Mar 12, 2019

IP ABC —IP Rights and Confidential Information: Whether IP Infringement or Breach of Confidence




Question of the Week  

Dear IP ABC


I am Ade Adeyoju, Founder of E-Estates, an internet company in Nigeria which owns and runs a number of e-commerce startups, including www.buysmartphones.ng. BuySmartphones is an e-commerce site where anyone can easily buy smartphones online and have them delivered anywhere in Nigeria. In August 2018 the year we founded BuySmartphones, we applied to register ‘BuySmartphones’ as a trademark in Nigeria. It wasn't accepted. The reason given was that ‘BuySmartphones’ was both descriptive, and consequently not distinctive enough for trademark registration. But because ‘BuySmartphones’ was already at the heart of our branding and marketing campaigns, including domain name Buysmartphones.ng, we continued to use it. ‘BuySmartphones’ is also just one of the brands amongst our other similarly named brands BuyCars, BuyToys, BuyLands, BuyFood, BuyBooks, etc. Why is ‘BuySmartphones’ not registrable as a trademark in Nigeria?




Answer

Dear Ade Adeyoju

‘BuySmartphones’ is not registrable as a trademark in Nigeria because it is not distinctive under Nigeria's Trademark Act. Under both Parts A and B of the Act, ‘BuySmartphones’ is neither adapted to distinguish nor capable of distinguishing your online smartphone-retail business from other smartphone retailers except the trademark has acquired distinctiveness out of use. For an online retail business that was launched in August 2018, BuySmartphones does not pass the by-reason-of-the-use-of-trademark test. Your registered domain name Buysmartphones.ng does not expressly amount to a registered trademark.



For the purpose of trademark registration under Part A of the Trademarks Act, ‘BuySmartphones’ does not meet the conditions for distinctiveness.

Distinctiveness requires that ‘BuySmartphones’ be inherently adapted to distinguish itself as a mark connected to your e-commerce business or by reason of the use of the trademark, it is adapted to distinguish.

The trademark ‘BuySmartphones’ does not contain any of the essential qualities that qualify it for trademark registration under Part A of the Trademarks Act. In order for a trademark to be registrable under Part A of the Act, section 9 of the Act requires that the mark must contain at least one of the following essential particulars:

  1. the name of a company, individual, or firm, represented in a special or particular manner;
  2. the signature of the applicant for registration or some predecessor in his business;
  3. an invented word or invented words;
  4. a word or words having no direct reference to the character or quality of the goods, and not being according to its ordinary signification a geographical name or a surname; or
  5. any other distinctive mark.

‘BuySmartphones’ does not pass the tests above. Regarding paragraph (a), you may argue that ‘BuySmartphones’ qualifies for trademark because you have represented it in a “special or particular manner” by joining two words together, ‘Buy’ and ‘Smartphones', but this representation may not be considered adequate for the purpose of distinguishing your goods from those of others. Regarding paragraph (c) above, though you have formed a word with two different words to form ‘BuySmartphones’, one cannot describe this as being inventive as both words don't only already exist in the English dictionary but are also commonly used. ‘BuySmartphones’ completely fails the test under paragraph (c). This is because ‘BuySmartphones’ are words that directly reference the character or quality of the goods.

Therefore, ‘BuySmartphones’ is not registrable under Part A of the Act. ‘BuySmartphones’ has not been adapted or modified enough to merit distinctiveness.


Similarly, for the purpose of trademark registration under Part B of the Trademarks Act, ‘BuySmartphones’ does not also meet the conditions for distinctiveness.

Registration under Part B requires that in relation to the goods or services in respect of which a trademark is registered or proposed to be registered, the trademark must be capable of distinguishing goods with which the proprietor or the trademark is or may be connected in the course of trade from goods or services in the case of which no such connection subsists. Section 10(1) of the Act.

Under section 10(2), what determines distinctiveness is not the adaptability of the trademark to distinguish goods or services (as required under Part A), but capability of distinctiveness. There is a difference between adaptability and capability. According to the Oxford Dictionary, adapt means “to change something in order to make it suitable for a new use or situation”, while capable means “[h]aving the ability, fitness, or quality necessary to do or achieve a specified thing.”

Therefore, while achieving distinctiveness under Part A of the Act relies on the extent to which an applicant has adapted, changed, or modified the words or elements in the trademark in order to make it distinctive or suitable for distinguishing goods or services connected to the applicant, achieving distinctiveness under Part B of the Act does not rely on the extent to which an applicant has adapted, changed, or modified the words or elements of the trademark but the ability or quality of the trademark itself to be inherently distinctive or distinguish goods or services connected to the applicant.

Consequently, ‘BuySmartphones’ is not registrable under Part B of the Act. ‘BuySmartphones’ does not have the ability or quality of inherent distinctiveness.


But how about distinctiveness by reason of use of the trademark?

Good question. Indeed under the Trademarks Act, a trademark may be determined to be distinctive if by reason of use of the trademark it is in fact adapted to distinguish {section 9(3)(b)} or capable of distinguishing {section 10(2)(b)}. Once a Tribunal determines that it is, the trademark is accepted for registration under the appropriate part.

In your case, BuySmartphones is a new e-commerce business which retails smartphones. It was just founded in August 2018. These past months, you have been using the unregistered trademark ‘BuySmartphones’ in your branding and other marketing campaigns. You also have it registered as your domain name. While these activities qualify as “use of the trademark”, has this use adapted it or made it become capable of distinctiveness? To determine this, a Tribunal will be considering whether your use of ‘BuySmartphones’ is to the extent that it is adequate for the purpose of distinctiveness. The period of time, degree of use, and even the goodwill you may have regarding the use of ‘BuySmartphones’ in connection to your e-commerce business of selling smartphones will all be critical.


Descriptive marks may be good for domain names in a search engine-driven digital world and also good for businesses with low-advertising budgets, but they are not good for trademarks and may result in bad investments.

Descriptive marks only describe the goods or services to which they are applied. Generally, descriptive marks cannot be registered as trademark. Descriptive marks may only be registered if they have achieved secondary meaning.

‘BuySmartphones’ is a descriptive mark. Has it achieved secondary meaning? The answer is most likely NO. Achieving secondary meaning for any descriptive mark takes a lot of time. It also needs some level of goodwill. Consequently, it is not registrable.

If after investing so much in branding and marketing you are unable to secure ‘BuySmartphones’ as your trademark, your e-commerce business is not protected. Any person can use the same or similar mark to deceive potential customers and you will have no remedy in law. This will not be good for business. Absolutely not.


Distinctiveness is the life of any trademark. Without distinctiveness, a trademark is dead.

When launching a new business entering a market, choosing a distinctive mark that distinguishes your goods and services in connection with your brand is not an easy task.

Your trademark is your business. Be creative, deliberate, and strategic. On one hand, don't assume that you need to be descriptive in your choice of trademark before your target customers can know your business exists. On the other hand, a nondescriptive trademark may also not be easily recognizable by your target customers. Everything depends on various factors, including economic, social, legal, and even psychological factors.

Always consult your IP lawyer or law firm when deciding on the best name for your brand products and services.



Best wishes
Follow-up questions, if any, are welcomed.


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