Introduction
In recent times, Nigeria has distinguished itself in the area of technology through skilled tech talent and homegrown innovative tech products and services. Artificial Intelligence (AI) is one essential technology that is gaining ground in the Nigerian technology landscape. The Nigerian government is investing in AI research and development to drive innovation, productivity, and future jobs. Initiatives like the National Centre for Artificial Intelligence and Robotics (NCAIR), the recently unveiled Nigeria Artificial Intelligence Research Scheme (NAIRS), and the 3 Million Technical Talent (3MTT) Program underscore the government's commitment to AI development. AI, simply put, is the leveraging of computers and machines to mimic the problem solving and decision-making capabilities of the human mind. 1 The utility of AI cuts across various spheres and is used in several forms such as in speech recognition, disease control/diagnosis, virtual assistants/helpdesks, stock trading, and lately, in natural language processing such as Open AI's Chat GPT. AI is also used in other technologies such as robotics, blockchain, and internet of things.
In this article, we provide guidance on some of the key laws and regulations companies utilising AI should consider in their operations in Nigeria.
Are there any specific laws on AI in Nigeria?
There is currently no specific legislation on AI in Nigeria, however, there are general and sector-specific laws that AI companies should be aware of.
1. General Considerations
- Data Privacy and Protection.
Data privacy is perhaps the most significant consideration when
utilizing AI. This is because AI uses an enormous amount of data to
train the AI algorithm so that the output produced is accurate.
These training data may include personal data that is protected
under the Nigerian Data Protection Act, 2023 (NDPA) and Nigeria
Data Protection Regulation, 2019 (NDPR).
It is important that collection, storage, and processing of
personal data conforms to data protection laws in force in Nigeria.
For example, companies must ensure that: they seek the consent of
owners of personal data ("data subjects"); have in place
a privacy policy,
terms of use, and data protection policy; and regularly audit their
data protection practices through a Data Protection Compliance
Organization.
These regulatory requirements are not exhaustive and companies are advised to have a Data Protection Officer who will be responsible for monitoring compliance with data protection laws.2
- Intellectual Property.
AI intertwines with Intellectual Property (IP) in the sense that the algorithm that powers the AI and the device or system through which the AI is accessed or used may be subject to IP protection. IP protection here involves the lines of code that form the AI algorithm. These codes are considered copyright under Nigerian law and ownership vests in the author of the code automatically once it is published. This means the copyright owner (in this case, the company) need not take further steps to register the copyright, however, the company may elect to file a copy of this code at the Nigerian Copyright Commission (NCC) for the purpose of obtaining a certificate which is evidence of copyright ownership. This will create an advantage for the company in the event a dispute arises regarding ownership, time or other relevant data in relation to the code. In addition, it is advisable for companies to register the name, logo, or tagline (or a combination of these) of the AI system or device as a trademark at the Nigeria Trademarks, Patents, and Designs Registry. This gives the company the exclusive right to use and license the use of these trademarks. Furthermore, companies should also register the AI device (e.g. an AI-powered smart home assistant, virtual reality googles, etc) as a patent, and the designs or dimensional features of this device as an industrial design.3
Companies are also advised to ensure that the trade secrets of the AI business are protected through Non-Disclosure Agreements signed between the company and its employees, contractors or anyone who would come into contact with these secrets.
2. Specific Considerations
- Licensing
Companies providing AI-powered services in regulated industries
need to adhere to the licensing requirements within those sectors.
For example, a company providing financial services such as an
AI-enabled loan or banking service will be required to obtain a
financial
license from the Central Bank of Nigeria. Likewise, a company
providing AI-powered stock trading services will be required to
register with the Securities and Exchange Commission.
- Registrations
Companies that enter into technology agreements with their foreign parent company or a foreign third-party are required to register the agreement (usually in the form of a Technology Transfer Agreement [TTA]) with the National Office for Technology Acquisition and Promotion (NOTAP). A benefit of this is that the company would be able to access the official foreign exchange market to pay for the license fees for the use of the technology.
Conclusion
The considerations outlined in this article are not exhaustive. Alongside the points mentioned above, AI companies should also be mindful of crucial aspects like company formation and structuring, fundraising, tax obligations, and labor relations. It is imperative for AI companies to seek legal counsel to gain a comprehensive understanding of these matters.
Footnotes
1. What is Artificial Intelligence – IBM https://www.ibm.com/topics/artificial-intelligence
2. For a detailed reading on data privacy and protection obligations for companies, please access our article here https://pavestoneslegal.com/important-data-protection-obligations-and-practices-for-companies-in-nigeria/
3. Kindly note that technological devices (and their associated names, logos, or taglines) must first meet the eligibility requirements of the Trademarks, Patents and Designs Registry before they can be registered as a trademark, patent or design, For more on these requirements and IP rights, please access our articles here:
(ii)https://pavestoneslegal.com/requirements-and-procedure-for-registration-of-trademarks-in-nigeria/
(iii) https://pavestoneslegal.com/intellectual-property-licensing-in-nigeria
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
