Legal implications of the naira and kobo patents

Legal implications of the naira and kobo patents.

ON August 23, 2012, the Governor of Central Bank of Nigeria at a press briefing announced the apex’s banks plan entitled “PROJECT CURE” to restructure Nigeria’s currency by the coining of the N20 (twenty), N10 (ten), and N5 (five) naira notes and the introduction of the five thousand naira note.

Understandably, the announcement was greeted with varied reactions, in an attempt to justify the proposed plan of the apex bank; a director in the said bank was quoted by a national newspaper as saying that

“It was quite shocking to us when we discovered that the patent rights of some of our notes are owned by non-Nigerians.”

The said director was also quoted as having said that the patent rights of the new designs of the naira would be owned fully by Nigerians.

Meanwhile, a former President of the Chartered Institute of Bankers of Nigeria, was quoted as having said that:   “It is not the standard practice to have the patents of national currency held by foreigners. It is because Nigeria lacks the technology and trained personnel to manage its own printing. It is dangerous because if we have to get it back we will pay heavily”.

However, without dwelling on the legality or illegality of the above action this paper will attempt to examine the Intellectual Property ramifications of the proposed course of action and the ambits of Intellectual Property protection for bank notes.

Olufola Wusu Esq.
 
Lead Partner
 
Megathos Law Practice  

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BRAND NAMES/TRADEMARKS VS GENERIC TERMS: ARE THEY PROTECTED?

 BRAND NAMES/TRADEMARKS VS GENERIC TERMS: ARE THEY PROTECTED?

When last did you visit Shoprite (a shopping mall) or go to Silverbird (the Cinema) or eat Indomie (noodles) or Google a word (use a search engine)?

What is a trademark?

A trademark is a sign that is used to identify particular goods and services as those produced or provided by a certain person or business. It helps to distinguish goods and services produced by one business from similar ones provided by another.

For example, “GT BANK” is a trademark that relates to services (innovative banking and financial services).

Please find below the legal regime for the protection of Intellectual Property Rights in Nigeria.

Nigerian Copy Right Act, Cap. C 28 Laws of the Federation of Nigeria 2004

Patents and Designs Act, Cap P2, Laws of the Federation of Nigeria 2004;

Trade Marks Act, Cap. T13 Laws of the Federation of Nigeria 2004;

Trade Marks Regulations; and

Merchandise Marks Act Cap. M10 Laws of the Federation of Nigeria 2004

 

Distinctive Names

The first asset in any great business is a good name. It should be registered as a trademark. A trademark must be distinctive and capable of distinguishing the goods or services with which it is used.

A trademark is usually a word, but it can also be a logo, an email address (folawusu@yahoo.com, a tag line “Just Do it”

Functions of a trademark

They usually; help consumers identify and distinguish products or services.

 

How is a trademark protected?

The most common and efficient way of protecting a trademark is to have it registered.

Why protect trademarks?

It provides business people with a remedy against unfair practices of competitors.

Most companies are always trying to make their brands household names.

But when a trade mark is being used as a general term to refer to all goods and services in its class, that trade mark can be said to be a genericized trade mark.

 

The Innovation Perspective

I.P. Lawyers would say this process is called “genericization”. At the very least companies must juggle their quest for brand recognition with the fear of brand dilution, leading to trademark loss or devaluation.

 

Brand Names can be declared Legally Generic after…

A company sues another firm for using its name and the case goes to court and the trademark is said to be genericized even though it was initially distinctive but has changed in meaning to become generic.

 

What if trademark protection is lost…?

Microsoft vs. Apple

Microsoft is challenging the “App Store” name. Apple first applied for the trademark in 2008, shortly after launching the App Store for the iPhone. Microsoft is seeking to thwart Apple’s claim to the “App Store” name.

Protecting your brand from becoming Generic

What can Brand owners do to protect their brand and prevent it from becoming generic? That is a discussion for another day.

Conclusion

In Nigeria you probably won’t lose your trademark because your mark has become generic. However you would probably still suffer the business consequences that would arise from the weakness of your trademarks.  As a trademark owner, you still have to actively protect your trademarked name. That means using it consistently and protecting it against infringement and from becoming a generic term.

Perhaps our trademark laws need to be amended such that a trademark owner loses his trademark once his trademark becomes generic as generic terms should continue to be available for use by all without fear of reprisal by a trademark owner especially one that made or watched or his trademark become generic.

 

Olufola Wusu Esq. © 2012

Lead Partner Megathos Law Practice

He can be reached at folawusu@yahoo.com

Copyright © 2012

Lead Partner with Megathos Law Practice

Okay let’s get started…

Your thoughts anyone?

Legal Disclaimer

by Olufola Wusu Esq

(1) No advice

This note contains general information about [law and legal practice]. The information is not advice, and should not be treated as such.

(2) No warranties

The legal information on this article is provided without any representations or warranties, express or implied. We make no representations or warranties in relation to the legal information on this website.

Without prejudice to the generality of the foregoing paragraph, we do not warrant that:

(a) the legal information on this article will be constantly available, or available at all; or

(b) the legal information on this article is complete, true, accurate, up-to-date, or non-misleading.

(3) Professional assistance

You must not rely on the information on this website as an alternative to legal advice from your lawyer or other professional legal services provider. If you have any specific questions about any legal matter you should consult your lawyer or other professional legal services provider. You should never delay seeking legal advice, disregard legal advice, or commence or discontinue any legal action because of information on this website.

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HOSPITAL BRUTALITY AND PUBLIC SECTOR BRANDING IN LAGOS

HOSPITAL BRUTALITY AND PUBLIC SECTOR BRANDING IN LAGOS

There was chaos at the Lagos State University Teaching Hospital (LASUTH) where families of victims of the Dana Air crash were busy collecting remains of dead relatives as there was a brutal and savage attack on Leadership newspaper photojournalist, Mr Benedict Uwalaka, on Thursday, August 9, 2012 by officials of the Lagos State University Teaching Hospital (LASUTH) believed to be mortuary attendants.

However, without dwelling on the legality or illegality of the above actions this paper will attempt to examine the Intellectual property ramifications of the said action

The laws enumerated below make up the legal regime for the protection of Intellectual Property Rights in Nigeria.

 

Nigerian Copy Right Act, Cap. C 28 Laws of the Federation of Nigeria 2004

Patents and Designs Act, Cap P2, Laws of the Federation of Nigeria 2004; and

Trade Marks Act, Cap. T13 laws of the Federation of Nigeria 2004

 

Public sector brands In Nigeria

In Lagos State many Public Sector organisations are beginning to brand effectively. Some have used bright colours, catchy slogans, or informative and navigable website, in all public sector bodies in Lagos State are looking like they mean business. They no longer come across as being aloof and unnecessarily bureaucratic. They now appear to be open, approachable, and yes desire to build working relationships with us, the citizens.

The other day I had to carry out a transaction at the Registrar of Limited Liability Partnerships at Ministry of Justice Alausa Lagos, their response was swift and the staff were courteous at all times.

Lagos State University Teaching Hospital as a Public Sector brand

According to information available on its website, the General Hospital Ikeja was commissioned for treatment of patients from Ikeja and its environs on June 29th 1955. It was originally a cottage hospital but later transformed to a full fledge General hospital.

It is pertinent to note that the General Hospital has now been transformed into a Teaching Hospital of repute from 9th February, 1999.

Thus it can be easily deduced that this hospital is a creation of statute and that it exists in the public sector as a public sector brand.

Distinctive Names

The first ingredient in any great public sector brand is a good name. It should be registered as a trademark. A trademark is usually a word, your name; but it can also be a logo, an email address (folawusu@yahoo.com, a tag line “Eko oni baje” “Ebe Ano”. Whether registered or not, a name is a valuable asset that can be protected under the tort of passing off.

A strong trademark is virtually mandatory for all public sector brands. As a matter of fact Section 30 of the Companies and Allied Matters Act contains some restrictions on the use of certain words as a Company name.

Further protection for a Statutory Brand can also be found in Section 62 of the Trademarks Act which grants protection to the “Coat of Arms” of both State Governments and Federal Governments by placing clear restrictions on the registration of any brand bearing these Arms.

A Public sector brand can be defined as a name, term, sign, symbol, design or a combination of colours intended to identify the Services of one Public Sector Institution, and differentiate it from that of another Public sector Institution.

 

Public sector brands are some of the most powerful and engaging brands in existence in Lagos.

LASTMA, KAI, VIO, NEIGHBOURHOOD WATCH, LIRS, LTV and LAWMA amongst others, to a large extent elicit tremendous loyalty/disdain from employees and a large numbers of people/Lagosians who feel a strong emotional attachment towards them.

It is however important to realise that effective public sector brands are about engaging people and changing behaviours not just by words but by timely actions and not just about logos and banners (although of course the visual expression is an important branding tool in every branding campaign ).

The number of public sector brands in Lagos has grown in recent times. Quite a number of reasons are behind this, including the growth of government and its extension into all aspects of society.

One can however argue that there is only one brand that counts in the Lagos public sector sphere– and that is the Lagos Government. That would be assuming that all the other public sector brands are sub-brands deriving their value from the major brand Lagos State, so damage done to a public sector institution is damage done to the brand of Lagos State that seems to have consolidated on the catch line the centre of excellence with breath-taking innovation obvious to all and sundry..

From the Horse’s mouth…

Mr Uwalaka was quoted as saying the following:

“I came to LASUTH in the morning to cover the release of the corpses of victims of the DANA Air crash. Some vehicles were deliberately used to block the entrance to the mortuary to prevent access. From a distance, I took the pictures of the vehicles. Suddenly I heard a voice behind me, saying ‘shows me your camera, show me your camera. What pictures are you taking?’ Suddenly, somebody came from behind and snatched the camera from me.”

He said the attackers began beating him mercilessly, hitting him with their fists, sticks, bottles and other dangerous weapons, resulting in serious bodily injuries, especially on his face. Indeed, dangerous weapons were freely used to inflict injuries on his head.

 

An eyewitness perhaps…

According to media reports, another journalist, Mr Kola Olasupo, who was present at the scene, corroborated Mr Uwalaka’s account.

He was quoted as saying

“Uwalaka was wrongly attacked for an offence he did not commit and his camera destroyed by attendants and officials of the mortuary; if we were not around to rescue him while the mortuary men pounced on him and stabbed him, he would have died from severe loss of blood.”

But the Police is our Friend…

The incident was immediately reported at the Area ‘F’ Police Division headquarters in Ikeja where Uwalaka was taken to by his colleagues and a police report sought to take him to the emergency unit of the hospital.

It’s curious that the police station beside the hospital where the incident was reported refused to act on the lodged by the Uwalaka, possibly there were a little over stretched at this time.

This is poor branding on their part, they would simply have saved the day by nipping such violence in the bud, and refusal to answer a call for help in a brawl does not inspire much confidence that calls for help will be answered when assailants are armed with firearms et al.

A Case of Double Standards perhaps?

Swift detention of accused nursing mother but no action on murderous attackers of photo journalist…

Why has the nursing mother accused of murdering a Lastma official been held in detention even when she denies the allegation? While we have a video clip by Channels Television of multiple assailants/officials murderously attacking a photojournalist armed with his camera, they are not even denying the crime captured on video camera yet they are still walking free while the government, police and hospital management are busy passing the buck back and forth.

Why invite journalists to your hospital if you don’t want them around?

If people are not safe in a hospital which is meant to be a sanctuary for the infirm then where then are they safe? Does it make any sense that Uwaleke walked into the hospital whole but walked out with horrific injuries and awful bruises? Is the hospital hiding something?

Does the hospital not owe the photo journalist a duty of care?

I beg to think that they actually do, there is a good reason why contractors are vetted, and this is because the lines separating an agent from an independent contractor are easily blurred thus making vicarious liability anything but a distant reality.

 

An unreserved apology…

Our Hardworking and Innovative Governor an oral apology however unreserved would simply not do.

For one,  your Excellency, it won’t heal the photojournalist’s injuries, it won’t pay his medical bills as he would need to nurse those horrific injuries he was inflicted with ( seeing the shoddy treatment he allegedly received at the said hospital one doubts the wisdom in going back for more maltreatment, …sorry treatment..). It does not suffice as compensation which the law courts would gladly award all things been equal and it won’t in any way deter other evil doers from assaulting other people…

The future of Public Sector Health Institution Branding

All branding is about communicating a clear offer to your customers or users, however for public sector health institutions organisations, such as hospitals and health services, the focus may be on clarity and access to important information.

So branding and design may focus on signposting information or communicating issues clearly in order to change people’s behaviour.

Like many others, we’ve been deeply saddened by the video clip of that brazen assault on citizen Uwaleke, this highlights the undignified attitude of some care givers towards people in our hospitals and care homes.

In too many cases, people like Uwaleke have been let down when they were vulnerable and most needed help.

We know there are some hospitals and care homes providing great care, and we need to learn from them to get dignified care right for every person, every time and at every place.

Hospitals and care homes should be lights to the rest of the community, demonstrating how we are all the richer when people are protected, respected, valued and celebrated. I mean if you are not safe from physical assault in a hospital then where are you safe?

We need a major cultural shift in the way everyone in care thinks about dignity to ensure care is person-centred and not task-focused.

It is absolutely clear that we all need to work together to improve dignity in health care and earn back public confidence in the health institutions in Lagos State.

 

Conclusion

Re-branding Lagos won’t be very effective when staff/ assorted hangers-on of public sector institutions go out of their way to negatively rebrand our beloved state with such despicable acts and vile behaviour.

An apology was the first step in the right direction, now we expect swift and hard sanctions Your Excellency!

Men set their hearts to do evil when punishment is slow in coming; it is probably not the first time such barbaric acts would have taken place, but as long as they remain unpunished men will continue to behave in such vile and despicable ways. Eko oni baje o!

Olufola Wusu Esq. © 2012

Counsel with Megathos Law Practice

Olufola Wusu is a Contract Review Specialist and Intellectual Property consultant

He can be reached at folawusu@yahoo.com

Legal Disclaimer

by Olufola Wusu Esq

(1) No advice

This note contains general information about [law and legal practice]. The information is not advice, and should not be treated as such.

(2) No warranties

The legal information on this article is provided without any representations or warranties, express or implied. We make no representations or warranties in relation to the legal information on this website.

Without prejudice to the generality of the foregoing paragraph, we do not warrant that:

(a) the legal information on this article will be constantly available, or available at all; or

(b) the legal information on this article is complete, true, accurate, up-to-date, or non-misleading.

