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Company names tribunal
9 December 2008
You are the owner of a registered trade mark and discover that
your registered trade mark is being used as part of a third party’s
registered company name. What can you do?
Previously, you would have had to rely on your rights of passing
off and trade mark infringement. However since 1 October 2008, and
the implementation of a new Company Names Tribunal to deal with
complaints made under Section 69(1) of the Companies Act 2006, you
may have another remedy.
The new procedure under the Act allows challenges to
‘opportunistic’ company name registrations, ie, registered company
names which are similar to existing brand names and are thought to
have been registered in order to capitalise on the goodwill already
built up in that name.
How does it work?
Under the Act the right to object to a company’s registered name
is available where the person bringing the action (‘the applicant’)
can establish the following grounds:
- The company name is the same as a name in respect of which the
applicant has goodwill; or
- The company name is sufficiently similar to a name owned by the
applicant that its use by the person applying to register it in the
UK would be likely to mislead by suggesting a connection between
the company and the applicant
Where a complaint is brought, the holder of the company
registration has defences available to it. These are as
follows:
- The name was registered before the applicant commenced the
activities on which it relies to show it has goodwill in the
relevant name
- The company is operating under the name, or is proposing to do
so, and has incurred substantial start up costs in preparation of
trading, or was formally operating and the company is now
dormant
- The company was registered in the ordinary course of business
and the company name is available for sale to the applicant on the
standard terms of that business
- The name was adopted in good faith by the company
- The interests of the applicant are not adversely affected to
any significant extent
The first three defences however can be undermined if the
applicant can show that the main aim of the company name
registration was to block the applicant from registering the name
or to obtain large sums of money in return for the transfer of the
relevant registered name.
In this regard the new procedure is similar to the measures in
place to combat cyber squatting, where the proof of a bad faith or
opportunistic registration will lead to the transfer of the
relevant domain name to the rights holder. However, what will be
considered opportunistic has not been defined by the legislation
and what will constitute bad faith remains to be decided on by the
Tribunal.
Where the applicant is successful in bringing its complaint the
Tribunal has the power to order the company name to be changed by a
specific deadline.
There is no time limit fixed to bring a claim but clearly if an
applicant is to avoid the defence that the company is operating
under the name, and has incurred substantial start up costs, and
where the applicant does not have strong evidence to rely on to
disprove that the name was adopted in good faith by the company,
then the sooner the application is made the better.
Bringing a complaint to the Tribunal attracts a £400 initial
application fee, although there are likely to be other associated
costs such as legal advice and hearing costs (a hearing will not
always be required and complaints can also be dealt with by way of
written statements alone).
No cases have yet been decided by the Tribunal, although some
rights holders (including Coca Cola) have already brought
complaints under the new procedure, and so it remains to be seen
how effective or utilised it will be. However, given the costs and
uncertainty associated with litigation, it is anticipated that
there may be wide take up of this cheaper remedy and that such
applications may yet become as common place as those being made
under the Nominet and ICANN procedures in respect of cyber
squatting.
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