In the last decade, Nigeria has become a source of and a dumping ground for imitation, substandard goods at the expense of both imported and locally manufactured brand-name (See Endnote 1) products. Companies have spent millions of Naira on the design, packaging, presentation and promotion of their products, but are being denied the usual benefits of a commanding and faithful market share.
Manufacturers are calling for tough new laws to stem the manufacture, importation and distribution of infringing products. Clearly, the country's laws need to be strengthened to cope with new onslaughts in this fiercely competitive arena.
Nigeria's copyright law currently protects literally, artistic, dramatic and musical works. However, Section 1(3) of the Copyright Act 1988 specifically excludes "industrial" artistic works from copyright protection, stating that "[a]n artistic work shall not be eligible for copyright protection, if at the time when the work is made, it is intended by the author to be used as a model or pattern to be multiplied by an industrial process."
Because of this provision, the copyright law provides little or no protection for the design, packaging or promotion of any products.
However, some protection can be obtained under the Patents and Designs Act 1970. This Act provides for the registration and ownership of patent and industrial designs in Nigeria.
Most brand names and manufactured products are, of course, not patentable. Only products that are new and original are patentable.
REGISTER THAT GET UP
However, Section 12 of the Patents and Designs Act 1970 provides that "any combination of lines or colours or both and any three dimensional form, whether or not associated with colours, is an industrial design if it is intended by the creator to be used as a model or pattern to be multiplied by an industrial process and is not intended solely to obtain a technical result." This statutory definition of industrial design is wide enough to include the packaging or get-up of most brand-name products.
Registration of industrial designs is limited to new designs that are not contrary to public policy and morality (See Endnote 2). The statute provides that "an industrial design is not new if before the date of application for registration it has been made available to the public anywhere and at any time by means of description, use, or in any other way, unless it is shown to the satisfaction of the Registrar that the creator of the design could not have known that it had been made so available" (See Endnote 3).
Thus, brand owners would be well advised to seek legal advice before their packaged goods become available on the market. This will enable their lawyers to apply for registration of the get-up or packaging of the product. Once a branded product is on the market, registration under the design law cannot obtained.
Brand owners who fail to comply with the advice given above may find that not only are they barred from registering the packaging design of their product but also that counterfeiters may subsequently register a design similar to the brand-name design. This could be eventualy force the legitimate brand owner to change its original packaging design or get-up, perhaps after having spent huge amounts promoting the design. The alternative is to lose market share to the counterfeiter.
A counterfeiter cannot, however, successfully register a brand owner's design merely because the owner has failed to register the design. The statute provides that "if the essential elements of an application for registration of an industrial design have been obtained by the purported applicant from the creation of another person without the consent of that other person, both to the obtaining of those essential elements and to the filing of the application, all rights in the application or in any consequent registration shall be deemed to be transferred to that other person." (See Endnote 4)
Registration of an industrial design confers upon the registered owners the right to preclude others from reproducing the design in the manufacture of the product (See Endnote 5). The registered owners can also prevent others from importing, selling or holding for commercial purposes a product reproducing the registered design (See Endnote 6).
Finally, the registered owner has the right to grant licenses to others to exploit the design (See Endnote 7). In order to be effective against third parties, such licenses must be duly registered with the Patents and Designs Registry in Abuja, Nigeria (See Endnote 8).
Registration of trademarks is traditionally a brand owner's most powerful weapon against product counterfeiting. In Nigeria, registration under the Trade Marks Act 1965 and the Trade Marks Regulations 1967 gives the registrant the exclusive right to use the mark in Nigeria in relation to the goods for which they are registered.
However, the country's trademark law is unable to stop "shadow products," products that mimic, but do not copy, the design, packaging, presentation and get-up of leading brands so as to trade off the goodwill of such brands. Shadow products are, by definition, careful not to use the brand owner's registered trademark.
Concern about shadow products has caused many brand owners to launch advertising campaigns to raise consumer perception of the fact that shadow products are often of inferior quality. The need for such advertising is compounded by the fact that Nigerian consumers are keenly aware of price discrepancies between brands and shadows. However, consumers are growing to accept lower quality if they can pay less than the price of branded items.
