It is quite easy in New Zealand to register a company name which includes another party’s trade mark, or is similar to the name of a well known person or business. However, using that company name or refusing to hand it over can prove to be expensive. 

The Companies Act 1993 takes a laissez-faire approach to company names and gives the Registrar of Companies only a very limited jurisdiction to refuse registration of a company on the basis of its nominated name.

That is only part of the story of course.  Various intellectual property laws and the Fair Trading Act constrain the ability of a deceptively named company to actually mislead members of the public.  A decision of the High Court serves as a warning to those who might be tempted to include well known business names when registering their own companies.

Mr Rutherford incorporated a company under the name “Rio Tinto Mining and Exploration Limited” despite having no association with the well known mining business.  Mr Rutherford and his company were sued with a view to the Court ordering the company to change its name.  The case eventually settled, but there was no agreement as to costs and the plaintiffs applied for their actual costs to be paid by Mr Rutherford and the company.

The Court considered the defendants to have acted vexatiously and unnecessarily in defending the case.  The Court ordered that the defendants pay $30,000 in costs, which compares with the amount of $10,528.00 payable under the scale set out in the High Court Rules.

While it may be tempting for individuals to choose well known names when incorporating a new company, it is worth bearing in mind the potential cost associated with doing so.  The apparent freedom is somewhat deceptive.