A new tribunal has been established within the UK Intellectual Property Office (UKIPO) to hear complaints against persons that register company names opportunistically, e.g. by registering close variants on a known company name in order to extract money from that company. The intention is to provide a complaint mechanism similar to those available against cyber-squatters’ domain name registrations.
The complaints procedure has been brought in by the Companies Act 2006 and the Company Names Adjudicator Rules 2008 from 1 October 20081. The procedure is limited to the grounds of complaint in the Act only, which means that, as the UKIPO points out in the opening sentence of its fact sheet2, it deals with only “a very limited set of circumstances”. Hence a person (applicant) can only bring a complaint against a registered name if:
a) it is the same as a name associated with the applicant in which he has goodwill; or
b) it is sufficiently similar to such a name that its use in the UK would be likely to mislead by suggesting a connection between the company and the applicant.
Complaints are brought before the Company Names Tribunal, a newly established office of the UKIPO using adjudicators initially drawn from hearing officers for trade mark matters. A fee of £400 is payable on bringing a complaint and, as the fact sheet notes, it will not be refunded if a complaint is brought in error on grounds not within (a) or (b). Further modest fees are payable on each subsequent stage of the proceedings.
At first sight, the grounds provide a seemingly useful and cheap remedy lying between the right to bring a court action in passing off or for trade mark infringement (if the complainant’s company name has been registered as one) and the right to object to Companies House over its registration of a name that is too like an existing company name in visual appearance or sound.
However, the real limitations to the procedure come from the defences available to the registrant of the name complained of. The defences arise from the underlying rationale of the procedure that it is to stop registrations aimed at extracting money from the complainant (e.g. by registering variants of an existing company name or registering a likely new name following a merger in order to sell those names to the complainant) or aimed at preventing the complainant from registering the name in issue for itself. Hence, in summary, the defences are that:
a) the name was registered before the complainant had any goodwill in it; or
b) the company is operating or has operated (and is now dormant) under the name or is proposing to do so (and has incurred substantial start-up costs); or
c) the name was registered by a company formation business and the company is available for sale to the applicant on standard terms; or
d) the name was adopted in good faith; or
e) the applicant’s interests are not adversely affected to a significant extent.
Defences (a) to (c) will fail if it can nonetheless be shown that the main purpose of the registration was to extract money or prevent the complainant’s own registration. As the latter implies, it is not a requirement of the procedure that the complainant has to have a registered company name. It can therefore be used, for example, to object to opportunistic registrations of trade names.
With opportunistic name registrations on the rise, and despite its limitations, the Company Names Tribunal should provide a useful forum for complaints where the name being objected to is more than a minor variant on an existing name and so is outside the Companies House complaints procedure. Whether it will actually achieve this will inevitably depend on how robust the adjudicators prove to be in practice, particularly in how readily they find that one or more of the five defences have been made out.
The Companies House complaint procedure is itself new, also introduced from 1 October 2008. For more details on the changes brought in by the Companies Act 2006, our briefing note “Companies Act 2006 - 1 October 2008” is available on our website.