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Trademarks in Nigeria
World Development Vol. 7, pp. 727-136 Pergamon Press Ltd. 1979. Printed in Great Britain
Trademarks in Nigeria Nigerian Institute
OSITA C. EZE* of International
Affairs,
Lagos
Summary. - Nigerian trademarks reflect the basic principles of market economy, embodied in the Paris Convention of 1883, which had the effect of integrating the underdeveloped economies in those of the developed capitalist countries. Emphasis is laid on the protection of private property rather than of consumers or the national interest at large. While attempts are being made to deal with some of the worst aspects of trademarks, the mixed economy philosophy is likely for a very long time to lead to both psychological and economic dependency as well as cultural distortion. Greater government participation and correct political orientation are imperative if trademarks are essentially to serve basic local needs. 1. INTRODUCTION Nigerian law recognizes property in trademarks which it protects on the basis that they enable producers or distributors to identify the origin of their products from other similar products; that they ensure the protection of the trademarks owners’ trade and business as well as the goodwill generated by the use of the trademark; and finally that the identification of the source of origin of particular products protects the public against deception and confusion. The above stated rationales for trademark protection in Nigeria, restated and reinforced in various parts of the Act’ must, however, be construed in the light of Nigeria’s political economy that accepts as its basic philosophy the ‘free’ enterprise system. This philosophy introduced during the colonial period, at least for the citizens of the metropolis, was effectively adopted by the independence leadership and elite and has since been confirmed by all subsequent Nigerian governments which have as one of their main objectives the creation of a viable private sector.2 The indigenization policies initiated in the early 1970s while envisaging government participation and control of certain economic sectors, have as their main thrust the creation of opportunities for replacing foreign private entrepreneurs by Nigerians. The concept of mixed economy which was and is currently being used to describe the Nigerian economy does not detract from our stated position that to all intents and purposes Nigeria operates essentially within the framework of market economy.3
Nigeria is typically a consumer society. There has developed over the years, and particularly with the stepping up of oil production, after the end of the Nigerian civil war, a consumption pattern - particularly among the urban dwellers - of foreign goods which are either imported or ‘manufactured’ in Nigeria following on the policy of import substitution. It has been shown that although only a fifth of the Nigerians are estimated to have progressed from barter to money economy, as of 1975, the ‘proportion is growing fast and consumer appetites and spending power are staying well ahead of the supply of goods’. Nigeria is thus a shortage economy with a consequent inflation which was estimated at 25530% during 1975.4 This occurred in spite of price control legislation’ which, for the most part, was ineffective since consumers were often inclined to cooperate with sellers to emasculate the price control machinery. The role of trademarks, as well as its rationale in Nigeria will, therefore, be looked at with this background in mind. Other relevant factors which will form part of the framework of our analysis include the role of advertising and the existence of effective machinery for monitoring and controlling advertisements in the various media and overall government policy with respect to trademarks. Finally we shall discuss the economic, cultural and psychological consequences of the use of trademarks in Nigeria. *Senior Research Fellow, Nigerian Institute of International Affairs, Lagos. The author is currently with UNCTAD secretariat in Geneva. The ideas expressed
in this paper are those of the author and do not represent those of UNCTAD. 121
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128 2. LEGAL
REGIME OF TRADEMARKS IN NIGERIA
(a) Historical
background
The Nigerian trademark law at independence was a colonial legislation fashioned on the principles underlying the Paris Convention of 1883.6 It carried over certain advantages conferred on the former power that could hardly be deemed to correspond with her national interest. The 1958’ Act has now been repealed and replaced by more recent legislation that is more consistent with Nigeria’s independent status.’ The repealed trademark legislation granted to the owner of a trademark registered in Great Britain the right to have the mark registered in Nigeria with priority over other applicants. In addition, the registration of such trademarks was allowed to date back to the time the original application was filed in Great Britain.’ A more obnoxious provision was to be found in the Trademark Regulations now repealed, which prohibited the registration in Nigeria of any mark relating to any type of cotton goods unless such marks had previously been registered in the IJnited Kingdom in respect of the same goods.‘e Other relevant provisions of the 1958 Act that were to be modified later by the current legislation on the subject include those relating which could only be made to assignments, together with the transfer of the goodwill connected with the business” and the period of validity of registration and renewal of trademarks.” The unsatisfactory nature of the colonial trademark law was, however, recognized from the inception of independence and its revision was already under consideration from the early 1 960s.13 Why it took 5 yr after independence to adopt new trademark legislation and two further years for it to come into force is not clear. l4 At the international level, Great Britian extended the application of relevant international and inter-colonial arrangements to Nigeria.” Thus before independence, the Paris Convention was already extended to Nigeria and its application to Nigeria was sanctioned by the first independent government. (b) Present
legislation
in the national
(i) Registrable trademarks The law governing trademarks
context
the Trademark Act of 1965 which came into force in 1967 and repealed the 1958 Act.16 The 1965 Act is also supplemented by Trademark Regulations of 1967 made by the Supreme Military Council pursuant to powers conferred by the Act and aimed at determining how the Registrar appointed under the Act should administer it.17 The new law, as the one it replaced, does not deal with service marks. Generic names - that is to say, the names of particular products are not protected under the Act. What is protected are brand names. Primary protection is accorded to registered trademarks although non-registered marks also enjoy some protection.18 Legal proceedings may be instituted under the Act to prevent or recover damages, for the infringement of a registered trademark. Essentially three types of trademarks are protected under the Act: ordinary trademarks, certification trademarks and defensive trademarks. The ordinary trademarks are registrable under Part A or B of the Register required to be kept by the Registrar. In order for a trademark to be registrable in Part A of the register it must be distinctive, defined to mean adapted in relation to the goods in respect of which it is registered or proposed to be registered, to distinguish the good with which the proprietor of the trademark is or may be connected in the course of trade from goods in the case of which no such connection subsists, either gradually or, where the trademark is registered or proposed to be registered subject to limitations, in relation to use within the extent of the registration.” With respect to registration under Part B of the register the requirement is the same except that instead of requiring that the trademark be ‘distinctive’, registration is dependent on the trademark being capable of distinguishing” and is therefore a less exacting requirement than under Part A. Certification trademarks in addition to being adapted to distinguish the goods of one proprietor from those of another are registrable in relation to goods certified in respect of origin, material, method of manufacture, quality, accuracy or other characteristics. Certification trademarks are registrable in Part A of the register.*’ Finally, certain well-known trademarks may be registered as defensive trademarks. S. 32( 1) of the Act stipulates that: Where a trade mark consisting
in Nigeria
is
of an invented word or invented words has, as respects any goods in respect of which it is registered and in relation
TRADEMARKS IN NIGERIA to which it has been used (in this subsection referred to as ‘the familiar goods’), became so wellknown that its use in relation to other goods would be likely to be taken as indicating a connection in the course of trade between those goods and a person entitled to use the trademark in relation to the familiar goods, the trademark may, on the application in the prescribed manner of the proprietor registered in respect of the familiar goods, be registered in his name in respect of those other goods as a defensive trademark, notwithstanding that the proprietor registered in respect of the familiar goods does not use or propose to use the trademark in relation to those other goods, and notwithstanding anything in section 31” of this Act; and while so registered, the trademark shall not be liable to be taken off the register in respect of those goods under section 31 of this Act. Certain points need to be made in relation to the various trademarks protected under the Act. Firstly, it will be seen that emphasis is laid on the capability of tine trademark to distinguish the goods of one proprietor from those of another. That the primary function of trademarks is that of differentiation has long been recognized.23 Secondly, certification trademarks which have the advantage of allowing for indication, inter alia, of quality and accuracy and therefore have some added advantages to ordinary trademarks, are rarely if ever used in Nigeria. (ii) Registration, duration and renewal of reregistration of marks Application for registration of a trademark is required to be made in a prescribed form and subject to the payment of prescribed fees. The Registrar may refuse an application or may accept it absolutely or subject to amendments, modifications or limitations, if any, as he thinks fit. Where an application has been made for legislation in Part A of the register, instead of refusing the application, the Registrar may, if the applicant is willing, treat it as an application for registration in Part B of the register.% Opportunity is given for opposition to an which on acceptance, or in application exceptional circumstances, before acceptance, is published in the Journal of Trademarks. Where an application for the registration of a trademark has been accepted and opposition to the application has not been successful the Registrar, unless the application has been accepted in error, registers the trademark.25 The 1965 Act has shortened the duration on first registration and renewal of registration from 14 to 7yr in each case.26 A shorter period for validity of trademarks has certain where each trademark advantages. Firstly,
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ceases to be of value to the registered proprietor, it is not likely to be renewed and therefore unnecessary entries in the register are not perpetuated. Secondly, it would allow for an earlier reassessment of the value of a trademark that should in fact determine the fees to be charged. The current practice in Nigeria is to charge basic fees of about f3 both for registration and renewal of registration of a trademark,27 a practice that is not dependent on the value of the trademark, the size of the enteprise or the sector in which the enterprise operates. It is suggested that with the increasing value of the trademark higher fees that are related to the economic value should be charged.28 Finally it may be pointed out that a trademark registered in Part A of the register is taken to be conclusively valid after the expiration of 7 yr from the date of registration unless the registration was obtained by fraud or is considered as deceptive or scandalous matter not registrable.29 (iii) Rights conferred by registration of marks Registration of a trademark, if valid, and subject to reservations made for vested rights and uses of names, addresses and description of goods, confers on the registered user the exclusive right to the use of the trademark in relation to the goods for which it has been registered.30 Infringements of the right of a registered proprietor occur when a person who is not the proprietor or registered user by way of permitted use, uses a mark identical or so nearly resembling it as to be likely to deceive or cause confusion in the course of trade.31 Once again emphasis is laid on the differentiation aspect of trademarks. It is clear that the overconcern with avoiding confusion and deceit is primarily intended to protect the business and goodwill of the proprietor or registered user of a trademark. Differentiation is also intended to ensure what has been termed fair competition. It has been maintained that product differentiation gives scope for a type of competition which mainly tries to influence the demand curve, instead of accepting it as in the case of price competition. In technical terms, while in perfect competition the cross elasticities of demand between different pairs of outputs will approach infinity, such elasticities will be perceptible and finite in the case of competition through product differentiation. In other words, in perfect competition outputs of different sellers are perfect substitutes from the point of view of the buyer, while in product differentiation competition they are just close substitutes.”
