Business owners often fail to conduct trademark availability searches before they register their company name at the Companies and Intellectual Property Commission (CIPC). Section 11 of the Companies Act prohibits the registration of a company with a name that is the same as, or even confusingly similar, to:
- another company name;
- a registered trademark;
- a name for which an application for registration as a trademark has been filed;
- a defensive company name; or
- a well-known trademark.
When assessing company name registrations, the CIPC considers only identical or confusingly similar company names that are contained on the company names register (and not those that are contained on the trademarks register) to be potential blocks to registration. Therefore, company names that proceed to registration may infringe on trademark rights as set out in Section 11 of the Companies Act. This often leads to company name objections having to be adjudicated by the Companies Tribunal. Therefore, conducting a trademark availability search as part of a due diligence investigation is an important preventive step that can:
- prevent future company name objections; and
- minimise the possibility of a company losing the right to its name in future.
On the other hand, it is important for trademark owners to prevent another company from using their trademark, or a name confusingly similar thereto, as its company name. In this regard, the Companies Act provides for the registration of a defensive company name. Defensive company name registrations aim to protect trademarks from being incorporated into company and close corporation names. This means that a company can protect its trademark on the company names register and prevent other companies from trading and using its trademark as a company name.
The applicant for a defensive company name must prove to the CIPC that it has a direct and material interest in the protection of the name (ie, a trademark registration or an application for one). A defensive company name may be registered with the CIPC for two years and may be renewed for every two years thereafter. The advantage of registering a defensive company name is that it avoids the cost of a formal company name objection every time a company is registered with an identical or confusingly similar name.
This article was first published by the International Law Office, a premium online legal update service for major companies and law firms worldwide. Register for a free subscription.