- Introduction
A trademark is a symbol, phrase, logo, colour, or design that differentiates a product or service from another. It serves as the distinguishing factor between the offerings of Company A and Company B. For instance, in the case of Coca-Cola and Pepsi, while the taste of the beverages is a notable difference, the primary distinguishing element—beyond the taste—is their respective trademarks. These trademarks establish brand identity and enable consumers to identify and differentiate between the two products instantly. In Nigeria, the trademark regulatory framework is governed by the Trade Marks Act of 19671 and the Nigerian Trade Mark Regulations contained in the 2004 compilation of laws.2 The regulatory body responsible for overseeing trademark matters is the Trade Marks Registry, which operates under the Commercial Law Department of the Federal Ministry of Trade, Investment, and Industry. This body is tasked with the registration, administration, and enforcement of trademark rights within the country.
According to the Trade Marks Act,3 a "trademark means, except in relation to a certification trade mark, a mark used or proposed to be used in relation to goods for the purpose of indicating, or so as to indicate, a connection in the course of trade between the goods and some person having the right either as proprietor or as a registered user to use the mark, whether with or without any indication of the identity of that person, and means, in relation to a certification trade mark, a mark registered or deemed to have been registered under section 43 of the Act"
Furthermore, in Ferodo Ltd v. Ibeto Ind. Ltd.,4 the Supreme Court defined a trademark as "...a name or symbol, an ensign in or any character or combination of both and character appearing along with it and possibly registered along with it. A good trade-mark which has a device as its central feature has this peculiar nature that its use is not restricted to customers who speak any language."Trademarks help consumers recognize a brand in the marketplace and distinguish it from competitors.5
As valuable intangible assets, trademarks often represent a significant portion of commercial and cultural significance, goodwill and brand identity. However, the legal framework is largely silent on the transfer of trademark rights upon the death of a proprietor in Nigeria, leading to challenges such as procedural uncertainties, potential conflicts among heirs, and risks of trademark abandonment. This paper focuses on Nigeria as a case study to explore the legal implications and succession planning for trademarks where the proprietor subsequently becomes deceased. It examines the existing provisions under the Nigerian Trade Marks Act, the Administration of Estates Law, and other relevant statutes, identifying gaps and ambiguities in the laws governing the inheritance and management of trademark rights. Through this study, the paper aims to provide a deeper understanding of the interplay between intellectual property and succession laws in Nigeria. It also offers practical recommendations for legal practitioners, policymakers, and business owners to develop strategies for the seamless transfer of trademark rights, ensuring the sustainability and growth of trademarks as assets within family-owned businesses and beyond.
- Trademark Ownership and Proprietorship Under the Trade Marks Act
In Nigeria, the first party to register a trademark generally has the exclusive right to prevent others from using an identical or confusingly similar mark for the same or related goods or services.6 However, there are situations where the owner of a registered trademark cannot prevent the use of a mark that is identical or confusingly similar to theirs. One such instance is when the unregistered trademark has been in use before registering the conflicting trademark. This prior use could be by the owner of the unregistered mark, a business owner, or even a predecessor-in-title.7 Trademarks can be owned by individuals, business names, registered trustees or corporations8 and may be transferred via a license or assignment at any time.9 Trademarks can also be transferred by Will or testamentary disposition.
Under Section 17 of the Trade Marks Act, for a trademark to be registered under either Part A or Part B, it must be distinctive and capable of being distinguished from other marks. Once this criterion is met, a person who is the proprietor, or who wishes to become the proprietor of a trademark must apply to the Registrar for approval. The trademark will be published in the Trade Marks Journal if the application is accepted, and can become fully registered following the expiration of the opposition period in the absence of objections by interested parties.10
- Trademarks As Choses in Action: Transferability, Succession and Estate Planning
In the context of succession and estate planning, the concept of "choses in action" becomes highly relevant. Trademarks, as an intellectual property right, fall under the category of choses in action, which are legal rights that can be enforced through legal action, such as a right to sue for breach of contract or the right to recover a debt. Understanding how trademarks function as choses in action is crucial for their proper transferability, especially in the context of estate planning and succession.
