Company Name Tribunal Actions: A Review of recent Defended Actions
If a company registers an identical or similar company name in the UK with Companies House, submitting a complaint with the Company Names Tribunal (“CNT”) can be an effective way to challenge them. In a related article, we discussed what you would need to submit a successful complaint, the possible issues that may arise, the expected timescale and some practical tips. In this article, BrandWrites looks at the defended CNT actions to date and sets out the key issues, findings, and takeaway points. We note that we are not reporting the undefended actions below since those were successful by default, in the Applicant’s favour.
In 2023, only 4% of the 266 actions filed with the CNT were defended[i]. This article reviews the defended actions at the CNT in the second half of 2023. Our previous article summarised defended actions in the first half of the year.
Before diving into the review of cases, we briefly summarise the elements required to succeed in an action against a company name:
- You must have goodwill/reputation in the name you are relying on;
- The company names must be sufficiently similar; and
- The respondent to the action must not have any defences available to them.
The possible defences available are:
Defence No.1: the name was registered before the start of the activities that you are relying on to show you have goodwill/reputation in the name;
Defence No.2: the company is already trading under the name or is proposing to do so and has incurred substantial start-up costs or was operating under the name but is now dormant;
Defence No.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;
Defence No.4: the name was chosen in good faith; or
Defence No.5: the interests of the Applicant are not adversely affected to any significant extent.
It is worth noting that a company cannot successfully rely on any of the above defences if the complainant (also referred to as the Applicant) can show that the main purpose of registering the company name was to obtain money (or other consideration) from them or to prevent them from registering the name.
Review of recent cases
|Summary of key findings and takeaways
|23 January 2024 Meta Platforms, Inc v Meta Platforms Incorporated Ltd Full decision here
|Applicant: Meta Platforms, Inc Respondent: Meta Platforms Incorporated Ltd Result: Successful Conclusion The goodwill that had existed in Facebook, Inc had transferred to Meta Platforms, Inc ‘essentially overnight’.The Respondent’s main intention in registering Meta Platforms Incorporated Ltd was to obtain money from the Applicant.The Respondent was forced to change its name. The ‘flagrant abuse of the system’ by the Respondent was taken into account in the costs awarded to Applicant. Takeaways Goodwill can exist pretty quickly in the case of a well-known company re-branding.‘Without prejudice’ settlement offers may be admitted as evidence of bad faith.
|29 August 2023 Mackie’s Limited v Mackie’s Ice Cream Limited Full decision here
|Applicant: Mackie’s Limited Respondent: Mackie’s Ice Cream Limited Result: Successful Conclusion The Applicant owned goodwill in MACKIE’S.The names were found to be sufficiently similar.The Respondent failed to successfully rely on any defences.The Respondent was forced to change its name and contributory costs were awarded to the Applicant. Defences relied on Defence No. 4: the name was adopted in good faith; Unsuccessful as Respondent failed to provide evidence to discharge burden of proof. Defence No.5: interests of the Applicant are not adversely affected to any significant extent; Unsuccessful as name was likely to mislead and the two companies operated in closely related fields of activity. Takeaways Sufficient evidence must be submitted to support defence no. 4, particularly where the Respondent is aware of the Applicant’s existence and reputation.
|2 August 2023 General Electric Company v General Electric Company Ltd Full decision here
|Applicant: General Electric Company Respondent: General Electric Company Ltd Result: Unsuccessful Conclusion Although the Tribunal agreed that the Applicant had goodwill in the name ‘GE’, the Applicant failed to demonstrate that it had goodwill in the name ‘General Electric’.The Respondent was able to keep its company name and contributory costs were awarded to the Respondent. Takeaways Even if the Applicant is a large, well-known company, they must prove goodwill in the full company name. It is sensible to give the evidence some consideration with your legal advisors before taking action before the CNT.
As you can see, only a limited number of CNT decisions were issued recently, and in the last 6 months, as most actions filed with the CNT go undefended. This same trend was found in our review of decisions in the first half of 2023 (see here).
The decisions discussed above demonstrate that:
- Even if the Applicant is a large, well-known company, they still need to prove goodwill in a name that is the same as or sufficiently similar to the company name being challenged – goodwill is never assumed;
- Goodwill can be transferred pretty quickly in the case of a large company re-branding; and
- ‘Without prejudice’ settlement offers may be admitted as evidence of bad faith.
Get in touch with your legal advisors if you have any questions on the above, or if you have any company names which are identical or similar to your trade mark rights, and which you wish to take action against.
We note that some defences discussed above (specifically those in Section 69(4)(b) Companies Act 2006) are likely to soon be repealed if/when the Economic Crime and Corporate Transparency Act 2023 is passed by the Government. We are keeping a close eye on its developments and will provide an update in BrandWrites soon.
[i] This data is based on the number of defended and undefended decisions and orders published on the CNT’s website (https://www.gov.uk/government/organisations/company-names-tribunal) and is accurate as of 31 January 2024 when the article was finalised for publishing.