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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 partys 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 companys 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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The content on this page is provided for the purposes of general interest and information. It contains only brief summaries of aspects of the subject matter and does not provide comprehensive statements of the law. It does not constitute legal advice and does not provide a substitute for it.

Declan Cushley

Declan Cushley

Partner and Head of IP and Commercial Group

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