Most Nigerians skip Trademark registration, thinking that registering their businesses with the Corporate Affairs Commission grants them exclusivity and, but sometimes, they are in for a rude awakening
The CAC vs Trademarks battle is not a new one, but it has gained prominence in recent times due to the widespread use of social media and strong pushbacks by brands against the unsanctioned use of their protected trademarks by business owners, even unknowingly. In other words, the CAC vs Trademark battle has become “bloody”.
Imagine this:
Ngozi has just come up with the perfect name for her new fashion brand—“Royal Stitches.” Excited, she rushes to the Corporate Affairs Commission and registers the name as her company. A few months later, her business starts gaining recognition on Instagram and other social media platforms where her designs are shared and reshared by industry blogs and fashion enthusiasts, only for her to receive a letter a cease-and-desist letter from a firm of lawyers representing a different brand demanding she ceases the use of the name “Royal Stitches” on the grounds that her use of the name amounts to trademark infringement. Buoyed on by the fact that her business name is registered with the CAC, she continues using the name on social media handles as her business name, only to, once again, receive another letter, this one from the CAC directing her to change the business’s name from “Royal Stitches” to something else entirely. Why? Because the other brand who had written to her earlier had already registered “Royal Stitches” as a trademark with the Federal Ministry of Trade and Commerce years before.
Ngozi is confused—she thought registering her company name with CAC meant she owned it outright. Unfortunately, she is wrong. Not only is she in the wrong, many Nigerians are often (rightly) confused in that situation.
Here’s what every entrepreneur and business owner must understand: in the CAC vs Trademarks war, Trademark registration takes precedence over CAC registration. That is why popular international brands without any business footprints in Nigeria can “defensively” register their trademarks in Nigeria and prevent Nigerians from registering such names even as unrelated business or company names with the Corporate Affairs Commission.
In the CAC vs Trademarks conundrum, why is trademark registration superior?
Under Nigerian law, a trademarked name enjoys legal protection that a mere company registration does not. A trademarked name enjoys the pure, unadulterated exclusivity a registered business or company name with the CAC does not. Section 852 (1) (d) of the Companies and Allied Matters Act, 2020; as amended 2023 prohibits the CAC from registering a company name if that name has already been trademarked—unless it belongs to the same person or the trademark owner has given express consent for the name to be registered.
Section 30 (4) of the Companies and Allied Matters Act, 2020; as amended 2023 authorizes the CAC to request a company to change its name (as in the aforementioned scenario with “Royal Stitches”) if it discovers that such a name conflicts with an existing trade mark registered prior to the registration of the company and the company did not obtain the consent of the trademark owner. Refusal to comply will not only lead to the CAC peremptorily removing the name from the Register of companies, but also exposes the company to lawsuits from the trademark owner. The popular trademark infringement case of French multinational Sanofi S. A. v. Sanofi Nigeria Enterprises Limited & Ors. at the Federal High Court, Abuja, is quite instructive in this regard.
The takeaway from the above is simple: the law guards trademarks jealously and expressly provides for its protection.
The right order of protection: CAC vs Trademarks – which comes first?
If you have a business name you hold dear, your first stop should not be CAC. It should be the trademark registry. Only after confirming that the name is available and registering it as a trademark in the relevant class(es) should you move on to register it with the CAC so you can avoid issues down the line due to infringement claims…which will be particularly devastating if you have established goodwill and brand awareness with the said name.
This two-step approach gives you both exclusive brand protection (upon registration with the Trademark Registry) and corporate recognition (upon eventual registration of your company with the CAC). Skipping the trademark step leaves you vulnerable to losing your name—sometimes after you’ve already invested heavily in branding, marketing, and goodwill.
Practical advice for business owners
Nigerian business owners usually skip legal advice in the beginning stages of their business, but that lack of legal foresight can birth numerous legal troubles down the line as they commence operations, market themselves out to their ideal clients, and gain brand goodwill. To prevent any eventualities, we advocate the following steps:
- Start with a trademark search: Before you print logos for your brand, buy domain name and other merch for the brand, and commence building out the brand, or spending on marketing, conduct a search at the trademark registry to ensure that the name is free to use and that there is no encumbrance over it. Furthermore, if your intended name is a very popular name used by a Brand – even if it is an international brand without localized presence in Nigeria – that is the more reason why you should conduct a trademark search.
- Secure your trademark: If the name is available, apply to register it in the relevant classes without any delay. Trademark registration in Nigeria usually has a lengthy turnaround time, but applying for registration, obtaining Acknowledgment Letter and Acceptance Letter is enough for you to establish rights over the Mark.
- Move to CAC: Once your trademark is secured, register the company with CAC to complete your corporate setup.
Final Thought
Your business name or company name is more than just a label or corporate compliance requirement. That name is an asset, a brand identity, and often your most valuable piece of intellectual property. Do not make the mistake of assuming that a CAC registration certificate equals protection. The real security begins with a trademark, not with the CAC.
At Kabbiz Legal & Advisory, we help businesses—local and foreign—navigate these crucial steps so they can grow without fear of losing their identity.
This article does not constitute legal advice. We encourage you to seek specialist guidance for your circumstances.
For guidance on the subject matter, you can contact us at contact@kabbizlegal.com or call +2348064231176.
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