A chose in action has been defined in Torkington v. Magee,11 as "a known legal expression used to describe all personal rights of property which can only be claimed or enforced by action, and not by taking physical possession". A chose in action is a proprietary right in property that holds economic value, though it is not a physical or tangible asset. Unlike tangible property, it cannot be physically possessed. It is an incorporeal personal property, and if infringed upon, the holder can take legal action to seek damages. Although it is not physically possessed, it can be protected and enforced through legal means, such as the possession of relevant certificates or proprietary documentation.
To illustrate this, examples of choses-in-action are shares in a company, negotiable instruments, bills of lading, patent rights, copyright, trademarks and so on. Choses in action are generally only defended by litigation. In the case of trademarks, a chose in action encompasses the owner's right to exclude others from using the mark and to sue for infringement. Because trademarks are intangible assets that represent goodwill, brand identity, and business reputation, they have significant commercial value and are often critical assets in the estate of a deceased individual, particularly for entrepreneurs or business owners.
A chose in action can be assigned, that is the transference of all or part of one's interest or right in a chose.12 InJulius Berger (Nig) Plc & Anor v. Toki Rainbow Community Bank Ltd,13 the Court of Appeal held that"assignment means to give something to some body for their use or benefit. It also may mean to transfer right, property or title from the persons legally entitled to them to somebody else for their benefit."
Trademarks, as intellectual property rights, have the characteristics of choses in action because they are intangible, enforceable legal rights that can be transferred or assigned. This means that they can be inherited, sold, or assigned to another party. Upon the death of the owner of a trademark, the ownership of the trademark rights typically becomes part of the deceased's estate and can be transferred to heirs, sold, or otherwise disposed of according to the terms of the decedent's will or according to the laws of intestate succession (if no will exists).
The legal transfer of trademarks (or any other chose in action) requires proper documentation and processes. For example, trademarks can be assigned to heirs or other beneficiaries through the decedent's will, and such transfers need to be registered with the relevant trademark office to update ownership records.
Accordingly, for there to be a valid transfer of a trademark, the owner of a trademark can assign it to another party, which involves transferring the rights to use, license, and enforce the trademark. In estate planning, this transfer is often part of the overall strategy for asset distribution, particularly if the trademark is a significant asset.
- The Nexus Between Intellectual Property and Succession
The Small Business Administration estimates that in the next decade or so, approximately 70% of privately-owned businesses (and their IP) will change ownership.14 Trademark proprietors may lack the time or emotional fortitude to face the notion of retirement or an unexpected need to hand over the reins to their business. However, a succession plan is the best way to facilitate a successful transition of the business, organisation, or corporation's continued viability, not to mention a return on the investment of the current owner(s).15
Upon the death of the proprietor of a registered trademark, the trademark devolves on the deceased's estate. The rights associated with the trademark, including the ability to use, license, and enforce it, are handed over to the legal heirs or the person(s) named in the deceased's will, if there is a will subject to the probate process. The successor(s) to the trademark must notify the Nigerian Trade Marks Registry of the transmission16 by filing an application to record the transfer. This ensures the new owner(s) are recognized in law and can enforce the trademark rights effectively. Since trademarks can pass via a will or trust designating who should be the beneficiary of that intellectual property, ideally there should be a specific provision in the will or trust disposing of trademark assets. If the trademark owner dies with no will, the trademark property will pass via extant laws of intestate succession.
By virtue of section 30 of the Trades Mark Act, "where a person becomes entitled by assignment or transmission to a registered trade mark, he shall make an application to the registrar to register his title, and the registrar shall, on receipt of the application and on proof of title to his satisfaction, register him as proprietor of the trademark in respect of the goods for which the assignment or transmission has effect, and shall cause particulars of the assignment or transmission to be entered into the registrar." This implies that upon devolution of the trademark on the estate of the personal representative of a deceased person, it shall be registered and the right thus transmitted, subject to the decision of the registrar and appeal to the Federal High Court.
Under Section 31 of the Nigerian Trade Marks Act, non-use of a trademark constitutes valid grounds for its removal from the register. The Act provides that a registered trademark may be struck off upon an application to the Registrar if it has not been in bona fide use by the proprietor, or any authorised user, for a continuous period of five years or more following registration among other grounds. This provision underscores the importance of consistent use in maintaining trademark rights.
