Decision

Decision on Virgin Security Ltd

Published 16 June 2021

Companies Act 2006

In the matter of application No. 2060 by Virgin Enterprises Limited for a change to the company name of Virgin Security Ltd, a company incorporated under number 11317107

Background, Claims and Defences

1. VIRGIN SECURITY LTD was incorporated on 18 April 2018 under number 11317107.

2. On 22 July 2019, Virgin Enterprises Limited (hereafter ‘the Applicant’) filed a Form CNA 1 (dated 19 July 2019) in application to the Company Names Tribunal for an Order under section 69 of the Companies Act 2006 (‘the Act’) to change the company name of Virgin Security Ltd.

3. In these proceedings VIRGIN SECURITY LTD is “the Primary Respondent” (as well as “the contested Company Name”) and, at the Applicant’s request, both officers of the Primary Respondent, Mr Syed Zahir Wasti (director) and Mr Syed Abid Gillani (secretary), were added as Co-Respondents to the proceedings on 16 October 2019.

4. Prior to filing its application seeking the name change, the Applicant had written to the Primary Respondent on five occasions between 26 July 2018 and 1 May 2019, including via external legal advisors, outlining the Applicant’s concerns regarding the contested Company Name. Those letters were sent via the Royal Mail’s special delivery service to the address of the registered office of the Primary Respondent. The Applicant’s letters received no response, which were returned to sender, the envelope marked “not called for”. Copies of the letters and proof of return were annexed to the Form CNA 1.

5. The Applicant’s letters outlined the Applicant’s rights in the VIRGIN name and its Form CNA 1 similarly reiterated the basis of the Applicant’s objection. The Applicant is the owner of all intellectual property in the “VIRGIN” brand on behalf of the Virgin Group, founded by Sir Richard Branson. The Applicant licenses the VIRGIN name throughout the Virgin Group, which is engaged in a diverse range of business sectors, focusing on financial services, travel and leisure, telecommunications and media, music and entertainment, health and wellness, and renewably energy. The Form CNA 1 highlighted in particular one of the Applicant’s licensees - Virgin Money Holdings (UK) plc (Company No. 03087587) (“Virgin Money”), which operates as a UK retail-only bank with 3.2 million customers. Its offerings include savings, mortgages, pensions, protection and investment products and its services are stated to have been recognised by industry awards. The Applicant’s objection is that the VIRGIN name has an established reputation and goodwill in relation to a wide range of goods and services on a global scale, including in the UK, and that the contested Company Name is sufficiently similar to the Virgin name relied on by the Applicant, such that use of the contested Company Name in the UK would be likely to confuse or mislead the public into thinking that any goods services provided by the Primary Respondent under the contested Company Name are associated with, endorsed by or in some other way connected with the Virgin Group, including Virgin Money, when that is not the case.

6. On 5 September 2019, Mr Wasti (one of the Co-Respondents) filed a Notice of Defence (Form CNA 2), denying the allegations in the Applicant’s statement of grounds. The response to Question 3 in the Form CNA 2 indicated a single defence relied upon: that the contested Company Name was adopted in good faith. He also provided a short counterstatement, making the following points:

i. He denies receipt of any correspondence from the Applicant;

ii. The contested Company Name was applied for in good faith “as it has our emotional and religious association with Holy Virgin mother of Jesus Christ”;

iii. The contested Company Name was issued through Companies House, so the Applicant should take the matter up with Companies House;

iv. There are other companies registered at Companies House, featuring “Virgin”, but which are not part of the Virgin Group.

7. On 16 December 2019 the Applicant filed evidence before the Company Names Tribunal (with copy by Recorded Delivery to the registered office of the Primary Respondent). The evidence comprises a witness statement of Frances Harding dated 16 December 2019 (and accompanying Exhibits FH01 - FH13). Ms Harding is a trade mark attorney for the Applicant. Her evidence seeks to establish the Applicant’s goodwill and reputation in the VIRGIN name and to show the enforcement activities it undertakes in protecting its intellectual property rights. None of the Respondents filed evidence in response or in support of their defence statement. Neither side requested an oral hearing and only the Applicant filed written submissions to assist in the determination by this Panel of Company Names Adjudicators.

Decision

8. Section 69 of the Act 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

9. The Applicant objects to the contested Company Name on the basis of the provisions of section 69(1)(a) and (b) of the Act (set out above). The Form CNA 1, supported by the witness evidence of Ms Harding, sets out the Applicant’s claimed goodwill and reputation in the VIRGIN name. The relevant date for the purpose of proving goodwill/reputation is the date of the registration of the contested Company Name which, in this case, is the date of incorporation, 18 April 2018.

