Corporate Affairs Commission clamps down on infringing registrations

Nigeria

Following restructuring to the Corporate Affairs Commission, mark owners will now find it easier to apply for the deregistration from the Register of Companies of company names that infringe their trademark rights. The deregistration on November 3 2006 of three companies highlights that the commission may now deregister an inactive company even when a conflicting trademark was registered after the company name.

The Nigerian Companies and Allied Matters Act has, for several decades, protected registered trademarks from identical or confusingly similar company name registrations in certain circumstances. Section 30(1)(d) of the act provides that:

"No company shall be registered under this act by a name which - in the opinion of the commission would violate any existing trademark ... registered in Nigeria unless the consent of the owner of the trademark ... has been obtained."

Section 31(4) further states that:

"Nothing in this act shall preclude the commission from requiring a company to change its name if it is discovered that such a name conflicts with an existing trademark ... registered in Nigeria prior to the registration of the company and the consent of the owner of the trademark ... was not obtained."

However, over the years, these provisions had not been largely implemented due to the shortcomings of the Corporate Affairs Commission.

With the restructuring of the commission, particularly, the computerization of the Register of Companies' records, one can now expeditiously deregister companies that were inadvertently registered on the basis of prior trademark registrations. However, it was not clear whether there was any remedy available to trademark proprietors that had registered their trademarks after the conflicting company names.

It appears from the deregistration on November 3 2006 of three company names, which were allegedly infringing later trademark rights, that the commission is very keen to implement Section 525 of the act, which provides for deregistration of shelf companies or companies that are otherwise dormant or inactive. Fortunately, the majority of offending companies in Nigeria fall within this category, the foremost test of which is the failure to file annual returns.

One of the most interesting aspects of the decision on November 3 to deregister the three company names is that even though the commission records indicated that two out of the three companies had filed their returns, the commission official noted that the returns were probably filed only as "a cover" to prevent deregistration. Investigations at the companies' registered addresses showed that the companies were not operating at the said addresses and helped to persuade the commission official that the companies should be deregistered.

Folasade Laniyan, Jackson Etti & Edu, Lagos

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