(3) Professional assistance

You must not rely on the information on this website as an alternative to legal advice from your lawyer or other professional legal services provider. If you have any specific questions about any legal matter you should consult your lawyer or other professional legal services provider. You should never delay seeking legal advice, disregard legal advice, or commence or discontinue any legal action because of information on this website.

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HYDRAULIC FRACTURING IN NIGERIA: PROS AND CONS

 

HYDRAULIC FRACTURING IN NIGERIA: PROS AND CONS

It has been reported in the news that out of the 388 acreages in the country, 173 had been allocated to 85 companies that are involved in the upstream business, while 215 were yet to be allocated to investors. It was also disclosed that 70 per cent of the 315 oil fields in these 173 acreages are producing oil and gas, while about 30 per cent of the fields are still going through exploration and appraisal stages.

Concerns about Hydraulic Fracturing Hydraulic fracturing is highly variable and unpredictable, and because drinking water supplies are extremely precious resources, numerous concerns have been raised.

Possible Legal Regime regulating Hydraulic fracturing…

Economic Pressure: Natural Gas Development

In Nigeria natural gas has become an important and extremely valuable fuel, Nigeria has approximately 184 trillion cubic feet (tcf) of gas reserves. Fracturing and the Environment Allegations of water quality impacts associated with hydraulic fracturing date back to at least the early 1990s, but hard evidence has gradually began to surface.

Regulating Hydraulic Fracturing… In this writer’s opinion, both Federal and State Environmental Protection Agencies should carry out comprehensive research in conjunction with civil society groups to ascertain and obtain credible evidence of environmental risks and possible economic benefits obtainable from fracking.  

Air Quality Protection

Concerns also have been raised over potential air impacts. Generally, natural gas contains significantly lower levels of greenhouse gases than coal and other fossil fuels, and therefore increased energy production with natural gas has the potential to significantly reduce GHG emissions. Air controls would be used to address the greenhouse gas (GHG) impacts of natural gas produced by fracking.

Hydraulic Fracturing Best Practices

It is common to use diesel in hydraulic fracturing fluids. This should be avoided, since diesel contains the carcinogen benzene, as well as other harmful chemicals such as naphthalene, toluene, ethyl benzene and xylene. It is technologically feasible to replace diesel with non-toxic additives such as plain water.

Possibility of Bans and Moratoriums

Despite movement toward reasonable regulation to address concerns related to hydraulic fracturing, there is still a strong movement, especially in the mid-Atlantic, toward banning all hydraulic fracturing. New York is the only U.S. state that has actually instituted any sort of ban or moratorium on fracking. Bulgaria and France have banned Hydraulic fracturing while in South Africa there is a moratorium on same.

Conclusion

The debate over hydraulic fracturing should commence sometime soon and should not be silenced, but it should remain based on fact, it should be focused on the protection that is already in place and what actually is being done to increase that protection or it will have failed to serve the public interest. In this writer’s opinion shedding light on the current status of facts should assist in that endeavour.

  Olufola Wusu Esq. © 2012

Counsel with Megathos Law Practice

Olufola Wusu is a Contract Review Specialist and Intellectual Property consultant

He can be reached at folawusu@yahoo.com for legal advice and more.

Legal Disclaimer by Olufola Wusu Esq

(1) No advice This note contains general information about [law and legal practice]. The information is not advice, and should not be treated as such. (2) No warranties The legal information on this article is provided without any representations or warranties, express or implied. We make no representations or warranties in relation to the legal information on this website. Without prejudice to the generality of the foregoing paragraph, we do not warrant that: (a) the legal information on this article will be constantly available, or available at all; or (b) the legal information on this article is complete, true, accurate, up-to-date, or non-misleading. (3) Professional assistance You must not rely on the information on this website as an alternative to legal advice from your lawyer or other professional legal services provider. If you have any specific questions about any legal matter you should consult your lawyer or other professional legal services provider. You should never delay seeking legal advice, disregard legal advice, or commence or discontinue any legal action because of information on this website.

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Oil and Gas Industry:Innovation/Intellectual Property based or a Commodity Market?

Introduction

The Occupy Nigeria demonstrations of the 1st of January 2012, the oil subsidy probe and the ensuing “entrapment gone awry” gives credence to the fact that the oil and gas industry is risky, political and very expensive. Furthermore, the industry is constantly being scrutinised by governments, numerous regulatory bodies, investors and ordinary citizens.

It’s also important because it energises every other industry in the world.

I guess you are thinking, there is enough money to go around in Oil and Gas Industry, so why bother with “innovation” i.e. Intellectual Property?

For starters, Oil and gas companies are expected to comply with the mantra, “cheaper, better and faster” i.e. more productivity, less cost to consumers, but it must still manage international politics and not mess up our environment.

Safety…

Innovation Management

Paradoxically the oil and gas industry probably has the best tools and capabilities covering operational efficiency and decision making.

 

Exploiting innovation

Innovative Contract Review and Environmental Protection

There is a possibility that contract review and negotiation can help stem the tide of pollution and environmental degradation…

The laws enumerated below make up the legal regime for the protection of Intellectual Property Rights in Nigeria.

Copy Right Act, Cap. C 28 Laws of the Federation of Nigeria 2004

Patents and Designs Act, Cap P2, Laws of the Federation of Nigeria 2004; and

Trade Marks Act, Cap. T13 laws of the Federation of Nigeria 2004

 

Oily Intellectual Property;

Patents

A patent is a document issued, upon application by a government office (or a regional office acting for several countries), which describes an invention and creates a legal situation in which the patented invention can normally only be exploited (manufactured, used, sold, imported) with the authorization of the owner of the patent

Why Oil and Gas companies are yet to fall in love with Patents …

Is Innovation necessary?

How important is our competition?

What does IP have to do with Oil and Gas?

Trade secrets

A “trade secret” is defined as any product, operating formula, pattern, device or other compilation of information which is used in a business, which gets its economic value from being kept secret, and gives the business a competitive advantage.

 

Contractual Protection for Trade Secrets

Trade secrets are more appropriately protected by contract.

Commercialisation of Patents and Trade Secret

Patents are public documents which disclose information about the invention (technology) in exchange for state protection.

Copyrights

A copyright gives the holder of such copyright the exclusive right to control exploitation, production and adaptation of such a work for a certain period of time.

TRADEMARKS

The first barrel in any great oil and gas company is a good name. It should be registered as a trademark.

 

Oily IP Transactions

Formal accounting procedures for IP assets are fast evolving, but they are generally not on the balance sheet of the average companies that own them, and they are sometimes ignored by financial analysts.

            Conclusion

The upstream oil and gas industry has been described as a “knowledge industry” because of new technologies such as three-dimensional acoustical sounding, horizontal drilling, and deep offshore drilling.

Perhaps the National assembly should do well by including provisions on Intellectual Property and Hydraulic Fracturing in the long awaited Petroleum Industry Bill, which should help nudge the Industry in the right direction IP wise.

Olufola Wusu Esq. © 2012

Counsel with Megathos Law Practice

Olufola Wusu is a Contract Review Specialist and Intellectual Property consultant

He can be reached at folawusu@yahoo.com

Legal Disclaimer

by Olufola Wusu Esq

(1) No advice

This note contains general information about [law and legal practice]. The information is not advice, and should not be treated as such.

(2) No warranties

The legal information on this article is provided without any representations or warranties, express or implied. We make no representations or warranties in relation to the legal information on this website.

Without prejudice to the generality of the foregoing paragraph, we do not warrant that:

(a) the legal information on this article will be constantly available, or available at all; or

(b) the legal information on this article is complete, true, accurate, up-to-date, or non-misleading.

(3) Professional assistance

You must not rely on the information on this website as an alternative to legal advice from your lawyer or other professional legal services provider. If you have any specific questions about any legal matter you should consult your lawyer or other professional legal services provider. You should never delay seeking legal advice, disregard legal advice, or commence or discontinue any legal action because of information on this website.

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CONTRACT REVIEW OF OIL AND GAS JOINT VENTURE AGREEMENTS-THE INNOVATION/INTELLECTUAL PROPERTY DIMENSION

Chronicles of Innovation II.

Oil and Gas Contract Review…

The Federal Government on the 2nd of July 2012 signed an agreement with an American and Nigerian joint venture group, Vulcan Petroleum Resources Limited and Petroleum Refining and Strategic Reserve Limited, for the construction of six modular refineries. The six refineries are estimated to gulp $4.5bn.

Joint ventures in the oil and gas sector in Nigeria are an easy way for businesses to put together their expertise and assets to carry out common projects.

A key area that is often ignored by joint venture participants is intellectual property in Joint Ventures, such as patents, trade secrets, research, software (the subject of copyright), and trade-marks.

The laws enumerated below make up the legal regime for the protection of Intellectual Property Rights in Nigeria.

Copy Right Act, Cap. C 28 Laws of the Federation of Nigeria 2004

Patents and Designs Act, Cap P2, Laws of the Federation of Nigeria 2004; and

Trade Marks Act, Cap. T13 laws of the Federation of Nigeria 2004

 

Intellectual Property in Oil and Gas Joint Ventures/Operating Agreementss;

The basic types of Intellectual property prevalent in the oil and gas sector are the following; Patents, Trademarks, Copyrights, Trade Secrets and Others like brands, Know-How, Know – Who and Professional Credentials & Credibility.

 

What is a Joint Venture/Operating Agreement?

A joint venture is an association of corporations or other legal entities who agree by contract to engage in a common undertaking for joint profit. Typically in Nigeria the Joint Venture is usually between Nigeria and the Oil Majors. The NNPC represents the interest of the government in the joint ventures.

 

Intellectual Property in Joint Ventures in Nigeria

When reviewing Joint Venture Agreements in Nigeria, Intellectual Property issues are given scant attention or swept under the carpet.

Pitfalls unique to Joint Ventures

Employees acting on behalf of the joint venture/one of the venturers:

 

The Nigerian Experience…

Indigenous companies have been awarded oil blocs and some entered into joint ventures with established oil majors, but found themselves holding the short end of the stick after being schemed out of the equation.

 

Protect Trade secrets/other Intellectual property…

Intellectual Property Theft

Network Breach

A Possible Paradigm Shift

Include Intellectual Property Terms in the Joint Venture Agreement

Innovation Savvy contract counsel

Envisage Possible Improvements…

Clearer Employee Roles…

The way forward…

This writer sees a future where research and innovation will play an increasingly important role in the Nigerian energy industry with more joint ventures being formed to capitalize on/commercialise new innovations or to pool resources to create new solutions as distinct from developing oil acreage or building refineries.

            Conclusion

A willingness to work with the locals and the middle men by enlisting their support to combat the more horrific types of illegal refiners down the line will be a useful tool in stamping out crude oil bunkering in Nigeria. Let brute force be the last card…

Olufola Wusu Esq.

Copyright © 2012

Counsel with Megathos Law Practice

Okay let’s get started…

Your thoughts anyone?

Legal Disclaimer

by Olufola Wusu Esq

(1) No advice

This note contains general information about [law and legal practice]. The information is not advice, and should not be treated as such.

(2) No warranties

The legal information on this article is provided without any representations or warranties, express or implied. We make no representations or warranties in relation to the legal information on this website.

Without prejudice to the generality of the foregoing paragraph, we do not warrant that:

(a) the legal information on this article will be constantly available, or available at all; or

(b) the legal information on this article is complete, true, accurate, up-to-date, or non-misleading.

(3) Professional assistance

You must not rely on the information on this website as an alternative to legal advice from your lawyer or other professional legal services provider. If you have any specific questions about any legal matter you should consult your lawyer or other professional legal services provider. You should never delay seeking legal advice, disregard legal advice, or commence or discontinue any legal action because of information on this website.

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NNPC’S $60 Billion Crude lifting Contracts: What the Local Companies Should Know (As it appeared in THISDAY NEWSPAPER’S THISDAY LAWYER 10/7/2012 at page 11. )

Chronicles of Innovation II.

How Intellectual Property Rights “Fathered” the Oil Field Service Industry.

Introduction

It is commendable that the Federal Government through the Nigerian National Petroleum Corporation decided to award nearly half of the 2012/2013 crude oil lifting contracts worth approximately $60 billion (sixty billion Dollars) to Nigerian companies.

This writer congratulates the successful Nigerian Companies and hopes that the increased cash flow will give these companies the needed leverage to grow and evolve into full-fledged International Oil Companies.

During exploration, extraction and even transportation of same, value is added to the unrefined oil and gas by technology, and other business practices that help process the extracts into useful and valuable consumer products.

Innovation, technology and business processes (Intellectual Property Assets) become valuable assets to a business organization, when they are registered and competitors prevented from accessing and using proprietary innovation for free.

Owners of such Intellectual Property Assets may actively commercialise their assets by licensing them to companies willing to use these Intellectual Property Assets in exchange for a license fee. Such businesses often enjoy competitive advantages over their competitors, by virtue of increased revenue flow.

Please find below the legal regime for the protection of Intellectual Property Rights in Nigeria.

Copy Right Act, Cap. C 28 Laws of the Federation of Nigeria 2004

Patents and Designs Act, Cap P2, Laws of the Federation of Nigeria 2004; and

Trade Marks Act, Cap. T13 laws of the Federation of Nigeria 2004

The need for Innovation/Intellectual Property Commercialization

At the very minimum however these Nigerian companies need to pay a little more attention to research, development and the resulting innovation that increases profitability which should be protected by Intellectual Property possibly Patents, Trade Secrets etc.

Mechanisms for Protecting Oil & Gas Technologies

Patent protection is the traditional choice but sometimes such technologies or business models can be kept confidential, then Trade secret protection becomes an option.

The Way Forward…

What is the nature of the company controlling the technology? Can access to the technology be controlled? Will our company benefit or be harmed by the disclosure of information when a patent application is filed? Does our company believe that the invention is sufficiently novel and non-obvious? Does our company have the funds to maintain a patent portfolio? Can the invention in question be reverse engineered?

Oil and Gas Patents

A patent is a document issued, upon application by a government office (or a regional office acting for several countries), which describes an invention and creates a legal situation in which the patented invention can normally only be exploited (manufactured, used, sold, imported) with the authorization of the owner of the patent.

Patents cover cutting-edge equipment and technologies used in exploration, production, refinement and manufacturing. It covers robotic oil well fire fighting cranes, drilling bits, oil rigs, oil pipeline cleaning scraper pigs; heavy lift ships carrying oil platforms, hydraulic fracturing fluids etc. 

Patent Protection “fathered” the Oil Field Service Industry.

The logistics required to locate, extract, process and transfer crude oil or gas can possibly make some companies think twice about even venturing into oil and gas production in the first place.

