Wed 21st Sep 2016
How to object when someone adopts a UK company name that is opportunistic or abusive
Sectors: Brand owners
Having spent many months building up the reputation of your business, it is extremely frustrating to see another business attempt to ride on your coat tails and profit from your goodwill, through opportunistic activities.
This note explains that, under the Companies Act, in the UK, it may be possible to object to a company name that is identical, or sufficiently similar to your trade names. Bear in mind that the option of a possible court action, which would be costlier, should also be considered.
What registered company names can be objected to?
The name must be
- the same as one in which you have established ‘goodwill’, or be sufficiently similar, that its use in the UK would be likely to mislead, by suggesting a connection between the companies
- registered at UK Companies House (eg Ltd/plc/LLP).
Examples of successful cases, where names were said to conflict have included:
- CAPITA and TRUSTCAPITA LTD;
- KRAKEN and KRAKEN VAPING LTD;
- The Dental Law Partnership Solicitors Ltd and Dental Law Partnership Ltd;
- Tesla and Tesla Cars (UK) Limited;
- Elk and Elk Building Services Limited; and
- Lituanica and Lituanika Ltd.
An objection by the insurance company AXA to a company called Axals Corp was not successful, as they were not considered sufficiently similar.
Is it necessary to prove our business has goodwill?
Yes, your business must have established a reputation under the trade name. An objection can only be made by the entity that owns the goodwill.
Objections have failed where:
- individual directors raised an objection, but the goodwill belonged solely to their company; and
- no goodwill had been established, as the applicant has not yet begun trading.
Who administers the proceedings?
There is a Company Names Tribunal, which is part of the United Kingdom Intellectual Property Office. Company names adjudicators issue decisions. They are experienced hearing officers and are accustomed to dealing with trade mark opposition matters.
What are the procedures?
We file a complaint on the relevant form, with a statement of grounds.
The defendant (respondent) has two months in which to file a defence. In several past cases, there has been no defence filed and applicants have won by default.
If the defendant does respond, then there is an opportunity to file evidence and the parties have the right to request a hearing, although this is often not taken up. The parties can also file written legal submissions.
Click here to read about how to defend your company name against an objection.
What are the costs?
The government fees for raising an objection as of September 2016 are £400 for filing the action. The Defendant pays £150 fees on filing a Defence and further £150 government fee is payable by parties, when filing evidence. This excludes legal adviser’s costs.
Can legal costs be recovered, if successful?
It is usual to instruct an intellectual property expert to object on your behalf, because they have experience of case law, rules, the Office and the key elements that will lead to success, and they therefore improve the prospects of success. They can advise you on the merits.
If successful, you are likely to be awarded a contribution towards any legal costs, including the recovery of government fees. The UK Intellectual Property Office generally follows a standard scale of costs which does not always fully compensate the successful party, but this can be deviated from in exceptional circumstances.
What are the remedies?
If you are successful in your objection, the Company Names Tribunal can order a change of name and does have powers to choose the new name. This is in addition to any award of legal costs.
What other positive action can be taken?
For a small charge, it is possible to set up a monitoring service to look out for conflicting UK company names when they are registered. We provide this service, which is not provided by the government.
In addition to your rights under the Companies Act, you may be able to take steps by an action under ‘passing off’ or trade mark infringement.
Asking us to send a letter to the defendant is a prudent first step which may resolve matters without the need for legal action. Failure to send such a letter may make it more difficult to recover legal costs later.
In summary, the Company Names Tribunal provides a weapon for dealing with opportunistic UK company names that are too similar to another party, who can show the necessary reputation. Its powers should be borne in mind as a potentially quicker and cheaper route to success.
Please do not hesitate to contact the team at Page White & Farrer, email@example.com, if you would like further assistance in protecting your company name.
This briefing is for general information purposes only and should not be used as a substitute for legal advice relating to your particular circumstances. We can discuss specific issues and facts on an individual basis and answer any questions about Brexit. Please note that the law may have changed since the date this was first published in September 2016.