When the Company Names Tribunal (CNT) was set up, the rationale for its creation was simple – to provide a cost-effective forum for brands to object to the incorporation of company names that were 'too like' their own. For example, in January this year Meta (previously Facebook) successfully forced third party company Meta Platforms Incorporated Ltd to change its name.
However, the CNT is often overlooked by brand owners, in large part due to the widely drawn defences available to respondents under Section 69 of the Companies Act 2006.
Indeed, these defences were often so easy to assert that almost every CNT complaint carried some risk, meaning brand owners have largely resorted to more traditional methods of enforcement, such as trade mark infringement, or simply chose to do nothing about the offending company name.
The Economic Crime and Corporate Transparency Act 2023 (the ECCTA), introduced in March 2024, makes a number of changes to section 69 of the Companies Act. The most significant is the removal of the s69(4)(b) defence, which gave respondents a complete defence to CNT actions if they could show:
- that the company had begun trading under the name;
- that the company had incurred substantial start-up costs in preparation for trading; or
- that the company was formerly operating under the name and was now dormant.
This was a relatively low bar and meant, unless the applicant could prove the respondent's 'main purpose' in registering the name was commercial gain, the challenge would likely fail.
The removal of s69(4)(b) is significant as it leaves only the following defences open to respondents:
- the name was registered before the applicant acquired goodwill in the name;
- the name was registered in the ordinary course of a company formation business and is available for sale to the applicant on the standard terms of that business;
- the name was adopted in good faith; or
- the interests of the applicant are not adversely affected to any significant extent.
The ECCTA also widens the scope of s69(1)(b), which concerns the similarity between the relevant company names. The change clarifies that the complainant's goodwill can extend beyond just the UK, to include situations where use of the similar company name is likely to mislead the public in other territories by suggesting a connection with the applicant.
It also amends s69(3) to provide that anyone who was a member and/or director of the challenged company when the name was registered can be joined as a party to the proceedings. Previously, only current members and/or directors could be joined.
These changes will be welcomed by brand owners faced with ever more sophisticated fraud and phishing attacks from fraudsters going to increasingly excessive lengths to appear legitimate.