Trademarking Your Business Brand: Positioning For Foreign Direct Investments In Nigeria -By Bob-Emmanuel Enwereji, Esq.

Abstract

As a prospective or an already business owner in Nigeria, one of the most important steps to take in improving your business chances of obtaining external and foreign investment amongst other things such as incorporation of the business and ensuring compliance with tax laws and policies, it is also important to ensure that your intellectual property rights (IPRs) are well protected under the relevant laws. This article explores the significance of trademark registration in Nigeria for businesses seeking domestic and global recognition for possible foreign direct investments (FDIs). It highlights the key reasons why the trademarking of a brand is essential for attracting FDI and also outlines the benefits it offers to business owners. This article emphasizes the role of trademark protection in safeguarding intellectual property rights, enhancing brand value and reputation, mitigating legal disputes, and providing market exclusivity and competitive advantage. It underscores how trademark registration contributes to brand recognition, consumer trust, and differentiation in the marketplace, making businesses more attractive to potential investors. The article goes further to reveal the licensing and franchising opportunities that may arise from trademark protection, and it concludes by making recommendations that establish the effect of Trademarks among other Intellectual property rights on Foreign Direct Investments (FDIs).

INTRODUCTION

Trademarking a brand in Nigeria establishes a strong foundation for business trust and attraction of foreign investments, as it demonstrates a commitment to protecting intellectual property and building a reputable and marketable brand. Considering the largely liberal nature of the Nigerian foreign investment framework, domestic businesses cannot afford to be myopic in taking advantage of same, as it is a possible source for business expansion, scaling, and funding. This might also involve the possibility of an outright sale in which case, an estimated valuation of the goodwill and brand of the business as represented by its trademark becomes essential. Consequently, where a business does not have its logos and designs protected by law, it can negatively affect the market value of the business. And this in turn weighs on the decision of foreign investors in determining whether an enterprise or business will prove to be a viable investment or not.

The Nigerian government in encouraging FDIs has made liberal legal and economic framework favorable to potential foreign investors by providing assurances and incentives to encourage foreign investments.One of these efforts is seen in the enactment of the Nigerian Investment Promotion Act and the corresponding establishment of the Nigerian Investment Promotion Commission.

Some other key assurances and guarantees provided by the Nigerian government include;

• Investment Protection: The Nigerian government offers guarantees to protect foreign investments against expropriation, nationalization, and unfair treatment. This guarantee is well spelt out in Section 25 of the Act. The Nigerian Investment Promotion Commission (NIPC) Act intends to provide legal safeguards and ensures that investments are treated in a non-discriminatory manner.
• Repatriation of Profits: Foreign investors are guaranteed the unrestricted repatriation of profits, dividends, and capital gains derived from their investments. This ensures that investors can freely transfer funds out of the country without undue restrictions or currency controls (sec. 24 NIPC Act). This provision is even more so facilitated by the recent decision of the Central Bank of Nigeria (CBN) to float the NAIRA at the time this article is being written.
• Dispute Resolution Mechanisms: The Nigerian government has established mechanisms for the resolution of investment disputes. The country is a member of the International Centre for Settlement of Investment Disputes (ICSID) and has bilateral investment treaties (BITs) with several countries, providing avenues and smooth machinery for international arbitration and quick dispute settlement. (sec. 26 NIPC Act)
• Tax Incentives and Holidays: The Nigerian government provides tax incentives and holidays to attract foreign investment. These incentives may include tax exemptions or reduced tax rates for specific periods, particularly in strategic sectors such as agriculture, manufacturing, infrastructure, and technology. The commission is empowered to do this in Section 22 of the Nigeria Investment Promotion Act.

Streamlined Business Registration: The Nigerian government has made efforts to streamline the process of registering and incorporating businesses. The Corporate Affairs Commission (CAC) has implemented reforms to simplify company registration, reduce bureaucracy, and expedite the establishment of businesses, making it easier for foreign investors to set up operations in Nigeria.

It is pertinent to note that while the Nigerian government provides assurances and guarantees to encourage FDI, investors should conduct thorough due diligence, seek legal advice, and carefully assess the risks and opportunities associated with their specific investment ventures.

