HOW TO LICENCE A TRADEMARK IN NIGERIA

HOW TO LICENCE A TRADEMARK IN NIGERIA

According to the World Intellectual Property organisation, a Trademark is any sign or any combination of signs used to distinguished the goods and services offered by one business from those offered by another business.

The Nigerian Trade Marks Act, Cap. T13, Laws of the Federation of Nigeria 2004, is the current trademark law in Nigeria (TMA). The TMA defines a trademark as "a mark used or proposed to be used in relation to goods to indicate a connection in the course of trade between the goods and some person having the right either as proprietor or as a registered user to use the mark whether with or without any indication of the identity of the person …”

Trademark Licensing is simply defined as permission granted by a registered trademark owner, known as the Licensor to another, known as the Licensee to utilize his trademark in instances where such utilization would otherwise result in infringement if done without such permission.

By licensing the trademark, the registered proprietor gives others the permission to use the mark without assigning the ownership to them. The proprietor can also put other limitations on the use of the mark through the terms that he puts into the licensing agreement. A Licensing Agreement is entered into in writing to serve as evidence of the grant of the license, and to detail the scope of the license as well as the rights and obligations of both parties.

Specifically, trademark Licensing is provided for under Section 33 of the TMA which provides that subject to the provisions of this and the next following section, a person other than the proprietor of a trademark may be registered as a registered user thereof in respect of all or any of the goods in respect of which it is registered (otherwise than as a defensive trademark) and either with or without conditions or restrictions. It be interpreted that the term “registered user” in the Act is synonymous with the term “licensee”. Furthermore, section 33 (3) provides that “For the purposes of section 31 of this Act and for any other purpose for which the use of a trademark is material under this Act or at common law, the permitted use of a trademark shall be deemed-

to be used by the proprietor thereof; and (b) not to be used by a person other than the proprietor.

TYPES OF TRADEMARK LICENSING

A Proprietor of a Trademark can assess his licensing options in the following ways:

SOLE LICENSING

This happens when the owner gives a single licensee permission to use the trademark for a set amount of time. As a result, both the owner and the licensee may use the trademark, and another licensee cannot be granted the same rights.

EXCLUSIVE LICENSING

This happens when the owner gives a licensee the sole commercial licence to use his trademark. In this case, the trademark in question does not give the licensor any commercial rights.

NON-EXCLUSIVE LICENSING

This occurs where the proprietor permits one or more licensees to exploit the trademark.

ADVANTAGES OF TRADEMARK LICENSING INCLUDE

PASSIVE INCOME

An owner of a trademark may grant licences for the use of the mark to as many users or licensees as is practical without running the risk of losing ownership rights, thereby creating additional revenue streams by each such user.

BUSINESS EXPANSION

As this kind of arrangement needs less cash and maximises earnings, it aids a licensee in starting a new business opportunity. The reputation and consumer knowledge of the brand assist the licensee firm as well, and if the licensee chooses to enhance a product, they may be able to make a little amount more money as a result.

ACCESS INTO FOREIGN MARKETS

Licensing a trademark helps the product enter into new markets much easier than if the trademark was used solely by the proprietor. Thus, cumbersome border and regulatory requirements which include the tariff barriers are avoided due to the usage by a domestic company.

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The more often a trademark is utilised, the more well-known the brand is. Shared expenses, especially those for advertising and promotion, are possible.

DISADVANTAGES OF TRADEMARK LICENSING

TRADEMARK THEFT

Since the owner cannot control how the mark is used, especially when it has been licenced to several licensees, licencing exposes the trademark to the market and opens the door for theft.

THREAT TO REPUTATION

The reputation of the licensor and licensee may suffer if any aspect of the licencing agreement is handled improperly or violated in a way that hurts or discomforts a consumer or client. If several licences are made available, the reputation could suffer on a global scale, hurting many businesses that are not participating. Having an effective quality control clause or policy in place is the only way to address this potential issue. To ensure brand consistency across all licensees, many licence agreements provide a list of best practises to adhere to.

Given the advantages and disadvantages of trademark licencing, it is necessary to underline the significance of creating a licencing agreement between the parties that contains sections outlining each party's rights and responsibilities.

The requirements for a licencing agreement is as follows:

The details of parties The type of license being offered Description of the trademark The territory where the licensee is to operate Permitted use of the trademark The products or services the licensee may offer with the registered trademark Effective dates Duration/Termination Clause Remuneration/Royalty Clause Provision for Quality control Dispute Resolution Clause

It is interesting, nonetheless, that the main obstacle to registering a trademark licence agreement in Nigeria is the registrar's right to reject it on the grounds that doing so may encourage market trafficking.

NB: This article is not a legal advice, and under no circumstance should you take it as such. All information provided are for general purpose only. For information, please contact chamanlawfirm@gmail.com

WRITTEN BY CHAMAN LAW FIRM TEAM

EMAIL: chamanlawfirm@gmail.com

TEL: 08065553671, 08024230080