Prior to its introduction, there were only really three possibilities in a disputed situation:
- a company (i.e. acting by its Directors) could object via Companies House to another registered company name which was "too alike";
- if the company name had acquired goodwill and reputation (and the company name was not registered as a trade mark), the company could seek recourse through the courts via a costly and often difficult "passing off" procedure; and
- if the company name was registered as a trade mark then it could try to enforce its registered rights through a trade mark infringement action.
However, the Tribunal now empowers any person with an interest in the company, to object to an "opportunistic name registration" (the equivalent of the recent money-making scam known as "cyber-squatting"). The applicant can object (to the Tribunal using a standard form CNA1 http://www.ipo.gov/cna1.pdf) to a company's registered name on the grounds that it is either (1) the same as a name associated with the complainant in which he has goodwill (including reputation); or (2) is sufficiently similar so as to be misleading by suggesting a connection with the complainant's company. Evidence of the opportunistic nature must be illustrated.
Examples would be -
- registering one or more variations of a well known company name in order to get the original company to buy the new registrations from them;
- on becoming aware of a future merger of companies, registering an appropriate name, anticipating that it may be of use to the newly amalgamated company;
- registering a company name, the same as or similar to that of a trading name of an existing business, in order to benefit from the latter's reputation and goodwill.
There are defences available -
- that the newest name was registered before the start of the activities on which the complainant relies to show goodwill;
- the company is operating under the name and has incurred significant start up costs in preparation;
- the name was registered in the ordinary course of a company formation business and the company is available for sale to the complainant;
- the name was adopted in good faith; or
- the interests of the complainant are not adversely affected to any significant extent.
Interestingly, from cases dealt with by the Tribunal so far, it appears that if the defendant cannot prove any of the above, they will be ordered to change the name. If they fail to change the name upon such request, the Adjudicator requests the Registrar of Companies to make a default change of name. It seems it really is an empowering, swift and cost effective method of protecting company names.