Exploring the limits of Trademark Registration as a Legal Defense

In Nigeria's evolving intellectual property (“IP”) landscape, businesses must remain vigilant in protecting their trademarks, as their market presence and brand identity largely depends on it. On 23^rd February 2024, the Supreme Court delivered a landmark judgment in Dike Geo Motors Limited & Anor. v. Allied Signal Inc . V & Anor. This decision not only addressed critical issues but also provided valuable insights into the concepts of passing off, trademark infringement, and the extent to which trademark registration can serve as a defense against legal claims. This article provides a comprehensive analysis of the key issues in the case, the ratio decidendi that shaped the final decision, its legal implications, and the essential lessons businesses can draw from it.

Background of the case

This is an appeal against the judgment of the Court of Appeal sitting in Lagos, delivered on 5^th May 2006. The appeal arose from the decision of D.D. Abutu J of the Federal High Court, sitting in Lagos, delivered on 13^th April 1999.

This case originated from a dispute between the 1^st Respondent, an American company, called Allied Corporation (later renamed to Allied Signal Inc.), and the 1^st Appellant, a Nigerian company called Dike Geo Motors Limited, which was marketing brake and clutch fluid under the “Allied” brand.

Before 1992, the 1^st Respondent and its French subsidiary (the 2^nd Respondent) had registered multiple trademarks such as "Allied and Device" under Nos. 40189 (Class 1), 40188 (Class 9), and 40186 (Class 12), "Bendix and Device," "DBA with Parallel Line Design" under No. 49735 (Class 1) and "e5", under which they marketed their products in Nigeria.

In 1992, Dike Geo Motors Limited began selling a competing brake and clutch fluid product branded as “Allied,” with packaging similar to that of the1st Respondent.

The Respondents complained that the use by the Appellants of marks and designs imitative of the marks and designs on their Bendix brake and clutch fluid cans was calculated to deceive and had in fact, led to deception and the belief that the Appellants’ Allied brake and clutch fluid product is the Respondents’ product or originates from the same source as the respondents’ Bendix brake and clutch fluid. In May 1995, the Respondents filed a lawsuit against the Appellants at the Federal High Court, Lagos for trademark infringement and passing off, citing the Appellants imitation of the design of the Respondents’ Bendix brake and clutch fluid can in their Allied brake and clutch fluid packaging, as well as the unauthorized use of the Respondents’ trademarks, “e5” and “ALLIED,” on their products.

In October 1995, the Appellants Privy (Dom Frank) applied to register the "Allied & Device" trademark under No. TP 18856. This application was published in the Trademark Journal five months after the Respondents had already filed their lawsuit. Despite the ongoing case, Dom Frank successfully registered "Allied & Device" under RTM No. 53200 (Class 4). The 1^st Respondent applied to the Trademark Registry for the removal of the trademark (No. 53200) from the Register of Trademarks

Two years and three months after Dom Frank's trademark registration (No. 53200)—and three months after the trial had begun—the Appellants filed a motion dated 20^th January 1999, seeking to dismiss the Respondents’ lawsuit. They argued that the case was frivolous and an abuse of the court process since they had registered the trademark, and supported their motion with an affidavit, showing their certificate of registration. The Respondents filed a counter-affidavit, alleging that the opposition proceedings against Dom Frank’s trademark were suspiciously terminated.

The Federal High Court dismissed the Appellants’ motion to strike out the case. Aggrieved by this, the Appellants appealed to the Court of Appeal against the ruling of the Federal High Court. The Court of Appeal in May 2006, dismissed the appeal, upholding the judgment of the Federal High Court and ruling in favor of the Respondents. Further still aggrieved, the Appellants approached the Supreme Court, arguing that their trademark registration constituted a complete defense to the Respondents’ infringement claims, thereby warranting a striking out of the suit in limine.

On 23^rd February 2024 the Apex Court in Nigeria – the Supreme Court delivered its judgment dismissing the appeal for lack of merit. The Court held that trademark registration does not automatically provide an absolute defense against infringement claims or passing off actions for that matter, especially if the registration was obtained in bad faith. The Court further held that even if the trademark registration were a complete defense that the mere existence of a defense is not, in itself, a basis to strike out a suit in limine, as the availability or otherwise of the defense must be assessed through a full consideration of the merits at trial.

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