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While by implication it may be argued that differentiation may lead to the protection of the public, this may be, if at all, true only in relation to a very minor sector of Nigerian purchasers. For most the protection is theoretical rather than real as the creation of brand loyalty through advertising and demonstration effect undermines the possibility of making distinction based on quality of goods. Once the habit to consume certain goods has been developed and sustained by advertising among the ‘nouveaux riches’ and elites who are unashamedly the pace setters and who cannot claim to act as rational purchasers, purchases by the rest of the population where they could afford to pay, are imitative rather than rational. The argument that ‘the biggest advantage of a trademark to the consumer is that she can buy the products which are sold with a brand mark which she has come to rely on and she can avoid the products she does not like which are made and sold under another brand mark’33 has to be qualified depending on the ability of consumers to act in a rational manner. This is an assumption which cannot be sustained in a society where only a few have had the benefit of meaningful - not just formal - education and therefore in theory have the capacity to act rationally. Furthermore, the fact that many, if not most, of the products using brand names are culturally alien to the public conceived in mass terms increases the chances of irrational choice. Rights conferred by registration of trademarks may also devolve by way of assignment, transmission or under licensing agreements. Registered trademarks are either assignable or transmissible in connection with the goodwill of the business or not.% Where a trademark is assigned otherwise than in connection with the goodwill, the rights of the assignee are postponed until after certain prescribed conditions have been fulfilled.35 An unregistered trademark is also assignable or transmissible under similar conditions as registered trademarks subject to the qualification that at the time of transmission the unregistered trademark is used in the same business as a registered trademark; it is assigned or transmitted at the same time and to the same person as the registered trademark and it is so assigned or transmitted in respect of goods all of which are goods in relation to which the unregistered trademark is used in that business and in respect of which the registered trademark is assigned or transmitted.36 It is the registered proprietor of a trademark that has the power to assign a trademark and
to give effective receipts for any consideration in for its assignment .37 There is no provision the Act to regulate the consideration to be made for assignments and this would seem to be left to determination by the parties. It is submitted that such transactions should be subject to control by a designated administrative authority, probably the Registrar of Trademarks, to ensure that inordinate fees are not charged for assignment of trademarks. An assignee of a trademark or a person to whom it has devolved by transmission must apply to the register to have his title registered. Decisions of the Registrar with respect to registration are subject to appeal to the court.38 A certification trademark is assignable or transmissible only with the consent of the Minister. This is because a certification trademark ~ unlike an ordinary trademark - guarantees origin, quality and other characteristics and the requirement that its use should conform with the regulations demands effective control.39 As already indicated, certification trademarks are hardly if ever used in Nigeria and, therefore, it is not possible to assess their effectiveness or usefulness. With a growing private sector, trademark licensing is on the increase in Nigeria and a licensee may be registered under the Act as a registered user. The scope of the rights of a registered user are determined by the ‘permitted use’ and any use that goes beyond that constitutes an infringement of the rights of the proprietor. Certain particulars are required to be given by the proprietor or some person authorized by him where a joint application is made by him and the proposed registered user for registration as a registered user. The application must be made in writing and in a prescribed manner. The information which must be furnished by way of statutory declaration must include particulars of the relationship existing or proposed between the proprietor and the proposed registered user; the degree of control of the proprietor over the permitted use which their relationship will confer and whether it is a term of their relationship that the proposed registered user shall be the sole registered user or that there shall be any other restriction as to persons for whose registration as registered users application may be made.40 The particulars must also state the goods in respect of which registration is proposed, any conditions or restrictions proposed with respect to the characteristics of the goods, to the mode or place of permitted use or to any other matter; whether the permitted use is
TRADEMARKS IN NIGERIA to be for a period, and if for a period the duration thereof. Finally, the Registrar has power to demand that further documents, information or evidence as may be required under the regulations should be furnished.41 Registration is effected only when the above stated requirements have been met and the Registrar, after considering the information furnished to him, is satisfied that in all circumstances the use of the trademark, subject to any conditions and restrictions which the Registrar thinks proper, would not be contrary to public interest.42 The Registrar of trademarks has used his powers relating to registered users to disallow some of the malpractices connected with licensing agreements. Thus any attempt by a proprietor to impose restrictions on the registered user such as limitations on production, control of advertising and tied-in export, clauses are generally disallowed under the Act where they are considered to be against the public interest. The public interest clause is omnibus enough to allow for a wide measure of action by the Registrar. Some of the information supplied with respect to the application for the registration of a registered user might well be considered confidential and its disclosure injurious to the interests of the applicant. The Act accordingly makes provision for the Registrar, if the applicant so requires, to take steps for securing that information supplied by him (other than the matter entered in the register) is not disclosed to rivals in the trade.43 Lastly it may be pointed out that the Registrar will refuse an application for registration as a registered user if it appears to him that it would tend to facilitate trafficking in a trademark. (iv) Removal on the grounds of non-use Where a trademark is registered without any bona fide intention on the part of the appli. cant for registration that it should be used and there has in fact been no bona fide use of the trademark by the proprietor for the time being up to the date 1 month before the date of the application for removal or where up to the date 1 month before the date of the application a continuous period of 5 yr or longer elapsed during which the trademark was a registered trademark or during which there was no bona fide use thereof, the trademark may be taken off the register. Proof of bona fide use before the relevant date or during the relevant period, or non-use due to special circumstances in the trade and not to any
731
intention not to use or abandon the trademark will preclude the applicant from obtaining the removal of the trademark from the register.44 The rationale behind this provision is that where the owner of a trademark does not sell goods for which the trademark has been registered, such a trademark which is of no value to the owner or the public should not be allowed to prevent the registration of other marks to unnecessarily encumber the register. On a proper interpretation bona fide use would exclude token sales especially where the intention is to avoid the incidences of the provision. (v) Compulsory licensing There is no provision for compulsory licensing of trademarks under the Nigerian trademark legislation. Compulsory licensing is usually employed where it is intended to prevent the use of a trademark to acquire a monopoly position. This line of reasoning was adopted in the United States Federal Trade Commission vs Borden Incorporated. In that case the administrative law judge held that the heart of the monopoly power preserved and maintained by respondent Borden lies in the ReaLeamon trademark and its dominant market position. For competition to enter the processed lemon juice industry, the barrier to entry which inheres In the ReaLeamon trademark must be eliminated. As a consequence, in the judgement of the undersigned, the only effective relief under the fact shown by the record in this case requires the licensing of ReaLeamon brand name to others wishing to enter the production, marketing and sale of processed reconstituted lemon juice.4s It is clear that in an underdeveloped economy where the manufacturing and to a great extent the sales sectors are dominated by expatriate firms or their affiliates, compulsory licensing of trademarks could well facilitate the entry of nascent local businesses into these sectors and consequently act as a motor in the industrialization process. This is particularly true of Nigeria where some well-known marks monopolize the production and sale of certain consumer goods. The indigenization process which has excluded foreigners from most of the sales sector has not diminished reliance on well-known foreign-owned marks. Compulsory licensing should, however, be used selectively to encourage businesses that essentially serve local needs rather than those that would perpetuate consumption patterns determined and imported from the outside.
