Trade Name Law

Every company has at least one: a so-called trade name. But how can you protect your trade name and when can you take action against infringement? 

When is a Trade Name Protected?

The Trade Name Act states:

“According to this law, trade name is defined as the name under which a company is run.”

Think for example of:

  • The name that is registered with the Chamber of Commerce;
  • The name used on the website or the domain name;
  • The name used in e-mail addresses;
  • The name on the facade;
  • The name the company uses on social media;
  • The name on the stationary;
  • The name that is mentioned when the phone is answered; 
  • The name used on business cards or, for example, the menu.

Note: A company can also have multiple trade names.

As soon as a company is run under a certain trade name, that trade name is protected. The trade name does not need to be registered in order to be protected by the Trade Name Act. By using the trade name, the name is protected.

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When is there an Infringement?

The Trade Name Act states that action can be taken against an identical trade name or against a trade name that differs slightly from the older trade name.

However, there is a very important requirement: There is only an infringement if there is confusion among the public between the two companies, given the nature of the two companies and where they are located.

Confusion

Whether there is confusion must, therefore, be determined by the following:

1: The Public

“The public” means the target group of the company. Whether there is confusion must be judged from the perception of this audience.

2: Nature

The “nature of the companies” means that the products of both companies or the services of both companies must be considered. If these are the same, matched or used together, they are more likely to be confused than if they are not.

3: The place where the companies are established

If one restaurant is located in Groningen and the other restaurant in Maastricht, confusion will not easily be assumed. It is important here what the so-called scope of the company is. Some companies focus on the whole of the Netherlands and some companies only on the local customer. If a company focuses on the whole of the Netherlands (for example an advertising agency from Amsterdam also targets the entrepreneurs in Brabant through its website), an advertising agency from Brabant can also infringe the trade name law of the company from Amsterdam.

Other circumstances may also play a role, such as the reputation of the older trade name or the design of the trade names.

Descriptive Trade Name

A descriptive trade name (for example “De Bakker” for a baker) may also be protected. This does, however, affect the extent of the protection, because it must be prevented that commonly used words are not monopolized (see ground 4.17 of this ruling). However, when there is an infringement, in that case, is not entirely clear. The Arnhem-Leeuwarden Court has therefore asked the Supreme Court to clarify this. So we have to wait and see.

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Enforcement

If there is indeed a trade name infringement, the company with the oldest trade name can claim that:

  • the other party is prohibited from using its trade name;
  • the other party must pay compensation;
  • the other party must prevent further infringement
  • the other party must reimburse the (reasonable and proportionate) legal costs of the company with the oldest trade name.
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Older Trade Name vs. Younger Trade or Other Name

Imagine the following situation: A company with an older trade name wants to take action against a younger trade name. However, another situation may also arise: The company with an older trade name wants to take action against the use of a younger brand. In that case, one cannot rely on trademark law or trade name law, but on the additional protection provided by Section 6: 162 of the Dutch Civil Code.

If the company with an (old) trade name wants to take action against a younger name that cannot be qualified as a trade name or brand, such as the name of a political party, this also goes through Section 6: 162 of the Dutch Civil Code. 

Older Brand vs Younger Trade Name

However, if the trade name is younger / newer than an older / existing brand, the trademark owner can probably take action against this trade name. See article 5a of the Trade Name Act and our blogs on trademark law.

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Specialist

Whether a trade name is protected and whether there is an infringement is unfortunately not an exact science. It is therefore advisable to be properly informed by a specialist before taking action.

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