BusinessDay

Protection of intellectual assets in the new digital environment

Just short of a decade ago, Bill Gates said “the internet is becoming the town square for the global village of tomorrow”. Today, we can confidently assert without risk of dissent, that what was then becoming has now become. In the past ten years, information and communication technology and the internet have immensely transformed nearly every facet of human life to such great extents that interactions—international interactions—could continue in the thick of a global lockdown.

We have witnessed massive changes in the way we do business, worship, socialise, and of course, in the way, we generate and exploit IP assets. You can easily own the copyright in as many photos as you would like simply by taking them with your phone. You can build an entire brand online and establish goodwill for your business. You can share your work with millions of people, make money, and even become famous. However, with this ease comes some dis-ease and the reality of exposure. Works are more vulnerable to infringement than ever.

Copying, reproduction and use are now too easy. The row between tech giants, Google and Oracle, is case in point. Google had acquired Android and sought to establish a new software system for mobile phones and copied 11,500 lines of code from Java SE in which Oracle owned a copyright in. Regardless of the court’s final findings on fair use, we can recognise that it took very little effort for Google to copy 11,500 lines of proprietary code belonging to Oracle. We find similar circumstances in the trademark dispute between French luxury brand, Louis Vuitton, whose name and logo were adopted by a South Korean fried chicken restaurant as Louis Vuitton Dak, thus ‘free-riding’ on the brand’s reputation, halfway across the world. Further elaborating the point, amidst the incessant reports/complaints of IP violation which roll in on social media platforms like YouTube, Facebook, TikTok, etc. on a regular basis, only last year, Vice President Yemi Osinbajo’s tweet was taken down by Twitter for violating Beyonce’s copyright in her song “Run the World”, after he posted a video using the song, without attribution.

Demonstrably, in the tech age, a simple thoughtless, unintentional, or even ignorant act could be infringing on the IP rights of a person, somewhere. Seemingly harmless and inconsequential acts now give rise to live issues in the realm of IP protection, because of the level of perviousness brought to bear by digital technology. It is thus imperative to have considerable understanding of the underlying issues which encircle IP protection in the new digital environment and how to best navigate them.

Intellectual property issues in the digital economy

The growing popularity of technology and the internet has given rise to a myriad of issues worthy of consideration. Observably, while a few of these issues are fairly modern, others have been in long existence and have simply taken on a new face. Below are the legal and economic issues which have been triggered or amplified by the digital age:

1. Challenges in Copyright Protection and Enforcement

The internet and technology have reshaped the production, reproduction, access, communication, and distribution of works by creators. Computer technologies that have been making waves in the digital world include the MP3, peer-to-peer (“P2P”) file sharing software (e.g., Xender), blogging, podcasting, and streaming – all new ways of distributing content to listeners and viewers via the Internet. These have significantly made works more susceptible to infringement. Today, there are tons of online platforms from which people access books, photos, songs, films, etc., for free; and consequently, deprive the owners of the financial benefits which ought to ordinarily accrue from the consumption of these works. There is rampant sharing of easily downloadable electronic files by unauthorised distributors. The ripple effect, undoubtedly, has whittled down the economic satisfaction in content creation.

On a further note, widespread use and access of copyrighted materials in cyberspace has unreservedly challenged the foundations of traditional copyright law, putting a strain on fundamental principles such as territoriality and exhaustion, and ultimately calling into question their effectiveness in securing the ultimate purpose of IP law, which is to incentivise creatives and balance their interests with those of the consuming public.

Owing to tremendous shift in conventional systems, it has become an uphill task for lawmakers and the courts to effectively regulate the use of digital copyrighted works. The virtual marketplace which now exists in cyberspace for works protected by copyright is not restricted by national boundaries or borders and it is pedestrian knowledge that national copyright laws are territorial in nature. This naturally births jurisdictional issues in instances of copyright infringement online — a phenomenon which existing legal rules do not adequately cater for. Surely, it will constitute a challenge to the enforcement of copyright if a right holder has to journey cross-country simply to seek redress, or if he has to contend with recurrent objections from infringers looking to evade consequences; not to mention issues surrounding international recognition and enforcement of national judgments. Taking the territoriality rule into account, we see that the confinement within a particular jurisdiction, of infringing acts which occur online is inarguably a complex exercise.