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WORLD DEVELOPMENT
In order to ensure that a reasonable quality standard is maintained, however, a quality control relationship should be established between the licenser and the licensee - a service to be performed on the payment of a reasonable fee by the latter. Nigerian quality control institutions should also be progressively developed in order to minimize reliance on foreign licensers. (vi) Special case of pharmaceuticals and food processing The pharmaceutical and Poisons Act of 196046 and Foods and Drugs Decree of 197447 are the main legislations which govern the production, distribution and sales of food products and drugs. The Nigerian Ministry of Health is the government department charged with vetting the advertisements of these products by the use of trademarks before they are diffused to the public. Such advertisements must be cleared with the relevant departments of the Ministry and failing to do so constitutes an offence under the relevant laws. The Ministry has had limited success in controlling the advertisements since many distributors do not bother to get the required clearance and in some cases where such clearance has been sought and refused the advertisements have none the less been carried by the various media who are primarily concerned with collecting the fees. The result is that in some cases advertisements are used to promote sales of products that may be harmful to health or considered immoral. This was the case with unauthorized advertisements of certain sex gadgets. Efforts are being made at the moment to involve the State Ministry of Health in combatting unauthorized advertisements and sales of products. The Ministry has powers to prosecute offenders under the relevant legislations but because of the delays in the litigation process there is a general reluctance to pursue infractions of the law before judicial tribunals. Some of the actions taken before the courts are known to have lasted for 5 yr or more. With respect to pharmaceuticals, while being aware of the possible advantage of using generic names that will not only streamline and standardize drugs being used in the country, but will also minimize costs and reduce foreign exchange outlay, no decision has been made in this regard .48 The main reason for this is said to be that there do not exist enough facilities for quality control on a continuous basis. Quality control is, however, carried on irregularly and there have been occasions where drugs using well-known marks having been tested and
approved have on later occasions been found to contain foreign particles dangerous to health. It is believed that the responsibility imposed on distributors or manufacturers to maintain a certain standard would be lost especially as a consequence of underdeveloped infrastructure for quality control. Shortage of qualified personnel is said to be one of the factors affecting the establishment of effective and efficient quality control divisions of the Ministry of Health. One would hasten to ask why little or no use is being made of the Nigerian Standards Organization, which is the main body charged with quality control of goods produced and sold. It may also be pointed that individuals who have suffered by relying on advertisements may bring an action in common law against those who have induced them to purchase or consume goods to their detriment. Finally it is clear that quality control by itself will not solve the problem of proliferation of trademarks in the pharmaceutical industry.49 Not only will a careful selection of critical drugs be necessary but in addition local production whenever possible is imperative. (c) International
regime on trademarks
As already indicated Nigeria is a Party to the Paris Convention for the Protection of Industrial Property of March 1883 as amended.” The Paris Convention recognizes the independence of national trademarks and does not pretend to create international trademarks. The Convention itself represents an effort to integrate the peripheries into the developed market economies and is characterized by a marked lack of concern for the interests of developing economies. In its nearly 100 yr of existence amendments of the convention have generally tended to strengthen the rights of investors from the developed countries.51 Two key principles are embodied in the Convention: that of national treatment and that of a priority period. The national provision of the Convention puts nationals of other countries of the Union at par both with respect to rights and remedies granted under their respective laws subject, however, to the fulfilment of conditions and formalities imposed upon the nationals of the country where protection is sought.‘* The national treatment standard is also extended to nationals of countries outside the Union, who are domiciled or have real and effective industrial or commercial establishments in the territory of one of the countries of the Union.53 This is an obvious attempt to extend the operational
TRADEMARKS
scope of the convention beyond the normal practice of making conventions apply to parties thereto and their nationals. A person who has duly filed an application for the registration of a trademark in one of the countries of the Union enjoys, for the purpose of filing in other countries, a right of priority. All that is required to secure priority right is a regular national filing and it is of no consequence what the faith of his application is. The period of priority under the Convention is 6 months.% The net effect of the priority right granted under the Convention is that any subsequent filing in any other countries of the Union before the expiration of 6 months from the time of the first application cannot be invalidated by reason of any acts accomplished in the interval, for example another filing or the use of a mark, and such acts cannot give rise to any third party right. A reservation is, however, made for rights acquired by third parties before the first application that serves as the basis of the right of priority.” By facilitating the multiple registration and opportunity is protection of trademarks, created for abuses, for example by registration without intention to use, which could delay the entry of young national enterprises in the production and sale of identical goods. A trademark that has been duly registered in the country of origin should be accepted for filing and protected in the other countries of the Union subject to certain specified exceptions in sub-section B or Article 6 quinquies. The relevant section provides that: Trademarks covered by this Article may be neither denied registration nor invalidated except in the following cases: 1. when they are of such nature as to infringe rights acquired by third parties in the country where protection is claimed; 2. when they are devoid of any distinctive character, or consist exclusively of signs or indications which may serve, in trade, to designate the kind, quality, quantity, intended purpose, value, place of origin, of the goods, or the time of production, or have become customary in the current language or in the bona fide and established practices of the trade of the country where protection is claimed; 3. when they are contrary to morality or public order and, in particular, of such a nature as to deceive the public. It is understood that a mark may not be considered contrary to public order for the sole reason that it does not conform to a provision of the legislation on marks, except if such provision itself relates to public order. This provision is subject, however, to the application of Article 1 O&. 56
IN NIGERIA
133
The article creates the anomalous situation whereby Parties to the Convention are required to register trademarks which could not be registered by their own nationals. Thus in addition to national treatment accorded to registered proprietors preferential treatment is also envisaged. Several attempts have been made to amend the principle of independence of trademarks by seeking to create ‘inte,rnational trademarks’, that would generalize protection in countries party to the Convention by a single registration. Nigeria has not adhered to any of these conventions. It is suggested that Nigeria should not become party to any of these conventions as they will only serve to integrate her economy more into the market economy, a factor that does not augur well for developing a selfreliant economy. Furthermore, Nigeria’s low level of industrialization and export of processed goods will not justify participation in such international arrangements. Finally, the influx of applications that will ensue as a result would impose additional costs for investigation that fees for registration will not cover and because registration of more foreign trademarks will be facilitated, freedom of trademarks available to Nigerian businessmen would be correspondingly less.57
3. ECONOMIC
AND PSYCHOLOGICAL FACTORS
While it has proved difficult to obtain data relating to ownerships of and remittances with respect to trademarks registered in Nigeria certain assertions may be reasonably made. Firstly, like in most developing countries, most of the trademarks are owned by foreigners. There is, however, a growing increase in the ownership of trademarks by Nigerians as a consequence of the government policy of strengthening the indigenous private sector. In spite of the increasing participation of Nigerians in shareholding of foreign enterprises, foreign trademarks are used for most processing or industrial enterprises. Emerging Nigerian businessmen are also entering into licensing agreements with foreign enterprises but as with most economies that embarked in the post-independence era on import-substitution, sales and consequently consumption are essentially geared to satisfy the ever growing consumption appetite of the elite. This could have certain adverse consequences. Demand patterns could be distorted and thus could inhibit the utilization of local
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WORLD
DEVELOPMENT
resources to satisfy the basic needs of the majority of Nigerians. There will thus be little convergence between demand and resource use. By depending on essentially foreign goods imported or locally manufactured to satisfy a burden is often placed on consumption, foreign exchange which could be better utilized in developing a viable industrial infrastructure that will serve the needs of the rural masses and urban poor. The consumption pattern has in fact led to Nigeria being a dumping ground for all kinds of undesirable products. The illusion that Nigeria was a rich country is difficult to dissipate but the government, faced with serious financial problems, has introduced strict import restrictions on certain luxury goods. The role of advertisement in encouraging a perverse consumption pattern is pertinent in understanding the use of trademarks in Nigeria. The media generally do not vet advertisements which tend to be rather persuasive. While the cost of advertising may not be very high it is nevertheless passed on to the consumers and in the context where price control is on the whole ineffective, it adds to the inflationary tendencies. It is ironical in an economy where there is generally a shortage of goods considerable media time and space is devoted to advertising. With respect to remittances on licensing agreements, attempts are being made to ensure that they correspond to the overall national interest. Remittances are generally allowed for a period of Syr but there is an attempt to reduce the period to 3 yr subject to renewal. The actual remittances allowed generally depend on the state of the economy and may take the form of l-3% of gross profit. Fixed sums may be considered in the case of young companies in order to enable them to establish themselves, although curiously enough no distinction is made between affiliates of foreign companies and local enterprises. It would be strange to consider the former as young. It is the Federal Ministry of Finance that is the final authority on remittances although the opinion of the Registrar of trademarks is taken into account. The scenario already painted will lead to certain psychological and cultural consequences. Too much reliance on foreign foods is a direct consequence of domination of tastes by outside forces that by itself perpetuates dependence and distorts the cultural pattern in the country. The psychology of the consumers is predicted on preference for goods bearing foreign marks and lack of faith in local products. Even where
the same product, as in the case of certain soaps or cigarettes, is sold under the same mark, the imported ones are preferred. Appeals to nationalism or pride in national products has had little or no impact on this behavioural pattern. Where import restrictions are imposed smuggling is intensified and provides a more lucrative means of accumulation. Culturally the elites emerge as stereotypes of consumers in the more advanced countries and are ever eager to mimic their current consumption patterns. The combination of psychological and cultural perversion reinforces the dependency psychosis and inferiority complex that undermines any realistic move in the direction of self-reliance. The answer to the problem does not obviously lie in trademark legislation and policies alone since these reflect the basic political economy of the country. It is very doubtful whether an elitist government has the capacity and/or the will to carry out the policies and the politicization needed if this trend is to be reversed.
