A business concept is the foundational idea behind a business. It is a framework which provides how an individual or a company can create value in the market. It is therefore intended to provide a meaningful direction for the process of developing a business plan and launching an organization. Basically, a business concept entails a full, well thought-out construct of all of the key items required to build a profitable business, including overall offering, specific products or services (at least to start out), how the product would be delivered to the target audience and why the concept is unique enough to succeed. These ideas or innovations give businesses commercial edge over their competitors in the market.
It is pertinent to state that ideas are generally not capable of protection. The Nigerian Copyright Act ("NCA")1 requires that certain criteria must be fulfilled in order for works, in this instance, business concepts to be eligible for protection under the law. The fundamental requirement is that the business concept must be expressed in a written form and not just something that exists in the mind.
This article focuses on the different ways business concepts can be protected in Nigeria.
OPTIONS AVAILABLE FOR PROTECTION OF BUSINESS CONCEPTS IN NIGERIA
This is the legal right given to some authors of designated works upon the fulfilment of certain conditions and for a stated duration. Some of the categories of works protected by copyright in Nigeria include literary works, musical works, artistic works, cinematograph films, sound recordings and broadcasts. Business concepts, once expressed in a written form, come under the class of literary works. A business concept need not be registered in order to be protected in Nigeria; however, sufficient effort must be expended on the work to give it an original character and it must be fixed in a tangible medium of expression now known or later to be developed from which it can be perceived, reproduced or otherwise communicated either directly or with the aid of any machine or device.2 Examples of such medium of expression used are letters, emails, photographs and digital formats.
Notwithstanding that business concepts need not be registered; the Nigerian Copyright Commission ("NCC or "the Commission") requires that business owners notify the Commission of their creation in order to maintain an effective database on copyrighted works. Presently, the NCC, being the body responsible for the administration of copyright and all matters affecting copyright, maintains a database of authors and their works, receive and approve applications for copyright licenses. More importantly, where the business concepts have been modified or improved upon, it is expected that business owners fix them in a medium of expression and further notify the NCC accordingly. With this, they can lawfully enjoy the benefits of their works being protected by copyright, which include the right to prevent unauthorized use or reproduction of the work and to claim damages for any infringement by anybody.
A trademark is a distinctive sign or indicator used by an individual, business organization or other legal entity to identify a particular product or service as originating from a unique source, and to distinguish the product or service from those of other entities. The trademark in this sense includes a name, slogan, logo or hashtag of a business concept. Unlike under copyright where business owners do not have to register their business concepts to be protected, for trademark, the requirement of registration is a condition precedent for protection. Thus, business owners are required to register their trademark at the Nigerian Trademarks, Patents and Designs Registry.3 After a successful registration process and an issuance of trademark certificate, the business owner has an exclusive right to use the mark along with the business concepts. These business concepts would therefore be distinguished from other concepts available in the market and third parties are estopped from using similar or identical trademark.
Furthermore, the owner of the business concept can acquire trademark rights through the continuous use of the mark.4 In other words, a registered user shall not interfere or prevent the use of such mark by a proprietor who has been in continuous use of such mark.
This is a legal right which confers on inventors of new and useful products and processes the right to exclude others from the commercial exploitation of the invention. Due to the unique nature of patent, the business concept must have been converted into an invention in order to be patentable as an Intellectual property right.
Unlike a copyright which comes into existence upon the creation and fixation of a work without the need of registration, patent rights are dependent on an issue or grant by the appropriate authority. Such grant is made subsequent to an application by the inventor. The grant operates to confer exclusive rights of exploitation on the patentee (business owner) for a period of time, not exceeding twenty (20) years.5 The price of this legal right is that the details of the new invention and the processes involved must be published in an official journal which is accessible to the public.
However, it must be noted that not all ideas or invention are patentable. To be patentable, an invention must satisfy the criteria set out in the Patents and Designs Act ("PDA"). The invention must be new; must result from an inventive activity and must be capable of industrial application.6 More so, an invention will be deemed patentable if it constitutes an improvement upon an existing patented invention so long as it satisfies the above-stated three (3) criteria.7 The improvement must not be a mere cosmetic adjustment or a minor alteration, but must be such as to render the product or process more efficient than it was before.
