Decision

Decision on Tender Sleeps Ltd

Published 30 May 2022

Order under the Companies Act 2006

In the matter of application No. 3539

By Tender Sleep Beds Ltd

For a change of company name of registration No. 12764028

Background

1. The company name TENDER SLEEP LTD (“the primary respondent”) has been registered since 23 July 2020 under number 12764028. The company is registered at an address in London SE7 and Mr Asif Habib is its sole director.

2. By an application filed on 9 June 2021, Tender Sleeps Beds Ltd of Birmingham B11 (“the applicant”) applied for a change of name of this registration under the provisions of section 69(1) of the Companies Act 2006 (“the Act”). In its application, the applicant asks that Mr Asif Habib be joined to the proceedings as a co-respondent.

3. In response to the following question which appears on the application form: “What is the name associated with you which has caused you to make this application?”, the applicant states:

Our company name is TENDER SLEEP BEDS LTD and their company name is TENDER SLEEP LTD. The name “TENDER SLEEP” is associated with us.

4. In relation to its goodwill/reputation and field of business it states:

Our company is trading under this name from last 21 years. We have really good business reputation. We cannot afford to share our name with any other company…Our reputation is excellent and we are in same business from last 21 years. We are a bed manufacturing company…our annual turnover is 3.5 million and currently are employing 52 people. Our reputation and quality of our beds is excellent. We have trusted customers all over UK. The same trading name is causing confusion among our customers & their customers on daily basis. The company in question is also in the same business selling beds & furniture.

5. In response to the following questions which appear on the application form: “Why do you object to the registered company…name?” and “Please provide any other relevant information…”, the applicant further states:

…Due to similar name we object that they must stop using “TENDER SLEEP” name with immediate effect…We are getting negative feedback due to the poor quality of their products & service. Name is similar and customers get confused as a consequence we are getting a lot of negative feedbacks online. That feedback is affecting our reputation….

6. The applicant explains that if successful, it is claiming the cost of the official fee associated with the application i.e. £400.

7. The following question appears on the Form CNA1:

Did you warn the company that if it did not change its name that you would start legal proceedings against it? If “yes”, when did you warn the company?

8. The applicant responded to the above in the following terms:

Yes. First passing off notice was posted on 14 July 2020. Second notice was posted on 20/04/21.

9. A copy of the application was sent to the primary respondent’s registered office on 18 January 2022. The primary respondent was allowed until 18 February 2022 to file a defence on Form CNA2 accompanied by the official fee of £150. On the same date, the Tribunal wrote to Mr Habib, to inform him that the applicant had requested that he be joined to the proceedings as a co-respondent; Mr Habib was also allowed until 18 February 2022 to comment upon that request.

10. On 18 February 2022, the primary respondent filed a Form CNA2 (signed by Mr Habib) and accompanied by exhibit TSL. In its defence, it states:

…Whilst the name Tender Sleep Ltd (‘TSL’) is similar to Tender Sleep Beds Ltd (‘TSBL’) there is a clear difference between the companies logos and websites. Whilst TSBL is only a Manufacturer of mattresses and specialised design activities, TSL is a seller of a range of furniture, hardware and ironmongery, whole seller of furniture, carpets, lighting equipment and office furniture…The Applicant has alleged that their customers are ‘confused’ however they have not provided any evidence in respect of the same… Whilst the names have similar words used are not the same in their presentation as the services provided are not entirely the same. TSL provides a range of products which TSBL does not. TSBL is limited to mattresses and beds only as limited by their name. However TSL provides a range of household products in the same place….TSL have a great reputation, with 803 customer reviews…TSBL not only do not have many reviews both on Trust Pilot and Google reviews, totalling to 56 reviews all together but they also have a lower customer satisfaction rating.

11. Having indicated that it is claiming its costs, the primary respondent further indicates that it is relying upon the following defences under section 69(4) of the Act:

(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.

12. Exhibit TSL consists of the following:

• page 1 – from www.tendersleep.co.uk dated 18 February 2022
  
  
• page 2 – from the applicant’s website tendersleepbeds.co.uk – dated 18 February 2022
  
  
• page 3 – an undated Trustpilot summary page in relation to tendersleep.co.uk which mentions “Tender Sleep Furniture” and refers to 803 reviews and “Great”
  
  
• page 4 – a Trustpilot summary page for the applicant (tendersleepbeds.co.uk) dated 18 February 2022 referring to 5 reviews and “Average”
  
  
• page 5 – an undated google search for “tender sleep beds” which refers to the applicant and mentions “51 Google reviews”

13. In an official letter dated 8 March 2022, the Tribunal directed that a Case Management Conference (“CMC”) be held to discuss the further conduct of the case.

The CMC took place before me, by telephone, on 29 March 2022. At the CMC, Mr Kamran Kayani represented the applicant; the primary respondent was represented by Mr Ray Purewal of Aston Brooke solicitors. The operative part of my letter of 30 March 2022 sent to the parties following the CMC was as follows:

I began by explaining to [Mr Kayani] the purpose of the Tribunal and I drew [his] attention to the reference to passing-off mentioned in the Form CNA1. In this regard, the following appears on the Tribunal’s website:

It is to be noted that one of the defences is that the company is operating under the company name; an application to the Tribunal is not an alternative to an action for passing-off or trade mark infringement.

