Court encourages settlement in N98.5 billion patent case involving CBN and NIBSS

The Federal High Court in Lagos has urged all parties in a N98.5 billion patent case involving the Central Bank of Nigeria (CBN), the Nigeria Inter-Bank Settlement System (NIBSS), Enterprise Logistics Special Limited, and Avanage Nigeria Limited to try and resolve the matter peacefully before it goes to trial.

Judge Deinde Dipeolu made this suggestion on Tuesday after he refused to start the trial. He noted that the Central Bank of Nigeria, Avanage Nigeria Limited, and the Registrar of Patents and Designs did not have their lawyers present in court.

The plaintiffs, Enterprise Logistics Special Limited and its Managing Director, Samuel Kolajo, are asking for around N98.5 billion in damages. They claim this is due to the alleged infringement of their patented cash management technology. They also allege a breach of a Non-Disclosure Agreement (NDA) and losses from the failure to use their cash management solution on Nigeria’s national payment system.

Tayo Oyetibo, a Senior Advocate of Nigeria (SAN), represented the plaintiffs along with Jessica Adeola-Ajayi and Esther Bawa. 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 trial was set to begin and that the plaintiffs’ witness was present and ready to give evidence. However, Mr Dipeolu insisted that hearing notices should first be sent to the absent defendants before the trial can start.

He then ordered that the hearing notices be delivered to them before the next sitting. The judge also reminded the lawyers about the Federal High Court Act, which encourages courts to help settle disputes amicably. He urged the parties to try and reach an agreement in good faith.

In response, the lawyer for NIBSS argued that the payment system operator works under the oversight of the CBN. He said NIBSS does not have the power to make unilateral decisions about access to its system.

He added that NIBSS could not support any arrangement that would lead to a monopoly, which he described as the main issue in the dispute. Mr Oyetibo countered this by saying that the plaintiffs had invested a lot in developing technologies that are protected by valid patents. He said they deserve to exclusively benefit from those inventions according to the law.

He mentioned that these innovations could greatly improve Nigeria’s cash management and benefit the economy. According to the senior advocate, the main challenge to settling the dispute is the “selfish interests” of some people in power. He added that Nigeria has lost economic benefits from the plaintiffs’ innovations.

Despite this, he told the court that the plaintiffs are still open to a settlement. After hearing from both sides, Mr Dipeolu directed the parties to have serious discussions and make real efforts to resolve the matter out of court.

The case was postponed until October 15 and 16 for trial if they do not reach a settlement. The disagreement revolves around the CBN’s Bank Neutral Cash Hubs (BNCH) framework. This framework aims to improve cash distribution by allowing licensed operators to manage cash for banks, reducing costs and risks involved in cash handling.

The plaintiffs argue that the framework copies technologies covered by their patents without their permission, which the defendants deny. NIBSS, which manages much of Nigeria’s shared payment system, including the Nigeria Central Switch, insists that access to its system requires regulatory approval and cannot be granted exclusively.

According to their revised statement, the plaintiffs started developing cash management technologies in 2011 to modernise Nigeria’s cash handling and reduce physical cash movement in banks. These 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. They claim their inventions are protected by three patents issued under the Patents and Designs Act.

The plaintiffs allege that after sharing their innovations with the defendants, the CBN introduced guidelines that replicate their patented processes without consent or compensation. They also claim that the CBN commercialised their inventions and did not protect their intellectual property rights as the regulator.

Among the reliefs they seek, they want the court to declare them the exclusive owners of the patented technologies and stop the defendants from using them without permission. They also want NIBSS to activate the PillarSalt Cash Management Solution/Terminal Management System on the Nigeria Central Switch within 30 days.

Additionally, they want the court to cancel the CBN's guidelines for the Bank Neutral Cash Hubs, arguing that it unlawfully reproduces their inventions. Their monetary claims include N500 million in damages for patent infringement against the first two defendants, N200 million against NIBSS for breaching the 2015 NDA, and N97.8 billion for losses since NIBSS refused to integrate the PillarSalt solution on the Nigeria Central Switch since December 2016.

In its response, NIBSS denied all the allegations. They stated they did not infringe on the plaintiffs’ patents or breach the NDA. NIBSS also said they did not refuse to integrate the plaintiffs’ solution.

Instead, NIBSS claimed that the plaintiffs were seeking exclusive rights that would block other operators with similar technologies from accessing the national payment system. They argued that granting such relief would be against trade laws, create a monopoly, and violate regulatory guidelines. NIBSS maintained that decisions about integrating solutions into its system must follow regulatory and corporate approval processes.