Thursday, 28 July 2011

Intellectual property versus the public interest: who gets the vote?

Authors: Kingsley Egbuonu (Queen Mary, University of London) and Chukwuyere Izuogu (Streamsowers & Köhn)

Bedding Holdings Ltd v INEC & Ors, Abuja High Court, Nigeria, 17 December 2010

Journal of Intellectual Property Law & Practice (2011) doi: 10.1093/jiplp/jpr118, first published online: 26 July 2011

In a patent infringement suit, a High Court lifted an injunction restraining the Independent National Electoral Commission (INEC) from taking delivery of the Direct Data Capture (DDC) equipment needed for the voter registration exercise on the ground of overriding national public interest.

Legal context

In Nigeria, a patent right is granted subject to the Patents and Designs Act 1990 (PDA). Nigeria is a common law jurisdiction and most of its laws and court procedures in relation to IP bear resemblance to those of England and Wales. Unlike a UK patent, there is no presumption of validity of a Nigerian patent (section 4 (4) PDA).

A patentee can seek ex parte injunctive relief when the right is threatened or about to be threatened. However, a court will grant this injunction only if it is satisfied that there is real urgency in preserving the status quo and in order to avoid the occurrence of irreparable harm (see Kotoye v C.B.N. (1989) 1 NWLR Part 98, 419 at 447). This reasoning follows well-settled English equitable principles in American Cyanamid Co v Ethicom Ltd [1975] AC 396.

On the other hand, Order 26 Rule 11 of the Federal High Court (Civil Procedure) Rules 2009 allows a party affected by an ex parte injunction to seek to vary or discharge such an order (see 7 UP Bottling Company v Abiola & Sons Ltd (1989) 4 NWLR (Pt 114) 229; U.T.B. Ltd v Dolmatech Pharm (Nig) Ltd (2007) 16 NWLR (Pt 1061) 520 at 542, 552).

Facts

On 3 December 2010, the plaintiff, a company engaged in metal fabrication and manufacturing of security and communication equipment, claimed that its rights had been infringed, and/or were about to be threatened, by the defendants. In the affidavit supporting its ex parte motion, it claimed to be the bona fide proprietor of Patent No. RP 16642 and Copyright Design No. 13841 relating to an Electronic Collapsible Transparent Ballot Box (ECTBB), and Patent No. RP NG/P/2010/202 in respect of a Proof of Address System/Scheme (PASS)—generally, the Direct Data Capture (DDC) equipment. This equipment was used for the collation and collection of names, age, sex, address, fingerprints, and other biometrics of individuals for various purposes, including voter registration.

Relying on this, the plaintiff sought the following relief from the Court:

  • a declaration that it was the bona fide proprietor of the listed rights and was thus entitled to 50 per cent of the contract sum, and an order compelling the defendants to obtain authorization; or
  • a declaration that certain contracts were null and void; an order of perpetual restraining injunction; general damages, and other relief deemed fit.

There were six defendants in total: the Independent National Electoral Commission (INEC), its chairman, the Attorney General and Minister of Justice of Nigeria, and three agents/contractors. INEC is the national agency charged with upholding democracy in Nigeria, to include, conducting free and fair elections. The defendants had already agreed, concluded, and executed their contractual agreements, but yet to take delivery of the alleged infringing articles needed for the conduct of the general elections in April 2011.

The plaintiff's infringement action was premised on the contracts awarded and/or the expected delivery of the alleged infringing articles, claiming that these acts put its patent rights in permanent jeopardy.

Analysis

On hearing the application, the High Court ruled in favour of the plaintiff and adjourned the case until 13 December 2010 to hear both parties. In its judgment, the Court ordered that
the defendants/respondents either by themselves, agents, privies, contractors, surrogates or any other person or persons claiming through them, are restrained from continuing the process of considering proposals of tendering/bidding for, producing, procuring, supplying, selling, leasing, alienating, applying or otherwise using the Direct Data Capture Machines, laptops and/or any other equipment ancillary to, or associated with the process and application of the said machines/equipment about to be supplied or being supplied by the 4th–6th defendants/ respondents to the 1st and 2nd Defendants/Respondents for the registration of voters and/or compilation, production and use of a Voters’ Register for the 2011 general elections or any other elections whatsoever, pending the hearing and determination of the motion on notice for interlocutory injunction filed before this Court.
On 13 December 2010, the defendants made substantive representations in seeking to discharge the order, relying on the following grounds:

  • the order was too broad, vague, and uncertain, incomprehensible and incapable of enforcement;
  • the order, on the face of it, was not hinged on any alleged right, nor did it aim at protecting any rights, and was therefore a ruse;
  • any claims based on infringement of patents or copyrights were commercial disputes which could be adequately compensated by damages on success;
  • there was no real urgency and the order, on the face of it, sought to disrupt the 2011 general elections with grave consequences;
  • the order was against the public interest and was made against a completed act;
  • the plaintiff had not given undertaking in damages and the suit was an abuse of process, and
  • the plaintiff violated the order by not serving the defendants on time.

