The Effective Protection Of Intellectual Property Rights: An Assurance Of Improved Inflows Of Foreign Direct Investment?

Lexworth Legal Partners


Lexworth is a a full-service commercial law firm in Nigeria, offering a full complement of legal services to local and international clients. Its primary focus is Business Law, and practice areas include Corporate and Commercial transactions, Finance, Capital Markets, Tech law, Intellectual Property, Legal and Regulatory Compliance, Data Privacy, Real Estate, and Commercial Disputes.
The need to attract Foreign Direct Investments (FDI) has encouraged Nigeria, amongst many other countries, to project economic assurances favourable to foreign investors.
Nigeria Intellectual Property
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The need to attract Foreign Direct Investments (FDI) has encouraged Nigeria, amongst many other countries, to project economic assurances favourable to foreign investors. One of such assurances is the protection of Intellectual Property Rights (IPRs).

The establishment of a business venture is in itself an innovative process, and a product of application of the human intellect. As such, business owners seek to introduce such intellectual products to a wider, foreign market for financial gain and international acceptance and recognition. Invariably, as much as business owners are concerned with the ease of doing business in a particular country, the assurance that intellectual property rights relating to their businesses will also be protected, is equally as important to them.

Intellectual Property Rights Protection and Foreign Direct Investment- The Correlation

It is impossible to deny the nexus between the assurance of IPRs protection and the flow of Foreign Direct Investment (FDI) in most jurisdictions.

FDI entails the establishment of businesses in a chosen jurisdiction outside that of the investor. The operation of these businesses requires some level of protection of their trademarks, trade names, patents, designs, music, artwork, literary works, etc., as applicable.

Research has shown that businesses that create intellectual property are less likely to engage in foreign production in countries with an inadequate IPRs protection regime. This is because weak IPR protection increases the probability of imitation and the risk of a licensee acting in direct competition with the original producer/seller. Park and Lippoldt (2005)1 argued that intellectual property owners will have weak incentives to market their technologies in developing regions with poor IPR regimes due to risks of infringement.

Research also indicates that developing countries can strengthen their IPR protection regime in order to increase FDI and technology transfer to facilitate the innovative capabilities of their citizens and domestic companies. Invariably owners of IPRs place the issue of IP protection high on their list of factors that would influence their decision as to where to invest. It can therefore be argued that if developing countries establish strong IPR regimes supported by measures aimed at improving the investment climate, communications infrastructure, and human resources capacity, they are likely to benefit from an increased flow of the right type of FDI essential for supporting economic growth.

There are many examples of instances when multinational enterprises (MNEs) have considered the protection of IP a factor affecting their decision to invest in a chosen country. For example, it has been reported that in 2006, 80% of chemical companies did not invest in India due to lack of intellectual property protection, and nearly all foreign managers were reluctant to invest in certain industrial sectors in China for the same reason.2 Moreover, Microsoft did not move major capital resources to Brazil until Brazil enacted a new copyright and software protection law in 1998.3

Advocates of a strong IPR regime attribute its importance to its double function of promoting innovation and FDI inflows, which are important determinants of growth of a nation's economy.

The Protection of IPRs In Nigeria

The three main statutes governing the IP law in Nigeria are the Copyright Act 2022, the Patents and Designs Act 2004, and the Trademarks Act 2004. There are other Nigerian laws that have an impact on the protection of IP rights, namely: Companies and Allied Matters Act, National Office for Technology Acquisition and Promotion Act, National Agency for Food and Drug Administration and Control Act, Federal Competition and Consumer Protection Commission Act.

Furthermore, Nigeria is a contracting State to many international IP Agreements and Conventions including the following:

  1. Beijing Treaty on Audiovisual Performances
  2. Berne Convention for the Protection of Literary and Artistic Works
  3. Paris Convention for the Protection of Industrial Property
  4. Patent Cooperation Treaty (PCT)
  5. Patent Law Treaty (PLT)
  6. The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS)
  7. WIPO Copyright Treaty (WCT)
  8. WIPO Performances and Phonograms Treaty (WPPT).

Although the TRIPS Agreement was not domesticated as a national law enforceable in Nigeria, the Copyright Act 2022 reflects some of the provisions in the TRIPS Agreement. Other IP laws are not TRIPS-compliant in terms of providing a legal framework for the protection and enforcement of IPRs, however, in practice, some of the principles are implemented.

COPYRIGHT: Copyright in an intellectual work is that exclusive and ownership right of the creator over his/her literary, artistic, sound recording, film, music, broadcasts, photography works, etc. (Section 1(1) (a-f), Copyright Act) to control or enable the doing of certain acts in respect of the whole or substantial part of the work either in its original form or in any other recognisably derived form. In Nigeria, copyright is governed by the Copyright Act 2022 and administered by the Nigerian Copyright Commission (NCC) in accordance with the provisions of the Copyright Act.