A critical issue arises when the proprietor is deceased, as only the proprietor, or someone acting under a valid Power of Attorney, has the authority to renew or license the trademark. If the trademark's initial seven-year registration period lapses without renewal, followed by the subsequent 14-year renewal period, questions emerge regarding who has the legal authority to act on the proprietor's behalf. In cases where intellectual property rights have not devolved to the estate through intestate succession or been explicitly transferred by will in testate succession, the trademark risks falling into disuse and eventual removal from the register.
To address this risk, the article advocates for proactive measures in trademark ownership. Proprietors are advised to register trademarks in the name of a corporation or license the trademark to a corporate entity, ensuring continuity of ownership and enforceability. A corporate owner enjoys perpetual succession, allowing the entity to maintain, renew, and enforce the trademark regardless of changes in individual stakeholders. This approach not only safeguards the trademark from lapses due to procedural uncertainties but also protects the associated goodwill, ensuring the mark remains a valuable asset over time.
- Where Proprietor Dies Testate
Wills and will-making are arrangements that ensure upon the death of a testator (deceased proprietor), the proprietor's properties devolve on his heirs according to the express wishes of the testator in his will. A will is very important because it is the voice of the testator from the grave.
In Nigeria, administration of estate is regulated at the state level. The State High Court has exclusive jurisdiction to resolve legal issues arising from estate administration. The probate registry is responsible for the issuance of grants of probate and letters of administration for deceased persons' estates. The probate registry is a division of the State High Court. Applicable laws include the Wills Act 1837 and the Administration of Estate Law of different states,17 Wills Law of different states18 and High Court Civil Procedure Rule of various states.19
A Will helps a person to determine what happens to personal and/real properties after death. It also facilitates the transmission of devolution/succession instructions upon death. A Will is simply the intentions and wishes of a person to be carried out after death. In Asikav v. Atuanya,20 the Supreme Court of Nigeria noted that a Will has two distinct meanings. The first meaning is metaphysical and denotes the sum of what the Testator wishes, or wills to happen upon death. The second meaning is physical and denotes the document or documents in which that intention is expressed. It is the declaration in a prescribed manner of the intention of the person making it with regard to matters which he wishes to take effect upon or after the testator's demise.21 A Will is sacrosanct because the wishes of the testator in the Will are the last wishes and testament with reference the testator's declared estate.22
In Ayinke v. Ibidunni, Ademola, C.J.F., observed that:
I also find myself in agreement with the learned trial Judge that there are means whereby a man may dispose of certain properties before his death in accordance with native law and custom. It is my view that disposition of properties could be made under native law and custom by a gift followed by a transfer of the property or a declaration by a man on his death-bed in the presence of witnesses.23
The major features of a formal Will are:
- It is testamentary, that is, it speaks after the death of the testator. This distinguishes it from other documents which take effect inter vivos, for example, deeds which become operative upon delivery.
- It is ambulatory which means that it is capable of being changed and revoked during the lifetime of the testator. It is revocable so long as the maker is living.
- It is voluntary which means that it must be independently and freely made without pressure and undue influence from other persons.
Thus, when a trademark proprietor dies testate and includes their trademark as part of their incorporeal property in the will, the trademark forms an integral part of the deceased's estate and is transferred to the beneficiaries as outlined in the will. Trademarks, being a type of intellectual property, often hold considerable economic value due to their association with brand recognition and commercial goodwill. As such, they are classified as assets subject to devolution. The executor of the estate plays a crucial role in managing the trademark, ensuring that the transfer of ownership aligns with the testator's expressed intentions. This process involves updating the trademark registry to reflect the change in ownership and ensuring that all legal requirements under the Trade Marks Act are satisfied. Proper management of trademark rights after the testator's death ensures the continuity of the brand's economic benefits for the designated beneficiaries.
- Where Proprietor Dies Intestate
It is important to elaborate on key aspects of the Trade Marks Act and the Trade Mark Regulations. According to Section 26 of the Trade Marks Act, a trademark can be assigned or transmitted. A transmitted trademark refers to one that passes to a deceased person's relative. If the proprietor (a natural person) of a trademark dies, it passes by operation of law in the absence of a will. If this assignment or transmission is registered, and the Registrar is satisfied, the applicant will be registered as the proprietor of the trademark.
