Companies Act 2006
In the matter of application No. 3254 by Nigel Hamilton for a change to the company name of Honey and Willow UK Limited, a company incorporated under number 12704507
Background and pleadings
1.
The company name Honey and Willow UK Limited (“the primary respondent”) has been registered since incorporation on 29 June 2020 under number 12704507.
2.
By an application filed on 24 August 2020, Nigel Hamilton applied under section 69(1) of the Companies Act 2006 (“the Act”) for the primary respondent’s name to be changed.
3.
Mr Hamilton states that his wife commenced trading “over ten years ago” using the business name “Honey Willow” and incorporated the company Honey Willow Ltd on 18 February 2016. The business registered the trade mark “Honey Willow” on 24 May 2015 (UK00003110202). Mr Hamilton states that Honey Willow has been trading since 2010 making jewellery that is sold “online throughout the world”. He claims that Honey and Willow UK Limited is too similar to the name Honey Willow Ltd and it “will be confusing for our customers and suppliers”. He also claims that Honey Willow Ltd has a well-established online reputation and that the respondent “can potentially trade on our good name which we have spent a decade establishing.”
4.
At the request of the applicant, Sharon Gail Sinclair and Colin Leonard Sinclair were joined to the proceedings as co-respondents.
5.
The primary respondent filed a notice of defence and counterstatement and signed with a statement of truth by Mr Sinclair. The primary respondent denies that it will be confusing the applicant’s customers and suppliers or that it will potentially benefit from the name. It relies upon two defences, namely:
(i) that the company name was adopted in good faith (section 69(4)(d) of the Act), and;
(ii) that the interests of the applicant are not adversely affected to any significant extent.
6.
We have reproduced the main part of the defence, below:
7.
The parties both filed evidence. The parties were asked if they wanted a decision to be made following a hearing or from the papers. Neither side chose to be heard but the applicant chose to file written submissions in lieu of attendance. Both parties represent themselves. We make this decision having carefully considered all the
papers.
Evidence
8.
The applicant’s evidence takes the form of a witness statement by Mr Hamilton in his capacity of director of Honey Willow Ltd. He provides a brief history of the business that became the applicant company when it was incorporated on 18 February 2016 with the objective of illustrating that his wife, as a sole trader, started making and selling jewellery in 2010 and that the business was called “Honey Willow” (using the name of their two daughters). Evidence of the scale of use is provided and we will discuss this in more detail later.
9.
The primary respondent’s evidence is in the form of a witness statement by Ms Sinclair and Exhibits SH1, SH2A and SH2B. Ms Sinclair is company director of the primary respondent and has held the position “since we became a limited company in June 2020”. Her evidence is that she began selling online approximately 10 years ago using the name of her cats Honey and Willow. After she lost her cats, she stopped using the website name “honeyandwillow.co.uk” and now uses yorkshirepets.co.uk but continues to use Honey and Willow for administrative purposes because it is the name that is registered with HMRC. We discuss this in more detail later.
10.
The applicant has provided evidence-in-reply in the form of a further witness statement by Mr Hamilton together with Exhibits NHR1 to NHR3. This illustrates that when using the Google online search for “honey and willow amazon”, the first hit is that of the primary respondent.
Decision
11.
Section 69 of the Act states:
(1) A person (“the applicant”) may object to a company’s registered name on the ground—
(a) that it is the same as a name associated with the applicant in which he has goodwill, or
(b) that it is sufficiently 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 applicant.
(2) The objection must be made by application to a company names adjudicator (see section 70).
(3) The company concerned shall be the primary respondent to the application.
Any of its members or directors may be joined as respondents.
(4) If the ground specified in subsection (1)(a) or (b) is established, it is for the respondents to show—
(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.
If none of those is shown, the objection shall be upheld.
(5) If the facts mentioned in subsection (4)(a), (b) or (c) are established, the objection shall nevertheless be upheld if the applicant shows that the main purpose of the respondents (or any of them) in registering the name was to obtain money (or other consideration) from the applicant or prevent him from registering the name.
(6) If the objection is not upheld under subsection (4) or (5), it shall be dismissed.
(7) In this section “goodwill” includes reputation of any description.”
Preliminary issue
12.
