effective brand protection strategy in the fmcg sectoripfnigeria.com/events/17feb18.pdf ·...

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EFFECTIVE BRAND PROTECTIONSTRATEGY IN THE FMCG SECTOR

Obafemi Agaba,LLM.IP (Lond.); Notary Public Sector Head, FMCG & Brand Protection

LABOUR & EMPLOYMENT RELATIONSIN NIGERIA: EMERGING TRENDS &MITIGATION STRATEGIES

Taiwo Adeshina LL.M (Dundee)Sector Head, Real Estate & Infrastructure & General Commercial Practice

MANAGING FX DENOMINATEDLIABILITIES: LEGAL ISSUES &OPTIONS

Abayomi Adebanjo LL.B; MBA (LBS)Sector Head, Financial Services

2018 © Jackson, Etti & Edu.

EFFECTIVE BRAND PROTECTION

STRATEGY IN THE FMCG SECTOR

Being a Presentation to theIndian Professionals Forum atthe Indian High Commissionon February 17, 2018

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Obafemi Agaba, LLM.IP (Lond.); Notary PublicSector Head, FMCG & Brand Protection

OBJECTIVES OF THIS PRESENTATION

� At the end of this discourse, beyond explaining the

legal and regulatory regimes, we would have

highlighted the sociological realities relating to brand

protection and enforcement in Nigeria.

� Respective Brand Protection Teams ought to be

equipped with necessary tips in entrenching a

successful anti-counterfeiting campaign/brand

protection and enforcement strategy.

2018 © Jackson, Etti & Edu. 3

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Segment ISegment I Segment IISegment II

Legal & Regulatory

Regimes for Effective

Brand Protection.

Developing effective

brand protection

strategies.

This presentation is divided into two segments:


INSIGHTS

UNDERSTANDING THE BASICS

The subject of your manufacture or services are ‘products’ to you... but to the market ... each of these is a is a


�BRANDING is the process

involved in creating a

unique name and image for

a product in the consumers’

mind, mainly through

advertising campaigns with

a consistent theme.� BRANDING aims to

establish a significant and

differentiated presence in

the market by creating an

attracting force for

customer retention.-the Business Dictionary

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�Underlying the whole concept of branding is the legal notion called trademark.

• A "trademark" could be a device, brand, heading, label, ticket, name signature, word, letter, numeral or a combination thereof, used in indicating the source of particular goods or services or that a connection exists, in the course of trade, between the goods and the proprietor of the mark.

• It is the instrumentality through which branding is achieved!

• Trademark is a type of Intellectual Property (IP)

UNDERSTANDING THE BASICS


• Intellectual Property (IP) refers to the properties of a man which emanate from the power of his mind to reason. i.e. the “the creations of the mind.”

• They are intangible in nature, as distinguished from tangible properties, such as a car or a mobile phone which can be physically held.

INTELLECTUAL PROPERTY

WHAT IS INTELLECTUAL PROPERTY?


Common law right of

goodwill arising from

use.

Statutory right arising

from registration.

Both forms of rights grant

exclusivity capable of legal protection and enforcement in the

event of violation.

BRANDS: OF WHAT MOMENT IN LAW?


LEGAL AND REGULATORY REGIMES FOR BRAND PROTECTION

The legal regime for the enforcement of IPR in Nigeria is dividedinto three:

Civil Court Action

Criminal Court Action

Regulatory/Administrative Action


LEGAL REGIME – CONT’D)

� Civil Court Action

� Infringement

� Section 5 (2) Trademarks Act creates a right of action for

infringement of trade mark

� Essential elements of this action:

� Valid and subsisting registered trademark;

� That the mark being used on the offending product is

identical or confusingly similar to your registered trademark;

and

� that the product in question is the same goods or of the same

description of goods as that in respect of which your

trademark is registered;


LEGAL REGIME : CIVIL COURT ACTION (CONT)

�Civil Court Action

� Common Law Tort of Passing-off

� Section 3 Trade Marks Act recognizes and preserves the right of a brandowner to seek redress against violation of his mark where such is notregistered.

