10 November 2008

Company Names Tribunal: New Fixed Fee Service

One of the many innovations of the Companies Act 2006  is a right under s.69 to object to the incorporation of a company in a name that is:
(a)   the same as a name associated with the person raising the objection in which the objector has goodwill; or
(b)   so similar to such a name that its use in the United Kingdom would be likely to mislead by suggesting a connection between the company and the objector.   Examples of cases where those circumstances occurred include Glaxo Plc v. Glaxowellcome Limited [1996] FSR 388 and Direct Line Group Limited v. Direct Line Estate Agency [1997] FSR 374.   In Glaxo, for instance,. the defendants incorporated Glaxowellcome shortly after a merger between Glaxo and the Wellcome group had been announced in the hope of extracting a ransom for the name from the new holding company. 

Those cases anticipated the practice of domain name squatting which led to a number of expensive trade mark infringement and passing off actions such as Pitman Training Ltd v. Nominet UK [1997] EWHC Ch 367 (22 May, 1997) and British Telecommunications Plc and others v. One in a Million and others [1997] EWHC Patents 357 (28 Nov, 1997)  in England as well as similar cases in other jurisdictions.   Domain name squatting has been tackled (though not by any means eliminated) by a novel system of alternative dispute resolution known as the Uniform Domain Name Dispute Resolution Policy. Under that policy the California company that regulates the internet known as the Internet Corporation for Assigned Names and Numbers ("ICANN") requires generic domain name registrars to insert a clause into their registration agreements obliging applicants for domain names to refer any dispute over their registrations to expert determination before panellists appointed by the WIPO and other organizations including yours truly. The charge for these references is about US$1,500 of which US$1,000. The panellist has to decide on paper whether:
(1)    the domain name is identical or confusingly similar to a trade or service mark in which the complainant has rights; and
(2)    the registered proprietor has rights or legitimate interests in respect of the domain name; and
(3)    the domain name has been registered and is being used in bad faith.
If all those conditions are satisfied the panellist has power to transfer the domain name to the complainant or to cancel the registration.   Nominet has a broadly similar scheme for the .uk domain name space as does the Czech Court of Arbitraiton for .eu names.   These schemes have been remarkably successful.   The WIPO, for instance, has handled 14,302 cases since 1999 as of today.
 
Parliament appears to have taken a leaf out of ICANN's book by instituting a panel of adjudicators known as The Company Names Tribunal to hear objections under s.69. If a complaint falls within s.69 (1) the adjudicator may require the company and its promoters to change its name under s.73 unless they can prove one of the following:

(a) that the name was registered before the commencement of the activities on which the applicant relies to show goodwill; or


(b) that the company—


(i) is operating under the name, or


(ii) is proposing to do so and has incurred substantial start-up costs in preparation, or


(iii) was formerly operating under the name and is now dormant;or


(c) that the name was registered in the ordinary course of a company formation business and the company is available for sale to the applicant on the standard terms of that business; or


(d) that the name was adopted in good faith; or

(e) that the interests of the applicant are not adversely affected to any significant extent." (s.69 (4)).

The adjudicator can also uphold the objection under s.69 (5) even if the facts mentioned in subsection (4)(a), (b) or (c) are established, where it can be shown that the main purpose in registering the name was to obtain money (or other consideration) from the applicant or prevent the objector from registering the name.

Rules governing those proceedings known as The Company Names Adjudicator Rules 2008 (SI 2008 No 1738) were made on 1 July 2008 and came into force on 1 Oct 2008. These are supplemented by a Practice Notice (No 01/08). Complaints are made in a simple application form known as CNA1 which can be downloaded  from the tribunal's website and costs £400 to file. Defences must be in form CNA2 and require a filing fee of £150.   Evidence is to be in writing uness the adjudicator orders cross-examination under rule 6 (2) (f) of the Rules. The tribunal can proceed on documents only unless one of the parties requests an oral hearing.

The two most striking features of this new jurisdiction are:
  • the very long time limits for the evidence rounds (up to 4 periods of 2 months each); and
  • the £3,000 cap on recoverable costs (£1,500 per day) plus £2,000 for preparation of evidence and £300 for statements of case unless one of the parties behaves unreasonably.
Becuse of those restrictions there is if course no question of success fees if work is undertaken under a conditional fee agreement.

Anyone reading the Rules and Practice Notice will be struck by the similariteis with the practice of the Trade Marks Registry as well as with the UDRP. Because of those similarities counsel who do a lot of work before those trbunals are probably best placed to take on this kind of work.   Since we can do this work quickly and accurately Lois, Alex and I will settle statements of case for £300, witness statements for between £250 and £1,000 depending on length and complexity and written submissions for £500. If we have to attend a hearing, we shall charge £1,500 for the first day and £750 for each successive day.  Richard Aird will undertake tribunal work in Scotland.   Any enquires should be made to our chambers manager, Toni Wilson on 0870 990 5081 who can also advise on our domain name advice and representaiton services.

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