[Guest Post] The Nigerian Companies And Allied Matters Act 2020 and the protection of trademarks against similar company names

In 2018, this Kat celebrated the passing of the Bill for an Act to repeal the Companies and Allied Matters Act 2004 (CAMA 2004) in a post, which addressed some aspects of the Bill that particularly affect IP and creative entrepreneurship. Now the Bill has been signed into law and has become Companies and Allied Matters Act, 2020 (CAMA 2020). Amala Umeike describes one significant aspect of CAMA 2020 that trademark owners may apply to stop company promoters from registering their trademarks as company names.

Here's what Amala writes:

In Nigeria, trademark trolls and sometimes, local distributors and representatives of international brands, register companies at the Corporate Affairs Commission (CAC) using existing trademarks as company names. For instance, a company promoter may apply to register “Gucci Nigeria Limited” suggesting that the new company has some relationship or affiliation with the Gucci brand. This practice becomes problematic when such international brands decide to do business in Nigeria. Where their trademark is similar to or the same as their company name, they would be unable to register such trademark/company name at the CAC. Even if the brand does not seek to use its trademark as a company name, the use of its trademark by third parties as company names, may lead to trade mark dilution.

Pay me and you can use your mark...

This problem is exacerbated by the fact that the procedure for objecting and striking out an infringing company name from the company register under the Companies and Allied Matters Act 1990 (CAMA 1990) is quite cumbersome and unwieldy. While Section 31 (4) of CAMA 1990 vests the CAC with the powers of mandating the change of a company name that is found to conflict with an existing trade mark, the procedure is limited to “an existing trademark or business name registered in Nigeria”. Furthermore, that section did not provide the CAC with a mechanism for enforcing its directive should such company refuse or neglect to change its name.

The CAMA 2020 makes provisions that significantly address this issue by inter alia simplifying the procedure for striking out of company names from the companies register where such names are similar to an existing trademark.

The new provisions under CAMA 2020
Section 30(1)(d) of CAMA 2020 retains the powers granted to the CAC to mandate the change of a company name where it is discovered that it is conflicting with an existing trademark. Section 852(1)(d) stipulates that an applicant can object to a registered company name, limited liability partnership, limited partnership, business name or incorporated trustees on the ground that it is — "(a) the same as a name associated with the applicant in which he has goodwill; or (b) sufficiently similar to such a name that its use in Nigeria would be likely to mislead by suggesting a connection between the company, limited liability partnership, limited partnership, business name or incorporated trustee and the applicant”.

It is submitted that the use of the word “goodwill” in the said section as opposed to “registered trade mark” used in CAMA 1990 has extended the right to object to companies who may not have a registered trade mark in Nigeria but has “goodwill” in Nigeria. It is also submitted that this new provision introduced in Nigeria’s law is a direct response to the unwholesome activities of trademark trolls who register the trade marks of other companies as company names in order to prevent future registration of such trademarks as company names by the relevant trademark owners. This opinion is further strengthened when section 857(5) is considered. Section 857(5) indicates that an applicant’s objection will be upheld if they show that “the main purpose of the respondents (or any of them) in registering the name was to obtain money (or other consideration) from the applicant or prevent him from registering the name”. It is submitted that applicants may prove this by presenting any correspondence showing that the respondent had demanded for monetary compensation to him to relinquish the name to the applicant.

Another innovation introduced under CAMA 2020 is the establishment of the Administrative Proceedings Committee (APC) which is akin to a Tribunal, under section 851 of CAMA 2020. By section 857(2) of CAMA 2020, the APC is now the body empowered to hear objections on the registration of a company name on the ground that it is infringing on a registered trade mark or a mark in which the objector has goodwill. Furthermore, the APC has the powers to direct the change of an infringing company name under its omnibus powers as stated in section 851(4) of CAMA 2020, and importantly, is vested with the cohesive powers to enforce its decisions by way of imposition of sanctions which include suspending or outright revocation of the registration of a company.

Comments 

These new provisions are quite commendable, as it has made the procedure for objecting to an infringing company name less cumbersome. The requirements for instituting an expensive court action and other ancillary procedures are now obviated and replaced by a straightforward and cost-efficient proceedings at the APC whose decision on the matter can be enforced through various self-acting mechanisms including the revocation of the registration of the infringing company name.

Under the CAMA 2004, IP lawyers had to devise creative procedures to deal with the absence of powers for the CAC to enforce its directives to have a company change its name. These procedures included bringing a court action to enforce the directive of the CAC and thereafter instituting a winding up or contempt proceedings to enforce the judgment of the court where the infringing company name does not comply with the judgment. Despite being ingenious, these procedures were admittedly not just unwieldy, but time consuming and costly. [Usually, Court actions in Nigeria take between two to 5 years to conclude at the court of first instance, while high legal fees depending on the nature and complexity of each case and counsel’s experience.]

From the above provisions of CAMA 2020, it is with no doubt that the law makes the procedure to procure the change of name of a company using another’s trademark as company name, cost-effective and uncomplicated.  [This Africa Correspondent feels that the level of complexities with this CAMA 2020 procedure merely reduced from 10 to perhaps 4. What would reduce the complexities to zero at least for trademarks registered in Nigeria, is to create synergy between the CAC and the Trademark Registry perhaps by requiring company promoters to present a search report from the Trademark Registry showing that the proposed company name is not similar to or same as any registered trademark. The same approach may also extend to trademarks, which while not registered in Nigeria are "well-known" marks. Of course, the latter would only be possible if Nigeria domesticates the Paris Convention and TRIPS Agreement into its national statutes.]