Protecting Software IP in Nigeria’s Fintech Startups

Contributor: Chibueze James

Introduction

The growth of financial technology (fintech) in Nigeria has revolutionised Nigeria’s financial landscape. Fintech in Nigeria has grown remarkably over the years, with investments in the fintech industry recording more than US$ 200.00 million (between 2011 to 2018).^[1]  This has brought about innovation and efficiency in service delivery. The sector has emerged as one of the most transformative forces in the global economy, reshaping how individuals and businesses manage, invest, and transfer money.^[2] At the heart of this revolution lies fintech software development, a discipline that combines cutting-edge technology with financial expertise to create innovative solutions.^[3] As fintech startups continue to rely heavily on proprietary code and algorithms to differentiate their products, the protection of software as intellectual property (IP) becomes a pressing concern.

In Nigeria, however, the legal framework for safeguarding software IP remain relatively underdeveloped, often leaving creators vulnerable to unauthorised replication, infringement, and technology theft.^[4] Consequently, an understanding of how IP laws apply to software, and how fintech enterprises can leverage these protections, is essential.

This work examines the legal mechanisms for protecting software IP within Nigeria’s fintech ecosystem and strategies for ensuring that innovation is both protected and encouraged in the evolving digital economy.

Forms of IP Protection Available for Software

There are various types of intellectual property recognized by IP Law. It is pertinent to understand how these types of IP law can offer protection to software.

1. Copyright: The Copyright Act 2022 provides for the protection and administration of copyright in Nigeria. Subject to the Act, works that are eligible for copyright include literary works, musical works, artistic works, audio- visual works, sound recordings, and broadcasts.^[5] Software can be classified under literary works because it consists of code written in programming languages, which are essentially expressions of ideas in written or symbolic form.^[6] Thus, where some effort has been expended on making the software, to give it an original character,^[7] and the it has been fixed in any medium of expression known or later to be developed, from which it can be perceived, reproduced or otherwise communicated either directly or with the aid of any machine or device,^[8] then it becomes eligible for copyright protection under the category of literary works.

In majority of the countries, including Nigeria, copyright is conferred automatically once a work is created and fulfils the criteria for eligibility; it does not need to go through the process of registration.^[9]

A useful illustration of software as a copyright-protected work can be found in the case of Inuit Inc., a United States–based fintech company, which is the developer of financial management software such as QuickBooks and TurboTax. Although Intuit’s copyright notice does not explicitly enumerate the particular software being protected, it expressly asserts ownership over its “products, services, web content, and related materials,” collectively referred to as Offerings.^[10] This broad formulation extends to the company’s software and digital platforms, thereby safeguarding them under copyright law.

1. Patents: A patent is an exclusive right granted for an invention. The Patent and Designs Act 1971 makes provisions for the registration and proprietorship of patents and designs in Nigeria. Generally, patents benefit inventors by providing them with legal protection of their inventions.^[11] However, it also benefits society by providing public access to technical information about these inventions, and thus accelerating innovation.^[12] To be patentable, an inventor must show that an invention is:
2. new (no technology like it has been produced); results from inventive activity (the product or process must provide a solution to a technical problem that is non-obvious to a person skilled in the art); and is capable of industrial application (the product must have practical applications in an industry, be it commercial, manufacturing, or other areas); or
3. if it constitutes an improvement upon a patented invention and also is new, results from inventive activity and is capable of industrial application.^[13]

Software patents hold significant value for developers and vendors, as they safeguard elements of a product that may not fall within the protection of other intellectual property regimes. Nevertheless, securing such patents often presents considerable challenges, given the complexity and duration of the application process.

For example, as part of its Artificial Intelligence and Machine Learning research, Apple developed a technology capable of predicting how a scene might appear from various perspectives.^[14] This innovation, known as Generative Scene Networks (GSN), represents a patented advancement by Apple, underscoring how software-related inventions can attract strong intellectual property protection when they demonstrate a distinct technical contribution.^[15]

1. Trade Mark: The Trade Marks Act 2004 provides for the registration and administration of trade marks in Nigeria. A trade mark constitutes any sign, word, phrase, symbol, logo, or other distinctive indicator capable of distinguishing the goods or services of one undertaking from those of another.^[16] It is worthy of note that the definition of “goods” under the Trademarks Act has been amended by the BFA to include services.^[17] Likewise, the definition of a trade mark has been expanded to include the shape of goods, their packaging and a combination of colours. This amendment effectively extends the scope of trade mark protection beyond tangible goods to cover services.

In the context of software enterprises, trade=marks safeguard the brand identity and the source-indicating function of the software, ensuring that consumers associate a given digital product with its rightful originator.

A recent illustration of the relevance of trademark protection in Nigeria’s fintech ecosystem is the ongoing dispute between Paystack and Zap Africa over the mark “ZAP.”^[18] Paystack reportedly registered “ZAP by Paystack” as a trademark across several classes, including financial and technological services, to protect the brand identity of its payment product.^[19] However, Zap Africa has challenged the registration, claiming prior use and registration of the same mark.^[20] This dispute underscores the growing importance of brand protection and early IP registration for fintech startups operating in competitive digital markets.

