Trade Name Law
Written by:
Hein Kernkamp
What is a trade name?
The Dutch Trade Name Act defines the trade name as the name under which a company is run. The Trade Name Act does not set other conditions or requirements. So it is not a requirement to register the name with the Chamber of Commerce or otherwise claim use of the name. The trade name can be descriptive, as long as it does not cause confusion.
Trade name infringement in the Netherlands
By using the trade name, one company differs from another. If that other company uses the same trade name or a very similar trade name, there is a likelihood of confusion. The public thinks that they are dealing with one entrepreneur, while it is the other company that connects to the reputation of its competitor and thus benefits from the reputation of the other company. This is unlawful and contrary to the Trade Name Act. Article 5 of the Trade Name Act states it as follows:
"It is forbidden to use a trade name which, before the company was operated under that name, was already lawfully used by another person, or which deviates only slightly from its trade name, insofar as consequently, in connection with the the nature of the two companies and the place where they are established, there is a risk of public confusion between them. "
So the first user of the trade name has the best right. He must then be able to prove that he has used the trade name lawfully in public before the other person. This use may appear, for example, the letterhead of old stationery, invoices, entries in the telephone directory or on the facade of the company or in other advertisements. Registration of the trade name in the trade register of the Chamber of Commerce also offers a solution here, because it also determines the date on which the registration took place.
Public Confusion Hazard
The purpose of a trade name is to distinguish one business from another, and to protect against confusion in the area where they are active. The law does not require that trade names have distinctive character, as it does with respect to trademarks. The Trade Name Act, introduced in 1921, still allows entrepreneurs to operate a café 'De Oude Sluis' in all kinds of places in the Netherlands, as long as there is no risk of confusion for the public. This becomes more complicated when one of the entrepreneurs starts a franchise chain and formula cafes come up all over the Netherlands and confusion does arise. The oldest café 'De Oude Sluis' then has the right to end the risk of confusion.
If one of the cafes has a website, this does not automatically mean that this entrepreneur also has national protection for his trade name. If customers come mainly from the region where the cafe is located, the trade name is protected in that area.
Infringement of a trade name
If the same or very similar trade names are used and there is confusion among the public, the person with the oldest trade name right can enter summary relief proceedings to prohibit the use of the later trade name. In addition, the company with the oldest trade name can demand that the younger trade name be changed. Finally, it is also possible to claim damages for the infringement of the trade name.
Trade name and trademark law
The proprietor of an earlier mark may prohibit a company from using a comparable younger trade name. The same applies the other way around. A company with an older trade name can object to infringing use of a younger brand. If the conditions for registration are met, a trade name can also be registered as a trademark, which also provides protection under trademark law.
Trade name transfer
Article 2 of the Trade Name Act provides that the trade name is transferred by succession and is subject to transfer, but only in connection with the company, which is operated under that name. It is therefore not possible to sell only the name of the company.
Franchising
In franchising, it is precisely the intention that another entrepreneur gets the right to use the other entrepreneur's trade name (and formula). Therefore, use of the trade name is lawful and permitted for the duration of the franchise agreement. The franchise agreement governs how the trade name may (and should) be used and how this use ends, usually at the end of the franchise agreement.
How long are trade name rights valid?
A trade name is valid for as long as it is demonstrably used. If the trade name is no longer being used, the right to it elapses.
Consult a knowledgeable lawyer
Our lawyers can provide you with further information about what trade name law means in your situation. We can work with you to determine whether the infringement has occurred and whether the infringement justifies taking legal action by you or your competitor. Mail or call us for a non-binding informative meeting, in which we can indicate what we can do for you. We like to help you. It is not without reason that our motto is: "Your problem, our concern."
More information?
Hein Kernkamp will gladly help you further.