Oil Field Service Companies offer products and services geared at lowering costs, reducing risk or improving productivity during exploration activities thereby improving the operating environment for operating companies.

So kudos to companies like Schlumberger Limited, Halliburton, Saipem, Transocean Ltd, Baker Hughes, Fluor, Weatherford International, BJ Services Company, Petrofac, China Oilfield Services Ltd and IBM.

It goes without saying that companies in the oil field service industry, would probably not have been formed and would not continue to exist today without protection of its Intellectual Property!

Commodity Sellers vs. Proprietary Industry…

If the products of Oil Field Service companies were not protected by patents, they would have been priced as a “commodity”.

If their products had been priced as a “commodity”, they may not have been developed and made available to the industry.

The thing is that Intellectual Property Rights are enforceable against the whole world while Contractual Rights are enforceable against only the parties that enter into contract with you!

Trade secrets

A “trade secret” is defined as any product, operating formula, pattern, device or other compilation of information which is used in a business, which gets its economic value from being kept secret, and gives the business a competitive advantage.

The upstream oil and gas industry depends heavily on trade secret protection. Large amounts of exploration data, design data and some production data are confidential and protected as trade secrets.

Trade Secrets arise without engaging any administrative process, they operate by denying competitors information that is necessary to access and use the technology.

Duration of Trade Secret protection

The duration of trade secret protection is in a way potentially, perpetual, as the protection continues as long as you can keep your trade secret, secret.

Paradigms of Trade secrets protection

Shades of Trade Secret protection

A school of thought states that ideas are ten naira a dozen; so they share their innovations by just executing better and getting to the market place in lightning speed, the second school treat their innovation as proprietary, and use available legal means to protect it: e.g., nondisclosure agreement; and generally limit access to information.

The right approach will be a mix of two of the options outlined above in conjunction with patent protection.

 

Threats to Trade Secret Protection

Regulatory Approval

For regulatory approval to be given for an Oil and Gas project there must be some form of disclosure which possibly erases the efficacy of trade secret protection.

In reality compliance with such regulations are sometimes illusory, companies spend millions of dollars to create new innovations and are very reluctant to disclose them even to regulatory bodies, this is particularly evident in our technology transfer experience, as seen in the inefficacy of Nigeria’s technology transfer clauses.

Employee Mobility

Where employee mobility is on the high side trade secret protection is no longer a viable option for the protection of intellectual property for the oil company.

Publication

Once the trade secret information becomes public, the trade secret, and its inherent value, becomes to a large extent permanently extinguished.

 

Patent protection cannot remedy Trade Secret disclosures…

Where trade secret protection is lost, it is permanent, and patent protection cannot remedy such a loss as the innovation would already be in public domain.

 

 

Oil Field Service Companies- Patents

Oilfield service companies’ deal with numerous customers which increases the risk of information about their technology being leaked into the public domain regardless of control mechanisms like confidentiality or non-disclosure agreements binding employees and even contractors! Technologies developed by oilfield service companies, are usually protected by patents.

Operating companies- Patents and Trade Secret Protection

Minor processes and innovations developed in-house at operating companies usually use trade secret protection, possibly because customers are not exposed to underlying technology used to produce a finished product.

Valuable innovations that have broader application beyond a singular operation may be better protected by patents

Commercialisation of Patents and Trade Secret

Patents are public documents which disclose information about the invention (technology) in exchange for state protection, which is the exact opposite of trade secret protection. However, commercialisation of patents and trade secret is a desirable option, thus trade secrets are licensed along with patent rights, in what is called a “hybrid” license.

 

Conclusion

Thus for our Oil and Gas companies to grow, they are going to have to take their innovation and resulting Intellectual Property like patents and trade secrets seriously, because that is what gave birth to the Oil Field Service Industry in the first place and that is what keeps them in business, the right to exclude others from exploiting their products (by sale, manufacture, use and importation) without their authorization (the owner of the patent) and this is usually granted in exchange for hefty license fees and other charges!

Olufola Wusu Esq.

Copyright © 2012

Counsel with Megathos Law Practice

Okay that was a mouthful…

So let’s get started…Does Oil and Gas really need Intellectual Property?

Your thoughts anyone?

Legal Disclaimer

by Olufola Wusu Esq

(1) No advice

This note contains general information about [law and legal practice]. The information is not advice, and should not be treated as such.

(2) No warranties

The legal information on this article is provided without any representations or warranties, express or implied. We make no representations or warranties in relation to the legal information on this website.

Without prejudice to the generality of the foregoing paragraph, we do not warrant that:

(a) the legal information on this article will be constantly available, or available at all; or

(b) the legal information on this article is complete, true, accurate, up-to-date, or non-misleading.

(3) Professional assistance

You must not rely on the information on this website as an alternative to legal advice from your lawyer or other professional legal services provider. If you have any specific questions about any legal matter you should consult your lawyer or other professional legal services provider. You should never delay seeking legal advice, disregard legal advice, or commence or discontinue any legal action because of information on this website.

2 Comments

Filed under Oil and Gas

LAUGH OUT LOUD! COMEDY AND INTELLECTUAL PROPERTY.

“I dey laugh o!”

Does anybody remember who said that?

“I still dey laugh o”

Who said that?

Is it covered by copyright?

Is this a tagline?

Comedy is no longer a laughing matter as it is now big business.  In the early days there was Chief Chika Okpala, aka Chief Zebrudaya of the New Masquerade fame in the 80s. Then along came John Chukwu in the early 90’s.  Meanwhile, Gbenga Adeboye held sway in the comedy circuit from the 70s till he passed on. Some of the comedians we have are Basket Mouth, Patrick Doyle, Julius Agwu, Jedi, AY, Gandoki, Teju Baby Face, Mandy, Princess, Lepacious Bose, Seyi Law, Holy Mallam, Julius the Genius Agwu and Ali Baba. 

Landmarks Events…

The Opa Williams “A Night of a Thousand Laughs”…

The programme took a life of its own and the organisers excelled at brand extension by churning out a number of goods like Cds, T-Shirts and other souvenirs.

Then along came Atunyota Alleluya Akpophiohuobo Akpobomerere, better known as, King Ali Baba.

He is said to have practically rebranded the industry by giving it a new face and direction.

At the onset people were a bit conservative, but overtime, with television, travel, information technology and yes freedom of speech (democracy) the industry evolved very quickly.

In Nigeria comedians often neglect their intellectual property and its legal power and commercial potential to develop their unique images, fend off competition and maximise profits by commercialisation and extension of their brand identity.

Find below the legal regime for the protection of Intellectual Property Rights in Nigeria.

Copy Right Act, Cap. C 28 Laws of the Federation of Nigeria 2004

Patents and Designs Act, Cap P2, Laws of the Federation of Nigeria 2004; and

Trade Marks Act, Cap. T13 laws of the Federation of Nigeria 2004

 

Is Comedy without Intellectual Property Protection and commercialization really a laughing matter?

Intellectual Property Registration and Enforcement Strategies:

The Nigerian Experience:

Innovative Jokes…

In other climes script writers pen the jokes that comedians perform.

Improvised routines?

One Liners?

 

Borrowing of Jokes/ Comedy Routines is not a laughing matter

More established comedians claim that they are getting fewer laughs when they perform because audience members have often already heard their jokes on the internet or from upcoming acts.

Intellectual Property for Borrowing…

The Federal Government under President Goodluck Jonathan released US$200 million as the Entertainment industry Fund. The Nigerian Entertainment Fund is being managed by Nigerian Export and Import Bank, NEXIM, which has since released guidelines for the operation of the Nigerian creative and entertainment Stimulation Loan Scheme.  According to the guidelines released         by        NEXIM, (http://neximbank.com.ng/CHECKLIST_Entertainment_Industry.pdf)

‘Applicant shall forward in addition to other requirements Collateral security / Intellectual Property Assets that are properly patented, trademarked, copyrighted, etc. to be pledged/assigned.

 

New Jokes in the house…

The experience in other climes:

 

Self help

 

Cease and desist letters

 

 

A Possible Paradigm shift

 

Basis for protection

While Nigerian Intellectual Property Right owners need to get smarter about the way they protect their I.P., there is still a foundation upon which the other strategies are built.

 

 

Which Wan Be This I.P. Sef?

Nigerian Comedians should show concern about infringement of their intellectual property, at the minimum they need to get up to date with IP and comedy.

 

            Conclusion

Registration of your intellectual property is the first step to properly managing I.P.

It is not about the form of expression versus the idea in the joke, it is a fine mix of both and it all depends on what angle you are looking from, in the end a mix of I.P. Registration, social normative systems, commercialisation of Intellectual Property  rights and Intellectual Property  asset management may hold the key to the growth of the comedy industry in Nigeria.


Olufola Wusu Esq.

copyright © 2012

Counsel with Megathos Law Practice

Okay that was a mouthful…

So lets get started…Does Comedy really need Intellectual Property?

Your thoughts anyone?

Legal Disclaimer

by Olufola Wusu Esq

(1) No advice

This note contains general information about [law and legal practice]. The information is not advice, and should not be treated as such.

(2) No warranties

The legal information on this article is provided without any representations or warranties, express or implied. We make no representations or warranties in relation to the legal information on this website.

Without prejudice to the generality of the foregoing paragraph, we do not warrant that:

(a) the legal information on this article will be constantly available, or available at all; or

(b) the legal information on this article is complete, true, accurate, up-to-date, or non-misleading.

(3) Professional assistance

You must not rely on the information on this website as an alternative to legal advice from your lawyer or other professional legal services provider. If you have any specific questions about any legal matter you should consult your lawyer or other professional legal services provider. You should never delay seeking legal advice, disregard legal advice, or commence or discontinue any legal action because of information on this website.

23 Comments

Filed under Comedy and Intellectual Property

DO YOU COOK? I.P. IN THE KITCHEN-(“Does a Restaurant Have IP Rights to its Menu?”As it appeared in Thisday Lawyer 22/05/12) http://www.thisdaylive.com)


In Nigeria, dining out has become a very popular form of leisure and entertainment, generating an estimated N250 billion(two hundred and fifty billion Naira) in 2011.

However, dining out represents only one aspect of the modern food economy; cooking and dining are regularly featured in newspapers, TV programmes and magazines, while celebrity chefs tout their own brands in other countries, in Nigeria celebrities’ are casted as chefs touting popular brands on television.

Eating has been transformed from routine activity into big business. Increasing competition for the attention and money of restaurant patrons and fast food lovers has prompted chefs of grande cuisine and owners of fast foods to differentiate their menus by creating unique dishes with innovative names that remain largely unprotected.

The time and labour that chefs invest into this form of innovation represents a substantial investment, and very few have turned to the law to protect their original dishes from competing chefs.

Yet, in Nigeria copyright law fails to protect chefs’ recipes from copycats.  Historically, the law has viewed recipes as uncopyrightable subject matter because of their “functional” and “utilitarian” nature.

More interestingly restaurant owners and fast food owners have not been very eager to protect the intellectual property inherent in their recipes and their shops as a whole.

The laws enumerated below make up the legal regime for the protection of Intellectual Property Rights in Nigeria.

Nigerian Copy Right Act, Cap. C 28 Laws of the Federation of Nigeria 2004

Patents and Designs Act, Cap P2, Laws of the Federation of Nigeria 2004; and

Trade Marks Act, Cap. T13 laws of the Federation of Nigeria 2004

Reasons for protecting Intellectual property in your Restaurant

In Nigeria many restaurant operators often neglect their intellectual property and its legal power and potential to develop their unique images, fend off competition and maximise profits by commercializing their intellectual property and extending their brand identity.

Key intellectual property in Restaurants and practical steps to protect them

There are a plethora of intellectual property assets that are worthy of legal protection namely Copyright, Patent, Industrial Design and Trademark and restaurants can and should use them to strengthen the value of their brands by the possibility of licensing, franchising and merchandising amongst other options.

Distinctive Names

The first ingredient in any great restaurant is a good name. It should be registered as a trademark. A trademark is usually a word, your name; but it can also be a logo, an email address(folawusu@yahoo.com, a tag line “Just do it”. Whether registered or not, a name is a valuable asset that can be protected under the tort of passing off. In choosing a name, it is wise to consider a name that is distinctive. In Nigeria single location, owner-operated restaurants often bear the name of their founder or chef. But to name a restaurant SEUN’S, for example, is to create something that would be virtually impossible to protect, it is advisable to come up with a creative name.

A strong trademark is virtually mandatory for restaurants and other members of the fast food industry. A local restaurant should, like any prudent business man at a minimum, conduct a comprehensive name/trademark search in order to avoid choosing a name similar to any known competitor or similar business. Geographical indicators can be used to name restaurants as can be seen in “AMALA SHITTA”, “OBALENDE SUYA” “SONOLA AMALA”

Menus

Instead of using generic descriptions like “ofada rice” or “Agege Bread”, restaurateurs or fast food owners can choose signature names for their dishes. These special names can then be protected as trademarks and can be used to build value for the owner through licensing, franchising and merchandising etc. In addition, a menu that is an original creation, combining photographs, illustrations, images, and descriptions of the wonderful and unique Nigerian dishes, is protectable under copyright law In Nigeria.

Recipes

Often recipes are protectable trade secrets. A “trade secret” is defined as any product, operating formula, pattern, device or other compilation of information which is used in a business, which gets its economic value from being kept secret, and gives the business a competitive advantage. They can be protected in the following ways; Identify your company’s trade secrets, Develop and codify a trade secret protection policy for your company, limit disclosures of trade secrets and other confidential information only on a “need to know” basis to chefs and managers, require appropriate parties to sign written confidentiality or non-disclosure agreements, require appropriate parties to sign non-competition and non-solicitation agreements and require appropriate parties to assign rights to the business with respect to inventions and work-product arising in the course of their relationship with the business.

However there are at least two schools of thought as regards trade secrets. The first school of thought states that ideas are ten Naira a dozen; so they want to share their innovations and don’t want to try to keep things for themselves, they just execute better and get to the market place quicker, or the second school of thought which believes that you should treat your stuff as proprietary, and use available legal means to protect it: e.g., nondisclosure agreement; employment agreements; and generally limit access to information.

The right approach will depend on a lot of factors, but having an approach that is well-considered and that you can clearly express and codify will help with maximizing returns on your trade secrets.

Use of Take away products as a Brand Extension

Nigerian restaurants can begin to package and sell signature products outside their business premises such as take away packs, ingredients, bottled water, t-shirts, face caps, cooking aprons, gloves and dish ware.

