Brands in Africa: the dos and the don’ts

Africa is a vast continent and is often underestimated, both from a business but also from a brand protection perspective.

Africa’s land mass exceeds that of India, China, the United States and Europe combined. It is also the second most populous continent, with over 1.3 billion people – or about 16.5% of the world’s population. It has the world’s largest free trade area. Business opportunities abound!

For brand owners, it makes sense to identify the business opportunity first and secure deals before thinking of brand protection. However, in an African context, it is prudent to secure protection of trademarks sooner rather than later. There are a host of reasons why brand protection should be top of mind when it comes to Africa. There are definite dos and don’ts in navigating the 54 countries, of which 52 have working trademark systems.

Why Africa?

The continent has extensive natural resources, a young and increasingly educated workforce, more stability in terms of governance, and more prospects for economic growth than in the past. Africa is resource rich, with a third of the world’s mineral resources and 10% of the planet’s oil reserves, and contributes significantly to the gold and oil trades. Manufacturing services and tourism have been gaining traction. In Nigeria, the services sector now accounts for the bulk of its gross domestic product, with its Nollywood film industry surpassing that of Bollywood and is now second only to Hollywood. The continent has also been quick to adapt current technologies to supplement its weak infrastructure, using mobile technology to deliver novel financial platforms – such as M-Pesa – thus easing access to and stimulating trade.

A strategy for Africa

A brand is a commercial asset and allows businesses to compete more efficiently, and protects businesses against infringement and unfair competition. Trademark squatters and counterfeiters have also discovered vast opportunities and often file applications for marks that are identical to, or incorporate elements of, internationally well-known brands. There are still jurisdictions where common law rights (user rights) or well-known marks are not recognised: the so-called first-to-file jurisdictions. Given the ever-growing reach of social media, brand owners should act quickly, lest they be blocked from trading in these markets. Unfortunately, brand owners often have to defend their rights without being able to rely on prior trademark registrations for their famous marks. This is not ideal and far costlier than creating a considered portfolio of trademark rights before the squatters and counterfeiters move in.

What to do?

A strategy to protect and enforce any trademark portfolio will be informed by the commercial considerations of the business, followed by the legal merits of that strategy. An effective trademark strategy creates a clear picture of what rights need to be secured. This will put the business in a position to identify its objectives, and to measure successes and potential gaps. Protection and enforcement of trademark rights are interdependent and securing trademark registrations must form the foundation of any brand owner’s enforcement strategy in Africa.

For most brand owners, the question is always where to start. This decision cannot be made without thoroughly considering the unique (and often challenging) African legal landscape. The laws are not uniform and brand owners will need expert guidance.

It is not only costly but also impractical to attempt to obtain trademark protection from east to west and north to south without first establishing the brand owner’s business goals and identifying countries of interest, as well as strategically important jurisdictions. A trademark filing strategy will be informed by the business strategy for the next five to 10 years. The focus of the business strategy will often be only on the commercial priority of jurisdictions and this approach will not necessarily be successful in the African environment. The business focus should be influenced by the importance of securing and enforcing trademark rights in jurisdictions where trademark squatters and counterfeiters thrive. These considerations will have an impact on the overall priority of jurisdictions and even the ranking of trademarks.

A carefully tiered filing programme, which is typically rolled out over a period of five years in jurisdictions of importance (both from a business and trademark perspective) can offer effective protection. The strategy must always cover enforcement and anti-counterfeiting steps. Playing only a defensive game in Africa can cause substantial, unexpected costs and disappointment on the commercial side – a big don’t!

Definite dos

There are a few important questions to ask in respect of brand owners’ jurisdictions of interest.

  • Can a trademark be protected in these jurisdictions and, if so, for goods and services?
  • Is this a first-to-file jurisdiction or can the brand owner rely on user rights?
  • How long does it take to get a trademark registered (the time periods can vary from a few months to several years)?
  • What are the costs of obtaining and maintaining trademark registrations versus litigation costs to oppose or recover a mark, or both?
  • What are the benefits of using regional filing systems including that of the Organisation Africaine de la Propriété Intellectuelle (OAPI) or the African Regional Intellectual Property Organization (ARIPO)?
  • Has the country acceded to the Madrid Protocol and will using the Protocol compromise the rights of the brand owner (eg, where a country has not amended its domestic laws to give effect to international registrations)?
  • Is the recordal of a licensee compulsory?

