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SAFLII Note: Certain personal/private details of parties or witnesses have been redacted from this document in compliance with the law and SAFLII Policy

IN THE COMPANIES TRIBUNAL OF THE REPUBLIC OF SOUTH AFRICA (“The Tribunal”)

CASE NO: CT013NOV2015

Re: In an Application in terms of Section 160 of the

Companies Act 71 of 2008 (“the Act”) and Section

11(2) of the Act.

In the matter between:

THEMBOKWAKHE GIFT MLOTSHWA                                                         THE APPLICANT

AND

COMPANIES AND INTELLECTUAL

PROPERTY COMMISSION (CIPC)                                                           THE RESPONDENT

Coram K. Tootla

Decision delivered on 22 December 2015

DECISION

INTRODUCTION:

[1] The Applicant is THEMBOKWAKHE GIFT MLOTSHWA of H... M. S., Shakaville Location, Stanger, South Africa, presumably brings an application in terms of Sections 12 (2) (a) and 160 of the Companies Act 2008 (“the Act”) for an order that the Respondent reserve the name of STILL STAND (Refer to form CTR 142) for his company.

[2] The Respondent is CIPC which claims in its notice CoR 9.4 dated 21 October 2015 that the name “STILL STAND” conflicts with three other names on the CIPC register and in an email dated 24 November 2015 claims that the this is infringing Section 11(2) (a) yet argues a case under Section 11(2)(b) and (c).

[3] However, CIPC has reserved the name INAMANDLA STILL in favour of the Applicant as per the CoR9.4. The Applicant in turn is dissatisfied with this state of affairs and has lodged an objection to the fact that he would like STILL STAND to be reserved as a company name as well.

PROCEDURE AND BACKGROUND:

[4] The date of the CIPC CoR 9.4 notice is dated 21 October 2015. The application was properly served on the Tribunal on 23 November 2015 and on CIPC (via email) on 24 November within the three month period as per Section 160.

[5] The Respondent did not serve or file any notice to oppose the Applicant’s application but has filed an email in response to the Applicant’s order requested which is sufficient. The Respondent opines in its email that in view of the confusingly similar names on the register, the name “STILL STAND” cannot be permitted registration.

[6] The Respondent is also of the view that the aforesaid name consists only of common word/s in daily use and that if permitted it would amount to monopoly or exclusive protection over common expression and that it would amount to the name “STILL STAND” overlapping with the names mentioned in the CIPC notice; and that as a result it would be contrary to Section 11(2) (a) of the Act.

[7] The Respondent is of the view that the Applicant’s name approval as requested will be tantamount to monopoly and or exclusive protection over common expression and will unequivocally be tantamount to riding on the goodwill vested in those registered entities. and that it would also amount to a likelihood of confusion in the business world in that it would place members of the public under the misapprehension that there is an association between this entity and those entities already registered, which it claims is in terms of Section 11 (2) (a). This is notwithstanding that it may be thought that the name STILL STAND of the Applicant is the mother body of all STILL STAND.

[8] Respondent also states that if it were to approve the name it would run out of names as approving it will further be tantamount to exclusive protection and monopoly over common words. In view thereof, a risk of confusion in the business world is inevitable unless of course the Respondent adds a distinguishing feature for example XYZ or ABC before the name STILL STAND, so that the element will sufficiently be capable of differentiating this name from the names already registered, within the meaning of the name register. This seems to be the reason that CIPC has approved the name INAMANDLA STILL.

APPLICABLE LAW:

[9] The jurisdiction of the Companies Tribunal is stated in section 160 of the Act and is as follows:

Section 160 “(1) A person to whom a notice is delivered in terms of this Act with respect to an application for reservation of a name, registration of a defensive name, application to transfer the reservation of a name or the registration of a defensive name, or the registration of a company’s name, or any other person with an interest in the name of a company, may apply to the Companies Tribunal in the prescribed manner and form for a determination whether the name, or the reservation, registration or use of the name, or the transfer of any such reservation or registration of a name, satisfies the requirements of this Act.

(2)     An application in terms of subsection (1) may be made— (a) within three months after the date of a notice contemplated in subsection (1), if the applicant received such a notice; or (b) on good cause shown at any time after the date of the reservation or registration of the name that is the subject of the application, in any other case.

(3)     After considering an application made in terms of subsection (1), and any submissions by the applicant and any other person with an interest in the name or proposed name that is the subject of the application, the Companies Tribunal— (a) must make a determination whether that name, or the reservation, registration or use of the name, or the transfer of the reservation or registration of the name, satisfies the requirements of this Act; and (b) may make an administrative order directing— (i) the Commission to— (aa) reserve a contested name, or register a particular defensive name that had been contested, for the applicant; (bb) register a name or amended name that had been contested as the name of a company; (cc) cancel the reservation of a name, or the registration of a defensive name; or (dd) transfer, or cancel the transfer of, the reservation of a name, or the registration of a defensive name; or

(ii) a company to choose a new name, and to file a notice of an amendment to its Memorandum of Incorporation, within a period and on any conditions that the Tribunal considers just, equitable and expedient in the circumstances, including a condition exempting the company from the requirement to pay the prescribed fee for filing the notice of amendment contemplated in this paragraph.”