Brief Assessment of the Legal Framework for Foreign Direct Investments (FDI) in Nigeria

Foreign Direct Investment (FDI) in Nigeria is regulated by various statutes and regulatory frameworks. The primary legislation that governs FDI in Nigeria is the Nigerian Investment Promotion Commission (NIPC) Act. The NIPC Act establishes the Nigerian Investment Promotion Commission, which is responsible for promoting and coordinating investments in Nigeria. The NIPC Act outlines the rights and guarantees available to investors, investment facilitation procedures, and dispute resolution mechanisms.

Key provisions of the NIPC Act include;

• Investment Promotion: The NIPC Act aims to promote and facilitate investment in Nigeria by providing necessary information, guidance, and support to investors.
• Investment Protection: The Act guarantees protection for investments against expropriation and nationalization. It ensures that investors are entitled to the transfer of funds, repatriation of capital, dividends, and returns on investment.
• Investment Incentives: The Act outlines various incentives available to investors, such as tax holidays, import duty exemptions, and access to land for investment purposes.
• Investment Facilitation: The NIPC Act establishes the NIPC as the principal agency responsible for coordinating, monitoring, and providing necessary approvals for investments in Nigeria.

Apart from the NIPC Act, other legislation and regulations impact FDI in specific sectors. Some examples include:

Companies and Allied Matters Act (CAMA): CAMA governs the formation, registration, and regulation of companies in Nigeria. It provides provisions for the establishment of foreign-owned companies and the rights and obligations of shareholders and directors.

Industrial Policy and Sector-Specific Regulations: Specific sectors, such as agriculture, power, telecommunications, and banking, have their own regulatory frameworks that impact FDI and may apply accordingly.

A Brief Assessment of the Regulatory Framework of Trademarking in Nigeria

The regulatory framework for trademark registration in Nigeria is primarily governed by the Trade Marks Act (Cap. T13, LFN 2004) and administered by the Trademarks, Patents, and Designs Registry. Below are the key features of the regulatory framework for trademarking in Nigeria:

Trade Marks Act: The Trade Marks Act is the principal legislation that governs trademark registration in Nigeria. It provides the legal framework for the registration, protection, and enforcement of trademarks. The Act outlines the requirements, procedures, and rights associated with trademark registration.

Nigerian Trademarks, Patents, and Designs Registry: The Trademarks, Patents, and Designs Registry is the government body responsible for the administration and registration of trademarks in Nigeria. It operates under the supervision of the Federal Ministry of Industry, Trade and Investment. The registry receives trademark applications, conducts examinations, maintains the trademark register, and facilitates the registration process.

Nice Classification System: Nigeria follows the international classification system known as the Nice Classification for goods and services. The Nice Classification system categorizes goods and services into different classes to ensure clarity and consistency in trademark registration. This classification provides for 45 class of registration.

Procedure for registration of Trademark in Nigeria:

To trademark your brand in Nigeria, you can follow the steps outlined below:

1. Conduct a Trademark Search: Before applying for a trademark, conduct a comprehensive search to ensure that your proposed brand name or logo is not already registered or similar to existing trademarks in Nigeria. This search helps avoid conflicts and potential trademark infringement issues. You can perform a search through the Nigerian Trademarks Registry or seek assistance from a trademark attorney or agent.
2. Prepare the Trademark Application: Once you have confirmed the availability of your desired trademark, prepare the trademark application. The application should include the following information:

– Name, address, and nationality of the applicant

– Description of the trademark and its associated goods or services

– Class(es) of goods or services according to the International Classification of Goods and Services (Nigeria follows the Nice Classification system)

– A clear representation of the trademark (logo or wordmark)

