The Lifeline Project was a well-regarded charity. Failure to carry out the targets within the contracts led the charity into insolvency and resulted in a personal, 7-year disqualification order.
Many charities choose to operate as charitable companies limited by guarantee, or they may have a separate trading company. Under the amended company name regulations, it is now easier to register a new company with a name that is similar to one already registered with Companies House. But what protection is available if another organisation seeks to operate under the same or similar name as you?
Companies House registration requirements
When considering whether to accept a proposed company name, Companies House will carry out various checks which will include examining:
- whether the proposed name contains any sensitive words, such as “Foundation” or “Society”, for which Secretary of State consent is needed; and
- whether there are any existing identical or similar registered names.
When considering whether a name is ‘similar’, Companies House will no longer take into consideration the use of certain words, such as ‘International’ and ‘Services’. This means that there is the potential for two companies to be registered with very similar names and operating in identical or similar sectors. In the third sector, this creates the obvious potential for beneficiaries, supporters, funders and other stakeholders to become confused as to the identity of the charity in question. Consider, for example, the many cancer research charities and institutes that exist with similar names.
Until now, many organisations have been content that having their company name registered will provide sufficient protection. However, if you are concerned that another company is operating with a very similar name to yours, there are numerous ways that you can protect your name and branding.
Any person can apply to the Company Names Adjudicator under Section 69 of the Companies Act 2006 if the name is either the same as one in which you have goodwill or is similar to your name and therefore likely to mislead the mislead the public by suggesting a connection between that company and yours.
Another potential route is to consider bringing a claim for 'passing off'. The general requirements for a passing claim are as follows:
You have goodwill or reputation attached to your goods or services;
- Charity B misrepresents (intentionally or not) that its goods / services are those of your charity; and
- You suffer damage as a result.
It is also possible to bring a claim for trademark infringement if another organisation uses a name or logo that is identical or similar to that of your registered trade mark and is used in relation to identical and similar goods or services. Successful claims for passing off or trade mark infringement can result in an award of damages, and/or a court order requiring the other organisation to change their name or branding. You should be aware that IP claims can be complex and you should always seek professional advice before commencing any legal action against a third party.
Are you considering setting up a new company or trading company?
To mitigate the risks of facing a claim for IP infringement, we would recommend that searches are undertaken to check if other organisations are already operating under your proposed new name. A very general online search is available, but you should consider engaging a trademark attorney to carry out a full availability search in relation to any registered or pending trademarks that are the same or similar to your proposed name. Trademark attorneys have access to a wide range of databases that they can check that will reveal all applications including those that are pending.
For more information
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