Recent case law in the United Kingdom, which is of persuasive authority in Nigeria, may provide a powerful new weapon against shadow products. The English tort of passing off prohibits any misrepresentation that leads customers to believe that a shadow product originates from a brand manufacturer when, in fact, it does not.
Even if Nigeria were to follow UK law in this area, it might be difficult to establish that a misrepresentation exists where the shadow product clearly states its origin. However, a recently developed English legal principle says that where a simple and unworldly man might confuse two products, a misrepresentation can be established (See Endnote 9).
NEED AN AGENT ?
Most IP rights, with the notable exception of copyright, require proof of registration before infringement proceedings can be commenced. In order to register such an IP right in Nigeria, it may be necessary to appoint an agent, usually a legal practitioner (See Endnote 10). The appointment of an agent seems compulsory for patent applications, but appointment is not clearly mandated for design or trademark applications.
If an agent is to be appointed, the brand owner must file an authorisation of agent form appointing the legal practitioner as agent of the brand owner. The form needs to be filed with the Patents and Designs Registry (for patent or design agents) or the Trade Marks Registry (for trademark agents).
Foreign brand owners can, of course, commence infringement proceedings in Nigerian courts but may asked to give security for costs.
A registered user or lawful licensee can institute infringement proceedings if the rights owner has been put on notice of such infringement and fails to take action. The licensee of a patent or design can apparently sue only under this condition, even if his license states otherwise (See Endnote 11).
If a licensee does commence infringement proceedings, he should, as a matter of good practice, name the rights holder as a party in the proceedings. Otherwise, a defendant can argue that the rights holder has not unreasonably neglected or refused to bring an infringement action and that therefore the licensee is not yet entitled to bring the instant action. Incidentally, naming the rights holder as a party does not make him liable for any costs unless he appears and takes part in the proceedings.
Prosecution of brand offences can be commenced under the Trade Marks Act 1965, the Merchandise Marks Act 1956, the Trade Malpractice's (Miscellaneous Offences) Decree 1992 or in the case of Pharmaceuticals under the Counterfeit and Fake Drugs (Miscellaneous) Act 1989.
GOVERNMENT PITCHES IN
A brand owner or licensee can enforce his statutory or common law IP rights by bringing infringement proceedings in the Federal High Court. The court has exclusive jurisdiction over IP matters and is empowered to grant any or all of the following remedies:
- an injunction restraining further infringement;
- an order for the delivery up of infringement articles and/or for the destruction of the offending articles (commonly known as an Anton Pillar Order); and
- an order for damages for loss of plaintiff's profits, or alternatively an accounting of the defendant's profits.
A brand owner can obtain assistance from the Standards Organisation of Nigeria (SON) in bringing civil enforcement proceedings against counterfeiters. SON is a part of the Federal Ministry of Industries and is responsible for, inter alia, undertaking investigations into the quality of products in Nigeria and regulating industrial marks and specifications.
Officials of SON are empowered to enter premises where an industrial or commercial undertaking is being carried on and to serve notice on any person carrying on such an undertaking to furnish in such form as directed information on specified matters (See Endnote 12).
SON officials can also purchase goods for the purpose of determining whether they satisfy the country's industrial standards (See Endnote 13). If goods don't meet the tests, SON can confiscate them. Since most counterfeit goods are not of sufficient quality. SON officials can be a big help in removing counterfeit goods from the market.
Criminal sanctions are imposed for dealing in counterfeit goods by the Merchandise Marks Act 1956 and the Trade Malpractice's (Miscellaneous Offences) Act 1992 and for Pharmaceutical brands under the Counterfeit and Fake Drugs (Miscellaneous) Act 1989. Upon conviction, an infringer is liable to a fine and, under the Merchandise Marks Act and the Counterfeit and Fake Drugs (Miscellaneous) Act, to a term of imprisonment.
However, an English law principle (See Endnote 14) states that criminal and civil actions may not be commenced simultaneously. This principle has often been invoked in Nigeria to stay civil proceedings until any pending criminal action has been finally determined. This common law rule has been abolished in the U.K, but it is still alive in Nigeria.
