TUESDAY, 23 SEPTEMBER 2008
The Company Names Tribunal: adjudicating on opportunistic company name registrations
On 1 October 2008 new provisions concerning company names will come into force, which I will explain and set out below. The Company Names Adjudicator Rules 2008, which give effect to sections 69-74 of the Companies Act 2006, provide for complaints by businesses or persons who have goodwill associated with a name, where that name has been "opportunistically" registered as a company name by someone else with a view to obtaining money from the Complainant, or to prevent the Complainant from registering the name.
"Opportunistic" company name registrations
Opportunistic company name registration share characteristics with "cyber squatting" in the field of domain names; for example, when someone registers variations of the name of a well-known company in order to get the latter company to buy the registrations.
"The Company Names Tribunal" at the UKIPO
The new proceedings will be administered by "The Company Names Tribunal" (the Tribunal) and each dispute will be decided by an adjudicator; these will be hearing officers experienced in trade mark and trade name tribunal work, who are based at the UK Intellectual Property Office.
Who can apply?
From 1 October 2008 onwards, any business or person with goodwill or reputation in a name is entitled to apply to the Tribunal, not just prior registrants of company names. The new proceedings will also allow businesses or persons to prevent the use of their name and/or trade marks in a company name, where such a use misleadingly suggests a connection between the company and the Complainant. At the moment, a trade mark proprietor who objects to a company name which encompasses its trade mark - or a confusingly similar mark - has to seek relief via the courts. The new proceedings are expected to provide a cheaper and simpler alternative to such, often costly, court proccedings. However, disputes where someone believes that another company name registration is too similar to their own company name, but where there is no alleged opportunistic motive, will still be dealt with by Companies House. It should be kept in mind, that if a company name is used as a trading name, the common law tort of passing off may also be invoked. It should be noted that if an application to the Tribunal does not fall within the scope of section 69 of the Companies Act 2006 the official application fees will not be refunded.
It can be said that the proceedings are reminiscent of UK trade mark opposition proceedings.
On the Complainant's side the process involves filing a complaint (form CNA 1) including a statement of grounds, a fee sheet as well as the payment of an official fee at the UKIPO. While the Complainant does not have to have a registered company name, it must demonstrate goodwill/reputation in the name at the time that it was adopted by the registration holder as the company name. The Complainant must show that the respondent company has been registered with a name in which the complainant has goodwill.
The UKIPO will send a copy of the form to the primary Respondent and will specify a fixed period within which the primary respondent must file its counter-statement ("Notice of Defence", form CNA2), pay an official fee and submit a fee sheet. The counter-statement should include a statement of the grounds on which the Respondent relies and should state which of the Complainant's allegations it admits or denies; as well as such allegations, which it is unable to admit or deny, but which it requires the applicant to prove.
Each party then has to file its supporting evidence in the evidence rounds; copies of which have to be sent copied to the other parties in the proceedings (forms CNA 3). The Complainant's evidence will inculde evidence of acquired goodwill or reputation in the disputed (company) name as well as evidence that shows bad faith on the Respondent's side.
In order to keep the disputed company name, the Respondent may justify its registration by reference to the following defences, which are listed in the Companies Act 2006:
1) the disputed name was registered before the start of the activities on which the applicant relies to show it has goodwill/reputation; or
2) the company is already operating under the name or is planning to do so and has incurred substantial start-up costs, or was operating under the name but is now dormant; or
3) the name was registered in the ordinary course of a company formation business and the company name is available for sale to the applicant on the standard terms of that business; so called ‘off the shelf company’; or
4) the name was adopted in good faith; or
5) the applicant's interests are not adversely affected to any significant extent.
Applications to the Tribunal will only be successful if the registration holder cannot invoke any of the above listed defences. Even if the registration holder can show that it complies with the criteria as set out under 1) - 3), a complaint will still be successful if the Complainant can demonstrate that the registration holder’s main purpose in registering the company name was to obtain money or some other consideration from the Complainant or to prevent the Complainant from registering the name.
Possibility of an oral hearing
Even though either party may request that the decision be made at an oral hearing, a decision may be made soley on the basis of written submissions. Where the adjudicator decides that a decision can be made without an oral hearing the adjudicator will specify a period for the parties to submit written submissions before making a decision. Extensions of time are possible at all stages of the proceedings.
While the initial application fee is GBP 400, further official fees may be incurred, for example for filing the counter-statement (GBP 150), filing evidence (GBP 150), when requesting a hearing (GBP 100), extension of time requests (GBP 100) and a request for security for costs (GBP 150)
The Tribunal will in most cases award costs to the winning side, however, it is unlikely to cover more than the official fees. If either side wishes to appoint a legal advisor after proceedings have started, or if either party needs to change their address details, a form CNA 7 will need to be filed.
If the application is successful and the complaint is upheld, the Tribunal will order the respondent company to change its name to something which does not offend. If the respondent company fails to comply with such an order within a specific time frame, the Tribunal's adjudicator has the power to ultimately enforce a new name on the company by ordering the registrar of companies to change the name to a name of the adjudicator’s choosing.
The Tribunal's decision and reasons will be available to the public and there will be a right of appeal to the High Court.
Further information can be found on the UK IPO's website here and here.
Posted by: Birgit Clark @ 12.07
Tags: Company Names Adjudicator Rules 2008, he Company Names Tribunal, ukipo,