it is wiser to register a name as a trademark first before proceeding to register with CAC as a legal entity
INTRODUCTION
There is a growing misconception around the registration of legal entities and its resultant effect(s) therefrom. The Companies and Allied Matters Act (CAMA) 2020 establishes the Corporate Affairs Commission (CAC) as a body corporate and clothes it with powers, amongst others, to conduct the registration/incorporation of legal entities.
Mythologically however, people have boldly begun to express, albeit ignorantly that the registration of such legal entities clothes the entities with a myriads of protections including protection against infringement vide the unauthorized use of their ‘brand’. An intellectual property lawyer is definitely taken aback when such an assertion is made and heard.
So when I recently heard a person say “no one can use my logo because I already registered my company with the CAC”, I realized that the necessity of this article was born.
LEGAL ENTITIES: SCOPE AND MEANING
It is any entity or organization existing, operating and carrying on its business legally subject to the fulfillment of laid down conditions and requirements; simply put, that is registered. Under the CAMA, legal entities include companies, business names, partnerships, associations, NGOs, churches, mosques, schools, hospitals etc.
Justice James Omotosho anchored by the prior trademark registration, gave judgment in favour of the plaintiff, upheld its rights and held inter alia that legally, trademarks have more weight than business names.
Some of these entities are business organizations why some exist not for the purpose of making profit but for achieving its goals common to its members.
CORPORATE REQUIREMENTS UNDER THE CAMA: INCORPORATION, WHAT DOES IT ENTAIL?
The CAMA provides for the registration of corporate bodies ardently discussed under these 3 headings as follows:
- Business Names
- Companies
- Incorporated Trustees
In this article, all of the above shall be jointly referred to as corporate bodies or legal entities used interchangeably, save there is need to individually and specifically reference one.
Now, the CAMA provides that for these entities to exist, function and carry on its business, they must be registered with the Corporate Affairs Commission.
Sections 20, 814 and 823 provide for the incorporation of companies, business names and incorporated trustees respectively.
the registration of a company, business or any corporation is a procedure that says “look, I do a legal business, and under — name”. Trademark does more. It goes on to protect your business and its features from use by your competitors in a way that they stand to benefit from it, and mostly to your detriment or loss
It therefore follows that incorporation/registration of corporations is what gives them the legal right to exist and carry on business.
THE REQUIREMENT OF TRADEMARK: HOW DOES IT WORK?
Trademark, Trade Mark, Trade-Mark law is one of the branches of intellectual property law (simply, IP law). Intellectual property are creations of one’s intellect or mind viz; artwork, artistic designs, brandings such as logo, music, literary works, etc. IP law is the body of law that provides for the protection of a person or organization’s intellectual property.
Trademark is a mark used or proposed to be used in relation to goods for the purpose of indicating, or so as to indicate, a connection in the course of trade between the goods and some person having the right either as a proprietor or as a registered user to use the mark. (S. 67, Trademarks Act).
A mark is then defined by the same section to include a device, brand, heading, label, ticket, name, signature, word, letter, numeral, or any combination thereof.
A trademark is any of the marks listed above that a company, individual or any legal entity uses to help its customers and consumers to identify the legal entity’s goods and services and distinguish them from the goods and services of other legal entities. The important factor is that it helps to distinguish.
Moving on, it is important to point out that trademark in itself does not protect, or offer protection against infringement. It is the registration of such trademarks that shields or prevents against any subsequent infringement; (without prejudice to the common law doctrine of passing-off) and the registration when done, gives or is deemed to have given to that person the exclusive right to the use of that trade mark in relation to those goods.: I.T. (NIG.) LTD. V. B.A.T. (NIG.) LTD (2023) NWLR (PT 1894) at 29 (quoted in part), citing section 5 of the Trademarks Act 2004.
While the registration of business and non business organizations is mandatory, the registration of a trademark is not. You are at liberty to register your trade mark or not, depending on how much you love and value your brand
The court also re-echoed further the words of section 5 that the right of the owner of a registered trademark shall be deemed to be infringed by any person who, not being the proprietor (the owner) of the trademark, or registered user or one who has permission to do so goes on to use a mark identical with it or so nearly resembling it as to be likely to deceive or cause confusion in the course of trade.