1. Trade Secrets: Trade secrets are a form of intellectual property rights which deals with the confidentiality of business ideas that are necessary for the progress of a particular business.^[21] They may be secret formulas, compilation of data, software algorithms, programmes, methods, patterns inter alia.^[22] Nigeria generally lacks a comprehensive law on trade secrets, as protection is largely achieved through contractual agreements, for instance, signing of a non-disclosure agreement (NDA).^[23]

Software trade secrets may receive legal protection where the proprietor has taken reasonable measures to preserve their confidentiality and where such information has not been independently discovered by others.

A pertinent illustration of the role of trade secret protection in safeguarding software intellectual property can be drawn from the case of Financial Information Technologies, LLC (Fintech) v. iControl Systems USA, LLC.^[24] In this case, iControl was found guilty by a jury in the United States District Court for the Middle District of Florida for misappropriating Fintech’s proprietary trade secrets. Fintech’s software, which facilitated the processing of invoices in the alcoholic beverage industry, contained confidential algorithms and processes that gave it a competitive advantage. The unauthorised use of these confidential elements by iControl amounted to theft of trade secrets.

This case shows that software innovations and proprietary systems developed by fintech companies may be legally protected as trade secrets, provided reasonable measures are taken to maintain their confidentiality.

Practical Strategies for Safeguarding Software IP in Nigeria’s Fintech Sector

1. Strong Legal Foundation: It is pertinent for businesses to collaborate with an experienced IP lawyer to identify the appropriate protections for their software.
2. Use of Comprehensive Contracts: Fintech startups should draft strong confidentiality, employment, and non-disclosure agreements (NDAs) to protect source codes, algorithms, and client data. Contracts with developers, partners, and employees must clearly state ownership of IP rights and prohibit unauthorised disclosure or use.
3. Trademark Registration: Startups should register their names, logos, slogans, and distinctive symbols under the Trademarks Act. This protects their brand identity and prevents competitors from passing off similar marks, as seen in the Paystack ZAP trademark dispute.
4. Technological Protection Measures: Adopt digital rights management (DRM), encryption, access control, and licensing keys to prevent reverse engineering or unauthorised reproduction. Regular software updates and code obfuscation can also help deter piracy and unauthorised copying.^[25]

Conclusion

In conclusion, while Nigeria has made commendable strides in strengthening intellectual property protection, particularly through the Copyright Act 2022, there remains a significant gap in the direct legal protection of software IP, especially for Fintech startups. Consequently, startups must rely on alternative mechanisms such as trademarks, contractual agreements, and confidentiality measures to safeguard their innovations.

The pending dispute between Paystack’s ZAP and ZAP Africa underscores the evolving nature of software-related IP protection in Nigeria. The outcome of this case will likely set an important precedent, shaping the future legal landscape for software IP registration and protection within the Nigerian Fintech ecosystem.

Reference

1. CBN, ‘Fintech Evolution and Development in Nigeria: Lessons from other Jurisdictions’, <https://share.google/jmBfZvneQHhtpmNJ2>, 22 October, 2025. ↑
2. Nehra, M, ‘Fintech Software Development: Revolutionizing the Financial Industry’, <https://share.google/yZZPEbFAoEegIaMsQ> (28 January, 2025), accessed 22 October, 2025. ↑
3. Ibid. ↑
4. Nwosu, C, ‘The Legal Challenges Encountered in Protecting Software Applications in Nigeria’, <https://spaajibade.com/the_legal_challenges_encountered_in_protecting_software_applications_in_nigeria/> (26 March, 2025), accessed 22 October, 2025. ↑
5. Copyright Act 2022, s 2(1). ↑
6. Wikipedia, ‘Programming Language’, <https://share.google/Mt7iXgFERBpF4ITGo> accessed 22 October, 2025. ↑
7. Copyright Act 2022, s 2(2)(a). ↑
8. Ibid, s 2(2)(b). ↑
9. WIPO, ‘Frequently Asked Questions: Copyright’, <https://share.google/c3vKR7HDpGJtmuq7K> accessed 22 October, 2025. ↑
10. Inuit, ‘Inuit Legal Information’, <https://share.google/Te1N5ZSdOE4iglr7r> accessed 22 October, 2025. ↑
11. WIPO, ‘Patents’, <https://www.wipo.int/en/web/patents> accessed 22 October, 2025. ↑
12. Ibid. ↑
13. Patent and Designs Act 1971, s 1. ↑
14. Thales, ‘Software Intellectual Property: What it is &How to Protect It’, <https://cpl.thalesgroup.com/software-monetization/protecting-software-intellectual-property> accessed 22 October, 2025. ↑
15. Ibid. ↑
16. Trade Mark Act 2004, s 67. ↑
17. Orlu, CC, et al, ‘The Business Facilitation (Miscellaneous Provisions) Act 2023 – A Boost for Economic Development’, <https://www.templars-law.com/app/uploads/2023/06/SA-Version-The-Business-Facilitation-29-Clean.pdf> accessed 22 October, 2025. ↑
18. Oladunmade, M, ‘Trademark Dispute between Paystack and Zap Africa Tests Nigeria’s IP Laws’, <https://techcabal.com/2025/04/18/zap-africa-paystack/> (18 April, 2025), accessed 22 October, 2025. ↑
19. Ibid. ↑
20. Ibid. ↑
21. Ndukwe, CS, ‘Legal Status of Trade Secrets in Nigeria’, <https://ssrn.com/abstract=4801279> (20 April, 2024), accessed 22 October, 2025. ↑
22. Ibid. ↑
23. Ibid. ↑
24. No. 20-13368 (11th Cir. Dec. 22 2021). ↑
25. Thales (n14). ↑