarks. A trademark right can be obtained by registration at the Nigerian Trade Mark Registry or through use. This form of protection grants the owner exclusive rights to use the mark in connection with the concepts and enables users distinguish the concept from other concepts available in the market. It may also prevent third parties from marketing their company under an identical or confusingly similar trademark.[19] Upon registration, the proprietor’s right in the trademark subsists for 7 years and is subject to renewals at 14-year intervals.[20]

The proprietor or owner of a business concept may also acquire trademark rights through continuous use of the mark.[21] Although an owner who has acquired trademark rights through use cannot institute an action for trademark infringement as this is only available to proprietors of registered marks, he may institute a passing off action under common law where his trademark rights have been violated.[22]

Copyright

Business concepts, when fixed in any definite medium of expression now known or later to be developed, from which they can be perceived, reproduced or otherwise communicated either directly or with the aid of any machine or device, may be protected as copyright.[23] The author of a concept that has been fixed in a medium of expression is guaranteed automatic copyright protection over his works, if sufficient effort has been expended to give it an original character.[24] Examples of definite mediums of expression which may be utilized by owners of business concepts include photographs, videos, letters, emails, journals and digital formats.

Although there is no statutory requirement for registration of copyright, the Nigerian Copyright Commission (NCC) has established a voluntary copyright notification scheme for owners of copyrights to notify the Commission of its creation and existence to maintain an effective databank of their copyrighted works. Owners of these concepts do not have to wait till the concepts are developed into the intended product prior to fixing them in a medium of expression and or lodging them at the NCC as these concepts may still be fixed in a tangible medium of expression pending when they are developed into actual products. Where improvements have been made on the concepts, the updated version can also be fixed in a medium of expression and lodged at the NCC.

Patent & Designs 

Patents and designs are also viable means of intellectual property protection for business concepts however, they can only be utilized where the concepts have been generated into actual products or inventions which may be patentable or registrable as designs.

A concept that exists in the mind only cannot be protected as designs or patents under the Patents and Designs Act (PDA).[25] Where a business concept has been developed into an actual invention, it may be patented if it is new, involves an inventive step that is not obvious to people knowledgeable in the field and is capable of industrial application.[26] Such invention may also be eligible for protection if it consists of an improvement on a previously patented invention which must also be new, involve an inventive step and capable of industrial application.[27] It is new if it has not been made available to the public before the date of filing of the patent application.[28] It would not be deemed to have been made available to the public if the inventor had exhibited it in an official or officially recognized international exhibition, six months preceding the filing of the patent application.[29] However, where it exceeds six months, it would be deemed to have been made available to the public.[30] The invention 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.[31] It must also be capable of being used in any kind of industry including agriculture. According to section 1(4) PDA, the following items are not patentable:

  • Plant or animal varieties, or essentially biological processes for production of plants or animals (other than microbiological processes and their products).
  • Inventions if their publication or exploitation would be contrary to public order or morality.

Principles and discoveries of a scientific nature are also not regarded as patentable inventions.[32] A patent is granted for 20 years and at the risk of the patentee without guarantee as to their validity.[33]

Industrial designs are the ornamental or aesthetic aspect of an article and include three dimensional features, such as the shape of an article and two-dimensional features, such as patterns, lines and colours.[34] Where a business concept relates to the design of a product which has been developed, the design may be eligible for protection.

Various countries utilize different means of protecting industrial designs as intellectual property rights. Some countries protect industrial designs by registering them as industrial designs while others register designs as design patents. A registered industrial design offers similar protection as a design patent, as both forms of protection safeguard the ornamental or aesthetic aspect of an article. However, a design patent right is obtained under Patent Laws while an industrial design right is obtained under Design Laws. In Nigeria, industrial design protection is an alternative to design patent protection which is the utilized in the United States.

An industrial design protection can be obtained through registration at the Patents and Designs Registry. According to the PDA, an industrial design is registrable if it is new and not contrary to public order or morality.[35]  Registering an industrial design confers on the registered owner the right to restrict a third party from reproducing the design in the manufacture of a product, importing, selling or utilizing for commercial purposes a product reproducing the design.[36]

Conclusion

Business concepts even if they exist in the mind alone, have the potential of yielding returns for the owner if active steps are taken to develop them into concrete forms that are protectable as intellectual property rights. As owners or proprietors of business concepts, it is paramount to ensure the core business ideas are duly protected prior to them being launched, utilized or generated into products as this would increase the chances of preventing intellectual property theft, attract more tangible methods of intellectual property protection, and guarantee a cause of action and remedy at law. Adequate protection of business concepts may also increase the valuation of a business, thereby increasing their relevance in the licensing and franchise market.

Non-protection of these concepts may be detrimental to the implementation or launch of the concepts and inevitably limit the profit that may be generated by the owners. On the other hand, all such innovations like proprietary know-how, technical and business methods, and confidential information which may fall under the trade secrets category should be properly protected as such to ensure that businesses acquire and maintain the competitive edge that gives them the much-needed business advantage necessary for commercial success.

