Novartis AG v Novartis Shareholders Association
| Case Outcome | Respondent successful |
| Respondent | Novartis Shareholders Association |
| Date | 23 July 2018 |
| Administrative Decision Number | O/445/18,10600756 |
| Court | Company Names Tribunal (EW) |
| Registration Number | 10600756 |
In the matter of application No. 1626, By Novartis AG.
For a change of company name of registration No. 10600756
Background1. The company name NOVARTIS SHAREHOLDERS ASSOCIATION (“the primary respondent”) has been registered since 3 February 2017 under number 10600756.
2. By an application filed on 6 December 2017, Novartis AG (“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”).
3. The applicant explains that the name associated with it which caused it to make the application is NOVARTIS. Having stated that this name has “goodwill in the pharmaceutical, healthcare and eye-care sectors (“the relevant sectors”)”, it explains that it objects to the primary respondent’s name because:
“13. [It] is concerned that the company name will (a) block registration by Novartis of a UK company devoted to the interests of its own shareholders, that it will (b) be used in the future in a way that is likely to mislead by suggesting, erroneously, a connection between the company and Novartis to third parties in the relevant sectors and/or in the financial and investment sectors and/or that it will (c) be used in a way that is otherwise detrimental to the interests and reputation of Novartis.”
The element NOVARTIS is clearly the dominant and distinctive element of the offending company name and it is identical to the mark NOVARTIS. As such it is bound to mislead by suggesting, erroneously, a connection with Novartis which does not exist. The other elements of the offending company name “Shareholders Association” simply compound the likelihood that it will mislead because the applicant is, to the best of its knowledge, the only share-listed company in the world comprising the name Novartis.
4. The applicant requests that the primary respondent’s sole director, Mike Moran, be joined to the proceedings as a co-respondent and:
“an order that [the primary respondent] will change its name to one that is not an offending name…”
5. In relation to the primary respondent’s sole director, Mike Moran, the applicant states:
“It is to be noted that Mr Moran is a Swiss national and an economist according to the details held at Companies House. It is therefore inconceivable that he was not aware of Novartis, one of the largest companies in Switzerland, at the time he registered the offending company name. Moreover, it is clear from the responses made to Novartis’ letters to him, he is perfectly well aware of Novartis and its interests.”
6. A copy of the application was sent to the primary respondent’s registered office on 19 December 2017, in accordance with rule 3(2) of the Company Names Adjudicator Rules 2008 (“the rules”). The copy of the application was sent by Royal Mail special delivery and allowed until 19 January 2018 for the filing of a defence. Also on 19 December 2017, the tribunal wrote to Mr Moran, again by special delivery, advising him that the applicant had asked that he be joined to the proceedings as a co-respondent; he was allowed until 19 January 2018 to comment upon that request.
7. The substance of the letter sent to the primary respondent on 19 December 2017, was as follows: “If you wish to file a defence, you should complete the enclosed form CNA 2 (notice of defence) and return it within one month of the date of this letter, that is on, or before, 19 January 2018. This is in accordance with rules 3(3) and 3(4) of the Company Names Adjudicator Rules 2008. A fee of £150 must accompany form CNA 2 or paid before the expiry of the deadline for the filing of form CNA 2.
Before you decide whether to file a defence, you may wish to refer to The Company Names Tribunal Practice Direction (copy enclosed).
If you choose not to file a form CNA 2 and the £150 fee the adjudicator may treat the application as not being opposed and may make an order under section 73(1) of the Companies Act 2006.
If you decide not to defend your company name, the application will normally succeed. A decision in favour of the applicant will normally include an award of costs in favour of the applicant.
If you inform the tribunal that you did not receive adequate notice that an application would be made before it was filed, the tribunal will normally not award costs to the applicant. If you are not defending the application and you consider that you did not receive adequate notification from the applicant before the filing of the application, you should inform the tribunal on or before the date for the filing of the defence.
Once an order is issued by the tribunal the adjudicator cannot revisit any costs issues.”
