intellectual-property – The Legal Trove

From Startup to Market Leader: The Role of Trademarks in Nigerian Business Success.

April 20, 2026April 20, 2026 aeolawpractice

Introduction

Nigeria’s commercial capital, Lagos where entrepreneurial activity is both vibrant and intensely competitive, brand identity functions as a critical business asset. It extends beyond a mere logo, wordmark, or slogan; it represents the intangible yet decisive factor that differentiates goods and services within saturated markets.

In this environment, brand identity is taken as optional, instead of a commercial necessity. When deliberately developed and strategically deployed, it fosters consumer loyalty, commands premium value, and safeguards the long-term viability of an enterprise, whether corporate or personal.

In the absence of adequate protection, however, a brand remains vulnerable to counterfeiting, imitation, and, in more severe cases, misappropriation by third parties. Practical experience, supported by legal precedent and commercial realities, demonstrates that effective leadership requires a proactive approach to trademark protection. A brand is not merely symbolic because of its marketing role; it is a legally cognizable asset warranting deliberate protection. Properly secured, trademarks provide a foundation for market differentiation and sustained competitive advantage.

The Leadership Decision: Prioritising Identity

Consider the case of an emerging founder in Abuja who launches a fintech application designed to facilitate rapid cross-border transactions. While significant resources are invested in product development and market entry, insufficient attention is given to securing proprietary rights in the brand name. The chosen name, though distinctive and commercially appealing, remains unregistered.

Subsequently, a more established competitor introduces a similar service under a confusingly similar name. Market uncertainty ensues: consumers are unable to clearly distinguish between the offerings, and investor confidence is undermined by perceived lapses in strategic foresight. Leadership extends beyond vision and operational competence; it encompasses the deliberate protection of those intangible assets that define and distinguish an enterprise. Within Nigeria’s rapidly expanding sectors—fintech, pharmaceuticals, beauty, cosmetology, and fast-moving consumer goods—the decision to secure trademark protection represents a critical inflection point. It communicates to stakeholders, including employees, investors, partners, and consumers, that the enterprise is structured for longevity rather than experimentation.

Nigerian jurisprudence provides clear guidance on this issue. In Piaggio & C.S.P.A. v Autobahn Techniques Ltd (Suit No: FHC/L/CS/1307/12) [2017] (Federal High Court, Lagos, per Tsoho J delivered 30 November 2017) (unreported)., the Federal High Court affirmed that proprietorship and goodwill in the PIAGGIO and APE trademarks remained vested in the Italian licensor, notwithstanding prolonged use by a local distributor. The defendant’s use was characterised as permissive rather than proprietary. The decision underscores a key commercial reality: absent proper registration and licensing frameworks, businesses expose themselves to opportunistic claims capable of undermining brand control.

Similarly, in Golden Guinea Breweries Plc v International Breweries Plc (FHC/PH/CS/647/2016, 6 March 2016, Pam J.) (unreported), the court upheld the claimant’s long-standing registration of the EAGLE STOUT trademark (No 21153, Class 32) and rejected assertions of registered user rights by the defendants. The award of substantial damages reinforces the evidentiary and remedial advantages conferred by registration. These authorities are not merely doctrinal; they provide practical instruction. Registration at the Trademarks Registry under the Federal Ministry of Industry, Trade and Investment converts a vulnerable business identifier into a legally enforceable right, thereby preserving goodwill and minimising litigation risk.

Beyond protection, trademarks function as strategic commercial assets. Under the Trade Marks Act, Cap T13 Laws of the Federation of Nigeria 2004, trademarks may be licensed, assigned, or utilised as collateral, particularly when read alongside the Secured Transactions in Movable Assets Act 2017. In SmithKline Beecham Plc v Farmex Ltd (2010) 1 NWLR (Pt 1176) 1 (CA), the Court of Appeal recognised the validity of trademark assignment, affirming the claimant’s proprietary rights in “Milk of Magnesia.” Although the claim ultimately failed on grounds of genericide, the case illustrates the legal recognition of trademarks as transferable commercial interests. Effective leadership therefore treats trademarks not as static identifiers but as dynamic financial instruments.

Conversely, neglecting trademark protection generates latent costs. These include erosion of consumer trust, diversion of managerial resources, and diminished valuation during investment or exit transactions. In contrast, early registration signals institutional foresight and enhances credibility in capital markets.

Brand as a Business Asset: Lessons from Controversy and Global Cautionary Tales.

Your brand is not ephemeral marketing fluff; it is a measurable, monetizable asset that can appreciate like prime real estate or outperform physical inventory. In Nigeria’s evolving economy, where intellectual property increasingly drives valuation, protecting this asset separates thriving enterprises from those that stumble.

Recent developments further illustrate these dynamics. The dispute between Paystack and Zap Africa (2025) highlights the commercial sensitivity of brand identity within Nigeria’s fintech ecosystem.

Zap Africa, a cryptocurrency exchange operating since around 2022 under the name “Zap,” had filed trademark applications in relevant classes (including Class 35 for business services and later Class 36 for financial services). When Paystack, the prominent fintech powerhouse (acquired by Stripe), launched its consumer-facing payment app “Zap by Paystack” in March 2025, Zap Africa publicly accused it of infringement, citing likely consumer confusion and dilution of its brand. Cease-and-desist letters flew. Public statements emphasized “There is only one Zap in Nigeria and Africa.” The spat spilled into regulatory scrutiny, with questions around Central Bank of Nigeria approvals and class-specific registrations (Paystack had filings in Classes 36 and 42, among others).

This controversy underscores the asset value of trademarks. For Zap Africa, the name represented years of building goodwill in crypto-to-Naira exchanges. For Paystack, the launch sought to expand into B2C payments but triggered a high-profile distraction, legal costs, and reputational noise. Analysts noted the dispute tested Nigeria’s first-to-file system and class-specific protection under the Trade Marks Act. Even partial overlaps in financial/tech services raised confusion risks. The episode highlighted how an unprotected or weakly defended name can suddenly become a liability rather than an asset, forcing reallocations of executive attention and resources.

Zap Africa’s defense illustrates the upside: a registered (or diligently pursued) trademark can shield market positioning and deter larger players. Yet the saga also exposed vulnerabilities when filings are not perfectly aligned across classes or when generic elements (“Zap” evoking speed or energy) invite challenges. Legal pundits debated whether “Zap” risked genericide, becoming so common it loses distinctiveness, echoing broader risks for descriptive or evocative marks.

Globally, unregistered trademarks amplify these dangers, turning potential assets into precarious ones. A classic cautionary tale is the Apple iPad dispute in China known as Apple Inc. v. Proview Technology (Shenzhen) Co., Ltd. (Shenzhen Intermediate People’s Court, 2011).

Apple delayed securing the “iPad” trademark there; a local firm, Proview Technology, had registered it earlier. When Apple launched the product, it faced injunctions and a costly $60 million settlement to reclaim rights. The episode delayed market entry, damaged momentum, and underscored that even iconic brands suffer when they underestimate territorial registration. Unregistered goodwill offered little shield against a first-to-file jurisdiction.

Another stark example involves genericide risks, as seen with brands like “Aspirin” or “Escalator,” See, e.g., Bayer Co. v. United Drug Co., 272 F. 505 (S.D.N.Y. 1921) (Aspirin); Haughton Elevator Co. v. Seeberger, 85 USPQ 80 (1950) (Escalator); once trademarks but now public domain terms due to unchecked generic use. In the US and EU, companies have lost rights through non-use or abandonment (e.g., McDonald’s temporarily losing “Big Mac” in certain EU categories for insufficient genuine use evidence). Closer to home in common-law influences, passing-off actions for unregistered marks demand rigorous proof of goodwill, misrepresentation, and damage, a heavy evidentiary burden compared to statutory infringement claims for registered marks.