The restaurant’s furnishing and layout

In this writers opinion, restaurant décor and layout as with all ideas and concepts can be protected under industrial designs provided they are distinctive. Blue tablecloths and blue wash hand basins for an Ibadan-themed Amala restaurant will probably not be protected. Nigerian restaurants can go ahead to post signs stating that no photography is permitted on their premises, however in a social media-driven world, this may be illusory and very difficult to enforce.

Websites and Social Media: Connecting with Customers

There is a need to ensure that company websites (internal and external) do not contain information which you want to be able to classify as a trade secret or confidential or proprietary. Websites need to be reviewed regularly to ensure such information is not placed at risk.  Restaurant owners must address what information employees can discuss or post on blogs, and prohibit the disclosure of confidential information and trade secrets.  It might be prudent to monitor blogging activity frequently, and take steps to prohibit or stop trade secret disclosures.

 

Consequences of Failing to Register Trademark/other Intellectual property

The absence of trademark registration may limit your expansion into new territories. Trademarks are tied to a geographical location; without a registration, your rights may be limited and you can get boxed in if a third-party registers the same name you use.

In addition it also means you have no obvious asset. You may have trademark rights based on prior use (at common law), but banks and other financial institutions are more likely to reckon with trademark registration as a tangible evidence of an intangible asset.

If you want to franchise your business model, not having a trademark registration is a significant risk and your franchisee may just go ahead and register your trademark in their own name and then go ahead to rail road you out of the market.

 

Building Brand Value with Intellectual Property Registration and Enforcement Strategies

In June 2007, Rebecca Charles, chef-owner of Pearl Oyster Bar (“Pearl”) in New York City’s Greenwich Village, sued her former sous chef, Ed McFarland, now chef and part owner of Ed’s Lobster Bar in New York’s SoHo neighborhood. In her complaint, Charles alleged that McFarland had pirated Pearl’s menu, recipes, dish presentations, décor, “look and feel,” all of which Charles believed amounted to a flagrant misappropriation of both her and Pearl’s intellectual property. The detail that reportedly irritated Charles most was a dish on McFarland’s menu called “Ed’s Caesar.”

According to Charles, McFarland had copied her own Caesar salad recipe, made with English muffin croutons and a coddled egg dressing, which Charles maintained was a signature dish at Pearl.

The culinary and restaurant industries billed Charles’s suit, which settled out of court on undisclosed terms in April 2008,as among the first of its kind. Chefs and restaurateurs had invoked intellectual property concepts to defend particular aspects of their restaurants, but most had stopped short of filing suits, and few had attempted to argue intellectual property theft in such totality. While Charles maintained that her case was about protecting her restaurant as a whole and not about laying claim to a type of food, her lawsuit sparked fierce debate in the culinary world, particularly with regard to intellectual property rights and cuisine itself.

Intellectual Property Registration is tangible evidence of an intangible asset. It is proof that the goodwill exists. Anytime you make an intangible asset, like goodwill and trademark rights, concrete it helps people understand the value.

Registering your intellectual property is not going to automatically prevent others from encroaching on your territory. Intellectual Property owners are obligated to protect their own right using governmental apparatus and applicable laws, well that is part of the reason you pay taxes.

Part of any good Intellectual Property protection strategy should include some budget to properly commercialize their IP in other to maximise profit and a willingness to fight any IP infringers.

            Conclusion

Simply owning intellectual property rights does not generate money.
To produce income the owners of these rights must exploit them financially through various types of commercial agreements including but not limited to licensing arrangements and/or
assignments of rights.
In a sense, all of these commercial agreements are an attempt to turn intellectual property into intellectual capital that will then increase your cash flow

Olufola Wusu Esq.

copyright © 2012

Principal Counsel Megathos Law Practice

Olufola Wusu is a Solicitor & Advocate and Intellectual Property consultant

He can be reached at folawusu@yahoo.com

Legal Disclaimer

by Olufola Wusu Esq

(1) No advice

This note contains general information about [law and legal practice]. The information is not advice, and should not be treated as such.

(2) No warranties

The legal information on this article is provided without any representations or warranties, express or implied. We make no representations or warranties in relation to the legal information on this website.

Without prejudice to the generality of the foregoing paragraph, we do not warrant that:

(a) the legal information on this article will be constantly available, or available at all; or

(b) the legal information on this article is complete, true, accurate, up-to-date, or non-misleading.

(3) Professional assistance

You must not rely on the information on this website as an alternative to legal advice from your lawyer or other professional legal services provider. If you have any specific questions about any legal matter you should consult your lawyer or other professional legal services provider. You should never delay seeking legal advice, disregard legal advice, or commence or discontinue any legal action because of information on this website.

9 Comments

Filed under Intellectual Property

SAVING AVIATION- (As it appeared in Thisday Lawyer 12/06/12) http://www.thisdaylive.com/articles/saving-aviation/117847/

On the 3rd of June 2012 a Passenger plane, MD-83 operated by Dana airlines crashed into houses in Iju Ishaga, an area in Lagos. The crash killed all the 153 people on board including the crew members. My friend Christopher Okocha was on that flight, he was a loving husband and father of one. May his gentle soul rest in peace.

Air Transport Safety

Air transport is probably the safest means of transportation and the most regulated industry in the world.

Safety within aviation circles can be defined as the management of risks to harm or damage to property to an acceptable level through a process of hazard identification, risk management, remedial action planning and continuous improvement. The acceptable level is usually determined by the regulatory authority in aviation.

The prevalence of plane crashes in the Nigerian Air space has exposed the need for a safety management system in the Nigerian Aviation Industry.

A Safety Management System (SMS) is a systematic, explicit and comprehensive process for the management of safety risks that integrates operations and technical systems with financial and human resource management for all activities related to any organisation.

 

Delayed Rescue operations

Reports have it that for about a quarter of an hour, the ill-fated plane was enmeshed in rubble with trapped passengers screaming for help. Besides when help came it was disorganised with no mention of air ambulances evacuating people!

 

Governmental Influence and policy formulation

There is an urgent need for the Federal Government in conjunction with all stakeholders to develop of a National Aviation Policy that will drive the aviation industry. It can be a 5-year or 10-year plan that can be reviewed periodically.

A National Aviation Policy will guide lawyers and government officials in assessing existing legislation and signing international agreements. In drafting a National Aviation Policy we need to examine the aviation policies of the US, the EU and other African countries. This would help us to decide what level of protection our local airlines need and how best we can go about protecting our economic interest.

 

Review of the Open Skies Arrangement and Bilateral Aviation Services Agreements.

Bilateral Air Service Agreement (BASA) is an air operation agreement which Nigeria signs with countries that have their airlines operate into the country and from which agreements Nigeria receives royalties. There is the need for a complete review of the Open Skies Arrangement and Bilateral Aviation Services Agreements. The Arik Air debacle has revealed that the BASA’s are not particularly favourable to Nigerian flag carriers.

The need for round pegs in round holes

We need aviation experts running the aviation industry in Nigeria, we can’t afford the politicisation of the appointment of key personnel in the Ministry of Aviation and the regulatory bodies in aviation, and this is because lapses in air travel regulation often result in tragic loss of life.

Public Sector branding in aviation

The regulatory bodies overseeing aviation in Nigeria have made concerted efforts to properly brand their organisations through seminars, workshops etc. However trust in the competency of the regulator is undermined every time an accident occurs. Airplane crashes have far-reaching effects as was seen when the market capitalisation of the listed equities on the Nigerian Stock Exchange fell by N106 billion or 1.5% per cent to close at N6.899trillion down from the N7.005 trillion it opened with on Monday 4/6/2012.It is important to note that public sector branding is ineffective especially when systemic failures are so critical that they result in wanton loss of life and property.

 

The need to restrict multi designation in Nigeria

Multi-designation is the assigning of foreign airlines to operate from more than one airport in Nigeria. It deprives local carriers a percentage of its local passenger market; as foreign airlines go to different airports to pick their passengers for flights to their destinations instead of local airlines bringing passengers to one airport for the foreign airlines.

Government participation in Aviation

All over the world more governments are actively participating in aviation.

 

The American Experience

A look at the American government’s Policy would reveal a strong protectionist tendency.

The Fly America policy compels all beneficiaries of air travel paid for by the American government, to use only American airlines with very few exceptions.

There is ample bankruptcy protection for American airlines, and almost all major American airlines have received bankruptcy protection at least once since September 11 2001.

The American government gave a total of $15B in aid to its airlines in the aftermath of September 11 2001.

Middle East experience

Emirates was established in 1985, it is now one of the youngest and strongest carriers in the Middle East. It is owned and funded by the government of Dubai. It has a viable, low-cost business model, which enables it to offer superior in-flight and ground facilities and free visas.  These incentives are offered at the same price competing airlines normally charge for the flight ticket alone without any other benefits. The government of Dubai also has an important role by drawing investors with a zero corporate tax policy to set up businesses in Dubai.

Other Challenges in Nigerian Aviation

Better Consumer protection

NCAA has Consumer Protection Units in all the airports, which have been upgraded to a full-fledged directorate.  Cases of harassment and ill-treatment of passengers by airline operators are now being addressed by the NCAA.

Airport facilities /Better access roads to our airports

Airport users all over Nigeria have decried the dirty state of its infrastructure especially the airport corridor and toilets. This is shameful as our airport is the primary first hand impression foreigners have of Nigeria. We urgently need better access roads to our airports.
Insurance compensation

The Montreal Convention has been domesticated into the Nigerian Civil Aviation Act 2006, which stipulates that airlines should pay victims of air accidents a minimum insurance compensation package from starting with $10,000 and a maximum of $100,000 per head.

The need to maintain Category one Status

Category One certification that was earned by Nigeria is evidence that our aviation sector has the potential to be world class. It has been alleged that the Dana aircraft that crashed Sunday revealed that, the plane – MD 83aircaft has a history of malfunctioning before it was re-sold to the Nigerian airline in 2009.

There is a policy that stipulates that Nigerian airline operators should not fly aircraft that are more than 22 years old. Despite this, investigations have shown that some Nigerian airlines still          operate aircraft that are more than 22 years old (http://www.planespotters.net/Production_List/Country/Nigeria ).

Conclusion

There is a glaring need for Government to act quickly to restructure the aviation industry and save it from possible collapse, perhaps Mr President should act with the same speed and determination it has deployed in forwarding the bill renaming Unilag in addressing the problems facing the aviation industry, insecurity, the reinstatement of Justice Salami and the passage of the Petroleum Industry Bill that has been dragging for so many years.

May the souls of the departed rest in peace.

Olufola Wusu Esq. copyright © 2012

Principal Counsel Megathos Law Practice

Olufola Wusu is a Solicitor & Advocate and Intellectual Property consultant

He can be reached at folawusu@yahoo.com

Legal Disclaimer

by Olufola Wusu Esq

(1) No advice

This note contains general information about [law and legal practice]. The information is not advice, and should not be treated as such.

(2) No warranties

The legal information on this article is provided without any representations or warranties, express or implied. We make no representations or warranties in relation to the legal information on this website.

Without prejudice to the generality of the foregoing paragraph, we do not warrant that:

(a) the legal information on this article will be constantly available, or available at all; or

(b) the legal information on this article is complete, true, accurate, up-to-date, or non-misleading.

(3) Professional assistance

You must not rely on the information on this website as an alternative to legal advice from your lawyer or other professional legal services provider. If you have any specific questions about any legal matter you should consult your lawyer or other professional legal services provider. You should never delay seeking legal advice, disregard legal advice, or commence or discontinue any legal action because of information on this website.

3 Comments

Filed under Aviation Law

A-Z OF SOFTWARE LICENSING AGREEMENTS IN NIGERIA-( “As it appeared in THISDAY Lawyer 08/05/12) http://www.thisdaylive.com)

Intellectual property (IP) is intangible property that is created in someone’s mind using his intellect or other tangible goods. Categories include art, literary works, music, inventions, designs, processes and trademarks.

Intellectual property has value just like tangible property, and you have to protect it otherwise your property can be exploited without your knowledge or permission.

Some view intellectual property as a shield that prevents unlawful exploitation while others view intellectual property as a net that allows you to synergise with others through licensing of intellectual property.

Licenses and Your Rights

A license allows an intellectual property rights holder (the licensor) to make money from an invention or creative work by charging a user (the licensee) for product use. Licenses protect proprietary rights in things such as software and other computer products, for example.  An intellectual property owner uses a license to give someone permission to do a certain activity or to use his property, without the license this would have been unlawful. Once you have a handle on your IP rights, you can create your software license agreement.

 

What Do I Include in a Licensing Agreement?

In business, a written license agreement is a must. There is no hard and fast rule to giving someone a license for property use. At this point I need to remind the reader of the essential functions of a properly drafted commercial agreement.

Firstly, it forces consideration by the client and, ultimately by the other parties, of the issues involved in a particular transaction.

It ought to clearly establish the obligations of the parties to each other in a way, hopefully, that will preclude future dispute and will, if a dispute does occur, enable a tribunal better to determine the issues involved, as a result of the clarity of the drafting.

You may also use these tips as a yardstick in determining whether the other party’s attorney or contract manager’s work product is favourable to you or not.

License Scope

First you need to set the license’s scope. Licensing is assigning limited use rights for property. Be sure you keep ultimate ownership rights. However, rights need to be broad enough so customers want to use your product. Except for custom-made products, a license is typically nonexclusive, so you could sell it to others too and make more money.

However, there should be balance it must not allow the licensee to reproduce or pirate the product and sell it in turn to third parties. Sometimes, licenses allow reproduction within a controlled environment such as with enterprise licenses or network licenses. In other cases, a licensor may allow for a resale license, with royalties paid to the licensor. Be sure about the wording of clauses permitting such activities.

Revenue from Your Product

Terms controlling revenue streams generated by licensed products are very important. Usually most license agreements on end-user consumer software, for example have a one-time license fee usually paid at the time of purchase. Other arrangements may include recurring payments such as royalties  or monthly lease payments. License agreements may also cover on-going maintenance charges that are usually hidden thus forcing the unsuspecting licensee to go back to the licensor to negotiate on-going maintenance charges that should have been negotiated with the original agreement.

Good legal writing

Good legal writing is a matter of style. Be mindful of subject-verb agreement. Use parallel construction on parallel concepts. Know the rules of singular possessive nouns as compared to plural possessive. Finally, use the names of the parties (a “shorthand” reference is acceptable) rather than “Licensee” and “Licensor.” It is too easy for the reader (and even the writer!) to confuse the two. This last part is however subject to debate with most objections coming from the abyss of habit rather than from the cliffs of reason.

