Decision

Decision on Spendor Ltd

Published 26 April 2023

Companies Act 2006

In the matter of application No. 3604 by Spendor Audio Systems Limited for a change to the company name of SPENDOR LTD, a company incorporated under number 13212876.

Background and Pleadings

1. The company name SPENDOR LTD (“the primary respondent”) has been registered since 19 February 2021 under number 13212876.

2. By an application filed on 26 July 2021, Spendor Audio Systems Limited (“the applicant”) applied for the primary respondent’s name to be changed under the provisions of Section 69(1) of the Companies Act 2006 (“the Act”).

3. The applicant states that the name associated with the applicant is Spendor. It states:

Spendor Audio Systems Limited (“Spendor Audio”) are the holders of the UK Trademark No. UK00910611234 in the name Spendor and have held such Trademark protection since 1993. It also holds similar Trademarks in the name Spendor for the EU, USA, Japan, China and Taiwan and sells products under the “Spendor” brand in markets across the world. Its goodwill is global and the company first began trading under the Spendor name in the 1960’s so the name and goodwill has been built over several decades of trade. Spendor Audio has for over 60 years manufactured and sold loudspeakers under the Spendor name. It has global reputation within the audio, music, studio recording, broadcasting and hi-fi markets. Spendor products are on public display in several hundred retailers and recording studios across the world as well as sitting in countless consumer’s homes as part of their hi-fi systems. The name directly copies and infringes the trademarked name of Spendor Audio. It is further likely to cause confusion in the mind of consumers and as such also amounts to passing-off of the brand.

4. On 26 November 2021, the primary respondent filed a notice of defence and counterstatement. It denies that that its name would cause any confusion to the applicant’ customers and states as follows:

Spendor Ltd and Spendor Audio Ltd are serving completed unrelated markets. Spendor Ltd is a marketplace / affiliate marketing technology in the conscious consumer space, helping people with alternative places to spend their money. Spendor Audio Ltd is clearly serving the audio / music market and sells physical objects. I do not believe any consumers would ever confuse the two, and even if they did happen upon the other’s website they would immediately be able to differentiate between the companies. The font, colour, and branding is completely different, too.

5. The primary respondent relies upon the following defences:

• it is operating under the name;

• its name was adopted in good faith;

• the interests of the applicant are not adversely affected to any significant extent.

6. At the request of the applicant, Alexandra D’Sa of the primary respondent, was subsequently joined to the proceedings as co-respondent.

7. Only the applicant 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. Neither party is professionally represented. I make this decision having carefully considered all the papers.

The Evidence

8. The applicant’s evidence takes the form of a witness statement by Mr John Baxter, in his capacity as the Head of Finance and Operations of the applicant, together with three attachments (JB1 – JB3).

Decision

9. Section 69 of the Companies Act 2006 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.

Goodwill/Reputation

10. The relevant date for the purpose of proving goodwill/reputation is the date of the application for a change of the contested company name which, in this case, is 26 July 2021.[1] ^{[footnote 1]}

11. The concept of goodwill was explained in Inland Revenue Commissioners v Muller & Co’s Margarine 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.

12. 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. The applicant’s evidence relevant to demonstrating its goodwill/reputation can be summarised as:

• the applicant has for over 60 years manufactured and sold loudspeakers under the ‘Spendor’ brand name. It has global reputation within the audio, music, studio recording, broadcasting and hi-fi markets;

• the applicant is also the holder of the UK trade mark no. UK00910611234 in the name ‘Spendor’ and have held such trade mark protection since 1993;

• the applicant also holds similar trade marks in the EU, USA, Japan, China and Taiwan and sell products under the ‘Spendor’ brand in numerous markets across the world

13. The above evidence is strongly supported by three exhibits which I describe below:

• Exhibit JB1 - this includes copy of a webpage from the applicant’s website at www.spendoraudio.com. Although the page is undated (save for a printing date of 24 February 2022) it confirms that in 2021 one of the applicant’s products (SPENDOR A7) had won the category of Best Floor standing speaker for the 4th consecutive year. The exhibit also includes copies of articles from UK printed magazines confirming, namely:
  
