Does A Trademark Registration Grant You Immunity From A Trademark Infringement Or Passing Off Lawsuits? Key Lessons From Dike Geo Motors Ltd. V. Allied Signal Inc. (2024) 10 NWLR (Pt. 1946) 201

Introduction

One of the key advantages of a trademark registration is that it confers on the Applicant an exclusive right to use the registered trademark for a category of goods. This protection is contained in section 5 of the Trade Marks Act, CAP T13 Laws of the Federation of Nigeria (L.F.N) 2004.

There is a common legal misconception that a Trademark Certificate acts as an absolute shield against a trademark infringement lawsuit. This legal misconception reared its head in the case of Dike Geo Motors Ltd v. Allied Signal Inc. (2024) 10 NWLR (Pt. 1946) 201, where the Appellants sought to use their trademark registration to dismiss a lawsuit for trademark infringement and passing off. This provided the Supreme Court with the opportunity to resolve whether a trademark registration could serve as a defence to an action for trademark infringement or passing off.

Summary of the Facts of Dike Geo Motors Ltd. v. Allied Signal Inc.

The 1st Respondent owned various trademarks, including "Allied and Device", "Bendix and Device", "DBA with Parallel Lines Design" and "e5", under which it manufactured and sold brake and clutch fluids for motor vehicles. The second Respondent was a subsidiary of the 1st respondent. It manufactured brake and clutch fluids called "Bendix brake and clutch fluid" under the 1st Respondent's trademarks and marketed them in Nigeria for several years in distinctively designed black, red, and white cans. Members of the public recognised the design of the cans as originating from the Respondents.

The 1st Appellant, Dike Geo Motors Limited, was a Nigerian company engaged in the sale of brake and clutch fluids under the "Allied" brand name. According to the 1st Appellant, it usually purchased the "Allied" brake and clutch fluid from Dom Frank Nigeria Limited, which had a registered trademark on the can of "Allied" brand of brake and clutch fluid.

The Respondents filed a lawsuit at the Federal High Court against the Appellants for infringing their registered trademarks and for passing-off the can of their Allied brake and clutch fluid as the Respondents' products. Furthermore, the Respondents argued that the Appellants' imitation of the overall design of the cans of their product was an attempt to deceive the public into believing that the products were connected.

The Appellants, in their defence, argued that they did not manufacture the product but only sold it. In addition, they stated that the fluid was purchased from another company, Dom Frank Nigeria Limited, which held the registered "Allied and Device" trademark (No. TP 188856). Therefore, the Appellants contended that there was no infringement of the Respondents' trademark, and they filed a motion praying for the dismissal of the Respondents' claims on the grounds that the action was an abuse of court process since they had a registered trademark for "Allied". Regarding the Respondents' claim for passing-off, the Appellants argued that the Federal High Court lacked the jurisdiction to entertain the claim because the Federal High Court could only entertain cases of passing-off related to the infringement of a registered trademark. It is important to note that the Respondents passing-off claim was in respect of an unregistered trademark.

The Federal High Court dismissed the Appellants application on the grounds that the mere existence of a registered trademark was not enough for the Court to dismiss a trademark infringement lawsuit without finding out through a trial if there was indeed a trademark infringement.

The Appellants were dissatisfied with the trial court's decision, and they appealed to the Court of Appeal. The Court of Appeal upheld the trial court's judgment, and the Appellants appealed to the Supreme Court.

The Supreme Court upheld the Court of Appeal's decision and held that the mere fact that a defendant in a lawsuit had a registered trademark would not automatically lead to the dismissal of a trademark infringement lawsuit at the preliminary stage without going to trial. Ogunwumiju, JSC at P 229 Para F-H of the judgment, held as follows:

"It therefore follows, based on these authorities cited, that a trade mark registration may not in all cases provide a complete defence to a trade mark infringement action or a passing off action. I have to agree that the mere fact that the appellants' "Allied and Device" trade mark became registered after the institution of the present suit, does not inescapably doom the claims for infringement of trade mark in this suit to failure...It has been held that registration of a trade mark does not give the owner of the trade mark the right to use the trade mark so as to deceive the public into believing that the goods of the owner of the trade mark are the goods of some other person."

Regarding the Appellants arguments that the Federal High Court lacked the jurisdiction to entertain a passing-off claim regarding an unregistered trademark, the Supreme Court disagreed with the Appellants and held that the Federal High Court had the jurisdiction to entertain all forms of passing-off claims regardless of whether or not they relate to an unregistered trademark or a registered trademark. Ogunwumiju, JSC at P 234 Para E-F of the judgment, held as follows:

"Therefore, since 26^th August, 1993, the Federal High Court had acquired jurisdiction in respect of claims in passing-off founded on common law principles, as well as arising from any Federal enactment relating to Trade Marks and passing-off.

Consequently, the Federal High Court has jurisdiction to hear and determine the claim for passing-off contained in the statement of claim filed by the respondents whether or not that claim arises from the infringement of a registered or unregistered trade mark."

Key Takeaways from the Supreme Court's Decision in Dike Geo Motors Ltd. v. Allied Signal Inc.

1. The subsequent registration of a trademark by an alleged infringer does not, in itself, constitute a defence to a pre-existing claim for trademark infringement. This means that having a trademark certificate for "Allied" does not allow you to copy the bottle or can design for another party's product.
2. The issuance of a trademark certificate does not provide a retroactive shield against claims of unlawful activity that occurred before its issuance.
3. The Federal High Court has the jurisdiction to entertain all forms of passing-off claims regardless of whether or not they relate to an unregistered trademark or a registered trademark.
4. It is imprudent for a Defendant in a trademark infringement lawsuit to file an application seeking the dismissal of the lawsuit on the grounds that it has a registered trademark. The proper step for such a Defendant to take is to proceed to establish its defence at the trial of the lawsuit, rather than seeking to delay the progress of the lawsuit through a frivolous application for dismissal.

Conclusion

This case highlights a vital principle: that a trademark registration is not a defence against a claim of trademark infringement or passing off, as the best way to establish that a party has neither breached another party's trademark nor passed off their goods is through a trial in Court.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.