In Nigeria, unregistered marks rely on the tort of passing off (Section 3 of the Trade Marks Act), requiring proof of reputation and deception. Cases like IT (Nig.) Ltd. v. BAT (Nig.) Ltd. (2009) 6 NWLR (Pt. 1138) 477 (CA), emphasize that without registration, enforcement is uphill. Businesses face risks: squatting (where opportunists register your mark first), inability to license or franchise cleanly, reduced attractiveness to investors, and barriers to international expansion. Therefore, unregistered marks expose owners to lost revenue, partnership hurdles, and customer confusion, which directly erodes the asset’s value.

Conversely, a properly registered trademark becomes balance-sheet worthy. It supports licensing (as in Piaggio’s distributor arrangements), franchising (KFC or Domino’s models in Nigeria through registered user agreements, often NOTAP-registered for tech transfer), assignment (SmithKline Beecham’s acquisition of Milk of Magnesia rights), and collateralization under Section 65(2) of the Trade Marks Act, which treats equities in trademarks like other personal property. Nigerian startups leveraging IP-backed financing under the Startup Act recognize this: a strong trademark portfolio signals credibility to lenders and venture capitalists.

The Zap-Paystack drama and global parallels like Apple in China teach entrepreneurs that brand assets demand vigilance. Registration provides prima facie evidence of ownership, nationwide exclusivity in specified classes, and easier enforcement, including injunctions, damages, and account of profits. Without it, even substantial goodwill can prove fragile when bigger players enter the fray.

Trademarks as a Tool for Market Dominance: Storytelling from the Trenches

Picture a Nigerian brewer in the 1970s registering “EAGLE STOUT.” Decades later, that mark anchors market share, enables licensing deals, and withstands challenges in court. Or envision Chicken Republic, a homegrown brand that franchises its registered trademarks and business format across Nigeria and beyond, creating a network of outlets that dominate quick-service dining through consistent identity and quality signals.

Trademarks are weapons of market dominance. They create mental shortcuts for consumers: trust, quality, origin. In a crowded marketplace, a protected mark differentiates, commands premium pricing, and builds barriers to entry. Registered owners enjoy exclusive rights to prevent confusingly similar uses in relevant classes (Section 5 of the Trade Marks Act). This exclusivity translates into customer loyalty and repeat business , the engine of sustainable dominance.

Imagine a small fashion label in Aba registers its distinctive logo and name. As demand grows, counterfeiters emerge, but the registration allows Customs seizures and court injunctions. Revenue stays protected; reputation intact. The brand expands into exports, licenses designs, and attracts acquisition interest — all because the identity was fortified early.

Internationally, brands like Louis Vuitton have aggressively defended against dilutions (e.g., the South Korean “Louis Vuiton Dak” fried chicken case, where close imitation led to fines and rebranding orders). The lesson: even in unrelated fields, similarity can confuse or tarnish if the mark is well-known. Nigerian courts similarly protect well-known marks, though statutory enhancements for unregistered famous marks could further strengthen dominance.

In franchising, trademarks enable scaled dominance without proportional capital outlay. Domino’s Pizza entered Nigeria via master franchisees using licensed registered marks. Local players like Mr. Bigg’s and Chicken Republic have built networks by licensing their identities to operators, maintaining quality control while expanding footprint. These arrangements require registered trademarks for enforceability. underscoring how protection fuels growth.

For individual leaders, personal brands like renowned professionals, business moguls, or influencers — trademarks (or service marks) protect reputation. Registering a professional name or tagline prevents impersonation and builds authority that translates into speaking fees, book deals, or advisory roles.

Market dominance also arises from strategic portfolios. Businesses file in multiple classes to cover current and future offerings, anticipating expansion. They monitor the Registry for conflicting applications and oppose where necessary. They use marks consistently to avoid genericide (as mentioned in the Zap context). Over time, the trademark evolves from a legal tool into cultural capital — evoking emotions, stories, and community.

Yet dominance requires ongoing leadership: renewals every 14 years (an initial 7 years under Nigerian law, which is renewable), quality control in licensing to preserve distinctiveness, and enforcement against infringers. Inaction invites challenges, as seen when generic use weakens protection.

A Call to Action: Protect Today, Dominate Tomorrow

As Nigeria’s economy digitalizes and integrates globally, entrepreneurs who lead with brand power will thrive. The Zap Africa-Paystack controversy is not an isolated drama, it is a national teachable moment about the perils of delayed or incomplete protection. Global stories, from Apple’s China battle, reinforce the universal stakes.

Every founder must ask: Is my identity an asset or an accident waiting to happen? Register early. Conduct searches. File in all relevant classes. Document use. Enforce diligently. Consider licensing, franchising, and financing strategies that leverage the mark.

In otherwords, protected trademark is more than legal paperwork — it is the foundation of legacy. It empowers leaders to build organizations that outlast trends, firms that command respect, and personal identities that inspire.

The sun rises again on Lagos streets. The hustlers return, but the wise ones now carry something extra: registered certainty. They lead not just with ideas, but with fortified identities. They transform brands into assets that generate wealth, deter rivals, and dominate markets. For every entrepreneur reading this, the question is no longer “Why protect?” but “Why wait?”

Written by Adeola Osifeko LLB,BL,LLM,ACIS,ABR. She can be contacted on 08091336859 and/or send an email to adeola@aeolawpractice.com

Revolutionizing Brand Protection: Key Innovations in Nigeria’s Trademarks (Repeal and Enactment) Bill, 2025.

January 28, 2026January 28, 2026 aeolawpractice

Introduction

In a significant step toward modernising its intellectual property (IP) regime, Nigeria’s Senate initiated the legislative process for the Trademarks (Repeal and Enactment) Bill, 2025, with its first reading on 11 November 2025. Sponsored by Senator Asuquo Ekpenyong of Cross River South, the Bill seeks to repeal and replace the Trademarks Act of 1965 (Cap. T13, Laws of the Federation of Nigeria 2004), a statute widely regarded as misaligned with contemporary commercial practices and technological developments. The proposed legislation introduces comprehensive reforms intended to bring Nigeria’s trademark framework into closer alignment with international standards, notably the Paris Convention for the Protection of Industrial Property and the World Trade Organization’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). Beyond formal updates, the Bill addresses longstanding deficiencies in administration, enforcement mechanisms, and technological integration, laying the groundwork for a more resilient and business-enabling IP ecosystem.

The push for reform reflects Nigeria’s rapidly evolving economic and industrial landscape. As Africa’s largest economy, with expanding digital, creative, and manufacturing sectors and deepening participation in global trade, Nigeria faces increasing pressure to provide effective and predictable trademark protection. While the 1965 Act served as a foundational instrument, it offers limited guidance on modern trademark issues such as digital branding, protection of well-known marks, and online infringement, resulting in regulatory gaps and enforcement challenges. The proposed Bill responds to these limitations, signalling Nigeria’s intent to strengthen brand protection, enhance investor confidence, and support innovation-driven growth across key sectors, including entertainment, e-commerce, and industrial production.

Commentators and IP practitioners view the Bill as part of a broader national effort to recalibrate Nigeria’s IP framework, consistent with the objectives of the National Intellectual Property Policy and Strategy 2025. That policy advocates coordinated reforms across trademarks, patents, and industrial designs to stimulate creativity, competitiveness, and economic development. If enacted, the Bill could represent a pivotal shift, with the potential to streamline registry operations, reduce administrative backlogs, and improve transparency—issues that have historically constrained the effectiveness of Nigeria’s trademark system. The sections that follow examine the Bill’s principal innovations and assess their implications for Nigeria’s participation in the African Continental Free Trade Area (AfCFTA) and its integration into global value and trade networks.