Nigeria's trademark laws need to be updated and revised. The current law is based on England's Trade Mark Act 1938, which England repealed by the Trade Marks Act 1994.
The Nigerian Law Reform Commission has already produced a working paper on the Reform of Industrial Property law, setting out a proposed Industrial Property Law. Unfortunately, this draft was issued in 1990 and is still awaiting legislative affirmation more than five years after it was first tabled before the government for signature.
This proposed law would allow for the simultaneous prosecution of infringers under both criminal and civil law, in addition to making many other changes.
It is expected that any new legislation on trademarks will include provisions allowing for the registration of shapes and certain distinctive aspects of packaging. Such a provision would require a precise and limited scope, lest it swallow up the limited protection now given for design registrations. A registered trademark can be renewed every seven (7) years, in perpetuity, but design registration gives an owner five (5) years of protection that can only be renewed two times for consecutive periods of five (5) years each.
Nigerian law also needs to be revised so that the definition of "infringement" is no longer restricted to goods within the same trademark specification but will extend to cover similar goods and even dissimilar goods in other categories, where the mark is famous. Such protection will have the advantage of allowing brand owners to use the reputation their mark has acquired should they expand the range of their products, without needing to expand under new trademarks.
Nigerian law needs to be changed so as to protect well-known marks even if they are not registered, by prohibiting the registration of an identical or similar mark without the consent of the owner.
The Standards Organisation of Nigeria Act 1970 should be amended to give SON the powers and responsibility of searching out and investigating the manufacture, distribution and sale of counterfeit products. SON investigators, if properly trained, will be able to gather evidence to be used in criminal and civil prosecutions and to give highly credible evidence in court. Of particular importance to such prosecutions is improving the integrity and proper storage of physical evidence that has been seized.
SON should also be empowered to assist the police in enforcing criminal sanctions under the Trade Malpractice's (Miscellaneous Offences) Decree 1992 and the Merchandise Marks Act 1956. Criminal procedures, when properly used, can serve as a powerful deterrent to infringers.
The surveillance arm of the Department of Customs and Excise needs to be strengthened so that skilled customs officials can find and seize imitations and counterfeit products at their points of entry into Nigeria. Such a change must be made if Nigeria is to satisfy its obligations under the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS).
TRIPS requires member states to "[a]dopt procedures to enable a right holder, who has valid grounds for suspecting that the importation of counterfeit trade mark or pirated copyright goods may take place, to lodge an application in writing with competent authorities, administrative or judicial, for the suspension by the customs authorities of the release into free circulation of such goods." (See Endnote 15). Nigeria is expected to bring her IP laws into conformity with the TRIPS agreement within the next four years.
If, as is expected, a new Industrial Property Act is eventually signed into law, the effectiveness of the new legislation can only be determined when the Act is construed by the Nigeria's courts. The court rulings should determine whether there is any real need for the legislature to also enact an unfair competition statute, similar to the statutes that already exist in other countries.
(1) A brand is a commercial term which can be a name, logo, distinctive packaging or a combination of these. They serve to identify the origin of a product and enable the consumer to distinguish the product from other products and promote customer loyalty. (2) Patents and Designs Act 1970, section 13(1) (3) Id. section 13(3) (4) Id. section 14(3) (5) Id. section 19(1)(a) (6) Id. section 19(1)(b) and (c) (7) Id. section 23(1)(a) (8) Id. section 23(2)(a) (9) Tattinger vs. Allbev Limited, T.L.R., 11/2/93. (10) See Patent Rules, Rule 6 (agent for design application); Trade Marks Regulations section 16(1) (agent for trademark registration). (11) Patents and Designs Act 1970, section 25(4) (the licensee of a patent or design can institute infringement proceedings only after the licensee has sent the licensor a registered letter containing notice of the infringement and the licensor has unreasonably neglected or refused to institute infringement proceedings). Compare Trade Marks Act 1965, section 33(4) (subject to any agreement to the contrary, a trade mark licensee can sue for infringement only after the rights owner neglects or refuses to bring suit within two months of being called upon to do so). (12) SON Act 1970, section 13 (13) Id. section 17