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Even before the issue of choosing the proper jurisdiction arises, there is the hurdle of first identifying who is liable for the infringement, particularly where the infringer has taken advantage of the anonymity offered by the internet by default. Good examples are pirate websites, currently proliferated on the internet.

Furthermore, and on the commercial front, it is commonplace that the value quotient of copyrighted works, or any IP asset for that matter, rests primarily in the right to exclude others from unauthorised use and access. However, the ability to exclude is greatly attenuated in the digital environment because of the impossibility of monitoring every use and exploitation of a work.

On another note, the digital environment raises questions as to how the doctrine of exhaustion applies. The doctrine, simply put, says that when a consumer legitimately buys a product, he can do whatever he wishes with it from then on out. The rights of the holder over the subject matter are extinguished following purchase by a user from an authorised dealer. The application of the concept in relation to the internet is, as might be expected, bedevilled with issues. It is a doctrine that is firmly rooted in the truth that physical goods cannot be owned or held by multiple persons simultaneously, as well as in the need to strike a balance and encourage the circulation of knowledge and innovation without the impediment of the exclusivity of rights which vest in the creator. But the same is not applicable to digital goods. Exhaustion cannot foster balance in cyberspace; it only sets up the copyright holder to suffer severe loss, because a person can replicate and transfer as many copies of copyrighted material to as many people as he desires without losing the one in his custody. For obvious reasons, a sturdy limit must be placed on the principle with respect to internet materials, as the converse would breed palpable levels of unfairness.

2. Breach of Privacy Rights

Privacy rights are so proximally intertwined with IP that they have taken root as a common IP issue. Issues around IP and breach of privacy rights are traceable, substantially, to the rise of digital technology.

There have been multiple incidents of privacy violations in different parts of the world, stemming from unauthorised use of individuals’ photos or other pictorial representations of them. The year 2013 witnessed the famous dispute between music superstar, Rihanna, and Topshop in the United Kingdom. The British fashion label had used a photo of Rihanna taken from one of her music videos on its t-shirts, without her permission. In the United States of America, media personality, Kim Kardashian sued iHandy Ltd in 2019 for unauthorised use of her photos in their advertising campaigns.

In Nigeria, we saw popular actor, Richard Mofe-Damijo (aka RMD) clash with e-commerce platform, Jumia, in 2016. Jumia had been consistent in its unauthorised use of the actor’s photos for advertising on its social media platforms, after obtaining them from his Instagram page. And in the recent case of Bi-Courtney Aviation Services Ltd v. Kelani, the Appellants took a photo of Mr. Olayiwola Kelani while he travelled through the Murtala Muhammad International Airport (Terminal 2) and used it for adverts on their billboards. Mr. Kelani’s consent was neither sought nor obtained. In fact, he was completely unaware that his photo was being taken. The court held that the procurement and public display of his photograph without his endorsement, was an unwarranted infraction of his inviolable right to private life. These incidents go to show how technology has immensely facilitated the violation of a very important fundamental right.

3. Cybersquatting

Cybersquatting has become very pronounced on the internet. Section 58 of the Cybercrimes (Prohibition, Prevention, etc.) Act 2015 defines the term as:

“the acquisition of a domain name over the internet in bad faith to profit, mislead, destroy reputation, and deprive others from registering the same, if such a domain name is: (a) similar, identical, or confusingly similar to an existing trademark registered with the appropriate government agency at the time of the domain name registration: (b) identical or in any way similar with the name of a person other than the registrant, in case of a personal name; and (c) acquired without right or with intellectual property interests in it.”

It is generally the unsanctioned registration and usage of domain names which are either identical or bear similarity to trademarks, service marks, company names, or personal names belonging to others, in order to profit from the goodwill of the actual owners.

A popular variation of it is typo squatting (also called URL hijacking), by which the cyber-squatter relies on typographical errors made by internet surfers when inputting a website address into a web browser, such that a slightly misspelt web address could redirect the user to a website owned by the cyber-squatter.

