A rose by any other name?

A recent case shows why your company name
is something that cannot be ignored. Businesses which take substantial steps
to protect their brand and reputation, including registering appropriate trademarks, ensuring they hold the copyright in all branding materials and bringing claims against other businesses whose activities constitute passing
off, often overlook the importance of the business' official company name as a 'branding' issue. The recent case of Sebry v Companies House and another demonstrates how easily a case of mistaken identity may arise and lead to drastic consequences.

A tale of two Taylors

Sebry was an action brought by the former CEO of Taylor & Sons Limited against Companies House for negligence and breach of statutory duty for accidentally putting the company into liquidation. In January 2009, the High Court issued an order to put Taylor & Son Limited (an entirely separate company) into liquidation. The order failed to specify the company number and the official receiver registered the order against Taylor & Sons in error. When the claimant discovered the error and asked Companies House to correct it, the information which stated the company was insolvent had already been sold on to third parties, including (crucially) credit agencies. This destroyed the company's credit rating, leading key suppliers and customers to cancel their orders and causing the bank to remove the company's credit facilities. The 124-year-old business was forced into 'real' liquidation by the omission of an 's'.

The company in Sebry
rightly received compensation. However, in partial defence
of Companies House, anyone
who is a regular user of their WebCHeck service will appreciate how easy it is to confuse company names if you cannot verify the company number or address. A current search returns 21 company names which contain the term 'Taylor & Son' or 'Taylor & Sons'.
If the staff of Companies House can make this mistake, how much easier is it for the general public to be confused?

Ironically, the Sebry
decision came just before the government brought into force legislation which makes it easier to register confusingly similar names. The Company, Limited Liability Partnership and Business (Names & Trading Disclosures) Regulations 2014 and the Company, Limited Liability Partnership and Business (Sensitive Words & Expressions) Regulations 2014 substantially reduce the list of words which are disregarded for determining whether a company name is the same as an existing one. As a result, the inclusion of 'generic' terms such as 'Holding', 'International' and 'Services' in a company name will be sufficient to differentiate it from otherwise identical ones.

Naming and shaming

A straightforward and cost-effective way businesses
can protect their name is by objecting to the registration
of a company name by applying
to the company names adjudicator. To bring
a successful claim, the complainant must demonstrate that it operates in association with the name and has goodwill in it. The adjudicator sits within the Intellectual Property Office and proceedings are operated in a similar way to other registered intellectual property claims. If the complaint is successful, the adjudicator will usually make an order to change the company's name to its company number. This is an arguably underutilised tool for protecting business identities.

What's in a name?

Even if a business does not generally promote itself under its company name, it should still regard the official name as part of its 'brand'. Before choosing a company name, a business should consider:

• Is it compliant? Although the list has been reduced, there are still a number of words which cannot be included in a company name. Businesses should also consider carrying out a trade mark search to check if the proposed name is confusingly similar to an existing trade mark.
• Is it distinctive? To avoid the risk of administrative errors and confusion, as seen in Sebry, it is safer to choose a name which is not highly similar to one or more existing company names.
• Is it confusing? Businesses should avoid registering names which are likely to cause confusion, taking into account the similarity of another company's name, its location and how well known it is among the new company's target market.

Once the company name
is registered, any use of or reference to the name should be monitored by management and the register of companies reviewed regularly to check for any confusingly similar names. The owners and directors of
a company should take precautions to ensure the fortunes of their business cannot be undermined by
a missing letter. SJ

Emma Sheldon, pictured, and Richard Pull are solicitors at Hamlins

@HamlinsLLP

Copyright & permissions