STRIKING OUT OF OFFENSIVE COMPANY NAMES
Against the backdrop of high levels of brand copycatting in Kenya, clients should be aware of the protection available if a third party uses a company name that is identical or confusingly similar to their registered trade mark. One of the avenues of recourse would be through the registrar of companies.
The Registrar of Companies operates under the Companies Act, which prohibits registration of '“offensive and undesirable names”. Offensive or undesirable names include:
- a name that is identical or confusingly similar to a registered trade mark unless a document signed by the owner of the trade mark and indicating consent to its use is provided;
- a name that suggests an association with the State or any of its agencies, a foreign government or an embassy, high commission or consulate, or a county government;
- a name that comprises an acronym that will render its use vague or uncertain;
- a name that the Registrar believes, on reasonable grounds, that there is reasonable possibility that it could offend members of a particular community or ethnic or racial group; or
- a name that includes "co-operative", "society" or "trade union "or any variant or synonym of these words.
The Registrar has powers to compel a company to change its name if it is similar to another company’s name, or the name would have appeared in the index of names at the time of registration of the infringing company. This would include an offensive or undesirable name. Where a company does not comply with the directive to change its name within 14 days, the Registrar has powers to strike off the company from the register of companies. This dissolution of the company does not negate the liability of any officer or member of the company.
The Companies Act does not provide for third parties to make applications to the Registrar, who is expected to act on his own motion. A third party may however write a formal letter to the Registrar drawing his attention to the infringing company name and stating reasons why the name is offensive or undesirable. The premise of this is that the company ought not to have been registered in the first place with a prohibited name.
It is worth noting that Bowmans has, on previous occasions, successfully petitioned the Registrar of Companies to compel an entity with a company name infringing on a registered trade mark to change its name. This approach is cost-effective compared to bringing a trade mark infringement case to the High Court on similar facts.