Expanding the Horizon: Modernized Definitions and Broader Protection Scope

One of the bill’s cornerstone innovations lies in its updated definitions, which broaden the umbrella of protectable trademarks to encompass a wider array of modern identifiers. Under Section 2, the term “sign” now includes elements like colors, shapes, positions, motions, sounds, holograms, and even packaging configurations—features that were absent in the previous legislation. This expansion acknowledges the evolution of branding in a digital age, where non-traditional marks, such as auditory jingles or dynamic logos, play pivotal roles in consumer recognition.

For the first time, the bill codifies concepts like “well-known marks,” “domain names,” “electronic register,” “bad faith,” and “controller.” These definitions provide clarity and legal certainty, reducing ambiguities that often led to disputes under the old regime. For instance, a well-known mark is defined as one recognized by a significant portion of the Nigerian public, irrespective of registration status, extending protections to foreign brands with substantial reputation.

This modernization aligns Nigeria with international benchmarks, as seen in similar provisions in the European Union’s trademark directive and the U.S. Lanham Act. By incorporating these, the bill not only strengthens domestic IP rights but also makes Nigeria more appealing to multinational corporations seeking consistent protection across borders.

Digitization at the Core: Electronic Register and Streamlined Processes

A pivotal shift toward technology-driven administration is evident in Sections 82 and 83, which establish an Electronic Register for trademarks. This digital repository allows for electronic maintenance of records, filings, and transactions, marking a departure from the paper-heavy system that plagued the old act with delays and errors.

Key aspects include electronic record-keeping, where digital entries hold the same legal weight as physical ones; e-filing for applications, renewals, assignments, licenses, and security interests; and public online access for inspections, prints, and certified copies. This facilitates transparency, enabling stakeholders to verify trademark status remotely, which could drastically cut processing times from months to weeks.

The implications are profound for efficiency. In a country where bureaucratic hurdles often deter investment, this digitization supports e-commerce growth and aligns with global trends, such as those in Singapore’s IPOS Go platform. Moreover, it empowers the Controller (replacing the Registrar) with tools for better oversight, reducing fraud and enhancing data security.

Fortifying Barriers: Enhanced Grounds for Refusal

The bill significantly bolsters the criteria for rejecting trademark applications, dividing them into absolute and relative grounds under Sections 7 and 8. Absolute grounds now explicitly bar non-distinctive, descriptive, generic, or customary signs, as well as those conflicting with public policy, morality, or existing laws—expanding beyond the old act’s limited focus.

Relative grounds introduce protections against confusion with earlier marks, even for similar goods or services, and extend safeguards to well-known marks across categories to prevent dilution or unfair exploitation. Bad faith filings are also targeted, with considerations for consent from prior owners and recent expirations.

This framework mirrors TRIPS requirements, promoting fair competition and preventing “trademark squatting,” a common issue in emerging markets. Analysts note that these changes will likely reduce invalid registrations, fostering a cleaner marketplace.[1]

Safeguarding Icons: Robust Protections for Well-Known and Foreign Marks

Section 2 and related provisions offer unprecedented shields for well-known trademarks, including unregistered ones owned by foreigners without local presence, in line with Paris Convention obligations. Recognition factors include public awareness, usage duration, promotion extent, and enforcement history, deeming sector-specific knowledge as nationwide if substantial.

Protections extend against misuse, dilution, or unfair advantage, even for dissimilar products, and cover state emblems. This is crucial for global brands like Coca-Cola or Nike, encouraging their entry into Nigeria without fear of local imitators.

Streamlining Ownership: Improved Registration and Renewal Procedures

The bill extends trademark validity from seven to ten years, with ten-year renewals, including a six-month grace period for late filings. Renewals require reclassification to the Nice International Classification, ensuring standardization.

Transitional rules automatically validate existing marks, transferring disclaimers and completing ongoing proceedings under the old law. This continuity minimizes disruption for current holders.

Balancing Acts: Use Obligations and Acquiescence

Proprietors must prove genuine use when challenged, with non-use potentially leading to revocation. A new acquiescence rule bars opposition after five years of knowing tolerance, except in bad faith cases, promoting stability.

Clarifying Boundaries: Expanded Non-Infringement Defenses

Section 28 lists explicit non-infringing acts, including honest name use, descriptive indications, nominative applications for parts, prior continuous use, and fair practices like comparative advertising or news commentary. This clarity reduces frivolous lawsuits and supports free expression.

Combating Fakes: Definitions and Remedies for Counterfeits

Section 34 defines infringing goods, materials, articles, and counterfeits precisely, empowering courts under Section 35 to order destruction, forfeiture, or disposal with safeguards. This strengthens anti-counterfeiting efforts, vital for industries like pharmaceuticals.

Deterring Abuse: Remedies Against Unjustified Threats

Aggrieved parties can now seek declarations, injunctions, and damages for groundless infringement threats, unless proven valid. Mere notifications of registration are exempt, balancing enforcement with fairness.

Border Vigilance: TRIPS-Compliant Measures

Proprietors can request customs detention of suspected imports, with temporary suspensions and court pursuits, including importer protections. This mirrors TRIPS border enforcement, curbing illicit trade.

Unlocking Value: Transactions and Financing Options

Trademarks can now be assigned partially, licensed, or used as security via charges, enabling IP-backed loans. This treats marks as financial assets, aiding SMEs in capital raising.

Group Protections: Collective and Certification Marks

New regimes for collective marks (for associations) and reformed certification marks require approved rules, public access, and specific revocation grounds. This supports geographical indications, like for Nigerian cocoa.

Digital Frontiers: Internet Use and Commercial Impact

Trademark use online counts in Nigeria only if it has commercial effect, assessed by factors like business ties. This addresses e-commerce infringements effectively.

Tougher Stance: Criminal Penalties

New offenses like counterfeiting carry fines up to ₦250,000 and 10-year imprisonment, with corporate liability.

Empowering Oversight: Controller’s Enhanced Role

The Controller gains powers to extend deadlines, summon witnesses, issue directions, and immunity for decisions.

Transitional Arrangements

Pending matters continue under old rules, with obsolete concepts abolished but rights preserved.

Elevating Nigeria’s Trade Profile: AfCFTA and Global Implications

The bill’s innovations promise to significantly enhance Nigeria’s integration into the AfCFTA, the world’s largest free trade area by participant countries, which is projected to boost intra-African trade by 52% as of 2025. By harmonizing trademark laws with the AfCFTA’s Intellectual Property Protocol (adopted in 2023), Nigeria facilitates seamless IP protection across the continent, covering trademarks, patents, and geographical indications. This protocol seeks to standardize rules, reducing barriers for Nigerian exporters in markets like South Africa or Kenya, where stronger IP regimes already exist.[2]

Under AfCFTA, enhanced protections for well-known marks and border measures will curb counterfeits in cross-border trade, protecting Nigerian brands like United Bank of Africa (in terms of product counterfeiting), Dangote or Nollywood content from dilution. Digitization aligns with the AfCFTA Digital Trade Protocol, which Nigeria ratified in 2025, promoting e-commerce and service exports. This could amplify Nigeria’s digital economy, projected to grow amid AfCFTA’s preferential tariffs.[3]

Globally, alignment with TRIPS and Paris Convention attracts foreign direct investment by assuring investors of reliable IP enforcement, potentially increasing trade volumes. Provisions on internet use address transnational e-commerce, positioning Nigeria favorably in WTO discussions. Overall, these reforms could elevate Nigeria’s IP index rankings, fostering innovation and export competitiveness.

In conclusion, the Trademarks Bill 2025 heralds a new era for Nigeria’s IP system, blending innovation with international harmony to drive economic prosperity.

Written by Adeola Osifeko LLB,BL,LLM, ACIS,ABR.

[1] G.Elias, ‘A Review of Nigeria’s National Intellectual Property Policy & Strategy 2025’ G.Elias Publication 15 December 2025

[2] Isaac Chibuife, ‘FG takes stock of Nigeria’s AfCFTA performance, affirms progress’ Guardian Newspapers 2 January 2026 < https://guardian.ng/business-services/fg-takes-stock-of-nigerias-afcfta-performance-affirms-progress/> Accessd on 20 January 2026

iPhone Counterfeiting in Nigeria: Legal Insights and Consumer Protection Guide.