Organization

There is generally no requirement for a contract under Nigerian Law to follow a particular format or layout.

Good legal writing is also a matter of organization. Contracts are not different from novels in the sense that they tell a story about the agreement that both parties have arrived at either independently or through the guidance of their lawyers if any.

They have a beginning, middle and end. A good lawyer would know what material to put in each part of the document. A definitions section should appear at the beginning of the body of the software license agreement. Each key term in the agreement should first be defined in this section and then be used according to this definition throughout the agreement. Each defined term should also be capitalized throughout the document so that the reader knows that it is a term of art, whose meaning may be different from a dictionary definition. The following terms are the least which should be defined in the definitions section: “Licensor,” “Licensee,” “Software,” “Documentation,” “Acceptance,” and “Licensed Location.” “license fees”

First things first

A lot of people including but not limited to writers seem to understand the principle that the first paragraph of any story should follow the “who, what, when, and where” convention. A well-crafted license agreement should follow this principle or methodology if you please. It is important that the business elements of the deal (which is what is being licensed, the cost of the license, and the scope and duration of the license) should be included right after the definitions section. You or your client will be grateful in knowing that the principal business elements of the deal are addressed near the front of the agreement, avoiding the need to read page after page to find the price of the software or the payment terms or the scope of the license.

Avoid repetition

Avoid repetition which is a common trap of legal drafting, I recently read an agreement that addressed the issue of who was going to pay the lawyers’ fees on the transaction by using similar language in two different parts of the document. This technique is probably poor legal writing; and it can even spring up a more serious problem especially where there are differences in the wording of the provision in different parts of the agreement. If multiple provisions address the same issue even in slightly different ways, which one controls the issue in question? What if the multiple provisions vary the licensor in one breath and in another breath favours the licensee?

Draft the Agreement in a consistent manner

A good agreement like a good story needs to be consistent with the facts. Be careful to make sure that the agreement is consistent with the attachments, especially the software documentation. The drafter of a software license agreement should be prudent enough to actually read the software documentation prepared by the vendor or software customer (or both) prior to drafting the license agreement. In essence do your research well.  In that way, a contradiction between the text of the agreement and the documentation should be easy to avoid. As a safety net, the drafter should include, near the end of the agreement, a provision which lists the priority of the documents (priority clause). For example, “in the event of a conflict or contradiction between this Agreement and Schedule A, the parties intend and agree that the Agreement shall control.” This avoids any argument that one document should control over another.

Be clear

Use conventional “markers” to set-off, caption, and paginated text. These include numbered or lettered section headings and pagination. It does not speak well when a software vendor (or customer) is sloppy in preparing legal documents, what kind of performance would you expect on the business side of the transaction?

Conclusion

Many issues come up when drafting a license agreement. Laws relating to intellectual property can be extremely complicated. An attorney can provide invaluable help with drafting your agreement and enforcing it

The attorney should carefully review the form and substance of any software license agreement prepared by a vendor to determine how closely it conforms to these guidelines. To the extent it does not, the customer or client should contemplate the risk that the transaction is not adequately documented.

This risk may be minimal when the contract is executed but may increase as the transaction unfolds and the parties look to the contract to define their rights and duties as the conflict unfolds.


Olufola Wusu Esq. © 2012

Principal Counsel  at Megathos Law Practice

Olufola Wusu is a Solicitor & Advocate and Intellectual Property consultant

He can be reached at folawusu@yahoo.com

OLUFOLA WUSU ESQ

MAY 2012

Legal Disclaimer

by Olufola Wusu Esq

(1) No advice

This note contains general information about [law and legal practice]. The information is not advice, and should not be treated as such.

(2) No warranties

The legal information on this article is provided without any representations or warranties, express or implied. We make no representations or warranties in relation to the legal information on this website.

Without prejudice to the generality of the foregoing paragraph, we do not warrant that:

(a) the legal information on this article will be constantly available, or available at all; or

(b) the legal information on this article is complete, true, accurate, up-to-date, or non-misleading.

(3) Professional assistance

You must not rely on the information on this website as an alternative to legal advice from your lawyer or other professional legal services provider. If you have any specific questions about any legal matter you should consult your lawyer or other professional legal services provider. You should never delay seeking legal advice, disregard legal advice, or commence or discontinue any legal action because of information on this website.


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PUBLIC SECTOR BRANDS AND FLUID TRADEMARKS-UNILAG


Background Facts

On the 29th of May 2012 President Goodluck Jonathan announced his plan to rename the University of Lagos, as Moshood Abiola University Lagos.

However, without dwelling on the legality or illegality of the above action this paper will attempt to examine the Intellectual property ramifications of the said action

The laws enumerated below make up the legal regime for the protection of Intellectual Property Rights in Nigeria.

Nigerian Copy Right Act, Cap. C 28 Laws of the Federation of Nigeria 2004

Patents and Designs Act, Cap P2, Laws of the Federation of Nigeria 2004; and

 

Trade Marks Act, Cap. T13 laws of the Federation of Nigeria 2004

 

Public Sector Brands In Nigeria

Neil McElroy is reported to have changed marketing substantially when he wrote the classic McElroy memo at P&G, which lead to the creation of the discipline of brand management. This began on May 13, 1931, when an internal memorandum from Neil McElroy argued that more concentrated attention should be paid to individual P&G brands.

The concern of these managers, he argued would be the brand, which would be marketed as if it were a separate business. In this way the qualities of every brand would be distinguished from those of every other.

In Nigeria many Public Sector organisations are beginning to brand effectively. Some have used bright colours, catchy slogans, or informative and navigable website, in all public sector bodies are looking like they mean business. They no longer come across as being aloof and unnecessarily bureaucratic. They now appear to be open, approachable, and yes desire to build working relationships with us, the citizens.

In a way, good branding is good marketing and communications. And one is tempted to think that what we need out of the public sector is very good communication.

University of Lagos as a Public Sector brand

University of Lagos was established by the University of Lagos Act. Section 1 of the University of Lagos Act 1967,             provides that:

“There is hereby established a University to be known as the University of Lagos (in this Act referred to as “the University”) to provide courses of instruction and learning in the faculties of arts, law, medicine, science, education, commerce and business administration, engineering, and any other faculties which may, from time to time, be approved under this Act.”

Thus it can be easily deduced that the brand University of Lagos is a creation of statute and that it exists in the public sector as a public sector brand.

Distinctive Names

The first ingredient in any great public sector brand is a good name. It should be registered as a trademark. A trademark is usually a word, your name; but it can also be a logo, an email address (folawusu@yahoo.com, a tag line “Eko oni baje” “Ebe Ano”. Whether registered or not, a name is a valuable asset that can be protected under the tort of passing off.

A strong Trademark is virtually mandatory for all public sector brands. As a matter of fact Section 30 of the Companies and Allied Matters Act contains some restrictions on the use of certain words as a Company name.
Further protection for a Statutory Brand can also be found in Section 62 of the Trademarks Act which grants protection to the “Coat of Arms” of both State and Federal Governments by placing clear restrictions on the registration of any brand bearing these Arms. In real life, self-help is also a real possibility; wearing Army camouflage on the streets would earn you anything but a cup cake from the boys in green, blue or even white.

A Public sector brand can be defined as a name, term, sign, symbol, design or a combination of colours intended to identify the Services of one Public Sector Institution, and differentiate it from that of another Public sector Institution.

Public sector brands are some of the most powerful and engaging brands in existence in Nigeria. The EFCC, LASTMA, PHCN and the NTA, amongst others, to a large extent elicit tremendous loyalty/disdain from employees and a large numbers of people who feel a strong emotional attachment towards them. It is however important to realise that effective public sector brands are about engaging people and changing behaviours, not just about logos and banners (although of course the visual expression is an important branding tool in every branding campaign ).

The number of public sector brands has grown in recent times. Quite a number of reasons are behind this, including the growth of government and its extension into all aspects of society. One can however argue that there is only one brand that counts in the Nigerian public sector – and that is the Nigerian Government. That would be assuming that all the other public sector brands are sub-brands deriving their value from the major brand Nigeria.

 

The future of Public Sector Branding

All branding is about communicating a clear offer to your customers or users, however for public sector organisations, such as the police force and health services, the focus may be on clarity and access to important information.

So branding and design may focus on signposting this information or communicating issues clearly in order to change people’s behaviour for example Federal Road Safety Commission’s “Don’t drink and drive campaign”, for example.

It goes without saying that Nigerian brands can make a huge difference to the people and are valuable public sector assets and as such should be protected and not decimated at the whim and caprice of every well-meaning leader. And perhaps most importantly of all there’s a need for more and better evaluation of the effectiveness of public sector brands.

In Nigeria it would be wise to expect to see more mergers of government bodies and some current brands disappear as the current economic downturn drives prudence.

A Fluid Trademark perhaps?

A trade mark that is always presented in the same way may become dull, repetitive and old-fashioned – or at least it may do so in the eyes of the consumers at whom it is aimed. Trade mark owners may therefore wish to replace the trade mark and use a new version for an indefinite period until it needs to be revitalised again.

Alternatively, the trade mark owner may try to be imaginative in terms of the way that he treats the mark – without actually replacing it. The mineral water manufacturer Perrier is a well-known exponent of this strategy. It created different colourful packages for its bottles and adapted them to special circumstances and events. However, on these packages the trade mark itself, used in white or green, remained unchanged.

Another alternative for trade mark owners is to create so-called fluid marks or mutating marks.

A “fluid trademark” can be defined as one where the owner makes significant and continuous changes to the registered trademark, often to secure new customers or retain existing ones.  Through the making of creative and sometimes obvious changes, the brand owner attempts to keep internet users and its customers interested and transfixed to its brand.

The mark itself is not replaced. Instead it is used in one or more variants, coexisting with the underlying mark. These variants can be used for special sales promotions, during particular periods of the year or for launching new products. They can be used just once or for a far longer period of time.

The most striking fluid trademark in the world should be Google. The world’s leading search engine changes their trademark on its most important webpage almost on a daily basis.

Another fluid brand is Robert Kelly, having altered his brand several times, from R Kelly, to Kelly to the Pied piper of Hamlin etc.

There are 3 major challenges that the trademark owner may face when permitting their mark to become fluid: It will possibly invite renditions not approved by the trademark owner (MAUL). The public could become confused as to the source of the trademark or new name and may consequentially seek reassurance or may attempt to verify same.

Conclusion

Using fluid trademarks can be dicey, but an abrupt name change won’t do already garnered good will any good.

However from a legal as well as marketing or branding point of view, the question is whether a total change of name is prone to cause brand/trademark dilution if it is the owner itself who is changing the name and mark? Or does it make a strong mark/name even stronger?

In this writer’s opinion the sudden name change does no good to the hard-won reputation of “University of Lagos” it would have been wiser to use the prior name, trademark exactly in the way it was registered. There is no point changing its appearance! But this may be a somewhat old-fashioned (legal/legalistic) point of view.

Olufola Wusu Esq. © 2012

Counsel  at Megathos Law Practice

Solicitor & Advocate and Intellectual Property consultant

He can be reached at fola@megathoslaw.com

OLUFOLA WUSU ESQ

MAY 2012

Legal Disclaimer

by Olufola Wusu Esq

(1) No advice

This note contains general information about [law and legal practice]. The information is not advice, and should not be treated as such.

(2) No warranties

The legal information on this article is provided without any representations or warranties, express or implied. We make no representations or warranties in relation to the legal information on this website.

Without prejudice to the generality of the foregoing paragraph, we do not warrant that:

(a) the legal information on this article will be constantly available, or available at all; or

(b) the legal information on this article is complete, true, accurate, up-to-date, or non-misleading.

(3) Professional assistance

You must not rely on the information on this website as an alternative to legal advice from your lawyer or other professional legal services provider. If you have any specific questions about any legal matter you should consult your lawyer or other professional legal services provider. You should never delay seeking legal advice, disregard legal advice, or commence or discontinue any legal action because of information on this website.

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PROTECTING YOUR BUSINESS IDEA-(“Legal Protection for Intellectual Property “As it appeared in Punch 21/05/12) http://www.punchng.com/feature/the-law-you/legal-protection-for-intellectual-property/) and (“Protecting your Business Idea “As it appeared in THISDAY Lawyer 27/03/12) http://www.thisdaylive.com)


Many people have great ideas for new products or services but don’t have the means to get them to market and more often than not tend to look for a larger company to help them commercialize their idea.

There are different types of  types of protection available for works or material that can be described as proprietary, but there may be strategic and financial reasons why applying for IP rights may not be commercially advantageous.

Intellectual property (IP) law is a complex area and as such you should consider seeking professional advice, for instance from an attorney, before deciding how to proceed.

If your idea is so unusual that you think it’s profitable, before you show it off, you’ll want to have that company sign a nondisclosure agreement promising it won’t steal it. This is because there is no patent protection for an idea in Nigeria.

 

Legal basis for protecting an idea?

In Nigeria Intellectual property rights protect the exploitation of ideas, information and inventions that are of commercial and proprietary value(not all things can be protected)

There is ample protection for the intellectual property rights of both Nigerians and foreigners this includes copyright, patents and industrial and design rights in line with international treaties and conventions.

The laws enumerated below make up the legal regime for the protection of Intellectual Property Rights in Nigeria.

Nigerian Copy Right Act, Cap. C 28 Laws of the Federation of Nigeria 2004

 Patents and Designs Act, Cap P2, Laws of the Federation of Nigeria 2004; and

 Trade Marks Act, Cap. T13 laws of the Federation of Nigeria 2004

 Intellectual property protection includes Copyright, Patent, Industrial Design and Trademark.

An idea that has not been exploited is not protected under the legal regime governing intellectual property; simply put an idea on its own is not protected by law.

For an idea to be protected it must be exploited or at least reduced into a fixed form for it to come under a head of protection under the Intellectual property regime in Nigeria.

Copyright exists in creative and artistic works such as books, movies, paintings, photographs and software. A copyright gives the holder of such copyright the exclusive right to control exploitation, production and adaptation of such a work for a certain period of time.

Section 1 of the Copyright Act states very categorically that class of works that are eligible for protection, the list is exhaustive and sadly it does not include ideas.

As matter of fact unless an “idea” or work falls under any of the above headings, that idea or work will not be eligible for copyright protection. As a rule ideas are not protected only works are protected by copyright.

Copyright exists in work on the basis of originality and fixation. Simply put for a   work to be eligible for protection under copyright such a work must be original and must be reduced into a fixed form.

