NIGERIA: 2002 SPECIAL 301 REVIEW ON IPR

UNCLAS SECTION 01 OF 03 ABUJA 000649

SIPDIS


STATE FOR EB/IPC:DRBEAN
DEPT PLEASE PASS TO USTR: BURKY/ALVAREZ
DOC FOR LASHLEY
USPTO FOR URBAN
LOC FOR TEPP


E.O. 12958: N/A
TAGS: KIPR ETRD ECON EINV NI IPR
SUBJECT: NIGERIA: 2002 SPECIAL 301 REVIEW ON IPR
PROTECTION


REF: (A) STATE 12498 (B) STATE 3106 (C) 01 LAGOS 647



1. Mission provides response to ref A request for views on
Nigeria,s compliance with TRIPS and recent trends in IPR
protection.



2. Summary and Introduction: The Government of Nigeria (GON)
appears to be making progress bringing its IPR legislation
into compliance with TRIPS. Areas where an inadequate
regulatory and legal framework exist are being targeted for
action by the key GON agencies, although whether proposed
enhanced IPR legislation will pass into law remains to be
seen. Nevertheless, low cost piracy of optical media is
commonplace due not only to lack of enforcement resources and
trained enforcement staff, but also to inadequate public and
government understanding and appreciation of the benefits of
IPR protection. In addition, Nigeria,s low per capita
income diminishes the likelihood of the successful
introduction of the more costly licensed products, which fall
outside the purchasing capability of most Nigerians.



3. Licensed software dealers, such as Microsoft Nigeria, are
the primary catalysts for the recent upsurge in the
procurement of these products among Nigeria,s financial
institutions. Ironically, the GON, as the largest user of
computers in the country, is also the largest consumer of
non-licensed computer products. Reversing Nigeria,s weak
enforcement culture will be a difficult, long-term effort.
Because piracy is commonplace here, we must closely monitor
Nigeria's progress. However, progress has been made.
Continued positive engagement is preferable to adding Nigeria
to the Watch List, and will likely produce better results.
End Summary.


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State of Intellectual Property Rights Regulation
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4. Most of Nigeria,s IPR protective legislation complies
with TRIPS. In 1999, amendments to the Nigerian Copyright
Law incorporated most TRIPS protections for copyrights,
except issues relating to Geographical Indications and the
protection of Undisclosed Information. Four TRIPS-related
bills and amendments are currently in various stages of
legislative enactment.
The World Intellectual Property Organization (WIPO) has
reviewed the first three of the acts listed (all except the
Breeders and Farmers Rights legislation) and, according to
the GON, determined that their enactment would bring Nigeria
into full compliance with TRIPS.


(a) A bill to establish an Intellectual Property Commission
(IPCON),merging the Nigerian Copyrights Commission (NCC) and
the Trademarks and Patents Registry, is now before the
National Assembly. The draft law also provides for the new
commission to retain a portion of the revenue accruing to it
to fund operations and programs.


(b) An amendment to the Patents and Designs Act that will
make comprehensive provisions for the registration and
proprietorship of patents and designs is under review by the
Ministry of Justice.


(c) An amendment to the Trademarks Act that will improve
existing legislation relating to the recording, publishing,
and enforcement of trademarks is also under review by the
Ministry of Justice.


(d) Still in the drafting stage, a bill to provide for the
protection of plant varieties, animal breeders, and farmers
rights will ensure intellectual property rights protection
for genetically engineered agricultural products.


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Optical Media
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5. Nigeria is a large market for a wide range of pirated
optical media products. The GON has slowly begun to take
measures to counter the problem. The Copyright Amendment
Decree (1999) inserted a new section (18A) into the principal
Copyright Act (1988) which provides the Nigerian Copyright
Commission (NCC) additional anti-piracy powers. The NCC
plans to prescribe the insertion of anti-piracy devices (e.g.
holograms) to checkmate copyright abuses as well as identify
real and pirated copies of sound recordings and
&cinematographic8 films intended for sale, rental, hiring,
lending, or other public distribution. (Cinematographic
films are interpreted to include music CDs, video CDs,
CD-ROMs and DVDs.) The NCC expects to launch this program in
March 2002 and reportedly has concluded arrangements with a
company to provide hologram stamps.



6. Piracy of compact discs, video tapes, and other
copyrighted products is rampant. To date, the GON has not
taken strong action against the pirate industry preferring,
for example, to attack videocassette rental shops rather than
manufacturers of pirated videocassettes. Coordination among
law enforcement authorities remains poor.


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Computer Software
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7. The GON categorizes software as literary work and provides
copyright protection. Microsoft and the Business Software
Alliance (BSA) have been instrumental in combating pirated
software. To improve the regulator,s ability to enforce its
own laws, Microsoft Nigeria is providing the NCC training in
computer literacy and the identification of pirated software.
The company has also donated computers to the NCC to aid in
the discharge of its duties.



