LexisNexis

Arbitrating Intellectual Property Disputes in Nigeria: Lessons from Hong Kong and Singapore

Friday 13 August 2021

Davidson Oturu
AELEX, Abuja
doturu@aelex.com

Oluwatobi Oluwasanya
AELEX, Abuja
ooluwasanya@aelex.com

Introduction

Alternative dispute resolution (ADR) is fast becoming popular as a relatively more straightforward method of resolving disputes across the world - and intellectual property (IP) is no exception. The rising number of disputes which have been handled by the World Intellectual Property Organisation (WIPO) Arbitration and Mediation Centre illustrates this point, growing from 36 cases in 2017, to 155 in 2018, 178 in 2019 and 182 in 2020.[1]

Existing limitations in Nigeria

Despite this increase in arbitrating IP disputes, Nigeria appears to have not totally embraced this method of dispute resolution. This may be due to the uncertainty surrounding the arbitrability of IP disputes. While it is common knowledge that the parties to a contract may resort to arbitration where the contract between them contains an arbitration clause, in Nigeria, the freedom to arbitrate is limited by statute and case law, such that disputes arising from specific subject matters are not arbitrable.

Section 251(1)(f) of the 1999 Constitution (as amended) (the 'Constitution'),outlines that the Federal High Court has jurisdiction to hear IP disputes, to the exclusion of every other court or tribunal.[2]​​​​​​Moreover, IP rights are, in the main, exclusive rights against the whole world conferred on an entity or group by a state or country. As such, arbitration mechanisms are not readily deployed to resolve IP disputes, as there is usually no middle ground for negotiations. It is therefore assumed that the right forum to determine the competing of parties in IP disputes can only be a court.

Below, we examine dispute resolution practices in Hong Kong and Singapore, comparing these states' practices with those of Nigeria and consider which methods could be deployed in the country.

Hong Kong

Prior to 2018, Hong Kong did not have any legislation specifically addressing the arbitrability of IP disputes. However, with the amendment to their Arbitration Ordinance, which took effect from 1 January 2018 (the 'Arbitration Ordinance'), the resulting uncertainty was resolved. The Hong Kong Arbitration Ordinance now clarifies that all IP disputes can be arbitrated, including those regarding the enforceability, infringement, subsistence, validity, ownership, scope or any other aspect of an IP dispute.[3] This is regardless of whether the IP dispute is a main or incidental issue to the dispute.[4]

The Arbitration Ordinance also provides that it is not contrary to public policy to enforce arbitral awards involving IP rights. However, it provides that arbitral awards will not be binding against a third party, including licensees (unless that licensee is made a party to the arbitration). It is important to note that arbitral awards are not binding on courts or registries of the Intellectual Property Department in Hong Kong.

Singapore

Singapore recently passed the Intellectual Property (Dispute Resolution) Act 2019 (the IPDRA 2019) which came into force on 21 November 2019. The IPDRA 2019 amends Singapore’s Arbitration Act and International Arbitration Act and now clarifies that IP disputes can be arbitrated, including those regarding enforceability, infringement, subsistence, validity, ownership, scope, duration or any other aspect of an IP right.[5]The IPDRA 2019 also reinforced that an arbitral award is not deemed contrary to public policy solely on the basis that the subject matter relates to an IP rights dispute.[6]

In order to encourage the use of ADR, both Hong Kong and Singapore have also made provisions regarding funding for ADR proceedings.

Nigeria

In Nigeria, though there is no specific legislation on arbitrability of IP disputes, there are instances which would allow arbitration mechanisms to be deployed in IP disputes. 

Contractual ADR provisions

Contractual ADR provisions are common in franchising, licensing or sponsorship agreements. Such agreements would typically provide for an ADR mechanism for resolving disputes arising out of the contract; for instance, agreements where a trademark, patent, or some other IP right is licensed to another party for his exclusive use in a particular territory. Disputes arising from such contracts are suitable for ADR mechanisms.

Regulator empowered by the statute to refer parties to explore ADR

Resolution of IP disputes other than by litigation is recognised by Section 13(3) of the Trademarks Act 1965:

‘Where separate applications are made by different persons to be registered in respect of the same goods or description of goods as proprietors respectively of trade marks that are identical or nearly resemble each other, the Registrar may refuse to register any of them until their rights have been determined by the court or have been settled by agreement in a manner approved –

a.  by the Registrar; or

b.  by the court on an appeal from the Registrar.’ (emphasis added).