4. CONCLUSIONS The 1965 trademark legislation is certainly an improvement on the repealed colonial legislation but it still retains the basic principles of a market economy reinforced by the basic thrust of the Paris Convention that is essentially geared to protect private enterprises. Attempts to control the use of trademarks and the conditions under which they are to be licensed represent positive steps in the direction of ensuring that overall ‘national’ interests are served. Consideration should, however, be given to reducing the number of years after which a trademark that is not intended to be used should be removed from the register, to encouraging the use of certification trademarks, and to introducing provisions and mechanisms for compulsory licensing of trademarks. Provision should also be made, in appropriate cases, for joint use of foreign and local trademarks to minimize the risk of non-renewal after the goodwill has been developed locally and to ensure that increase in value of such trademarks does not accrue only to the foreign owner once arrangements for its use have been ended. The fees being charged under the present law both for registration and renewal of registration do not bear any relation to the economic value of the trademarks and may not even cover the cost of administration. The fees
TRADEMARKS IN NIGERIA should be progressively increased with renewals since it is simple logic that a proprietor would not renew if there are no valid financial expectations. Ultimately the objectives of trademark legislation will be determined by the political economy of the country. The mixed economy policy is likely for a very long time to lead to
735
greater dependence on external forces and trademark laws represent one of the instruments for perpetuating that dependence. Greater government intervention in the economic sector as a whole as well as a correct political orientation is therefore imperative if trademarks are essentially to serve basic local needs.
NOTES 1. See Trademarks Act, No. 29 of 1965. Sections 3,9, 10, 11,13, etc.
7. Trademarks Federation Act, Cap. 199, 1958. 8. See Note 1. Supra.
2. See Osita C. Eze, ‘MNCs in Nigeria’, an unpublished paper. See also Federation of Nigeria National Development Plan, 1962-1968 (Lagos: Federal Ministry of Economic Development), pp. 3 and 8;Second National Development Plan 1979-1974 (Lagos: Federal Ministry of Information, 1970), Chapter 28; Third National Development Plan, 1975-1980, Vol. I (Lagos: The Central Planning Office, Federal Ministry of Economic Development, 1975), p. 33 and Chapter 30. 3. Lewis, Reflections on Nigeria’s Economic Growth (Paris: OECD, 1967), p. 35, where the author writing on the Development Plan in a mixed economy maintains that one of its purposes is ‘to help the government to pursue policies which encourage private individuals to make decisions which favour growth to invest more, plant more, use fertilizer, undergo training, change jobs, et?. See also Onimode and Osagie, ‘Economic interpretations of the Nigerian Draft Constitution’, an unpublished paper where the authors point out, commenting on the use of the term mixed economy in the Draft Constitution, that: The upshot of all these is simply that the mixed economy is an ideological confusion and an economic illusion for achieving egalitarian ideals. Its basic fallacy lies in its refusal or inability to perceive the implacable irreconcilability of dominant private enterprise and populist idealism. The persistent failure of planned development, the perpetuation of underdevelopment and mass poverty since the mixed economy was instituted under colonial planning in 1946 testify to the reality of the situation. 4. Nigeria: A Survey of US Business Opportunities, US Department of Commerce, (Washington: US Government Printing Office, May 1976), p. 1. 5. See Third National Development p. 16.
Plan, op. cit.,
6. Paris Convention for the Protection of Industrial Property of 20 March 1883, as revised at Brussels on 14 December at the Hague 2 June 1934, Stockholm on
1900, at Washington on 2 June 1911, on 6 November 1925, at London on at Lisbon on 31 October 1958 and at 4 July 1967 (Geneva: WIPO, 1970).
9. Cap. 199. S.63(1) and S. 63 A (1). 10. ibid., Reg. 6, and Second Schedule, items 23, 24 and 25. See also S. Suckow, Nigerian Law and Foreign Investment (Paris: Mouton and Co., 1966), p. 192. 11. Cap. 199. S. 28. 12. ibid., S. 34. Under this provision the duration of a registered trademark was 14 yr and could be renewed indefinitely for further 14 yr. 13. S. Suckow, op. cit., p. 193. 14. L.N. 60 of 1967. The Act came into force on the fist of June 1967. 15. Cap. 199. Sections 66 and 67. 16. See supra. 17. L.N. 70 of 1967. See also Trademarks Act, 1965, No. 29, Sections 42 and 45.
18. Actions may be brought for ‘passing off’ and remedies granted with respect to unregistered trademarks. See Trademarks Act 1965, S.3. 19. S 9(l) and (2). Such a trademark to be registrable under Part A of the register must contain one of the following: the name of a company, individual or firm, represented in a special or particular manner; the signature of the applicant for registration or some predecessor in his business; and invented word or invented words; a word or words having no direct reference to the character or quality of the goods, and not being according to the ordinary signification of a geographical name or surname. Any of the above stated particulars is registrable, however, upon evidence of its distinctiveness.
20. ibid., S. 10. 21. ibid., S. 43. 22. S. 31 of the Act deals with removal from the register on the grounds of non-use. See also infra.
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DEVELOPMENT
23. See UNCTAD Secretariat, The Role of Trademarks in Developing Countries, UN Publications Sales No. E. 79. II. D. 5, p. 6. 24. Trademarks Act, 1965, Sections 18-19. cf. S 17, makes provision for preliminary advice on distinctiveness. 25. ibid., Sections
19, 20 and 22.
26. ibid., S. 23. 27. Trademarks schedule I.
Regulations
1967,
28.
UNCTAD
29.
Trademarks Act 1965, S.14.
Secretariat,
L.N.
70 of 1967,
op. cit., pp. 10-l
1.
30. ibid., S. 5(l). 31. ibid., S. 5(2). 32. See UNCTAD
Secretariat,
op. cit., p. 6.
33. See H. 0. Blair, Understanding Patents, Trademarks and other Propn‘etary Assets and Their Role in Technology Transfer and Licensing: The Practical View, p. 7. 34.
47. Decree No. 35 of 1974, Republic of Nigeria, 1974. 48. See UNCTAD, ‘A case ceutical industry’, TD/B/C.6/4
Luws
of the Federal
study of the pharma(October 1975).
49. See UNCTAD, ‘Case studies in transfer of technology: pharmaceutical policies in Sri Lanka’, TD/B/ C.6/21 (27 June 1977); ‘Case studies in the transfer of technology: the pharmaceutical industry in India’, TD/B/C.6/20 (11 October 1977). 50.
TrademarksAct., 1965, S. 44.
51. UNCTAD, ‘International Patent System: The Revision of the Paris Convention for the Protection of Ildustrial Property’, TD/B/C.6/AC.3/2 (28 June 1977); Osita C. Eze, The Legal Status of Foreign Investments in the East African Common Market (Geneva: Institut Universitaire de Hautes Etudes Internationales/Leiden: A. W. Sijthoff, 1975), Chapter VIII. 52. Paris Convention, 53. ibid., Article
Article
2(l).
3.
54.
ibid., Article
4A and C.
55.
ibid., Article
4B.
Trademarks Act 1965, S. 26.
35. ibid., S. 26 (4) (a) and (b). 36. ibid., S. 26(3). 37. ibid., S. 29. 38. ibid., S. 30. 39. ibid., S. 43 (9). Subsection 7 of S. 7 requires that there should be deposited at the office of the Registrar, in respect of every registered certification trademark, rules approved by the Ministers for governing its use. 40.
ibid., Sections
41.
ibid., S. 34 (1) (a)-(d).
42.
ibid., S. 34 (2).
43.
ibid., S. 34 (4).
44.
ibid.. S. 31.
45.
Cited in UNCTAD
46.
Cap. 152, 1960.
33 and 34.
Secretariat,
op. cit., p. 40.
56. Article 10”’ deals with unfair competition and provides that: (1) The countries of the Union are bound to assure to nationals of such countries effective protection against unfair competition. (2) Any Act of competition contrary to honest practices in industrial or commercial matters constitutes an act of unfair competition. (3) The following in particular shall be prohibited: 1. all acts of such a nature as to create confusion by any means whatever with the establishment, the goods, or the industrial or commercial activities, of a competitor; 2. false allegations in the course of trade of such a nature as to discredit the establishment, the goods, or the industrial or commercial activities, of a competitor; 3. indications or allegations the use of which in the course of trade is liable to mislead the public as to the nature, the manufacturing process, the characteristics, the suitability for their purpose, or the quantity, of the goods. 57. The Madrid Agreement concerning the International Registration of Marks, revised at Brussels (1900), Washington (1911), the Hague (1925), London (1934); see also The Trademark Registration Treaty 1973. See also Peter O’Brien, The international trademark systems and developing countries’, IDEA, The Journal of Law and Technology, Vol. 19, No. 2, p. 104.