8. Microsoft Nigeria launched a publicity campaign to explain
the benefits of respecting IPR. Software development
companies in Nigeria reportedly prefer that Source
Identification Marks (SID) not be incorporated on their
media. They opine that SID does not provide them enough
economies of scale benefits from such an exercise.



9. During 2001, the Nigerian financial services sector
aggressively shifted from being a user of pirated software to
becoming generally compliant with the procurement of licensed
products. Microsoft Nigeria estimates that 65 percent of
Nigeria,s banks are at various levels of compliance with
procurement of licensed software. Just one year ago, only a
few were compliant. This reversal is due, in part, to
Microsoft Nigeria and other local software companies
effectively promoting the long-term cost advantages and
customer protection benefits of using licensed products.
That Microsoft Nigeria continues to threaten noncompliant
financial institutions with court action has also helped.
The dramatic change in bank usage of licensed software is
also due to increased competitiveness among Nigeria,s banks
in the campaign to obtain an edge in information technology.
Many bankers now realize that pirated products often create
more problems than solutions in their effort to improve
customer service.



10. Other large-scale software consumers, particularly the
insurance sector, discount houses, brokerage firms and
accountants, have yet to follow the lead of the banks.
Increased competition among these entities, and the continued
legal campaign against users of non-licensed software may
change this situation. Microsoft Nigeria claims they have
achieved several out of court settlements leading to the use
of licensed products.


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IPR Enforcement
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11. GON enforcement of IPR laws remains ineffective. Woeful
lack of funding (the total budget for NCC,s IPR enforcement
nationwide was only USD 43,000 in 2001),inadequate
computerization to facilitate enforcement, and shortage of
skilled manpower contribute to the weak enforcement effort.
A key deficiency remains inadequate understanding and
appreciation among regulatory officials, distributor
networks, and consumers of the benefits from intellectual
property rights protection.



12. NCC leadership admits they lack sufficient enforcement
officers to cover the entire country. Some NCC offices are
not staffed with prosecutors which prevents concluded
investigations from going to trial. According to the NCC,
the frequency of raids on manufacturers and distributors of
pirated materials depends on the availability of funds and
the lodging of complaints by rights holders. While over 150
IPR enforcement raids were allegedly carried out nationwide
in 2001, their impact has been negligible.



13. While the extent of GON consumption of pirated software
is unknown, the government itself is considered the most
egregious abuser of IPR. Many, if not most government
offices, utilize pirated software. To address IPR abuses
within the GON, the NCC is forced to go through a protracted
administrative process with the Ministry of Culture and
Tourism, which oversees the NCC. Nevertheless, according to
the NCC, discussions aimed at ensuring that all government
agencies use appropriately licensed software are ongoing with
individual GON agencies. The NCC is also pressing for the
establishment of a single clearance office for bulk
government purchases of licensed computer hardware and
software. Additionally, the NCC claims it is unable to audit
firms with connections to important political figures.



14. Most legal practitioners do not possess adequate
knowledge of intellectual property rights law to address IPR
properly in court, although a cadre of legal experts is
developing. IPR cases are handled primarily by the Federal
High Court and High Court judges generally enjoy broad
familiarity with IPR protection law. However, at the
Appellate Court level, a judge knowledgeable in IPR might not
be handling the case, and misapplication of the law is not
uncommon. Lagos is the only region in Nigeria where most
judges have a reasonable knowledge of IPR. The USG,s
Commercial Law Development Program (CLDP) is working to
educate Nigerian civil and judicial officials on IPR through
educational seminars and training programs.



15. In addition to the judiciary, Nigeria,s over-stretched
and under-trained police force lacks understanding of IPR.
Moreover, IPR protection is not a priority. It is unlikely
that Nigeria,s police force, without assertive political
leadership, policy direction, and financial support from the
GON, can deter producers and vendors of pirated materials
from operating.


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Comment
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16. Although Nigeria is a large market for pirated goods, it
should not be included on the Watch List. The Government is
making considerable efforts to shore up its legal and
regulatory framework. For a variety of reasons, enforcement
remains poor but some steps have been taken. Given the many
competing demands on the GON's resources, enforcement of IPR
is a secondary priority. However, the GON has shown a
demonstrable, although weakly financed, commitment to IPR.
More importantly, government policies have opposed piracy not
condoned it. Nigeria has much work to do but has some
willing actors in both the public and private sector. Thus,
our interests are better served in providing encouragement
and positive reinforcement to these watch dogs and not
placing Nigeria on the list of worst offenders.
Jeter