� Protects a business or product from being misrepresented as another’s, byuse of a name, mark, get-up, etc., similar to an existing company/businessname or existing mark (whether registered or not).

� Essential elements:

� Goodwill

� Misrepresentation

� Damages


LEGAL REGIME : CIVIL COURT ACTION – Cont’d

� SHORTCOMINGS/INADEQUACIES

• Snail paced – procedural technicalities/delay byopposing counsel; volume of cases;

• Poor understanding of substantive intellectualproperty laws and procedure – Judges and other Courtofficials;

• Poor funding of the judicial system;

• Possible corruption and compromises;

• Bureaucracy involved in obtaining Police protection forexecution of court orders;

• Ineffective enforcement of court orders andjudgments – Bailiffs.


LEGAL REGIME: CRIMINAL COURT ACTION

False Trade Description

• The Merchandize Marks Act, criminalizes the following acts:


1 2

3 4

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� Enforcement Procedure

� Recourse is made to the Police pursuant to its general duties of crime

prevention and detention under Section 4 of the Police Act. This forms the

legal basis for Police raids usually conducted in the markets.

� Advantages:

� Frequency/Nuisance effect

� Quick top organize

� Two-pronged – prelude the civil action

� Mopping up – ridding the market, periodically, of offending products.

� Criminal conviction – imprisonment and fines.

� Stigmatization


LEGAL REGIME: CRIMINAL COURT ACTION – Cont’d

LEGAL REGIME: REGULATORY/ADMINISTRATIVE ACTIONS

� CPC

� The CPC has inter alia the responsibility of providing redressfor obnoxious practices or unscrupulous exploitation of theconsumers by companies, firms, trade associations and/orindividuals. - See Section 2 (i) of the CPC Act Cap C25 LFN,2004


� SON

� SON is a statutory body, charged with the responsibility of registering

and regulating standard marks and specifications for products both

locally manufactured and imported products and services, throughout

Nigeria

-See Section 3 and 4 of SON Act, Cap S9, LFN, 2004.

� This forms the fulcrum upon which SON can be approached in

situations where the counterfeit products are sub-standard.

� EFCC

� Economic and Financial Crime has been defined to include ‘Theft of Intellectual property and piracy’. - See Section 46 of the EFCC Act, Cap E1, LFN 2004.

� The Commission can, based on this, carry out Intellectual Property

Right Enforcement, through criminal investigation, raids and

prosecution.


LEGAL REGIME: REGULATORY/ADMINISTRATIVE ACTIONS – Cont’d

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� NCS� The NCS was recently empowered under the Common

External Tariff (C.E.T) for 2008-2012 (has been extended)

Schedule 4 to treat ‘all counterfeit/pirated materials or

articles including base or counterfeit coin of any country’

as absolutely prohibited items.

� This opens a new phase for fighting counterfeits at our

various borders or port of entry.

� NCC

�This body is established to monitor, supervise and

regulate all matters affecting Copyrights in Nigeria

�See Section 34 of the Copyright Act, Cap C28, LFN

2004.

�They Guard against piracy of copyright works.


LEGAL REGIME: REGULATORY/ADMINISTRATIVE ACTIONS – CONT’D

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� SHORTCOMINGS


LEGAL REGIME: REGULATORY/ADMINISTRATIVE ACTIONS – CONT’D

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2

1

3

4

5

6

7

8

‘Bureaucratic

bottlenecks’

Jurisdictional

limitations

Ineffective

prosecution;

Possible

corruption and

compromise;

Inadequate

storage facilities

for seizures;

Poor funding

Inadequate

provisions in the

existing laws

Lack of co-

operation

among the

regulatory

bodies

DEVELOPING EFFECTIVE STRATEGIES

PRIOR TO VIOLATION OF IPR


PRODUCT IDENTIFICATION – It is imperative that you must know your product, and be familiar with all the trade marks and other intellectual property rights associated with such product.

REGISTRATION OF INTELLECTUAL PROPERTY RIGHTS –This affords the brand owner full protection under the law.

PRODUCT REGISTRATION WITH RELEVANT GOVERNMENT AGENCIES- This enables the brand owner the protection available under laws of a particular agency.