Trademark protects not the idea itself, but how the idea is packaged. This is one significant difference between trademark and its cousin, copyright.
WHAT CAN QUALIFY AS TRADEMARK? AN EXPANSIVE EXPOSITORY
Several things can be protected by trademark. What is important is that they connect the goods and services with a distinct, identifiable or particular source.
And so when I see that unique swoosh on a sneakers or a shirt, I can immediately tell that this is a Nike product.
Yes! I know exactly what you must think at this moment. I know that there are several shoes and clothes branded like Nike’s in circulation in the market. Now, Nike’s logo enjoys protection because it is a registered trademark and anyone or entity in the same industry as Nike who uses its trademarked logo without permission, or uses something confusingly similar has infringed on the trademark rights of Nike and Nike can sue for damages.
The concept of ‘confusingly similar says that “I bought this sneakers thinking it was Nike’s, because it was branded like Nike”. Beyond using its logo without permission, you (trademark infringer) have deceived Nike’s customers and stolen sales from them. They will sue.
Let’s look at a few scenarios;
SCENARIO A – NAME
If Mr. A does business under the name and style of Mr. Phenomenal, and goes ahead to register it with the CAC without trade marking the name, he cannot bring a claim for infringement of his rights if Mr. B trademarks the name Mr. Phenomenal with the Trademark registry. Instead, Mr. B can sue Mr. A for trademark infringement. It is immaterial that the CAC registration came first.
Note: a registrable name is not always the name of the company alone, it can be another name. e.g, Apple Inc. is the name of the company, but iphone, ipad, itunes etc are all trademarked names.
The Trademark Registry will not refuse a trademark registration by another person/organization simply because you have that name registered as your business name with CAC
Even, it may be advisable not to trademark your company name unless it is also a brand.
The Kizz Daniel Saga:
In 2018, following the exit of Kizz Daniel from his former record label G-Worldwid, the later claimed rights to the name ‘Kiss’ which they had trademarked; the situation eventually forced Kizz Daniel to change his name from Kiss to Kizz Daniel.
SCENARIO B – SLOGAN
The slogan “Just do it” is a trademark of Nike, the famous shoe and clothing company. If Kpekpeye Enterprises Nig. Ltd. begins a shoe business and uses the slogan “Just do it” to advertise its products/shoes, Nike reserves the right to sue kpekpeye as it amounts to infringement of Nike’s intellectual property rights.
Likewise, the trademark ‘shekpe’ cannot be used by any other musician but Davido, if trademarked.
SCENARIO C – SOUND
The ‘reflection’ ringtone of iphone, a trademark belonging to Apple electronics is protected from being used by any phones or gadgets produced by Samsung or any other companies in competing industries.
Likewise, the Channels television theme sound noticeably used at the beginning of news reports if trademarked cannot be used by any other television broadcasting company.
SCENARIO D – SHAPES
If Mimi baby body oil trademarks the shape of the container (oval shape) in which it packages its body oil for sale to consumers, Ristels body oil is prohibited from packaging its body oil in same shape.
Logos, Colours, tastes, smells and sizes can also be trademarked.
TRADEMARK AND COMPANY/TRADE NAME: A COMPARATIVE ANALYSIS
In the simplest terms, the registration of a company, business or any corporation is a procedure that says “look, I do a legal business, and under — name”. Trademark does more. It goes on to protect your business and its features from use by your competitors in a way that they stand to benefit from it, and mostly to your detriment or loss.
it is not enough that a search is done at the CAC alone, a search should also be conducted at the trademarks registry as a mandatory condition precedent
While the registration of business and non business organizations is mandatory, the registration of a trademark is not. You are at liberty to register your trade mark or not, depending on how much you love and value your brand.
Can your company name be trademarked by another even though you have registered your business?
Do you stand a chance of losing your logo to another company, even though you registered your business?
Can you lose you brand entirely even after registering your business?
The answers to the above questions are in the positive if you do not do something more: trademark them. The Trademark Registry will not refuse a trademark registration by another person/organization simply because you have that name registered as your business name with CAC; it does not even know you did, and it does not care to be honest. Its concern is with trademarks.
