Legal action against a company name in the UK: everything you need to know
One possible and effective way to stop a company that has registered the same or a very similar company name in the UK with Companies House is to submit a complaint with the Company Names Tribunal (“CNT”).
This article discusses what you’ll need to submit a successful complaint, the possible issues that may arise, the expected timescale and some practical tips.
What you’ll need
To submit a complaint with the CNT, you need to show that you have goodwill/reputation in the name which is identical or very similar to the company name that you are contesting.
You do not need to have a company registered with that name or own a trade mark registration, though the existence of a UK trade mark registration would be helpful.
If not the same, the contested company name must be sufficiently similar to your name. The CNT will consider a name to be sufficiently similar if the use of that name (in the UK) would likely be misleading by suggesting the existence of a connection between the company using the similar name and your business.
To show goodwill, you can show (a) that the company is currently operating under the name in the UK and (b) include details regarding the extent of those activities and when you began operating under that name.
The type of evidence that would be helpful to prove that you have goodwill in a name may include but is not limited to:
- Extracts from your website and social media where you are operating under the name;
- Marketing and promotional material; and
- Financial information.
Possible issues that could arise
Presuming you have the goodwill and reputation in the name in question – your action will be successful if (a) no defence is filed, and you win by default; or (b) the company is not able to rely on any of the defences available to them.
It is worth noting that most actions brought before the CNT are undefended. Approximately 90% of all actions concluded in 2022 (at the date of this article) were undefended1. Nevertheless, it is worth bearing in mind that there are a handful of defences a company can rely on. These are as follows:
- Defence #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 #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 #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 #4: the name was chosen in good faith.
- Defence #5: the interests of the applicant are not adversely affected to any significant extent.
However, the company cannot successfully rely on any of these defence if you can show that the main purpose of registering the company name was to obtain money (or other consideration) from you or to prevent you from registering the name.
To date, the most frequently relied upon defence is Defence #2 (i.e. when a company is already trading under the name or is planning to do so and has incurred significant start-up costs).
The quicker you can act against a company with the same or a very similar name on Companies House – the better chances you’ll have that they are not operating under the name or have incurred a significant cost in planning to do so.
Below, we discuss some practical tips to minimise the chances of this defence being relied on or being caught off guard during a proceeding.
What can you do to improve your chances?
- Tip #1: Monitor the UK’s Companies House’s register to quickly identify when a company has registered the same or a very similar name which you may want to object to. Companies House is a public register accessible to everyone – therefore, checking the register frequently or setting up an account (free of charge) to set up alerts on a company could help you identify any issues early on. Alternatively, your legal advisor may also offer a watching service which can be put into place.
- Tip #2: Do a quick Google search to see whether the company is currently trading or was trading.
- Tip #3: Check social media, including the company directors’ LinkedIn pages for any information (e.g. has a launch date been announced?).
Following these tips will minimise the chances that a company will be able to rely on Defence #2 or provide a clearer picture on your chances of success and the potential need to resort to other options.
What if you discover that the company is already trading?
If you are not able to rely on the exception discussed above (i.e being able to demonstrate that the main purpose a company registered its name was to obtain money from you or to prevent you from registering the name) then trade mark owners can consider an action for trade mark infringement/passing off as an alternative.
If you do not have any registered rights, you may still have a course of action under the law of passing off.
If you want to know more about your options under these actions, it is worth seeking further advice from a legal advisor specialising in trade marks.
Timescale and costs
Challenging a company name with the CNT is relatively inexpensive and an expeditious process in comparison to taking infringement action through the courts.
If an action is defended, proceedings before the CNT can take up to 15 months, however, undefended actions usually conclude in 4-6 months.
If an action is defended, then you will need to submit supporting arguments and evidence (e.g. to show that you have goodwill/reputation).
What happens when you win?
The CNT can order a change of name and/or exercise their power to choose a new name on behalf of the company. Additionally, a cost award will likely be granted in your favour to recover legal and official government fees.
- Stopping a company that has registered the same or a very similar name on Companies House by submitting a complaint with the CNT can be an economic way to enforce your rights in your chosen name (whether registered as a trade mark or not);
- If you are planning to submit a complaint, make sure you can show goodwill/reputation in the name in question, and if you have UK trade mark registrations for the same or a closely similar name, be sure to include details of those;
- The most common defence relied on by companies is when a company is already trading under the name or is planning to and has incurred substantial start-up costs. It is advisable to (a) monitor Companies House’s company register, (b) do your research on whether the company is operating under the name and (c) act quickly or be prepared to support your case by submitting evidence that the company has registered the name to obtain money from you or prevent you from registering it.
This percentage 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)