The next step in devising the strategy is to focus on proactive and reactive enforcement, including anti-counterfeiting measures, policing rights and an effective watch service in Africa.

After finalising the trademark strategy, the budgeting process will be much easier as a long-term plan will be in place. The filing programme can be rolled out in accordance with the budget. Such a strategy should, in time, result in fewer but more effective enforcement measures as the brand owner would have anticipated problems in specific jurisdictions.

Let’s talk basics

There are two basic philosophical and legal approaches to trademark priority: first-to-file and first-to-use. Well-known marks should also be considered.

First-to-file jurisdictions

The first-to-file rule is followed in most African territories. These jurisdictions must be prioritised in a trademark strategy.

The OAPI regional system (a centralised system covering 17 countries), follows the first-to-file rule. Trademarks can be opposed or a claim to ownership can be filed. The latter involves proving that the brand owner can claim ownership through use in the region or the mark being well known.

In Zambia, it is not possible to rely on earlier user rights in opposing a later application, following the DH Brothers High Court case. In many countries, competitors or counterfeiters use and often register the get-ups, or similar get-ups, but without the well-known house mark of brand owners. When user rights are not recognised, this can create a problem. Well-known animated characters also often feature in unauthorised label and logo marks. Depending on the jurisdiction, user or well-known rights may not be sufficient. Copyright cannot always be relied on in trademark oppositions and copyright must be pursued up to the appeal stage in the High Court in jurisdictions such as Morocco.

As most African countries and jurisdictions follow the first-to-file approach, it is critical to obtain registration as early as possible. Failure to do so can leave the business vulnerable to trademark squatting or counterfeits, or a current or former distributor could secure registration. Former distributors often have the chutzpah to register a well-known brand, threaten the new distributor with infringement and even use genuine packaging to sell their own products. If a brand owner wants to enter the market, or sell through another distributor, it will either first have to oppose or cancel the registration. Creative litigation solutions are possible, but absent registered rights, enforcement will inevitably be more complex and costly.

First-to-use jurisdictions

In countries where user rights are recognised (the first-to-use system), priority is given to those who are the first to use a trademark and can demonstrate evidence of that use if another party has applied to register that mark. The brand owner, however, must prove its earlier use. Detailed evidence must be compiled and a trademark application must be filed in any event. If there is no earlier use, proving that the mark is well known may be the only solution. This increases enforcement costs. The importance of securing registrations, even in first-to-use or jurisdictions where well-known marks are recognised, cannot be overstated. Enforcement will be much easier and results are certain.

Countries where a brand owner can rely on user rights include Botswana, Eswatini, the Gambia, Ghana, Kenya, Lesotho, Malawi, Namibia, Nigeria, Sierra Leone, South Africa, Tanzania, Uganda, Zimbabwe and Zanzibar.

Well-known rights

Many African countries are signatories to the Paris Convention for the Protection of Industrial Property and well-known marks are recognised, although there are nuances when it comes to the extent of the recognition and proving such rights.

Typically, the brand owner must be able to establish that its trademark is well known in the country in issue. This will often require evidence of local use, promotion or, in some instances, spill-over advertising. Reliance on well-known rights alone can negatively impact the merits of taking enforcement action, particularly where there is insufficient evidence that the mark is well known locally.

Well-known rights are recognised, subject to nuances in each country, in Algeria, Botswana, Burundi, Cape Verde, the Democratic Republic of the Congo, Ethiopia, Djibouti, Egypt, the Gambia, Ghana, Kenya, Lesotho, Liberia, Libya, Malawi, Mauritius, Morocco, Mozambique, Nigeria, Rwanda, São Tomé and Príncipe, the Seychelles, South Africa, Sudan, Tanzania, Tunisia, Uganda, Zambia, Zanzibar and Zimbabwe, as well as the OAPI member states.

Practical examples

Trademark squatting is an ongoing brand enforcement challenge. Companies or individuals seek registration of well-known trademarks often to circumvent anti-counterfeiting efforts.

In Nigeria, a major economy in Africa, local companies (with links to the manufacturers of counterfeit products abroad) apply to register well-known trademarks, but only prosecute those applications to the point of acceptance. That notice is then relied on by counterfeiters to convince customs officials that they own a trademark “registration”. The true brand owner’s application can be blocked by the earlier identical one, creating an impasse. Relief must be sought from the High Court, which involves costly, drawn-out litigation.

