All over Africa, there is growth in the media, entertainment and technology sectors. In these exciting times, where creative visions are being birthed, how can African creatives ensure that they get the most out of their creations? To find out, LEGAL BUSINESS’ Onyinye Ukegbu speaks with Davidson Oturu, Partner and Head, Intellectual Property, Technology and Innovation Practice, AELEX.
1. These days everywhere you turn, you hear the word “innovation” and right on its heels, “intellectual property”. What’s the big deal about IPR?
Well, to understand the way IPR works, I always try to simplify the description of the IPRs. One of the most valuable IPRs in the world is the Apple trademark with an estimated value of almost $400bn. When you see the Apple trademark stamped on any product, you would consider that it has good quality as that brand serves as an identifier. Besides, the trademark, Apple has a patent for the technology of the iPhone, which prevents the technology from being replicated by any other company, and so there is value ascribed to it [the technology] that can even be sold or licensed to another company for billions of Dollars. Additionally, there are codes, software, and operating systems that make the iPhone function in a unique way and this is protectable as copyright. Finally, you have the unique and unmistakable design of the phone.
Imagine if the Apple phone did not have any of these IPRs I have described; if the Apple logo meant nothing or is nonexistent. No one would be able to identify the brand. Also, imagine if Apple did not secure any of these its IPRs and allowed anyone to use them freely. There would be no value ascribed to any of them and Apple would be an inconsequential technology company.
Away from the world of technology, you have the Coca-Cola trade secret for its Coke soft drink. It is that trade secret, created in 1886, that is now valued at almost $100bn, and is the foundation of Coca-Cola’s global reach. If that trade secret Is released to the public, that could be the end of Coca-Cola’s almost $300bn market capitalisation.
Thus, as you can see, IPRs are a big deal.
2. Some say that intellectual property is the most valuable asset owned by a company. Do you agree with this? Does this brand evaluation subsist different from the valuation of the company’s actual services or goods?
I would rather say that IP Is one of the most valuable assets owned by a company. Of course, the effective exploitation of the IP would lead to the company’s brand becoming recognisable and the effective sale of its products. Using Apple, for example, its trademark is valued at over $400bn, while the market capitalisation (cap) of Apple itself is at over $3trn.
What this means is that by the time you take into consideration Apple’s technology (patents which comprise the operating system that makes the brand unique), processes (which could be copyright and trade secrets), identifiable trademarks and other existing assets of Apple, it brings you to its market cap. Arguably, that cap would not be possible without the valuable brand.
Thus, while the valuation of the company’s services and goods may be different from the brand valuation, the company’s services and goods would be of minimal value if the brand itself was not valuable.
3. You’ve been in practice for over a decade now, correct? How did you come to specialise in IP/TMT?
Yes, I have been practising law for over 15 years. My involvement with IP and TMT was fortuitous; I started out in the Dispute Resolution and broader Corporate/Commercial practices, and during this time I handled trademarks oppositions where I had to shore up my knowledge of Intellectual Property. I also handled a number of clients in the telecommunications, technology and media space. Ultimately, I started advising clients who were seeking licences from the SEC and CBN and it was only a matter of time before I realised that what had started out as genuine efforts to help my clients had turned into me straddling different practice areas. Based on this, I took an LL.M in International Business Law, with different modules on IPRs and business, and an MBA, with a focus on technology, finance and entrepreneurship. I also took several courses in fintech, technology and IP and things generally took off from there.
4. Statistics show that most IP protections filed in Sub-Saharan Africa are not filed by nationals or residents of the region but emanate from North America, Europe etc. Why do you think this is? Can anything be done to improve it?
Well, most inventions and Intellectual Property creations have emanated from the western world. Additionally, a lot of business owners in Nigeria did not see any value in IP, or know they had an IP worth protecting. Thus, there was a general lack of understanding of IPRs and how they can positively impact a company’s business and profit.
However, there has been a shift in this as more African creatives and entrepreneurs are beginning to build valuable companies and brands. On a periodic basis, we see Nigerian startups and businesses growing more valuable and by extension, their IPRs are also growing in value. I have been involved over the last few years in some acquisitions for a fintech, a beverage company, a retail store and a fast-food chain. All these are local businesses but the amount of value placed on their respective IPRs have been quite considerable. Thus, it would only be a matter of time before most businesses would start having very valuable IPRs In Nigeria and Africa.
