At the beginning of the month, Clare McCauley reported that the Government has relaxed the rules concerning company names. Your organisation’s name can now include what were “sensitive” words under the old regime. ‘United Kingdom’ ‘International’ ‘Group’, ‘Holdings’ and ‘Services’ amongst others can now be used without approval from the Secretary of State. You can read Clare’s article here.
The Company & Business Names consultation was published on 27 February 2013, as part of the Government’s “Red Tape Challenge”. The aim of which was to ensure that every company has a name easily differentiated from others and that the name does not misrepresent the company’s position in the eyes of the general public. This caught the eye of the IP team here at PS and whilst we are always happy to see less bureaucracy, we do have some additional thoughts. The relaxed rules will benefit businesses wishing to incorporate for example, their own holding or international company, but could we see an increase in company name disputes?
Under s.69 of the Companies Act 2006, a person may make an application to the Company Name Tribunal (CNT) to change a company’s registered name if that name is the same as one in which the applicant has goodwill, or is sufficiently similar that it would be likely to mislead or suggest a connection. However, a company can defend an application if good faith can be shown in adopting the company name. Further, if the applicant’s interests are not adversely affected the application will fail.
An English company Botox Limited was ordered by the CNT to change its name. Why? Because the American company Allegan Inc, the maker of Botox wished to set up an English company with the same name and Botox Limited had not yet traded. Conversely, Tektronix Inc, another American Company, failed to have the name of an unrelated English company Tektronix Limited, changed. The English company had adopted the name in good faith and the American company failed to show that they had a reputation in the UK.
Get your company name wrong, and you could also be liable in passing off if the name suggests that you are carrying on someone else’s business. A successful claimant can ask a court for an injunction, as well as damages and an account of profits. Get your company name very wrong and you could be infringing someone’s registered trade mark.
We are here to help you make sure that you avoid name disputes by conducting searches on your behalf prior to registering your company. We can also assist if you believe someone is trading off your goodwill. Whilst an application to the CNT is one course of action, ultimately the best protection for your company and reputation is to register your name as a trade mark.