In countries such as Algeria, where user and well-known rights are not clearly enforceable absent registered rights, infringers open clone stores imitating obviously well-known brands, which closely resemble the original stores and outlets that have not yet been used or promoted locally by the brand owners. In Morocco, trademark squatting has become rife. Surprisingly, squatters defend oppositions even up to the appeal level.

The scourge of counterfeits – what to do?

Brand owners around the globe have embarked on business expansion plans to exploit the potential of their trademark rights, increase their market share and create an additional revenue stream in Africa. This trend has also created a fertile ground for the counterfeit goods trade, which is thriving in Africa.

There are challenges such as poor legislative framework, an unharmonised legislative landscape, unmonitored or porous borders, weak enforcement, limited resources and a lack of political will in some cases; however, these challenges are not insurmountable. It is possible to effectively address the counterfeit goods trade by partnering with a legal team familiar with the landscape and navigate around those challenges.

The most critical step in implementing an effective and sustainable anti-counterfeiting strategy is to record trademark rights with customs agencies. Formal customs recordal systems are possible in some, but not in the majority, of African countries, but informal recordals are possible in others. These recordals are a critical tool, and must be kept up to date and renewed. Kenya has recently amended its laws and is on the verge of implementing mandatory recordal with the Anti-Counterfeit Authority.

Brand owners are encouraged to conduct regular customs and police training (at local and regional levels) to create brand awareness and to demonstrate their commitment to the fight against the counterfeit goods trade.

It is equally important to conduct in-market investigations and regular surveys to understand the extent of the counterfeit goods problem and the flow of such goods, and to establish the identity of the retailers, (bulk) distributors and, importantly, manufacturers. The outcome of these investigations will ensure that an effective anti-counterfeiting strategy can be adopted, and brand owners must strategically and aggressively pursue criminal and civil remedies, especially against bulk importers, distributors, manufacturers and product completion centres. This approach will not only send a strong message to the market, but ensure that the problem is nipped in the bud.

Another important factor is the collaboration between local, regional and international enforcement agencies in several jurisdictions. This will enable law enforcement to impactfully tackle the practical challenges of transhipment and round-tripping of consignments between neighbouring countries, and assist with capacity building. The proper flow of information, an extensive network of investigators and the support of the World Customs Organization and Interpol have placed law enforcement in a position to identify new trends in the importation and movement of counterfeit goods across Africa.

Information is key to enable brand owners to formulate a cost-effective and sustainable enforcement strategy. As each country’s intellectual property framework is different, a one size fits all approach is a don’t and will not achieve meaningful results.

The dos for an anti-counterfeiting strategy include:

  • border enforcement (formal and informal recordals);
  • regular participation in law enforcement training;
  • pursuing border detention cases against importers;
  • conducting in-market surveys and intelligence-gathering exercises to understand the extent of the problem;
  • pursuing in-market intelligence-driven search and seizure operations;
  • exploring control delivery exercises, particularly for cross-border consignments of counterfeit goods;
  • pursuing both civil and criminal proceedings, when warranted;
  • supporting the police and prosecutors to achieve successful criminal convictions;
  • exploring knock and talk exercises (where removal of counterfeit goods from the market is a priority) and voluntary surrenders, where appropriate; and
  • conducting online investigations and dispatching cease and desist letters or submitting take-down notices on online platforms, or a combination thereof.

Many African countries have efficient regulatory authorities that are willing to participate in the fight against the counterfeit goods trade. They can assist with the removal of counterfeit goods in situations such as where packaging is in contravention of the labelling regulations, goods have been proven to be sub-standard or medicines are unregistered.

One unexpected side effect of the covid-19 pandemic in Africa was the migration of the sale of counterfeit goods onto online platforms, which has created significant challenges for law enforcement agencies. A hybrid of online and offline or traditional investigations has proven pivotal to infiltrate organised crime syndicates, which employ sophisticated strategies to circulate counterfeit goods online through websites, trading and social media platforms.

Conclusion

For brand owners, the African continent presents a huge, growing and dynamic market. With a focused and well-developed trademark strategy that involves securing registration for all key brands in relevant first-to-file jurisdictions and proactively policing and enforcement of rights in jurisdictions that are strategically important, successfully navigating the African continent from east to west and north to south is possible!

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