Procedures and strategies for anti-counterfeiting: Nigeria
In spite of socio-economic challenges, Nigeria has continued to witness growth and expansion, diversification and a greater level of transparence. Contributing factors to this are Nigeria’s creative industries, which have grown somewhat informally, as well as a fast-emerging retail culture.
In spite of socio-economic challenges, Nigeria has continued to witness growth and expansion, diversification and a greater level of transparence. Contributing factors to this are Nigeria’s creative industries, which have grown somewhat informally, as well as a fast-emerging retail culture. Nigeria has a population of 170 million that largely comprises exposed and sophisticated people who – conversely – have low purchasing power. This oxymoronic reality makes the country a popular destination for counterfeit and pirated goods.
Nigeria has no specific anti-counterfeiting law – at least, not a broad one that covers all types of goods and all species of counterfeiting. Hence, the fight against counterfeits involves the creative application of the various laws that affect rights holders in one way or another. Therefore, combating counterfeiting may involve civil court action, criminal court action or a regulatory or administrative approach – and sometimes a combination of these.
The following legislation is involved in the fight against counterfeiting in Nigeria:
- the Copyright Act (CAP C2, 2004);
- the Counterfeit and Fake Drugs and Unwholesome Processed Foods (Miscellaneous Provisions) Act (CAP C34, 2004);
- the Customs and Excise Management Act (CAP 45, 2004);
- the Cybercrime (Prohibit, Prevention, Etc) Act 2015;
- the Merchandise Marks Act (CAP M10, 2004);
- the National Information Technology Development Agency Act 2007;
- the Nigerian Police Act (CAP P19, 2004);
- the Patent and Industrial Designs Act (CAP P2, 2004); and
- the Trademarks Act (CAP T13, 2004).
Further, the following legislation establishes the regulatory and administrative bodies that play a key anti-counterfeiting role:
- the Consumer Protection Council (CPC) Act (CAP C25);
- the Economic and Financial Crime Commission (EFCC) Act (CAP E7, LFN 2004);
- the National Agency for Food and Drugs Administration and Control (NAFDAC) Act (CAP N1, 2004); and
- the Standards Organisation of Nigeria (SON) Act (CAP S9, 2004).
Nigerian Customs has a mandate to ensure that all import and export duties are duly levied and collected for the federal government, and that contraband products are not brought into the country. These have always been the major focuses of Customs, which does not see combating counterfeiting as its main preoccupation.
However, an amendment to the Common External Tariff made several years ago placed “all counterfeit/pirated materials or articles including base or counterfeit coin of any country” on the Absolute Prohibition List. Therefore, Customs has the power to fight counterfeiting in Nigeria.
Nevertheless, Customs has yet to institute a formal and functional system for dealing with counterfeiting, although some efforts are now being made in that direction. For now, it plays a role upon an interested party seeking an injunctive order, which may be obtained in a civil action (eg, directing it to set aside a shipment), or through the intervention of other government agencies that demonstrate interest in a particular consignment.
Nigerian law provides two major routes for the criminal prosecution of counterfeiters.
False trade descriptions and related offences
The Merchandise Marks Act criminalises any act that involves:
- trademark forgery;
- false trade description;
- the manufacture, sale or possession of equipment used to forge trademarks; or
- the deceptive application and use of trademarks.
To enforce this law, a rights holder petitions the police pursuant to the general power of crime prevention and detection under Section 4 of the Police Act. Following the petition, the police may conduct independent investigations and thereafter organise raids to seize the offending products and arrest the perpetrators for the purpose of prosecution. However, prosecution may not be the main reason to avail of this option, since the police may not be very experienced or diligent in this regard. Nevertheless, the use of police raids as part of a multi-faceted approach has the following advantages:
- Repeated raids can cause disruption on the market. The associated stigma and inconvenience can help to deter offenders and would-be offenders;
- It is easy and quick to organise raids with the police;
- A raid can be used as a prelude to civil court action; and
- Effective prosecution may lead to imprisonment and fines.
Sale of counterfeit drugs and unwholesome processed foods
Section 1 of the Counterfeit and Fake Drugs and Unwholesome Processed Foods (Miscellaneous Provisions) Act provides that any party that produces, imports, manufactures, sells, distributes, possesses or displays for sale any counterfeit, adulterated, banned, fake, sub-standard or expired drug or unwholesome processed food in any form – or aids or abets another party to so do – commits an offence. The definition of ‘fake drug’ in this context includes where “anything accompanying the drug bears any statement, design or device which makes a false claim for the drug or which is false or misleading”.
Such matters are tried by the Federal High Court and the punishments on conviction include a fine of up to N500,000 and imprisonment for between five and 15 years.
The enforcement of this law is largely vested in NAFDAC.
Traditional IP legislation
A major strategy for combating counterfeiting in Nigeria is to resort to traditional IP legislation covering trademarks, patents, industrial designs or copyright, provided that the case involves violation of such rights. In a typical trademark infringement case, the following two civil causes of action are possible.
