If you own or are thinking of starting a business in the UK then you’ll know how important your brand identity is.
Having a unique and eye-catching brand can help draw in new customers, and help consumers differentiate you from your competitors.
But what if someone establishes a brand suspiciously similar to yours, and draws away customers? What recourse do you have as a business owner to protect your brand?
Well, the recent enactment of the Economic Crime and Corporate Transparency Act 2023, and its amendments to the Companies Act 2006, have made protecting your brand easier than ever. These changes particularly affected the operations of the Company Names Tribunal, making it harder for opportunists to encroach on your brand identity. These changes, effective from Monday, 4 March 2024, are crucial for businesses operating both within and outside the United Kingdom.
What is the Company Names Tribunal?
The Company Names Tribunal is a system created to resolve conflicts related to company names. This includes cases where a company registers a name that closely resembles one that already exists or where a company name is registered with the intention of blocking an existing brand from securing it.
For example, it would resolve instances of an individual or business registering a company name that a competitor may want to use and demanding payment for releasing it.
The Company Names Tribunal is in place to prevent unfair competition and practices between businesses and to be a neutral third party for conflict resolution.
What impact have the new changes had?
Expanded Scope of Protection
The Company Names Tribunal can prevent a company from taking a name if it has reason to believe that it would mislead the customers of an established brand. Previously, the tribunal would only consider the potential misleading of customers in the UK.
Now, the tribunal will consider whether the new brand name could infringe on your brand identity anywhere in the world. This change aims to protect businesses from potential confusion or misleading of the public on a global scale, reflecting the modern, global scale of business today.
Increased Accountability
These changes have also allowed for greater accountability within corporate structures. Now individuals who were members or directors at the time a company name was registered will be joined as respondents in proceedings, meaning they are liable for any wrongdoing the company committed at the time. This adjustment ensures that those involved in decision-making processes are accountable, potentially deterring the registration of misleading or harmful company names.
Removal of Certain Defences
Any company accused of infringing on a brand name has multiple possible explanations and defences for why the name was chosen and why its claim to the name is legitimate. However, this list is now more limited, as the government have removed the legitimacy of certain defences that were easy to take advantage of. This change strips away the defence where a company could argue its right to a name based on:
- Existing operations
- Planned operations with substantial incurred start-up costs
- Past operations if the company is now dormant
The removal of these defences lines up with a stricter regulatory approach the government is taking with the Economic Crime and Corporate Transparency Act, focusing on current business activities without relying on past or planned future uses.
What are the implications for ongoing and future proceedings?
It is important to note that the Economic Crime and Corporate Transparency Act 2023 did not include any transitional provisions. Therefore, all active proceedings within the Company Names Tribunal continuing past the implementation date will be subject to the new laws.
For example, the defences listed in the previous section are no longer valid or enforceable, even if the original claim was made before the 4th of March 2024. The changes to accountability and international claims are similarly immediate and apply to all relevant proceedings from the implementation date onward.
How we can assist
At Slater Heelis, our corporate commercial department is made up of experts across all areas of corporate law. Our team of solicitors possesses deep expertise and up-to-date knowledge of legislative changes. Whether you are assessing the potential impacts on your business, facing proceedings at the Company Names Tribunal, or need guidance on adapting to the new legal framework, our experts are here to provide comprehensive support.
For more information or to schedule an appointment, please reach out to our team department by filling out our online contact form, or give us a call on 0330 111 3131.