Cablegate: Nigeria's 2005 Special 301 Review: Special

This record is a partial extract of the original cable. The full text of the original cable is not available.

271435Z Apr 05

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.

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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

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