Tuesday, 24 April 2012

NAFDAC, trade marks and trade reps in Nigeria: some guidance

Under current regulations of the National Agency for Food and Drug Administration and Control (NAFDAC), product owners who want to export into Nigeria without being physically present can do so through a representative. Typically, the representative will be a local individual or organisation already trading in regulated food or drug products locally, as NAFDAC requires representatives to possess the facilities to effect a recall of products when necessary. NAFDAC will require additional documents to be presented by the representative prior to registration, including a Power of Attorney from the manufacturer and a certificate of trade mark registration from the Nigerian Trade Marks Registry. The seemingly innocuous trademark registration requirement has proven to be a thorny issue for many manufacturers who eventually decide to establish a greater physical presence in Nigeria.

A straightforward trade mark application will usually take between 12 and 24 months to complete in Nigeria. NAFDAC accommodates this difficulty by accepting the Notice of Acceptance issued by the Trade Marks Registry, usually issued (upon acceptance of an application) 3 to 5 weeks after the trade mark application is filed. There are usually no later complications if the manufacturer has already filed a trade mark application or already holds a registration for its trade mark in Nigeria.

It occurs frequently, however, that the representative undertakes the trade mark application, many times in its own name rather than the manufacturer’s. This is of little import to many manufacturers at the beginning of the manufacturer-representative relationship, as they may indeed have initially been approached by the representative or are tentatively testing the Nigerian market.

However, many such new products are received very well by the market, convincing manufacturers that it would be even more profitable to establish a local plant or a subsidiary to handle local distribution on a larger scale. Many representatives, feeling that they were instrumental to growing the product in the Nigerian market, feel aggrieved at being “jettisoned” by manufacturers and hold on to the business for as long as they can. One of the tactics they employ is to refuse to assign the trademark to the manufacturer, technically making any product subsequently imported by the manufacturer a counterfeit or a parallel import. It is clear therefore that it is essential to plan for the success of a product in the market at the very beginning of the manufacturer-representative relationship. The following solutions should be considered:
1. The term (length) of the distribution agreement between the parties should be as short as is commercially expedient. It is best for the manufacturer not to enter into an agreement that is too lengthy, to ensure that effective control is retained and a decision to personally operate in the market can be executed without excessive delays.  
2. While it is understandable that a manufacturer may not want to incur fees associated with trade mark registration in an unproven market, it is best that the manufacturer registers its trade mark in any country in which it intends to distribute its goods. Otherwise, the distribution agreement with the representative should compel the representative to register the trade mark in the manufacturer’s name or compel the representative to assign the trade mark to the manufacturer upon demand.

Source: "Trademark Issues in Food and Drug Registration and Distribution in Nigeria", Trenchard Partners Newsletter, 23 April 2012

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