8. In an email sent from info@suishare.com on 29 January 2018 (i.e. ten days after the deadline had expired), P. M. Moran (who I infer is the primary respondent’s sole director, Mike Moran), stated:
“Apologies for the late reply to your email of the 19th of December, but the Christmas and new year holidays was the first instance that delayed our receipt of your mail.
As a dormant company (in planning), we are unfortunately additionally not regularly present to receive mail, and in this case were in Russia.
May we please offer our side of this dispute as the issue in question is extremely important from a corporate governance standpoint, and there is now a growing precedent for company based shareholder associations. Additionally we believe if put to a shareholder vote – shareholders after all are the ultimate arbiters – there would be a resounding support for a shareholder association as an enhanced balance in the corporate governance landscape.
Additionally it will embolden companies such as Volkswagen – to cudgel their shareholders from organising to ensure a repeat of the emission cheating scandal. There are many more examples.
Thus may we kindly request time to balance out the assertion that Novartis Shareholders wanting the best for their shareholding interests and the company Novartis may not call themselves what they are, the Novartis Shareholders Association. There are now a growing number of company shareholder associations in Europe that for obvious reasons utilize the company name.
If one discounts the Christmas/New year holiday days we would still be within an appeal timeline if this issue had been raised at any other time of the year.”
9. In official letters of 20 March 2018 sent by ordinary post, (i) the primary respondent was allowed until 3 April 2018 to file a Form CNA5 (to request additional time to file a defence) and, (ii) as Mr Moran had not commented upon the applicant’s request that he be joined as a co-respondent, he was, under the provisions of section 69(3) of the Act, joined to the proceedings. Under the provisions of rule 5(3), he was allowed a period of 14 days to request a hearing to challenge this decision.
10. In official letters of 12 April 2018 sent by ordinary post, the primary respondent and applicant were advised that as no Form CNA5 had been received and no defence filed, the adjudicator may treat the application as not being opposed. The parties were granted a period of 14 days i.e. until 26 April 2018 to request a hearing in relation to this matter.
11. On 25 April 2018, the primary respondent requested a hearing, filing Form CNA4 (accompanied by the official fee of £100) for this purpose. The Form CNA4 was completed by Mr Moran, who states:
“Thank you, your mail [i.e. the official letter of 12 April 2018] reached us this last Thursday evening. The only prior mail was the one of the 19 December 2017 that arrived after your deadline!
The mail of 20 March has been unknown to us until an email from Mr Bentley on the deadline date of 3 April 2018. The Swiss Shareholders Association is a volunteer driven Association, and someone usually checks our inbox every evening.
We can only ascribe missing mails to the fact that being in the same city as Novartis, that mail forwarded to us from London may have been misdirected. If you might please use the email info@suishare.com as a communication channel this would alleviate any future mail issues.
The missing correspondence is an anathema for us, as the Swiss Shareholder Association prides itself on its efficiency and professionalism. Therefore we are ramping up our legal support and paid a visit to our new lawyer in Lincoln Inn on 11 April 2018. He was unfortunately out of the office this Friday last, however, I passed your letter on.
To the issue:
1) We understand that from a name/trademark aspect, the name “Novartis Shareholders Association” is descriptive of the aims/purposes of what the (currently dormant) Association intends to pursue, and thus legitimate.
2) There are many associations already existent globally containing the name “Novartis” and “Association.”
3) There is a lot of precedence already in the UK and Europe for company specific shareholders associations.
4) Additionally, this is surely a shareholder rights issue rather than a naming issue. Shareholders are the ultimate authority and decision makers for a company.
Thank you for persistence and fairness in ensuring that we do receive the appropriate communications and the opportunity to present details as to why the Novartis Shareholders Associations, as well as the concept of company specific Shareholders Associations, will be important in the near future.”
The hearing12. A hearing to discuss the matter took place before me on 30 May 2018, by telephone conference. At the hearing, Mr David Greene of Edwin Coe LLP represented the primary respondent; the applicant was represented by Mr Simon Bentley of Abel & Imray.
13. Although the request for a hearing was made in the correct manner i.e. on the appropriate Form, was accompanied by the correct fee and contained the information reproduced above, it did not explicitly state what action the primary respondent was asking the tribunal to take as a consequence of the information it had provided. At the hearing, Mr...
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