A cursory look at the facts of the case shows that though the business name of the 3rd defendant was first registered in Nigeria before the plaintiff’s company was registered some 7 years later, the law will accord priority to a registered trademark
Rather, by virtue of section 852 of CAMA, CAC is instructed to refuse the registration of any legal entity that is identical with or infringes on the rights of an existing trademarked name.
Further, section 851 (4) empowers the Commission through the Administrative Proceedings Committee (APC) to order and direct an entity to change its name if it finds that the use of that name by that entity infringes on a trademarked name.
These regulatory bodies (CAC and trademark registry) are enabled differently; they also have no unified database. Might I add, with CAC, you register the company, or business or an association, you do not register the brand. It’s different.
A brand is comprised of a symbol, name, design, a term or other feature that distinguishes an organization or product from its rival in the eyes of the customer. So you do not just boast: “my brand” with some nonetheless justifiable bloated ego simply because you have registered your company with the CAC, and have used it for a long time. Is the brand truly yours?
THE SANOFI CASE:
Though a decision of the Federal High Court as the court of first instance, the court’s holding is instructive and it is the present position of the law.
A brief facts of the case are that SANOFI S.A., (the plaintiff) a multinational pharmaceutical company with its headquarters in Paris registered its trademark in 1987 and then in Nigeria in 2004. The company then registered its subsidiary, SANOFI-AVENTIS LIMITED in Nigeria in 1999.
Eventually, the plaintiff noticed that Sanofi Integrated Services Ltd., Sanofi Nigeria Enterprises Limited and Susan Namiji (trading under the name and style of Sanofi Nigeria Enterprise) (1st – 3rd defendants) were using the trademark SANOFI to carry out its business.
The plaintiff sent several cease and desist letters to the 1st– 3rd defendants in 2021 asking them to discontinue use of its trademarked name, and eventually made a complaint to the CAC (sued as 4th defendant) which reviewed the complaint and directed the 1st – 3rd defendants to alter their names within six weeks. All the efforts yielded no fruits; hence the matter was brought to court.
The case of the 1st – 3rd defendants was that they registered SANOFI NIGERIA ENTERPRISES since 1992 and the 2nd and 3rd defendant companies in 2011 and 2013 respectively and therefore laid claim to the SANOFI brand.
In 2023, the court, per Justice James Omotosho anchored by the prior trademark registration, gave judgment in favour of the plaintiff, upheld its rights and held inter alia that legally, trademarks have more weight than business names.
The court granted injunctions against the 1st– 3rd defendants and directed them to change their business names. The 4th defendant (CAC) was directed by the court to cancel the names of the entities in CAC’s register of registered businesses if they failed to comply with the Order of court within 2 weeks from the date of judgment. The court also awarded damages.
A cursory look at the facts of the case shows that though the business name of the 3rd defendant was first registered in Nigeria before the plaintiff’s company was registered some 7 years later, the law will accord priority to a registered trademark.
It is important to also note that Nigeria operates a first to file system as against the first to use. What this means is that it is who is first to file for the registration of a trademark that reserves the exclusive right to the use of the trademark, irrespective of how long the other competitor has been using the unregistered mark.
CONCLUSION
Contrary to what you may have thought, registering your business with the CAC does not protect your brand from being infringed upon and even the possible eventual loss of your brand or any of its features thereof.
The proper and convenient thing to do after registering your legal entity with the CAC is to file for registration of your business name/brand as a trademark at the Trademarks Registry.
In fact, it is wiser to register a name as a trademark first before proceeding to register with CAC as a legal entity.
Additionally, Your corporate lawyer should also know that for the purpose of ascertaining existing entities with similar names during business registration processes, it is not enough that a search is done at the CAC alone, a search should also be conducted at the trademarks registry as a mandatory condition precedent, as failure to do so could amount to a gross corporate inadequacy that may cause the eventual loss of a brand, in the event that the registered business takes the name of an existing registered trademarked name.
As earlier mentioned, both the CAC and Trademarks Registry maintain separate data bases. Sometimes the loss (es) incurred is bigger than just forfeiture of the brand. Do not spend so many years and so much building your brand for someone else.
