Addressing the Legal Challenges to Combating Counterfeiting of Goods in Nigeria: An Appraisal of the Legal Framework

By Oyetola Muyiwa Atoyebi, SAN FCIArb. (U.K)

INTRODUCTION

Counterfeiting is the illegal act of imitating an original with an intent to deceive another, usually for economic advantage. Counterfeiting of goods is, therefore, the production the a good which imitates an original with the intent to deceive a consumer as being from the same source as the original. While counterfeiting of goods is a global phenomenon, the Nigerian situation has witnessed a surprising surge, owing largely to the precarious economic condition of the nation. For instance, in 2020, about 70% of drugs circulated were deemed counterfeits. More recently, trends of fake products circulating in the Nigerian markets have been uncovered, with several fake brands imitating a genuine brand and this led to further discoveries and arrests across several parts of the country.

Counterfeiting of goods has ripple effects on the health and safety of Nigerian citizens as well as the economy of the nation. While counterfeit goods are almost always substandard as the aim is to gain economic advantage from the goodwill already built by another business brand, the government also loses legitimate revenue which concomitantly hinders the effective operation of the machinery of governance. Thus, effectively addressing the counterfeiting of goods in Nigeria isn’t just to protect the legitimate economic or intellectual property interest of a business or brand but also to protect the health of the masses as well as the economic integrity of the nation. 

This article will examine the existing legal framework for combatting the counterfeiting of goods in Nigeria as well as the attendant challenges to its effectiveness. 

THE LEGAL FRAMEWORK FOR COMBATTING COUNTERFEITING OF GOODS IN NIGERIA: ISSUES AND CHALLENGES

The extant legal framework addressing counterfeit goods in Nigeria is a rather extensive one which incorporates several laws tackling several counterfeiting issues in different sectors in the society. Some of these include:

1. The Trademarks Act

The Nigerian Trademarks Act is a legislation which governs the registration, protection, and enforcement of trademarks in Nigeria. Enacted to safeguard the rights of trademark owners and promote fair competition in the marketplace, the Act establishes the procedures and requirements for trademark registration, including eligibility criteria, application processes, and renewal procedures. It grants trademark owners exclusive rights to use their marks in connection with goods or services and provides legal remedies for infringement, such as injunctions, damages, and seizure of counterfeit goods. Additionally, the Act outlines provisions for the licensing, and assignment of trademarks, as well as the establishment of the Nigerian Trademarks Registry to administer trademark registrations and maintain the public register of trademarks in the country.

2. The Patent and Designs Act

The Patent and Designs Act regulates the registration, and protection, of patents and industrial designs in Nigeria. With the primary objective of stimulating innovation, encouraging technological advancement, and safeguarding the rights of inventors and designers, the Act provides procedures and requirements for the registration of patents and industrial designs, including the criteria for eligibility, application processes, and examination procedures. It grants patent and design owners exclusive rights to exploit their inventions or designs for a specified period and offers legal remedies for infringement, such as injunctions, damages, and seizure of infringing products. The Act further outlines provisions for the assignment, licensing, and exploitation of patents and designs, as well as the establishment of the Nigerian Patents and Designs Registry to administer registrations and maintain the public register of patents and designs in the country. It is noteworthy to state that the Act, much like the Trademarks Act is designed principally to protect inventors and the prohibition of counterfeit products is to ensure that inventors reap the benefits of their invention maximally.

3. The Merchandise Marks Act

The Act covers various areas such as the interpretation of trademarks and trade descriptions, offences related to false trademarks or descriptions, forging trademarks, applying marks or descriptions, etc. Additionally, it addresses the punishment of accessories, issuance and proceedings on search warrants, forfeiture of goods in the absence of defendants, disposal of forfeited goods, costs of defence or prosecution, limitation of time for prosecution, prohibition of importation of goods liable to forfeiture, implied warranty on the sale of marked goods, and false representation as to warrant. The Act also includes provisions regarding the application of false descriptions to certain goods and the implied warranty on the sale of goods with trademarks or descriptions.