[10] Section 11 of the Companies Act provides as follows:

“11.   Criteria for names of companies.—

…… (1)

(2) The name of a company must—

(a)   not be the same as (my emphasis)—

(i)            the name of another company, domesticated company, registered external company, close corporation or co-operative;

(ii)          a name registered for the use of a person, other than the company itself or a person controlling the company, as a defensive name in terms of section 12 (9), as a business name in terms of the Business Names Act, 1960 (Act No. 27 of 1960), unless the registered user of that defensive name or business name has executed the necessary documents to transfer the registration in favour of the company;

(iii) a registered trade mark belonging to a person other than the company, or a mark in respect of which an application has been filed in the Republic for registration as a trade mark or a well-known trade mark as contemplated in section 35 of the Trade Marks Act, 1993 (Act No. 194 of 1993), unless the registered owner of that mark has consented in writing to the use of the mark as the name of the company; or...

(b)  not be confusingly similar (my emphasis)to a name, trade mark, mark, word or expression contemplated in paragraph (a) unless—

(i)            in the case of names referred to in paragraph (a) (i), each company bearing any such similar name is a member of the same group of companies;

(ii)          in the case of a company name similar to a defensive name or to a business name referred to in paragraph (a) (ii), the company, or a person who controls the company, is the registered owner of that defensive name or business name;

(iii)         in the case of a name similar to a trade mark or mark referred to in paragraph

(a)    (iii), the company is the registered owner of the business name, trade mark, or mark, or is authorised by the registered owner to use it , or

(iv)         in the case of a name similar to a mark, word or expression referred to in paragraph (a) (iv), the use of that mark, word or expression by the company is permitted by or in terms of the Merchandise Marks Act, 1941;

(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;  …”

[11] Section 12 - Reservation of name and defensive names

(1)       A person may reserve one or more names to be used at a later time, either for a newly incorporated company, or as an amendment to the name of an existing company, by filing an application together with the prescribed fee.

(2)   The Commission must reserve each name as applied for in the name of the applicant, unless-

(a)          the applicant is prohibited, in terms of section 11 (2) (a), from using the name as applied for; or

(b)          the name as applied for is already reserved in terms of this section. [Sub-s. (2) substituted by s. 7 (a) of Act 3 of 2011.]

(3)   If, upon reserving a name in terms of subsection (2), there are reasonable grounds for considering that the name may be inconsistent with the requirements of-

(a) Section 11 (2) (b) or (c)-

(i)     the Commission, by written notice, may require the applicant to serve a copy of the application and name reservation on any particular person, or class of persons, named in the notice, on the grounds that the person or persons may have an interest in the use of the name that has been reserved for the applicant; and

(ii)     any person to whom a notice is required to be given in terms of subparagraph (i) may apply to the Companies Tribunal for a determination and order in terms of section 160; or

[Para. (a) amended by s. 7 (b) of Act 3 of 2011.]

[12] Regulation 9- Reservation of company names

(1)   An application to reserve a name in terms of section 12 (1) must be made in Form CoR 9.1, may include as many as four alternative names listed in order of preference, and must be accompanied by––

(a)   ) the fee set out in Table CR 1; and

(b)   any relevant documentation or evidence required in terms of regulation 8 with respect to each name included in the application.

(2)   An application to extend the reservation of a name, as contemplated in section 12 (4), must be made in Form CoR 9.2, and must be accompanied by––

(a)   ) the fee set out in Table CR 1; and

(b)   in the case of a name in respect of which satisfactory evidence of any facts was required  in  terms  of  regulation  8  when  the  name  was  first  reserved,  further satisfactory evidence of the relevant circumstances, including any alteration in those circumstances since the reservation was first applied for.

(3)   As soon as practicable after receiving an application to reserve a name, or to extend the reservation of a name, the Commission must consider the name, or if more than one name is included in the application for reservation, must consider the names serially in the order in which they appear in the application, and must issue to the applicant––

(a)    a Notice Requiring Further Particulars in Form CoR 9.3, if the Commission requires more information to satisfy any relevant requirements in terms of section 11 or 12 or regulation 8, before determining whether to accept the application; or

(b)   a Notice Confirming a Name Reservation or Registration in Form CoR 9.4, if the Commission has accepted an application to reserve a name, or extend the reservation of a name; or

(c)   ) a Notice Refusing a Name Reservation or Registration in Form CoR 9.5, if––

(i)   the form of the name, or in the case of an application including alternative names, the form of each such name, fails to satisfy any requirements set out in section 11 or 12, or regulation 8; or

(ii)   the use of that name, or in the case of an application including alternative names, the use of each of those names, by the applicant is prohibited in terms of the Act.

