Trade names

A trade name is the name which a company trades under. Often companies use the family name of its founder but nowadays all kind of trade names are being used.

The Dutch Trade Name Act (Handelsnaamwet) contains the rights and obligations regarding the use of trade names. In principal a company is free to choose its own trade name. However, there are certain limitations in the form of prohibitions such as the prohibition to use a trade name that is or can be misleading e.g. about the ownership and/or the legal form of the entity.

It is also important to realize that a trade name is connected to a company and therefore a trade name cannot be sold separately.

By far most disputes about trade names have to do with third parties using a trade name that is similar to or resembles an already existing trade name. If indeed a fear for confusion exists a company can take legal action. For instance:

Optician J. Jansen can (under certain circumstances) oppose to the use of the trade name “Optician Janssen” if such use could lead to confusion.

As far as the circumstances are concerned, the place of business is an important factor. Two (almost) identical trade names in the same (small) town will more likely lead to confusion compared to the same situation in a big city or in an entirely different part of the country.

Another important characteristic of trade names is that the names do not need to be distinctive in any way. This is different from for instance the situation regarding trade marks. A pure descriptive trade name such as “Optician Jansen” does have the disadvantage that the scope of protection is very limited.

At the time the Dutch Trade Name Act was put on paper it was not foreseeable that the criterion of the ‘place of business’ would become of minor importance due to modern means of communication such as the Internet. The Internet and in particular search engines, such as Google, produce results on a national or international level, increasing therewith the possible danger of confusion.

With the increased use of the Internet and domain names, the number of legal disputes regarding trade names has also increased. Although a domain name itself is in principle only an address of a certain domain, the main reason for the increasing number of disputes is that trade names are often used by means of domain names.

Furthermore the Dutch Trade Name Act forbids the use of trade names that are identical to or resemble already existing (older) trade marks if confusion regarding the origin of the merchandise may exist. The use of a trade name can be forbidden. However, an older trade name does not need to give way to a younger trade mark.

In case trade name rights are violated there are several legal options. It is possible to demand a change of the other party’s trade name, but it is also possible to command summary proceedings, for instance when it (also) concerns an infringement of existing older trade mark.

The lawyers of Fruytier Lawyers in Business can advice you on these matters. Please contact Mr. M.N. van Hasselt via mvanhasselt@flib.nl or Mrs. N.Y. Wong via nwong@flib.nl for questions and/or advice on trade names.

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