What would definitely help, though, would be a situation where the IP registries become more efficient so that local businesses can quickly register their businesses and enjoy protection. Furthermore, there is still a lot of education that needs to be given to entrepreneurs and creatives so they start appreciating the value attached to IP and seek to protect their brands, not just In Nigeria, but in different parts of the world.
5. Data suggests that the most common IPR protection filed by residents and nationals of Sub-Saharan Africa is trademarks. I find it remarkable given that we have a booming media and entertainment sector, why isn’t copyrights prevalent?
So, two things that are important to note here. Firstly, trademarks grow into what is loosely referred to as “brands” and they serve as identifiers. No matter how beautiful your product or patent Is, without a recognisable trademark, no one would be able to identify your goods or services. Think of some notable trademarks like the BMW logo or the Nike symbol. Imagine if any of those brands went into the market without first protecting their trademarks. Or imagine a situation where you have a product but there is no trademark that can be used to identify the product in the market. Nobody would trust it and no one would buy It.
Do you know some people get addicted to trademarks (brands)? Some phone users will only buy Apple products and even refer to themselves as a “tribe”. So, understanding this explains why trademarks are the most common IPRs that are protected.
Now for copyright, they are unique in themselves because you have automatic protection for them once they are placed In a fixed medium. So, in other words, once you write out the script or song on a piece of paper or record it on your phone, it enjoys automatic protection. It is only registered with the Copyright Commission so that there Is a public record of the existence of the work. What is then issued by the Commission is a “notification certificate” and not a registration certificate in that sense. As a result, you may not see so many copyright filings as regardless of whether you file the copyright, It Is protected If It meets the criteria for protection.
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6. In a report by the Nigerian Export-Import Bank, Nollywood is said to generate about $590 million annually and is considered a vital non-oil area that is crucial to Nigeria’s economic diversification. However, a World Bank report estimates that “for every legitimate copy (of a Nigerian film) sold, nine others are pirated”. At one point, it was reported that about N82 billion has been lost by Nollywood alone to piracy. In the spirit of incremental change, what should be our immediate next step and why?
I have had a number of parleys with officials from the Nigerian Copyright Commission and they keep insisting that the Nigerian Copyright Act is strong enough to protect copyright in Nigeria but I always beg to disagree. Our copyright laws need to be updated to cater for issues like digital piracy. Furthermore, enforcement for infringement needs to be stepped up as piracy thrives when people hardly get caught. If infringers are caught regularly and dealt with swiftly, it could serve as a deterrence.
So, I would say that immediate next steps would be to urgently amend our laws and simultaneously step up enforcement.
7. Let’s talk about influencers. Do they have IP rights?
That’s an interesting question! They do have rights but it depends on the angle from which it’s being considered. For instance, one area where Influencers are making a lot of impact is in the utilisation of their Image rights (which falls under copyright and trademark). Because these celebrities are famous, they can exploit the value reposed in their personalities by lending their faces or voices to a brand. The brands increase their sales and profile due to the endorsements by these celebrities while the celebrities earn royalties in return.
In fact, most of the time, celebrities can earn more revenue than they make from their regular careers. For example, in 2016, Kylie Jenner was reported to have signed a $1,000,000 deal to serve as a brand ambassador for Puma. In Nigeria, Iyanya was reported in 2016 to have had a $350,000 endorsement deal with Zinox computers.
An interesting example of commercialisation of image rights is Cardi B’s application to trademark the two catchphrases, “Okrrr” and “Okrr” which she has become known for, to control the exploitation of the phrases for sale purposes.
However, image rights can even be a double-edged sword as some photographers have been seen to take legal actions against celebrities who post images of themselves without the photographer’s permission! For example, Kim Kardashian was sued in 2017 for copyright infringement when she posted one of her pictures where she was going to dinner at a Miami restaurant without permission from the photographer. Gigi Hadid was also sued in 2019 when she posted one of her images on her Instagram page without the photographer’s permission. Although the photographs being posted by the celebrities contain images of themselves, the photo agencies are claiming copyright to the photos and a breach of these rights by the celebrities.
So, to answer the question again, Influencers have IP rights but even those have to be managed properly and adequately protected.
8. At AELEX you are the Head of the Intellectual Property, Technology and Innovation practice group. This includes TMT, as well, right? What’s the difference between IP and TMT? Are they interchangeable or embedded in each other?
So, IP, like the name implies, deals with Intellectual property that covers patents, designs, trademarks, trade secrets, copyright and by virtue of the World Trade Organization (WTO) Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs), geographical Indications.