Trademarks in Nigeria Nigerian Institute
OSITA C. EZE* of International
Affairs,
Lagos
Summary. - Nigerian trademarks reflect the basic principles of market economy, embodied in the Paris Convention of 1883, which had the effect of integrating the underdeveloped economies in those of the developed capitalist countries. Emphasis is laid on the protection of private property rather than of consumers or the national interest at large. While attempts are being made to deal with some of the worst aspects of trademarks, the mixed economy philosophy is likely for a very long time to lead to both psychological and economic dependency as well as cultural distortion. Greater government participation and correct political orientation are imperative if trademarks are essentially to serve basic local needs. 1. INTRODUCTION Nigerian law recognizes property in trademarks which it protects on the basis that they enable producers or distributors to identify the origin of their products from other similar products; that they ensure the protection of the trademarks owners’ trade and business as well as the goodwill generated by the use of the trademark; and finally that the identification of the source of origin of particular products protects the public against deception and confusion. The above stated rationales for trademark protection in Nigeria, restated and reinforced in various parts of the Act’ must, however, be construed in the light of Nigeria’s political economy that accepts as its basic philosophy the ‘free’ enterprise system. This philosophy introduced during the colonial period, at least for the citizens of the metropolis, was effectively adopted by the independence leadership and elite and has since been confirmed by all subsequent Nigerian governments which have as one of their main objectives the creation of a viable private sector.2 The indigenization policies initiated in the early 1970s while envisaging government participation and control of certain economic sectors, have as their main thrust the creation of opportunities for replacing foreign private entrepreneurs by Nigerians. The concept of mixed economy which was and is currently being used to describe the Nigerian economy does not detract from our stated position that to all intents and purposes Nigeria operates essentially within the framework of market economy.3
Nigeria is typically a consumer society. There has developed over the years, and particularly with the stepping up of oil production, after the end of the Nigerian civil war, a consumption pattern - particularly among the urban dwellers - of foreign goods which are either imported or ‘manufactured’ in Nigeria following on the policy of import substitution. It has been shown that although only a fifth of the Nigerians are estimated to have progressed from barter to money economy, as of 1975, the ‘proportion is growing fast and consumer appetites and spending power are staying well ahead of the supply of goods’. Nigeria is thus a shortage economy with a consequent inflation which was estimated at 25530% during 1975.4 This occurred in spite of price control legislation’ which, for the most part, was ineffective since consumers were often inclined to cooperate with sellers to emasculate the price control machinery. The role of trademarks, as well as its rationale in Nigeria will, therefore, be looked at with this background in mind. Other relevant factors which will form part of the framework of our analysis include the role of advertising and the existence of effective machinery for monitoring and controlling advertisements in the various media and overall government policy with respect to trademarks. Finally we shall discuss the economic, cultural and psychological consequences of the use of trademarks in Nigeria. *Senior Research Fellow, Nigerian Institute of International Affairs, Lagos. The author is currently with UNCTAD secretariat in Geneva. The ideas expressed
in this paper are those of the author and do not represent those of UNCTAD. 121
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128 2. LEGAL
REGIME OF TRADEMARKS IN NIGERIA
(a) Historical
background
The Nigerian trademark law at independence was a colonial legislation fashioned on the principles underlying the Paris Convention of 1883.6 It carried over certain advantages conferred on the former power that could hardly be deemed to correspond with her national interest. The 1958’ Act has now been repealed and replaced by more recent legislation that is more consistent with Nigeria’s independent status.’ The repealed trademark legislation granted to the owner of a trademark registered in Great Britain the right to have the mark registered in Nigeria with priority over other applicants. In addition, the registration of such trademarks was allowed to date back to the time the original application was filed in Great Britain.’ A more obnoxious provision was to be found in the Trademark Regulations now repealed, which prohibited the registration in Nigeria of any mark relating to any type of cotton goods unless such marks had previously been registered in the IJnited Kingdom in respect of the same goods.‘e Other relevant provisions of the 1958 Act that were to be modified later by the current legislation on the subject include those relating which could only be made to assignments, together with the transfer of the goodwill connected with the business” and the period of validity of registration and renewal of trademarks.” The unsatisfactory nature of the colonial trademark law was, however, recognized from the inception of independence and its revision was already under consideration from the early 1 960s.13 Why it took 5 yr after independence to adopt new trademark legislation and two further years for it to come into force is not clear. l4 At the international level, Great Britian extended the application of relevant international and inter-colonial arrangements to Nigeria.” Thus before independence, the Paris Convention was already extended to Nigeria and its application to Nigeria was sanctioned by the first independent government. (b) Present
legislation
in the national
(i) Registrable trademarks The law governing trademarks
context
the Trademark Act of 1965 which came into force in 1967 and repealed the 1958 Act.16 The 1965 Act is also supplemented by Trademark Regulations of 1967 made by the Supreme Military Council pursuant to powers conferred by the Act and aimed at determining how the Registrar appointed under the Act should administer it.17 The new law, as the one it replaced, does not deal with service marks. Generic names - that is to say, the names of particular products are not protected under the Act. What is protected are brand names. Primary protection is accorded to registered trademarks although non-registered marks also enjoy some protection.18 Legal proceedings may be instituted under the Act to prevent or recover damages, for the infringement of a registered trademark. Essentially three types of trademarks are protected under the Act: ordinary trademarks, certification trademarks and defensive trademarks. The ordinary trademarks are registrable under Part A or B of the Register required to be kept by the Registrar. In order for a trademark to be registrable in Part A of the register it must be distinctive, defined to mean adapted in relation to the goods in respect of which it is registered or proposed to be registered, to distinguish the good with which the proprietor of the trademark is or may be connected in the course of trade from goods in the case of which no such connection subsists, either gradually or, where the trademark is registered or proposed to be registered subject to limitations, in relation to use within the extent of the registration.” With respect to registration under Part B of the register the requirement is the same except that instead of requiring that the trademark be ‘distinctive’, registration is dependent on the trademark being capable of distinguishing” and is therefore a less exacting requirement than under Part A. Certification trademarks in addition to being adapted to distinguish the goods of one proprietor from those of another are registrable in relation to goods certified in respect of origin, material, method of manufacture, quality, accuracy or other characteristics. Certification trademarks are registrable in Part A of the register.*’ Finally, certain well-known trademarks may be registered as defensive trademarks. S. 32( 1) of the Act stipulates that: Where a trade mark consisting
in Nigeria
is
of an invented word or invented words has, as respects any goods in respect of which it is registered and in relation
TRADEMARKS IN NIGERIA to which it has been used (in this subsection referred to as ‘the familiar goods’), became so wellknown that its use in relation to other goods would be likely to be taken as indicating a connection in the course of trade between those goods and a person entitled to use the trademark in relation to the familiar goods, the trademark may, on the application in the prescribed manner of the proprietor registered in respect of the familiar goods, be registered in his name in respect of those other goods as a defensive trademark, notwithstanding that the proprietor registered in respect of the familiar goods does not use or propose to use the trademark in relation to those other goods, and notwithstanding anything in section 31” of this Act; and while so registered, the trademark shall not be liable to be taken off the register in respect of those goods under section 31 of this Act. Certain points need to be made in relation to the various trademarks protected under the Act. Firstly, it will be seen that emphasis is laid on the capability of tine trademark to distinguish the goods of one proprietor from those of another. That the primary function of trademarks is that of differentiation has long been recognized.23 Secondly, certification trademarks which have the advantage of allowing for indication, inter alia, of quality and accuracy and therefore have some added advantages to ordinary trademarks, are rarely if ever used in Nigeria. (ii) Registration, duration and renewal of reregistration of marks Application for registration of a trademark is required to be made in a prescribed form and subject to the payment of prescribed fees. The Registrar may refuse an application or may accept it absolutely or subject to amendments, modifications or limitations, if any, as he thinks fit. Where an application has been made for legislation in Part A of the register, instead of refusing the application, the Registrar may, if the applicant is willing, treat it as an application for registration in Part B of the register.% Opportunity is given for opposition to an which on acceptance, or in application exceptional circumstances, before acceptance, is published in the Journal of Trademarks. Where an application for the registration of a trademark has been accepted and opposition to the application has not been successful the Registrar, unless the application has been accepted in error, registers the trademark.25 The 1965 Act has shortened the duration on first registration and renewal of registration from 14 to 7yr in each case.26 A shorter period for validity of trademarks has certain where each trademark advantages. Firstly,
129
ceases to be of value to the registered proprietor, it is not likely to be renewed and therefore unnecessary entries in the register are not perpetuated. Secondly, it would allow for an earlier reassessment of the value of a trademark that should in fact determine the fees to be charged. The current practice in Nigeria is to charge basic fees of about f3 both for registration and renewal of registration of a trademark,27 a practice that is not dependent on the value of the trademark, the size of the enteprise or the sector in which the enterprise operates. It is suggested that with the increasing value of the trademark higher fees that are related to the economic value should be charged.28 Finally it may be pointed out that a trademark registered in Part A of the register is taken to be conclusively valid after the expiration of 7 yr from the date of registration unless the registration was obtained by fraud or is considered as deceptive or scandalous matter not registrable.29 (iii) Rights conferred by registration of marks Registration of a trademark, if valid, and subject to reservations made for vested rights and uses of names, addresses and description of goods, confers on the registered user the exclusive right to the use of the trademark in relation to the goods for which it has been registered.30 Infringements of the right of a registered proprietor occur when a person who is not the proprietor or registered user by way of permitted use, uses a mark identical or so nearly resembling it as to be likely to deceive or cause confusion in the course of trade.31 Once again emphasis is laid on the differentiation aspect of trademarks. It is clear that the overconcern with avoiding confusion and deceit is primarily intended to protect the business and goodwill of the proprietor or registered user of a trademark. Differentiation is also intended to ensure what has been termed fair competition. It has been maintained that product differentiation gives scope for a type of competition which mainly tries to influence the demand curve, instead of accepting it as in the case of price competition. In technical terms, while in perfect competition the cross elasticities of demand between different pairs of outputs will approach infinity, such elasticities will be perceptible and finite in the case of competition through product differentiation. In other words, in perfect competition outputs of different sellers are perfect substitutes from the point of view of the buyer, while in product differentiation competition they are just close substitutes.”