Section 69(1)(a) requires that the name of the respondent is the same as a name associated with the applicant in which he has goodwill. The applicant is Mr Hamilton and not the company Honey Willow Ltd. Mr Hamilton asserts that the goodwill resides in the business of Honey Willow Ltd and not himself personally. No issue has been taken by the primary respondent to this possible irregularity. Mr Hamilton does not have the requisite goodwill/reputation to bring proceedings. Rather, the goodwill/reputation, insofar as we consider may exist, would belong to the company Honey Willow Ltd rather than the applicant. On the face of it, we consider that the issue is technically fatal to the applicant’s case but in the absence of a challenge from the primary respondent we will also consider the merits of the case.
Goodwill/reputation
13.
The relevant date for the purpose of proving goodwill/reputation is the date of the registration of the contested company name which, in this case, is the date of incorporation, 29 June 2020.
14.
The concept of goodwill was explained in Inland Revenue Commissioners v Muller & Co’s Margerine Ltd [1901] AC 217 at 223:
What is goodwill? It is a thing very easy to describe, very difficult to define. It is the benefit and advantage of the good name, reputation and connection of a business. It is the attractive force which brings in custom. It is the one thing which distinguishes an old-established business from a new business at its first start.
15.
Sections 69(1) and (7) stipulate that the applicant must have goodwill and/or a reputation in the name associated with it. This must be proven in evidence. Mr Hamilton’s evidence relevant to demonstrating goodwill belonging to Honey Willow Ltd can be summarised as:
- his wife traded as a sole trader between 2010 and 2016 making and selling jewellery using the business name “Honey Willow”;
- he registered the domain name honeywillow.com on 4 December 2009;
- the trade mark “Honey Willow” was registered on 28 August 2015 and the applicant was incorporated on 18 February 2016 and is now the owner of the trade mark;
- honey Willow sells to thousands of UK customers in online sales channels including Etsy , Amazon and its own website honeywillow.com;
- a screenshot of a page from the applicant’s Etsy account shows a graph of sales. This shows sales beginning in 2013 and rising sharply to about £174,000 in 2016. Similar sales are shown for the years 2017 and 2020 and in the region of £130,000 – £150,000 in 2018 and 2019. Total sales on the Etsy platform during this period is shown as £1.9 million;
- Mr Hamilton states that 27,000 sales have been made through the Etsy platform and there have been 970,000 visits to the site, and the applicant’s product listings have appeared over 1.8 million times;
- about £500 a day is spent promoting the applicant’s business on Google and Amazon using the keywords “Honey Willow” to help returning UK customers find its website
16.
This evidence is not without flaws, for example, the screenshots of the applicant’s goods being promoted online are either undated or include an indication that they were from the time the evidence was being prepared. However, these screenshots concur with the statements of Mr Hamilton regarding how the applicant’s goods are marketed and there is also evidence that the applicant began selling on Etsy in 2013 and the annual sales volumes on that online platform total in excess of £1.9 million. With this in mind, we conclude that the applicant has demonstrated that Honey Willow Ltd had at the relevant date, the requisite goodwill as required by section 69(1)(a) and section 69 (7).
Are the names “sufficiently similar”?
17.
The respective company names must also be “sufficiently similar” that use of the primary respondent’s name in the UK would be likely to mislead by suggesting a connection between it and Honey Willow Ltd. The name relied upon is HONEY WILLOW. The contested name is HONEY AND WILLOW UK LIMITED. The differences between the names is the word “AND” appearing between the words “HONEY” and “WILLOW”, and the addition of the indication “UK” and word “LIMITED”. Consequently, owing to the differences the names are not the same (section 69(1)(a)). However, the addition of “UK” to the primary respondent’s name does no more than indicate the country in which it operates or is incorporated and the word “LIMITED” merely describes the legal nature of the business. It is “HONEY AND WILLOW” that is the distinctive part of the primary respondent’s mark and this differs from the name relied upon only by the addition of the word “AND”. This word plays a much more subservient role in the name compared to the words “HONEY” and “WILLOW”. Taking all of this into account, we have little hesitation in finding that the names are sufficiently similar and that the use of the primary respondent’s name in the UK would be likely to mislead by suggesting a connection between it and Honey Willow Ltd, under section 69(1)(b) of the Act.