Thus if an idea is reduced into a fixed form as long as the two requirements for copyright protection are met, then copyright protection would lie in favour of such a work and as such it may be wise to reduce such an idea into a fixed form and get copyright protection for such a work.

     

       Practical steps to protect an idea

Many people have great ideas for new products or services but don’t have the means to get them to market and often look for a larger company to help them. If your idea is so unusual that it’s profitable, before you show it off, you’ll want to have that company sign a nondisclosure agreement / confidentiality agreement promising it won’t steal it.  This is because there is no patent protection for an idea in Nigeria!

Get a good lawyer in your industry to help you write a nondisclosure agreement. Some agreements spell out exact confidentiality measures and obligations and monetary penalties if the signer is found to have breached the agreement, though you don’t want terms so harsh that nobody would sign it, although reluctance to sign the agreement would usually be a sign that the company might just be willing to borrow your idea behind your back.

Without such protection, winning an infringement claim may be difficult. If you do encounter a copycat, it may be worth hiring a lawyer to investigate the merits of your case. If the manufacturer replicated your product and packaging to the point of customer confusion or copied something that’s protected under trademark or copyright law, you might have a strong legal case.

     

       Basis of a Non-disclosure /Confidentiality agreement

It is trite law that every person who receives information which has the necessary “quality of confidence” about it knowing that he is required to keep it confidential is likely in law to be deemed to have accepted (either expressly or impliedly) obligations of confidence relating to that information (at least if he does so before he receives the information). Accordingly, as a matter of law, a written secrecy agreement is not strictly necessary. 

Nevertheless, it is highly desirable for the protection of the person disclosing the information that such an agreement should be entered into by any recipient of it, since having documentary evidence of the information regarded as confidential and the acceptance of confidentiality obligations relating to it will assist him in enforcing them against the recipient.  

No gainsaying the fact that the process of entering into the Agreement will also be evidence that the disclosing party operates a practice of maintaining confidentiality which will be of assistance should he need to take proceedings for breach of confidence against the recipient or any third-party such as ex-employees of his own or of the recipient.  

Additionally, which may be just as important in some cases, the recipient will have a clear statement as to what he may and may not do with the information provided and if this is clear any breach of same will be easier to prove. 

 

       Possibility of Litigation

However it’s more probable a company would go the extra mile to alter your product or design just enough to dodge any legal issues. And please keep in mind that enforcing those legal protections in court can be prohibitively expensive. In Nigeria just like it obtains in other jurisdictions, a lawyer will first send a cease-and-desist letter, describing the believed offense and requesting the offender to stop producing the product and possibly pay damages. If letters don’t work, the next step is usually a lawsuit.

Please bear in mind that a law suit In Nigeria can cost hundreds of thousands of Naira in legal fees and filing fees and take away plenty of time from your business. Lawsuits in Nigeria simply take a long time, on average four years at the High Court and there’s no guarantee you’ll win.

Control Exposure to your idea

In the end, the best way to protect yourself is by being extra cautious about whom you share your idea with. It’s worth talking extensively with others in your industry and getting referrals before disclosing your concept to anyone and when in doubt “non-disclosure” is in itself a more potent device than a “non-disclosure agreement”.

            Conclusion

Simply owning intellectual property rights does not generate money.

To produce income the owners of these rights must exploit them financially through various types of commercial agreements including but not limited to licensing arrangements and/or
assignments of rights.

In a sense, all of these commercial agreements are an
attempt to turn intellectual property into intellectual capital that will then increase your cash flow!

Olufola Wusu Esq. © 2012

Principal Counsel  at Megathos Law Practice

Olufola Wusu is a Solicitor & Advocate and Intellectual Property consultant

He can be reached at fola@megathoslaw.com

@Olufola_MY_IP

OLUFOLA WUSU ESQ

MAY 2012

Legal Disclaimer

by Olufola Wusu Esq

(1) No advice

This note contains general information about [law and legal practice]. The information is not advice, and should not be treated as such.

(2) No warranties

The legal information on this article is provided without any representations or warranties, express or implied. We make no representations or warranties in relation to the legal information on this website.

Without prejudice to the generality of the foregoing paragraph, we do not warrant that:

(a) the legal information on this article will be constantly available, or available at all; or

(b) the legal information on this article is complete, true, accurate, up-to-date, or non-misleading.

(3) Professional assistance

You must not rely on the information on this website as an alternative to legal advice from your lawyer or other professional legal services provider. If you have any specific questions about any legal matter you should consult your lawyer or other professional legal services provider. You should never delay seeking legal advice, disregard legal advice, or commence or discontinue any legal action because of information on this website.


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Egbin Power Plant plans to build a liquefied natural gas terminal to solve a severe shortage of gas

Liquefied Natural Gas (LNG) for export is great… However, LNG to power has become imperative for an energy starved Lagos!
Light Up Lagos!

Lagos is reported to have a population of over 20 million people and is still growing, Lagos is said to consume over 40% of the premium motor spirit consumed by Nigeria as a whole on a daily basis. Governor Akinwunmi Ambode has been drumming up support for his light up Lagos plan, this liquefied natural gas terminal might just be the tipping point for him…

Lagos has the opportunity to become the LNG import hub for Nigeria and Africa as a whole.
Egbin to the rescue…

Owners of Nigeria’s largest power plant located at Egbin Power Plant near Lagos are planning to build an LNG import terminal, as it seeks to solve an acute shortage of gas according to Chief Executive Officer Dallas Peavey.

What is LNG?
LNG is gas frozen to liquid reducing its original size by 1/600. LNG is a liquid which can be shipped in, this might give Egbin some respite from the constant attacks on pipelines, which has reduced its gas supply, switching to LNG may also open Egbin up to multiple suppliers of LNG struggling for new markets. It is plausible that Egbin may be able to ensure the stability of gas supply to the market with a floating LNG terminal for importation.

What is an LNG Terminal?
An LNG terminal is a purpose built port used exclusively to export or import LNG.

“LNG import terminals” as a service?
The LNG terminal can be used strictly for Egbin or/and for other players who may also want access to LNG.
Egbin has the opportunity to champion the use of LNG import terminals for its sole use, or the use of LNG import terminals as a service to other gas consumers…

LNG Pricing
Concerns about LNG prices rising are a real concern, it is hoped that the price indexation/decoupling of LNG prices may have ended.
Historically there has been some relationship between the price of crude oil and that of natural gas that is, barring any unforeseen occurrences like natural disasters etc.

Decoupling of prices is usually temporary. However three factors tend to point to a possible permanent decoupling of prices and a possible dip in some areas. They are:
1. The globalization of natural gas
2. Specialization in all parts of oil and gas industry by companies
3. The emergence of Shale Gas.
Quite a number of industry experts agree that LNG prices change with time, thus, Egbin may consider benchmarking its projections on possible higher prices or hedge against a rise in LNG prices.

Egbin may do well, to avoid the mistake some indigenous oil companies made; those oil companies banked on higher crude oil prices, which eventually fell.

Egbin should be wary of banking on low LNG prices, which may eventually rise, when demand rises or supply falls.
Egbin should avoid limiting its LNG supply to “local sources”. Our “local sources” of LNG may be given a right of first refusal, but at no point should Egbin limit itself, as our “local sources” of LNG may be fixated on export of their product…

Buyers Market v Sellers Market
It is now a buyer’s market in the LNG world; sellers are aggressively wooing buyers…

Qatar LNG recently gave a huge discount to India, waived a penalty and has been selling on the “spot market” too.
“The new formula between the two companies is in the interests of a win-win. Where the previous contract meant that Petronet had to buy LNG at $12-13 per mmBtu, the new contract means a price of $6-7 per mmBtu,”.

Iran has started supplying LNG to Kenya, Tanzania and South Africa.
Long Term Contracts v Spot Markets
Egbin should try spot markets and negotiate a long term deal if the price is right, preferably with a major player like Qatar Gas LNG or a player like Iran keen on gaining market share.

Long term LNG contracts have given way to spot markets, it’s no longer a seller’s market, it’s now a buyer’s market. There are quite a few LNG projects on the ground, floating and in the pipeline but consumption is not spiking per se.

India renegotiated a long term LNG contract recently and got a 50% discount. I believe Egbin should negotiate for the best deal it can get, since it’s building an LNG terminal.
Egbin may consider prospecting for a seller, willing to finance the construction of the LNG terminal…

Hydraulic fracturing has increased the supply of natural gas available. It has been reported that, 5 (five) LNG export terminals are being built along the U.S. East Coast alone, making the possibility of an LNG glut more feasible. Egbin LNG import terminal will be very handy for gas exporters from the U.S.A, Qatar and Iran to enter the Nigerian market.
In Africa, it is reported that there are at least 5 (five) planned LNG import terminals , Cotonou LNG Import Terminal, Benin, Ghana FSRU LNG Import Terminal, Ghana, Jorf Lasfar LNG Import Terminal, Morocco, Mombassa LNG Import Terminal, Kenya and Mossel Bay LNG Terminal, South Africa.

The Croatian Paradigm

Land Based LNG terminal v Floating LNG terminal

Croatia has been reported to have opted to go for an FLNG (Floating LNG) terminal to commence LNG import over a land-based LNG terminal.

This FLNG import terminal is expected to reduce the construction costs of an LNG terminal and will require only two years to be fully operational. It will be the world’s first offshore LNG regasification terminal. It is 47-metre (154 ft) high, 88-metre (289 ft) wide, and 180-metre (590 ft) long.

It was reported that, the FLNG terminal will be operated by Qatar Terminal Ltd., a subsidiary of Qatar Petroleum and some other companies.

Conclusion
The benefits of an LNG import terminal may far outweigh its cost, avoiding gas supply disruptions due to ruptured pipes may be the least of such benefits, while the possibilities range from security of gas supply, to the possibility of long term storage tanks, to opening the window for the use of gas for transportation and helping a nation complete its energy circle.

Olufola Wusu is a Commercial, Oil and Gas and I.P. Lawyer based in Lagos
Olufola Wusu Esq. © 2016
Who’s Who Legal

Internationally recognised on Who’s Who Legal as a top business lawyer:

Olufola Wusu is noted for his “dynamic practice” and “commercial acumen”. He is praised for his “first-rate skills” in assisting clients…
http://whoswholegal.com/profiles/65712/0/wusu/olufola-wusu/

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NNPC takes the lead in safeguarding Intellectual Property in the Oil and Gas Industry

 NNPC imagesIt was reported in the news that the Nigerian National Petroleum Corporation (NNPC) Retail Limited has sued the Natural Network Petroleum and Gas Company (NNPG) Limited and two others over infringement on its trademark.  NNPC had in a suit joined Corporate Affairs Commission (CAC) and the Registrar of Trade Marks, Patent and Designs as second and third defendants respectively.

From this action, it would seem that the NNPC is keen on taking the lead in safeguarding Intellectual Property (IP) in the Oil and Gas Industry in Nigeria. It remains to be seen whether indigenous oil and gas companies will follow suit of their own accord or await regulatory changes, making IP Asset development, research & development mandatory, thus leading to IP and Innovation development.

This article attempts to highlight some key IP Issues indigenous Oil and Gas Companies may need to note.

The need for Innovation/Intellectual Property Commercialization

A report issued by PricewaterhouseCoopers in 1999 found that the global IP licensing market totalled more than US$100 billion, giving an idea of how economically important IP assets are today. Right now the total worldwide IP licensing market is estimated to be $250 billion annually.

ExxonMobil is reported to have collected more than US $129 million in 2011 from licensing its IP to third parties, and this number is increasing every year.

IBM alone generates nearly $2 billion a year from out-licensing its IP. The asset value of patents worldwide is estimated at $1 trillion.

U.S. IP licensing revenues were estimated at $120 billion in 2003 and are expected to have reached $500 billion by 2010. University licensing royalties in the U.S. total nearly $1 billion annually.

In 2013, the Shell Oil Company received 189 patents from the U.S. Patent and Trademark Office. Research with patent portfolio analysis tools shows that Shell was assigned 207 U.S. patents in 2014 held by Royal Shell. Shell spent $1.2 billion on R&D.

The Chinese government paradigm

The Chinese Government is fostering home-grown innovation and IP commercialisation through tax incentives. From 2006 through 2010, Chinese oil and gas companies cumulatively boosted R&D spending by 29 percent annually and upstream patenting activity by 66 percent annually. In downstream, the Chinese energy conglomerate Sinopec is amassing a large patent portfolio, at home and abroad.

 

 

Nigeria’s Window of Innovation

For our industries to thrive we need Governmental support for our local industry, government has given some support in the Nigerian Local Content Act? However technological growth and development does not happen by chance, in this writer’s opinion our local companies have a duty to take full advantage of governmental support by actively innovating and commercialising their resulting innovation and Intellectual Property.

Nigerian companies may need to pay a little more attention to research, development and the resulting innovation that increases profitability which should be protected and commercialised by IP possibly Patents, Trademarks, Copyright  and Trade Secrets etc.

During exploration, extraction and transportation of Oil and gas, value is added to the unrefined Oil and Gas by technology, and other business practices that help process the extracts into useful and valuable consumer products.

The innovation, technology and business processes (Intellectual Property Assets) involved, are often protected by IP and become valuable assets to Oil and Gas companies, when they are registered and competitors prevented from accessing and using proprietary innovation for free.

Owners of such IP Assets may actively commercialise their assets by licensing them to companies willing to use these IP Assets in exchange for a license fee.

Trademark as an IP Assets in the Oil and Gas industry

The first barrel in any great oil and gas company is a good name. It should be registered as a trademark.  A trademark is a symbol or a sign which differentiates the goods and services of one business from another one. A trademark provides protection to the owner of the mark by ensuring the exclusive right to use it to identify goods or services, or to authorize another to use it in return for payment of license fees.

The Oil and Gas Industry is particularly susceptible to trademark issues as internal and external consumers rely on their trademarks to purchase goods and services from them.

Filling Stations and Trademark lawsuits

The Managing Director of NNPC Retail Limited, Mr. Fagbola Ladipo was reported to have alleged that the infringement on the NNPC trademark by the first defendant had begun to cause a dwindling in the sales of NNPC in Ondo State. He also alleged that the first defendant was imitating the NNPC logo by using its colour combination of red, yellow, green, uniform, emblem and the acronym NNPC…

The Russian Legal Information Agency (RAPSI/rapsinews.com) reported that sometime in 2003, a court awarded Rosneft oil company $95,000 in its trademark infringement lawsuit against EKA-AZS fuel company, which operates a large chain of filling stations.  The parties told the court they entered into a franchise agreement in 2005 for a term of 5 years, under which EKA-AZS paid $1,000 for the right to use Rosneft’s trademarks to sell fuel at 40 filling stations. Rosneft maintains the defendant illegally used trademarks for five months after the contract expired on September 29, 2010.

