Fair Trade, Monopoly And Competitiveness: Appraising The Legal Rights Of Franchisees Against Parallel Imports In Nigeria

THE NIGERIAN LEGAL FRAMEWORK

As stated earlier, grey goods generally are genuine (not counterfeit) products, but they may have been manufactured for a different market, and are usually imported into a target market without the consent of the patent/trademark owner. These goods are then further distributed within the target market without the permission of the franchisee(s) appointed for that market. Therefore, the legal status of parallel import in a given jurisdiction rests squarely, on the treatment that is given to the doctrine of exhaustion of IPR, in the applicable IP laws.

The Nigerian IP regime is governed by a number of statutes which include the: Trademarks Act (Cap. T13, LFN 2004); Merchandise Marks Act (Cap. M10, LFN 2004); Copyright Act (Cap. C28, LFN 2004); Trade Malpractices (Miscellaneous Offences) Act (Cap. T12, LFN 2004); and the Patents and Designs Act (Cap. P2, LFN 2004).

Admittedly, these statutes create the basis for the ownership, proprietorship and authorship of patentable inventions and registrable innovative brands, and (sometimes) criminalize any acts that violate or compromise the genuine image of registered proprietary rights, such as counterfeiting or false misrepresentation or any other forms of infringement. However, the laws unfortunately are all silent on the extent to which an IP owner, or his licensed representative in respect of any branded product, can legally restrict the distribution and sale of such product in the market by an unlicensed importer or trader.

In the Nigerian IP statutes as earlier stated, neither parallel imports nor the exhaustion doctrine is specifically noted. However, there have been a number of judicial pronouncements by the Nigerian courts on the knotty issue of parallel imports. In the case of The Honda Place Limited Vs. Globe Motors Limited [2005] 14 NWLR (Pt.945) 273, the Plaintiff, who was licensed by the Japanese manufacturer of Honda cars for the Nigerian market, entered a sub-dealership agreement with the Defendant granting the right to import and sell the cars allotted to the Plaintiff by the manufacturer. The Plaintiff claimed that the Defendant, in breach of their contract, was engaging in parallel importation of Honda cars from the United States instead of Japan and in order to protect its business and reputation, sued the Defendant on the grounds that Honda cars from the United States were ill-adapted for the Nigerian climatic conditions and fuel specifications. In delivering a consent judgment (adopted by the parties), the Federal High Court ordered the defendant to cease from importing Honda cars from the United States or any other country different from Japan.

Whilst the decision by parties to amicably settle the above case seems to have deprived us of the opportunity of a full judicial pronouncement, on the legal rights of IP owners and their licensed agents against the parallel importation of their branded goods, the issue appears to have been settled by the Court of Appeal in the case of Pfizer Specialties Limited Vs. Chyzob Pharmacy Limited (LER [2006] CA/L/282/2001), where the court held that parallel importation is a foreign doctrine, which is not actionable under Nigerian Law.