There has been a trend where third parties adopt well-known trademarks in the incorporation of their companies. By so doing, the trademark forms part of the company name of the third party. Often, such third parties proceed to register their trademark with the said name; but even where they do not register the name as a trademark, the third parties still carry on business with a corporate name that incorporates a trademark belonging to another entity.
The Nigerian laws do not allow foreign companies to carry on business in Nigeria without being incorporated with the Corporate Affairs Commission, but foreign companies can own and register trademarks in Nigeria. To this end, some trademark trolls and third parties have used this leeway in the laws to register companies adapting well-known trademarks thereby misleading and deceiving the consumers. This is sometimes also done in bad faith with the aim of offering the incorporated companies (adapting the trademark belonging to a foreign entity) for sale to the foreign entities when such foreign entities decide to enter Nigeria for business.
The legal effect of registering a Company using an unauthorized trademark
The Corporate Affairs Commission is the statutory body charged with the responsibility of, amongst other things, incorporation of companies and the general administration of the Companies and Allied Matters Act. At the point of incorporation, a company could be incorporated with any name of choice of the proprietors’ subject however to the prohibited and/or restricted names under the Act.