Despite an invention scaling through the hurdles of patentability, if however, it falls within the ambit of the items excluded from patentability, it will still not be patentable in Nigeria. The items excluded from patentability are:
- Plant or animal varieties or essentially biological processes for the production of plants or animals (other than microbiological processes and their products); or
- Inventions if their publication or exploitation of which would be contrary to public order or morality.8
In essence, business owners must ensure that their business concept which has been converted to an invention does not fall within the purview of non-patentable inventions in order to be eligible for protection under the PDA.
4. Industrial Design
An industrial design relates to the appearance of an article which results from features such as the lines or colours of the article or its ornamental. It may consist of three (3) dimensional features such as the shape of an article, or two (2) dimensional features such as patterns, lines or colour of an article.9
The design of a product could form part of a business concept and can therefore be protected under the PDA. Howbeit, such design must be developed in order to be eligible for protection. An essential criterion for protection is that the Industrial design must be registered at the Trademarks, Patents and Designs Registry. For an Industrial Design to be registrable, it must be new and must not be contrary to public order or morality.10 An Industrial Design is considered new if it has not been in the public domain,11 more or less like an innovation slightly comparable to what is required for an invention to be patentable. A registered design is effective for three (3) consecutive period of five (5) years subject to renewal at the end of the first and second period of five (5) years.12
In essence, the protection confers business owners with the exclusive right to prevent unauthorized imitation of protected designs by third parties. The right conferred extends only to acts done for commercial or industrial purposes, and does not extend to acts done in respect of a product incorporating a registered Industrial Design after the product has been lawfully sold in Nigeria.13
5. Trade Secrets
Trade secrets refers to any business information that has commercial value derived from its secrecy. In other words, any confidential business information which gives an enterprise a competitive edge in the market and is unknown to others may be protected as a trade secret. Thus, business concepts such as financial information, source codes, recipes, formulas, business strategies, advertising strategies and marketing plans are protected as trade secrets. It encompasses manufacturing and industrial secrets.
It is pertinent to note that not all information is regarded as trade secrets. An information must therefore contain certain criteria in order to qualify as a trade secret. These include:
- The information must be commercially valuable because it is secret;
- The information must be known only to a limited group of persons; and
- The information must be subject to reasonable steps taken by the rightful holder of the information to keep it secret, including the use of confidentiality agreements or a non-disclosure agreement ("NDA") for business partners and employees.14 It is important that organizations introduce trade secret policy at workplace and prevent employees from accessing information labelled as confidential.
Trade secrets is an old form of protecting intellectual property and gives rise to the modern intellectual property system which aims to create a fair competition among various competing enterprises. Although Nigeria laws do not provide for its protection; they are however protected by contracts and legal principles.
Unlike a patent which must be registered and has a limited term of protection, trade secrets need not be registered and there is no limited term of protection. However, its major disadvantage results from the fact that once the product or business concept is out in the market and can be dismantled, the secrets can be learned merely by looking at the product or studying the business concept and as such the trade secret protection is lost. Also, unlike patent rights which are territorial in nature,15 trade secrets are not territorial and so protection can be granted anywhere it is being used.
The fact that the trade secrets protection is indefinite gives it an edge over other kinds of intellectual property rights and in turn remains an attractive option for business owners.
Business concepts, being an essential part of any business, must be duly protected at all costs. Thus, any of the options considered would prevent the imitation or theft by a third party from occurring and would further control access by others to the ideas or product. Protection of these concepts is therefore essential for Small and Medium sized enterprises (SMEs) as well as larger organizations.
1. CAP C28, Laws of Federation of Nigeria 2004.
2. Section 1 (2) (a) (b) of NCA.
3. Commercial Law Department, Federal Ministry of Trade & Investment Abuja.
4. Section 7 of Trademark Act CAP T13, Laws of Federation of Nigeria 2004.
5. Section 7 (1) of Patents and Designs Act CAP P2, Laws of Federation of Nigeria 2004.
6. Section 1 (1) (a) of PDA.
7. Section 1 (1) (b) of PDA.
8. Section 1 (4) (a) (b) of PDA.
9. Section 12 of PDA.
10. Section 13 (1) of PDA.
11. Section 13 (3) and (4) of PDA.
12. Section 20 (1) (a) and (b) of PDA.
13. Section 19 (3) of PDA.
14. Article 39 of the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS).
15. This means patent rights are independent of any such rights existing in other countries. Thus, they are offered and governed by each country's legislation.
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.