TMT on the other hand is technology, media and telecommunications. Now IP stands alone, but TMT can have elements of IP in them. For example, when dealing with technology, you have patents, copyright and trademark at the fore which are required to protect the technological product. For media, you have scripts, music, movies etc and you would require knowledge of IP and contract to assist clients in that space to operate. Finally, for telecommunications, there are situations where an IP lawyer may have to draft and prosecute patent applications relating to software and communication protocols, hardware and end-user devices, network technology and media. The lawyer may also have to evaluate patents related to technical standards (such as MPEG and LTE) and be knowledgeable about licensing and enforcing Standard Essential Patents (SEPs). Thus, in order to be a good TMT lawyer, you must have a healthy working knowledge of IP.
9. Speaking of innovation, we have Fintech dominating tech in Africa. Why is an IP strategy or portfolio attractive to investors? And how does one go about creating one?
An IP strategy is required for these Fintechs and tech companies that are scaling and carrying out cross border transactions and businesses. This is because most IP rights are territorial. This means that for instance, if Flutterwave has a trademark registered in Nigeria, but does not have it in Ghana, a competitor may be able to register Flutterwave in Ghana. Although Flutterwave may eventually make a case for passing off and may win after a lengthy battle, this would have been avoided if there was an IP strategy that had set out where the company would protect its trademark and other IP rights.
Some brands who are aware of this take their IP strategy very seriously. For instance, a company like Apple has over 70,000 patents. It shows why it keeps getting bigger and better.
How to go about creating one? Well, I do not want to make iit seem like I am plugging my practice but get a good IP lawyer to help you develop one!
10. Two major concerns are typically found among MSMEs-failure to register one’s own IPR and unknowing infringing on another’s. In some jurisdictions, there are sensitization programmes. Do we have such programmes here at home?
I am aware that the different government agencies, IP practitioners and different stakeholders have events periodically where they try to raise awareness around IP rights. My firm, AELEX for one, has collaborated with the likes of the Trademarks Registry, the Copyright Commission and some accelerators and incubators in having sensitisation programs. While organisations can definitely do more, I think the ecosystem is maturing and we will see more advances made over the next few years.
11. We’ve talked about Startups, MSMEs, influencers, here’s a question about big-name brands who undoubtedly have secured their IPRs. How can they leverage on and/or expand their IPR value in a way that positively impacts the bottom line?
Well, one way of advancing one’s IPRs is by utilising franchising and licensing. For instance, we now have some local brands in different sectors that are beginning to thrive. They can borrow a leaf from International brands. For example, Dominos Pizza is in Nigeria but the franchisee that brought that brand into Nigeria collects millions in royalty in the US simply because its trademark and other technical know-how are being used in Nigeria.
Nigerian brands in FMCG, technology and even entertainment, should look to explore these opportunities and break out in other jurisdictions which could lead to more revenues and better visibility for our brands.
12. Africa is home to some of the world’s fastest economies. A reliable IP framework can provide a safe legal environment for investing and commercializing creativity. As earlier mentioned, this requires a creative balance of the rights of consumers and creators. How prepared is Africa in this regard?
Personally, I feel Africa is playing catchup at the moment as a number of countries, Nigeria inclusive, do not have existing IP policies that drive growth in the sectors. Nigeria’s Trademark Act is that of 1967 and our Patent Act is 1970. Clearly, these outdated legislations are inadequate for present-day realities. However, there is an awakening within which is being driven by a lot of advocacy. Furthermore, with the African Free Trade Continental Agreement (AfCFTA) coming into effect, it Is hoped that there will be a harmonised IP policy, locally and regionally, that can lead to a safe environment for investments on the continent.
13. What do you enjoy most about what you do and how does this fit into the future you see for the sector?
This Is an exciting time to be in the IP and TMT space and the opportunities appear limitless.
What I enjoy most is being able to bring clients’ businesses to life and seeing them blossom. Working with startups and established companies is a good blend for the sort of work I do as I see the different needs of clients on diverse ends of the spectrum. I enjoy helping clients create their IP strategy and also love working with them on transactions that could lead to an impact in their businesses and the ecosystem.
I see a future where Nigeria has a strong IP policy that guides the space. For the startups, I hope that the Nigerian Startup Bill will serve as a catalyst for growth in the TMT space and I hope to be a part of the changes that are certain to come to the creative space In Nigeria.