The decision of the Administrative Panel of the WIPO Arbitration and Mediation Centre in Ally Financial Inc. v. James Promise aptly demonstrates the cross-jurisdictional reach of the phenomenon. The facts of the case reveal Ally Financial Inc. as the proprietor of the trademarks, “ALLY” and “ALLY BANK”, which it had used in connection with financial services since 2009. The Complainant also had a strong Internet presence through its websites with several domain names, including and . Mr. James Promise from Nigeria, however, registered (inserting an ‘s’ between ‘ally’ and ‘bank’), in respect of similar services as the Complainant, and copying the colour scheme and logo of the Complainant’s website. Upon hearing the complaint, the Panel found in favour of Ally Financial Inc. and ordered James Promise to transfer the disputed domain name to the company.

4. Trademark Violations

Trademark infringement on the internet is now multifaceted, ranging from unauthorised use by online auction sites, to use in games and virtual reality. With auction sites, infringers have access to a vast consumer base at low cost, and can unlawfully exploit brand names and reputation to attract buyers to goods, including non-genuine goods. With this comes the burden of policing the use of marks on these sites, which raises the question as to whom the responsibility rests on — the IP owners or the auction sites? Or whether auction sites will be liable for contributory trademark infringement. In this regard, courts in different jurisdictions have held contrasting views.

Popular online auction site, eBay, was sued for infringement on multiple occasions in the United Kingdom, the United States, and France. In Tiffany v eBay, where the e-commerce company was sued for the sale of non-genuine jewellery on its site, the US court found it not liable. Similar facts unravelled in the UK decision in L’Oreal SA v eBay International AG. There, the court held that eBay was under no legal duty to prevent infringement, and that facilitation with knowledge and intention to profit was not enough. However, the courts in France held eBay to be liable for trademark infringement, on the ground that it not only provides a hosting service but also acts as an online broker, engaged in paid commercial activities and taking an active role to increase the number of transactions generating commission for its own benefit.

Trademark violations also take place with the sale of trademarks as keywords by search engines. It is normal practice for advertisers to pay fees to search engines to facilitate the appearance of their web links following the input of keywords by users in the course of search. Recent developments have seen registered marks being sold as keywords as well.

Technology has also allowed for the use of real-life brands in video games and virtual worlds to enhance the realistic qualities of same. Needless to say, this presents a platform for the violation of trademark rights. A good example is the case of Taser International Inc. v Linden Research Inc. Taser International Inc. sued Linden Research Inc., the owner of ‘Second Life’ – an online virtual world, for infringement based on the latter’s sale of virtual versions of the TASER stun gun, which were alleged to have violated the complainant’s TASER and ADVANCED TASER trademarks. Even though the case was withdrawn after Linden Research took down the infringing aspects of its virtual world, the case clearly accentuates the IP issues surrounding virtual worlds.

Then, of course, there is the issue of violations on social media. These could range from the use of brand names and logos in unsanctioned posts to offering of counterfeit goods, which gives rise to the exploitation of brands in ways that may tamper with their image and goodwill, alongside other negative impacts.

5. Design Theft

The value of industrial designs rests in their appearance. It is the very essence of designs. People need to see them. Thus, the sharing of design portfolios for publicity and customer attraction is an integral part of the commercialisation of designs. The unfortunate consequence of this, of course, is the risk of shared original designs being picked up and misappropriated by infringers on the internet.

Practical suggestions for IP protection in the digital economy

Amidst the multiple issues highlighted above, knowledge of how to effectively manage intangible assets and combat infringement is imperative. Below are some of the pragmatic steps creators and other holders of IP assets can take to ensure their assets are better protected.

For Right Holders:

1. Registration of IP: This goes without saying. Save for copyright, all other IP need to be registered with the appropriate registries to enjoy full legal protection. Without registration, the right to exclude others and seek redress for violations do not accrue. Holders of intangible assets must develop a sense of responsibility to seek the needed legal advice in order to acquire registered rights in respect of their IP. It is the all-important first step.

