Timetable for implementation of Companies Act 2006 revised

The Department for Business, Enterprise and Regulatory Reform (BERR) has announced that the implementation of some of the provisions on company names contained in the new Companies Act 2006 (Sections 53 to 85) has been delayed until October 1 2009. Implementation was originally scheduled for October 2008. BERR has stated that the reason for the delay is that the internal Companies House systems "may not be 100% effective" in time for the original implementation date.

Of particular interest to trademark rights holders is that BERR is currently considering whether the implementation of the new rules contained in Sections 69 to 74 will also be delayed.

It is hoped that the new provisions in Sections 69 to 74 will make it easier for a company to take action against similar company names where it can be established that the new company name is taking advantage of its goodwill. Under the old Companies Act 1985, for Companies House to object to a new company name, the new name had to be extremely similar to the name of an existing company. No account was taken of:

• the broader goodwill that a company might have in a specific name; or
  
  
• whether the new name created an implied association with the existing company.

Under the Companies Act 2006, there is now an additional ground of objection. The new rules provide that an applicant may object to another company's registered name on the grounds that it is:

• the same as a name associated with the applicant in which it has goodwill (which is defined as "reputation of any description"); or
  
  
• sufficiently similar to such a name that its use in the United Kingdom would be likely to mislead by suggesting a connection between the other company and the applicant.

Objections are made to a company names adjudicator appointed for this purpose.

The new company can overcome an objection if, for example, it can show that:

• it has actually used the name or made preparations for such use;
  
  
• the name was adopted in good faith; or
  
  
• the interests of the applicant are not adversely affected to any significant extent.

However, these defences do not apply if the applicant can show that the main purpose of the registration was to obtain money from the applicant or to prevent it from registering the name itself.

There are no time limits to making an objection, although the goodwill relied upon must have been established before the date on which the new company was registered. How the rules will be applied to companies incorporated under the 1985 act remains unclear.

It is widely hoped that the new grounds will make it easier for a company to take action against similar company names where it can be established that the new company name is taking advantage of its goodwill. However, depending on the results of BERR's consultation, it looks like rights holders may need to wait a little longer before they can take advantage of these new provisions.

Dan Royle, Clifford Chance LLP, London