Section 69(5) of the Companies Act 2006 reads:

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.

Following discussion, [Mr Kayani] confirmed that section 69(5) of the Act was not in play in these proceedings. Rule 5(2) of The Company Names Adjudicator Rules 2008 reads:

The adjudicator may strike out the application or any defence in whole or in part if it is vexatious, has no reasonable prospect of success or is otherwise misconceived.

Given the factual matrix described, I explained that I intended to strike out the application.

However, having confirmed that Mr Habib had no objection to being joined to the proceedings, Mr Purewal indicated that the primary respondent would be open to discussions with the applicant to ascertain whether or not the matter could be settled by agreement.

In those circumstances, I agreed to suspend the proceedings for 1 month from the date of the CMC for negotiations to take place. If nothing is heard by the Tribunal by the conclusion of that period nor additional time sought, I will issue a decision in which the application will be struck out and I will make a determination on costs.

14. In an email dated 7 April 2022, the primary respondent stated:

…we are writing to inform the Company Names Tribunal of our intent to correspond via email, with our first letter being sent to the applicant via email later today…

15. On 28 April 2022, Mr Kayani advised the Tribunal that its “final proposal was rejected by other party” and “We are not going to request additional time for any further negotiations”.

Decision

16. In its decision in Barloworld Handling Ltd (BL-O-127-09), this Tribunal stated:

7. BHL has stated in its application that “this new company is marketing similar products to us using the Unilift name”. This is a statement that USW was operating under the name at the time of the application, which is a defence to the application under section 69(4)(b)(i) of the Act. Under the provisions of section 69(5), however, even if it is shown that the company is operating under the name, this defence may be insufficient to defeat the application if the applicant shows that the main purpose of the respondent in registering the name was to obtain money (or other consideration) from the applicant or prevent him from registering the name.

8. BHL has provided no indication either in its application or in any response to the adjudicator’s letter of 6 April 2009 that it has grounds under section 69(5) to thwart USW’s defence under section 69(4)(b)(i). It has made no request to be heard in relation to the preliminary view to strike out the application. Furthermore, it has made reference to passing-off. As stated in the adjudicator’s letter, applications to the Company Names Adjudicator are neither an alternative nor an equivalent to an action for passing-off. ‘Passing-off’ indicates a trading activity and thereby constitutes a defence to the application under section 69(4)(b)(i) which has not been countered by any indication under section 69(5) that the registration was opportunistic on the part of USW.

17. As indicated above, a primary respondent may have a defence to an application if, prior to the date of the applicant’s application (in this case 9 June 2021), it has operated under the name. The operating defence does not represent a high hurdle, it simply requires that the primary respondent has engaged in some form of external commercial activity which shows that the company is operating under the name.

18. In its application, the applicant states that it sent a first passing off notice on 14 July 2020 (some eleven months prior to its application to the Tribunal) and a second passing off notice on 20 April 2021 (i.e. a little under two months prior to its application). As I mentioned in my letter to the parties of 30 March 2022, the notes on the Tribunal’s website states:

It is to be noted that one of the defences is that the company is operating under the company name; an application to the Tribunal is not an alternative to an action for passing-off or trade mark infringement.

19. The applicant’s references to passing-off contained in its application (in which it comments upon, inter alia, receiving “negative feedback due to the poor quality of [the primary respondent’s] products and service”) provided the primary respondent with a defence to the application.

20. Although reliance on an operating defence may be thwarted by the operation of section 69(5) of the Act, as Mr Kayani confirmed at the CMC that section was not relevant, it is not a provision that assists the applicant.

21. In addition to the reference to passing-off contained in the application, in its Form CNA2, the primary respondent provided a number of documents as exhibit TSL. Although those that relate to the primary respondent are either undated or after the date of the application, they provide some support for the primary respondent’s defence based upon operating under the name.

22. Rule 5(2) of The Company Names Adjudicator Rules 2008 reads:

The adjudicator may strike out the application or any defence in whole or in part if it is vexatious, has no reasonable prospect of success or is otherwise misconceived.

23. In view of the above, had Mr Purewal not indicated at the CMC that the primary respondent wanted the opportunity to discuss the matter with the applicant to see if the matter could be settled by agreement, I would have struck the application out at that point as having “no reasonable prospect of success”. As no agreement has been reached, this decision simply confirms the decision I reached at the CMC and communicated to the parties in my letter of 30 March 2022.

Costs

24. As the primary respondent has been successful, in line with the guidance provided in the Tribunal’s Practice Direction, it is entitled to a contribution towards the costs it has incurred in relation to (i) the reviewing of the application and filing a defence (£400), (ii) the official fee associated with the Form CNA2 (£150), and (iii) a contribution towards the costs incurred in preparing for and attending the CMC at which it was successful (£200) i.e. a total of £750.

25. I order Tender Sleep Beds Ltd to pay to Tender Sleep Ltd the sum of £750 within 21 days of the expiry of the appeal period, or within 21 days of the final determination of this case if any appeal against this decision is unsuccessful. Under section 74(1) of the Act, an appeal can only be made in relation to the decision to dismiss the application; there is no right of appeal in relation to costs.

26. Any notice of appeal against this decision 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.

27. The company adjudicator must be advised if an appeal is lodged, so that implementation of the order is suspended.

Dated 27 May 2022

Christopher Bowen
Company Names Adjudicator