10. The concept of goodwill was explained in Inland Revenue Commissioners v Muller & Co’s Margarine Ltd [1901] AC 217 at 223 as follows:

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.

11. The evidence shows the VIRGIN brand to be based on a multi-billion pound, highly diversified business, with a global presence and whose goodwill and reputation clearly extends to the UK. The VIRGIN brand is widely promoted on social media, including through the activities of Sir Richard Branson, who is classified as an ‘influencer’ on LinkedIn, where his page has over 15 million followers; his Twitter account has over 12 million followers, his Instagram and Facebook accounts each over 3 million. The level of consumer recognition in the UK is stated to be 99%. The brand has hundreds of trade marks covering the UK, spanning the majority of the 45 classes of goods and services, reflecting the diversity of the Virgin Group of businesses. The Applicant strictly controls use of the VIRGIN trade marks, which it licenses to over twenty businesses in the UK alone. The licensees are all trading entities whose names begin with the distinctive element of the VIRGIN name followed by an additional word; examples include Virgin Money, Virgin Atlantic, Virgin Media, Virgin Holidays, Virgin Hotels, Virgin Mobile and Virgin Trains. The brand is promoted through numerous and diverse sponsorship activities, including of Manchester United, Newcastle United and Southampton Football clubs and the Virgin Money London Marathon.

12. As indicated in the above summary, the evidence establishes that at the relevant date the Applicant had the goodwill/reputation in the VIRGIN name required by section 69(1)(a) of the Act. Its reputation and goodwill are substantial, and the public will be accustomed to seeing the VIRGIN brand used in relation to new and different products and services. Section 69(1)(b) requires sufficient similarity in the names likely to misleadingly suggest a connection between the parties. The Applicant’s submissions include the following:

i. the VIRGIN name is an unusual, distinctive and memorable name and trade mark which is widely known to be associated with the Virgin Group, of which the Applicant is a member, and in respect of which the Applicant owns goodwill and reputation;

ii. in light of the Virgin Group’s diversified interests and the fact that many Virgin Group companies consist of the word “Virgin” plus [activity/goods/services] denoting the type of business carried on by that particular Virgin Group entity, the appearance of the Virgin name together with a descriptive word (here SECURITY) will confuse the public and make them believe that the Company is connected with the Applicant, when this is not the case. For example, the word ‘SECURITY’ may be descriptive of services likely to be offered by a banking or financial business (for example, in relation to the securitisation of financial assets and all financial services) such as those undertaken by Virgin Money (whose financial activities are evidenced at Exhibit FH10);

iii. the Applicant cited firstly the decision of the Company Names Adjudicators in Zurich Investments Limited,^{[footnote 1]} where it was held that the addition to the end of a company’s name of descriptive words or words designating how a company is incorporated adds nothing to the overall effect that the company’s name has and therefore ‘Zurich Investments Limited’ was held to be “clearly similar” to the name ‘Zurich’. It secondly referred to the decision in Intel Corporation v Intel Marketing Ltd,^{[footnote 2]} where it was held that the addition of the word “MARKETING” to the well-known trade mark INTEL gave the impression that the undertaking was connected to INTEL or tasked with marketing its goods/services.

13. The Adjudicators agree with the above points and accept the Applicant’s submission that the combination of the distinctive Virgin name with the descriptive word “SECURITY” and the company designation “Ltd” is clearly similar to the Virgin name, and that this is likely to mislead the public that the company is licensed by the Applicant to use the Virgin name. The next question to be considered is whether the Respondents have established that they are able to rely on any of the statutory defences set out by the provisions of section 69(4)(a) - (e) of the Act. The burden of proof is on the Respondents to show that they are entitled to one or more of the statutory defences.

14. The Form CNA 2, sets out those defences at its Question 3 and the Respondents indicated reliance only on one of those defences - namely that, in line with section 69(4)(d) of the Act, the contested Company Name was adopted in good faith because “it has our emotional and religious association with Holy Virgin mother of Jesus Christ.”

15. The burden of proof is on the Respondents to show that they are entitled to one or more of the statutory defences. The Respondents filed no evidence at all, so, as the Applicant submitted, there is nothing to support this claim, nor is it possible to infer the alleged connection between the Virgin Mary and the contested Company Name. In the absence of any particularisation or evidence there appears no apparent or plausible relevance of the Virgin Mary to the Primary Respondent, or the contested Company Name, nor to the Primary Respondent’s registered nature of business (being private security activities). The Applicant submitted that if the Primary Respondent were named after the Virgin Mary, the Applicant would have expected it to be incorporated under the name “Virgin Mary Security Ltd”, rather than “VIRGIN SECURITY LTD”.

