Trademark Licensing and Assignment in Nigeria

Every time a Nigerian franchise partner opens a KFC or Shoprite outlet, they are operating under a trademark licence arrangement: they have been authorised by the overseas brand owner to use the registered mark in connection with their business in Nigeria, without ever owning the mark themselves. Every time a Nigerian manufacturer of branded goods is acquired by a competitor who continues to sell under the original brand name, a trademark assignment has occurred: ownership of the mark has been transferred from one legal entity to another. These are among the most commercially significant transactions in the Nigerian business landscape, and they operate under a framework that is, by the frank assessment of Nigerian IP scholars, structurally inadequate in several important respects.

This article explains how the Trade Marks Act provides for the transfer and licensing of registered marks, what the specific provisions require, where the framework has gaps that create legal risk for businesses and consumers alike, and what an additional layer of regulatory compliance, the NOTAP registration requirement, demands of international trademark licensing arrangements in Nigeria.

1. Assignment: Transferring Ownership of a Registered Mark

Section 26(1) of the Trade Marks Act Cap T13 LFN 2004 provides that, notwithstanding any rule of law or equity to the contrary, a registered trade mark shall be assignable and transmissible either in connection with the goodwill of a business or not, and either in respect of all the goods for which it is registered or in respect of some of those goods only.¹

The phrase “notwithstanding any rule of law or equity to the contrary” is deliberate and significant. At common law, a trademark could not be validly assigned separately from the goodwill of the business with which it was associated, because a trademark’s entire purpose was to indicate the source of goods and the quality standards associated with that source. If the mark changed hands without the business, consumers would be deceived: they would continue to purchase goods bearing the familiar mark expecting the quality they associated with the original owner, while actually receiving goods from an entirely different undertaking. By expressly permitting assignment “with or without goodwill,” section 26(1) overrides this common law rule and allows what is sometimes called a “bare assignment,” a transfer of the mark entirely divorced from the business or goodwill that gave it commercial meaning.

The potential for consumer deception that bare assignment creates is acknowledged frankly in the Nigerian academic literature. Nigerian IP scholars have argued that the TMA’s permission for assignment without goodwill has a high tendency of causing consumer confusion or deception, because a consumer who associated the mark with a particular quality or source continues to rely on the mark’s signal after assignment, while that signal now points to an entirely different undertaking with potentially different quality standards.² This is precisely the consumer protection gap that a modern trademark statute would be expected to address by imposing quality control obligations on assignees.

Section 26(2) confirms that assignment may be total, covering all the goods for which the mark is registered, or partial, covering only some of those goods. A partial assignment allows a brand that is registered in multiple classes to assign the mark for specific product lines while retaining ownership in others, allowing the original proprietor to continue using the mark for their core business while monetising classes in which they do not actively trade.

2. Formalities for Assignment: Section 30

Section 30 of the Act requires that an assignment of a registered trade mark be registered at the Trade Marks Registry.³ The assignee must apply for registration within six months of the assignment taking effect, or such longer period as the Registrar may allow.⁴ An unregistered assignment does not confer on the assignee the right to institute infringement proceedings until the assignment is registered.

Publication in the Trade Marks Journal follows registration of the assignment, giving notice to the public that ownership of the mark has changed.⁵ This publication requirement is the mechanism through which the consumer-facing information about who owns the mark is kept current.

The Registrar has power under section 27 to require that marks that are identical or nearly resembling, registered in the name of the same proprietor in respect of the same goods, be entered on the Register as associated trade marks.⁶ Associated marks must be assigned together under section 28: they cannot be separated and assigned to different assignees.⁷ This protection against fragmentation of a mark portfolio prevents the confusion that would result from closely similar marks being owned by different competing proprietors.

3. Licensing Under the TMA: The Registered User Framework

The Trade Marks Act does not use the word “licence” anywhere in its operative provisions. Instead, sections 33 and 34 create the mechanism of the “registered user,” which produces an equivalent legal effect to a trademark licence: the registered proprietor authorises a named person or company to use the registered mark in connection with specified goods, without transferring ownership of the mark itself.⁸

The registered user framework is the statutory route for trademark licensing in Nigeria. An arrangement under which a third party uses a registered Nigerian trademark without being entered on the Register as a registered user is a “bare licence” that lacks the statutory protection and consequences of the registered user arrangement, with risks discussed in section 5 below.

