Nigeria: 2003 Special 301 Review on IPR

UNCLAS SECTION 01 OF 03 ABUJA 000416

SIPDIS


STATE FOR AF/W AND EB/IPC
SATE PASS USTR ALVAREZ
COMMERCE FOR LASHLEY
USPTO FOR URBAN
LOC FOR TEPP


E.O. 12958: N/A
TAGS: KIPR ETRD ECON EINV NI
SUBJECT: Nigeria: 2003 Special 301 Review on IPR
Protection

Ref: State 43677


Summary
--------------

1. Piracy of optical media remains a major issue in
Nigeria. Lack of enforcement resources and trained
enforcement staff, coupled with inadequate public and
government understanding and appreciation of the benefits
of IPR protection, make reversing this situation a
difficult, long-term effort. The Government of Nigeria
(GON)--by far the largest user of computers in the
country--is making a serious effort to see that all
government agencies use only licensed software, but it
still remains the largest user of pirated software in the
country. Meanwhile, the GON appears stalled in its
efforts to bring its IPR legislation into full compliance
with TRIPS. Admittedly, there has been little progress
over the last year, but we believe that naming Nigeria to
the Watch List is unwarranted. In fact, doing so might
make further progress on this issue considerably more
difficult. End Summary.


Optical Media Piracy
--------------

2. Nigeria remains a large market for a wide range of
pirated optical media products. Although no formal
surveys have been conducted, Emboffs observe that nearly
all recordings offered for sale are pirated. Much of the
pirate industry is centered in one section of Lagos,
where several local optical media companies have the
capacity to produce over 500 copies of CDs, DVDs, and
VCDs daily.



3. The GON has slowly begun to take measures to counter
the problem. In early 2002, the Nigerian Copyrights
Commission (NCC) said it would require optical media
manufacturers to include anti-piracy devices (for
example, holograms) on their recordings. This program has
been subject to numerous delays, but the NCC announced
recently that all media would include holograms by March

2003. The NCC has no plans to require manufacturers to
include source identification codes. Nor are there plans
to enact legislation that would specifically target
optical media piracy.



4. To date, the GON has demonstrated only tepid 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 almost non-
existent.


Use/Procurement of Government Software
--------------

5. While the extent of GON consumption of pirated
software is unknown, the government itself is considered
the largest abuser of IPR. Many, if not most, government
offices, utilize pirated software. In early 2002
President Obasanjo directed all ministries and
parastatals to account for the software in their
possession, and to regularize software usage.



6. To that end, the President tasked the National
Information Technology Development Agency (NITDA)--in
coordination with the NCC--with auditing all software in
use by the government and negotiating license agreements
with the software owners. NITDA has faced delays in
completing the first step of the process, determining the
volume and types of software in use. NITDA promised to
provide an inter-ministerial review committee with a
report by September 2002 and then December 2002, but the
report is still pending.



7. Although the audit report has not been completed,
NITDA attempted to begin negotiations with at least one
software company, Microsoft. A participant in a recent
meeting between NITDA and Microsoft says that NITDA
lacked sufficient data on the government's use of
Microsoft products to make any headway. It is likely that
NITDA--underfunded and poorly staffed, given the enormity
of its new mandate--will continue to make similar
missteps.


TRIPs Compliance
--------------

8. Nigeria is a signatory to the Universal Copyright
Convention and the Berne Convention. In 1993, Nigeria
became a member of the World Intellectual Property
Organization (WIPO) and thereby became party to most of
the major international agreements on intellectual
property rights. The Patents and Design Decree of 1970
governs the registration of patents; and the Standards
Organization of Nigeria is responsible for issuing
patents, trademarks, and copyrights. Once conferred, a
patent conveys an exclusive right to make, import, sell,
or use the products or apply the process. The Copyright
Decree of 1988, based on WIPO standards and U.S.
copyright law, makes it a crime to export, import,
reproduce, exhibit, perform, or sell any work without the
permission of the copyright owner.



9. In 1999, amendments to the Copyright Decree
incorporated most TRIPS protections for copyrights,
except provisions to protect geographical indications and
undisclosed business information. The amendment also gave
the Nigerian Copyright Commission (NCC) additional
enforcement powers.



10. Four TRIPS-related bills and amendments are currently
in various stages of preparation, but none have been
forwarded to the National Assembly. The World
Intellectual Property Organization (WIPO) has reviewed
the first three of the acts listed (all except the plant
and animal variety legislation) and, according to the
GON, determined that their enactment would bring Nigeria
into full compliance with TRIPS.


