The Company Names Tribunal

November 10, 2008

The new Company Names Adjudication System was launched on 1 October in line with section 69 Companies Act 2006. The new system aims to reduce the number of opportunistic company name squatters who incorporate companies with a view to selling the company to an aggrieved third party, making a profit in the process.

 Registering a company in the UK is a simple process from the outset, unlike most other European jurisdictions which require notarised and authenticated documentation. While the UK incorporation process is very simple and streamlined, it does lead to abuse of the system.

The ease of incorporating along with the relatively liberal approach to company names, when compared with trademark rules, has led to some individuals registering similar names to genuine organisations with the hope that they will be coerced into buying the company to prevent damage to their reputation or confusion in the marketplace. It is this activity of opportunistic name registration that the Company Names Tribunal was set up to address.

New Adjudication System

The new adjudication system allows aggrieved parties to appeal to the tribunal at the UK Intellectual Property Office. The tribunal system is dissimilar to the opposition proceedings for trademarks, and is more akin to ICANN’s Uniform Dispute Resolution Policy. In order to make a claim through the tribunal, the applicant is required to show that a company name has been opportunistically registered as a company name by someone else with a view to obtaining money from the complainant. The process has further requirements and there are a number of defences open to respondents to defeat any claim.  These are aimed at preventing the tribunal being extended to cover anything more than opportunistic registrations.

The costs of the tribunal are dealt with in the traditional UK Intellectual Property Office style of forms and fees due on filing. An application will initially cost £400 but the costs are likely to be significantly more when factoring in legal representation. However, a successful application will result in the adjudicator awarding a contribution towards these costs, so start ups need to beware more than ever before incorporating in their chosen name.

There is an appeal process, whereby the adjudicator’s decisions can be appealed to the High Court, although the cost and time involved to launch an appeal could deter many complainants. The IPO itself concedes in its factsheet that any appeal process is “difficult to predict” at this stage.

Need for legal advice

Given the novelty of the system, and the uncertainty of the appeals process, aggrieved parties would be wise to seek legal representation to give themselves the best chance of success in using the tribunal system.

How effective the system will be at preventing abuse remains to be seen, although remedies against such opportunistic companies could arguably be vigorously enforced by the state under striking off provisions in the Companies Act 1985 and the Companies Act 2006 which replaces it.