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WORLD DEVELOPMENT
While by implication it may be argued that differentiation may lead to the protection of the public, this may be, if at all, true only in relation to a very minor sector of Nigerian purchasers. For most the protection is theoretical rather than real as the creation of brand loyalty through advertising and demonstration effect undermines the possibility of making distinction based on quality of goods. Once the habit to consume certain goods has been developed and sustained by advertising among the ‘nouveaux riches’ and elites who are unashamedly the pace setters and who cannot claim to act as rational purchasers, purchases by the rest of the population where they could afford to pay, are imitative rather than rational. The argument that ‘the biggest advantage of a trademark to the consumer is that she can buy the products which are sold with a brand mark which she has come to rely on and she can avoid the products she does not like which are made and sold under another brand mark’33 has to be qualified depending on the ability of consumers to act in a rational manner. This is an assumption which cannot be sustained in a society where only a few have had the benefit of meaningful - not just formal - education and therefore in theory have the capacity to act rationally. Furthermore, the fact that many, if not most, of the products using brand names are culturally alien to the public conceived in mass terms increases the chances of irrational choice. Rights conferred by registration of trademarks may also devolve by way of assignment, transmission or under licensing agreements. Registered trademarks are either assignable or transmissible in connection with the goodwill of the business or not.% Where a trademark is assigned otherwise than in connection with the goodwill, the rights of the assignee are postponed until after certain prescribed conditions have been fulfilled.35 An unregistered trademark is also assignable or transmissible under similar conditions as registered trademarks subject to the qualification that at the time of transmission the unregistered trademark is used in the same business as a registered trademark; it is assigned or transmitted at the same time and to the same person as the registered trademark and it is so assigned or transmitted in respect of goods all of which are goods in relation to which the unregistered trademark is used in that business and in respect of which the registered trademark is assigned or transmitted.36 It is the registered proprietor of a trademark that has the power to assign a trademark and
to give effective receipts for any consideration in for its assignment .37 There is no provision the Act to regulate the consideration to be made for assignments and this would seem to be left to determination by the parties. It is submitted that such transactions should be subject to control by a designated administrative authority, probably the Registrar of Trademarks, to ensure that inordinate fees are not charged for assignment of trademarks. An assignee of a trademark or a person to whom it has devolved by transmission must apply to the register to have his title registered. Decisions of the Registrar with respect to registration are subject to appeal to the court.38 A certification trademark is assignable or transmissible only with the consent of the Minister. This is because a certification trademark ~ unlike an ordinary trademark - guarantees origin, quality and other characteristics and the requirement that its use should conform with the regulations demands effective control.39 As already indicated, certification trademarks are hardly if ever used in Nigeria and, therefore, it is not possible to assess their effectiveness or usefulness. With a growing private sector, trademark licensing is on the increase in Nigeria and a licensee may be registered under the Act as a registered user. The scope of the rights of a registered user are determined by the ‘permitted use’ and any use that goes beyond that constitutes an infringement of the rights of the proprietor. Certain particulars are required to be given by the proprietor or some person authorized by him where a joint application is made by him and the proposed registered user for registration as a registered user. The application must be made in writing and in a prescribed manner. The information which must be furnished by way of statutory declaration must include particulars of the relationship existing or proposed between the proprietor and the proposed registered user; the degree of control of the proprietor over the permitted use which their relationship will confer and whether it is a term of their relationship that the proposed registered user shall be the sole registered user or that there shall be any other restriction as to persons for whose registration as registered users application may be made.40 The particulars must also state the goods in respect of which registration is proposed, any conditions or restrictions proposed with respect to the characteristics of the goods, to the mode or place of permitted use or to any other matter; whether the permitted use is
TRADEMARKS IN NIGERIA to be for a period, and if for a period the duration thereof. Finally, the Registrar has power to demand that further documents, information or evidence as may be required under the regulations should be furnished.41 Registration is effected only when the above stated requirements have been met and the Registrar, after considering the information furnished to him, is satisfied that in all circumstances the use of the trademark, subject to any conditions and restrictions which the Registrar thinks proper, would not be contrary to public interest.42 The Registrar of trademarks has used his powers relating to registered users to disallow some of the malpractices connected with licensing agreements. Thus any attempt by a proprietor to impose restrictions on the registered user such as limitations on production, control of advertising and tied-in export, clauses are generally disallowed under the Act where they are considered to be against the public interest. The public interest clause is omnibus enough to allow for a wide measure of action by the Registrar. Some of the information supplied with respect to the application for the registration of a registered user might well be considered confidential and its disclosure injurious to the interests of the applicant. The Act accordingly makes provision for the Registrar, if the applicant so requires, to take steps for securing that information supplied by him (other than the matter entered in the register) is not disclosed to rivals in the trade.43 Lastly it may be pointed out that the Registrar will refuse an application for registration as a registered user if it appears to him that it would tend to facilitate trafficking in a trademark. (iv) Removal on the grounds of non-use Where a trademark is registered without any bona fide intention on the part of the appli. cant for registration that it should be used and there has in fact been no bona fide use of the trademark by the proprietor for the time being up to the date 1 month before the date of the application for removal or where up to the date 1 month before the date of the application a continuous period of 5 yr or longer elapsed during which the trademark was a registered trademark or during which there was no bona fide use thereof, the trademark may be taken off the register. Proof of bona fide use before the relevant date or during the relevant period, or non-use due to special circumstances in the trade and not to any
731
intention not to use or abandon the trademark will preclude the applicant from obtaining the removal of the trademark from the register.44 The rationale behind this provision is that where the owner of a trademark does not sell goods for which the trademark has been registered, such a trademark which is of no value to the owner or the public should not be allowed to prevent the registration of other marks to unnecessarily encumber the register. On a proper interpretation bona fide use would exclude token sales especially where the intention is to avoid the incidences of the provision. (v) Compulsory licensing There is no provision for compulsory licensing of trademarks under the Nigerian trademark legislation. Compulsory licensing is usually employed where it is intended to prevent the use of a trademark to acquire a monopoly position. This line of reasoning was adopted in the United States Federal Trade Commission vs Borden Incorporated. In that case the administrative law judge held that the heart of the monopoly power preserved and maintained by respondent Borden lies in the ReaLeamon trademark and its dominant market position. For competition to enter the processed lemon juice industry, the barrier to entry which inheres In the ReaLeamon trademark must be eliminated. As a consequence, in the judgement of the undersigned, the only effective relief under the fact shown by the record in this case requires the licensing of ReaLeamon brand name to others wishing to enter the production, marketing and sale of processed reconstituted lemon juice.4s It is clear that in an underdeveloped economy where the manufacturing and to a great extent the sales sectors are dominated by expatriate firms or their affiliates, compulsory licensing of trademarks could well facilitate the entry of nascent local businesses into these sectors and consequently act as a motor in the industrialization process. This is particularly true of Nigeria where some well-known marks monopolize the production and sale of certain consumer goods. The indigenization process which has excluded foreigners from most of the sales sector has not diminished reliance on well-known foreign-owned marks. Compulsory licensing should, however, be used selectively to encourage businesses that essentially serve local needs rather than those that would perpetuate consumption patterns determined and imported from the outside.
