Trademarks and business names: Similarities and differences
In resolving a conflict between a trademark and a business name, what will essentially be decisive is who first used the disputed designation. The true subject of the business will also be relevant.
A trademark is a designation that can be presented in graphic form and is used on goods to identify the undertaking that is the source of the goods. It might be a word, a logo, a spatial form, a melody or sound. A trademark is an incredibly important instrument for communicating between businesses and consumers in the contemporary economy. It is also popularly known as a brand.
The primary function of a trademark is to distinguish goods coming from one undertaking from those coming from another undertaking. Trademark regulations seek to avoid situations where consumers are confused, concluding because the goods are similar or identical that they come from one undertaking, when they actually come from another. The regulations are also designed to prevent situations where the designations may not be confusing, but give the impression that the undertakings are somehow affiliated when in fact they are not. Thus a trademark that conflicts with the moral or economic rights of a third party, e.g. the rights to a business name, can be invalidated at the request of the other person due to a risk of confusion.
Consumers encountering a trademark they already know automatically imagine the quality and properties of the goods bearing that label. Their imagination is stirred by earlier experiences with such goods. Thus by using a trademark for products over the years, so consumers grow accustomed to the mark and the products labelled with it, an undertaking can build a recognisable, highly attractive brand with great distinguishing power. The value of such a trademark becomes one of the key assets of the enterprise.
The register of trademarks protected in Poland is maintained by the Polish Patent Office for national marks, the World Intellectual Property Organisation for international marks, and the European Union Intellectual Property Office for EU trademarks. The rights to a trademark that is registered arise upon filing.
A business name is nothing but the designation under which an undertaking operates. Here it should only be stressed that a business name must not be misleading, and should be distinguished from the name of an enterprise. A single undertaking can have only one business name, but it can operate several enterprises under various names.
But there is no register of business names as such. In the case of individuals (sole traders and ordinary partnerships of individuals), their businesses and names are entered in Poland’s Central Evidence and Information on Business (CEIDG), and in the case of legal persons and organisational units their businesses and names are entered in the commercial register of the National Court Register. While there is no doubt that protection of the right to a business name can be sought from the time the right arises, the time when the right to a business name arises is not so clear. Legal commentators predominantly take the view that the right to a business name and protection of the business name arises when the use of the business name begins (and thus can arise before the undertaking is entered in CEIDG or the commercial register). Accepting the view in the legal literature, it should also be recognised that the scope of protection of the right to a business name depends on the market where the name is used.
Trademark v company name
It may be said that the fundamental difference between a trademark and a business name is that a trademark individualises and distinguishes products, and a business name does that for undertakings. But often the name of an undertaking overlaps with a trademark registered and used by the undertaking. Then the differences in the roles they play can blur. For example, the owner of the verbal trademark Coca-Cola is the Coca-Cola Company.
In the case of a conflict between a trademark and a business name, time is the decisive factor. The rule is first in time, first in right. This helps avoid the risk of consumer confusion. A designation used as a business name or trademark, already functioning on the market and known to consumers, should not be copied and exploited by other undertakings, because consumers could confuse the undertakings or their products.
What if a trademark is the same as the name of another business?
Essentially, if a trademark was registered earlier than a business name, the owner of the mark will acquire the rights. If the business name is registered first, the proprietor of the business name will have the right to use that designation.
This was confirmed in the recent judgment by the Court of Justice of the European Union of 5 April 2017 in Case C-598/14 P, EUIPO v Szajner. On 17 January 2005, Gilbert Szajner registered the verbal trademark Laguiole for nine classes of goods and services. A French company operating under the name Forge de Laguiole, manufacturing and marketing a range of knives and other tableware, applied for invalidation of the trademark, relying on its rights to its business name. It was found in the proceeding that before filing of the Laguiole trademark, Forge de Laguiole had operated a business trading in virtually all of the goods and services covered by the trademark application, apart from telecommunications services in class 38. Consequently, the General Court held that Szajner was entitled to the Laguiole trademark only for services in class 38. Otherwise, the trademark had to be invalidated because the goods and services for which it was registered overlapped with business actually conducted earlier by Forge de Laguiole. The court stressed that the actual business was decisive, rather than the types of operations listed in the articles of association as the company’s authorised corporate purposes. This position was upheld on appeal by the Court of Justice.
Business name, enterprise name, trademark: these designations are often erroneously used interchangeably in practice and colloquially. This happens because undertakings often use the same designation in all of these forms. It is vital that undertakings use their designations with proper awareness and manage their intellectual property rights to make the most effective use of them and to maintain the right to use them in the future, as the character in which a designation is used will determine the scope of its protection.
Cases in which two different undertakings use the same designation, each in a different character, can be ambiguous. Most importantly, in the event of a dispute the undertaking must be in a position to demonstrate its priority in time.
Ewa Górnisiewicz-Kaczor, Intellectual Property practice, Wardyński & Partners