Legal Framework For Technology transfer in Nigeria

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LEGAL FRAMEWORK FOR TECHNOLOGY TRANSFER IN NIGERIA

Table of Content

1.0 Abstract

2.0 Components of the Regulatory Framework Governing Technology Transfer in Nigeria

3.0 Types of Agreements that are Eligible for Registration with NOTAP

4.0 Regulatory Time Period within which Technology Transfer Agreement Must be Registered with NOTAP

5.0 Procedure for the Registration of Technology Transfer with NOTAP

6.0 Grounds for the Refusal of Registration Application by a Transferee Company

7.0 Legal Effect of Non-Registration of Technology Transfer Agreement with NOTAP

8.0 Conclusion

Abstract

Nigeria with the biggest market of black people in the world, has an estimated untapped technology market, valued at over $40,000,000,000 (Forty billion dollars), with a rapid growth of 6.55% per quarter, and contributing 18.44% of Nigeria’s GDP as released by the National Bereau of Statistics in the second quarter of 2022, is a sleeping giant in the economic sun of the world. Over the years prior to the legislation of the National Office for Technology Transfer and Promotion Act (NOTAPA) there has been little or no interest or enthusiasm to issues concerning technology transfer by successive Nigerian governments. Technology is the knowledge of how to manipulate raw materials through complex scientific techniques, to achieve an expected end.

It is very necessary in virtually all aspects of human life as the world keeps advancing tech-wise, and new inventions in robotics, artificial intelligence, broad-band internet and internet of things now makes life easier while phasing out the old order of manual labour and crude technology. The transfer of technology across the globe by experts is therefore indispensable. The question then is; Has Nigeria strategically position herself through effective and implementable legislations so as to harness the benefits endowed in global technology transfer? This is the precis of this article.

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There is no doubt that Nigeria has legal and statutory frameworks for transfer of technology, but the biggest problem lies with the enlightenment of key operators within the tech business space, and implementation of the provisions of these laws with due diligence from the sector regulators.

2.0 Components of the Regulatory Framework Governing Technology Transfer in Nigeria

The chief regulatory agency governing the transfer of the technology into Nigeria is the National Office for Technology Acquisition and Promotion (NOTAP) which was created by the National Office for Technology Acquisition and Promotion Act (NOTAPA) which made it mandatory to register with NOTAP, all agreements for the transfer of foreign technology into Nigeria.

2.1 Core Operational Functions of NOTAP

  1. Registration of technology transfer agreements
  2. Monitoring of technology transfer agreements

iii. Establishing relationship with national agencies, research and development institutions etc, for focused activities on priority areas of domestic technological needs.

  1. Linkages between and among research institutions, industry and venture capitalists, financial institutions, governments and Non-governmental agencies.
  2. Evaluation and assessment of data gathered from the various research institutions nationwide.
  3. Sectorial analysis of registered technology agreements to monitor technology trends in the country.

vii. Consultancy services on investment and selection of processed technologies.

viii. Promotion and advancement of SME’s through the exploitation of locally motivated technologies.

  1. Promotion of innovation, patenting, intellectual property rights and related matters through workshops, seminars and awareness building programmes.
  2. Collaboration with international agencies in capacity building for researchers in Nigeria.

2.2 Mandate of NOTAP

  1. Encouragement of a more efficient process for the identification and selection of foreign technology.
  2. Development of the negotiating skills of Nigerians with a view to ensuring the acquisition of the best contractual terms and conditions by Nigerian parties entering into any contract or agreement for the transfer of foreign technology.

iii. Provision of a more efficient process for the adaptation of imported technology.

  1. Registration of all contracts or agreements having effect in Nigeria for the transfer of foreign technology to Nigerian parties.
  2. Monitoring on a continuous basis, the execution of any contracts or agreements registered by NOTAP.
  3. Promotion of intellectual property rights and encouragement of innovation among Nigerian scientists, researchers and inventors.

vii. Establishment of network of linkages among researchers, inventors, industry and research institutions.

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3.0 Types of Agreements that are Eligible for Registration with NOTAP

The following are agreements for technology transfer that must be registered with NOTAP;

  1. Agreements for the provision of technical managerial personnel assistance for the production of foreign technology in Nigeria
  2. Agreements for the supply of plants and machineries

iii. Agreements to use patented inventions

  1. Agreements for the supply of technical assistance in the form of technical plans, diagrams, operating formula or any other form of technical assistance.
  2. Agreement for supply of basic or detailed engineering.
  3. Agreement for the use of foreign trademarks.