Court ordered ADR

Section 17 of the Federal High Court Act provides: ‘In any proceedings in the Court, the Court may promote reconciliation among the parties thereto and encourage and facilitate the amicable settlement thereof.’ This provision therefore confers on the Federal High Court, the power to facilitate amicable resolution of disputes.

Similarly, section 24 of the High Court Laws of Lagos State 2003 provides that: ‘In any action, the court may promote reconciliation among the parties thereto, encourage and facilitate the amicable settlement thereof.’

This means that these courts can direct that parties resolve IP litigation through some form of ADR mechanism and report the outcome to the court.

Uniform Domain Name Dispute Resolution Policy (UDRP)

The Uniform Doman Name Dispute Resolution Policy (UDRP) is a process established by the Internet Corporation for Assigned Names and Numbers (ICANN) for the resolution of disputes regarding the registration of internet domain names. ICANN, in collaboration with WIPO, developed the UDRP and the its Rules.

The UDRP Rules provide a mechanism for rapid, cheap and reasonable resolution of domain name conflicts by avoiding the traditional court system for disputes and allowing cases to be brought to a set of bodies that determine domain name disputes. The UDRP provides trademark owners with an efficient framework for protection against the bad-faith registration and use of domain names corresponding to their trademark rights.[7]

The UDRP Policy sets out the legal framework for the resolution of disputes between a domain name registrant and a third party over the abusive registration and use of an internet domain name in the generic top-level domains (gTLDs) for example: .biz, .com, .info, .mobi, .name, .net, .org as well as  those country code top level domains (ccTLDs) which have voluntarily adopted the UDRP.

The UDRP provides for the resolution of domain name disputes through compulsory administrative proceedings, which are in certain aspects similar to arbitration proceedings.

Conclusion

The framework for arbitrating IP disputes in Nigeria is underdeveloped. There are lessons to be learnt from Singapore and Hong Kong in this regard. For example, arbitration laws in Singapore and Hong Kong make specific provision for arbitration of IP disputes, so there is no ambiguity as to their arbitrability.  Moreover, these laws specifically provide that arbitration of IP disputes is not against public policy, and issues concerning enforceability of IP disputes specifically provided for. As funding may sometimes deter interested parties from opting for ADR as a preferred method of resolving IP disputes, Singapore has made provisions in its law to plug this gape.

In 2018, the Nigerian Arbitration and Conciliation Act (Repeal and Re-Enactment) Bill 2017 (the 'Bill') was passed by the Nigerian Senate. Although the Bill contains provisions on third party funding, there is no provision on arbitration of IP disputes. The Bill has now been sent back to the Senate for redrafting.

While there is still much work to be done in terms of legislation, Nigeria’s courts are enjoined to exercise the powers conferred on them to refer IP disputes to ADR based on existing legislation. It is hoped that in years to come there will a greater receptiveness towards adopting ADR processes in IP disputes.

 

Notes

[1] WIPO Caseload Summary, see https://www.wipo.int/amc/en/center/caseload.html, accessed 17 March 2021.

[2] Shell Nigeria Exploration and Production Nigeria Ltd & 3 ors v Federal Inland Revenue Service v FIRS, Unreported Appeal No CA/A/208/2012, delivered on 31 August 2016; and Esso Petroleum and Production Nigeria Ltd & SNEPCO v NNPC, Unreported Appeal No CA/A/507/2012, delivered on 22 July 2016.

[3] S 103C, Arbitration Ordinance (Cap. 609).

[4] S 103D(3), Arbitration Ordinance (Cap. 609).

[5] S 2 IPDRA 2019, amending s 52A Arbitration Act 2001.

[6] S 2 IPDRA 2019, amending s 52D(2) Arbitration Act 2001.

[7] Davidson Oturu, ‘Nigeria: Cybersquatting – How to Protect your Domain Name/Website from Cybersquatters in Nigeria’, AELEX, 4 June 2018, see https://www.mondaq.com/nigeria/security/706866/cybersquatting-how-to-protect-your-domain-namewebsite-from-cybersquatters-in-nigeria accessed 3 July 2021.