 

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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: bscott@spaajibade.com

www.spaajibade.com

 

1       Bisola Scott, Associate Intellectual Property & Technology Department, SPA Ajibade & Co., Lagos, Nigeria.

[2]       Some of the relevant intellectual property laws in Nigeria include the Copyright Act Cap. 68, Laws of the Federation of Nigeria, 1990 as amended by the Copyright Amendment Decree No. 98 of 1992 and the Copyright (Amendment) Decree 1999 (NCA), Trade Marks Act 1967 Cap T13, Laws of the Federation of Nigeria 2004 (TMA), and Patents and Designs Act. Cap. P2, Laws of the Federation of Nigeria 2004 (PDA).

[3]       For instance, section 2(a) and (b) of the NCA provides that a “literary, musical or artistic work shall not be eligible for copyright unless sufficient effort has been expended on making the work to give it an original character, and the work has been fixed in any definite medium of expression now known or later to be developed, from which it can be perceived, reproduced or otherwise communicated either directly or with the aid of any machine or device.”

[4]       Copyright, trademark, and patent do not protect ideas unless they have been developed into concrete form.

[5]       These ideas and unique selling propositions or innovations give businesses commercial edge over their competitors in the market.

[6]       WIPO, Frequently Asked Questions: Trade Secrets Basics, available at https://www.wipo.int/tradesecrets/ en/tradesecrets_faqs.html, accessed on 10th December 2020. Also, see Article 39 of the TRIPS Agreement, available at https://www.wto.org/english/docs_e/legal_e/27-trips_04d_e.htm#:~:text=Article%2039&text= n%20the%20course%20of%20ensuring,in%20accordance%20with%20paragraph%203. accessed on 15th December 2020.

[7]       See generally, John Onyido, “The Role of Trade Secrets in the Protection of IP Rights”, The Gravitas Review of Business & Property Law, Vol. 6, No. 3, 2015.

[8]       Supra, n. 6.

[9]       Ibid.

[10]     Gene Quinn, IPWatchDog, Protecting an Idea: Can Ideas Be Patented or Protected? available at: https://www.ipwatchdog.com/2018/11/17/protecting-idea-can-ideas-be-patented/id=103389/#:~:text=Unfortunately%2C%20despite%20what%20you%20may,copyrights%20or%20patents%20protect%20ideas, accessed on 10th December 2020.

[11]     Ibid.

[12]     2015, available at https://www.cert.gov.ng/ngcert/resources/CyberCrimeProhibitionPreventionetcAct2015.pdf,  accessed on 16th December 2020.

[13]     Ibid.

[14]     Supra, n. 7.

[15]     416 U.S. 470, 492 (1974).

16     James Pooley, IPWatchdog, Choosing Between Patents and Trade Secrets, A Discussion Worth Revisiting, available at https://www.ipwatchdog.com/2017/11/01/patents-and-trade-secrets-revisited/id=89641/, accessed on 28th December 2020.

[17]      See Bisola Scott, “Essential Intellectual Property Clauses in Employment Contracts” – Bisola Scott, available at http://www.spaajibade.com/resources/essential-intellectual-property-clauses-in-employment-contracts-bisola-scott/, accessed on 16th December 2020.

[18]     Supra, n. 6.

[19]     UpCounsel, Intellectual Property Protection for Software: What to Know, available at https://www.upcounsel.com/intellectual-property-software, accessed on 15th December   2020.

[20]     See section 23(1) TMA, available at https://nigeria.tradeportal.org/media/Trade%20Mark%20Act.pdf, accessed on 17th December 2020.

[21]     See section 3 and 7 TMA, available at https://nigeria.tradeportal.org/media/Trade%20Mark%20Act.pdf, accessed on 16th December 2020.

[22]     Ibid.

[23]     See section 2(b) Copyright Act, available at https://www.wipo.int/edocs/lexdocs/laws/en/ng/ng001en.pdf, accessed on 5th December 2020.

[24]      See section 2(b) Copyright Act, available at https://www.wipo.int/edocs/lexdocs/laws/en/ng/ng001en.pdf, accessed on 5th December 2020.

[25]     Cap. P2, Laws of the Federation of Nigeria 2004.

[26]     Section 1 PDA, available at https://lawsofnigeria.placng.org/laws/P2.pdfaccessed on 2nd December 2020.

[27]     Ibid.

[28]     Section 1 (3) PDA.

[29]      Ibid.

[30]     Ibid.

[31]     Ibid.

[32]     Section 1(5) PDA.

[33]      Section 7(1) and 4(4) PDA.

[34]     Section 12 Patents and Designs Act, Cap. P2, Laws of the Federation of Nigeria 2004 (PDA).

[35]     Section 13(1) (a) & (b) PDA. An industrial design is new if it has not been made available to the public before an application for registration is filed at the registry. For instance, if it has been advertised, it will not be regarded as new as it has become part of the public domain. It will also not be regarded as new if it is similar to an existing design and the difference between the design and the existing design is insignificant, or because the product to which the design is applied is different from that of an existing design.

[36]     Section 19(1)(a)-(c) PDA. See Bisola Scott, How do I Register an Industrial Design in Nigeria? Substantive and Procedural Requirements for Registration of an Industrial Design, available at http://www.spaajibade.com/resources/how-do-i-register-an-industrial-design-in-nigeria-substantive-and-procedural-requirements-for-registration-of-an-industrial-design-bisola-scott/ accessed on 5th December 2020.

 

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