Additionally, Regulation 73 provides that:
"Where a person becomes entitled by assignment or transmission to a registered trademark, they may, conjointly with the registered proprietor, make an application to the Registrar..."
The use of the word "may" indicates that if the proprietor is deceased, the signature of the proprietor is not necessary. If a person becomes entitled to a registered trademark under Regulation 73 and does not submit a joint application, they must apply to the Registrar using Form 17 to register their title. The application must include the claimant's name, trade or business address, a description of their claim, and full details of any supporting documents. These documents should ideally be presented for inspection by the Registrar at the time of application. In the case of a partnership, the full names of the partners must be provided. The Registrar may request and retain an attested copy of any document for verification, but this copy will not be available for public inspection. If the applicant does not have a document that independently proves their title, they must, unless directed otherwise by the Registrar, provide a statement detailing the facts supporting their claim, along with evidence of the trademark's assignment or transfer. If required by the Registrar, the statement must be verified by a statutory declaration. The Registrar may also request additional proof of title from the applicant to confirm the validity of the claim
If a person dies intestate, their estate is vested in the Chief Judge of the state where they lived until the issuance of a letter of administration. A letter of administration is a legal document issued by the probate registry empowering the appointed administrators to manage the affairs of a deceased person's estate for the benefit of the beneficiaries. The Administration of Estate Law of Lagos stateprovides for the persons who may apply for and be granted Letters of Administration, in the following order of priority:
- Surviving spouse of the deceased
- Children or grandchildren (if parents predeceased)
- Parents
- Siblings or their surviving children
- Half-siblings or their surviving children
- Grandparents
- Uncles and aunts
- Creditors
- Administrator General (if all others fail)
- Application for Letters of Administration: Processes
The process of obtaining Letters of Administration involves several structured steps to ensure compliance with legal requirements:
- The first step is the filing of a formal application by the proposed administrators or their representatives. In Lagos State, this application is submitted online. Applicants must include a formal letter of application along with the required documents and information.
- Next, the proposed administrators and their sureties must undergo an interview at the Probate Registry. This interview serves to verify the accuracy of their claims regarding the estate. Subsequently, the names and addresses of the deceased and the administrators are published in a widely circulated newspaper. This publication acts as a notice to interested parties, providing a 21-day period for objections. Any interested party may file a caveat within this period to contest the issuance of the Letters of Administration. If a caveat is filed, the process is paused until the dispute is resolved by the court.
- In the absence of any objection, the Probate Registrar issues the Letters of Administration to the proposed administrators. These administrators are then entrusted with the responsibility of managing the estate in the best interest of the beneficiaries. This process ensures that the administration of the estate is carried out lawfully and fairly, safeguarding the rights of all interested parties.
- Renewal of trademarks upon the death of the proprietor to address the vital requirement of use in Nigerian Trademark Law.
- Recommendations
Under Nigerian law, it is highly advisable for the proprietor of a trademark to create a Will that is registered at the probate court to avoid the complications that arise when someone dies intestate (without a valid will). This is especially important in the context of trademarks, which are valuable intellectual property assets. If a trademark owner dies intestate, the transfer of ownership of the trademark becomes subject to the laws of intestate succession under Nigerian law, which may not align with the wishes of the deceased.
Under the Wills Law (in Lagos State, for instance), if a trademark owner passes away without a Will, the trademark becomes part of the estate, and its ownership will be distributed according to the provisions of the Administration of Estates Law or other relevant succession laws. This can create complications if there is no clear directive on how the trademark should be managed or passed to the heirs.
Without a will, a situation of posthumous trademark ownership may arise, where there is ambiguity regarding who has the right to exploit or manage the trademark. This could lead to legal disputes among family members, and in some cases, result in the trademark losing its value or being misused. To prevent such issues, creating a properly drafted Will ensures that the trademark is passed on according to the wishes of the proprietor and avoids the potential for future disputes.
Further, registering the Will at the probate court helps make it an official document that is recognized at the law, thus giving it legal effect and clarity. This step provides protection against any challenges to the Will and ensures that the transfer of the trademark and other assets occur smoothly according to the deceased's intent.