October 18, 2025October 19, 2025 aeolawpractice

In recent weeks, Nigeria’s social media platforms have been ablaze with shocking revelations about a sophisticated scam involving fake iPhones. Videos and posts circulating on platforms like Instagram and X (formerly Twitter) expose how unscrupulous vendors are repackaging outdated models, such as the iPhone XR, into boxes mimicking the latest iPhone 17 Pro Max. One viral clip shows a buyer dismantling a supposed “new” iPhone 17 only to discover an old XR inside, sparking outrage and debates among X influencers like VeryDarkMan and Blord_Official. The Guardian Newspaper suggests that numerous iPhones in the Nigerian market could be refurbished or counterfeit, often sourced from China and sold at inflated prices to unsuspecting buyers. This phenomenon is more than simply a matter of consumer disappointment: it points to a broader challenge of counterfeiting, brand-erosion and non-compliance to business laws in Nigeria’s electronics market.

Against this backdrop, it is crucial for both consumers and distributors to understand what counterfeiting means in legal terms, how Nigeria’s intellectual-property and consumer-protection laws address it, and how one can be protected. This article sets out what “counterfeiting” entails, examines Nigerian legal provisions including the Trademarks Act 1965, Merchandise Marks Act 1916 and Federal Competition & Consumer Protection Act 2018 whilst providing practical guidance for distributors and consumers in the smartphone market.

What Does Counterfeiting Mean?

Counterfeiting goes beyond mere imitation of a product. At its heart, counterfeiting involves the unauthorised reproduction of genuine goods — or the mis-labelling of goods — in a way that misleads consumers into believing they are acquiring authentic products when they are not. In the context of smartphones such as Apple’s iPhone, counterfeit practices may involve the use of Apple’s distinctive Apple logo, the “iPhone” model name, serial-number formats or packaging features, all without any authorisation from ‎Apple Inc.. The aim is deceiving consumers to believe they are buying a premium, genuine product but end up with an inferior one (or, worse, one that is unsafe).

Globally, counterfeiting is a multibillion-dollar illicit enterprise; in Nigeria, high demand for premium electronics amid economic pressures make consumers vulnerable. The viral exposé of fake iPhones in Nigeria serves as a stark accusation of vendors resealing older devices in packaging branded as newer models, or even converting Android devices to mimic iPhone hardware or user interface features, then selling them as top-tier iPhones. These goods frequently under-perform, fail prematurely and may present safety risks (for example, battery failure or overheating).

It is important to distinguish counterfeits from legitimate imitation. The latter may involve making a product that is functionally similar or inspired by another, but does not copy protected elements (for example, branding, packaging or logos) in a way that misleads the consumer. By contrast, counterfeits deliberately replicate protected elements or use confusingly similar marks, packaging or trade dress so that the consumer is deceived into believing they are purchasing the genuine article. Under intellectual‐property (IP) law, that deception constitutes a misappropriation of brand identity, undermines legitimate trademark ownership and erodes consumer trust. In the Nigerian context, where a large portion of electronics are imported and where government revenue from duties and taxes on genuine products is significant, counterfeiting also contributes to state revenue leakage and market distortion.

Nigerian Intellectual Property and Consumer-Protection Laws on Counterfeiting

Nigeria does not have a single dedicated “anti-counterfeiting statute”; rather, the legislative framework spans multiple statutes that together provide civil and criminal remedies and consumer-protection mechanisms. The key statutes implicated in counterfeiting include the Trademarks Act, the Merchandise Marks Act, and consumer-protection laws such as the FCCPA, together with enforcement authorities such as the ‎Federal Competition and Consumer Protection Commission (FCCPC). Below we focus on the legislative basis, and then examine in particular the Merchandise Marks Act and its intersection with the Trademarks Act and FCCPA.

The Trademarks Act (CAP T13 LFN 2004)

The primary legislation governing the registration, protection and enforcement of trademarks in Nigeria is the Trademarks Act (Cap T13, Laws of the Federation of Nigeria 2004). Under section 5(2) of the Act, the proprietor of a registered trademark may restrain unauthorised use of that mark on identical or similar goods where there is a likelihood of confusion. The Act defines a trademark in terms consistent with international norms: a mark used or proposed to be used in relation to goods for the purpose of indicating a connection between those goods and a person who has the right either as proprietor or registered user.

Registration under the Act gives the owner the exclusive right to use the mark in relation to the specified goods and to take action for infringement in the Federal High Court of Nigeria. In practice, unregistered trademarks may still afford a cause of action in passing off under common law, but the statutory route under the Trademarks Act is only available to registered proprietors.

The Act complements the registration regime with civil remedies (such as injunctive relief, account of profits, damages and delivery up of infringing goods) and enforcement mechanisms.

The Merchandise Marks Act (CAP M10 LFN 2004)

The Merchandise Marks Act is a crucial statute that targets counterfeit goods and false trade descriptions. It was originally derived from the UK Merchandise Marks Act (1916) but as applied in Nigeria (Cap M10, LFN 2004).

Under section 1 of the Act, the term “false trade description” is defined broadly, including any description that is false or misleading in a material respect regarding the goods to which it is applied, as well as any alteration of description that renders it false or misleading. Further, the Act makes it an offence for any person to forge a trade mark, falsely apply a trade mark or a mark so nearly resembling a trade mark as to be calculated to deceive. Section 2(1) makes offences of forging trade marks or applying trade descriptions. Section 2(2) criminalises the sale or exposure for sale of goods bearing forged marks or false trade descriptions. The penalties arising from a High Court decision includes imprisonment of up to two years (or a fine, or both). The Act also empowers forfeiture of goods, instruments, or chattels used in the commission of the offence.

Critically, commentators have questioned whether the Act remains fully fit for purpose in the modern Nigerian market, given that it has seen few substantive updates despite the evolution of counterfeiting methods.

FCCPA 2018 – The Federal Competition and Consumer Protection Act

In addition to IP-specific legislation, Nigeria has a modern consumer-protection and competition statute: the FCCPA 2018. The Act established the Federal Competition and Consumer Protection Commission (FCCPC) and the Competition and Consumer Protection Tribunal, and empowers the FCCPC to eliminate anti-competitive practices, misleading or deceptive marketing and trading behaviour, and to ensure safe products for consumers. Section 17(g), (l), (m), (p), (r), (s) and (t) enumerates the functions of the Commission including removal of hazardous or substandard products, preventing deceptive practices, and regulating trading practices that harm consumer welfare.

While the Trademarks Act focuses on the rights of trademark proprietors and enforcement of exclusive use, and the Merchandise Marks Act targets false trade descriptions, the FCCPA 2018 broadens the regulatory landscape to include consumer protection within the competitive market. That is important in the context of counterfeit goods, because it allows regulatory intervention not only by trademark owners, but also by the consumer-protection authority in relation to misleading representations, unsafe goods, and deceptive trading practices.

Intersection of the Merchandise Marks Act, Trademarks Act and FCCPA 2018

Understanding how these statutes interplay helps clarify how counterfeiting is addressed in Nigeria. First, the Trademarks Act provides the civil and criminal framework for misuse of registered trademarks: once a mark is registered under the Act, any unauthorised use of that mark on identical or similar goods that is likely to cause confusion constitutes infringement (statutory infringement) and enables the proprietor to sue.

Second, the Merchandise Marks Act complements this by criminalising, more broadly, the forgery of trademarks and the application of false trade descriptions – even on unregistered marks or on trade descriptions that do not necessarily amount to registered trademarks. By doing so, it targets counterfeit goods at the point of mis-labelling, false descriptions, or the use of a mark so similar as to mislead consumers. Thus, the Merchandise Marks Act may apply in instances where a product uses a mark that is not registered in Nigeria but nonetheless is deceptively similar or employs false description of origin.

