Patent licensing contracts under Nigerian and US law: the operation of exhaustion doctrine in Nigeria

Law on patents in Nigeria raises thorny questions on what restrictions may be validly imposed by a licence in section 23(3) of the Nigerian Patents and Designs Act 1970 (‘PDA’), which prohibits restrictions that are unnecessary for safeguarding the rights conferred by patent protection. This chapter examines some patent licensing restrictions in American jurisprudence and the extent to which these restrictions may be validly imposed on patent licensees under Nigerian law. The chapter discusses the validity of ‘assignment-back’ and ‘licence-back’ grant-back clauses under US and Nigerian law. The chapter also considers the validity of conditions in licences that impose obligations beyond the patent term and the right of licensees to challenge the validity of a patent in the US and Nigeria. Section 23(3) of the PDA seems to strike a fair balance between the rights of patent holders and licensees. The chapter evaluates the extent to which patent licensing restrictions may affect the operation of the exhaustion doctrine under Nigerian patent law and highlights the need for Nigeria to amend the PDA to allow for international exhaustion of patent rights.