What is the difference between trademark and trade name?

Whenever a person wishes to register a company, the representatives of the National Trade Registry Office will request for a registration name and will check the availability of such name in the county where the company is to be registered. This is the trade name. Unlike the trade name, the registration of the company name as a trademark is not compulsory, but by means of the trademark, the owner ensures that no other competitor will sell identical or similar goods or services under the same name. In other words, by registering the trademark, the trademark owner ensures that it is unique in a given market.

Recently, the High Court of Cassation and Justice ruled on the distinction between the two elements. The conclusion of the court was as follows: the fact that the trade name and the trademark include an identical phrase cannot automatically lead to the conclusion that there is an infringement of the exclusive right to the trademark. The owner of the trademark has the obligation to prove that all the cumulative conditions laid down by the relevant legislation have been fulfilled.

By its action, the plaintiff asked the court to find that the defendant, which had a trade name similar to the trademark, had infringed its trademark rights. In this respect, the following arguments were put forward: (i) the services offered by the defendant company are similar; (ii) a phrase in the defendant company’s name is similar to that in the plaintiff’s name, which is likely to cause confusion; and (iii) the plaintiff’s trademark has a distinctive design, and the defendant does not have a logo or other elements that may differentiate the defendant’s name, in order to avoid confusion.

All the courts (both the lower and the higher courts) dismissed the plaintiff’s action and found that there was no infringement of the trademark right. The High Court held that the only evidence of infringement of the exclusive right to the trademark is the existence of a similarity between the names of the two companies. That was not sufficient to establish infringement.

In order to hold that there has been an infringement of the exclusive trademark right, the person concerned must prove that the trade name has been used as a trademark. More specifically, it must be shown that the name was used for the purpose of indicating the origin of the goods and services (i.e., for the purpose of creating a link between the trade name and the goods marketed or the services provided). According to the High Court, in so far as the person concerned is unable to prove this, there is no need to verify the other conditions laid down by the law.

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