2. Digital Rights Management (DRM): This is essentially for copyrighted works. It involves the use of technologies which restrict the copying and use of copyrighted works. DRM software like Bynder and Vitrium Security assist right holders to limit or bar the copying, editing, saving, sharing, printing, and even screenshotting of digital content. Some DRM software also allow time limits to be placed on users’ access, as well as limits on the number of downloads that can be made and the devices on which the works can be accessed. The international community acknowledges the importance of DRM; hence the WIPO Copyright Treaty 1996 mandates State Parties to provide adequate legal protection and effective legal remedies against the circumvention of effective technological measures used by authors to protect their works. There has been compliance by a number of states, including African nations like Kenya.

3. Use of Rights Management Information (RMI): The RMI of a work refers to data which provide identification of rights related to that work, either directly or indirectly. They are important for the purpose of notifying the public and potential infringers of the subsistence of rights in online works, so as to inspire a sense of caution. For copyright owners, the symbol, ©, may be used alongside their name and the year in which the work was created. The symbol, ®, may be used to denote a registered trademark, and the symbol, ™, in respect of unregistered trademarks to provide notice that common law rights are claimed. In case a right holder is open to the use of his IP by others, the RMI should also include information about the terms and conditions of use.

4. Thorough Record Keeping: This is important should need ever arise for the owner of an IP asset to prove title. Every right holder must endeavour to keep adequate records and always have at hand, evidence of creation or of transfer of rights to him. It would greatly aid enforcement efforts should infringements occur.

5. Active Assertion of Rights: Efficient record keeping, registration of assets, use of DRM and RMI, and in fact, any precautionary step will mean nothing without active efforts at enforcing acquired rights. It is not uncommon for right holders to sleep on their rights and ignore or condone acts of infringement. Whether by reporting violations on social media platforms, serving cease and desist letters on infringers, initiating negotiations for licensing, or instituting actions for infringement, right holders need to be prompt and proactive in asserting their rights, especially in the current digital age where passivity could prove very costly. In this regard, the services of legal experts are always advised.

6. Collective Management Organisations (CMOs): Copyright holders can administer and manage their rights through a CMO. CMOs are especially useful because individual management and monitoring in today’s world is incredibly difficult. In Nigeria, Section 39 of the Copyright Act provides for the licensing of collecting societies by the Nigerian Copyright Commission (NCC). More CMOs need to be established for rights management, albeit not in respect of the same categories of rights to avoid duplication or clash of functions, as was the case with the Musical Copyright Society of Nigeria (MCSN) and Copyright Society of Nigeria (COSON) – which resulted in a lot of confusion and inefficiency in the administration of holders’ rights.

For the Authorities:

Legislative/Judicial Intervention: National legislatures need to enact new IP laws or amend extant IP legislation to reflect the reality of modern-day developments in technology and the internet. Key areas of focus should include protection in respect of DRM, clear rules on jurisdiction for IP violations in cyberspace, and express limitation of the doctrine of exhaustion in relation to digital goods.

Judicial intervention is also suggested in this regard. With specific reference to the exhaustion doctrine, courts can draw from the landmark ruling of the Court of Justice of the European Union (CJEU) in Nederlands Uitgeversverbond and Groep Algemene Uitgevers v Tom Kabinet Internet BV & Ors, delivered on December 19, 2019, which dealt with the sale of second-hand e-books. The CJEU held that the doctrine of exhaustion only applies to the right of distribution which entails relinquishing possession of the subject matter, as against the right of communication to the public which does not. It was held that the supply of digital products amounts to communication to the public, by reason of which the rights therein are not exhausted. According to the CJEU, in this case, there was no evidence of technical measures ensuring that the e-books were downloaded only by one user at a time or that users lost access to the copies in their possession once they sold them back. In the words of one commentator, this well-reasoned decision is “a boost to copyright owners who view the ruling as a re-balancing of rights in an era where the digitisation of content has impacted their ability to be obtain appropriate reward for their creations.” National courts are encouraged to follow suit.

Conclusion

Digital technology is evolving at an unprecedented rate, and this has had significant implications for the protection of IP assets. Many of the issues surrounding the protection of IP asets have either been birthed or amplified by the advent of technology and the internet. While it cannot be said for sure that absolute protection for IP assets will be possible in the future, laudable progress can certainly be expected, provided we see keen and concerted efforts from rights holders, national governments, international organisations, and other relevant stakeholders.

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