3. File the Trademark Application: Submit the trademark application to the Trademarks, Patents, and Designs Registry in Nigeria. You can apply online or physically at the registry office in Abuja. Ensure that the application is complete and accompanied by the required fees.
4. Application Examination: The Nigerian Trademarks Registry will examine your application to determine if it meets the necessary requirements, including distinctiveness, non-descriptiveness, and compliance with the law. They will also verify that the trademark does not conflict with existing registered trademarks.
5. Publication in the Trademark Journal: If your application passes the examination, it will be published in the Trademark Journal, allowing third parties to oppose the registration if they believe it conflicts with their existing rights. The journal is published online and in print.
6. Opposition Period: After publication, there is a 60-day period during which interested parties can file an opposition to your trademark registration. If no opposition is filed within this period, your application will proceed to the next stage.
7. Registration and Issuance of Certificate: If there are no valid oppositions or objections, and the registrar is satisfied with the application, your trademark will be registered. You will receive a Certificate of Registration, which provides legal protection for your trademark in Nigeria.

Note that trademark registration in Nigeria is valid for an initial period of seven years and can be renewed indefinitely every 14 years thereafter, as long as the trademark remains in use and the renewal fees are paid on time.

Significance of Trademarking your brand to position properly for possible Foreign  Investments

Trademarking your brand is essential for attracting foreign direct investment (FDI) as a business owner in Nigeria. Here are some key reasons why trademark registration is important in the context of FDI:

1. Protection of Intellectual Property: By trademarking your brand, you establish legal protection for your intellectual property rights in Nigeria. This protection safeguards your brand identity, logo, name, or slogan from unauthorized use or infringement by others. Investors value businesses with protected intellectual property, as it reduces the risk of brand dilution, counterfeiting, or unfair competition.
2. Enhancing Brand Value and Reputation: A registered trademark adds value to your brand and enhances its reputation. Investors are attracted to businesses that have built strong brand recognition and loyalty among consumers. Trademark registration demonstrates your commitment to protecting your brand and signals professionalism, credibility, and trustworthiness.
3. Mitigating Risks and Legal Disputes: Registering your trademark reduces the risk of legal disputes and potential litigation. It provides you with exclusive rights to use the trademark in connection with your goods or services, allowing you to take legal action against any infringement. Investors are more likely to invest in businesses that have secured their intellectual property rights, minimizing the risk of costly legal battles.
4. Market Exclusivity and Competitive Advantage: Trademark registration grants you the exclusive right to use the trademark in Nigeria for the goods or services it represents. This exclusivity provides a competitive advantage by preventing others from using similar marks that could confuse consumers. It helps you differentiate your business in the market and gain a unique selling point, making it more attractive to investors seeking sustainable market positioning.
5. Brand Recognition and Consumer Trust: A registered trademark enhances brand recognition and consumer trust. Investors are attracted to businesses that have established a strong brand presence and consumer following. A well-protected trademark contributes to brand equity and makes your business stand out in a crowded marketplace, increasing its appeal to potential investors.
6. Licensing and Franchising Opportunities: Trademark registration opens doors to licensing and franchising opportunities. It allows you to grant licenses to third parties to use your trademark in exchange for royalties or enter into franchise agreements. These arrangements can be attractive to investors who are looking to expand their market presence and leverage your brand’s success.

Conclusion and Recommendations

In conclusion, trademark registration in Nigeria plays a vital role in attracting foreign direct investment (FDI) and fostering a favorable business environment as considered already in this article. By trademarking of  business brands, businesses can benefit from enhanced intellectual property protection, increased brand value, and reputation, reduced legal risks, and a competitive advantage in the market. Investors value businesses with secure and well-protected brands, as it reduces the risk of counterfeiting, brand dilution, and unfair competition. Trademarked brands also contribute to brand recognition, consumer trust, and differentiation, making businesses more attractive to potential investors seeking sustainable market positioning.

References

1. The official website of the Nigerian Trademarks, Patents, and Designs Registry. (Website: iponigeria.com)
2. The official Website of the Nigerian Investment Promotion Commission (NIPC): (Website: nipc.gov.ng)
3. Nigerian Investment Promotion Act (Cap. N117, LFN 2004)
4. Trade Marks Act (Cap. T13, LFN 2004)

Bob-Emmanuel Enwereji, Esq. is a Lawyer with interest in Corporate Law practice and commercial Litigation. He is an Associate at MCALI LEGAL CONSULT, Wuye, FCT Abuja. He can be contacted at: mcalilegal@gmail.com