Trademark Licence Agreement (Nigeria)

A Trademark Licence Agreement in Nigeria governs the relationship between the parties by fixing what each must do.

Trademark licensing in Nigeria is governed by Part V of the Trade Marks Act (Cap T13, LFN 2004), Sections 34–40, which provide for 'registered user' agreements. Section 34 of the Trade Marks Act requires that a trademark licence (registered user agreement) be registered at the Nigerian Trade Marks Registry to create an enforceable registered user relationship. A registered user has standing to sue for trademark infringement in their own name in addition to the proprietor, under Section 37 of the Trade Marks Act. An unregistered licence is effective between the parties as a contractual matter but does not confer the procedural advantages of registered user status.

Quality control is a critical element of a Nigerian trademark licence. If a trademark is used by a licensee without adequate quality control by the licensor, the trademark may be vulnerable to a cancellation application at the Federal High Court on the ground of deceptive use — the mark may mislead consumers about the quality of goods or services because the licensor is no longer confirming that quality standards are maintained. Section 39 of the Trade Marks Act (Cap T13, LFN 2004) addresses the effect of registered user agreements on the distinctiveness of a trademark, and the agreement must include provisions for the licensor's right to inspect and audit the licensee's operations to maintain quality.

For franchise arrangements in Nigeria — where a franchisor licences its brand and business system to a franchisee — the Trademark Licence Agreement forms part of the broader franchise agreement and is complemented by the NOTAP-registered Technology Transfer Agreement (covering know-how and technical systems) and the Franchise Agreement (covering the operating system). Multinational brands expanding into Nigeria through master franchise or area development agreements must confirm their trademark licences comply with both the Trade Marks Act and the NOTAP Act requirements for technology transfer arrangements involving foreign licensors.

The Trademark Licence Agreement (Nigeria) sits within a multi-layered legal framework. Corporate parties must be registered under the Companies and Allied Matters Act 2020 (CAMA), with the Corporate Affairs Commission (CAC) maintaining their incorporation records. Foreign licensors transferring technology or know-how alongside the trademark must register the arrangement with the National Office for Technology Acquisition and Promotion (NOTAP) under the NOTAP Act (Cap N62, LFN 2004), and NOTAP's approval is required before royalties can be remitted abroad via CBN-approved foreign exchange channels. The Nigeria Data Protection Regulation (NDPR) 2019, administered by the Nigeria Data Protection Commission (NDPC), applies to any personal data exchanged during the quality audit or inspection process. The Federal Inland Revenue Service (FIRS) collects withholding tax at 10% on royalty payments to non-resident licensors under Section 78 of the Companies Income Tax Act (CITA) and the Finance Act 2021. The Nigerian Trade Marks Registry at the Federal Ministry of Industry, Trade and Investment processes registered user applications under Section 34 of the Trade Marks Act (Cap T13, LFN 2004). Disputes over trademark infringement or licence validity are heard by the Federal High Court, which has exclusive jurisdiction over intellectual property matters under Section 251(1)(f) of the Constitution of the Federal Republic of Nigeria 1999. The National Industrial Court of Nigeria (NICN) handles employment disputes between licensors and their Nigerian workforce. The Securities and Exchange Commission (SEC Nigeria) is relevant where a trademark licence forms part of a franchised business offered as a collective investment scheme. Parties should confirm the current status of the trademark registration at the Nigerian Trade Marks Registry before executing the licence, as a lapsed or cancelled mark cannot support a valid registered user agreement.

A Trademark Licence Agreement in Nigeria is needed whenever a trademark owner wishes to permit another party to use their registered trademark in connection with goods or services in Nigeria, without permanently transferring ownership.

A Trademark Licence Agreement is required when a multinational company establishes a distributor or authorised dealer network in Nigeria and wishes to authorise the distributors to use the company's registered trademark in their marketing, packaging, and signage, while retaining central control over brand standards and quality.

A Trademark Licence Agreement is needed when a Nigerian franchise system is established, with the franchisor licensing its registered brand name and logo to franchisees who operate outlets using the franchisor's brand identity — for example, fast food chains, retail stores, or service businesses expanding through franchising in Nigeria.

A Trademark Licence Agreement is required when a manufacturer contracts with a Nigerian company for the production of goods under the manufacturer's brand (private label or contract manufacturing), and the Nigerian company needs a trademark licence to affix the brand to the manufactured goods sold in the Nigerian market.

A Trademark Licence Agreement is needed when a technology company licences its software product under a brand name and needs to grant the Nigerian distributor or reseller the right to use the brand name and logo in marketing materials and on licensed software packages.