The application procedure under section 34(1) requires the proprietor and the proposed registered user to apply jointly to the Registrar in writing. The application must be accompanied by a statutory declaration made by the proprietor providing: particulars of the relationship between the proprietor and the proposed registered user; particulars showing the degree of control by the proprietor over the permitted use which their relationship contemplates; the goods for which the mark is to be used by the registered user; and any conditions or restrictions to which the use is subject.⁹

The degree of control requirement is the most analytically significant element of the registered user declaration. The Act requires that the degree of control be stated, but it does not specify what minimum degree of control is required.¹⁰ This is the most widely criticised gap in the TMA’s licensing framework. The quality control requirement in a trademark licensing arrangement serves a fundamental function: it ensures that the goods bearing the licensed mark meet the quality standards that consumers associate with that mark. A trademark licence without meaningful quality control is, from the consumer’s perspective, indistinguishable from a bare assignment: goods bearing the familiar mark may be of an entirely different quality from what consumers have come to expect, and the trademark’s source-identification and quality-signalling functions are undermined. The proposed Trademarks, Service Marks, Collective Marks and Trade Names Bill is expected to address this gap by specifying minimum quality control obligations for registered users.

Section 34(5) provides that nothing in section 33 shall confer on a registered user of a trade mark any assignable or transmissible right to the use thereof.¹¹ A registered user cannot sublicence the mark to a third party without the original proprietor’s consent and a fresh registered user application. In franchise structures, a master franchisee who receives a registered user licence for a territory cannot pass that licence down to sub-franchisees without ensuring each sub-franchisee is separately entered as a registered user, or without a different legal arrangement that addresses this limitation.

4. Use of the Mark by Registered Users: The Trade Connection Gap

Under sections 35 and 67 of the TMA, trade use of the mark by a registered proprietor is not mandatory in a registered user arrangement.¹² This means a proprietor can enter the mark on the Register and licence it to registered users for commercial use, without themselves maintaining any active trade in the goods for which the mark is registered.

This feature, taken together with the absence of a mandated minimum quality control requirement, creates what scholars have described as the risk of the “empty shell” trademark: a mark registered by an entity with no active trading business, no meaningful commercial involvement with the goods it nominally covers, and no genuine quality control relationship with the licensed users of the mark, but that can nonetheless generate licensing income and maintain its registered status indefinitely. The protection against this scenario is limited to the non-use removal mechanism in section 31(2), but since use by a registered user counts as use by the proprietor under section 36, the registered user’s commercial activity can prevent removal even when the proprietor has no genuine trading activity of its own.¹³

5. Bare Licences: The Unregistered Licensing Problem

A trademark owner who permits a third party to use their registered mark without going through the registered user registration procedure creates a “bare licence.” A bare licence is not invalid, but it lacks the protections that the registered user framework provides.

The most significant consequence is that the licensee under a bare licence cannot sue for trademark infringement in their own name. Only the registered proprietor and registered users have standing to bring infringement proceedings. In franchise structures where the franchisee is most directly affected by local infringement of the mark, the franchisee’s inability to sue independently without the franchisor’s cooperation can be commercially crippling. This practical pressure toward formalisation of the registered user arrangement is one that many Nigerian businesses overlook when entering informal brand-sharing arrangements.

A second risk is the quality control void. Without a formal registered user arrangement, there is no regulatory framework governing the quality of goods the licensee produces under the mark. If the licensee produces substandard goods and consumers associate those goods with the mark’s original owner, the reputational harm to the proprietor is a direct consequence of the inadequate quality governance that the bare licence created.

6. The NOTAP Requirement: A Mandatory Additional Layer

International trademark licensing arrangements in Nigeria are subject to a regulatory requirement that the TMA itself does not impose but that sits as a mandatory layer on top of the registered user framework. The National Office for Technology Acquisition and Promotion Act Cap N62 LFN 2004 requires that agreements for the licensing of technology, including agreements for the use of trademarks, trade names, and patents, between foreign technology owners and Nigerian parties must be registered with the National Office for Technology Acquisition and Promotion (NOTAP) before they can be valid and enforceable in Nigeria.¹⁴

NOTAP registration is mandatory for any franchise agreement, technology transfer agreement, or trademark licence agreement that involves a payment of royalties or fees from a Nigerian party to a foreign rights holder. Without NOTAP registration, a Nigerian licensee cannot legally remit royalty payments to a foreign franchisor or licensor, and the foreign rights holder cannot lawfully enforce the payment obligations under the licensing agreement in Nigeria.¹⁵

The practical consequence for international brands licensing their trademarks to Nigerian franchise partners is that two parallel registration processes must be completed: the TMA registered user registration at the Trademarks Registry, and the NOTAP registration at the National Office for Technology Acquisition and Promotion. Both must be in order before the licensing arrangement is fully compliant with Nigerian law and before royalty remittance is lawfully permitted.

