FROM IDEA TO IMPACTS; IT IS DANGEROUS NOT TO GET ALL SECURED.

In my last couple of posts, we’ve dug into how trademark and trade secret protection can give your business a boost, not just in terms of safeguarding your brand, but also in setting your business up for long-term success. Today, we will explore another interesting area you need to know especially as a business innovator. It is something that might not be on every business owner’s radar, but very important for anyone or a legal entity diving into technology/craft innovation and development.

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This interesting and innovative area is PATENT.

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In this newsletter, we will dive deeply to see how embracing patent protection cannot only secure your inventions but also open up new doors of opportunities for your business expansion and startup.

Now, when you hear the term "patent",

It is simply a form of intellectual property protection that grants exclusive rights and allows one to control the ownership, use, creation, and distribution of an invention made by the same person, group of people or legal entity. This protection ensures that the inventor [ one with the exclusive right of ownership], or the entity to whom ownership is assigned, can benefit economically from the invention without others (such as competitors) taking advantage of it. Such inventor or entity is identified as the statutory owner/ statutory inventor/ patentee, and they can be either an individual or a legal corporate entity.

Inventions above start from valuable tools born out of innovative ideas often considered trade secrets, as discussed in my previous post. These ideas are put together to create an invention such as an advanced machinery, technology product or process designed to enhance business efficiency. Creating such inventions requires extensive research, a commitment to tech development, significant capital, highly innovative team among others. All this effort makes it crucial to protect the invention and avoid the risk of losing it or having another party claim ownership.

In one of my previous newsletters on trademarks and how it can promote scalability in business, I mentioned an international company- Illy Coffee and how they introduced technology innovation in their startup by creating coffee machinery to ensure consistent quality in their production and reduce human error through a smart, interconnected system, while they ensure that the machinery [ a tech invention] is protected through patent. This approach allowed them to expand their business beyond merely coffee production, to engaging in more commercial transactions involving their machinery haven patent. Without patent protection, they could easily risk losing exclusive ownership of this valuable asset.

HERE ARE BENEFITS PATENT PROTECTION WOULD BRING TO TECH INNOVATIVE SPACE AMONG STARTUPS.

First, why focus on startups?

According to Section 13 of The Nigeria Startup Act, businesses eligible for startup labelling are those engaged in the innovation, development, production, improvement, and commercialization of digital technology products or processes. This makes it crucial for Nigerian startups/companies to embrace this patent protection for their digital technology innovations, even some craft innovations and here’s how patent protection can benefit them:

1. Long-Term Security: Since patents offer long-term protection, typically for 20 years [Section 7 of the Patent and Design Act for protective usage after the registration of the technology innovative product or process made, it tends to make your startup have the viability to make a long-lasting impact at least for 20 years that you have such registered innovation in your control. This sustains your startup's/company's business model and promotes the growth, to gain more recognition in the market.

2. Commercial Value: Patents grant exclusive rights to the inventor, allowing them to control the invention’s use and potentially generate significant commercial value. This can include selling products made from the invention or leasing the patented invention, with royalties paid to the statutory inventor/ statutory owner. The financial benefits can be substantial, especially if the invention requires significant Research and Development investment.

3. Exclusive Ownership: Patents establish clear ownership, recognizing the inventor as the first to create and protect the invention. This exclusivity prevents others from claiming your work.

4. Competitive Edge: Introducing patented technology innovation will give your startup a competitive edge over others in the same industry, particularly small businesses that haven’t adopted advanced technology. Most consumers are drawn to the efficiency and comfort they gain from businesses whose deliverables are birthed through innovative technology provided, making your startup more attractive in the market.

5. Sustainable Protection: Beyond the long-term security, patent protection attracts funding opportunities too, as investors prefer businesses with protected, innovative technologies that offer a global impact.

6. Broader Impact: Patented innovations that meet the needs of various industries will surely expand your startup’s influence and customer base.

7. Foreign Investment: Developed countries highly value sustainable technology innovation, research and development, and having patented technologies birthed through this can attract foreign investment to your startup, establishing valuable connections for your industry.

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BEYOND STARTUP’S BENEFITS ABOVE, HERE ARE RIGHTS OWNED AS A STATUTORY INVENTOR

A statutory inventor or patentee has several rights after registering their innovation, and as an industry that embraces technology innovation and its protection, you get to enjoy the following:

1. Right of Exclusivity: You have the right to prevent others from making, importing, selling, or using your patent invention without your permission. This includes preventing unauthorized infringement of the use or exploitation of your patent inventions.

2. Right to Commercial Licensing: You can transfer the right of usage of your patent invention such as patent machinery, either fully or on a time-limited license to use the patent invention, while you generate some income among other royalties.

3. Right to seek Legal Redress: If someone infringes on your patent, you have the right to take legal action, provided the invention is registered, ensuring your ownership is protected.

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HERE ARE WHAT QUALIFIES YOUR INVENTION FOR PATENT.

