Trademark v. CAC Registered Name by Boluwatife Sanya

Our client QQQ limited (not the real name) in the technology space owns four trademarks, of which each mark was used for different softwares that have been launched. Particularly, one of the trademarks (QR2) not the real name has gained so much traction in the public space and several other companies have made proposals to partner with our client and or even purchase the software which is branded with QR2.

Suddenly, a staff in QQQ limited drew the attention of his Managing Director to an advertisement he came across on Facebook where he observed that someone had registered QR2 as a company limited by shares in Nigeria.

We were contacted and instructed to conduct a search at the Corporate Affairs Commission to ascertain whether there is a company registered as QR2 Limited, we did and found that the company was registered just last month whereas our client’s trademark (QR2) was registered  in 2021.

Apparently, the person who incorporated QR2 limited wanted a legitimate way to pass off/ use the name QR2 without seeking recourse to the trademarks registry. The question that popped in mind was; can a registered trademark be used as a company name at the Corporate Affairs Commission by a person other than the owner of the trademark?

What is the position of law?

The law is that a name/trademark which has already been registered as a trademark with the trademarks registry cannot be registered as a company name by a person other than the proprietor/owner of the trademark. See sections 852(1d) and 857 of the Companies and Allied Matters Act, 2020 (CAMA).

Interestingly, CAMA covers instances of pre-incorporation (before the company is registered) and post-incorporation (after the company is registered). This means that a trademark owner can object to his mark being used as a company name either before the company is registered or after registration.

Pre-incorporation

Pre-incorporation covers all kind of applications or agreements done before the corporate affairs commission approves the proposed company for registration.

In line with Section 852(1d) of the Companies and Allied Matters Act, 2020, an objection can be raised by a trademark owner that a proposed company name is identical to his trademark. The section empowers the Corporate Affairs Commission  to refuse such registration. However, it is observed that this provision is strictly left at the discretion of the corporate affairs commission.

Although, it is my argument that the provision is impracticable for two reasons.

First, the public is not put on notice when a company is to be registered in Nigeria. It is only when an incorporated trustee is to be registered that a notice will be published in the newspaper for the public to know who the intended trustees would be. Hence, how then will a trademark owner know that his mark is to be registered as a company name?

The only option we are left with is if the corporate affairs commission finds out itself. That leads us to the second impracticability.

Second, there is a slim possibility that the commission will find out because the corporate affairs commission and the trademarks registry do not have the same database. Hence, the commission can only exercise the discretionary power of refusing a proposed company name when it is a well-known mark.  For instance, an application to register Cocacola Nigeria limited by an entity other than Nigeria Bottling Company.

Of course, our client was not aware during the pre-incorporation stage. Hence, we resolved the issue through another route of redress during post-incorporation.

Post-incorporation

After incorporation of a company with the corporate affairs commission, a person can object to the registered name of the company in two instances.

First, if the registered name with the CAC is the same or associated with the applicant with which he enjoys goodwill.

Second, if the registered name is sufficiently similar to that of the applicant and would likely mislead the public by suggesting a connection between the applicant and the registered company.

Which defences could the registered company (respondent to the objection) rely upon?

1. That the company name was registered with the corporate affairs commission before the applicant/objector commenced activities with the name which made him have goodwill with the name.
2. The respondent adopted the name in good faith. This is easy to prove when the applicant and respondent are not in the same industry or there is no probability that the respondent has come across the name or the name itself does not have goodwill.
3. That the interest of the applicant is not adversely affected to any significant extent.

However, note that regardless of the probable defences stated above, the objection of an applicant may be upheld if it is established that the principal reason for the registration of that name as a company name is to collect money from the applicant or to prevent the applicant from registering that name.

A question that pops in mind is; what if it is an already registered company name that another person registers as a trademark and carries on business with it? I will address this next week.

Recommendation

Harmonisation of the trademarks registry and corporate affairs commission. Alternatively, they should make use of one portal.

Legal Advice

Trademark all your marks or names used in carrying on business. This should include the registered company name itself.

Boluwatife Sanya 

LL.B, B.L, Copyright (Harvard), ACIArb (U.K), MIP (WIPO, ARIPO, A.U)

Boluwatife is the Managing Partner of Paddle Solicitors. Paddle Solicitors is a full-service litigation, commercial and dispute resolution law office.