Third, the FCCPA 2018 provides institutional and regulatory reinforcement: when counterfeit goods are being distributed, sold or advertised, the FCCPC has the power to investigate, seize products, impose sanctions for misleading or deceptive practices, and issue directives to protect consumers. For example, under section 17(g) of the FCCPA, the Commission can act to “eliminate unfair, misleading, or deceptive or unconscionable practices” in business or trade.

In practice, the distributor of counterfeit goods in Nigeria may face legal exposure on multiple fronts if any iPhone authorised dealer decides to enforce its right under (a) the Trademarks Act, for infringement of registered trademark rights; (b) the Merchandise Marks Act, for forging or falsely applying marks or descriptions; and (c) the FCCPA 2018, for engaging in misleading trade practices that harm consumers. Meanwhile, enforcement agencies such as the Nigerian Customs Service, the Standards Organisation of Nigeria (SON) and the FCCPC may act in parallel to effect seizures, raids and regulatory sanctions.

For consumers and distributors, the practical implication is that counterfeit-based risks are not merely commercial or reputational; they are legal and regulatory. The combination of these laws means that counterfeit goods, especially those masquerading as premium electronics, can trigger criminal liability (via the criminal provisions of the Merchandise Marks Act), civil liability (via infringement actions under the Trademarks Act) and regulatory penalties (via the FCCPC under FCCPA 2018).

Practical Guidance for Phone Distributors

For those operating as distributors or retailers in Nigeria’s busy smartphone markets, the exposure connected with dealing in counterfeit or mis-described goods is significant. Under the Trademarks Act, distribution of infringing goods is liable to legal action; even if a distributor claims ignorance of the counterfeiting at the supply stage, such a defence may not always succeed. The Merchandise Marks Act explicitly provides that a person who sells or exposes for sale goods bearing forged marks or false trade descriptions is guilty of an offence unless they can prove that they took all reasonable precautions and at the time of the act had no reason to suspect the genuineness of the goods and provided all information in their power about the supplier.

Moreover, the FCCPA 2018 empowers the FCCPC to carry out investigations and to seal premises involved in sale or distribution of counterfeit or hazardous goods. Under section 17(p) FCCPA, the Commission is expected to encourage trade, industry, and professional groups to set and enforce quality standards that protect consumers’ interests while, subsection (s) of the aforementioned section obligates the Commission to ensure that consumers’ interests are properly considered in relevant forums and provide remedies against unfair practices or exploitation by businesses or individuals..

From an ethical and business-practical perspective, distributors should ensure they source products through authorised supply chains, verify that the products bear proper certification (e.g., genuine packaging, serial numbers, warranty documentation) and conduct due diligence on suppliers. Ignoring these steps not only undermines trust but also leaves the distributor vulnerable to enforcement actions, seizures by SON or customs, and reputational damage. Indeed, distributors who become associated with viral exposés of fake devices may suffer boycotts, shutdowns or forfeiture of stock.

For authorised dealers working with brands like Apple, and sellers on eCommerce platforms like Jumia and Konga, implementing traceability measures (authenticity apps, holograms, serial-check features) and training staff to identify counterfeit devices helps reduce risk. For example, ensuring devices are verified via Apple’s serial-number checking tools gives consumers confidence and helps minimise returns. Regular auditing of supply chain, maintaining records of purchase and supply, and co-operating with enforcement agencies when requested are also wise practices.

Practical Advice for Consumers

Consumers are frequently the victims in counterfeit-device schemes: they may pay premium prices for what they believe is a genuine iPhone, but end up with a refurbished model, a fake device, or an older model repackaged as new. The consequences include no valid warranty, poor device performance, safety hazards (such as battery failure or overheating) and the difficulty of obtaining effective redress. Under the FCCPA 2018, consumers have greater regulatory protection: the Act allows the FCCPC to investigate misleading trading practices, unsafe products and deceptive marketing.

Consumers should take several proactive steps. First, buy from credible dealers, additionally always obtain a proper receipt and warranty certificate from the seller; genuine devices should carry legitimate packaging, serial/IMEI numbers that can be verified (e.g., on Apple’s official website). If the price is significantly below typical market value, it should trigger suspicion. Examine the packaging carefully: genuine iPhones have high-quality seals, matching accessories, correctly spelled brand names and serial numbers that register as genuine on Apple’s site. If the device is claimed to have certain features (such as water resistance or certain hardware specifications), test them or verify via the device settings or Apple’s official check.

If you suspect you have been sold a counterfeit device, you may report the transaction to SON, the Police Cybercrime Unit or the FCCPC. You may also consider legal action: for instance, you may pursue a claim under contract law or for mis-representation of the supply contract; if the device uses a counterfeit mark you may also support a passing-off or infringement claim. It is important to act promptly, preserve the evidence (packaging, serial numbers, purchase receipt) and seek advice.

The Nigerian consumer market is becoming more sophisticated: viral videos and social-media influencers have helped push awareness of fake-phone scams. But awareness alone is not enough — consumers must act responsibly by insisting on authorised sources, verifying serial numbers, and being vigilant about extremely low-cost offers or ambiguous packaging.

Why the Fake-iPhone Epidemic in Nigeria is a Wake-Up Call

The recent wave of fake-iPhone exposures in Nigeria serves as a stark indicator of the intersection between consumer demand, supply-chain vulnerabilities, and weaknesses in enforcement. For legitimate brand owners such as Apple, such counterfeits erode brand reputation, reduce revenue and undermine the value of their authorised distribution networks. For the Nigerian economy, the sale of counterfeits undermines customs duties, taxation, and regulatory oversight. For consumers, the risks range from financial loss to safety concerns.

But there is reason for optimism. The existence of statutory regimes like the Trademarks Act and the Merchandise Marks Act, and of regulatory tools such as the FCCPA 2018, means that the legal foundation for tackling counterfeiting is already in place in Nigeria. What remains critical is enforcement, awareness and coordination among brand owners, distributors, regulators and consumers. Educating distributors about their legal obligations and encouraging consumers to demand genuine products can help shift the market toward transparency and trust.

At a systemic level, stronger collaboration between agencies such as the Customs Service, SON, the FCCPC, the judiciary and brand-owners is essential. For example, prompt seizure of counterfeit goods at the border, cooperation on intelligence gathering, rapid prosecution of infringers, and publicising of enforcement outcomes all help to raise the cost of counterfeiting and deter would-be offenders. Moreover, legislative reform (for example, to modernise the Merchandise Marks Act) may be required to address evolving methods of digital counterfeiting, online marketplace issues and global supply chains.

In Conclusion

Counterfeiting is not simply a matter of consumer inconvenience. It is a legal, regulatory, commercial and social problem. In Nigeria, understanding the contours of statutes such as the Trademarks Act 1965, Merchandise Marks Act 1916 and the FCCPA 2018 is critical. For distributors, sourcing insistently from authorised supply-chains, verifying authenticity, training staff and co-operating with regulatory authorities is a business imperative. For consumers, vigilance in verifying packaging, serial numbers, warranty documentation and the pricing offers is essential.

If recent viral cases of fake-iPhone scams can serve as a catalyst, then they may help raise awareness, bolster enforcement and ultimately foster a Nigerian electronics market that is more transparent, fair and protective of the rights of consumers and genuine brand-owners alike. By turning social-media outrage into informed action, every buyer and seller can contribute to a marketplace where authenticity matters and counterfeiting is rendered increasingly risky and untenable.

