Partner Article

Goodwill Hunting

With Watson Burton LLP Law Firm

Businesses wishing to protect their names and brands may wish to take note of new rules relating to the registration of companies names which came into force on 1 October 2008 as part of the further implementation of the Companies Act 2006.

The old legislation prevented a company name from being registered only where it was identical to, or was ‘too like’, an existing registered company name. The policing of offending names was at the discretion of Companies House, either at the time of registration of the new company name or upon objection from the owner of an existing registered company name. Whilst this limited regime has been retained under the Companies Act 2006 (and continues to be administered by Companies House), it has now been supplemented by the creation of a Companies Name Adjudicator (CNA) and tribunal system.

The new CNA system seeks to remedy the mischief of opportunistic registration of company names, for example where someone registers a variation of the name of an existing company in order to get that company to buy the registration. The CNA system provides that any person (“the applicant”) may make an objection to the registration of a company name if the name is (i) the same as a name associated with the applicant in which he has goodwill; or (ii) sufficiently similar to such a name that its use within the UK would be likely to mislead by suggesting a connection between the company and the applicant.

An application under the CNA system is not therefore restricted to being made by the owner of an existing registered company name nor in relation to that name only: an objection could be made by someone in connection with a brand or trade name provided that they were able to demonstrate association and goodwill in that name or the potential for confusion in the UK. There are, however, prescribed defences that a respondent to an application may rely upon, each of which give rise to a presumption that a company name was adopted legitimately.

The defences are

1. that the name was registered before the commencement of the activities on which the applicant relies to show goodwill;
2. that the respondent is or was operating under the company name, or is proposing to do so and has incurred substantial start up costs;
3. that the name was formed in the course of a company formation business and is available for sale on the standard terms of that business;
4. that the name was adopted in good faith;
5. the interests of the applicant are not affected to any significant extent

Applications will be determined by the CNA upon the written and/or oral evidence and submissions of the parties and the CNA has the power to order that the offending name be changed. The CNA system should prove to be a relatively cheap means of guarding against the opportunistic registration of company names and may also be a useful tool to be used as a precursor to, or in tandem with, actions for passing off and trade mark infringement.

If you have any comments or questions about this article or any company or intellectual property matters, please contact Gareth Booth of Watson Burton LLP at gareth.booth@watsonburton.com.

This was posted in Bdaily's Members' News section by Ruth Mitchell .