Trademark infringement action: This action is instituted pursuant to Section 5(2) of the Trademarks Act. To succeed, the plaintiff must establish that:
- it has a registered trademark, which is valid and listed on the Nigerian Trademarks Register;
- the mark being used on the offending product is identical or confusingly similar to its registered mark; and
- the offending products are the same as or similar to those for which the trademark is registered.
Passing off: Section 3 of the Trademarks Act preserves the right to seek redress against the violation of an unregistered trademark through passing off. This action seeks to protect a business or product from being misrepresented as another’s by use of a name, mark or get-up that is similar to an existing company or business name. To succeed, the plaintiff must show that a misrepresentation was made:
- by a trader in the course of trade;
- to prospective customers or ultimate consumers of the goods;
- which was calculated to injure the business or goodwill of another; and
- which caused or is likely to cause actual damage to the business or goodwill of the plaintiff.
Preliminary measures in the form of an interim injunction or Anton Piller search and seizure order can be obtained ex parte, without putting the adverse party on notice. This enables the bailiff and the plaintiff’s solicitors to enter the defendant’s premises to seize all offending products and incriminating documents that may be used as evidence during trial.
This action can be filed as a class action against all named and unnamed parties that are engaged in illicit trade in the offending products.
Available remedies include damages, accounting of profits, perpetual injunction and destruction.
Experience shows that those who engage in IP violations are usually involved in other ancillary offences and violations in furtherance of their illegal businesses. The intervention of various government and regulatory agencies and authorities thus becomes relevant in combating counterfeiting. Which regulators to petition will depend on the nature of the products, the industry involved and the facts and circumstances of each case.
CPC: The primary function of the CPC is to provide redress for unfair or deceptive practices against consumers. As part of its mandate, the CPC can enforce all laws that are meant to protect consumers and require products to be properly labelled to assist consumers in identifying different products. Consumer deception through false advertisement (eg, the use of forged trademarks) forms the basis of the CPC’s intervention in IP infringements.
Through its designated inspectors, the CPC has the power to enter premises and seize and destroy offending products without first procuring a court order. The power to prosecute offenders is vested in the attorney general of the federation on the request of the CPC. In addition, the CPC believes in consumer education as part of its mandate and encourages rights holders in this direction.
SON: The SON is responsible for registering and regulating standard marks and specifications for both local and imported products in Nigeria. To act, the SON requires the rights holder to:
- register its products;
- obtain appropriate SON Conformity Assessment Programme and Mandatory Conformity Assessment Programme certificates;
- pay due port inspection charges; and
- provide evidence of trademark ownership.
The SON has the power to enter premises and seize or destroy products that are found to be dangerous or sub-standard or that violate the SON Act. These powers are enforceable on obtaining an ex parte order from a magistrates court. However, the SON cannot prosecute an offender; accordingly, prosecution is carried out by the Office of the Attorney General of the Federation.
NAFDAC: All food products, drugs and medical devices in Nigeria must be registered with NAFDAC. Accordingly, it has the power to seize and destroy unregistered products, as well as counterfeit products. Unlike the agencies mentioned above, NAFDAC officers can institute criminal proceedings (however, this requires the consent of the Office of the Attorney General of the Federation).
EFCC: The EFCC is vested with the prosecution of offences relating to economic and financial crimes. Section 46 of the EFCC Act defines economic and financial crimes to include “theft of intellectual property and piracy”; on this basis, the EFCC also addresses counterfeiting. The EFCC is empowered under the act to bring legal action against offenders and may carry out criminal investigations, raids and prosecutions in respect of IP rights enforcement.
As part of its policy objectives, the explanatory note of the Cybercrime (Prohibit, Prevention, Etc) Act states that the protection of IP rights and private data is a key goal. The law was passed in 2015 and its effectiveness against counterfeiting is as yet unknown.
The Copyright Act is being reviewed and the new bill includes provisions relating to the activities of internet service providers and related matters, including takedown provisions.
Further, the Nigeria Internet Registration Association’s Dispute Resolution Policy (May 5 2008) established complaint and takedown mechanisms regarding abusive and bad-faith registrations. The remedies available when a party is found liable include cancellation of the domain name or transfer to a party with legitimate rights.
A major preventative measure is the registration of appropriate trademarks in Nigeria in order to provide a basis for challenging unauthorised use. Further, rights holders should carry out regular market surveys and Trademark Journal watches to ensure that any unauthorised use of trademarks or application for registration of a trademark is discovered as soon as possible, facilitating appropriate action.
Rights holders that deal in NAFDAC-regulated products should be especially careful when appointing distributors to assist them in obtaining their NAFDAC registrations. The power of attorney must be unequivocally revocable and affirm that the rights holder is the proprietor of the trademark.
Rights holders are generally encouraged not to appoint distributors in Nigeria without ensuring that trademark registrations or (at least) applications have been filed. Regular checks on distributors are encouraged.
While the use of technology and holograms has advantages, experience shows that counterfeiters are quick to replicate them. Thus, constant market checks and some form of enforcement action are crucial to deter and discourage trade in counterfeits.
Institutional engagement with market leaders in relevant major markets has also proved effective.
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