Court urges settlement in N98.5bn patent suit against CBN, NIBSS

The judge also reminded the lawyers of the provisions of the Federal High Court Act encouraging courts to facilitate amicable settlement of disputes and urged the parties to explore that option in good faith.

The Federal High Court in Lagos has urged parties in a N98.5 billion patent infringement suit involving the Central Bank of Nigeria (CBN), the Nigeria Inter-Bank Settlement System (NIBSS), Enterprise Logistics Special Limited and Avanage Nigeria Limited to make genuine efforts to resolve the dispute amicably before the case proceeds to trial.

Trial court judge Deinde Dipeolu gave the advice on Tuesday after declining to commence trial because the Central Bank of Nigeria, Avanage Nigeria Limited and the Registrar of Patents and Designs were not represented by their lawyers.

The plaintiffs, Enterprise Logistics Speciale Limited and its Managing Director, Samuel Kolajo, are seeking about N98.5 billion in damages over the alleged infringement of their patented cash management technology, an alleged breach of a Non-Disclosure Agreement (NDA), and losses they claim resulted from the failure to deploy their cash management solution on Nigeria’s national payment infrastructure.

Tayo Oyetibo, who is a Senior Advocate of Nigeria (SAN), appeared for the plaintiffs alongside Jessica Adeola-Ajayi and Esther Bawa, while Olaoluwa Ale-Daniel represented NIBSS. There was no legal representation for the CBN, Avanage Nigeria Limited and the Registrar of Patents and Designs.

Mr Oyetibo told the court that the matter had been scheduled for trial and that the plaintiffs’ witness was present and ready to testify.

Mr Dipeolu, however, held that hearing notices should first be issued and served on the absent defendants before the case could proceed.

He subsequently ordered that hearing notices be served on them ahead of the next sitting.

The judge also reminded the lawyers of the provisions of the Federal High Court Act encouraging courts to facilitate amicable settlement of disputes and urged the parties to explore that option in good faith.

Responding, lawyer to NIBSS argued that the payment system operator functions under the regulatory oversight of the CBN and lacks the authority to take unilateral decisions regarding access to its infrastructure.

He also maintained that NIBSS could not support any arrangement that would create a monopoly, describing that as the central issue in dispute.

In response, Mr Oyetibo argued that the plaintiffs had invested substantial resources in developing technologies protected by valid patents and were entitled to the exclusive enjoyment of those inventions under the law.

He said the innovations, if deployed, would significantly improve Nigeria’s cash management system and contribute to the country’s economy.

According to the senior advocate, the major obstacle to resolving the dispute is the “selfish interests” of certain individuals in positions of authority, adding that Nigeria had been deprived of the economic benefits of the plaintiffs’ innovations.

He nevertheless told the court that the plaintiffs remained open to settlement.

Following submissions by both sides, Mr Dipeolu directed the parties to engage in meaningful discussions and make genuine efforts to resolve the dispute out of court.

The case was adjourned until 15 and 16 October for trial if settlement negotiations fail.

The dispute centres on the CBN’s Bank Neutral Cash Hubs (BNCH) framework, introduced to improve cash distribution by allowing licensed operators to receive, process, store and redistribute cash on behalf of banks, with the aim of reducing the cost and risks associated with cash handling across the financial system. The plaintiffs contend that the framework substantially reproduces technologies covered by their patents without their consent, a claim disputed by the defendants.

NIBSS, which operates much of Nigeria’s shared payment infrastructure, including the Nigeria Central Switch, has consistently maintained that access to its infrastructure is subject to regulatory oversight and internal approval and cannot be granted on an exclusive basis.

Claims before the court

According to their amended statement of claim, the plaintiffs began developing innovative cash management technologies in 2011 to modernise Nigeria’s cash handling system and reduce the movement of physical cash within the banking sector.

The technologies include the Mobile Smart Deposit, Mobile Cash Sorting and Processing Device, PillarSalt Cash Supply Chain, Cash Recycling and Retail Cash Management Solution, and the PillarSalt Cash and Terminal Management System. The plaintiffs stated the inventions are protected by three patent certificates issued under the Patents and Designs Act.

They alleged that after sharing details of the innovations with the defendants, the CBN introduced the Guidelines for the Registration and Operation of Bank Neutral Cash Hubs, which substantially replicate the processes and technologies covered by their patents without their consent or compensation.

The plaintiffs further alleged that the apex bank commercialised their patented inventions and failed, in its capacity as regulator, to protect their intellectual property rights.

Among the reliefs sought, they are asking the court to declare them the exclusive owners of the patented technologies and restrain the defendants from making, deploying, reproducing or commercially using the inventions without their written consent.

They are also seeking an order compelling NIBSS to activate the PillarSalt Cash Management Solution/Terminal Management System on the Nigeria Central Switch within 30 days.

The plaintiffs further want the court to nullify the CBN’s Guidelines for the Registration and Operation of Bank Neutral Cash Hubs, arguing that the framework unlawfully reproduces their patented inventions.

Their monetary claims include N500 million in general damages for the alleged patent infringement against the first and second defendants, N200 million against NIBSS for the alleged breach of the 2015 Non-Disclosure Agreement, and N97.8 billion for losses allegedly arising from NIBSS’s refusal to integrate and activate the PillarSalt solution on the Nigeria Central Switch since December 2016.

NIBSS’ defence

In its amended statement of defence, NIBSS denied all allegations of wrongdoing.

The payment system operator maintained that it neither infringed the plaintiffs’ patents nor breached the Non-Disclosure Agreement. It also denied refusing to integrate the plaintiffs’ solution.

Instead, NIBSS argued that the plaintiffs were seeking exclusive rights that would prevent other operators with similar technologies from accessing the national payment infrastructure.

According to NIBSS, granting such relief would amount to an unlawful restraint of trade, create a monopoly and run contrary to applicable regulatory guidelines.

The organisation further maintained that decisions on integrating solutions into its infrastructure are subject to regulatory oversight and corporate approval and cannot be taken unilaterally.