There are new disclosures of how ExxonMobil Nigeria gave scant regard to efforts by some personalities to resolve amicably its royalty payment dispute with an indigenous inventor, Clement Uwemedimo, before the scientist decided to take the oil giant to the Supreme Court. The case comes up on October 7.
Uwemedimo and Comandclem Nigeria, his company, are demanding more than $40 billion in accumulated royalty rights.
Former President Olusegun Obasanjo wrote to ExxonMobil in 2011 suggesting his personal mediation, but the company did not take the opportunity, writes Special Correspondent, SAM NWOKORO, who has been following the case.
Olusegun Obasanjo
ExxonMobil will again appear at the Supreme Court, Abuja on October 7 in what is expected to be the conclusion of an epic legal battle. The case has spanned more than two decades since 1980 when Clement Uwemedimo, a professor of soil agronomy, invented an anti-corrosive special paint with registration number RP 13522 given by the World Intellectual Property Organisation (WIPO).
The court hearing will be the third after two adjournments in February and May this year.
Uwemedimo is suing for enforcement of his royalty rights, amounting to over $40 billion to date, in compliance with the judgment of the Federal Court of Appeal, Calabar on December 8, 2009 that “having applied for the patent and the patent certificate N0.13522 was issued (Exh2), Comandclem Nigeria Limited became the registered patentee in the invention called Anti-corrosive Special Paint for QIT (Tran steel, Blue White enamel A.D) with effect from 5/8/99.”
Uwemedimo’s attorney, Jesse Onuigbo, described the case as “infringement and breach of sole supplier status agreement by ExxonMobil.”
Before it went to the Supreme Court, many professional bodies, social groups, geologists, environmental activists, fellow scientists and about 46 other interest groups had by 2010 urged ExxonMobil to settle with Uwemedimo out of court.
They expressed concern over the local and international implications on the invention of the only chemical that makes possible oil and gas drilling on sea and land, and is also used in other sectors, including construction, metallurgy, fabrication, and front end engineering designs.
Clement Akpan, who headed the international relations and publicity department at Comandclem disclosed before his death that by 2010, the company had identified 500 companies using illegally the anti-corrosive special paint, the only one listed on the WIPO website.
Obasanjo’s offer of mediation
Among the documents made available to TheNiche is the letter Obasanjo personally wrote to the managing director of ExxonMobil Nigeria on March 14, 2011.
It read in part: “Uwemedimo has visited me to register his complaints about transactions that went between himself and Mobil Nigeria Limited in respect of anti-corrosive special paint which he claimed that he invented.
“I only believe that if Mobil is so inclined, I can make my good offices available to intervene, otherwise, I will have to advise Uwemedimo to seek redress by any other means he deems necessary.”
ExxonMobil’s reply
ExxonMobil Nigeria Country Managing Director, Mark R. Ward, replied Obasanjo on March 18, 2011.
His letter said in part: “We thank you for your esteemed offer to intervene in matter discussed in your referenced letter. Apart from a 1980 transaction in which CJA Uwemedimo’s company, Comandclem Nigeria Limited, supplied Mobil Producing Nigeria Unlimited (MPN) with a small quantity of commercially available paint, for which he was paid by MPN, there has been no transaction between MPN and Mr. Uwemedimo and his company.
“CJA Uwemedimo and Comandclem have filed actions in various courts since 2000 asserting that he invented a special anti-corrosive paint for MPN upon our request in exchange for a share of MPN profits in perpetuity. MPN denies this claim which to date he has been unable to prove in any court.
“Mr. Uwemedimo and his company currently maintain an appeal at the Supreme Court from a Court of Appeal judgment against them. We trust that in view of the matter currently being before the courts, your Excellency will understand our constraints in discussing it in detail.
“Thank you very much for your offer and please accept assurances of our highest regards.”
Comandclem’s reaction
Presented with the letter from Obasanjo, and Mobil’s reply, one of the managers at Comandclem, Ubong Ubong, said: “Mobil is just trying to confuse people. That’s how they have been doing all along, trying to deceive people.
“If they won any case at the Appeal Court Calabar, how come the same court asked it to pay the royalties effective 5/8/99. If they say we did not win any case, have you not read the clear ruling of Appeal Court endorsing that Mobil owes Uwemedimo and Comandclem royalty rights? But where do they think they are going with all this deception?
“The amount due to [Uwemedimo] by now exceeds that $39.3 billion. What do they think they want to achieve by misinforming people. If it won any case against Comandclem or King, how come they wrote us begging for time to tidy up their budget in order to commence payment?”
One of the letters ExxonMobil wrote to Camandclem stated its agreement to commence payment by the second quarter of 2010, but did not fulfil the promise because of unfavourable terms.
Ubong explained: “You are owing somebody more than $40 billion dollars in debt, and you want to start redeeming it at a paltry $10 million a year after decades of deferment, whereas you have made billions of dollars from a stolen invention since 1980 and have become an Unlimited conglomerate from the proceeds of such invention.
“Do you know what it means to become an unlimited company? That is what Mobil has become after fraudulently mass producing a stolen invention. Mobil fed on our invention and grew to become an oil giant that it is now shedding weight. They have secretly mass produced a stolen invention, breached agreement and enjoyed protection from high quarters since 1980.”