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WORLD DEVELOPMENT
In order to ensure that a reasonable quality standard is maintained, however, a quality control relationship should be established between the licenser and the licensee - a service to be performed on the payment of a reasonable fee by the latter. Nigerian quality control institutions should also be progressively developed in order to minimize reliance on foreign licensers. (vi) Special case of pharmaceuticals and food processing The pharmaceutical and Poisons Act of 196046 and Foods and Drugs Decree of 197447 are the main legislations which govern the production, distribution and sales of food products and drugs. The Nigerian Ministry of Health is the government department charged with vetting the advertisements of these products by the use of trademarks before they are diffused to the public. Such advertisements must be cleared with the relevant departments of the Ministry and failing to do so constitutes an offence under the relevant laws. The Ministry has had limited success in controlling the advertisements since many distributors do not bother to get the required clearance and in some cases where such clearance has been sought and refused the advertisements have none the less been carried by the various media who are primarily concerned with collecting the fees. The result is that in some cases advertisements are used to promote sales of products that may be harmful to health or considered immoral. This was the case with unauthorized advertisements of certain sex gadgets. Efforts are being made at the moment to involve the State Ministry of Health in combatting unauthorized advertisements and sales of products. The Ministry has powers to prosecute offenders under the relevant legislations but because of the delays in the litigation process there is a general reluctance to pursue infractions of the law before judicial tribunals. Some of the actions taken before the courts are known to have lasted for 5 yr or more. With respect to pharmaceuticals, while being aware of the possible advantage of using generic names that will not only streamline and standardize drugs being used in the country, but will also minimize costs and reduce foreign exchange outlay, no decision has been made in this regard .48 The main reason for this is said to be that there do not exist enough facilities for quality control on a continuous basis. Quality control is, however, carried on irregularly and there have been occasions where drugs using well-known marks having been tested and
approved have on later occasions been found to contain foreign particles dangerous to health. It is believed that the responsibility imposed on distributors or manufacturers to maintain a certain standard would be lost especially as a consequence of underdeveloped infrastructure for quality control. Shortage of qualified personnel is said to be one of the factors affecting the establishment of effective and efficient quality control divisions of the Ministry of Health. One would hasten to ask why little or no use is being made of the Nigerian Standards Organization, which is the main body charged with quality control of goods produced and sold. It may also be pointed that individuals who have suffered by relying on advertisements may bring an action in common law against those who have induced them to purchase or consume goods to their detriment. Finally it is clear that quality control by itself will not solve the problem of proliferation of trademarks in the pharmaceutical industry.49 Not only will a careful selection of critical drugs be necessary but in addition local production whenever possible is imperative. (c) International
regime on trademarks
As already indicated Nigeria is a Party to the Paris Convention for the Protection of Industrial Property of March 1883 as amended.” The Paris Convention recognizes the independence of national trademarks and does not pretend to create international trademarks. The Convention itself represents an effort to integrate the peripheries into the developed market economies and is characterized by a marked lack of concern for the interests of developing economies. In its nearly 100 yr of existence amendments of the convention have generally tended to strengthen the rights of investors from the developed countries.51 Two key principles are embodied in the Convention: that of national treatment and that of a priority period. The national provision of the Convention puts nationals of other countries of the Union at par both with respect to rights and remedies granted under their respective laws subject, however, to the fulfilment of conditions and formalities imposed upon the nationals of the country where protection is sought.‘* The national treatment standard is also extended to nationals of countries outside the Union, who are domiciled or have real and effective industrial or commercial establishments in the territory of one of the countries of the Union.53 This is an obvious attempt to extend the operational
TRADEMARKS
scope of the convention beyond the normal practice of making conventions apply to parties thereto and their nationals. A person who has duly filed an application for the registration of a trademark in one of the countries of the Union enjoys, for the purpose of filing in other countries, a right of priority. All that is required to secure priority right is a regular national filing and it is of no consequence what the faith of his application is. The period of priority under the Convention is 6 months.% The net effect of the priority right granted under the Convention is that any subsequent filing in any other countries of the Union before the expiration of 6 months from the time of the first application cannot be invalidated by reason of any acts accomplished in the interval, for example another filing or the use of a mark, and such acts cannot give rise to any third party right. A reservation is, however, made for rights acquired by third parties before the first application that serves as the basis of the right of priority.” By facilitating the multiple registration and opportunity is protection of trademarks, created for abuses, for example by registration without intention to use, which could delay the entry of young national enterprises in the production and sale of identical goods. A trademark that has been duly registered in the country of origin should be accepted for filing and protected in the other countries of the Union subject to certain specified exceptions in sub-section B or Article 6 quinquies. The relevant section provides that: Trademarks covered by this Article may be neither denied registration nor invalidated except in the following cases: 1. when they are of such nature as to infringe rights acquired by third parties in the country where protection is claimed; 2. when they are devoid of any distinctive character, or consist exclusively of signs or indications which may serve, in trade, to designate the kind, quality, quantity, intended purpose, value, place of origin, of the goods, or the time of production, or have become customary in the current language or in the bona fide and established practices of the trade of the country where protection is claimed; 3. when they are contrary to morality or public order and, in particular, of such a nature as to deceive the public. It is understood that a mark may not be considered contrary to public order for the sole reason that it does not conform to a provision of the legislation on marks, except if such provision itself relates to public order. This provision is subject, however, to the application of Article 1 O&. 56
IN NIGERIA
133
The article creates the anomalous situation whereby Parties to the Convention are required to register trademarks which could not be registered by their own nationals. Thus in addition to national treatment accorded to registered proprietors preferential treatment is also envisaged. Several attempts have been made to amend the principle of independence of trademarks by seeking to create ‘inte,rnational trademarks’, that would generalize protection in countries party to the Convention by a single registration. Nigeria has not adhered to any of these conventions. It is suggested that Nigeria should not become party to any of these conventions as they will only serve to integrate her economy more into the market economy, a factor that does not augur well for developing a selfreliant economy. Furthermore, Nigeria’s low level of industrialization and export of processed goods will not justify participation in such international arrangements. Finally, the influx of applications that will ensue as a result would impose additional costs for investigation that fees for registration will not cover and because registration of more foreign trademarks will be facilitated, freedom of trademarks available to Nigerian businessmen would be correspondingly less.57
3. ECONOMIC
AND PSYCHOLOGICAL FACTORS
While it has proved difficult to obtain data relating to ownerships of and remittances with respect to trademarks registered in Nigeria certain assertions may be reasonably made. Firstly, like in most developing countries, most of the trademarks are owned by foreigners. There is, however, a growing increase in the ownership of trademarks by Nigerians as a consequence of the government policy of strengthening the indigenous private sector. In spite of the increasing participation of Nigerians in shareholding of foreign enterprises, foreign trademarks are used for most processing or industrial enterprises. Emerging Nigerian businessmen are also entering into licensing agreements with foreign enterprises but as with most economies that embarked in the post-independence era on import-substitution, sales and consequently consumption are essentially geared to satisfy the ever growing consumption appetite of the elite. This could have certain adverse consequences. Demand patterns could be distorted and thus could inhibit the utilization of local
734
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resources to satisfy the basic needs of the majority of Nigerians. There will thus be little convergence between demand and resource use. By depending on essentially foreign goods imported or locally manufactured to satisfy a burden is often placed on consumption, foreign exchange which could be better utilized in developing a viable industrial infrastructure that will serve the needs of the rural masses and urban poor. The consumption pattern has in fact led to Nigeria being a dumping ground for all kinds of undesirable products. The illusion that Nigeria was a rich country is difficult to dissipate but the government, faced with serious financial problems, has introduced strict import restrictions on certain luxury goods. The role of advertisement in encouraging a perverse consumption pattern is pertinent in understanding the use of trademarks in Nigeria. The media generally do not vet advertisements which tend to be rather persuasive. While the cost of advertising may not be very high it is nevertheless passed on to the consumers and in the context where price control is on the whole ineffective, it adds to the inflationary tendencies. It is ironical in an economy where there is generally a shortage of goods considerable media time and space is devoted to advertising. With respect to remittances on licensing agreements, attempts are being made to ensure that they correspond to the overall national interest. Remittances are generally allowed for a period of Syr but there is an attempt to reduce the period to 3 yr subject to renewal. The actual remittances allowed generally depend on the state of the economy and may take the form of l-3% of gross profit. Fixed sums may be considered in the case of young companies in order to enable them to establish themselves, although curiously enough no distinction is made between affiliates of foreign companies and local enterprises. It would be strange to consider the former as young. It is the Federal Ministry of Finance that is the final authority on remittances although the opinion of the Registrar of trademarks is taken into account. The scenario already painted will lead to certain psychological and cultural consequences. Too much reliance on foreign foods is a direct consequence of domination of tastes by outside forces that by itself perpetuates dependence and distorts the cultural pattern in the country. The psychology of the consumers is predicted on preference for goods bearing foreign marks and lack of faith in local products. Even where
the same product, as in the case of certain soaps or cigarettes, is sold under the same mark, the imported ones are preferred. Appeals to nationalism or pride in national products has had little or no impact on this behavioural pattern. Where import restrictions are imposed smuggling is intensified and provides a more lucrative means of accumulation. Culturally the elites emerge as stereotypes of consumers in the more advanced countries and are ever eager to mimic their current consumption patterns. The combination of psychological and cultural perversion reinforces the dependency psychosis and inferiority complex that undermines any realistic move in the direction of self-reliance. The answer to the problem does not obviously lie in trademark legislation and policies alone since these reflect the basic political economy of the country. It is very doubtful whether an elitist government has the capacity and/or the will to carry out the policies and the politicization needed if this trend is to be reversed.