MARKET SURVEY – This connotes that a system of routine checks of the market should be carried out to ascertain the existence of counterfeits.

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DEVELOPING EFFECTIVE BRAND PROTECTION STRATEGIES

�POST VIOLATION OF IPR –

� INVESTIGATIONS – The overall objective of investigation is to

ascertain all necessary details and evidence of the offending acts.

�Methodology

� Market search

� Corporate search

� On-site investigations

� Trademark searches

� On-line searches

�Reconcile the applicable laws with the findings and peculiar

facts of the matter – no one size fits all!


SOCIOLOGY OF ENFORCEMENT

� The Harsh Reality!

� The harsh reality that brand owners are faced with is that irrespective of

the foregoing shortcomings and inadequacies associated with the various

options available under the legal regime, the brand owner has no choice

but to protect its IPR and combat counterfeiting, and unfortunately, only

within the ambits of the afore-mentioned legal options.

� The Challenge!

� The challenge, therefore, is how does the brand owner work within the

ambit of the existing legal regime, with its many shortcomings, and yet,

achieve its goal of ridding the markets of counterfeits and reaping home

commercial success.

� A critical analysis of the shortcomings highlighted above, as well reasons

why counterfeiting thrives in the country reveals that the shortcomings, as

well as the reasons, are in the main, factors borne out of societalbehavioural patterns. They are sociological in nature!


DEVELOPING EFFECTIVE BRAND PROTECTION STRATEGY

Sociological initiatives� Re-cycling of defendants within one civil action;

� Effective public relations with the regulators;

� Choice of personnel;

� Strategic persuasion;

� Public enlightenment;

� Mixed grill of firmness and benevolence in enforcementteams;

� Swiftness in carrying out enforcement actions;

� Training program for judicial and regulatory officers;

� Institutional support;

� Flexibility;

� Multi-pronged approach

� Once you seize, tie seizure down with some judicialprocess.

� Swift instigation of criminal prosecution from theFederal Ministry of Justice where police or a regulatoryauthority becomes ineffective or compromised.


CONCLUSION

�It is imperative to note that counterfeiting is a dreadeddisease that has eaten deep into the commercial nervesof many businesses. Thus, combating it requires clearlyarticulated sociological strategies, incorporating thelegal and regulatory regimes.

�However, it should be noted that strategies should notbe cast in stone. The use of one, or combination of twoor more largely depends on the peculiar circumstanceof each case.


RCO Court 3-5, Sinari Daranijo Street, Victoria Island, Lagos, Nigeria.

t: +234 (1) 4626841/3, +234 (1) 2716889

e: [email protected] w: www.jacksonettiandedu.com

…THANK YOU


LABOUR & EMPLOYMENT RELATIONS

IN NIGERIA A Presentation to the Indian

Professionals Forum at the

Indian High Commission

Taiwo Adeshina, LL.M (Dundee)Sector Head, Real Estate & Infrastructure & General Commercial Practice

February 17, 2018

EMERGING TRENDS & MITIGATION STRATEGIES

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LEGAL FRAMEWORK

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THE CONSTITUTION (1999) THIRD ALTERATION ACT

2 THE NATIONAL INDUSTRIAL COURT ACT

THE LABOUR ACT

IMMIGRATION ACT

INDUSTRIAL TRAINING FUND ACT

EMPLOYEES COMPENSATION ACT

NIGERIA SOCIAL INSURANCE TRUST FUND ACT

NATIONAL HOUSING FUND ACT

NATIONAL HEALTH INSURANCE ACT

PENSION REFORM ACT

NATIONAL MINIMUM WAGE ACT

HIV/AIDS ANTI-DISCRIMINATION ACT

JUDICIAL PRECEDENTS/CASE LAW

CONTRACTUAL DOCUMENTATION BETWEEN EMPLOYERS & EMPLOYEES

NATIONAL INDUSTRIAL COURT – THE INFLUENCER

THE CONSTITUTION OF THE FEDERAL REPUBLIC OF NIGERIA (THIRDALTERATION ACT) 2010

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01

02

03

04

Section 254 of the 1999 Constitution (as altered) grants the NIC exclusive jurisdiction (Civil & Criminal matters) on labour and employment relations.

