With the implementation of the Economic Crime and Corporate Transparency Act 2023 ("ECCTA") came changes to the Companies Act 2006 enhancing the protection of brand owners IP rights when initiating Company Names Tribunal complaints.
The Company Names Tribunal enables brand owners to challenge company names that use their brand without permission. It can be a relatively quick and low-cost solution for brand owners to enforce their rights. The changes ECCTA has made to the Companies Act eradicate some of the hurdles brand owners have previously faced when making an application to the Company Names Tribunal. The changes to the Companies Act came into force in March 2024 and include:
Extended Consideration of Similarity:
In its consideration of a complaint, the Tribunal compare the similarity between the brand owner's trade mark and the name of the company against which the complaint is filed in order to determine whether consumers would be misled by the similarity of the names. Previously, when carrying out the scope of similarity assessment, the focus was primarily on domestic use by the infringing company with reference solely to the perception of UK consumers.
The changes to section 69(1)(b) of the Companies Act have expanded the scope of similarity assessment to include use outside of the UK. Now, if an infringing company uses a similar name internationally, it could be subject to a complaint before the Company Names Tribunal. This broader perspective not only enhances protection for trade mark holders but ensures that infringing companies cannot escape scrutiny by operating beyond UK borders.
Qualifying Criteria for Co-Respondents:
Amendments to section 69(3) of the Companies Act now mean that the criteria for joining co-respondents in tribunal proceedings have been broadened to include individuals who were directors of the infringing company at the time that company name was registered. Previously, if, for example, directors were to resign, they were able to avoid being joined as co-respondents.
This change expands the scope of accountability and can potentially influence the behaviour of company members and directors by making them personally liable for the company’s actions regarding its name. By allowing former members or directors to be held accountable, it ensures that individuals cannot evade responsibility by simply resigning from their positions or transferring their shares after the registration of a potentially contentious company name.
Repeal of Section 69(4)(b):
The most significant, and positive, change for brand owners is the repeal of Section 69(4)(b) in its entirety. This provision, often referred to as “the operating defence” previously allowed infringing companies a complete defence in Company Names Tribunal proceedings if they were able to demonstrate that they had either (i) begun trading under the disputed name; or (ii) already incurred substantial start-up costs in preparation of trading under the disputed name.
With its repeal, infringing companies can no longer rely on this defence. Brand owners can now file a complaint with the tribunal against an objectionable company without the concern of whether the company has been registered for some time and could already be trading or have incurred substantial costs with the intention to begin trading. With brand owners no longer needing to contend with infringing companies invoking this defence, an expedited resolution may be possible.
If you would like advice related to any of the points raised here or assistance in determining whether a Company Names Tribunal application may be an appropriate course of action for your business, please do contact us to discuss.
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