4. CONCLUSIONS The 1965 trademark legislation is certainly an improvement on the repealed colonial legislation but it still retains the basic principles of a market economy reinforced by the basic thrust of the Paris Convention that is essentially geared to protect private enterprises. Attempts to control the use of trademarks and the conditions under which they are to be licensed represent positive steps in the direction of ensuring that overall ‘national’ interests are served. Consideration should, however, be given to reducing the number of years after which a trademark that is not intended to be used should be removed from the register, to encouraging the use of certification trademarks, and to introducing provisions and mechanisms for compulsory licensing of trademarks. Provision should also be made, in appropriate cases, for joint use of foreign and local trademarks to minimize the risk of non-renewal after the goodwill has been developed locally and to ensure that increase in value of such trademarks does not accrue only to the foreign owner once arrangements for its use have been ended. The fees being charged under the present law both for registration and renewal of registration do not bear any relation to the economic value of the trademarks and may not even cover the cost of administration. The fees
TRADEMARKS IN NIGERIA should be progressively increased with renewals since it is simple logic that a proprietor would not renew if there are no valid financial expectations. Ultimately the objectives of trademark legislation will be determined by the political economy of the country. The mixed economy policy is likely for a very long time to lead to
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greater dependence on external forces and trademark laws represent one of the instruments for perpetuating that dependence. Greater government intervention in the economic sector as a whole as well as a correct political orientation is therefore imperative if trademarks are essentially to serve basic local needs.
NOTES 1. See Trademarks Act, No. 29 of 1965. Sections 3,9, 10, 11,13, etc.
7. Trademarks Federation Act, Cap. 199, 1958. 8. See Note 1. Supra.
2. See Osita C. Eze, ‘MNCs in Nigeria’, an unpublished paper. See also Federation of Nigeria National Development Plan, 1962-1968 (Lagos: Federal Ministry of Economic Development), pp. 3 and 8;Second National Development Plan 1979-1974 (Lagos: Federal Ministry of Information, 1970), Chapter 28; Third National Development Plan, 1975-1980, Vol. I (Lagos: The Central Planning Office, Federal Ministry of Economic Development, 1975), p. 33 and Chapter 30. 3. Lewis, Reflections on Nigeria’s Economic Growth (Paris: OECD, 1967), p. 35, where the author writing on the Development Plan in a mixed economy maintains that one of its purposes is ‘to help the government to pursue policies which encourage private individuals to make decisions which favour growth to invest more, plant more, use fertilizer, undergo training, change jobs, et?. See also Onimode and Osagie, ‘Economic interpretations of the Nigerian Draft Constitution’, an unpublished paper where the authors point out, commenting on the use of the term mixed economy in the Draft Constitution, that: The upshot of all these is simply that the mixed economy is an ideological confusion and an economic illusion for achieving egalitarian ideals. Its basic fallacy lies in its refusal or inability to perceive the implacable irreconcilability of dominant private enterprise and populist idealism. The persistent failure of planned development, the perpetuation of underdevelopment and mass poverty since the mixed economy was instituted under colonial planning in 1946 testify to the reality of the situation. 4. Nigeria: A Survey of US Business Opportunities, US Department of Commerce, (Washington: US Government Printing Office, May 1976), p. 1. 5. See Third National Development p. 16.
Plan, op. cit.,
6. Paris Convention for the Protection of Industrial Property of 20 March 1883, as revised at Brussels on 14 December at the Hague 2 June 1934, Stockholm on
1900, at Washington on 2 June 1911, on 6 November 1925, at London on at Lisbon on 31 October 1958 and at 4 July 1967 (Geneva: WIPO, 1970).
9. Cap. 199. S.63(1) and S. 63 A (1). 10. ibid., Reg. 6, and Second Schedule, items 23, 24 and 25. See also S. Suckow, Nigerian Law and Foreign Investment (Paris: Mouton and Co., 1966), p. 192. 11. Cap. 199. S. 28. 12. ibid., S. 34. Under this provision the duration of a registered trademark was 14 yr and could be renewed indefinitely for further 14 yr. 13. S. Suckow, op. cit., p. 193. 14. L.N. 60 of 1967. The Act came into force on the fist of June 1967. 15. Cap. 199. Sections 66 and 67. 16. See supra. 17. L.N. 70 of 1967. See also Trademarks Act, 1965, No. 29, Sections 42 and 45.
18. Actions may be brought for ‘passing off’ and remedies granted with respect to unregistered trademarks. See Trademarks Act 1965, S.3. 19. S 9(l) and (2). Such a trademark to be registrable under Part A of the register must contain one of the following: the name of a company, individual or firm, represented in a special or particular manner; the signature of the applicant for registration or some predecessor in his business; and invented word or invented words; a word or words having no direct reference to the character or quality of the goods, and not being according to the ordinary signification of a geographical name or surname. Any of the above stated particulars is registrable, however, upon evidence of its distinctiveness.
20. ibid., S. 10. 21. ibid., S. 43. 22. S. 31 of the Act deals with removal from the register on the grounds of non-use. See also infra.
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23. See UNCTAD Secretariat, The Role of Trademarks in Developing Countries, UN Publications Sales No. E. 79. II. D. 5, p. 6. 24. Trademarks Act, 1965, Sections 18-19. cf. S 17, makes provision for preliminary advice on distinctiveness. 25. ibid., Sections
19, 20 and 22.
26. ibid., S. 23. 27. Trademarks schedule I.
Regulations
1967,
28.
UNCTAD
29.
Trademarks Act 1965, S.14.
Secretariat,
L.N.
70 of 1967,
op. cit., pp. 10-l
1.
30. ibid., S. 5(l). 31. ibid., S. 5(2). 32. See UNCTAD
Secretariat,
op. cit., p. 6.
33. See H. 0. Blair, Understanding Patents, Trademarks and other Propn‘etary Assets and Their Role in Technology Transfer and Licensing: The Practical View, p. 7. 34.
47. Decree No. 35 of 1974, Republic of Nigeria, 1974. 48. See UNCTAD, ‘A case ceutical industry’, TD/B/C.6/4
Luws
of the Federal
study of the pharma(October 1975).
49. See UNCTAD, ‘Case studies in transfer of technology: pharmaceutical policies in Sri Lanka’, TD/B/ C.6/21 (27 June 1977); ‘Case studies in the transfer of technology: the pharmaceutical industry in India’, TD/B/C.6/20 (11 October 1977). 50.
TrademarksAct., 1965, S. 44.
51. UNCTAD, ‘International Patent System: The Revision of the Paris Convention for the Protection of Ildustrial Property’, TD/B/C.6/AC.3/2 (28 June 1977); Osita C. Eze, The Legal Status of Foreign Investments in the East African Common Market (Geneva: Institut Universitaire de Hautes Etudes Internationales/Leiden: A. W. Sijthoff, 1975), Chapter VIII. 52. Paris Convention, 53. ibid., Article
Article
2(l).
3.
54.
ibid., Article
4A and C.
55.
ibid., Article
4B.
Trademarks Act 1965, S. 26.
35. ibid., S. 26 (4) (a) and (b). 36. ibid., S. 26(3). 37. ibid., S. 29. 38. ibid., S. 30. 39. ibid., S. 43 (9). Subsection 7 of S. 7 requires that there should be deposited at the office of the Registrar, in respect of every registered certification trademark, rules approved by the Ministers for governing its use. 40.
ibid., Sections
41.
ibid., S. 34 (1) (a)-(d).
42.
ibid., S. 34 (2).
43.
ibid., S. 34 (4).
44.
ibid.. S. 31.
45.
Cited in UNCTAD
46.
Cap. 152, 1960.
33 and 34.
Secretariat,
op. cit., p. 40.
56. Article 10”’ deals with unfair competition and provides that: (1) The countries of the Union are bound to assure to nationals of such countries effective protection against unfair competition. (2) Any Act of competition contrary to honest practices in industrial or commercial matters constitutes an act of unfair competition. (3) The following in particular shall be prohibited: 1. all acts of such a nature as to create confusion by any means whatever with the establishment, the goods, or the industrial or commercial activities, of a competitor; 2. false allegations in the course of trade of such a nature as to discredit the establishment, the goods, or the industrial or commercial activities, of a competitor; 3. indications or allegations the use of which in the course of trade is liable to mislead the public as to the nature, the manufacturing process, the characteristics, the suitability for their purpose, or the quantity, of the goods. 57. The Madrid Agreement concerning the International Registration of Marks, revised at Brussels (1900), Washington (1911), the Hague (1925), London (1934); see also The Trademark Registration Treaty 1973. See also Peter O’Brien, The international trademark systems and developing countries’, IDEA, The Journal of Law and Technology, Vol. 19, No. 2, p. 104.