Out-Law Guide | 11 Aug 2008 | 11:00 am | 6 min. read
This guide was last updated in January 2018.
The provisions concerning the Company Names Adjudicator came into force on 1st October 2008.
It was a common misconception that the incorporation of a company under the previous Companies Act, the Companies Act 1985, gave the company concerned some form of trade mark right to its company name. It did not. The incorporation of a company under the old act simply prevented the incorporation of a company whose name was identical to or ‘too like’ the name of a company already incorporated under the Act.
A company name registration, in the absence of a trade mark registration or common law rights established via use under the tort of 'passing off', could not in itself prevent another company trading under the identical or similar name. It simply prevented the incorporation of a company under that name on the Companies Register.
Furthermore, although the old Companies Act did give companies already incorporated under the Act the right to object to the continued incorporation of a company which was ‘too like’ an existing name, a decision to force the change of a company name was subject to the discretion of the Secretary of State in the form of Companies House. In practice this meant that this happened only if a company name was almost identical to an existing registration. The ability to challenge a company name registration under the old Act was also only available to the owner of an existing company registration.
Weak provisions of the old Act
The relatively weak provisions of the old Act concerning the registration of similar company names was particularly problematic for companies which had not yet been incorporated under the Act, but where news of their impending launch had been leaked to the press or for companies which had yet to begin trading or were in the early days of trading and thus had not established common law rights to a name via use and had not yet registered the name as a trade mark.
In 1996 news of the merger of the multinational pharmaceutical companies Glaxo plc and Wellcome plc was leaked and at the time the news of the merger became known, there was no company on the Companies Register incorporated under the name GlaxoWellcome. An individual proceeded to incorporate such a company before the owners of the merged GlaxoWellcome entity had done the same.
Although ultimately the ‘true’ Glaxo Plc was successful in forcing the change of the offending company name, it had to resort to taking action through the courts and succeeded on the basis that the earlier incorporation would act as an ‘instrument of fraud’. The GlaxoWellcome case aptly illustrates some of the problems with the old Act in that a complainant was forced into costly court proceedings, rather than being able to utilise the provisions of the Companies Act itself.
Furthermore, an allegation that a company name registration is an ‘instrument of fraud’ would succeed only in the most blatant of cases. If the offending company never actually used the name concerned in commerce, then conventional trade mark infringement and passing off actions would not be available to the complainant, enabling a dormant company to remain on the Register with an offending name.
The Companies Act 2006 provides for a team of nine Company Names Adjudicators who reside at the UK Intellectual Property Office (UKIPO). Company Names are dealt with under Sections 66 to 74 of the new Act and the currentprovisions came into force on 1st October 2008.
Under the 2006 Act anybody can file an objection with the Company Names Adjudicator if the new company is incorporated under a name that is the same as that associated with the complainant and in which the complainant has goodwill in a business associated with the name or that the new company name is sufficiently similar to such a name and that its use in the United Kingdom would be likely to mislead by suggesting a connection between the company and the complainant.
The crucial difference to the provisions of the old act is that the complainant need not be owner of a registered company. Furthermore, the issue of goodwill has been brought into consideration with the phraseology of ‘sufficiently similar’ bringing the currentregime much more in line with the tort of passing off and the law of trade mark infringement. It istherefore easier for a complaint to be upheld under the new regime compared to the old regime.
The currentregime provides for the protection of the rights to company names which have not been registered under the Companies Act, a major difference to the old regime.
Furthermore, the introduction of the phraseology of ‘sufficiently similar’ appears to be a much broader concept than ‘too like’ under the old Act. It would appear that if there is likely to be any association with the complainant then the complaint will be upheld.
If the Company Names Adjudicator upholds a complaint then he can make an order to force the respondent company to change its name.
Section 69(4) of the Act sets out a number of defences to a complaint which are:
A defence based on any of the first three points above will not succeed if the applicant can prove that the main purpose of the respondent's company name was to obtain money (or other consideration) from the applicant or to prevent the applicant from registering the name.
There are been few defended actions since the formation of the Company Names Tribunal. For the majority of defended actions, the Adjudicator has found in favour of the applicant.
Making a complaint
Applications are made to the Tribunal on Form CNA 1 with accompanying £400 fee and Fee Sheet. To succeed in an application you will need to provide evidence of goodwill or reputation in the name(s) associated with you that have caused you to make an application. You will also need to provide reasons why you object to the offending company name.
It is important to provide notice to the company name holder of your intention to file an application for two reasons. Firstly a failure to provide adequate notice may affect any award of costs at the end of proceedings. Secondly a lack of notice can delay proceedings. If notice is given prior to application, the company usually has one month to file a defence. If no notice if given, the company usually has two months to file a defence. The length of time it takes to complete an action will vary depending on whether the application is defended and if extensions of time are applied for.
The ‘Company Names Adjudicator’ does mean that it is more likely that complainants under the Companies Act will succeed in challenging the incorporation of companies under similar names. It is also easier and cheaper for a complaint to succeed in such cases meaning that the complainant no longer has to resort to costly court proceedings. A complaint under the new provisions could also nip a trade mark infringement and passing off situation in the bud with a successful challenge to the Adjudicator. However the Adjudicator's powers are limited changing a company name. If other remedies, such as damages or injunction are sought, application must be made to the Court.
Given that complaints under the Companies Act with regards similar company names now appear to be a much stronger weapon in the protection of trade mark rights, you or your clients should review the issue of company name watching, as such a service could provide the first warning signal for possible infringement of your trade mark rights in the future and enable you to launch and succeed in a complaint under the Companies Act 2006.