  (a)An article from the magazine HI-FI NEWS (this shows a UK corresponding website address at www.hifinews.co.uk) dated October 2019. It states:
  
  “Spendor Classic 200Ti
  
  We report on a classic with a modern twist as Spendor launches a flagship inspired by its iconic 1970s models […]
  Any hi-fi enthusiast will know, Spendor has an illustrious history, its co-founder Spencer Hughes creating the company’s first speaker, the BC1, using knowledge he’d gained while working at the BBC in the ’60s. Yet for the past decade the brand has been working hard to reinvent itself, its affordable A and higher-end D series selling into the mainstream speaker market. At the same time, however, Spendor has continued to make its Classic range, a series of speakers that embody the spirit of its original ’70s designs. Now it has plans to revamp all of these models, with the flagship Classic 200Ti being the first to be unveiled. While Spendor’s modern loudspeakers have small footprints, compact drive units and narrow baffles – as is the current vogue – its Classic range offers the reverse. Here we see a different philosophical take on design, the speakers having large diameter bass drivers, wide baffles and unfashionable infinite baffle cabinet loading.
  
  (b) An article from the magazine HIFI CHOICE (this shows a UK corresponding website address at www.hifichoice.co.uk) undated. The article refers to the applicant and its brand SPENDOR as “the classic British loudspeaker brand” and states that the brand celebrates its 50th anniversary as shown by the extract I reproduce below:
  
  

David Price talks to Spendor Audio’s Philip Swift about the life and times of the classic British loudspeaker brand as it celebrates its 50th anniversary”

Spendor’s BC1 launched in 1969 and became one of the standout designs of the seventies;

• Exhibit JB2- it is a print from the UKIPO trade mark register showing that the applicant is the owner of the trade mark no. UK00910611234 for the mark SPENDOR which has a filing date 02 February 2012, a registration date of 28 June 2012 and a seniority date of 26 February 1993;

• Exhibit JB3 - it shows five registrations for the mark “Spendor” in China, USA, Taiwan and Japan all in the applicant’s name. Mr Baxter states that the Spendor brand is sold in over 40 countries across the world.

14. This concludes my summary of the evidence to the extent that I consider it necessary.

Is the respondent’s company name the same as (or sufficiently similar to) as a name associated with the applicant in which the applicant has goodwill?

15. The primary respondent’s name must also be “sufficiently similar” to the name in which the applicant enjoys goodwill/reputation in the UK such that it would be likely to mislead by suggesting a connection between them. The name relied upon by the applicant is ‘SPENDOR’, the respondent’s name is ‘SPENDOR LTD’. The differences between the respective names is the presence of the words ‘LTD’ in the applicant’s name. ln Zurich Insurance Co v Zurich Investments Ltd [2011] RPC 6 the Tribunal stated as follows at [37]:

An undertaking cannot trade by reference to a company name under which it is not incorporated and, under section 66 of the Act, identical company names cannot be registered. Taking this into account, section 69(1)(a) of the Act would be virtually redundant if it requires the name upon which the applicant relies to include the designation of the nature of the company. For the purposes of section 69(1)(a), a company name and the name associated with an applicant are the same if the only difference that arises is from the designation of the nature of the company. So, in this case, the presence of the word ‘Limited’ of itself does not prevent a finding that the names are the same.

16. The addition of the letters ‘LTD’ in the applicant’s name will be perceived as the very obvious abbreviation of the word ‘Limited’ being merely descriptive of the legal nature of the business. Accordingly, the names are the same.

Did the applicant have goodwill in the name SPENDOR by the date of the application?

17. Taking into account the length of use, the examples of use of the name SPENDOR within a UK website and in relation to products, and the references in independent UK articles to SPENDOR being “the classic British loudspeaker brand” and celebrating its 50th anniversary, even in the absence of turnover figures, I am satisfied that the evidence is sufficient for me to find that the applicant had goodwill in the name SPENDOR in the UK at the relevant date.