References

Merchandise Marks Act 1916, Cap M10, Laws of the Federation of Nigeria (LFN) 2004.
S. P. A. Ajibade & Co., “The Nigerian Merchandise Marks Act: A viable or obsolete piece of legislation”, Mondaq, 8 May 2018 <https://www.mondaq.com/nigeria/trademark/880834/the-nigerian-merchandise-marks-act-a-viable-or-obsolete-piece-of-legislation> Accessed on 14 October 2025
Trademark Law in Nigeria: A Guide to Registration, Infringement and Enforcement, IR Global, February 10 2025 <https://irglobal.com/article/trademark-law-in-nigeria-a-guide-to-registration-infringement-and-enforcement> Accessed on 14 October 2025..
Trademarks Act 1965, Cap T13, Laws of the Federation of Nigeria (LFN) 2004.
Procedures and Strategies for Anti-counterfeiting: Nigeria, World Trademark Review, 2018 <https://www.worldtrademarkreview.com/global-guide/anti-counterfeiting-and-online-brand-enforcement/2018/article/procedures-and-strategies-anti-counterfeiting-nigeria. Accessed on 14 October 2025.
Trade Marks Laws and Regulations Report 2025 – Nigeria, ICLG, 10 April 2025 <https://iclg.com/practice-areas/trade-marks-laws-and-regulations/nigeria> Accessed on 14 October 2025.
Federal Competition and Consumer Protection Act 2018, Laws of the Federation of Nigeria.

Turning Your Creative Work into a Business in Contemporary Nigeria: IP as a Revenue Stream.

May 19, 2025May 19, 2025 aeolawpractice

Introduction

In an era increasingly defined by intangible assets, intellectual property (IP) has emerged as a potent economic resource for creators across Nigeria. While talent and originality remain central to creative success, monetisation through structured legal and business frameworks is what transforms creativity into sustainable enterprise. For Nigerian artists, writers, musicians, filmmakers, and digital innovators, understanding how to commercialise IP is not merely a luxury—it is a necessity in an economy where informal sectors dominate and rights enforcement remains underdeveloped.

This article explores how creators in contemporary Nigeria can turn their works into viable business ventures, focusing on licensing, franchising, merchandising, and relevant tax considerations. Drawing on Nigerian legal principles and international best practices, it offers a practical and analytical approach to unlocking the value inherent in creative works.

The Nature of Intellectual Property as a Commercial Asset

Intellectual property refers to creations of the mind—such as literary and artistic works, designs, symbols, names, and inventions—that are protected by law. In Nigeria, the principal statutes governing IP include the Copyright Act 2022, the Patents and Designs Act 1970, and the Trademarks Act 1965. Under these frameworks, IP rights confer exclusive control to the rights holder, enabling them to license, assign, or otherwise exploit these assets for profit.

The transformation of creative output into a business begins with recognising IP as not just a legal entitlement, but a commercial tool. For example, a musician owns copyright in their composition and recording; these rights can be fragmented and monetised through performance rights organisations, streaming deals, or licensing for commercials. Similarly, a visual artist’s brand can be developed into a merchandising line OR even a novelist’s character universe ie collection of fictional characters, settings, storylines, and themes created in a book or series, can be licensed to film studios or game developers.

Yet, commercialisation requires more than ownership—it requires strategy. The creator must understand market value, legal protections, enforceability, and the infrastructure to manage and monetise their IP.

Licensing: Leveraging Control While Retaining Ownership

Licensing is one of the most effective ways to monetise IP in Nigeria. A licence is a contractual agreement by which the rights holder (licensor) permits another party (licensee) to use their intellectual property for a defined purpose, in a specific territory, and for a certain duration. The Copyright Act 2022 affirms the right of authors to grant licences for reproduction, adaptation, performance, broadcasting and other uses of their works, either exclusively or non-exclusively.

A well-drafted licence agreement enables the creator to earn recurring income while maintaining ownership. In Nigeria’s music industry, for instance, mechanical licences permit streaming platforms like Boomplay or Spotify to use artists’ recordings. In publishing, authors license their works to publishers in exchange for royalties. In the digital space, developers often license their software under open-source or commercial terms.

However, licensing requires attention to detail. Key clauses should cover the scope of use, payment structure (flat fee, royalty, or hybrid), duration, termination rights, indemnity, and dispute resolution.

A clearer instance of licensing within the Nigerian creative or tech ecosystem can be found in the licensing of digital content services by the Nigerian Copyright Commission (NCC). For example, platforms like iROKOtv and YouTube partners (Nigerian channels officially monetising content) typically enter into licensing agreements with rights holders (such as Nollywood producers) to host and monetise films.

These agreements are often registered with the NCC to ensure enforceability and public record, especially when disputes arise over revenue-sharing or piracy. Registration is strongly recommended in cases of exclusive or high-value licences.

Registration Process through the Nigerian Copyright Commission (NCC):

Submission of the Licensing Agreement: The rights owner (licensor) or their lawyer submits the licence agreement to the NCC, stating whether it is exclusive or non-exclusive.
Accompanying Forms and Documents: Includes the NCC’s standard registration form, a statutory declaration, and proof of ownership (e.g., copyright registration certificate or assignment document).
Payment of Filing Fees: A modest fee is paid depending on the category and scope of the licence.
Review and Entry into Register: The NCC reviews the submission to ensure compliance with the Copyright Act 2022 and, if approved, enters it into the official register of copyright transactions.

This process does not create the licence but provides legal certainty and public notice of the transaction. It is particularly useful where disputes over exclusivity, scope, or territorial use might arise

Moreover, for international deals, Nigerian creators must consider jurisdictional issues and the protection afforded under treaties such as the Berne Convention and TRIPS Agreement.

A notable example of jurisdictional and treaty-based protection is the case of Nollywood films licensed for global streaming on Netflix. When Nigerian producers license their content to Netflix (a U.S.-based company), the licensing agreement typically includes jurisdictional clauses that govern where and how disputes will be resolved — often stipulating New York or California law, or international arbitration.

In such cross-border deals, Nigerian creators must ensure that their copyrighted works are protected not only in Nigeria but also internationally. This is where international treaties come into play based on the following facts:

Nigeria is a signatory to the Berne Convention for the Protection of Literary and Artistic Works, which mandates that Nigerian creators enjoy automatic copyright protection in all other Berne member countries (currently over 180 countries), without the need for further registration.
Additionally, under the TRIPS Agreement (Agreement on Trade-Related Aspects of Intellectual Property Rights), to which Nigeria is also a party via its WTO membership, Nigerian works receive enforceable IP protection standards in other WTO member countries. TRIPS also sets minimum enforcement obligations and dispute resolution processes that can be relied upon in international litigation or arbitration.

In 2020, Mo Abudu’s EbonyLife Studios entered a multi-title content partnership with Netflix, the IP involved (films, series concepts, character rights), which were protected internationally under both the Berne Convention and TRIPS, ensuring EbonyLife’s rights remained enforceable in the U.S., UK, and other Netflix territories

Franchising: Replicating Creative Business Models

Franchising offers a strategic pathway for Nigerian creatives who wish to scale their brand and business operations without directly managing every outlet. In legal and commercial terms, franchising is a model through which a creator or brand owner (the franchisor) permits another party (the franchisee) to operate a business using the franchisor’s brand, trade secrets, and other intellectual property under specified conditions.

Although Nigeria does not currently have a specific franchise law, the legal architecture governing franchising is built on multiple intersecting frameworks. The most fundamental of these is contract law. Since franchising is a contractual relationship at its core, the Nigerian Law of Contract governs the franchise agreement. The agreement must be legally valid—i.e., based on offer, acceptance, consideration, and an intention to create legal relations. It must also clearly outline the scope of the franchise i.e territorial boundaries, obligations of the franchisor and franchisee, quality control expectations, duration, renewal terms, and conditions for termination. Vague or incomplete agreements expose both parties to operational and legal risks, including disputes over revenue-sharing, branding, or performance.