NOTAP’s role extends beyond mere registration to substantive review of the terms of licensing arrangements. The Office can require modifications to agreements it considers to contain restrictive clauses, excessive royalty rates, or terms prejudicial to Nigeria’s technology development interests. This regulatory review function adds a layer of engagement that international brands licensing into Nigeria must anticipate and plan for.

7. Assignment of Unregistered Marks: Passing Off Implications

Section 26(3) of the Act applies the assignment provisions to unregistered marks used in relation to goods, subject to conditions. For unregistered marks protected through passing off, the assignment question is complicated by the relationship between the mark and the goodwill in which passing off protection inheres. Because passing off protects goodwill rather than a registered mark as property, the proper assignment of a passing off right requires the transfer of the underlying goodwill itself. A purported assignment of the right to use an unregistered mark without transferring the goodwill does not successfully transfer the passing off right and may leave the assignee unable to bring a passing off action in their own name.

In franchise arrangements involving an unregistered mark or a trading name that has not been registered in Nigeria, this creates a significant enforcement vulnerability. The Nigerian franchisee who builds local goodwill in the brand name has a personal passing off right in that local reputation, but cannot easily assign that right to a successor or sub-franchisee without also transferring the associated goodwill.

8. The Constitutional Dimension: Property Rights and Consumer Protection

Section 44 of the 1999 Constitution protects the trademark proprietor’s property interest in their mark, supporting their right to assign and licence it freely as commercial property.¹⁶ But the manner in which that property interest is exercised, specifically through bare assignments and inadequately controlled licences, can cause consumer harm that the law recognises but does not yet adequately prevent.

The doctrinal response in a modern trademark statute would be to impose quality control obligations on assignees and licensees as a condition of benefiting from trademark protection, ensuring that the exclusive right the proprietor holds continues to serve the source-identification function that justifies the monopoly. This is the reform direction anticipated by the proposed Trademarks, Service Marks, Collective Marks and Trade Names Bill that has been under discussion for several years. Students should understand the current law as imperfect, with identifiable gaps that a reform bill is intended to close.

Section 42 of the Constitution, which protects against discrimination, has a subtle relevance: smaller Nigerian businesses that lack the resources to navigate both the registered user registration process and the NOTAP registration process are, in practice, excluded from the formal protection framework and must rely on bare licences with all their attendant risks. This structural disadvantage does not violate section 42 in any direct legal sense, but it illustrates how regulatory complexity can produce differential outcomes based on access to professional and financial resources.

9. Problem Question Framework

When a problem question involves a trademark assignment or licence, work through the following sequence.

For assignments, confirm whether the transaction is registered under section 30. An unregistered assignment does not enable the assignee to sue for infringement. Check whether the mark is one of a group of associated marks under section 27, requiring that all marks in the group be assigned together under section 28. Flag the bare assignment risk where goodwill is not being transferred: section 26(1) permits it, but consumer deception may result.

For licensing arrangements, confirm whether the licensee is a registered user under section 33. If not, identify the bare licence risks: no standing to sue, no quality control framework. If a registered user arrangement is in place, note that the degree of control must be stated in the statutory declaration under section 34(1)(a), but that the Act does not specify the minimum acceptable degree, leaving a genuine gap in consumer protection.

For international licensing, identify the NOTAP compliance requirement. If the facts involve a Nigerian party receiving a licence from a foreign rights holder with royalty payment obligations, NOTAP registration is mandatory. The absence of NOTAP registration makes royalty remittance unlawful and may render the payment obligations unenforceable.

For passing off licensing, identify the goodwill transfer requirement. Purported assignment of an unregistered mark without transferring the underlying goodwill does not transfer the passing off right.