18. In light of this finding, it is now necessary that I consider the respondents’ defences.

Defences

19. As the ground specified in subsection 69(1)(a) is established, the onus switches to the primary respondent to establish whether it can rely on any of the defences pleaded. The primary respondent relies upon the defences identified at Sections 69(4)(b), (d) and (e) of the Act:

• that the company is operating under the name, or is proposing to do so and has incurred substantial start-up costs in preparation, or was formerly operating under the name and is now dormant (section 69(4)(b));

• that the company name was adopted in good faith (section 69(4)(d)); and,

• that the interests of the applicant are not adversely affected to any significant extent (section 69(4)(e))

20. It is for the primary respondent to make good its defences through filing evidence. The primary respondent has not filed evidence during the evidence rounds, or with its counter statement.

21. The first two defences, i.e. that the company is operating under the name and that the company name was adopted in good faith, are evidence-based because there is an initial evidential burden placed upon the primary respondent in order to rely on them. As the primary respondent has failed to file any evidence in support of these defences, they fail.

22. As regard the third defence, i.e. that the interests of the applicant are not adversely affected to any significant extent, the primary respondent states that is not in the same line of business as the applicant’s, that the parties are serving completed unrelated markets and that the primary respondent is “a marketplace/affiliate marketing technology in the conscious consumer space, helping people with alternative places to spend their money”. It is not clear to me what type of business the primary respondent is allegedly involved in, but this is not a valid defence. Regardless of what sector the primary respondent has so far chosen to trade in, and/or what are the listed services in the primary respondent’s company registration, the business area in which the primary respondent trades (or for which it is registered with Companies House) could change. In such circumstances, the primary respondent would be brought into direct confusion with the applicant, resulting in, for example, loss of trade or damage to the applicant’s reputation. This would adversely affect the interests of the applicant to a significant extent. The defences under Section 69(4)(b), (d) and (e) of the Act all fail.

Outcome

23. The primary respondent cannot rely upon any of its defences. As a consequence, the application is successful. Therefore, in accordance with Section 73(1) of the Act, I make the following order:

• SPENDOR LTD shall change its name within one month of the date of this order to one that is not an offending name;

• SPENDOR LTD and Alexandra D’Sa each shall:

• take such steps as are within their power to make, or facilitate the making, of that change;

• not cause or permit any steps to be taken calculated to result in another company being registered with a name that is an offending name

24. In accordance with Section 73(3) of the Act, this order may be enforced in the same way as an order of the High Court or, in Scotland, the Court of Session.

25. In any event, if no such change is made within one month of the date of this order, I will determine a new company name as per Section 73(4) of the Act and will give notice of that change under Section 73(5) of the Act.

26. All respondents including individual co-respondents have a legal duty under Section 73(1)(b)(ii) of the Act not to cause or permit any steps to be taken calculated to result in another company being registered with an offending name; this includes the current company. Non-compliance may result in an action being brought for contempt of court and may result in a custodial sentence.

Costs

27. The applicant contacted the primary respondent on 4 June and 2 July 2021 to warn it that, unless the primary respondent changed the company name, proceedings would be launched before this tribunal. I therefore see no reason to deny the applicant, as the successful party, an award of costs. In his evidence Mr Baxter states that the applicant seeks an order for the payment of their legal costs by the co-respondent jointly and severally with the respondent. 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. Accordingly, I award costs to the applicant as follows:

Preparing the application: £400
Fee for filing the application: £400
Evidence: £500

Total: £1,300

28. I order SPENDOR LTD and Alexandra D’Sa (jointly) to pay to Spendor Audio Systems Limited the sum of £1,300 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 uphold the application; there is no right of appeal in relation to costs.

29. 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.

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

Dated 21 April 2023

Teresa Perks
Company Names Adjudicator

1. Botanica Agriculture and Extraction Limited v Botanica Limited [2022] EWHC 2957 (Ch) and MB Inspection Ltd v Hi-Rope Ltd [2010] RPC 18 ↩