A Trademark Licence Agreement is required when a celebrity, athlete, or public figure licences their name or personal brand (registered as a trademark in Nigeria) to a manufacturer or retailer for use on endorsed products, establishing quality standards, royalty rates, and approval processes for use of the personal brand.

Parties in Nigeria should prepare a Trademark Licence Agreement proactively rather than waiting for a dispute to arise. The Federal High Court and state High Courts interpret agreements based on written terms, not oral representations. Where the licence involves technology transfer, the National Office for Technology Acquisition and Promotion (NOTAP) under the NOTAP Act (Cap N62, LFN 2004) must approve the arrangement before royalties can be remitted abroad. The Federal Inland Revenue Service (FIRS) will withhold tax at 10% on all royalty remittances to non-resident licensors under the Companies Income Tax Act and Finance Act 2021. The Corporate Affairs Commission (CAC) under the Companies and Allied Matters Act 2020 (CAMA) verifies the legal capacity of corporate licensees. The Nigeria Data Protection Commission (NDPC), enforcing the NDPR 2019, requires a lawful basis for personal data shared during quality inspections. Where any regulated activity — such as food, drugs, or cosmetics sold under the licensed mark — is involved, prior approval from NAFDAC under the NAFDAC Act (Cap N1, LFN 2004) is required before the licence is exercised.

A properly drafted Trademark Licence Agreement in Nigeria must contain the following essential elements.

Parties: Full legal names, CAMA 2020 RC numbers, and registered addresses of the licensor (trademark owner) and licensee. The licensor must be the registered owner of the trademark at the Nigerian Trade Marks Registry — if the licensor is a foreign entity, the trademark must be registered in Nigeria (not merely in the home country) for a Nigerian trademark licence to be meaningful.

Licensed Trademark: A precise identification of the trademark(s) being licensed — including the exact wording or description of the logo/device, the Nigerian trademark registration number(s), the applicable class(es) of goods or services under the Nice Classification, and the registration date at the Nigerian Trade Marks Registry.

Scope of Licence: Whether the licence is exclusive (only the licensee can use the mark), sole (the licensor and licensee can use the mark but no other licensees are granted), or non-exclusive (the licensor can grant further licences to others). The permitted field of use and geographic territory (Nigeria only, or specific states) must be defined.

Quality Control: Detailed provisions for the licensor's quality control rights — including the licensor's right to inspect the licensee's production facilities, approve samples before product launch, and withdraw the licence if quality standards fall below specified levels. Inadequate quality control in a trademark licence can lead to cancellation of the trademark registration under Section 39 of the Trade Marks Act (Cap T13, LFN 2004).

Royalties and Fees: The royalty rate payable to the licensor — typically expressed as a percentage of the licensee's net sales of licensed goods or services, or a fixed periodic fee. All royalty payments are subject to 10% withholding tax under the Finance Act 2021 where the licensor is a non-resident entity.

Duration: The term of the licence, with provisions for renewal, extension, and early termination. A licence that is indefinite in duration may be difficult to terminate and creates uncertainties for both parties.

Registered User Registration: A provision requiring the parties to jointly apply to the Nigerian Trade Marks Registry to register the licence as a registered user agreement under Sections 34–38 of the Trade Marks Act (Cap T13, LFN 2004), and identifying who bears the registration fees and bears responsibility for the application process.

Additional compliance provisions essential to a Trademark Licence Agreement in Nigeria include: Data Protection — the Nigeria Data Protection Regulation (NDPR) 2019, enforced by the Nigeria Data Protection Commission (NDPC), requires a lawful basis for any personal data processed during quality audits or licensee inspections. Stamp Duty — Section 4 of the Stamp Duties Act (Cap S8, LFN 2004) requires the agreement to be stamped by the Federal Inland Revenue Service (FIRS) where both parties are corporate entities. NOTAP Registration — where the licence is bundled with technology transfer, Section 5 of the NOTAP Act (Cap N62, LFN 2004) mandates registration with the National Office for Technology Acquisition and Promotion before the agreement takes effect. Governing Law — specify the Federal Republic of Nigeria; the Federal High Court has exclusive jurisdiction over intellectual property matters under Section 251(1)(f) of the 1999 Constitution. Dispute Resolution — parties may refer disputes to arbitration at the Lagos Court of Arbitration (LCA) or the Regional Centre for International Commercial Arbitration Lagos (RCICAL) before resorting to the Federal High Court. Employment matters arising from licence operations fall under the National Industrial Court of Nigeria (NICN). The Companies and Allied Matters Act 2020 (CAMA) and the Corporate Affairs Commission (CAC) govern the corporate capacity of the parties. Forms-legal.com provides this template as a starting point for Nigeria-compliant trademark licensing documentation; specialist IP counsel should review the registered user application to the Nigerian Trade Marks Registry before filing.