Forfeiture of a trade mark as part a criminal conviction: a Nigerian perspective

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Can trade marks be subject to forfeiture orders? A recent case in the US gives the opportunity to Katfriend Chijioke Okorie (Penguide) to reflect on this issue from the perspective of Nigerian law. 

Here’s what Chijioke writes: 

“A few days ago, news spread that a jury in California convicted a popular motorcycle club – Mongols – of racketeering and racketeering conspiracy for the crimes of murder, attempted murder and drug dealing committed by individual members of the Mongols in the course of several years. 

The jury also found that the club’s trade mark and various items bearing the sign (e.g. vests, clothing and the like) as well as documents such as the Mongols’ constitution were to be forfeited to the US Government under the Racketeer Influenced and Corrupt Organizations Act (RICO Act). Under the RICO Act, ‘property’ that may be subject to criminal forfeiture includes: “real property, including things growing on, affixed to, and found in land; and tangible and intangible personal property, including rights, privileges, interests, claims, and securities”. 

Prosecutors sought a forfeiture of the Mongols’ trade mark as a way to cripple the organisation. The idea was that control of the trade marks would not only cut off the Mongols’ income stream (from selling patches and other merchandise to members) but would also empower Government officials to stop Mongols members from wearing any clothing item with the Mongol mark. Amongst motorcycle clubs, trade marks or insignia are at the heart of a certain club’s prestige and power. 

The judge in the matter has scheduled a hearing in February regarding the issue of whether a trade mark forfeiture order in the case exceeded the Government’s constitutional boundaries and offended the Mongols’ First Amendment rights. 

This post looks at the issue of criminal forfeiture of a trade mark from a Nigerian perspective. 

Are trade marks property that may be forfeited? 

There are provisions for criminal forfeiture of property and assets in the Nigerian Criminal Code Act, Economic and Financial Crimes Commission (Establishment) Act (EFCC Act) and the Corrupt Practices and Other Related Offences Act. 

One of the consequences of being convicted for the offence of constituting an unlawful society is that the property of the society within Nigeria will be forfeited to the State: see section 67 of the Criminal Code Act. Such property includes “the insignia, banners, arms, books, papers, documents and other property” belonging to such unlawful society: see section 68. 

A society is an unlawful society, if formed for any of the purposes listed in section 62(2) of the Criminal Code Act. These purposes include: killing or injuring or encouraging the killing or injuring of any person; destroying or injuring or encouraging the destruction or injuring of any property; and committing or inciting to acts of violence or intimidation. An unlawful society may also be one declared as such by an order of the President to be a society dangerous to the good government of Nigeria. 

Section 19 of the EFCC Act and section 47 of the Corrupt Practices and Other Related Offences Act provide for the forfeiture of property obtained as a result of the commission of an offence. There is no definition of ‘property’ or ‘assets’ in these statutes. However, in the case of the Criminal Code Act, there is mention of ‘insignia’, ‘other property’ and ‘banners’, which suggests that trade marks may be indeed forfeited if an organisation is found to constitute an unlawful society. Furthermore, it appears that the EFCC Act and the Corrupt Practices and Other Related Offences Act negate the inclusion of trade marks in criminal forfeiture. Both statutes stipulate that the property must have been realized as a result of the offence and it is unlikely that the trade mark of a convicted organisation might have been realized as proceeds of a crime. 

Another factor is the question of what would become of such property (including trade marks) once forfeited to the State. 

Assets forfeited under the EFCC Act are to be disposed of by the Secretary to the Commission and the proceeds paid to the federal government: see section 30(2). Under the Corrupt Practices and Other Related Offences Act, forfeited properties are to be disposed of or the court may order the accused to pay the value of the property as a penalty: see section 47. 

Under the Criminal Code Act, forfeited properties in the case of the offence of constituting an unlawful society are to be dealt with in such manner as the President may direct. It is opined that this discretion may be exercised by the President taking advice or suggestions from relevant experts on how best to deal with a forfeited insignia or trademark of an unlawful society. 

The issue of whether IPRs (in that case, copyright) was moveable property within the contemplation of section 44 of the Nigerian Constitution came up as an issue in the case of Musical Copyright Society of Nigeria Limited (MCSN) v. Nigeria Copyright Commission (NCC) discussed here. MCSN argued that insofar as Section 11 of the Copyright Act referred to copyright as a moveable property, copyright falls within the property referred to and protected by the Constitution. The NCC conceded that copyright was indeed moveable property but the assignee or licensee of copyright does not own property rights within the contemplation of Section 44 of the Constitution. However, the Court of Appeal decided the appeal on some technical issue and did not address the issue of whether copyright was a property right in that sense. Section 44 prohibits compulsory acquisition of property without due process but also provides that compulsory acquisition is permissible in the case of criminal forfeiture following conviction for an offence. 

Criminal Kat

What of cancellation of trade mark on grounds of public interest? 

Under the Trademarks Act, there is provision for the court to expunge or cancel a registered trade mark if the mark or the use of the mark would be contrary to the public interest. Trade marks are registered inter alia where the use of the mark would not be contrary to the public interest: see Section 34(2) of the Trademarks Act. Having been registered, an interested person may apply to court to have a registered mark expunged on the grounds that the registration was made wrongly – in this case, that the use of the mark would be contrary to public interest: see section 38(1). 

Based on the foregoing, it may be possible for the Government to apply to court to expunge or cancel the registration of a mark used or owned by a convicted criminal organisation. In such case, the Government would need to prove that the continued use of such trade mark by the criminal organisation would be contrary to the public interest. 

Proscription orders to the rescue? 

There is also provision for the courts to approve proscription orders banning the continued existence and operation of criminal organisations. A case in point is that of the Indigenous People of Biafra (IPOB), an organisation established to ensure the creation of an ‘Igbo nation’ comprising of the citizens of Biafra. The establishment of Biafra led to a civil war in Nigeria from 1967 to 1970 and was voided by the Nigerian government at the end of that war. IPOB members use the then Biafran flag as insignia for the group. 

In 2017, the Attorney General of the Federation, based on an executive order signed by the President, applied to the Federal High Court to outlaw the activities of IPOB in Nigeria as ‘an act of terrorism’. This followed several protests initiated by IPOB and the Operation Python Dance conducted by the Nigerian Army. The court granted the application based on section 2 of the Terrorism (Prevention) Act, 2011. 

The action attracted criticisms with the argument that due process was not followed before the declaration and proscription, making the order unconstitutional. Other critics pointed out that armed herdsmen terrorizing farmlands and local communities were yet to be proscribed despite the mayhem they have been alleged to cause in several instances. However, the organisation, IPOB remains outlawed as the proscription order has not been lifted. 

Considering the above (unlawful society, cancellation of trade marks and proscription orders), this blogger is inclined to think that there are several avenues in Nigeria to procure criminal forfeiture of trademarks and cripple convicted criminal organisations. 

For an organisation charged for constituting an unlawful society, see here.”