--The NCC and Trademarks and Patents Registry (TPR) are
preparing a bill that would merge both agencies to
establish an Intellectual Property Commission (IPCON).
The draft law also provides for the new commission to
retain a portion of the fees it collects to fund
operations and programs.


--The Ministry of Justice is reviewing an amendment to
the Patents and Designs Act that will make comprehensive
provisions for the registration and proprietorship of
patents and designs.


--The Ministry of Justice is also reviewing an amendment
to the Trademarks Act that will improve existing
legislation relating to the recording, publishing, and
enforcement of trademarks.


--Various agencies are drafting a bill to provide
protection for plant varieties, including biotechnology,
and animal breeds.


Enforcement
--------------

11. Law enforcement, particularly for patents and
trademarks, remains weak, and the judicial process is
slow and subject to corrupting influences. Inadequate
funding, lack of computerization to facilitate
enforcement, and staffing shortages contribute to
Nigeria's weak IPR enforcement climate.



12. A key deficiency remains inadequate understanding and
appreciation among regulatory officials, distributor
networks, and consumers of the benefits of intellectual
property rights protection. This is coupled with the fact
that the average consumer price of legally produced or
imported materials, particularly software, is beyond the
reach of most Nigerians. In particular, Nigeria's over-
stretched and under-trained police lack understanding of
IPR. The Nigerian Customs Service has received some WIPO
sponsored training, but even those officers who can
identify pirated imports are not allowed, under the
current law, to impound the offending materials unless
the copyright owner has filed a complaint against that
particular shipment, which is only done in very rare
instances.



13. Companies rarely seek trademark or patent protection
because it is generally perceived as ineffective.
Nonetheless, recent government efforts to curtail IPR
abuse have yielded some results. A number of high profile
actions have been taken against IPR violators. The
Nigerian Police, working closely with the NCC, have
occasionally raided enterprises allegedly producing and
selling pirated software and videos. Industry sources
indicate that the NCC has been reinvigorated to an extent
by the appointment of a new director general in July
2002, who voices a commitment to enforcement. Microsoft
reports more successful raids in 2002, including a bank
that has been charged in court, and settlements that have
resulted in the purchase of appropriate licenses.



14. However, most raids appear to be conducted against
small-scale pirates, and not the large, well-connected
ones. Moreover, very few cases involving copyright,
patent, or trademark infringement have been successfully
prosecuted, and most cases continue to be settled out of
court. It is unlikely that law enforcement will improve
without assertive political leadership, policy direction,
and adequate financial support.



15. IPR cases are handled primarily by the Federal High
Court, whose judges generally enjoy broad familiarity
with IPR protection law. However, in the lower courts, a
judge handling the case might not be knowledgeable in
IPR, and misapplication of the law is not uncommon. Lagos
is the only region in Nigeria where the majority of
judges have a reasonable knowledge of IPR. Further
exacerbating the problem, most legal practitioners do not
possess adequate knowledge of intellectual property
rights to properly handle cases. In 2002, the USG's Civil
Law Development Program (CLDP) continued to educate
Nigerian civil and judicial officials on IPR.



16. Rightsholders continue to push for improved law
enforcement. Nigerian artists--including writers,
filmmakers, and musicians--have in recent years
campaigned for more effective copyright protection and
amendments to existing law. Lawyers active in IPR issues
formed the Industrial Property Law Interest Group (IPLIG)
to educate the public and lobby on behalf of industrial
IPR issues. IPLIG has sponsored several copyright
conferences and initiated an IPR course at the Lagos Law
School. Software company representatives, represented by
the Business Software Alliance (BSA),continue to work
directly with the Nigerian Government to reduce the now
high number of agencies using pirated software. Nigerian
filmmakers formed the Proteus Entertainment Agency to
challenge copyright infringement and promote stronger law
enforcement.


Comment
--------------

17. Although Nigeria is a large market for pirated goods,
it should not be included in USTR's Special 301 Watch
List. The GON continues to make efforts to shore up its
regulatory and legal framework. Admittedly, enforcement
remains poor, mostly due to inadequate funding but also
the result of competing priorities. Overall, though, the
GON has made a serious effort to improve IPR protection.
Obasanjo's effort to ensure that GON agencies use
licensed software is this year's best example of this
commitment. Furthermore, naming Nigeria to the Watch List
would only serve to incite latent anti-Western sentiments
in Nigeria and complicate efforts of local and foreign
rights-holders to strengthen the protection afforded
their intellectual property.


JETER