16. The Applicant submits that even if there were a connection between the Virgin Mary and the Primary Respondent, its contested Company Name, and/or the stated intended trading activities of the Primary Respondent, the adoption of the Company Name would not be in good faith. The Applicant submits that it is inconceivable that the Respondents were not aware of the Virgin Group. The VIRGIN name is distinctive, and is strongly associated with the Virgin Group and the Applicant. If the Primary Respondent had a legitimate right to use the VIRGIN name, the Applicant would have expected that to have been outlined in correspondence. The Applicant referred to the comment of Pumfrey J in Harrisons Trade Mark Application (“Chinawhite”) [2004] FSR 13 that “The words “bona fide” or “good faith” are what are sometimes called chameleon words and take their content and their colour from their surroundings.” The Applicant submitted that the surrounding circumstances of this case suggest that the Primary Respondent was registered with a name which would inevitably bring to the mind of the public a connection with the Virgin Group, in particular in light of its Virgin Money business, and therefore seeks to profit from the renown of the VIRGIN name.

17. The Adjudicators accept the Applicant’s submissions in relation to the only claimed statutory defence under section 69(4)(d) of the Act. There is no evidence of good faith and the Respondents are unable to rely on a defence under section 69(4)(d) of the Act.

Other defences

18. The Respondents have not sought to invoke any of the other section 69(4) defences. None of the various points made in the Notice of Defence gives rise to a defence under section 69(4) of the Act, nor have the Respondents sought to explain their relevance. For the sake of completeness, it is noted that the points are nonetheless addressed in the Applicant’s submissions:

i. The Respondents claim to have received no correspondence from the Applicant. However, the Form CNA 1 filed by the Applicant details its considerable efforts, over a period of 8 months, to contact the Primary Respondent. Further, the Respondents have since had the opportunity to respond to the Company Names Tribunal, yet have put forward no evidence in support of a defence.

ii. Secondly that the contested Company Name was registered without intervention from Companies House has no relevance. The Companies House website warns of the importance of checking the Trade Marks Register of the UK IPO to ensure that proposed names do not infringe existing trade marks;

iii. Thirdly, the defence refers to the existence of certain non-Virgin Group companies whose names incorporate the “VIRGIN” name. However, the Applicant correctly submits that the use of the VIRGIN name by other non-Virgin Group companies has no relevance to the actions of the Primary Respondent. Moreover, the Applicant denies that there is such use of the VIRGIN name and refers to Ms Harding’s statement, which addresses the activities undertaken by the Applicant in the protection of its intellectual property rights.

19. No evidence has been filed that the Primary Respondent has traded or prepared to trade. On the contrary, on 12 January 2020 the Primary Respondent filed ‘Accounts for a dormant company’ at Companies House. There is no claim nor evidence in support of any of the other potential statutory defences under 69(4).

Outcome

20. The application to change the contested Company Name is successful. In accordance with section 73(1) of the Act, the following order is made:

(a) VIRGIN SECURITY LTD (Company Registration 11317107) shall change its name within one month of the date of this order to one that is not an offending name i.e. one not incorporating the Applicant’s name or trade marks;

(b) VIRGIN SECURITY LTD, Mr Wasti and Mr Gillani shall:

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

(ii) 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.

21. If no such change is made within one month of the date of this Order, a new company name will be determined as per section 73(4) of the Act and notice will be given of that change under section 73(5) of the Act.

Costs

22. The Tribunal awards costs from the published scale at paragraph 10 of the Company Names Tribunal’s Practice Direction. This is intended to provide a contribution, but not recompense, to the successful party. It is the Applicant who has been successful in these proceedings and who is entitled to a contribution towards its costs. The award breakdown is as follows:

Fee for filing the application: £400
Fee for filing evidence: £150
Preparing a statement and considering the counterstatement: £350
Preparing evidence: £600
Preparation of submissions in lieu of hearing: £300
Total: £1800

23. VIRGIN SECURITY LTD, Syed Zahir Wasti and Syed Abid Gillani, being jointly and severally liable, are ordered to pay VIRGIN ENTERPRISES LIMITED the sum of £1800 within twenty-one days of the expiry of the appeal period, or within twenty-one 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.

24. Any notice of appeal must be given within one month of the date of this decision. Appeal is to the High Court in England and Wales. The Tribunal must be advised if an appeal is lodged.

Dated 16 June 2021

Matthew Williams
Company Names Adjudicator

Judi Pike
Company Names Adjudicator

Mark Bryant
Company Names Adjudicator

1. Decision of the Company Names Adjudicator dated 18 June 2010 in the matter of Application No. 40 ↩

2. Decision of the Company Names Adjudicator dated 23 March 2012 in the matter of Application No. 133 ↩