Furthermore, the Act specifies that a person is not exempted from legal action that could be brought against them, nor does it entitle any person to refuse to make a complete discovery or to answer any question in any action or suit. It also outlines the consequences for falsely representing goods made by a person holding a warrant or other authority, or for the service of the President, ministry, department of the Federation, or any government department.

4. The Counterfeit and Fake Drugs and Unwholesome Processed Foods (Miscellaneous Provisions) Act

The Act prohibits the sale and distribution of counterfeit, adulterated, banned or fake, substandard or expired drug or unwholesome processed food; and of sale, etc., of drugs or poisons in certain premises or places, while specifying the conditions under which a product can be deemed unwholesome or injurious to health. Additionally, it establishes the Federal Task Force, describing its composition, and functions, while highlighting its role in enforcing the Act, coordinating the activities of State Task, and conducting unscheduled visits to ports of entry and border posts. Furthermore, it stipulates that individuals holding specific positions within a body corporate can be held accountable for offences committed by the corporation. Punishments prescribed under the Act for the different categories of offences ranging from the production, importation hawking or sale of prohibited substances under the Act range from fines not exceeding #500,000 to two to five years imprisonment as the case may be.

The Act aims to safeguard public health by regulating the preparation, packaging, and storage of products, as well as addressing the presence of harmful or toxic substances. It further underscores the collaborative efforts between federal and state levels in enforcing its provisions, ensuring a coordinated approach to monitoring and regulating the quality of products entering the country.

5. The Standards Organisation Act

The Standards Organization of Nigeria Act aims at promoting and enforcing standards for goods, products, and services in Nigeria. Enacted to enhance consumer protection, ensure product quality and safety, and facilitate trade, the Act empowers the Standards Organization of Nigeria (SON) to develop, establish, and enforce standards for industrial, commercial, and consumer products. It mandates SON to undertake conformity assessment activities, including testing, certification, and inspection, to verify compliance with applicable standards and specifications. In addition, the Act provides for the registration and accreditation of conformity assessment bodies, the imposition of penalties for non-compliance with standards, and the establishment of technical committees to advise on standardization matters, thereby contributing to the promotion of quality assurance, competitiveness, and sustainable development in Nigeria.

6. The Counterfeit Currency (Special Provisions) Act

The Act seeks to combat the production, distribution, and use of counterfeit currency within the country. The primary purpose of the Act was to safeguard the integrity of the national currency, protect the economy, and maintain public confidence in financial transactions. It imposes stringent penalties for offences related to counterfeit currency, counterfeiting possession, and uttering counterfeit notes or coins, providing for the investigation, prosecution, and punishment of individuals involved in counterfeiting activities, as well as the forfeiture of assets derived from such offences. The Act further empowers law enforcement agencies to collaborate with financial institutions, regulatory authorities, and international partners to detect, prevent, and prosecute counterfeit currency cases, thereby contributing to maintaining a secure and stable financial system in Nigeria.

7. The National Agency for Food and Drug Administration and Control (NAFDAC) Act

The National Agency for Food and Drug Administration and Control (NAFDAC) Act regulates and ensures the safety, quality, and efficacy of food, drugs, cosmetics, medical devices, and other related products in Nigeria. The Act protects public health, promotes consumer protection, and prevents the circulation of substandard and counterfeit products. It empowers NAFDAC to establish standards, guidelines, and regulations for the manufacture, importation, distribution, and sale of regulated products, granting it authority to license manufacturers, importers, and distributors of regulated products, conduct inspections and investigations, seize and destroy substandard or counterfeit products, and impose sanctions on violators. It also strengthens collaboration with relevant stakeholders and facilitates international cooperation to address cross-border product regulation and safety challenges.