Defences
18.
As the ground specified in subsection 69(1)(b) is established, the onus switches to the primary respondent to establish any of the defences relied upon. We will begin with the defence that the company name was adopted in good faith.
Section 69(4)(d): that the company names were adopted in good faith
19.
It is evident from the wording of s.69(4) of the Act that the onus is on the respondents to show that the contested name was adopted in good faith. The relevant date for this defence is the date on which the company name was registered, namely, 29 June 2020.
20.
The relevant evidence provided by the primary respondent can be summarised as follows:
- Ms Sinclair states that she began using the name HONEY AND WILLOW approximately 10 years ago . The name reflected the names of her cats at that time;
- the domain name honeyandwillow.co.uk was purchased (at an unspecified time) and this was used for several years and HONEY AND WILLOW was also the name registered with HMRC;
- in order to sell on Amazon as a business seller, it is a requirement that the seller is registered with HMRC. She was registered as “Honey and Willow” until her accountant advised (in June 2020 ) that the business became a limited company;
- Ms Sinclair stopped using the name and the website when she lost her cats and now uses yorkshirepets.co.uk but continues to use the name for administrative purposes;
- in response to Mr Hamilton’s claim that his customers can be corralled into the primary respondent’s Amazon shop, Ms Sinclair states that anyone, when looking for Honey Willow jewellery, would realise that it is not the same company and it sells very different products
21.
The following principles in relation to good faith can be extracted from the judgments of the Privy Council in Barlow Clowes v Eurotrust International Ltd, and the Court of Appeal in England and Wales in Niru Battery Manufacturing v Milestone Trading Ltd:
(i) Good faith is not displayed by certain kinds of sharp practice which fall short of outright dishonesty or by dishonesty itself – see Niru Battery at para 164.
(ii) There is a combined subjective/objective approach to the honesty of a party’s behaviour. This involves (i) a consideration of what the party knew at the time of a transaction and (ii) how that party’s action would be viewed by applying normally acceptable standards of commercial behaviour – see Barlow Clowes paras 15–18, 28–32.
22.
Our task is (a) to determine what the primary respondent knew at the time the contested name was adopted, and (b) whether the adoption of the name would be viewed as commercially acceptable behaviour when judged objectively. This means how reasonable people in the field would view the primary respondent’s behaviour (i.e. not simply how the respondent viewed their own actions).
What did the respondent know when it adopted the name?
23.
The evidence provided on behalf of the primary respondent is limited in nature and focuses upon how its and Honey Willow Ltd’s businesses appear on the Amazon online market place. However, the evidence does indicate that:
(i) the primary respondent’s choice of name was unrelated to Honey Willow Ltd.;
(ii) its name was inspired by the name of Ms Sinclair’s cats, and;
(iii) its area of business is unrelated to the business area of Honey Willow Ltd.
Were the respondent’s actions commercially acceptable?
24.
The purpose of creating the primary respondent was that Ms Sinclair’s accountant advised creating a limited company. Its name was inspired by the names of Ms Sinclair’s cats and the name “Honey and Willow” had already been used in respect to Ms Sinclair’s business. Further, the primary respondent’s business appears to be the sales of pet supplies whilst Honey Willow UK Limited sells jewellery. All of this points towards the co-existence of the parties’ names being no more than coincidence and there is nothing in this factual matrix that would suggest anything other than good faith. Further, we also note that the evidence that points towards a good faith motive for registering the name has not been challenged in any way by the applicant.
25.
In his final written submissions, Mr Hamilton focuses his criticisms on Ms Sinclair’s statement that the primary respondent no longer trades under “Honey & Willow” when he has found the name appearing in Google search results. He also relies upon his claim that the primary respondent is unfairly benefitting from Honey and Willow UK Ltd’s returning customers looking for “honey willow amazon” and finding the primary respondent’s shop instead. None of this is sufficient to cast doubt on the reasons provided by the respondents for coming up with the primary respondent’s name and its intentions in incorporating it. We are not persuaded by Mr Hamilton’s submissions.
26.
In summary, we conclude that even if the application had been made by Honey Willow Ltd, it would have not succeeded because the primary respondent’s defence that it was registered in good faith has been made out.