- Corporate Ownership of Trademarks
Another key recommendation in Nigerian law is that upon incorporation, the company or other legal entity should be the proprietor of the trademark rather than the individual owners or directors. This is particularly pertinent for businesses that rely on trademarks as a critical part of their brand identity and operations. The Nigerian Trade Marks Act allows both individuals and legal entities (such as companies or partnerships) to register trademarks. However, when a trademark is owned by an individual, there are potential risks during the owner's lifetime and after death, especially if the individual has a personal estate dispute or if the trademark is not transferred effectively.
If the company holds the trademark, it ensures that the ownership is independent of any single person, thus protecting the trademark from personal issues such as the death, incapacity, or bankruptcy of the proprietor. When the company is the proprietor of the trademark, the trademark becomes a part of the company's assets, which are managed according to corporate governance structures, including the articles of association, board decisions, and shareholder agreements. This avoids the complications associated with individual ownership, such as succession issues and the potential loss of business continuity after the proprietor's death or incapacity.
Additionally, company ownership of the trademark ensures that there is no interruption in the use or protection of the trademark even when the ownership changes hands—whether through mergers, acquisitions, or changes in shareholding. This is crucial for businesses that depend on the trademark to distinguish their goods and services in the market.
- Estate Executors and Trustees in Nigerian Law
The estate executor or trustee in Nigeria plays a vital role in ensuring that intellectual property rights, including trademarks, are handled properly upon the death of the trademark owner. The executor or trustee is responsible for administering the estate and ensuring that all assets, including intellectual property, are transferred according to the will or the laws of succession. Given the complexity of managing trademarks, it is highly advisable for the executor or trustee to be knowledgeable about intellectual property (IP) rights, particularly trademarks, as this will ensure that the trademark is protected and its value maximized.
In Nigeria, the Administration of Estates Law (applicable in various states such as Lagos, Ogun, and others) governs the appointment and duties of estate executors or administrators. This law requires that the executor acts in the best interest of the estate and follows the directives set forth in the Will, including those relating to intellectual property. The executor must understand the trademark's significance, potential income sources (such as royalties or licensing fees), and the procedures required to transfer or assign the trademark to beneficiaries or to manage the trademark if it continues to be part of a business.
If the executor is unfamiliar with the intricacies of IP law, there could be delays in registering the trademark transfer or difficulties in enforcing the trademark rights. For example, the executor may need to apply for a change of ownership at the Nigerian Trade Marks, Patents and Designs Registry to ensure the proper transfer of rights.
Thus, estate planning involving intellectual property should consider appointing an executor with experience in IP law or seeking expert advice to prevent the mismanagement of valuable trademark assets.
- Use of Power of Attorney (POA) for Trademark Management
A power of attorney is "a formal instrument by which one person empowers another to represent or to act in his stead for a certain purpose."24 This was further expounded upon in Chime v. Chime,25 where the court defined a power of attorney as "...a document, and may be under seal, which authorises a person to act for another person as his agent... The power conferred on the donee may be either general or special."
A POA can specifically address intellectual property rights and give the attorney-in-fact the authority to license, protect, and enforce the trademark, including the power to sue for infringement or to enter into agreements related to the trademark. By using a POA, the trademark owner ensures that the trademark continues to be used legally and that its value is maintained even in their absence or incapacity.
The POA should be carefully drafted to specify the exact powers granted, and it should be clear whether the powers are general or limited to specific actions, such as the management or licensing of the trademark. For instance, the POA could provide authority for the attorney-in-fact to oversee ongoing trademark registrations, renewals, and protection actions until the principal recovers or the trademark is transferred to another owner.
In situations where a trademark owner is alive but incapacitated, using a Power of Attorney (POA) can ensure the continuity of the trademark's use and protection. A POA is a legal document that allows one person (the principal) to grant another person (the attorney-in-fact) the authority to act on their behalf. In the case of trademarks, the POA can be used to appoint a trusted individual or entity to manage the trademark rights when the owner is unable to do so due to illness, disability, or other incapacitating circumstances.
This legal instrument helps ensure that there are no gaps in the management of the trademark, preventing the risk of loss of rights or potential infringement during the period of incapacity. In this way, the continuity of the trademark's use is safeguarded, and its business value can be preserved for the owner or their beneficiaries.