Other legislations which affect the production, sale, importation or distribution of counterfeit products as well as the prohibition of related acts include the Nigeria Customs Service Act, the Federal Competition and Consumer Protection Act 2018, etc. 

While these laws made elaborate provisions to address issues in their areas of focus, it is not in doubt that the legal regime is still fraught with challenges. To begin with, the fragmentation of laws relating to counterfeit goods or products creates implementation challenges. Harmonising these fragments in enforcement turns out to be a herculean task, resulting in a weak enforcement system in the nation.

Moreover, the sanctions prescribed in some of these laws are no longer in tune with the realities of contemporary times, thereby defeating the purpose of the legislations. 

In addition, owing to the bureaucratic nature of the nation’s regulatory framework, achieving actual synergy among stakeholders remains a challenge and this is evident from the current state of the regulators.

Perhaps a recognition of the challenges faced by the present system spurred the sponsoring of the Counterfeit Goods Bill, 2016, a specific legislation on the counterfeiting of goods which did not see the light of day, unfortunately. The Bill, in substance introduced measures to combat the trade in counterfeit goods and enhance the protection of intellectual property rights in Nigeria. It sought to prevent the unlawful application of intellectual property rights to goods, the release of counterfeit goods into commerce, and the possession of counterfeit goods under certain circumstances. It further outlined the application process for the protection of goods, the powers of the customs authorities to seize and detain counterfeit goods, the designation of inspectors, and the establishment of counterfeit goods depots. Moreover, it sought to grant the Minister for Trade and Investment, the authority to make regulations for the effective control, management, and administration of counterfeit goods depots, as well as for other administrative and procedural matters related to the implementation of the Act.

However, the Bill failed to take cognizance of the peculiar challenges of our contemporary era and the attendant effects of the adoption of technology and globalization. The advent of technology has made new ways for the commission of offences and technology can also be adopted in the prevention and detection of crimes. It is believed that the said Bill needs to be revisited to provide a harmonized position on counterfeiting of goods in Nigeria and provide a stronger enforcement mechanism which deploys the relevant technological tools of contemporary society. The effects of counterfeiting of goods on the life and economy of the nation, ideals which the government has a mandate to protect, are endless. Thus, proactive steps need to be taken now, more than ever before.

CONCLUSION

In light of the foregoing, it is recommended that the legislature pay keen attention to the subject of counterfeiting of goods in Nigeria by providing a harmonized regulatory framework on same taking cognizance of the peculiar role of technology in our contemporary society. Moreover, the said framework should provide a strong institutional mechanism for the enforcement of the law otherwise the aim of the law would be defeated.

Finally, there is need for increased consumer education in order to increase awareness on the subject and reduce the chances of the proliferation of markets with counterfeit goods. 

SNIPPET:

While counterfeiting of goods is a global phenomenon, the Nigerian situation has witnessed a surprising surge, owing largely to the precarious economic condition of the nation. For instance, in 2020, about 70% of drugs circulated were deemed counterfeits.

KEYWORDS

Trademarks act, merchandise marks act, counterfeit goods bill, counterfeiting of goods, patents and designs act.

AUTHOR: Oyetola Muyiwa Atoyebi, SAN FCIArb. (U.K)

Mr. Oyetola Muyiwa Atoyebi, SAN, is the Managing Partner of O. M. Atoyebi, S.A.N & Partners (OMAPLEX Law Firm).

Mr. Atoyebi has expertise in and vast knowledge of Commercial Law and Practice, and this has seen him advise and represent his vast clientele in a myriad of high-level transactions.  He holds the honour of being the youngest lawyer in Nigeria’s history to be conferred with the rank of Senior Advocate of Nigeria.

He can be reached at atoyebi@omaplex.com.ng   

CONTRIBUTOR: PWAVENO DITTO

Pwaveno is the team lead of the Dispute Resolution Department at OMAPLEX Law Firm. She also holds commendable legal expertise in Commercial Law and Practice.

She can be reached at pwaveno.ditto@omaplex.com.ng