The plaintiff began by arguing that it had acted in good faith in enforcing its rights and thus deserved the protection of the Court (citing Attorney General v Attorney General of the Federation (2004) 18 NWLR Pt 904, 127). Counsel for the plaintiff also objected to various paragraphs in the defendant's affidavit as legal conclusions which should be struck out for offending the provisions of the Evidence Act. Counsel went further to submit that the defendants had not fulfilled the requirements to vary or discharge the injunction as laid down in U.T.B. Ltd v Dolmatech and, although an executive arm of government, the first defendant was still subject to the rule of law (citing Niki Tobi JSC in AG Lagos State v AG Federation (2004) 18 NWLR (Pt 904) 127).

Having heard both parties, the Court reiterated that the grant of an injunction is discretionary, and as such, it is exercised judiciously not judicially. It then observed that, on prima facie evidence, the plaintiff proved his patent rights with the certificate issued by the Registrar of Patents for the articles and/or process as claimed, whereas none of the defendants had such rights. In finding for the plaintiff, the Court accepted that certain paragraphs in the defendant's affidavit should be struck out as not being at issue, since the plaintiff as the rights holder had the right to file the motion.

The Court also affirmed the condition that a plaintiff must give an undertaking as to damages in affidavit, while seeking injunctive relief; however, it dismissed the defendant's submission that the law required a plaintiff to make a separate deposition or monetary deposit to that effect.

The Court noted that the plaintiff did not claim rights in and over the voters’ register; or in and over the DDC equipment per se, but claimed that the process and application of using the DDC equipment to achieve the compilation of the voters’ register infringed the two patents. On the other hand, the Court did comment that the defendants failed to delineate their invalidity challenge.

In assessing whether the injunction was still appropriate, the Court looked at the plaintiff's claims and concluded that an award of damages would be adequate compensation if the plaintiff succeeded at trial. The Court found that the parties were not in dispute as to the conclusion and execution of the contracts in suit. It also dismissed the defendant's claim that the equipment would have been deployed to action by 6 December 2010, but for the restraining order.

In its judgment dated 17 December 2010, the Court found merit in the defendant's application to discharge the injunction on the grounds that: (a) the plaintiff would be compensated by an award of damages if it was successful at trial; (b) the injunction could not be sustained in view of the fact(s) that what it intended to prevent had already been executed, and most importantly; and (c) there was an overriding national public interest to discharge the ex parte order of 3 December 2010 for the sake of the April 2011 general elections.

As both parties were content with the decision, the Court ordered for an accelerated hearing. However, it remains unclear whether this case progressed to trial.

Practical significance

First, this case highlights the perceived and growing distrust in the current IP regime in Nigeria, possibly due to the lack of confidence in the Registrar of Patents, and the unavailability of a database of granted rights which is publicly accessible. Nevertheless, the Court will always accept a duly endorsed registration certificate by the Registrar as genuine and prima facie evidence in proceedings.

Secondly, the Court appears to have been satisfied that the plaintiff's application was made as a “matter of urgency”, and accepted it was in good faith. Perhaps it is worth noting here that, Courts in Nigeria are often criticized for their generous attitude towards ex parte applications for injunctive relief.

Thirdly, by recognizing that the balance of convenience lay in the defendant's favour and that damages would not be adequate compensation on success, the Court's decision paved the way for the acclaimed April 2011 general elections in Nigeria. This exercise mirrors a similar approach taken by a British Court where public interest is at issue (see Lord Goff in Regina v Secretary of State for Transport, ex parte Factortame (No 2) [1991] 1 AC 603).

Fourthly, bearing in mind that there is no exhaustive list of what is in the public interest, the Court ruled correctly after weighing the two conflicting interests. Again, this reflects a stance readily adopted by Courts when faced with difficult issues that impinge on economic and/or non-economic development or stability of a nation (for instance, see the Indian Court's decision in Hoffmann-La Roche v Cipla Ltd, IA 642/2008 IN CS (OS) 89/2008).

It is impressive to see that the Court was cautious not to be drawn into a mini-trial at the interim stage. More so, although public interest prevailed, the positive cue here is that in Nigeria, the Court is eager to protect a bold proprietor of IP regardless of the status of the alleged infringer.

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