(4)  If the Commission has accepted the reservation of a name that the Commission considers may be contestable on any ground contemplated in section 12 (3), the Commission, when issuing Form 9.4 in response to that application, must also issue (my emphasis)–

(a)    A Notice of a Potentially Contested Name, in Form CoR 9.6, to the applicant if the name is contestable in terms of section 12 (3)(a), read with section 11 (2)(b) or (c); or

EVALUATION:

[13] Although the Applicant has not mentioned in the founding affidavit which section of the Act it applies in terms of, he has lodged an objection wherein he states that he is dissatisfied with the decision to reject the name reservation as it is in his view nowhere close to the other names on the register and his name does not hold the same meaning. He states that he does not see any conflicts in the name he has chosen when compared to the other names listed in CoR 9.4.

[14] The Applicant is requesting the Tribunal to make an order that the name STILL STAND be reserved as its company name which CIPC has refused to do. Presumably this is in terms of Section 160 read with Section 12 (2) (a) of the Act.

[15] The Respondent submits that the Applicant’s company name overlaps with the other names on the CoR 9.4 notice and via its email dated 24 November 2015 alleges infringement of the provisions of Section 11(2) (a); and that the Applicant should change its name as stated above by adding a distinguishable element to the name as a prefix.

[16] In addition, CIPC states that it would amount to the name “STILL STAND” overlapping with the names mentioned in the CIPC notice; and that as a result it would be contrary to Section 11(2) (a) of the Act. However, the contents of the CIPC email substantiates a case under Section 11(2) (b) and (c), that is, of being confusingly similar and of a misapprehension by the public into believing that there is an association in the course of trade, most importantly those entities incorporating the commonly used words STILL STAND; and not the same as is stated in Section 11(2) (a).

This is in contradiction of the CoR 9.4 notice which is a notice in terms of the Regulations which simply confirms the name reservation of INAMANDLA STILL and rejects the name STILL STAND (without any basis in Law), with which decision the Applicant is any event dissatisfied.

[17] In terms of Section 12(2) CIPC must reserve each name as applied for in the name of the Applicant unless (a) the applicant is prohibited in terms of Section 11(2) (a) from using the name as applied for; or (b) the name as applied for is already reserved in terms of this section. Thus it is clear that if the name STILL STAND is not the same (exactly the same) as the other names in the register, CIPC must reserve the name.

[18] On further examination of Section 12 (3) it can be seen what CIPC can object only once it has reserved the name STILL STAND, if it has reasonable grounds for considering that the name may be inconsistent with the requirement of Section 11(2)(b) or (c). CIPC can thereafter by written notice request the Applicant to serve a copy of the application and the name reservation on any particular person or class of persons name in the notice on the grounds that the person/s may have an interest in the use of the name that has been reserved for the applicant; and that any person to whom a notice is required to be given may apply to the Tribunal for a determination and order in terms of Section 160 (3)(b)(i)(bb).

[19] The confusion arises in CIPC’s email and reasoning. If one examines Section 12(2) (a) and Regulation 9(4) (a) one can easily note the discrepancy. CIPC has confused the issue of the word “same” in Section 11(2) (a) with the words “confusingly similar” in Section 11(2) (b) and the words in Section 11(2)(c). The possibility exists that CIPC is reading Section 11 (2)

(a) as it was prior to the amendment of the Bill which resulted in the final Act.

[20] What is “same” in the law can be seen from the case law set out below. This issue of “same” was also dealt with in Renier A Schuld vs Companies and Intellectual Property Commission CT002Oct2014 and see also notes on Section 12 in Henochsberg on the Companies Act 71 of 2008.

[21] Thus Section 11(2) (a) of the Companies Act does not apply, as it clearly refers to names that are the same, i.e. “…it must be identical rather than ‘similar to’”: see also Century City Apartments Property Services CC and Another v Century City Property Owners Association [2010] 2 All SA 1 (SCA); Henochsberg on the Companies Act 71 of 2008 at 57.

[22] Thus CIPC has no choice but to follow the reasoning and procedure in Section 12(3) currently in the Act and therefore is obliged to reserve the name STILL STAND as it is not the same as any of the names on the CoR 9.4 notice.

In the circumstances, CIPC is obliged to reserve the name STILL STAND and thereafter should it wish to object on the grounds mentioned in Section 11(2) (b) and (c) as being confusingly similar to some or other name on the register as listed in the notice, then it is at liberty to do so in terms of Section 12 (4) and Regulation 9(3) (a).

[23] Thus STILL STAND is clearly not the same as any of the names mentioned in the CoR 9.4 notice. For example, the names “STILL STANDING BUILDING CONSTRUCTION;” STILL STANDING CATERERS” (being some of the name mentioned in the notice), or parts thereof, is not the same as “STILL STAND” and section 11 (2) (a) will not apply.

ORDER:

[24] The application for an order in terms of section 160 read with Section 12 (2) (a) of the Companies Act is granted in that CIPC is obliged to reserve the name STILL STAND in favour of the Applicant.

k.y. tootla (electronically signed)

 

___________________

KHATIJA TOOTLA

Member of the Companies Tribunal

22 December 2015

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