Intellectual property law, particularly the Trade Marks Act, plays a central role in franchising, as it protects the creative assets that form the foundation of the franchise. A creative entrepreneur must register their brand name, logos, slogans, and related marks with the Trademark Registry to ensure enforceability and exclusivity. The franchisee is then licensed to use these marks under controlled conditions. Without such protection, the franchisor may lose the ability to restrict unauthorised use, leading to brand dilution or reputational damage.

Franchise arrangements must also be examined through the lens of competition law. The Federal Competition and Consumer Protection Commission Act 2018 prohibits agreements that may substantially restrict competition or create monopolistic control. Clauses in franchise agreements that engage in price-fixing, exclusive dealing, or territorial restrictions must be carefully evaluated to avoid contravening anti-competitive practice provisions under the oversight of the Federal Competition and Consumer Protection Commission (FCCPC). While some restrictions may be justifiable for brand consistency or quality control, overly broad or oppressive terms may invite regulatory scrutiny.

Furthermore, franchising arrangements must comply with Nigeria’s consumer protection laws, also administered by the FCCPC, ensuring that the rights of end consumers are upheld, regardless of whether they are dealing with the franchisor or franchisee. Issues such as false advertising, misleading promotional materials, product safety, and fair refund policies fall within the FCCPC regulatory purview. Failure to uphold these standards can result in penalties, sanctions, or reputational damage, all of which may undermine the long-term viability of the franchise system.

In practice, creative entrepreneurs can adopt franchising to replicate successful business models in fashion, food, entertainment, or lifestyle branding. A designer with a successful boutique in Lagos, for instance, may enter into franchise agreements to expand into Abuja, Port Harcourt, or even across West Africa, provided the underlying IP is protected and regulatory compliance is ensured.

While franchising offers tremendous growth potential, it demands strategic planning and robust legal infrastructure. Prospective franchisors must work closely with IP lawyers, tax advisors, and business consultants to ensure that the franchise model is scalable, legally compliant, and aligned with long-term business goals

Merchandising: Materialising Creative Expression

Merchandising involves the commercial use of characters, images, logos, or phrases from a creative work on physical goods. It allows creators to monetise fan engagement and cultural capital. For example, a popular comic book character can appear on clothing, mugs, posters, and even video games—each representing a separate revenue stream.

A global case study in merchandising excellence is Barbie, the iconic doll brand owned by Mattel Inc. Since its launch in 1959, Barbie has evolved from a toy into a multi-billion-dollar lifestyle brand. The company has licensed Barbie’s image, logo, and characters across a vast range of products — from backpacks and lunchboxes to video games, cosmetics, animated films, and most recently, the 2023 Barbie live-action movie. That film alone drove over $1.4 billion in global box office revenue, while also triggering a fresh wave of merchandise sales in apparel, beauty, and home decor, co-branded with leading global retailers.

This model of IP commercialisation demonstrates the power of character-based branding. Barbie’s pink-themed aesthetic, distinct typography, and cultural influence have been licensed to hundreds of manufacturers globally. Each merchandising deal is underpinned by formal IP licensing agreements, often registered in accordance with national laws and protected under international treaties such as the Berne Convention and TRIPS.

For Nigerian creators, this offers a replicable blueprint. A comic artist or author can license characters for school supplies, clothing lines, or animated web series. Music artists can monetise their brands through fashion lines or branded accessories. But these activities must be governed by well-structured licensing contracts to ensure that royalty rates, production quality, brand consistency, and territorial rights are clearly defined — and enforced where necessary.

Merchandising, when backed by a strong IP strategy, allows a brand to transition from creative expression to commercial empire, a model that Barbie has arguably perfected over six decades.

The commercial success of merchandising depends heavily on branding and marketing. Nollywood films, for instance, have begun exploring merchandise extensions, such as T-shirts bearing iconic quotes or character imagery. Similarly, music artists may sell branded merchandise during concerts or online, extending the lifecycle and reach of their creative works like Beyoncé is currently doing at the Cowboy Carter Tour.

Importantly, creators must monitor and enforce their IP rights to avoid unauthorised use or counterfeit merchandise, a common problem in Nigeria’s informal markets. Partnering with established retailers, using digital sales platforms, and entering joint ventures can reduce operational burdens while ensuring professional distribution.

Tax and Regulatory Considerations

Transforming creative work into a business also entails compliance with Nigeria’s tax and regulatory framework. IP-generated revenue—whether through royalties, franchise fees, or merchandise sales—is subject to taxation under Nigerian law.

The Federal Inland Revenue Service (FIRS) treats income from licensing or royalties as part of a taxpayer’s assessable income under the Personal Income Tax Act 2011 or the Companies Income Tax Act 2007, depending on whether the rights holder is an individual or a corporate entity. In some cases, withholding tax may be applicable on royalty payments, particularly in cross-border transactions.

Moreover, Value Added Tax (VAT) obligations may arise from the sale of merchandise or licensing of digital content. Section 2 of the VAT Act 2007 (as amended) imposes VAT on the supply of goods and services in Nigeria, including intangible assets such as software or artistic content.

To reduce tax exposure and ensure compliance, creators should consider formalising their businesses through business name registration or incorporation under the Corporate Affairs Commission (CAC). This not only enhances credibility but also facilitates access to bank loans, grants, and investor funding.

In some instances, creators may benefit from tax incentives, such as the Pioneer Status Incentive for creative sectors or specific waivers granted by the Nigerian Export Promotion Council (NEPC) for export-oriented creative goods. Legal and tax advisors play a crucial role in helping creatives navigate these complexities.

Challenges and Opportunities in the Nigerian Context

While the potential to monetise IP is considerable, Nigerian creatives face systemic barriers that can inhibit revenue generation. These include weak enforcement of IP laws, piracy, lack of access to legal counsel, limited financial literacy, and inadequate government support. Despite the Copyright Act 2022 introducing stronger provisions for digital enforcement and recognition of new rights, implementation remains a challenge.

However, digital platforms have created new frontiers for IP monetisation. Social media, streaming services, e-commerce, and blockchain technologies offer Nigerian creators global exposure and direct-to-consumer models. The increasing interest of international investors and the growth of the African Continental Free Trade Area (AfCFTA) present new opportunities for regional and global licensing of Nigerian content.

To fully realise these opportunities, creators must invest in IP education, form partnerships with professionals, and adopt a business mindset. This includes maintaining documentation of ownership, using contracts in all commercial dealings, and taking advantage of registration systems offered by regulatory agencies like the Nigerian Copyright Commission (NCC), the Trademarks Registry, and the CAC.

Conclusion

In contemporary Nigeria, turning creative work into a business is no longer aspirational—it is both practical and necessary. Intellectual property offers a suite of tools that enable creators to generate revenue, build brands, and scale their impact. Licensing, franchising, and merchandising serve as powerful commercialisation strategies, while proper attention to tax and regulatory issues ensures legal and financial sustainability.

For Nigeria to fully unlock the potential of its creative economy, institutional support must be complemented by creator-driven action. Creatives who recognise their work as a business, and treat their IP as a core asset, are best positioned to thrive in an increasingly competitive and globalised market.

Written by Adeola Osifeko LLB, LLM, ACIS, ABR. Partner Corporate Commercial Group at AEO Law Practice.

References

Trademarks Act Cap T13, LFN 2004
Patents and Designs Act Cap P2, LFN 2004
Companies and Allied Matters Act 2020 (Nigeria)
Thomas Buckley and Bloomberg, ‘Barbie doll sales boom for Mattel after the namesake’s movie became a global blockbuster’ Fortune 2023 https://fortune.com/2023/10/25/barbie-sales-mattel-movie-film-doll/ Accessed 17 May 2025
Personal Income Tax Act Cap P8, LFN 2011 (Also see Chijioke Uwaegbute, and Emuesiri Agbeyi, ‘Individual – Taxes on personal income’ PWC Tax Summaries 2025 <https://taxsummaries.pwc.com/nigeria/individual/taxes-on-personal-income> Accessed 16 May 2025
Companies Income Tax Act Cap C21, LFN 2007 <https://old.firs.gov.ng/wp-content/uploads/2021/07/Company-Income-Tax-Act.pdf >
Value Added Tax Act Cap V1, LFN 2007 (as amended) <https://www.firs.gov.ng/vat>
World Intellectual Property Organization (WIPO), Understanding Copyright and Related Rights (2nd edn, 2016) https://www.wipo.int/edocs/pubdocs/en/wipo_pub_909_2016.pdf Accessed 14 May 2025

Developing an Efficient IP Portfolio Strategy for Startups and SMEs: Beyond Legal Compliance.

