New Company Names Tribunal: a first success for brand owners
Legal updates: case law analysis and intelligence
The new Company Names Tribunal gave its first decision on December 3 2008.
The Company Names Adjudicator Rules, which enable brand owners that have goodwill associated with a particular name to object to opportunistic company name registrations, came into force on October 1 2008. The rules, which were intended to address name-squatters, also allow objection to any company name that is the same as, or sufficiently similar to, an existing name with goodwill.
On the day the rules entered into force, the Coca-Cola Company became the first brand owner to test the new procedure by filing a petition against the company name Coke Cola Limited, which was incorporated on February 29 2008. Coke Cola failed to file a defence within the one-month period stipulated under the rules. Consequently, the Company Names Tribunal was entitled to treat Coke Cola as not opposing the application. The tribunal ordered Coke Cola:
- to change its name within one month of the decision;
- not to register another company with an 'offending name' (an 'offending name' is a name which, by reason of its similarity to the name associated with the applicant in which it claims goodwill, would be likely to be subject to a direction of change of name, or give rise to a further application to change the company name); and
- to pay a contribution of £700 towards Coca-Cola’s costs.
If a defendant fails to change the company name within the stipulated time period, the adjudicator will determine a new company name. A defendant has one month within which to file an appeal against the decision.
The decision will reassure brand owners. It demonstrates that the process is effective and comparatively quick: as Coke Cola Limited did not appeal, the matter was resolved in just over three months from the filing of the complaint. Coke Cola failed to change its name within the stipulated period and the adjudicator has now determined a new company name.
The decision also confirms that the regime is retrospective against companies named prior to October 2008. The effectiveness of the relief - specifically, the ability to impose a name change on a company without its involvement or response - is clear. This last aspect will be particularly useful against small entities based in non-European jurisdictions where enforcement and collection of damages are not cost-effective.
Several factors are unusual about this case. Coca-Cola is probably one of the best-known brands in the world and the offending company name was extremely close to the brand owner’s company name. In addition, the company did not resist the challenge, allowing the fastest possible relief to be granted.
As a result, a number of questions remain. Will future cases be decided as quickly? Much depends on the popularity of the regime and any backlog of complaints that builds up. Another factor will be the UK Intellectual Property Office’s approach to contested applications, particularly the filing of evidence on both sides and the time taken to consider and decide on such evidence.
It is also unclear whether the regime will offer protection against entities other than 'company-name squatters' which seek payment for transfer of the company name registration. On its face, the system should protect against any act of passing off that includes a company name. This, in turn, raises the question of how far the tribunal will go to protect names with goodwill and reputation (ie, brands) that are not company names. While the procedure appears to be effective for straightforward company name complaints, only time will tell whether it will be as beneficial in relation to more complex cases (ie, where it is not clear cut that a company name was registered opportunistically).
Hiroshi Sheraton and Désirée Fields, McDermott Will & Emery UK LLP, London
Copyright © Law Business ResearchCompany Number: 03281866 VAT: GB 160 7529 10