Conflicts between company names and trademarks (or tradenames) are very common and there has always been considerable debate, both in doctrine and in case law, regarding the relationship and differences between the respective concepts and, specifically, regarding the scope of the exclusive rights conferred by a trademark (or tradename) registration with respect to company names that are identical or similar to such signs.

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First of all, it is necessary to identify the differences between the two concepts:

  • A company name is the designation that serves to identify companies in legal affairs (it will normally appear in the company’s documentation concerning its legal relations, such as invoices, contracts, etc.). Company names are registered at the Company Registration Office and their governing rules are set out in the Company Registration Office Regulations.
  • A trademark is the name or sign that serves to identify the goods and services of an undertaking in the marketplace and distinguish them from those of other undertakings, and a tradename is the name or sign that serves to identify an undertaking in the course of trade and distinguish it from others that carry out the same or similar activities in the marketplace. Both are registered at the Spanish Patent and Trademark Office and their registration confers on the owner an exclusive right to use them in trade.

What happens when a company name is identical or similar to a registered trademark or tradename? Does the company name constitute an infringement of the trademark or tradename?

The rules governing such a conflict are set out in the following sections of the Spanish Trademark Act [in Spanish]:

  • 14th Additional provision
  • Article 34

The 14th Additional provision of the Trademark Act establishes a bar to registration aimed at the Company Registration Office: the company registries shall refuse the company name applied for where it is the same as or might give rise to confusion with a reputed trademark or tradename.

In accordance with this provision, it is therefore clear that a new application for a company name cannot conflict with a reputed trademark or tradename. But what happens if the trademark or tradename is not reputed, or if the company name is already registered at the Company Registration Office? Can owners of trademarks or tradenames invoke their exclusive rights to seek the cancellation of the company name or prevent its use?

In these circumstances, it is necessary to rely on Article 34 of the Trademark Act, which is the provision that regulates the rights conferred by a trademark or tradename registration. Under this article, for the owner of the trademark or tradename to be able to prevent a third party from using a sign, various cumulative requirements must be fulfilled, of which, for the purposes of the subject matter at issue, I would highlight the following:

  • the use must be in the course of trade; and
  • it must be in relation to goods or services.

It follows from the above that:

  • The mere registration of a company name at the Company Registration Office does not in itself constitute an infringement of an earlier trademark or tradename registration that the owner of a trademark or tradename registration is entitled to prevent. It is necessary that the company name is used in the course of trade, that is, in the marketplace.
  • Mere use as a company name, that is, for the purpose that it is intended to serve, namely, to identify the company in legal matters, cannot constitute an infringement of an earlier trademark or tradename registration that the owner is entitled to prevent. The use of the company name must be in relation to goods and services.

Thus, it is ultimately an improper use of the company name, given that, as noted above, that is not its intended purpose, which is to identify the company in legal matters.

In summary, the owner of a registered trademark or tradename is entitled to prohibit use of a company name provided that (in addition to other requirements for infringement, such as confusion, etc.) said company name is used: (i) in the course of trade, and (ii) in relation to goods or services. The entitlement to prohibit infringing use of a company name is also expressly provided for in Art. 34.3 (d) of the Trademark Act.

The above parameters and requirements have been confirmed in case law. Particularly well known in this area is the CJEU’s judgment in the case C-17/06 Céline of 11 September 2007, the principles of which remain valid and are applied by the Spanish courts.

Previously published in Economist & Jurist [in Spanish]

Author: María Cadarso

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