In accordance with Article 5(2) of the Berne Convention, there is no requirement for copyright registration in Nigeria. The copyright is conveyed on the author and is protected as soon as the eligible original work is fixed in a definite medium. However, the (NCC) developed the voluntary Copyright Notification Scheme, which allows authors to register their work with the NCC as proof of both the ownership and the date of publication.

The Copyright Act recognises and protects foreign copyright by authors from countries that have signed treaties with Nigeria. However, judicial precedents have shown that there are preconditions before such foreign copyright will be granted protection. One of these conditions requires that on the date of the first publication of the work, at least one of the authors is a citizen of or domiciled in a country that is a party to an obligation in a treaty or other international agreement to which Nigeria is a party.

PATENTS: A patent is an exclusive right granted for an invention. Generally speaking, a patent provides the patent owner with the right to decide how – or whether – the invention can be used by others.4

Patents law is channeled towards protecting inventions that extend to things like machines, devices, chemical compositions, manufacturing processes, etc. The Patent & Designs Act Cap P2, Laws of the Federation of Nigeria 2004, outlines conditions for an invention to be deemed patentable. According to section 1(1) of the Patent & Designs Act, an invention is considered patentable if it meets the following conditions:

  1. It must be new;
  2. It must be the result of an inventive step; and
  3. It must be capable of industrial application.

The rights conferred on a patentee usually expires at the end of twenty years (20 years) from the date of the filing of the application in Nigeria. However, within the subsistence of the twenty years, it can be renewed annually to remain valid.5 Thus, where such renewal is not made for a period exceeding six months from the annual due date, such patent formerly granted will be revoked.

TRADEMARKS: A trademark is any mark, sign, word, label, letter, colour, signature or combination thereof that identify and distinguish the source of the goods or services of one manufacturer from those of others in the course of trade. As mentioned earlier, trademarks in Nigeria are currently governed by the Trademarks Act. Nigeria is not a party to the African Regional Intellectual/Property Organisation's (ARIPO) Banjul Protocol and therefore there is no regional registration/protection of trademarks.

Currently, Nigeria practices the single class trademark system and applications are filed in any of the 45 classes of goods and services; this classification is currently tailored to the 9th edition of the Nice Classification even though Nigeria is not a signatory to the Nice Agreement. A registered trademark is initially valid for 7 years and then valid for a further 14 years after each renewal.

INDUSTRIAL DESIGNS: Industrial designs are those elements incorporated into mass-produced items that tend to enhance their attractiveness by their appearances.6 Industrial design protection covers designs that are original and novel. It is referred to as an industrial design because for it to qualify for protection, the design must be capable of application for mass or industrial reproduction. The protection of designs under Nigerian law is governed by the provisions in the Patent and Designs Act.

Applications for the registration of industrial designs in Nigeria can only be filed in Nigeria (because Nigeria is not a party to any regional or international agreement for the protection of industrial designs). Although Nigeria is not a signatory to the Hague Agreement, industrial design applications filed in other foreign jurisdictions are acceptable for the filing in Nigeria and the foreign priority date is recognised.

By Section 13 of the Patent and Designs Act, an industrial design is capable of registration if it is new and not contrary to public order or morality. An industrial design application takes an average of 6-9 months from the date of filing and a design registered in Nigeria is valid for an initial period of 5 years from the filing date, with the possibility of two further consecutive 5-year terms.


Nigeria has made great progress in protecting Intellectual Property Rights and has used the assurance of such protection to attract Foreign Direct Investment over time. Although there is still work to be done in this regard, new developments such as the Copyright Act, 2022 which takes cognizance of the new developments in technology continue to show that steps are being taken in the right direction.


1. Park, Walter G. and Lippoldt, Douglas C., International Licensing and the Strengthening of Intellectual Property Rights in Developing Countries During the 1990s (November 1, 2005). OECD Economic Studies, Issue 1, No. 40, 2005

2. J.R Homere, Intellectual Property Rights can help stimulate the Economic Development of least developed Countries, note 28 at 287 (2004) as cited in David Hindman, The effect of Intellectual Property Regimes on Foreign Investment In Developing Economies, 2, Arizona Journal of International & Comparative Law Vol 23, No 2, note 28, 7 at Pg 473

3. O. Lippert, Brazil's Evolving Legal System: Judicial Reform, Predictability are key to Foreign Investment, CORP.LEGAL TIMES, Sept.2001, at BWB16 as cited in David Hindman, The effect of Intellectual Property Regimes on Foreign Investment In Developing Economies,7, Arizona Journal of International & Comparative Law Vol 23, No 2, Pg 473


5. Janssen Pharmaceutical N.V v The Registrar of Patent and Designs (1978) F.H.C.L 160

6. W. Cornish & D. Llewelln, Intellectual Property: Patents, Copyright, Trademarks and Allied Rights, 6th ed. (Sweet & Maxwell: London)

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.

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