Case law update: AXA Wholesale Trading Ltd v AXA

Since the relevant provisions of the Companies Act 2006 (the "Act") came into force in 2008, parties have been able to object to another company's name through the Company Names Tribunal. To do so, the opposed company must have been opportunistic in registering a company name the same or sufficiently similar to the company name under which the opponent has goodwill or reputation.

In the recent case of AXA Wholesale Trading Ltd v AXA [2023] EWHC 1339 (Ch), the High Court determined if and to what extent they would interfere with the decisions of the Company Names Tribunal.

The facts

Soon after its incorporation AXA Wholesale Trading Ltd's ("AWT") name was challenged by AXA, the well-known French insurance and financial services group. AXA filed a notice pursuant to section 69(1)(b) of the Act against AWT seeking that AWT should change its name. AXA argued that AWT's company name was sufficiently similar to their company name to the extent that AWT were taking advantage of AXA's reputation in the insurance industry. Furthermore, AWT's use of the word AXA as part of their company name would be likely to mislead and suggest a connection between the companies.

While AWT accepted that AXA had "a massive goodwill and reputation" in relation to insurance and financial services, AWT disagreed with AXA's claims. AWT also sought to rely on the 'good faith' and 'no adverse impact' defences respectively found under section 69(4)(d) and (e) of the Act. Under the Act, AWT would need to sufficiently evidence that the incorporation of its name was adopted in good faith and that the interests of AXA were not significantly affected by the registration. In doing so, AWT argued that their name was not intended to be opportunistic, nor did they believe that it impacted AXA to any significant degree.

Company Names Tribunal decision

To be successful, AXA needed to establish that:

1. It had goodwill or reputation in relation to its company name at the relevant date (i.e. the incorporation of AWT).
2. The 'AWT' company name (i.e. AXA Wholesale Trading Ltd) is the same, or sufficiently similar to 'AXA', therefore suggesting a connection between the companies.

Furthermore, AWT must not be able to rely upon a defence under section 69(4) of the Act.

The Company Names Tribunal ruled that AXA successfully met the requirements under section 69(1)(b). In other words, AWT's use of AXA Wholesale Trading Ltd would be likely to mislead the public by suggesting a connection with AXA. This is irrespective that AWT's name also included the words "WHOLESALE TRADING" – those words were "insufficient to neutralise the effect of the use of 'AXA' as the first word".

As for AWT's pleaded defences, the Company Names adjudicator considered that the evidential burden was not met. Of particular note, in regards to the good faith defence, the adjudicator highlighted that adopting a company name containing only one distinctive element (i.e. 'AXA'), of which was shared with a long-established and highly successful financial and insurance business, would likely be regarded as falling below commercially accepted standards. AWT also failed to make out a defence that AXA's interests were not adversely affected – it was not enough that AWT were not trading.

AWT was instructed to change its name pursuant to section 73 of the Act.

The appeal

AWT appealed to the High Court requesting a re-evaluation of the facts of the case. However, the High Court dismissed the appeal on the grounds there was no error of law and that the Company Names Tribunal correctly found that AWT failed to establish any defence in the lower court.

As Company Names Tribunal appeals are few and far between, the High Court took the rare opportunity to outline its role in such appeals and it provided guidance on how appellate courts should respond when requested to re-evaluate the facts of a case once an error of law has been ruled out. In essence:

• An appellate court ought not to interfere with a decision of the lower courts simply to re-evaluate the facts of the case.

• An appellate court has an established role to rectify errors of law - it can determine that a lower court (such as the Company Names Tribunal) was "wrong" due to an error of law or because a judge ruled outside of their judicial remit.

• Where the decision was based on a multifactorial assessment, the appellate court would have a "real reluctance" to interfere unless there was a distinct and material error of principle.

• It takes its lead from intellectual property cases, in particular decisions relating to trade marks in matters brought before the UK Intellectual Property Office ("UK IPO"). This is especially true since Hearing Officers at the UK IPO also act as Company Names Adjudicators at the Company Names Tribunal.

Our comment

Bethany Wheeler-Fowler, IP Solicitor, said: "This decision is a clear reminder that dissatisfaction with a legal decision is not a valid appeal basis. Parties should be careful when appealing cases unless they can point to an actual error of law. The decision also provides a helpful clarification on the role of the High Court and, in drawing similarities to trade mark infringement proceedings, it provides more guidance on navigating appeals cases from the Company Names Tribunal."