Section 69(4)(e): that the interests of the applicant are not adversely affected to any significant extent
27.
The primary respondent also relied upon this second defence. Section 69(4)(e) of the Act gives a defence if the interests of the applicant are not adversely affected to any significant extent. The matter should be judged at the date of filing of the application; in this case, 24 August 2020.
28.
The principal activities for which the respondent’s company name is registered are “Retail sale via mail order houses or via Internet”. This would cover the services provided by Honey Willow Ltd, however, the evidence shows that the primary respondent retails products that are in a different field to the products retailed by Honey Willow Ltd. The primary respondent has been using its name, albeit more recently in a limited capacity, and the adverse effect must relate to that use of the company name in business. That use has been in respect of a business selling pet supplies and not jewellery. Mr Hamilton submits that the primary respondent’s presence on Amazon is confusing and deceptive to Honey and Willow UK Ltd’s customers and its goodwill “as a meaningful jewellery brand is suffering and we are losing potential sales”. We are unconvinced by this argument. We fail to see how a jewellery retailer will lose sales or potential sales to a pet supplies retailer and there is no evidence that the primary respondent’s use of its name “is having a significant, detrimental effect on [Honey and Willow UK Ltd’s] customers and business” and neither can we infer that this is so when all the circumstances are taken into account. Therefore, it is not established that, as of 24 August 2020, the interests of Honey Willow Ltd would be adversely affected to any significant extent by use of the primary respondent’s name.
29.
In summary, we conclude that even if the application had been made by Honey Willow Ltd, it would have not succeeded because the primary respondent’s defence that the interests of Honey Willow Ltd are not adversely affected to any significant extent is made out on the facts of the case.
30.
We comment on one final aspect of this case. Ms Sinclair provides information regarding the trading activities of the primary respondent. Mr Hamilton appears to accept this when, in his final written submissions it states “[t[he respondent’s company is not dormant and is actively trading. The business appears as “Honey & Willow” in Google’s search results and on Amazon’s UK marketplace”. The purpose of s.69 of the Act is to prevent the opportunistic registration of company names for commercial gain or other mischief. It is not intended to provide exclusive rights to a company or trading name (as with trade marks). Applications to the Tribunal are not an alternative to an action for passing off or trade mark infringement. Therefore, Ms Sinclair’s evidence would, prima facie, provide the respondent with a defence under section 69(4)(b)(i) capable of defeating the applicant’s case if such trading activity had been relied upon for such a defence. It was not and it is not necessary that we say more on this point.
Outcome
31.
The application to change the name of the primary respondent fails because:
(i) The applicant does not own the relevant goodwill, but even if Honey Willow Ltd had been the applicant, the application would have failed because:
(ii) the respondents have a defence that the contested name was adopted in good faith, and
(iii) the respondents have a defence that the interests of Honey Willow Ltd are not adversely affected to any significant extent.
Costs
32.
The Tribunal awards costs from the published scale at paragraph 10 of the Tribunal’s Practice Direction. This is intended to provide a contribution to costs, but not to recompense the successful party. It is the primary respondent who has been successful in these proceedings and who is entitled to a contribution towards its costs. The primary respondent has not been professionally represented. We will therefore reduce the award by 50% (statutory fees are awarded in full). The award breakdown is as follows:
Considering the Form CNA1 and evidence and filing a Form CNA2: £200
Fee for filing the Form CNA2: £150
Fee for filing the Form CNA3: £150
Total: £500
33.
Honey Willow Ltd is ordered to pay Honey and Willow UK Ltd the sum of £500. This sum is to be paid within twenty-one days of the period allowed for appeal or, if there is an appeal, within twenty-one days of the conclusion of the appeal proceedings (subject to any order of the appellant tribunal).
34.
Under section 74(1) of the Act, an appeal can only be made in relation to the decision to dismiss the applications; there is no right of appeal in relation to costs. Any notice of appeal must be given within one month of the date of this decision. Appeal is to the High Court in England Wales and Northern Ireland and to the Court of Session in Scotland. The Tribunal must be advised if an appeal is lodged.
Dated 17 March 2022
Mark Bryant
Judi Pike
Matthew Williams
Company Names
Adjudicator
