Company Names Adjudicator issues first decision

Summary

In its first decision since the new right of complaint came into force on 1 October 2008, the Company Names Adjudicator has made an order against Coke Cola Limited to change its name within one month to one which does not offend section 69 of the Companies Act 2006. The Coca-Cola Company Limited filed an application on the basis that Coke Cola Limited’s name was ‘sufficiently similar’ that it would be likely to mislead when used in the UK by ‘suggesting a connection between the company and the applicant’. Since the company was incorporated before the legislation came into effect, the decision also confirms that complaints can be made in relation to companies incorporated prior to 1 October 2008.

First decision

In its first decision since the new right of complaint came into force on 1 October 2008, the Company Names Adjudicator has made an order against Coke Cola Limited to change its name within one month to one which does not offend section 69 of the Companies Act 2006. The Coca-Cola Company Limited (‘Coca-Cola’) filed an application on the basis that Coke Cola Limited’s name was ‘sufficiently similar’ to Coca-Cola’s that it would be likely to mislead when used in the UK by ‘suggesting a connection between the company and the applicant’.

Coke Cola Limited registered its company name on 29 February 2008. Coca-Cola filed a complaint with the Company Names Adjudicator on 1 October 2008, the first day on which complaints could be made. Coke Cola Limited failed to file a defence within the specified one month period so the Adjudicator treated the defendant company as not opposing the application and ordered it to change its name within one month. If Coke Cola Limited fails to do so, the Adjudicator stated her intention to choose a new name for the company. The Adjudicator also ordered Coke Cola Limited to make a contribution of £700 to Coca-Cola’s costs. Coke Cola Limited has one month to appeal the decision to the High Court should it wish to do so.

This first decision by the newly-appointed Company Names Adjudicator confirms that the complaint procedure under section 69 has retrospective effect. Coke Cola Limited registered its name in February 2008, while the relevant legislation did not come into force until 1 October 2008. It is now clear that a company may object to a name which was registered prior to the procedure becoming available, although the extent of this retrospective effect was not addressed by the Adjudicator.

The intention of the legislation was to prevent ‘opportunistic’ or speculative company name registrations, that are designed to extract money from the brand owner, or pose barriers to legitimate interests of rights holders. Coke Cola Limited’s name is clearly ‘sufficiently similar’ that it would be likely to mislead in the UK by suggesting a connection between the two companies, so squarely falls within the ambit of the new legislation.

The entire process from the date of the application to the Adjudicator’s decision took just over two months, which is encouraging for brand owners with a strong basis for complaint. However, this timeframe would be extended if a respondent chooses to file a defence and either party files evidence, as the matter would progress to a hearing. It may also take longer as the number of cases pending before the Adjudicator increases.

As Coke Cola Limited did not file a defence and was therefore treated as not opposing the application, we do not yet have any guidance on the Adjudicator’s interpretation of the potential defences available to respondents, such as the incurrence of start-up costs, or adoption of a name in good faith. Further decisions by the Adjudicator on these points will be of considerable interest.