Section 7 NIC ACT/Section 254(C)1999 Constitution (as altered) vsSection 12 1999 Constitution.

The Supreme Court has held that there is noconstitutional provision divesting the Court ofAppeal of jurisdiction to hear appeals emanatingfrom the National Industrial Court of Nigeria (NICN)and that the right of appeal is not limited tofundamental rights cases.

Appeals will lie as of right from the decision of the National Industrial Court to the Court of Appeal only on questions of fundamental right and Criminal matters

� Coca-Cola v Titilayo Akinsanya

� Triangular employment maylead to co-employment in asituation where an employeewould be regarded as beingemployed by two employersany one of which may be boundby the terms of the contract ofemployment.

� Determinants of Co-employment� Recruitment� Termination� Direction� Supervision� Remuneration

EMERGING TRENDS - TRIANGULAR EMPLOYMENT/CO-EMPLOYMENT

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RECOGNISED

BY LAW

EMPLOYEE

END USEREMPLOYER

EMERGING TRENDS - TERMINATION OF EMPLOYMENT

� Reasons for termination of Contracts ofEmployment

� Termination of employment for good reason, bad

reason or no reason at all.

� In a recent decision of the NIC, it was held that

where the contract of employment contains

grounds upon which the employment can be

terminated, then termination must fall under

any of the agreed grounds and same must be

stated when the employment is being

terminated.

� The NIC has also stated that termination of

employment without reason is no longer tenable

in line with international best practices.




� Redundancy

� Entities with Unionised employees

� Redundancy is carried out based on

any existing collective agreements

negotiated between the employees

and the union.

� Entities with Non-unionised employees/ParentCompany Policy (2017 Experience)

� The provisions of the Labour Act (Section 20)provide for the applicable steps:� inform the workers concerned of the

reasons for and extent of the anticipatedredundancy;

� apply the principle of last in, first out inthe discharge of the worker subject tofactors like relative merit, including skill,ability and reliability;

� Use best endeavours to negotiateredundancy payments to any dischargedemployees.

� Resignation

� Can an Employer reject a resignation?

� No. A notice of resignation of an appointmentbecomes effective and valid the moment it isreceived by the employer.

� Options available to an employer whereresignation is tendered prior to commencementof investigation for disciplinary actions

� Where the resignation is with immediateeffect, that is, payment in lieu of notice, theemployer’s only relief might lie in an actionfor breach of contract.

� Where the resignation gives notice, theemployer may summarily dismiss theemployee provided that the investigation hascommenced and same is concluded beforethe end of the notice period.



� Termination by Notice

� Usually done in accordance with notice

requirements whether as prescribed in

the Labour Act (for workers governed by

the Act) or in the contract of

employment.

� Payment in lieu of Notice

� Either party reserves the right to accept

payment in lieu of notice in this regard.� Must be made simultaneously with the

proposed termination.

� Payment in lieu of notice is the basic

salary.



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DATA PROTECTION

� Transfer of Employees’ Data outside Nigeria

�NITDA Guidelines applies to organisations based outside

Nigeria that process personal data of Nigerian residents.

�Consent of employees required pursuant to NITDA

Guidelines.

�Data can only be transferred to countries that have an

adequate level of protection pursuant to the Guidelines


EMPLOYMENT TRAINING BOND

� As a general rule, employment contracts that act as

restraint of trade are unenforceable unless it can

be proven that it is reasonable as it affects the

interest of the parties concerned (the employer and

the employee), the public and does not amount to

unfair labour practice.

� Employment bonds are however enforceable against

the parties who executes them and a breach by the

employee is treated as a breach of contract.

� Where damages are stipulated for breach of the

contract, the employee must pay the named

damages in case of breach.


INTELLECTUAL PROPERTY RIGHTS

� Copyright

� Copyright belongs in the first instance to the

author, unless otherwise stipulated in writing

by contract.

