Introduction
It is now established that a registered or unregistered trademark owner can sue for the infringement or passing off of their trademark by another registered trademark owner where the public is deceived into believing that goods produced by the latter are in fact produced by the former. This means that the registration of a trademark cannot in all cases constitute a complete defence to an action for passing off or trademark infringement in Nigeria.
This has resulted from the recent landmark decision of the Supreme Court in the case of Dike Geo Motors et al. v. Allied Signal Inc. et al. (2024) 10 NWLR (Pt.1946) 201 (the “Dike Geo Case”). The reason given by Ogunwumiju J.S.C. who gave the leading judgment is that the registration of a trademark does not give the owner of the trademark the right to use the trademark to deceive the public into believing that the goods of the owner of the trademark are the goods of some other person. The apex Court concluded that the courts may refuse to interfere to protect the use of a deceptive trademark or to assist a trader who is using his mark for the purpose of a fraudulent trade.
In this article, we take a deep dive into the facts, arguments, and decision of the Dike Geo Case. We also provide comments on the decision reached in the case. On balance, the decision is a most welcome development and a progressive step toward the advancement of trademark jurisprudence in Nigeria.
Facts of the Case
Allied Signal Inc. (the “1st Respondent”) was an American company and owner of several trademarks described as “Allied and Device”, “Bendix and Device”, “DBA with Parallel Lines Design”, and “e5” (collectively the “Trademarks”). The 1st Respondent used the Trademarks to manufacture and sell brake and clutch fluids for motor vehicles. Allied Signal Aftermarket Europe (the “2nd Respondent”) was a French subsidiary of the 1st Respondent that used the 1st Respondent's Trademarks to manufacture brake and clutch fluids in Nigeria. The 2nd Respondent's products were distinctively designed in black, red, and white cans which colours were indicative of their products in the Nigerian market.
Dike Geo Motors Ltd. (the “1st Appellant”) was a Nigerian company engaged in the manufacture, importation and sale of brake and clutch fluids in Nigeria. Mr. Francis Umeh (the “2nd Appellant”) was the 1st Appellant's chief executive officer. The fact leading to the Dike Geo Case arose sometime in 1992, when the 1st Appellant began to market brake fluid products in Nigeria branded as “Allied”. The design and marks on the 1 st Appellant's products were so similar to that on the Respondents' products as to cause confusion. The Respondents therefore commenced an action at the Federal High Court, Lagos, claiming against the Appellants for the infringement of their Trademarks. The Respondents also claimed passing off on the ground that the can of the Appellants' Allied brake and clutch fluid was an imitation of the Respondents' Bendix brake and clutch fluid. The Respondents' case was also based on the use by the Appellants of the 1st Respondent's trademark “e5” and “ALLIED”.
The Appellants' main response was that they were not the manufacturers of the products which allegedly infringed the Respondents' products. The Appellants claimed that they only “sold” the products which they purchased from one Don Frank Nigeria Limited (“DFNL”) who was the actual manufacturers of the products. During the pendency of the suit, DFNL applied to register the mark “Allied and Device” in Class 4. The Respondents opposed the application but the mark “Allied and Device” was eventually registered. Following the Registration, the Appellants filed a motion on notice seeking to dismiss the Respondents' case on the ground that it had become frivolous, vexatious and constitutes an abuse of court process. The trial court heard the application and dismissed the same. The Appellants were aggrieved and unsuccessfully appealed to the Court of Appeal and later to the Supreme Court.
Arguments of Counsel
At the Supreme Court, the Appellants contended that there was no reasonable cause of action against them because the trademark in question was registered in the name of DFNL under class 4. They also emphasized that the Respondents initiated and participated in opposition proceedings which preceded the registration of the trademark “Allied and Device” in favour of DFNL. The Appellants submitted further that an action for infringement presupposes that the defendant alleged to have infringed the plaintiff's trademark does not have legal rights to the trademark in question and that where the defendant has a legal right to the trademark, he should make an application for registration upon which the action for infringement would be stayed. The Appellants relied on sections 5, 6, and 20 of the Trademarks Act, Cap.436, LFN 1990 (“TMA”). The Appellants argued that the TMA does not contemplate an infringement action and an application for registration to co-exist in respect of the same trademark. Hence, the Appellants submitted that the Respondents' claims were unsustainable against them.
Regarding the claim for passing off, the Appellants relying on the case of Ayman v. Akuma Enterprises1, argued that the Federal High Court lacked jurisdiction to entertain the passing off claims on the basis that the Federal High Court can only entertain a passing off action flowing from a registered trademark and not a case of passing off simpliciter where the mark is unregistered.
The Respondents on their part argued that the registration of the mark “Allied and Device” was not a complete defence to the Respondents' action. The Respondents submitted that the claims before the lower court were for the infringement and passing off of the trademark which was registered only in class 1 and not class 4. The Respondents argued that the claim for passing off remains viable and that the registration of a trademark does not give the right to use it to deceive consumers. The Respondents further argued that the registration of a trademark is not a complete defence to an action for trademark infringement particularly if the registered trademark was capable of deceiving consumers.
