Opportunistic Company Name Registrations Restricted by Companies Act 2006

Cyber squatting, where individuals register web domain names similar to existing businesses in the hope of selling the name to the business concerned for an inflated price, is a well known problem. Perhaps less notorious but potentially just as problematic for businesses, particularly those which are not incorporated as a limited company, is the registration by opportunists of company names similar to the names of existing businesses. From 1 October 2008, however, opportunistic registration of company names will be controlled by new laws under the Companies Act 2006.

The Current Rules

• Company names that are considered to be the same as existing entries on the companies register will not be registered by Companies House.
• In addition a company’s name can be challenged if it is ‘too like’ an existing name registered at Companies House.
• ‘Too like’ does not imply that two names are identical but that confusion could occur between the identity of two companies. This may provide some protection for similar names but not if a business has not incorporated.

The New Law

• Anyone can apply to object to a company’s name on the register on the grounds that the name is:
• the same as a name associated with the applicant in which the applicant has goodwill; or
• sufficiently similar to cause confusion by suggesting a link between the company and the applicant’s business.
• This statutory right to object is not just available to companies thus providing protection to unincorporated businesses.

Statutory Defences

• A company has a number of statutory defences, for example:
• The name was registered before the applicant’s activities began;
• The company is or is proposing to use the name and has substantial start up costs;
• The applicant’s interests are not adversely affected.
• Certain of the defences are negated if the principal reason for the company registering the name is to obtain money from the applicant or to prevent the applicant from registering the name.

How to Object

• All objections about opportunistic registration should be made to the newly created Company Names Tribunal details of which can be found at www.ipo.gov.uk/cna.
• If the Tribunal upholds a challenge then it can make an order for the company to change its name or ultimately, if the company fails to comply, change the company’s name without the company’s consent.
• Objections that a company’s name is ‘too like’ an existing name should still be made to Companies House.