4.0 Regulatory Time Period within which Technology Transfer Agreements must be Registered with NOTAP

The Revised Guidelines for Registration and Monitoring of Technology Transfer Agreements in Nigeria, gazette February 2020, has the following timeframe for registration of agreements relating to technology transfer in Nigeria.

  1. Filing of new agreement for registration, accompanied by required documents, information and payments: To be registered within 30 days from the date of execution/signing of the agreement.
  2. Filing of renewal agreement for registration, accompanied by required documents, information and payments: Within 30 days from the date of signing the renewed agreement.

iii. Extension of agreement and certification of registration for transferred technology: Within 30 days from the date the previously registered agreement expired.

  1. Notice of additional requirements needed for registration: Within 3 days from the date of filing the application.
  2. Response time by an applicant transferee company to any query: Within 12 days from the date of receiving such notice, failure upon which the agreement shall be construed to have been abandoned.
  3. Application for extension of response time to queries, by an applicant transferee company: Within 10 days from the date of expiration of the initial response.

vii. Notification of an applicant transferee company for the collection of his certificate of registration: Within 24 hours after the signing of the certificate of registration by the Director-General of NOTAP.

5.0 Procedure for the Registration of a Technology Transfer Agreement with NOTAP

To commence the registration of a Technology Transfer Agreement with NOTAP, the legal representative of the Nigerian transferee company are to forward to NOTAP, a duly completed regulatory NOTAP allocation form with the following attachments;

  1. A bank draft for an application fee payable to the Director-General of NOTAP.
  2. A copy of the Memorandum and Articles of Association of the transferee Nigerian company, showing that the object clause of the company’s memo, allows for transfer of foreign technology of the nature intended to be transferred.

iii. Two Certified True Copies (CTC) of the agreement to be registered.

  1. Two copies of duly completed questionnaires as in Form NOTAP 2-84.
  2. A copy of the transferee’s feasibility study and environmental impact assessment of the foreign technology.
  3. A certified true copy of the transferee Nigerian company’s certificate of incorporation and annual audit report.

vii. Upon thorough scrutiny and approval by NOTAP, the transferee company is to pay a registration fee to NOTAP.

6.0 Grounds for Refusal of Registration Application by a Transferee Company

NOTAP has the inherent powers to refuse grant of transfer and registration of foreign technology into Nigeria. The grounds upon which NOTAP can decline registration application of a transferee company are;

  1. Availability of the foreign technology in Nigeria, such that if allowed into Nigeria, may negatively affect the advancement of the existing Nigeria technology.
  2. Where the cost price of the foreign technology is higher than the global market value.

iii. Where the cost of the technology is higher than the available market value of such technology in the Nigerian tech market.

  1. Existing terms in the contract between the transferee and the transferor companies, that the transferee is to only acquire equipment’s, materials and tools exclusively from the transferor foreign company or an appointee of the transferor company.
  2. Where the contract warrants full payment from the transferee company in a yet to be exploited technology of the transferor.
  3. Where there is an unfair imbalance clause in the contract that allows the transferor company to unnecessarily intervene in the execution of the contract.

vii. Where there is a clause in the contract that requires the transferee to transfer technology or intellectual property to the transferor foreign company in exchange for the technology transferred, without any input from the transferor company.

viii. Where there exists a limitation clause that prevents the transferee company from selling its product to anyone else other than the transferor company.

7.0 Legal Effect of Non-Registration of Technology Transfer Agreement with NOTAP

One of the major effects of Non-Registration of Technology Transfer with NOTAP is that no license will be issued for the transfer of payment from the Transferee to the foreign transferor company either by the Central Bank of Nigeria, any commercial bank in Nigeria or the Federal Ministry of Finance.

8.0 Conclusion

Businesses in the tech sector of Nigeria can hardly do without registration of foreign technology with NOTAP. As the world keeps advancing in technology, there will always be need for technology transfer across the globe, and Nigeria been the most populated black nation in the world, remains a fertile market for transfer of new technologies as she remains the gateway for technology advancement in Africa. Businesses within the tech sector should always contact legal practitioners who are experts in Tech-law for legal advice before signing the dotted lines on contracts dealing with technology transfer into Nigeria.

At Law Accent, the drive has always been to bring the practice of law in Nigeria at par with global best standards, and we are always glad to take your business twenty steps ahead of your contemporaries.

Written by: Onu David Njoku, an enthusiastic, young and vibrant legal practitioner with bias for corporate and commercial law practice, Real estate and Aviation law but open to various aspects of legal practice. He is currently an NYSC Associate with Law Accent a reputable top tier law firm base in Lagos State, Nigeria.

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