US embassy cable - 05LAGOS630

UNCLAS SECTION 01 OF 04 LAGOS 000630 
 
SIPDIS 
 
STATE FOR EB/IPC WILSON 
SATE PASS USTR - PBECK; PASS ALSO TO EXIM 
COMMERCE FOR KSCHLEGELMILCH 
USPTO FOR JURBAN/DLASHLEY-JOHNSON 
 
E.O. 12958: N/A 
TAGS: ECON, ETRD, KIPR, NI 
SUBJECT: Nigeria's 2005 Special 301 Review: Special 
Mention 
 
Ref: 2004 Lagos 001933 
 
1. Summary.  While awareness of intellectual 
property rights (IPR) is increasing in Nigeria, IPR 
compliance has improved only slightly. Inadequate 
funding of relevant agencies and the inability to 
sustain public and government attention to IPR 
violations remain concerns.  Optical media piracy is 
rampant and pirated products are openly traded in 
the local market.  The GON itself violates IPR, 
notably by non-payment of licensing fees as required 
under a computer software licensing agreement with 
Microsoft, and through use of software by some state 
and local government agencies not covered by the 
agreement. 
 
2. The GON nonetheless made efforts to address IPR 
piracy and improve enforcement of IPR laws in 2004. 
For example, trademark and patent registration 
processes were streamlined. State high courts now 
can hear trademark cases; previously only federal 
high courts had jurisdiction.  The Nigerian 
Copyright Commission (NCC) developed a Strategic 
Action Against Piracy (STRAP) initiative to increase 
IPR awareness of and enforcement by all GON agencies 
and the private sector.  End summary. 
 
----------------------------- 
Optical Media Piracy Persists 
----------------------------- 
 
3. Pirated local and foreign music CDs, video CDs, 
CD-ROMS and DVDs sell openly in markets and on the 
streets of Nigeria's urban centers.  Local optical 
media pirates copy hundreds of thousands of music 
CDs and video CDs daily.  The NCC estimates 20 
million pirated items are produced each year in 
Nigeria, and an additional 10 million are smuggled 
into the country.  They estimate at least 9 or 10 
plants are producing pirated optical media, and 
roughly 15 to 20 professional smugglers are 
importing large quantities of pirated goods. 
However, these estimates are likely conservative. 
In a July 2004 media report, the NCC estimated the 
copying capacity of eleven plants alone (operated by 
a single supplier) was 24 million CDs per month. 
Given that this was one supplier among several, 
numbers could be much higher than the NCC is letting 
on. 
 
4. A reason for this flourishing trade is that the 
GON did not fully enforce anti-piracy laws in 2004. 
For example, the NCC is not implementing its 
directive requiring anti-piracy holograms to be 
included on optical media.  Similarly, the NCC 
proved unable to require all optical disc producers 
to register their products.  (The potential efficacy 
of this registration policy is questionable since 
pirates might easily forge registration numbers.) 
 
5. The popular "Computer Village" market in Lagos is 
the epicenter for Nigeria's pirated hardware and 
software products.  Despite several raids by the NCC 
in the last year, the blatant sale of illegal 
products remains undeterred. Recently, the market 
launched a website (www.otigba.com) to showcase its 
products. 
 
--------------------------------------------- -- 
State and Local Governments Remain in Violation 
--------------------------------------------- -- 
 
6. The GON is trying to improve its reputation as 
the country's largest abuser of IPR, and has 
significantly reduced the number of government 
offices using pirated software. In 2002 President 
Obasanjo directed all ministries and parastatal 
companies to account for software and to regularize 
software usage.  In 2003 the National Information 
Technology Development Agency (NITDA), in 
coordination with NCC, audited GON software use and 
negotiated license agreements with software owners. 
 
7.  Although Microsoft reports it has signed 
licensing agreements with most government parastatal 
companies and agencies, it has complained the GON 
has not paid for all the licenses and that some non- 
licensed government agencies continue to use 
software illegally.  The use of pirated software by 
state and local government agencies and parastatal 
companies is common, as Microsoft's agreements are 
only with the federal government. 
 
---------------- 
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 international agreements on 
intellectual property rights.  Nigeria's Patents and 
Design Decree of 1970 governs the registration of 
patents; and the Standards Organization of Nigeria 
(SON) 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 patented. 
Nigeria's Copyright Decree of 1988, which is based 
on WIPO standards and U.S. copyright law, makes it a 
crime to export, import, reproduce, exhibit, 
perform, or sell any work covered by the decree 
without the permission of the copyright owner. 
 
9. In 1999, the GON amended the Copyright Decree to 
incorporate most trade-related intellectual property 
rights (TRIPS) protections for copyrights, except 
provisions to protect geographical indications and 
undisclosed business information. The amendment also 
gave the NCC additional enforcement powers. 
 
