Discovering that another company is operating under a name that is identical or similar to your own can be concerning. If you have spent years building your business's reputation and goodwill, the prospect of customers, suppliers or trade counterparts becoming confused between the two businesses can be frustrating and potentially damaging.
Fortunately, there are legal protections available to businesses facing this issue. Depending on the circumstances, you may be able to challenge the use of a company name and take steps to prevent continued confusion. As with many legal matters, seeking advice at an early stage can make a significant difference. Prompt action may help prevent further confusion.
There are a number of routes available to businesses experiencing this issue, but it is important to establish the correct approach depending on individual circumstances.
Why are you challenging the company name?
Depending on your circumstances, the crux of the issue will lie with why the name is being challenged, is it:
- Exploiting a name you have built a reputation on, or to extort or block you?
- Too similar to your name?
- Registered to mislead the public or other companies?
- Used in trade and damaging your brand or causing you financial loss?
Once these points are established, the right route is set out below.
The Company Names Tribunal (CNT)
A business who has built up goodwill or reputation in a name, and another company has registered a name that is the same or confusingly similar, can bring a claim in the CNT.
The company complained of has the right to defend itself - for example, by showing it chose the name in good faith - but those defences will not save it if its main purpose was to extract money from you or to block you from using the name. The grounds for bringing the claim are crucial for success. If your application is successful, the company will be ordered to change its name accordingly in order to prevent the further harm.
Companies House and ‘too like’ names
If a name is ‘too like’ the name of your company, you can request for Companies House (acting for the Secretary of State) to step in and review in accordance with the rules on names that are too alike. If Companies House finds that such names are too similar, then it will direct the company to change its name accordingly. The company will be given a compliance period of at least 28 days to do so.
It is worth noting that requests of this nature need to be made within 12 months of the offending company’s registration.
Misleading names or activities
Further to the above, there is another set of avenues that can be taken with Companies House. It can direct a company to change its name:
- Where misleading information was given to register the name or a promise at registration has not been kept. In this situation, action must be taken within five years from registration; and
- Where a misleading impression of the company’s activities has been given, which poses a risk of harm to the public. The company being accused of this can apply to Court to set aside the direction within three weeks of the direction.
Court Proceedings
If the name is being used to trade and is actually damaging your business or causing you financial loss, you may be able to take the party affecting this to court. Where a name is used in trade and causes damage, a claim typically lies in passing off and/or registered trade mark infringement.
Awards for this type of claim could include injunctions (stopping the company from trading under that name) and either damages (compensation for the harm to your business) or an account of the other company's profits.
Whilst the Companies House routes set out above only change the name on the register, Court proceedings can stop the trading and award compensation.
Key takeaways:
If another company’s name is causing you a problem, the sensible first step is to take specialist advice early, so you pursue the route most likely to succeed. We would be glad to help you assess your options and act on your behalf. Please contact our experienced litigation team at oliver.leigh@mfgsolicitors.com and rachel.gill@mfgsolciitors.com.