What can a brand owner do if a company sets itself up using that brand in its company name? To date brand owners have had little alternative but to commence proceedings for trade mark infringement and/or passing off and to seek an injunction requiring the company to change its name. That looked set to change with the introduction of a Company Names Adjudicator. Unfortunately this new procedure now faces a delay to its implementation and brand owners may have to wait until October 2009 before being able to benefit from it.
The issue this new system is intended to address is that Companies House has only limited powers when dealing with objections to such company names. It can only take action if a name is the same as or is "too like" an existing company name. In considering the question of whether two company names are "too like" each other, no consideration is given to the companies respective locations, activities or goodwill. Importantly, Companies House cannot take action based on a trade mark.
In an attempt to address these problems, the Companies Act 2006 includes a new provision (section 69) allowing any person or company to object to a Company Names Adjudicator if a company name is similar to one in which the objector has goodwill. The respondent must then show that the name was adopted legitimately, that he otherwise has acted in good faith or that the objector's interests are not significantly affected.
In a move that is likely to assist brand owners, the office of the Company Names Adjudicator is not going to be at Companies House but instead will be at the Intellectual Property Office (the new name for the Patent Office). Their understanding of and experience in IP protection issues should enable the new system to operate more effectively. Unfortunately however, the system is not yet up and running.
The new procedure was scheduled to come into operation (along with numerous other sections of the Companies Act 2006) in October 2008. Unfortunately this now appears to be in doubt. The Minister for Competitiveness Stephen Timms announced on November 7 that while Companies House has "made considerable progress" towards preparing for the implementation of the new sections "there remains a great deal of work to be done". For this reason the implementation of the remaining provisions of the act has been delayed by a year to October 1 2009. A ray of hope exists however in that section 69 is highlighted in the announcement as one of the sections which might not necessitate changes to Companies House systems. It might therefore still go ahead as planned next year. An announcement will be made to Parliament in December regarding the date of its implementation.
Given that a draft set of rules for governing the company names adjudication procedure was published in August and that the Intellectual Property Office rather than Companies House is in charge of it, it is hoped that it can still be implemented on time. This should give brand owners a quick and hopefully cheap (details of fees have yet to be published) alternative to court proceedings when a company seeks to trade off their goodwill via its company name.
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| Chris Moran |
Bristows
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London WC2A 3AA
United Kingdom
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info@bristows.com
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