Decision of the Supreme Court
The Supreme Court in deciding the question of whether the registration of “Allied and Device” marks by the Appellants abated the Respondents' action, held emphatically that the registration of a trademark is not always a complete defence to an action for trademark infringement or passing off. The Supreme Court held that since the Respondents have used “Allied and Device” in their trade, the mere fact that the Appellants registered that trademark after the institution of the suit will not “inescapably doom the claims for infringement of trade marks” to failure. In reaching this decision, the Supreme Court relied on the Indian case of N.R. Dongre et. al. v. Whirpool Corporation et. al.2 as well as the English case of Eli Lilly & Co. Ltd. v. Chelsea Drug Chemical Co. Ltd.3
The Supreme Court also noted remarkably that even when a trademark has been registered as in this case, an aggrieved party has several options available for them to seek redress including, but not limited to (i) rectification proceedings under s. 38 of the TMA; (ii) appeal to the Federal High Court under s.56(b) of the TMA; and (iii) commencing an action for an infringement of the trademark. The apex Court held that the Respondents had validly opted for an action for infringement, and as such, the action was maintainable, the registration notwithstanding. The Supreme Court concluded that the Appellants' contention that the Respondents' action for trademark infringement abated upon the registration of the appellants' trademark must fail for the reasons stated above.
For the claim of passing off, the ratio of the Supreme Court was that the whole essence of the concept of passing off is to prevent one man from selling his goods as that of another. Thus, the registration of a trademark does not give the owner of the trademark the right to use the trademark to deceive the public into believing that the goods of the owner of the trademark are the goods of some other persons. On the issue of jurisdiction of the Federal High Court to entertain a passing off claim, after a thorough analysis of the provisions of section 7 of the Federal High Court Act 1973, as amended by the provisions of Decree No. 60 of 1991, the Supreme Court concluded that the Federal High Court has jurisdiction to hear and determine a claim for passing off whether that claim arises from the infringement of a registered or unregistered trademark. Hence, the Court agreed with the Respondents that the decision in the case of Ayman v. Akuma Enterprises4 was reached per incuriam.
Based on the foregoing, the appeal was dismissed, and cost of Two Million Naira awarded against the Appellants in favour of the Respondents.
Our Comments
In our view, the Judgment is clearly articulated and well-considered. It carefully analysed the issues in question and ingeniously reached sound legal conclusions that reflect the true principles underpinning trademark protection in Nigeria. Without doubt, the law on trademarks has since evolved in most common law countries and this judgment is a step in the right direction toward adopting international best practices in trademark law in Nigeria.
In Canada, for example, the position has been that the registration of a trademark does not necessarily constitute a defence to a claim of passing off. This has resulted in part due to the decision rendered by Justice Muldoon5 in Wing (c.o.b. Wing Hing Electrical Engineers Co.) v. Golden Gold Enterprises Co.6
The position is similar in India, another common law country, where it has long been held by the Supreme Court of India in the case of N.R. Dongre et. al v. Whirlpool Corporation et al7 that there is “no reason why a registered owner of a trade mark should be allowed to deceive purchasers into the belief that they are getting the goods of another while they would be buying the goods of the former which they never intended to do”.
We also commend the decision in the Dike Geo Case for the brilliant effort of their Lordships of the apex Court in carefully scrutinising the issue of jurisdiction of the Federal High Court as it relates to proceedings for passing-off action arising from an infringement of unregistered trademark. The fine distinction made by the Court between the position of the law before and after the enactment of the Federal High Court (Amendment) Decree No. 60 of 1991 is laudable.
Indeed, as analysed by the Supreme Court, the jurisdiction conferred on the Federal High Court by section 251 of the Constitution of the Federal Republic of Nigeria (1999) (as amended) (the “Constitution”) is in addition to any other jurisdiction which might be conferred on the court by an Act of the National Assembly. Hence, the jurisdiction of the Federal High Court is not limited to what is prescribed in the Constitution. The Federal High Court Act 1973 is an Act of the National Assembly by virtue of the provisions of section 315 of the Constitution which deems existing law in respect of matters within the legislative authority of the National Assembly to be Acts of the National Assembly. This means that any jurisdiction conferred upon the Federal High Court by the Federal High Court Act, although wider than the jurisdiction conferred upon it by the Constitution but not in conflict with it, is valid.
Section 7 of the Federal High Court Act, 1973 was amended by the Federal High Court (Amendment) Decree No. 60 of 1991. The latter provides that the Federal High Court shall to the exclusion of any other court have original jurisdiction to try civil causes and matters connected with or pertaining to “any Federal enactment or common law relating to copyright, patents, designs, trademarks and passing-off”. The insertion of the phrase “or common law” shows beyond doubt that the draftsman intended that the jurisdiction of the Federal High Court in respect of actions for passing off should not be limited to actions arising from Federal enactments relating to trademarks or passing off alone but should be extended to common law actions for passing off as well.
Conclusion
In conclusion, the decision of the Supreme Court in the Dike Geo Case is a significant step in the right direction. Businesses are strongly encouraged to consult competent legal practitioners for professional advice on their intellectual property rights and challenge any perceived infringement of their trademark in court regardless of their registration status.
Footnotes
1. (2003) 13 NWLR (Pt.836) 22.
2. (1996) 5 SCC 714.
3. (1966) 83 RPC 14.
4. (Supra).
5. Marcel Naud, Trade-Mark Registration as a valid defence to a Passing-off Action. Available at: https://www.robic.ca/en/?publications=trade-mark-registration-as-a-valid-defence-to-a-passing-off-action (Accessed on February 13, 2025).
6. (1996, 66 CPR (3d) 62 (FCTD)).
7. (Supra)
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