In its 23 February 2024 judgment in Dike Geo Motors Ltd v Allied Signal Inc, Nigeria’s Supreme Court delivered a decisive clarification with direct consequences for brand-led market entry: trademark registration does not confer immunity from infringement or passing-off claims, particularly where there is evidence of bad-faith registration, prior use by another party or a likelihood of consumer confusion. The Court confirmed that trademark registration provides only prima facie (face value) evidence of validity, and courts remain fully empowered to interrogate the legitimacy, timing and commercial context of a registration during substantive proceedings.

Crucially for cosmetic exporters, the ruling dismantles the common assumption that a newly registered trademark can be relied upon as a regulatory safe harbour when entering Nigeria. The Court rejected the argument that registration—especially where obtained after a dispute has crystallised—can extinguish competing claims or justify striking out enforcement actions at an early stage. Instead, the judgment elevates consumer perception, market conduct and goodwill over formal registry status.

This has material implications for engagement with NAFDAC, where trademark registration is often treated as a de facto prerequisite for product filing and launch. The judgment makes clear that NAFDAC approval does not cure IP vulnerability: products cleared for sale can still face injunctions, delisting, recalls or rebranding if underlying trademark or passing-off disputes succeed. In effect, regulatory approval and IP defensibility must now be assessed in parallel, not sequentially.

From a strategic standpoint, the Court’s reasoning signals a shift toward substance-driven IP enforcement in Nigeria, aligning judicial thinking with broader African regulatory trends that prioritise fair competition and consumer protection over procedural formality. For cosmetic brands—where name, packaging and visual identity are core commercial assets—the ruling raises the risk profile of “close-fit” branding strategies and heightens the importance of early, evidence-based trademark diligence.

For companies that internalise these lessons, the judgment offers a competitive advantage: clean trademarks reduce launch friction, stabilise regulatory approvals and protect long-term brand equity. For those that do not, Nigeria is now a market where registration alone may accelerate exposure rather than mitigate it.

Why This Matters for Cosmetic Exporters to Nigeria

Key regulatory and commercial insights:

• Trademark registration does not neutralise prior-use claims, even under Nigeria’s first-to-file system.
• Bad-faith or opportunistic registrations can be challenged and unravelled post-launch.
• Passing off operates independently of trademark registration and focuses on consumer perception and goodwill.
• NAFDAC registration does not insulate brands from IP disputes that may later disrupt market access.

In effect, regulatory approval and IP defensibility are no longer sequential—they are interdependent.

Business, Portfolio & Reputational Impact

Predictive impacts include:

• Forced market exits or relabelling after NAFDAC approval if IP disputes succeed.
• Portfolio exposure for brands with names, packaging or trade dress similar to established Nigerian or international brands.
• Reputational damage where consumer confusion suggests deliberate imitation.
• Increased cost of late-stage rebranding, including loss of regulatory approvals tied to brand identity.

Conversely, companies that embed IP diligence upfront gain greater launch certainty and enforcement resilience.

Strategic Insights for Cosmetic Companies

• Nigeria's legislature signalled with this judgement, a substance-over-form approach to trademark protection.
• Trademark registration should be treated as evidence, not armour.
• Cosmetic brands positioned as “clinical”, “professional” or “heritage” face higher scrutiny where similarity exists.

Recommended Remedial & Forward-Looking Actions

Cosmetic companies should:

• Conduct pre-registration trademark clearance focused on prior use and market reputation, not registry status alone.
• Align brand name, packaging and trade dress to avoid cumulative confusion risk.
• Treat trademark registration as a prerequisite—not a defence—to NAFDAC filing.
• Monitor Nigerian market activity continuously for emerging conflicts.
• Build IP risk checkpoints into export, regulatory and launch governance processes.

Bottom Line

The Supreme Court drew a clear line: registration alone does not legitimise imitation. For cosmetic exporters, Nigeria now demands clean trademarks, not just registered ones. Those who integrate IP diligence into regulatory strategy will protect continuity, credibility and brand equity; those who do not risk regulatory disruption after market entry—when the cost of correction is highest.