March 10, 2025March 19, 2025 aeolawpractice

Introduction

Intellectual Property (IP) is a significant asset for startups and small to medium-sized enterprises (SMEs), not only for legal protection but also as a tool for commercial growth and competitive advantage. This is why SMEs should focus on an effective IP portfolio strategy, structured towards managing and leveraging intellectual property (IP) assets for commercial and strategic advantage. It goes beyond mere registration to actively protect, monetize, and integrate IP into business growth plans.

While many businesses focus on fulfilling registration requirements, an effective IP portfolio strategy should align with broader business goals, including market expansion, fundraising, and brand positioning. This article explores how startups and SMEs can leverage their IP assets beyond mere legal compliance to drive commercial success.

Understanding the Business Value of IP

A well-developed IP portfolio strengthens a company’s market position, attracts investors, and increases valuation. Patents, trademarks, copyrights, and trade secrets provide legal protection while also making commercial avenues available to the business in form of licensing, franchise, merchandising and assignment of IP i.e transferring ownership of IP assets to another entity for a lump sum or structured payments. For example, trademarks enhance brand recognition, and strengthens market positioning, patents secure technological innovations, and trade secrets protect proprietary business processes. Businesses that effectively manage their IP tend to experience greater investment interest and financial growth. Startups and SMEs that strategically develop their IP portfolios can establish a competitive edge within their industries and create long-term business sustainability.

Aligning IP Strategy with Business Objectives.

An IP strategy should be integrated into a company’s business development plan. Startups and SMEs need to identify the core aspects of their business that require IP protection and select the appropriate rights accordingly. For instance, a technology startup specializing in artificial intelligence may prioritize patent protection and software copyright, whereas a fashion brand may focus more on trademark and industrial design registration. Investors often view a strong IP portfolio as an indicator of business stability and innovation potential. By ensuring that IP management aligns with broader commercial objectives, startups can enhance their financial and operational prospects.

Prioritizing Key IP Assets

Given the financial limitations of many startups, prioritizing the most valuable IP assets is essential. Conducting an IP audit allows businesses to assess which assets provide a competitive advantage. Companies should categorize their IP as: core IP, which is directly linked to primary products or services; supporting IP, which contributes to brand visibility and credibility; and monetizable IP, which can generate revenue through licensing, franchise and distribution agreements. The Nigerian Startup Act 2022[i] emphasizes the importance of IP identification and protection, offering regulatory support to help startups register and commercialize their intellectual assets. The Act also includes incentives such as tax relief and funding to encourage startups to actively safeguard their IP.

Leveraging IP for Competitive Advantage.

Some of West Africa’s leading companies have demonstrated how intellectual property can be leveraged to create lasting competitive advantages. One notable example is Dangote Group, which has secured trademarks across multiple markets, reinforcing brand trust and preventing unauthorized use of its name in sectors such as cement, salt, and consumer goods. This strategic use of IP protection has allowed Dangote to dominate industries while maintaining a strong corporate identity.

In the technology sector, Flutterwave, a Nigerian fintech unicorn, has actively protected its proprietary payment technology through patents and trademarks, ensuring its brand remains distinctive in the growing African digital payments ecosystem. By securing its innovations and licensing its solutions to partners, Flutterwave has scaled its operations across multiple African countries while preventing competitors from exploiting its technology.

Another example is MTN Group, one of Africa’s largest telecommunications firms, which has strategically used trademarks and copyrights to protect its digital services and content. By securing exclusive rights over its mobile financial service platform, MTN MoMo, the company has established a trusted digital payments brand, preventing market dilution and unauthorized replication of its service offerings.

These examples illustrate how effective IP management goes beyond legal registration. By licensing proprietary technologies, forging strategic partnerships, and protecting brand identity, companies can reinforce their market presence and increase profitability. For startups and SMEs, following the lead of established firms in leveraging IP can significantly enhance business sustainability and long-term success.

Cost-Effective IP Management Strategies.

Since many startups operate within budget constraints, managing IP efficiently is crucial. Businesses can reduce costs by using provisional patent applications, which secure an early filing date before committing to the full cost of a patent. Regional trademark and patent registrations may be prioritized based on market relevance, rather than pursuing global coverage. Several renowned technology startups have successfully adopted hybrid models to balance proprietary rights with open-source accessibility.

For example, Dropbox has taken a hybrid approach with projects like Lepton, a streaming image compression format. They maintained proprietary rights over the compression technique, which provided significant business value, while open-sourcing the project to engage the community and encourage broader adoption. This strategy allowed Dropbox to benefit from community-supported development and code review while protecting aspects of the software that are unique to their business or provide a competitive advantage.[ii]

Another example is the Advanced Technology Research Council (ATRC) in Abu Dhabi, which developed and released a series of large language models named Falcon for free. This open-source approach bolstered the UAE’s credibility in the AI field and allowed global developers to download, modify, and integrate these models, fostering widespread adoption and collaboration. [iii]

These cost-conscious approaches allow startups to safeguard core innovations while fostering industry collaboration, market penetration, and increased adoption. By striking a balance between proprietary protection and selective openness, businesses can optimize their IP assets while allocating resources strategically.

Enforcing and Protecting IP Assets

Securing IP rights is only part of the equation; enforcement is equally important. Startups should actively monitor for potential infringements by using an IP lawyer to carry out watch services and deploy digital tracking tools. Additionally, establishing clear IP ownership agreements with employees and contractors helps prevent disputes and unauthorized disclosures. In the event of infringement, businesses can explore alternative dispute resolution mechanisms to address conflicts in a cost-effective manner. The Nigerian Copyright Act 2022 provides legal frameworks for startups to enforce copyright protection, offering provisions for seeking damages and injunctions against unauthorized use.[iv] By utilizing these mechanisms, startups can protect their creative assets and deter exploitation.

IP as a Fundraising and Investment Tool

For startups seeking investment, a strong IP portfolio can significantly enhance credibility and valuation. Some investors may frequently assess the extent to which a business has protected its intellectual assets before committing financial resources. Highlighting registered patents and trademarks in investment pitches can strengthen a startup’s appeal, in addition to demonstrating how IP protection mitigates competitive risks. Some businesses also explore IP-backed financing, using their intangible assets as collateral for securing funding. Effectively leveraging IP in fundraising efforts increases a company’s chances of securing long-term financial support.

Conclusion

An efficient IP portfolio strategy is more than a legal necessity; it is a fundamental driver of business growth. Startups and SMEs must integrate IP management into their overall strategy, identifying and prioritizing key assets while leveraging their IP for competitive advantage. Protecting and enforcing IP rights ensures that businesses retain control over their innovations while enhancing their appeal to investors and commercial partners. By taking a proactive approach, startups can transform their intellectual assets into powerful economic tools that sustain long-term success.

Endnotes

[i] 2022 Nigeria Startup Act, s 31.

[ii] Gideon Myle, ‘Balancing Open Source and Proprietary IP’:Dropbox Tech Blog, December 2017 <https://dropbox.tech/infrastructure/balancing-open-source-and-proprietary-ip-they-can-co-exist?> accessed 9 March 2025

[iii] Harry Booth, ‘Time100 AI 2024’: Time Magazine, September 2024 < https://time.com/7012755/faisal-al-bannai/> Accessed 9 March 2025