- Conclusion
The ownership of trademarks after the death of a proprietor is a significant yet often overlooked aspect of intellectual property management. Trademarks, being valuable assets, require proper succession planning to ensure their seamless transfer and continued utility. As demonstrated, a registered trademark can be inherited either through testate or intestate succession, with the specific pathway determined by the presence of a Will or the laws of intestacy.
The legal framework in Nigeria provides for the administration and transfer of such assets, ensuring the rights of successors are recognised and enforceable. However, challenges such as delays in the probate process, inadequate awareness of intellectual property succession, and ambiguities in estate planning documents can hinder the smooth transition of ownership.
It is crucial for trademark proprietors to engage in proactive succession planning by clearly addressing the disposition of their intellectual property in their wills or trusts. This preparation safeguards the value and integrity of trademarks, ensuring their continued protection and use by heirs. By taking these steps, proprietors can ensure that their trademarks remain a lasting legacy, contributing to the brand identity and commercial success of their businesses, even after their demise.
Proper legal and procedural adherence in both testate and intestate scenarios underscore the need for awareness and professional guidance in intellectual property succession, ultimately preserving the economic and sentimental value associated with trademarks.
Footnotes
1 CAP T13, Laws of the Federation of Nigeria, 2004.
2 The Trade Marks Regulation, 1967.
3 Section 67 of the Act.
4 (1999) 2 NWLR (Pt. 592) 509 (pp. 518-519, paras. H-C).
5 See, https://www.uspto.gov/trademarks/basics/trademark-patent-copyright, accessed 14th December 2024.
6 See, https://www.banwo-ighodalo.com/resources/ownership-of-trademarks-in-nigeria accessed 14th December 2024.
7 Section 7 of the Trade Marks Act.
8 Section 9(1)(a) of the Trade Marks Act.
9 Section 26 of the Trade Marks Act.
10 See, https://spaajibade.com/how-do-i-register-a-trademark-in-nigeria-substantive-and-procedural-requirements-for-registration-of-a-trademark-by-yetunde-okojie-and-oluwasolape-owoyemi/ accessed, 15th December 2024.
11 (1902) 2 K.B. 427 at 430.
12 See Emmanuel Bassey, Assignment of Chose in action, available at https://spaajibade.com/assignment-of-choses-in-action/ , accessed 16th December 2024.
13 (2019) LPELR- 46408(SC).
14 See, https://www.grossmcginley.com/resources/blog/succession-planning-and-ip/, accessed 15th December 2024.
15 Ibid.
16 A change in ownership by provision of law, devolution of the personal representative of a deceased person, any the mode of transfer not being assignment. Section 71 of the Trade Marks Act.
17 Cap. 1, Laws of Rivers State of Nigeria, 1999; Administration and Succession (Estate of Deceased Persons) Law, Cap 4, Revised Laws of Anambra State1991; Administrationof the Estates of Deceased Persons. [WN 1959, Cap. 1. LSLN 16 of 1972 etc.
18 Wills Law of Lagos State CAP W2 LFN (2004); Kaduna State Wills Law, Cap 163, Laws of Kaduna State 1999, 3. Abia State Wills Law cap 37 Laws of Abia State, Kwara State Wills Law, cap 168 Laws of Kwara State 1991 and so on.
19 See, https://tundeadisa.com/media_insights/understanding-probate-in-nigeria-what-happens-when-there-is-no will/#:~:text=In%20Nigeria%2C%20the%20administration%20of,administration%20for%20deceased%20persons'%20estates, accessed 15th December 2024, Order 62 of the Lagos State Rules 2019. Order 62 Rule 1 of the High court of Lagos State (Civil Procedure) Rules 2019 and Section 35 of the Administration of estate laws of Lagos State 2004.
20 (2014) AFWLR, part 710, at p. 1264.
21 Ibid.
23 Asika v. Atanya (2008) AFWLR part 433, p. 1293 at 1317.
23 Per Ademola, CJF.
24 Ibrahim v. Obaje [2019] 3 NWLR (p. 408, paras. D-E).
25 (1995) 6 NWLR (Pt. 404) 734 (p. 757, paras. B-C).
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.