The Companies Act 71 of 2008 (hereinafter referred to as “the Act”) established the Companies Tribunal – an agency of the Department of Trade and Industry – to ensure the speedy resolution of company disputes. The Companies Tribunal is tasked with resolving name disputes relating to company name reservations, including defensive names, or the use of the name, or the transfer of any such reservation or registration.
In 2020, Smith Attorneys successfully represented Gast Consulting, the Respondent in a matter held before the Companies Tribunal, which dealt with an objection to the registration of a company name with the Companies and Intellectual Property Commission (hereinafter referred to as the “CIPC”). Moreover, the Applicant in the matter is a group of engineering companies with 38 years’ experience in the industry, utilising the name “Gast”, prior to launching the application. Gast Consulting, conversely is a professional service entity registered as a company in 2018, providing services, amongst others, in the following: issuing of work permits, visa’s, business registration, marketing, general consulting, translations and interpreting. The main question, to be dealt with by the Companies Tribunal was whether the term “Gast”, as utilised in the Respondent’s name, was in contravention of the provisions of section 11(2) of the Act.
Section 11(2)(b) and (c) of the Act reads as follows:
“11.Criteria for names of companies
(2) The name of a company must—
(b) not be confusingly similar to a name, trade mark, mark, word or expression contemplated in paragraph (a) unless— ….
(c) not falsely imply or suggest, or be such as would reasonably mislead a person to believe incorrectly, that the company—
(i) is part of, or associated with, any other person or entity;…”
As such, the application was brought before the Companies Tribunal in terms of Section 160(1) of the Act. Section 160 (2) outlines that an application to challenge a reservation or registration of a company name is required within 3 months of the date of notice or on good cause shown as to why the objection was not noted earlier.
Furthermore, In the matter of Comair Limited vs Kuhlula Training, Projects and Development Center (Pty) Limited CT007Sept 2014, the Companies Tribunal confirmed that the requirement of showing of good cause as: “an Applicant has to at least adduce evidence regarding how it became aware of the reservation of am impugned company name when it became aware and not earlier”.
Upon applying the law, in the present matter, the Companies Tribunal reached the following findings: the word “similar” within the context refers to a logo, website or company name bearing an immediate association with the Applicant’s companies. Essentially, it is a test of whether there exists an opportunity for an objective person to mistakenly regard the Respondent as a part of the Applicant’s companies.
While the Companies Tribunal does not possess jurisdiction to hear the matter, it noted, that the Trademark infringement claim raised by the one of the Applicant’s, being a Trust, the Trademark as registered had a specific endorsement, that the “registration of this trademark shall give no right to exclusive use of the surname GAST separately and apart from the mark”. This aspect was accordingly dismissed by the Tribunal.
As such, the application was dismissed by the Companies Tribunal with costs based on the following main points:
1. The Applicant’s companies operate in a vastly different industry compared to that of the Respondent
2. The Respondent’s business areas are clearly identifiable based on its website, services and logo designs.
3. Any reputation which the Respondent may have acquired is distinctly different from the Engineering Business to which the Applicant’s operate in.
4. The general public would not easily be confused into believing that the Respondents were associated with the Applicant’s in some or other way.
In applying our understanding and interpretation of the legal principles present in this matter, Smith Attorneys, represented by our Senior Associate and Head of our Litigation Department, JJ Rebello, successfully proved that the case brought before the Companies Tribunal by the Applicant, represented by a Senior Counsel, did not satisfy the requirements as set out in the Act above.
In conclusion, it is pertinent to ensure that, when approaching the Companies Tribunal to challenge the registration of a company name, that basis for the application complies with the provisions of the Act.
Link to the full decision: https://www.companiestribunal.org.za/cases/ct00404adj2020/