10. Four TRIPS-related bills and amendments have 
been under consideration by the Ministry of Justice 
for two years, but none have been forwarded to the 
National Assembly.  According to the NCC, the World 
Intellectual Property Organization (WIPO) reviewed 
the first three of the acts listed (all except the 
plant and animal variety legislation) and determined 
TRIPS enactment would bring Nigeria into full 
compliance. 
 
11. TRIPS-Related Bills/Amendments Pending: 
 
--The NCC and the Trademarks and Patents Registry 
(TPR) have prepared a bill to transform both 
agencies into an Intellectual Property Commission 
(IPCON). The draft law provides for the new 
commission to retain a part of the fees it would 
collect to fund operations and programs. 
 
-- The Ministry of Justice is reviewing an amendment 
to the Patents and Designs Act making 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 would 
strengthen existing legislation relating to the 
recording, publishing, and enforcement of 
trademarks. 
 
-- Various agencies have also discussed a draft bill 
to regulate plant varieties including genetically 
modified seeds, and animal breeds, but no progress 
has been reported. 
 
------------------------ 
Enforcement Remains Weak 
------------------------ 
 
12. Piracy law enforcement remains weak, and the 
attendant judicial process is slow and subject to 
corruption.  Court cases can be dormant two years or 
more without a hearing.  Prosecution of a typical 
IPR case may take as long as three years.  According 
to an IPR contact, law officials charged with 
prosecuting such cases on behalf of the government 
sometimes lack the will to see the cases through, 
unless they receive compensation.  Pirates thus 
often escape punishment, which encourages subsequent 
IPR infringements. 
 
13. The inadequate funding of law enforcement 
agencies, the NCC, and the courts is a major 
obstacle to effective enforcement of IPR laws.  The 
NCC, which has about 120 personnel, runs on a 
monthly budget of USD5,263 (naira 700,000).  Because 
of insufficient funding, it carried out only two 
major raids in 2004, which led to roughly 20 
arrests, mostly of Asian nationals, allegedly 
pirating local and foreign CDs and VCDs (reftel). 
The police force and the courts fare no better; they 
lack everything from staff and computers to vehicles 
and office supplies.  IPR-owners have had to provide 
administrative or logistical support to the 
enforcement agencies to conduct raids against 
pirates to protect the former's IPR rights; for 
example, in 2004, Microsoft donate computers to the 
NCC to facilitate its work. 
 
14.  Another key issue affecting IPR enforcement is 
the inadequate appreciation among regulatory 
officials, distributor networks, and consumers of 
the benefits of IPR protection.  For instance, 
Microsoft has difficulties encouraging corporate 
customers to comply with terms and conditions of use 
and sale of its software.  (Comment.  Microsoft 
would be well served if EXIM were to ensure that its 
Nigerian clients respect IPR before lending or 
guaranteeing funds to such clients.  End comment.) 
Largely because of a culture of ignorance and the 
lack of interest, the senior management of 
Microsoft's customers often fail to ensure their 
companies adopt and implement sound software asset 
management policies.  The top violators include 
banks and some telecom companies. 
 
15.  This lack of interest and the enforcement of 
IPR regulations have led IPR-owners to adopt 
alternative means to ensure compliance or 
deterrence.  In 2004, Microsoft persuaded the 
Nigerian telecom industry regulator to compel a 
telecom company to stop its illegal use of Microsoft 
software.  The press and the Economic and Financial 
Crimes Commission (EFCC) have raised awareness about 
the need for better IPR enforcement.  The National 
Agency for Food and Drug Administration and Control 
(NAFDAC) and the Standards Organization of Nigeria, 
which conduct anti-piracy raids with the Nigerian 
police, have been fairly successful in countering 
IPR infringements by industrial firms. 
 
-------------- 
2004 Successes 
-------------- 
 
15. In early 2005, the trademark and patent 
registration (TPR) office streamlined its 
registration process and cleared up a 5 - 10 year 
backlog.  TPR now regularly publishes its trademark 
journal and highlights legitimate Nigerian right 
holders.  The journals also provide revenue to TPR, 
which helped update and speed up its applications 
processing system. 
 
16.  Nigeria's Supreme Court recently ruled that 
state high courts can handle unregistered trademark 
cases.  The court so ruled in response to complaints 
of violations against trademark registration 
applicants that had been pending for years in some 
instances. 
 
17.  The NCC's new leadership initiated the 
Strategic Action Against Piracy (STRAP) initiative, 
which is to be launched by President Obasanjo in 
early 2005.  STRAP will attempt to ensure legitimate 
distribution of all copyrighted products in Nigeria. 
The NCC considers STRAP its guiding plan for the 
coming years; it will seek to promote IPR awareness 
and enforcement of IPR laws, but the STRAP action 
plans have yet to be released to the public. 
 
-------- 
Comment 
-------- 
 
18. The GON is engaged in efforts to improve its 
regulatory and legal framework to tackle piracy. 
Much needs to be done.  Significant progress will 
require more political will, more enforcement, and 
ultimately, more funding.  End comment. 
BROWNE