Sometime in 2015 LUKOIL North America filed a lawsuit in U.S. District Court for the Eastern District of Pennsylvania against R.K. Keystone Mobile Mart Inc., Gurmeet Singh, As Airport Texaco Inc. and Swapnesh Sharma, alleging trademark infringement and trade dress infringement.

According to the complaint, the defendants own and operate the former LUKOIL fuel station at 3575 Airport Road in Allentown even though the station no longer is a franchise under the LUKOIL name.

Sometime in 2011, it was reported by Bloomberg that BP filling station operators in the western U.S. sued BP Plc. seeking $200 million in damages over allegations the company’s sales and inventory software they are forced to use is “an unmitigated disaster.”

Branding in oil and gas

Oil and Gas companies seldom attempt to suggest that they have perfectly “green credentials”. It may be more prudent to emphasise their capacity for innovation which benefits society in future and their importance in providing energy for today’s society.

 

The world’s most valuable Oil & Gas brands

Please find below a table of the world’s most valuable Oil and Gas Brands, at number 8 is Petronas, a national oil company just like the NNPC.

 

Rank 2015 Brand Name Domicile Brand Value ($) 2015
1 Shell Netherlands $30,716,000.00
2 ExxonMobil United States $18,242,000.00
3 Chevron United States $18,163,000.00
4 PetroChina China $17,521,000.00
5 Sinopec China $16,135,000.00
6 Total France $15,203,000.00
7 BP UK $14,743,000.00
8 Petronas Malaysia $9,480,000.00
9 Eni Italy $8,037,000.00
10 Gazprom Russia $ 6,961,000.00
11 Statoil Norway $6,528,000.00
12 ConocoPhillips United States $6,062,000.00
13 Petrobras Brazil $5,945,000.00
14 Mobil United States $4,696,000.00
15 CNOOC China $4,523,000.00
16 Esso United States $4,471,000.00
17 Enbridge Canada $4,340,000.00
18 Exxon United States $3,995,000.00
19 Schlumberger United States $3,994,000.00
20 PTT Thailand $3,681,000.00

 

Interestingly, some Energy brands operating in Nigeria’s upstream sector are struggling to erase negative perceptions especially as it concerns environmental compliance. We have recently seen a number of IOCs divest assets onshore possibly due to a whiplash from host communities over alleged unacceptable environmental practices. All these point to the importance of IP to an Oil and Gas company’s profitability.

 

Conclusion

The challenges facing our oil & gas industry ranging from the fall in crude oil prices to the perception of oil & gas companies by the local populace and the changing global energy landscape make it needful for active collaboration between all stakeholders. In addition, for our Local Oil and Gas companies to grow they may need to take their Research and Development and resulting IP like patents and trade secrets seriously, they may also wish to leverage on the advantages conferred on them by the local content policy currently being pushed by the government. It goes without saying that technological development does not happen by chance, it can be encouraged by good policies like the local content policy serving as a spring board for the inventiveness of our local companies to flourish. 

[1] Source http://www.eregistration.copyright.gov.ng/? last accessed on 30/03/2015

Olufola Wusu Esq © 2015

fola@megathoslaw.com

Olufola Wusu is a Commercial, Oil and Gas and I.P. Lawyer based in Lagos

OLUFOLA WUSU IS NOTED FOR HIS “DYNAMIC PRACTICE” AND “COMMERCIAL ACUMEN”. HE IS PRAISED FOR HIS “FIRST-RATE SKILLS” IN ASSISTING CLIENTS…

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NNPC Reforms: Review of Production Sharing Contracts between the NNPC and IOCs

The Nigerian National Petroleum Corporation (NNPC) has disclosed that it would renegotiate the fiscal terms of existing Production Sharing Contracts (PSCs) entered into with international oil companies (IOCs).

The review is aimed at bringing the PSCs in line with present day realities in the global oil and gas industry.

Production Sharing Contract (PSC)

In a PSC, the NNPC engages a competent contractor usually an International Oil Company (IOC) to carry out petroleum operations on NNPC’s wholly held acreage. The contractor undertakes the initial exploration risks and recovers his costs if and when oil is discovered in commercial quantities and extracted.

Primary Legal Regime regulating Production Sharing Contracts

DEEP OFFSHORE AND INLAND BASIN PRODCUTION SHARING CONTRACTS DECREE NO 9 1999 ACT. CAP. D3. LFN 2004.

This is in addition to the individual contracts signed with the individual companies.

History of production sharing contracts

Indonesia pioneered the first PSC in 1966 through Permina, the state oil company. The contract system was evolved due to the imbalance in the traditional concessionary system regarding Government Take.

Possible issues to be looked at in a Review of NNPC’s PSCs with IOCs

In reviewing a PSC, it might be wise to use a basic checklist that covers issues like; who are the Parties to the contract? What exactly, is the subject of the PSC? Is there a renegotiation clause? What are the triggers and have the conditions been fulfilled?

Amazing Fiscal Incentives

In 1993, Nigeria entered into deep water drilling and awarded over 20 oil blocks in the deep water to various IOC’s.

Nigeria was not very familiar with deep-water drilling and its possible yield. Thus the fiscal terms for deep offshore in Nigeria were unbelievably generous to point of occasioning loss to our national treasury. The PSC had an unbelievable graduated rate of royalty payment dependent on water depth.

The rates are as follows:

  • 205-500 meters water depth: 12%
  • 501-800 meters water depth: 8%
  • 801-1,000 meters water depth: 4%
  • Above 1,000 meters water depth: 0%

Considering the fact that these rates regulate deep water drilling, it was not particularly prudent on Nigeria’s part to have based the royalty rates on drilling depth, ignoring indices like production levels, oil prices etc. Even more alarming is the fact that deep offshore reserves are more prolific than land based reserves.

Interestingly, it was reported in 2005, that Oil and gas production began in the 200,000 barrels per day capacity Bonga field, Nigeria’s first deep-water development in water depths of over 1,000 metres.

It was also reported that Erha deep-water development, including the Erha field and Erha North satellite field, was completed in 2006.The fields are located approximately 97km offshore Nigeria, in water depths ranging from 1,000m to 1,200m.!

It was also reported that the Agbami-2 appraisal well was drilled in 4,800ft of water to a total depth of 15,683ft.

The Egina field lies within the block Oil Mining Lease OML 130 and covers an area of around 500 square miles. It is situated at a water depth of ranging from 1400m to 1,750m.

Thus it can be easily deduced that Bonga and the above mentioned deep water fields fall under the 1000 metre royalty rate of 0 (zero) percent!

The petroleum tax payable under the PSC arrangement was fixed at 50% flat rate of chargeable profits for the duration of the production sharing contracts against the rate of 85%, prescribed by the Petroleum Profit Tax Act operable in the Joint Venture arrangement.

Like every major energy contract, the PSC’s that Nigeria signed contains possible renegotiation clauses in case the project dynamics change for better or worse. In Nigeria’s case the project dynamics have changed for better, Deep water fields have proven to be quite prolific, a fact the IOC’s based on their vast deep water experience may have known from the world go.

Production Sharing: The PSC provides for how the International Oil Company (IOC)/contractor will recover his costs, the allowable percentage of recovery and how production will be shared. Common items found in PSCs are royalty oil, cost (recovery) oil and profit oil.

Tax: The PSC states the taxes that the International Oil Company (IOC)/contractor would be subjected to. 

Enforcement of Abandonment/Decommissioning clauses

The PSC provides for a Decommissioning clause for each Development Area. This is quite commendable as the IOC is under obligation to properly clean up after operations.

Contractual Terms and Environmental Protection

There is a possibility that basic contract review and negotiation can help stem the tide of pollution and environmental degradation… by making sure we negotiate and include clauses that enact stringent conditions for environmental protection.

Contract terms are very important because they determine how much Nigeria as a producing country earns from it natural resources; and they can strengthen the regulatory power of government to enforce environmental, health and other standards, if standard legal and regulatory systems are not well established…

Agreed damages clause for pollution

There might be a need to insert a clause stipulating the minimum fine for every barrel spilled, especially after a certain period of grace.

Model PSC for Non-Associated Gas

The scheduled review might be a good opportunity to develop a model Production Sharing Contract for Non-Associated Gas fields. Which in turn might help kick start the much awaited natural gas revolution.

NNPC images

The funding arrangement is beneficial for an NOC participating in the project. The good thing is that even after production begins and the NOC is required to finance the project payments are made from crude oil production rather than cash. However the PSC’s did not make adequate provisions for times when oil prices rise. Thus governmental take did not rise in proportion to oil price. 

Curbing Artificial Expenses

The IOC may decide to slow down the pace of production, be wasteful or extravagant in its exploitation especially when the operator knows his expenses would be fully met by the crude produced. Such behaviour is also called gold plating.

Social Normative Norms in Oil Pollution?

Lax enforcement of the law in the area of environmental degradation eventually results in whiplashes and hostility from the host communities targeted at the International Oil Company.

Conclusion

Renegotiating a Production Sharing Contract requires legal knowledge, foresight and common sense. The number of model clauses successfully incorporated modified in the renegotiated Production Sharing Contract depends largely upon negotiating power of the parties involved. Even so, the information contained in this piece will enlighten the Government and International Oil Company (IOC)/contractor as to some possible alternatives, and possibly foster frank discussion between the Government and the Oil Company.

Olufola Wusu Esq. © 2015

fola@megathoslaw.com

Olufola Wusu is noted for his “dynamic practice” and “commercial acumen”. He is praised for his “first-rate skills” in assisting clients…

@OlufolaWusu_IP

Olufola Wusu is a Commercial, Oil and Gas and IP Lawyer based in Lagos.

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NLNG panics as US, Australia enter gas market

Punch newspaper recently reported thus: “NLNG panics as US, Australia enter gas market” http://www.punchng.com/business/business-economy/nlng-panics-as-us-australia-enter-gas-market/

Its this analyst’s opinion that this might be the perfect opportunity for Nigeria LNG Limited and Nigeria to rethink its commercial strategy on gas and LNG use.

It may no longer be appropriate for LNG to be entirely export centred.

We may need to continue with the export of LNG while pushing for domestic use/African use of LNG/Natural Gas.

We should also consider LNG storage tanks for rainy days and to make our production mix more nimble, Floating LNG  may just be the way forward. Thankfully Shell has shown the way via its Prelude FLNG in Browse Basin, Australia.

Brass LNG may consider using Floating LNG, it should be cheaper as it does not require land and all the attendant costs like compensation and community relations.

All over the world traditional fossil fuels like petrol and diesel are being replaced with natural gas as it is seen as a cleaner and cheaper alternative.

In America LNG/Natural Gas provides :

a. 76% of the residential and commercial sectors’ energy needs

b. 40% of the industrial sector’s energy needs

c. 18% of electricity generation

d. 3% of the transportation sector’s energy needs
Over 110,000 transit buses, taxi cabs, package delivery trucks and other vehicles operating in the U.S. are fueled with clean-burning natural gas, according to the Natural Gas Vehicle Association.
Heavy duty trucks, trains and ships now run on LNG as it affords them the opportunity to store more fuel using less space!

Japan is pushing LNG for its transportation needs, it intends to use LNG  for its buses, trucks and ships while dumping diesel.

There are so many innovative uses of LNG Nigeria that Nigeria may freely adopt. Going by the huge sums of money spent on subsidy and importation of petrol and diesel I dare say that there is a ready market for gas utilisation in Nigeria. Either way the dwindling prices of LNG and the entry of bigger and nimble players offering lower prices into the global LNG market may just be the incentive needed to jump start the natural gas revolution in Nigeria.

There is no point spending money on importing petrol and diesel when we have so much Gas!!!

Olufola Wusu

I work with companies seeking to invest in Nigeria. I solve legal problems and help monetise I.P. & Oil and Gas .

Listed in the prestigious directory of “Who is Who Legal” Nigeria.

http://whoswholegal.com/profiles/65712/0/wusu/olufola-wusu/

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NNPC Reforms-The IP Dimension

President Muhammadu Buhari has stated that the Nigerian National Petroleum Corporation (NNPC), the national oil company will be divided into two successor entities under his administration, one of the successor companies will be an independent regulator, the second would run as an investment vehicle for the country.

The Group Managing Director (GMD) of the Nigerian National Petroleum Corporation (NNPC), Dr. Emmanuel Ibe Kachikwu is reported to have stated that “We are doing a lot of work in terms of repositioning, restructuring, getting the right people in key places and setting a culture of accountability and service delivery so that the new NNPC that you are going to see will be a different institution altogether”.

“It’s a three-pronged process that I am pursuing. There’s a people aspect which we are dealing with now; there is a process aspect; after the people at the right places, you are going to get forensic audit done so that we know clearly, proper forensic audit that will cover us all the way to 2014, 2015, that will be able to say to you, this is the state of the company”.

The new NNPC boss said under his watch, processes and control are going to be put in place. He also said the NNPC is going to embark on retraining and repositioning.

Without dwelling on the legal ramification or ethical considerations of the above reforms, this paper will attempt to highlight the possible Intellectual Property (IP) dimensions of the proposed NNPC reforms.

What does IP have to do with Oil and Gas?

Oil and Gas Intellectual Property;

The basic types of Intellectual property prevalent in the oil and gas sector are the following; Patents, Trademarks, Copyrights, Trade Secrets and Others like brands, Know-How, Know – Who and Professional Credentials & Credibility.

In protecting innovation and technology a key benefit of an intellectual property system is that a contractual right is only enforceable against the person who entered into contract with you; while a property right is enforceable against the world! Reports have however shown a strong correlation between the presence of intellectual property in oil and gas companies, especially service companies, and their profitability.

Patents

A patent is a document issued, upon application by a government office (or a regional office acting for several countries), which describes an invention and creates a legal situation in which the patented invention can normally only be exploited (manufactured, used, sold, imported) with the authorization of the owner of the patent. Patents cover things like cutting-edge technologies used in refining, gas processing, LNG facilities, instrumentation, production data capture, horizontal drilling, multilateral wells, hydraulic fracturing, or fracking, and deep-water-drilling methods. Technology breeds IP which often gives rise to market dominance or influence.

Who are Getting Oil and Gas Patents?

Nearly everyone in the oil and gas industry is getting patents.