Another Comandclem patentee who gave his name simply as Cajetan added: “It is not true that the Calabar judgment was not in our favour. What kind of lie is this? Where did Mobil do its own laboratory experiment before coming up with a patent. Why has it not made it public since 1980?
“Why has it been begging for time to pay up since the Calabar Appeal Court judgment? There is no confusion in the matter. If Mobil has been paying anything at all to [Uwemedimo], it only paid for the anti-corrosive paint which [he] invented. It has not paid for the patent.
“A product and a patent are not the same thing. One is of exhaustible usage, while a patent usage is in perpetuity.”
A lawyer’s explanation
Onuigbo said ExxonMobil is not happy with the two pronouncements of the Court of Appeal which ruled that the anti-corrosive special paint was invented by Uwemedimo and that the oral agreement to pay $2 per barrel was not against public policy.
Conversely, he explained, Comandclem is not comfortable with two pronouncements of the Court of Appeal which ruled that paragraph 29 (iii), (iv), and (viii) of the amended statement of claim were statute barred and that Comandclem failed to show evidence that the infringement of Uwemedimo’s patent was continuous after August 5, 1999 when the federal government issued the patent certificate to Uwemedimo.
Onuigbo explained that ExxonMobil “commissioned my client to invent the chemical, according to their statements. The powerful chemical you commissioned my client to invent in the course of executing a contract for the performance of specific work should not be strange to Mobil Oil.
“They knew the paint very well. This is because they have paid for the product but failed to pay for the invention, according to them.
“What you paid for in the execution of a contract for the performance of a specific work should not be an issue before the court.”
He also contended that since Justice Kumai Akaahs (now on the Supreme Court) was one of the justices who adjudicated the matter at the Appeal Court on December 8, 2009, he lacks judicial capacity to entertain the same contested issues between the same parties twice.
“It is axiomatic in the Nigerian judicial system that a judge cannot preside over his appeal (that is, the appeal in a case he had earlier adjudicated).”
Patent Decree 60, 1970
Patent Decree No 60 of 1970 requires an inventor to describe the value of an invention before a patent certificate is issued.
In compliance, Uwemedimo gave the name of the invention as “anti-corrosive special paint for QIT (Tran steel, Blue, White Enamel Q.A.D). The inventor’s name is given as Clement John Adiamiko Uwemedimo and Comandclem Nigeria Limited, 3 Maba Afia Uyo, Akwa Ibom State.
He stated that “the present invention relates to the controlling of corrosion in the oil producing areas. This is as a result of high concentration of salt in the Atlantic Ocean, specifically around Ibeno and the high seas of Akwa Ibom State.
“The chemical formulas which undergo regular improvement to check immunities caused by weather conditions and time, is composed of several chemicals. These chemicals include ketones formulas, which include methyl ethyl ketone, methyl isobutyl ketone, diacetone alcohol.”
Anti-corrosive paint and oil industry
Before 1980, Nigeria’s crude oil production was limited to on-shore fields which do not involve much risk to harvest. Between 1956 – when Nigeria’s first train of crude oil was lifted from Oloibiri, in present day Bayelsa State – and 1980, only a few oil companies operated in the country. Now they are about 100.
The anti-corrosive special paint has enabled many of them to venture into oil and gas exploration both in on-shore and deep-water off-shore basins.
Between 1980 and now, Mobil has lifted more than a billion barrels of crude oil. Its current production averages 1.2 million barrels per day (bpd), more than 70 per cent of Nigeria’s total 2.3 million bpd.
Test case for local content, Petroleum Industry Bill
Uwemedimo’s case against ExxonMobil once again highlights the local content law which seeks to enhance the participation of indigenous players in key sectors of the economy, especially oil and gas dominated by multinationals.
Though this case predates the enactment of the law, its resolution will determine how far Abuja is willing to protect or discourage indigenous enterprise.
Best case scenario
An expert in Nordic and maritime law, Chucks Nwawuike, said the case is best settled out of court because of its peculiar nature.
“If you look at it very well,” he stressed, “there is no way Mobil can advance any reasonable argument. It has admitted it contracted [Uwemedimo] to help it find solution to soil corrosion in its operation. So it is no longer material whether the man produces the patent before the court or not.
“You can infer in this case that since the NNPC (Nigerian National Petroleum Corporation) is Mobil’s joint venture partner, it is as good as saying that both Mobil and its business partners share the blame for the abuse of the patent.
“Mobil has since the past four years been selling most of its non-commercially viable fields to a host of indigenous operators in its marginal field relinquish programme.
“It could enter a swap arrangement with the inventor if it wants to settle the matter out of court since, in the calculation of industry watchers, there is no way a government that makes law about local content and PIB (Petroleum Industry Bill) will provide any kind of cover up for a patent abuse.”
Worst case scenario
If the Supreme Court fails to resolve the case, Uwemedimo and his group of over a thousand patentees may take it to international courts. Nigeria is a signatory to the World Intellectual Copyright Convention.
An internationalised litigation will expose Nigeria as a country not yet in touch with intellectual property worth and it may send a wrong signal to investors in Nigeria’s solid mineral industry where a lot of scientific invention and fabrication is expected.