To determine if your innovation is patentable, it must meet some specific criteria under the provision of the Nigeria Patent and Design Act:

1. Novelty:

The innovation must be entirely new, meaning it hasn't existed before. While it can build on existing ideas, the new aspect that is truly novel must be the focus of the patent. It should not be based on publicly known information, as outlined in Section 1[2] and explained in Section 3 of the Patent and Design Act. For example, in the Nigerian case of ‘’James Oitomen Agbonrofo V. Grain Haulage and Transport Ltd’’, the court was able to establish the patent of the plaintiff for tech made invention because his invention of an electric water boiler made by him satisfied the requirement of novelty.

2. Industrial Applicability:

The innovation must be useful and efficient within its industry. It should be capable of being used by others in the same industry too, thereby introducing more technological advancements to the business landscape.

3. Result of Inventive Activities:

The innovation must be the outcome of creative processes that are not obvious or familiar to experts in the field. It must involve a unique inventive step that differentiates it from existing knowledge or products. Also, you must at this point protect the trade secrets behind such an invention. This is crucial, as losing them to the public at that time would eliminate the possibility of securing the patent.

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CAN THESE PATENTED INNOVATIONS BE TRANSFERRED?

Yes, patented innovations are transferable, but only when they are officially patented/registered. Without a patent, revealing your innovation to the public for transfer could be risky, as competitors might steal the idea behind the creation and what you create. It's crucial to secure legal protection before making your invention public. This protection allows you to take legal action against unauthorized use and potentially recover damages.

To transfer your patent rights, it can be done through assignment or lease, with a written agreement signed by both parties, as stipulated in Sections 23[1] and 24 of the Nigeria Patent and Design Act. Transfer can occur as a succession or for joint ownership, through licensing for a specific period, with all changes duly registered to reflect the current owner. The legal protection for such transfers is grounded in a specific contract agreement and its proper registration. [It is important to seek help here by reaching out to me for a proper guide].

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WHAT LEGAL REMEDIES ARE AVAILABLE WHEN YOUR PATENT IS INFRINGED UPON?

If your patent rights are infringed upon, you have the right to seek legal remedies in court (specifically The Federal High Court with the jurisdiction), where you can get an injunction or damages. An injunction can prevent further unauthorized use of your invention while the case is being determined or a court decision is eventually made in your favour. You may also claim damages for losses incurred due to the infringement. A notable example is the case involving Beddings Holdings Limited V. Independent National Electoral Commission INEC. & 6 Ors, a Nigerian case where INEC unauthorized engaged in the importation of an invented transparent ballot box created by the plaintiffs and used in the 1998 elections without obtaining a license from the plaintiff/statutory inventor. The Federal High Court ordered INEC to pay 17.3 billion Naira in damages for the illegal use of the plaintiff’s patented electoral material to the plaintiff and compelled INEC to always obtain the plaintiff’s written license for any desire to use or transact with their material.

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Beyond the above, here are several other questions you might want to consider:

1. Do you have the statutory right to protect tech innovations created during employment?

2. Can you protect your craft works under patent, even if they’re not tech inventions?

3. Is your patent protection active and enforceable in every country?

4. Upon patent expiration, can it be renewed, especially if it’s a valuable asset to your startup?

These topics, and more, will be covered in my posts or upcoming newsletters. Kindly, stay tuned!

Before then, REMEMBER THESE KEY POINTS:

-Patents do not apply to biological processes involving plant and animal production [ A specific exclusion].

- A patent cannot be granted for an invention that would promote exploitation or is against the public interest.

- To be recognized as the statutory inventor and secure exclusive rights, it is essential to be the first to file for the patent. Why? Because it is possible another has a similar or even the same new technology tool or process as you hoping to file/register soon too. Do the needful early - Section 2[1] of the Act.

-Patent protection, like other forms of intellectual property protection, grants the inventor exclusive rights and economic benefits, including the ability to earn royalties when the patent is commercialized.

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FINAL ADVICE FOR STARTUPS AND BUSINESSES IN NIGERIA

Embrace industrial and technological development to carve out a unique market space within the tech industry. As highlighted in this newsletter, doing so provides significant growth opportunities and grants exclusive rights that can drive your business forward. In today’s landscape, it's essential for anyone investing substantial effort, energy, time, and resources into creating technology-driven structures, whether for business or social impact to prioritize every available protective measure. Patents and other forms of intellectual property protection should never be overlooked.

Additionally, small businesses aiming for long-term sustainable impact should consider expanding or upgrading by embracing innovation, sustainable development, efficient production, and the integration of digital technology.

If you have further questions or need guidance on executing patent protection, securing trade secrets, scaling your business for global impact, and more, feel free to email me at [email protected] . I’m available there to provide the legal support, protection, and advice you need.

I am Abidemi Peace,

Your Business Lawyer, Intellectual Property Enthusiast, and Business Advisor.

Convener, The Secured Business Growth Community.

Business Lawyer, MP Legals