10. Common Student Mistakes

Treating the registered user and a licence as different concepts requiring different analysis. The registered user under sections 33 and 34 of the TMA is Nigeria’s statutory equivalent of a trademark licensee. They are the same commercial relationship operating under different terminology.

Assuming that a trademark can only be assigned with the goodwill of a business. Section 26(1) expressly overrides the common law rule. A registered mark can be assigned without goodwill in Nigeria, though the consumer protection risks of doing so must be flagged.

Failing to flag the NOTAP requirement for international trademark licences. This additional mandatory regulatory layer for international licensing arrangements is not addressed by the TMA alone and is consistently overlooked in examination answers.

Treating a bare licensee as having standing to sue. Only the registered proprietor and registered users have standing. An entity operating under an informal bare licence cannot sue for infringement independently.

Ignoring the quality control gap as a distinct analytical point. The Act requires the degree of control to be stated; it does not specify the minimum standard. These are two different points. Conflating them misrepresents the nature of the gap.

11. Quick Reference Table

12. Key Cases

The Procter and Gamble Ltd v. Global Soap and Detergent Industries Ltd is relevant to licensing in the context of non-use: even where a registered user arrangement is in place, if neither the proprietor nor any registered user is making bona fide use of the mark in trade, the mark remains vulnerable to removal under section 31(2). The registered user’s commercial activity counts as use by the proprietor under section 36, but use that is token or contrived for the purpose of maintaining the registration will not suffice.

Zeneca Limited and Ors v. Jagal Pharmaceutical Limited (2003-2007) 5 IPLR 409 confirmed that registration of a trade mark entitles the proprietor to sue for infringement and that a registered user through the licence arrangement is authorised to use the mark within the scope of their registration. The decision is relevant to the relationship between the registered user’s licensed use and the proprietor’s retained right to control and enforce the mark.

Aristoc Ltd v. Rysta Ltd (English authority, applied in Nigeria) addressed the connection in the course of trade requirement under the TMA and established that a mark can only be used as a trade mark in relation to goods with which the proprietor has a genuine trading connection. The case informs the analysis of what constitutes an adequate commercial relationship between the proprietor and the mark for the purposes of the registered user arrangement.

Footnotes

¹ Section 26(1), Trade Marks Act Cap T13 LFN 2004.

² I. Okonkwo, ‘Fundamentals of the Nigerian Trade Marks Act and Implications for Foreign Trade Mark Owners’ (ResearchGate, 2016); ResearchGate, ‘The Requirements of Goodwill and Quality Control in Trademark Commercialisation under the Nigerian Trademarks Act: A Call for Reforms’ (2016), arguing that the current position has a high tendency of causing consumer confusion or deception.

³ Section 30, Trade Marks Act Cap T13 LFN 2004.

⁴ ICLG, ‘Trade Marks Laws and Regulations Report 2026: Nigeria’, confirming the six-month registration requirement for assignments.

⁵ Section 26(4), Trade Marks Act Cap T13 LFN 2004.

⁶ Section 27, Trade Marks Act Cap T13 LFN 2004.

⁷ Section 28, Trade Marks Act Cap T13 LFN 2004.

⁸ Sections 33 and 34, Trade Marks Act Cap T13 LFN 2004; ResearchGate (n 2), noting that although the word “licensing” is not used throughout Cap T13, the registered user arrangement has the same effects as licensing.

⁹ Section 34(1)(a), Trade Marks Act Cap T13 LFN 2004.

¹⁰ ResearchGate (n 2), identifying the degree of control gap: the Act requires the degree to be stated but is in total silence on what degree of control is required.

¹¹ Section 34(5), Trade Marks Act Cap T13 LFN 2004.

¹² Sections 35 and 67, Trade Marks Act Cap T13 LFN 2004; ResearchGate (n 2), noting that trade use of the mark by a registered proprietor is not mandatory in a registered user arrangement.

¹³ Section 36, Trade Marks Act Cap T13 LFN 2004.

¹⁴ National Office for Technology Acquisition and Promotion Act Cap N62 LFN 2004, section 5.

¹⁵ ICLG (n 4), confirming that contracts between foreign technology providers and Nigerian companies including trademark licences must be registered with NOTAP to be valid and to permit lawful royalty remittance.

¹⁶ Section 44(1), Constitution of the Federal Republic of Nigeria 1999.