In Nigeria, under the Trade Marks Act (TMA), a Trademark License Agreement may be registered by the licensee and the registered proprietor. The Trade Marks Act does not use license but describes it as a “right of use” or "permitted use" of a trademark. In the TMA such license agreement are known as the Registered User Agreement.
Section 33 of the TMA states that “…a person other than the proprietor of a trademark may be registered as a registered user thereof…..”
In considering whether it is a mandatory requirement to register the trademark license agreement, it may appear that by the use of the word "may" instead of "shall" in the above section, the requirement to register may not be mandatory. However, it is important to register the trademark license agreement as non-registration will likely have an adverse effect on the licensee.
Generally, it is practice that the registry must be notified of all changes to a registered trademark to ensure that the register is updated accordingly. Non-registration of the license agreement may have the following adverse effects on the licensee:
A) The trademark licensee will not be able to bring an action for infringement against a 3rd party. The TMA allows the trademark licensee to bring an action for infringement in its own name against third parties if the trademark proprietor refuses to do so. However, this is subject to the terms of the license agreement.
B) The trademark licensee cannot claim damages in an action for infringement since his rights to the trademark are not recognized. Where the trademark license agreement is not registered, only the trademark proprietor can bring an action against or claim damages against a third party infringer.
As such, it is always important for the licensee to ensure that a license agreement is duly registered and recorded by the trademark registry.