Schlumberger is one of them. Schlumberger’s technological dominance in the oil field servicing landscape is reflected in its formidable patent portfolio. A search on Espacenet, an international database operated by the European Patent Office, for Schlumberger reveals more than 36,000 patents linked to the firm. A search for Halliburton yields 25,000, while Baker Hughes, the third-largest in the sector has 20,000 patents.

ExxonMobil had over 10,000 active patents at the end of 2011.  Shell had over 20,000 patents at the end of 2012.

Over the past 35 years of GTL development Shell has filed some 3,500 patents, the company’s world-scale undertaking in Qatar is bringing new discoveries and challenges

Why Nigerian Oil and Gas companies are yet to fall in love with Patents …

They are so busy making money selling oil and gas (i.e. commodity trade) that no one thinks that there is a need to innovate; there is enough money to go around so why bother with R&D that leads to technology which breeds IP that gives rise to increased profitability.

Interestingly, oil prices have fallen and with IP, companies will be able to make more profits. For example the sands project method described in (U.S. Patent No. 6,158,510) was patented by ExxonMobil in 2000.  ExxonMobil licensed it to Baker Hughes in 2012.  ExxonMobil collected more than $129 million in 2011 from licensing its intellectual property to third parties, and this number is increasing every year.

Trade secrets

A “trade secret” is any product, operating formula, pattern, device or other compilation of information which is used in a business, which gets its economic value from being kept secret, and gives the business a competitive advantage.  The upstream oil and gas industry depends heavily on trade secret protection.  The duration of trade secret protection is potentially perpetual, as it continues as long as you can keep your “trade secret” secret! Hydraulic fracturing is also heavily protected by trade secret protection. Despite regulatory pressure to show the contents of hydraulic fracturing fluids, companies that ‘frack’ have failed to show the full content of hydraulic fracturing fluids.

Copyrights

Copyright exists in a work on the basis of originality and fixation. Copyright protection is particularly important to the oil and gas industry in the protection of software, databases and maps, the results of a 3-D seismic survey which would include aspects of each.

Trademarks

The first barrel in any great oil and gas company is a good name. It should be registered as a trademark.  The oil and gas industry seems to have overlooked the power and value of branding as many executives may not appreciate how brands work to create economic value.A brand is a collection of trademarks, trade names, logos, signs, symbols, domain names, copyright and creative material which stand for values and character in the minds of stakeholders which positively influences their behaviour towards the subject company. According towww.brandfinance.com Shell is described as having the most valuable brand in the oil and gas industry.

Interestingly host community hostility has driven some oil majors from onshore operations offshore, perhaps due to negative branding with regard to environmental issues. In addition not all IP-branding endeavours are successful as BP recently lost its battle to trademark the colour green in Australia.

Economic Benefits of IP in Oil and Gas

The oil and gas industry has become aware of the benefits of IP in Oil and Gas and the dangers of its neglect. This awareness has been accelerated, by the sudden growth in the extraction of difficult oil and gas reserves (leading to increased profitability for some oil and gas companies) as made possible by technological innovation such as hydraulic fracturing, or fracking, and deep-water-drilling methods in the oil and gas industry as well as a changing competitive landscape, characterised by low prices and increasing supply that seems to have changed the oil and gas industry’s dynamics. The good thing is that technology breeds very valuable IP.

QatarGas engaged in intensive research and development leading to technology innovation backed by patents that enabled it to build Liquefied Natural Gas plants on a very large-scale. QatarGas has 20 trains thus it processes more gas at a cheaper rate and is able to sell at lower rate, thus selling more gas and making more profit despite the seeming downturn.

Oil and gas companies have recently boosted their research and development (R&D) spending and innovation to stay relevant. From 2002 through 2011 the top ten oil and gas companies increased their spending on R&D by nearly 10 percent annually yielding favourable results. In the Boston Consulting Group’s recently released list of the world’s most-innovative companies, three oil and gas companies ranked in the top 50: Shell at 26, Exxon Mobil at 40, and BP at 44.

 

Global IP in Oil and Gas Competition is increasing

Efforts to protect IP in oil and gas through patents, trade secrets, and other means have clearly increased.  Globally, patent activity in upstream oil and gas rose by about 20 percent per year from 2009 through 2012. However, the downstream sector which comprises of IP-intensive businesses such as refineries has had steady patent activity.

Innovation has the potential to drive oil and gas companies’ profitability and influence their relationships with national oil companies and oil-field-service companies. This may be the reason the Chinese government is encouraging “home-grown” innovation and facilitating “patenting” in oil and gas through tax incentives.

From 2006 through 2010, Chinese oil and gas companies have increased R&D spending by 29 percent and upstream patenting activity by 66 percent. In downstream, the Chinese energy conglomerate Sinopec is amassing a large patent portfolio, at home and abroad (excluding Nigeria I guess).

Nigeria may consider encouraging innovation in oil and gas backed by IP in its oil and gas companies. The NNPC may very well lead the way in this regard by laying the regulatory framework for IP in oil and gas to thrive in Nigeria.

The Need for IP reforms in NNPC

There is a need for Nigeria, the NNPC and Indigenous Oil and Gas companies to pay attention to IP which is catalysing growth in the Oil and Gas industry. The Oil and Gas industry is intensely innovative and technology driven and this technology is protected by patents and other IP owned by companies who either directly take part in Oil and Gas projects or license out their IP including patents to others to use for a hefty fee.

National Oil Companies are driven by IP-The Petronas Paradigm

Malaysia’s national petroleum corporation is called Petroleum Nasional Berhad (PETRONAS). It was incorporated in 1974 under the Companies Act (1965) and is owned by the Malaysian government. Just like it is in Nigeria, the entire ownership and control of petroleum resources in Malaysia rests with PETRONAS through the Petroleum Development Act (1974).

Clear IP Centred Research and Development Policy

PETRONAS uses sound technology to run world-class plants to create new products or improve existing products.  PETRONAS receives grants for commercialization of research and development (R&D), and for developing prototypes or pilot plants leading to valuable patents and IP. Its R&D partners include universities, institutions of higher learning, government research institutes, private consultants, and other companies.

NNPC’s research and development policy is a bit unclear, the number of patents or IP it owns are not easily ascertainable.

 

Intellectual Property Management

IP increases the profitability, growth and business development of PETRONAS. The need to protect PETRONAS’ intangible assets/IP motivated it to set up a separate IP division within its legal department consisting of lawyers who understand the IP implications of oil and gas. The IP division has the function of protecting PETRONAS IP rights (IPR) against the competition, preventing infringement, and commercialization of IP asset by sales or licensing.

The IP Division is also in charge of everything about corporate IP matters like the development of IP guidelines and IP process flow. Conducting IP awareness programs on the value of IP/intangibles and the registration of PETRONAS trademarks and patents, for the units within PETRONAS.

Patents

Owning a patent (and other IPR) makes it easier to attract investment. Venture capitalists often seek entities that own IP to invest in. Strategic patenting by NNPC can help raise funding, increase profitability, help avoid prosecution for patent infringement, also IP portrays  a company as innovative.

Trademarks and Branding

PETRONAS has more than 200 trademarks spread out over 65 countries. PETRONAS has registered 110 trademark applications in 45 classes with the Malaysia Intellectual Property Office. PETRONAS brand promotional activities have made customer loyalty the most important target.

Domain Names

PETRONAS has invested a significant amount of money and time in creating and promoting its brand name, both nationally and internationally. A number of internet websites are operated by the company and its subsidiaries. Petronas has successfully challenged cyber squatters at least three times.

Conclusion

The upstream oil and gas industry has been described as a “knowledge industry” because of new technologies such as three-dimensional acoustical sounding, horizontal drilling, and deep offshore drilling. Cutting edge technologies coupled with Supercomputers have taken their place with the industry developing a big interest in IP. Commercialisation of IP needs careful analysis of a number of factors to pick the best strategy. IP may be licensed, sold or even exploited in a joint venture. Perhaps the inclusion of IP in the NNPC reforms would pave the way for “the IP in Oil and Gas” revolution to begin in Nigeria which should help nudge the indigenous oil and gas companies and the Industry in the right direction IP wise.

Olufola Wusu Esq. © 2015

I work with companies seeking to invest in Nigeria. I solve legal problems and help monetize I.P. & Oil and Gas.

fola@megathoslaw.com

Please connect with me on LinkedIn http://www.linkedin.com/pub/olufola-wusu/22/317/587

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LEGAL ISSUES IN ANIMATION-10 THINGS TO NOTE

I grew up watching “Snow White and the Seven Dwarfs”, “Hercules”, “Bugs” like most Nigerians my early memories are filled with watching foreign cartoons. However, recently Thisday Newspapers published a story about Mrs Damilola Solesi, an enterprising Nigerian who runs Smids Animation Studio.

Mrs Dami Solesi was quoted has having said: “Primarily, what we do is to provide animation services to brands and agencies,” “We do commercials, documentaries, visual animation, motion graphics, and all that. We primarily use three media – core 3D animation, motion graphics, and visual effects. We are also working on some of our own content. We have a short movie we are working on, which is almost done; and we are looking to turn it into a web series.”

Animation has multiple uses beyond entertainment; it is also useful for socialisation and other forms of information dissemination.

However Nigeria seems to lack enough productive capacity to produce the animation it needs. Thus individuals and companies in need of animation have had to source for animation outside the shores of this country.
However, without dwelling on the propriety or otherwise of the seeming absence of local content in Animation in Nigeria this paper will attempt to examine the Intellectual property ramifications of Animation and the benefits of Innovation to Animators and Animation Companies in Nigeria and beyond.

Animation Intellectual Property;
Research and operations in the Animation industry produce new ideas, procedures, software, compositions, equipment and plenty of data.

This make up the basic intellectual properties of the industry which has potentially transformed the Animation industry from a commodity market to knowledge/innovation/intellectual property based industry.

Intellectual Property becomes a valuable asset to Animation companies, when it is registered and steps are taken to prevent competitors from accessing and using it for free.

The basic types of Intellectual property prevalent in the Animation Industry are the following; Trademarks, Copyrights, Trade Secrets, Patents and others like brands, Know-How, Know – Who and Professional Credentials & Credibility.

Benefit of Animation Intellectual Property;
In protecting innovation, a key benefit of an intellectual property system is that a contractual right is only enforceable against the person who entered into contract with you; while a property right is enforceable against the whole world.

Copyrights
A copyright gives the holder of such copyright the exclusive right to control exploitation, production and adaptation of such a work for a certain period of time.
Copyright exists in a work on the basis of originality and fixation. Copyright protection is particularly important to the Animation industry in the protection of its script, movies, 3-D animation and software used for animation.

Trademarks
The first scene in animation is a good name. It should be registered as a trademark. The crux of trademark infringement is the “likelihood of confusion.” The analysis would revolve around whether or not the allegedly infringing mark is likely to cause confusion in the eyes of the public. Whether registered or not, a name is a valuable asset that can be protected under the tort of passing off. A strong trademark is virtually mandatory for all Animation brands.

Animation brands In Nigeria
An Animation brand can be defined as a name, term, sign, symbol, design or a combination of colours intended to identify an Animation Company or studio and differentiate it from that of other Animation Companies. In Nigeria many of the Animation Brands we know are foreign.

Animation Brands, Social Media and Information Technology
All over the world Animation Brands are proficient with the use of the internet (yes websites and all) and social media in promoting their unique identities.

Patents
A patent is a document issued, upon application by a government office (or a regional office acting for several countries), which describes an invention and creates a legal situation in which the patented invention can normally only be exploited (manufactured, used, sold, imported) with the authorization of the owner of the patent

Patents in Nigeria are of limited duration, typically providing protection for a period of 20 years from the filing of the application for patent grant.
Patents cover things like Apple’s page turning animation and other cutting-edge technologies used in Animation.

IP Protection “fathered” the Animation Industry
It goes without saying that companies in the Animation industry, would probably not have been formed and would not continue to exist today without protection of its intellectual property!
If its creative products were not protected by IP, they would have been priced as a commodity and not as a brand. If the products had been priced as a commodity, they may not have been developed and made available to the industry. Spider-Man 3 was reported to have cost $258,000,000.

Why Nigerian Animation companies are yet to fall in love with IP…
Is Innovation necessary?
They don’t need to, because they are so busy creating animation (i.e. commodity trade) that no one thinks that there is a need to innovate, animation creates good publicity so why bother. Well… because with IP animation will create more value.

How significant is our market?
The market in Nigeria may be perceived to be so inconsequential that they do not see a need to secure IP rights in animation they produce. The animation companies may not have seen the need to generate revenue outside Nigeria.

Trade secrets
A “trade secret” is defined as any product, operating formula, pattern, device or other compilation of information which is used in a business, which gets its economic value from being kept secret, and gives the business a competitive advantage.
Contractual Protection for Trade Secrets
Trade secrets are more appropriately protected by contract. The contract should define the trade secret as explicitly as possible. Contracts like “non-disclosure agreements” (“NDAs”) need to have sharp definitions of trade secret boundaries just as patent claims are required to have definite boundaries.

Animation IP Transactions
Formal accounting procedures for IP assets are fast evolving, but they are generally not on the balance sheet of the average companies that own them, and they are sometimes ignored by financial analysts.
Creating and exploiting intellectual property is a key part of Animation. Crucial issues that need to be addressed include IP strategies, patent valuations, licensing and litigation.
Animation companies need to have in house counsel who understand and have the expertise to help them manage, enforce and extract value from Intellectual Property Portfolios.
The value of I.P. is a monetary compensation that is expected to be received from licensing of I.P. or from sale or exchange of other intangible assets.

Conclusion
The Global Animation Industry has been described as a “knowledge industry” because of new technologies coupled with Supercomputers have taken their place causing the industry to develop a big interest in intellectual property.
Commercialisation of intellectual property needs careful analysis of a number of factors to pick the best strategy. I.P. may be licensed, sold or even joint ventured.
Intellectual Property becomes a valuable asset to anybody and industry, when it is utilized to enhance everyday activities, registered and steps are taken to prevent competitors from accessing and using it for free.

Olufola Wusu Esq. © 2015

I help monetise Intellectual Property and make complicated Commercial and Oil & Gas Legal Problems simple.

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Alaba Mafia: The real ‘stars’ of Nigerian music industry

The Nigerian music industry is largely regarded by many as successful, though there is still room for improvement. But the success recorded in the industry today cannot be said to have come solely through the hard work of the musicians without recognising the ingenuity of the Alaba music promoters, also known as the Alaba Mafia, SEGUN ADEBAYO reports.

Read more here: http://www.tribune.com.ng/special-report/item/33710-alaba-mafia-the-real-stars-of-nigerian-music-industry#

 

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