� Exceptions

� Where literary, musical or artistic work is made

in the course of employment with a newspaper,

magazine or similar periodical for the purpose

of being published in that newspaper,

magazine or periodical.

� Patents & Designs

� Where invention occurs in the course of

employment, the right to the patent is vested

in the employer (statutory inventor).

� The employee (true inventor) must be named

in the patent.


MITIGATION STRATEGIES

� EMPLOYMENT AUDIT

� REDRAFTING

� STANDARDISING

� HARMONISING

� PERIODIC TRAINING ON EMPLOYMENT

RELATIONS IN NIGERIA



t: +234 (1) 4626841/3, +234 (1) 2716889


…THANK YOU


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MANAGING FX DENOMINATED LIABILITIES

A Presentation to the Indian

Professionals Forum at the

Indian High CommissionAbayomi Adebanjo

February 17, 2018

LEGAL ISSUES AND OPTION:

OUTLINE

Understanding Nigeria’s FX Dynamics

Architecture of Foreign Exchange Market

Legal Issues Underpinning the FX Market

Options

Conclusion


UNDERSTANDING NIGERIA’S FX DYNAMICS

‘For years, the dollar’s role as the major global currency has been termed

an “exorbitant privilege and now it may be becoming an extravagant

curse’

• Framework of FX market principally based on the Foreign

Exchange (Monitoring and Miscellaneous Provisions) Act - A

legislation passed on 1995 that gives the CBN the

supervisory mandate to regulate and oversee; and Foreign

Exchange Manual . However this legislation currently

under review through the Foreign Exchange (Control and

Monitoring) Bill 2016

• Nigeria is a structurally concentrated economy dominated

by six sectors which account for 75% of GDP but Oil

accounts for over 93% of FX earnings and over 63% of

revenues over the past five years

• Strong correlative relationship between Oil Prices,

Exchange Rate and Inflation



UNDERSTANDING NIGERIA’S FX DYNAMICS

Strong policy regulation of FXMarket through CBN circulars,guidelines and directives - over 40circulars in 24months targeteddirectly at the FX Market

Transitioned from a PeggedRate Regime established andoperational over 40 years to aManaged Float Regime in 2016

Significant dollarization ofeconomy driven by strongdemands for importedproducts, dollar as betterstore of value and insatiableappetite for luxury

Highly speculative FXmarket characterisedby lack of transparencyand significantarbitrage opportunities

Weak Infrastructure

meaning significant

under-manufacturing

capacity

inability to exploit

comparative advantages

e.g. raw materials and

processing41


ARCHITECTURE OF EXCHANGE RATE MARKET

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Central Bank of Nigeria Rate (CBN Rate)

Nigerian Autonomous Foreign Exchange Fixing (NAFEX)

Nigerian Interbank Foreign Exchange Market (NIFEX)

Multiple Exchange Rate Regime comprising

Bureau De Change Rate (BDC Rate)

Pilgrim Rate

Parallel Market Rate (Black Market)


NIFEX RATE CHARACTERISTICS

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Underpinned by the ‘Revised Guidelines for Operation of Nigerian Interbank Foreign Exchange Market’ issued in June 2016

Introduction of FX Primary Dealers – authorised dealers designed

to deal in large trade sizes and provided 2 ways quotes for

standard amounts and spreads– together with participation of Oil

Companies, End-Users, Authorised Dealers etc

IFEX based on two way order quotes with agreed spreads and use

of CBN approved derivatives products – FX Options, Forwards

(Outright and Non- Deliverable), FX Swaps and Cross-Currency

Interest Rate Swaps

Addition of OTX FX Futures - Naira-settled non-deliverable

forward contracts where parties agree to an exchange rate for a

predetermined date in the future, without the obligation to

deliver the underlying currencies (US Dollar and Nigerian Naira)

on the maturity/settlement date.

