The IP Commercial & Corporate Team of Chang Tsi recently achieved a significant victory by successfully representing a prominent domestic food and beverage company in a company name complaint against a maliciously imitative "shadow company" in Hong Kong. This complaint has been acknowledged by the Hong Kong Companies Registry, safeguarding the client's legitimate rights and interests.

Hong Kong's relatively relaxed rules for company name registrations and the low registration fees make it an attractive target for unscrupulous individuals and entities. They often establish companies with names that closely resemble those of well-known brands and companies, creating "shadow companies." This may mislead the public into believing these shadow companies are associated with the established brands and companies. Operators of these shadow companies frequently use the similar names on their products and services to unfairly capitalize on the goodwill of the reputable companies.

Under the Companies Ordinance (Cap. 622), companies that have been imitated can seek administrative remedies. Upon identifying potential indications of “shadow companies,” the Chant Tsi team immediately conducted a thorough assessment and reported to the client. Leveraging their extensive experience with similar complaints, the team swiftly gathered and organized evidence related to the client's and its affiliated companies' names and good will. Despite the limited time available to obtain a name change directive, the team efficiently submitted the complaint materials and engaged in multiple rounds of communication with the relevant department of the Companies Registry. Their efforts successfully persuaded the Registry to recognize the complaint. In less than a month, the team secured a name change directive from the Registrar for the client.

The client, a historically renowned food and beverage company, has maintained a high market share and stellar reputation for decades. Its products are exported worldwide, making it a model for Chinese brand building. The successful complaint has effectively protected the client's reputation and legal rights concerning its company name. Additionally, it has significantly aided in combating the production and sale of counterfeit products by the shadow company. By ordering the name change, the production and sale of products bearing the counterfeit company name can be effectively halted, providing strong evidence of malicious infringement for subsequent enforcement actions. This complaint not only safeguarded the client’s brand image but also further consolidated its leadership position in the market.

The Chang Tsi team also advises rights holders to monitor for shadow companies and take proactive measures against the imitation of company names. This is essential to protect their own reputation and interests, as well as the rights of consumers and the public. Compared to litigation, filing a complaint with the Companies Registry can achieve effective relief more quickly and at a lower cost, making it the optimal choice for rights holders. According to the Companies Ordinance, the Registrar can issue a written notice within 12 months of the shadow company’s name registration, instructing the company to change its name. To ensure the Registry has sufficient time to review the complaint materials, it is recommended that rights holders submit the relevant complaints within 10 to 11 months of the shadow company's registration date to avoid missing the optimal relief window.