Licensing · Essay 08
Licensing Across Borders
A Nigerian registration protects a Nigerian mark in Nigeria. The moment a licence crosses a border, it is protecting nothing at all until somebody registers it there too.
A Nigerian skincare brand, proud of a decade of registered protection at home, licensed a South African operator to build the brand across that market. Eighteen months in, a quality dispute surfaced serious enough to warrant termination. The owner's lawyer went looking for the registration to enforce — and found that a South African company, entirely unconnected to the dispute, had registered a confusingly similar mark eight months before the licence was even signed. The Nigerian registration, watertight at home, had done nothing to prevent it, because it had never been asked to operate outside Nigeria in the first place.
Paul Magaji · 5 min
Everything this cluster has covered so far assumes a licence sitting inside one legal system. The moment either party is outside Nigeria — a Nigerian mark licensed abroad, or a foreign mark licensed into Nigeria — three additional questions arrive at once: whose registration actually protects the mark where the licensee operates, whose courts and whose law govern a dispute, and how money actually moves between the two systems. This essay takes the first two. The third — currency, repatriation, and the regulatory mechanics of moving royalty payments across the Nigerian border — belongs to Money Under Law, this publication's dedicated legal-financial series, rather than being absorbed here as a footnote to a subject substantial enough to deserve its own full treatment.
A trademark right does not travel with the licence that relies on it. It has to be built, separately, in every country the licence actually reaches.
Act One
Territoriality, again, at a larger scale
Trademark rights are territorial — a point this cluster has already made in the context of a single country's classification system, and one that matters considerably more once a licence crosses a border entirely. A Nigerian registration is a right enforceable in Nigeria. It grants nothing in South Africa, nothing in the United Kingdom, nothing anywhere a Nigerian mark owner has not separately registered — and a licensee operating abroad under an owner's name is operating under protection that may not exist at all in the licensee's own market.
The practical consequence is sequencing, and it is unforgiving of delay in a way domestic licensing rarely is: registration in the licensee's territory should be secured, or at minimum filed, before the licence begins operating there, not after a dispute makes the gap visible. Where the owner does not hold a registration in the target territory, the licence agreement should specify who is responsible for filing one — the owner directly, or the licensee on the owner's behalf, with ownership of whatever results vesting in the owner regardless of who did the filing — because a licensee left to register the mark in her own name, even with good intentions, has created exactly the ownership dispute a private-label arrangement's anti-registration covenant exists to prevent, applied here across a border instead of across a factory floor.
Act Two
What changes once a border sits between the parties
Crossing One
Governing law and forum
A cross-border licence with no stated governing law is a dispute waiting to be fought twice — once over the merits, and once over which country's court gets to hear them.
The agreement should state, expressly, which country's law governs interpretation and which forum resolves disputes. Litigation in a foreign court, for either party, means engaging counsel, procedure, and a legal system neither may have any real familiarity with — which is why cross-border licences increasingly favour arbitration, now governed in Nigeria by the Arbitration and Mediation Act 2023, over litigation in either party's home courts. An arbitral award is, in practice, considerably more portable across borders than a foreign court judgment, which many national court systems will not enforce directly at all without a fresh domestic proceeding.
The Reach
A judgment an owner wins in a Nigerian court against a foreign licensee is, on its own, frequently unenforceable against that licensee's assets abroad — it is a piece of paper until a court in the licensee's own country agrees to recognise it, which is a proceeding of its own, not a formality.
Crossing Two
Withholding tax and the treaty question
A cross-border royalty is taxed twice by default — once by the payer's country, once by the recipient's — unless a treaty between the two says otherwise.
Nigeria has entered double-taxation treaties with a number of countries, which can reduce the standard withholding rate applied to a cross-border royalty payment where the recipient qualifies as a resident of a treaty partner for tax purposes. Which countries currently have an operative treaty with Nigeria, and on what terms, changes as agreements are entered, renegotiated, or in some cases terminated — precisely the kind of detail this essay will not fix a name or a rate to, because printed certainty about a treaty network is stale the moment the network changes. A party to a cross-border licence should confirm the current treaty position with a tax adviser at the time the royalty clause is drafted, not assume whatever was true when a similar deal was done previously.
The Reach
A royalty priced without accounting for withholding at both ends can leave one party receiving materially less than the number printed in the contract — a gap that surfaces on the first payment, not at signature.
Crossing Three
Moving the money — and where this essay stops
Royalty payments crossing the Nigerian border are a foreign exchange transaction before they are anything else, and Nigeria's foreign exchange regime is its own body of law.
A royalty owed to a party outside Nigeria, or owed from abroad into Nigeria, moves through Nigeria's foreign exchange framework — involving documentation for external remittances, the Central Bank's role in the process, and considerations that differ depending on which direction the money is travelling and how the original investment or licence was structured. This is not a subject a single clause in a licensing essay can responsibly compress, and attempting to would risk giving exactly the kind of confident-sounding but shallow guidance this series exists to avoid. Money Under Law treats the legal architecture of money crossing borders as its central subject; anyone drafting the payment mechanics of a real cross-border licence should read that series' treatment in full rather than rely on a summary here.
The Reach
A royalty clause that specifies an amount and a currency without addressing how that amount actually leaves or enters Nigeria has specified an obligation, not a payment mechanism — and the gap between the two is exactly where cross-border royalties most often stall.
Crossing Four
Enforcement needs a local partner, not just a local clause
A well-drafted governing-law clause tells a court which law to apply. It does not, on its own, get a counterfeiter's goods seized at a foreign port.
Practical enforcement — customs recordal to stop counterfeit goods at a border, a takedown against an infringing local competitor, a dispute with the licensee herself — almost always requires counsel qualified in the licensee's own jurisdiction, engaged before a problem arises rather than found in a hurry once one has. An owner licensing abroad for the first time should treat local counsel in the licensee's market as a standing relationship, not a one-time hire reserved for emergencies, in the same way a Nigerian quality-control inspection right in Law of the Label depends on someone actually being able to walk into a factory and look.
The Reach
The South African registration in the opening was discovered only once a dispute made it urgent to look — and by then, the eight-month head start the other registrant had was no longer a fact the owner could do anything about.
Every protection this cluster has built into a licence stops at the border unless somebody deliberately rebuilt it on the other side.
The skincare owner's mark was, by every domestic measure, well protected — properly registered, carefully licensed, its quality standards clearly documented. None of that travelled with the licence to a market where somebody else had simply gotten there first.
This publication is educational and analytical. It describes how legal and commercial structures work; it does not advise on any particular matter, and nothing here should be relied upon as advice on a reader’s own affairs. The author holds commercial interests in the brand-building and private-label sector examined by this series.