01

02

03

04

� End-users can execute OTC FX Futures withpreferred DMBS instead of DMB with tradesupporting documents

� Margin requirements to mitigate counterpartyrisk subject to requirements set by FMDQ andNIBBS – Clearing Agent

� CBN interventions either directly through theIFEX by buying or selling FX spots, FX Forwardsor offering OTC FX Futures

� CBN Secondary intervention through theSecondary Market Intervention Sales on awholesale (authorised dealers) or retail (end-users) basis


NIFEX RATE CHARACTERISTICS – CONT’D

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� The OTC FX Futures contract is aneffective exchange rate management toolsupported by a transparent price driventwo-way quote (2WQ) market

� Transactions underlying derivativescontracts must be trade backed (visible/invisible) including – Foreign currencyloans, FDI, Dividend Repayments, Importtransactions, Fixed Income Securities,Quoted Securities et

� Minimum transaction that can beexecuted between counterparties set at$500k

• Creation of the Investors and Exporters Window as a special window by CBN to accommodate FX obligations

• Permissible transactions eligible to access window include:

• Trade related payment obligations

• Bills for Collection

• Invisible Transactions (excluding Airline International Ticket Sales)

• Opportunity to hedge FX exposure through CBN approved hedging mechanisms including OTC FX Futures

• Holders of Legacy OTC FX Futures Contracts ( April 2017 – March 2018) with option to have settlements based on either NIFEX rates or NAFEX rates

• Nafex fixing methodology based on a polled rate based on the submissions of ten(10) contributing banks and calculated using a trimmed arithmetic mean. Uponreceipt of quotes, the individual contributing banks’ submission is ranked indescending order. The lowest and highest two (2) quotes are eliminated from theranked rates leaving only the middle six (6) rates. The arithmetic mean of theremaining rates are then calculated to two (2) decimal places and disseminatedas the NAFEX Spot Rate.


NAFEX RATE CHARACTERISTICS – CONT’D

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LEGAL ISSUES UNDERPINNING THE FX MARKET

Erosion of Value Currency Mismatch

Increased costs of capital Convertibility/Repatriation

of Capital

Increased contractual delinquency ratio

Regulatory Issues - 41 items Not Valid for Forex,

loans to Non-dollar generating business


OPTIONS

Key Advantages

� Prevention of Loan default

� Preservation of Security

� Realignment of facility with

more predictable cashflows


Redenomination and Refinancing:

� Naira debt instrument will be

used to purchase USD at the FX

market to prepay the USD

facility.

� FX conversion mechanism will be

given elaborate consideration

� Structure of

conversion/repayment process

� Revision of existing security

documents to incorporate the

Naira facility.

� Consideration of insolvency

hardening period triggers for the

existing security interests under

the USD facility can be a major

factor in the structuring.

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�Derivatives/ Hedging Mechanisms

A derivative is a financial instrument whose value derives from the value ofsomething else and which entitles the holder to buy or sell a commodity atsome future date for a predetermined price.

Based on Nigerian Master FX Agreement and ISDA documentation

� FX Derivatives

• FX Forwards: The maximum tenor allowed for FX Forwards and byimplication FX Swaps and Cross-Currency Interest Rate Swaps is nowextended to five (5) years.

• Cross Currency Interest Rate Swap: Used to support projects withlong-term foreign exchange exposure and shall therefore be projectbacked.

• OTC FX Futures: Non-deliverable Forwards traded on FMDQ Platformand settled based on NAFEX rates


OPTIONS

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Improve the business planning practice ofend-users and FX sellers, as the futureexchange rate is guaranteed through thederivatives market

Eradicate the constant front-loading of FX

requirements and minimize the

disequilibrium in the Spot FX market.

Useful in attracting significant capital

flows to the Nigerian fixed income and

equity markets as returns can now be

enhanced as FX exposures are hedged.

Key Advantages


OPTIONS

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1

2

3

CONCLUSION

• Documentation should always anticipate and provide mitigants for fxrelated risks

• Standard clauses are not sacrosanct – parties can always innovate tomeet intervening realities

• Ensure alignment between loan amount and underlying denominationof repayments

• Consider on-lending mechanisms using ECA’s and DFIs to reduce cost ofcapital

• GET A GREAT COMMERCIAL COUNSEL



t: +234 (1) 4626841/3, +234 (1) 2716889


THANK YOU

for the audience!


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