According to article 1 of the Dutch Trade Name Law a trade name is nothing more than the name under which a business is conducted. To avoid misleading or confusing of the public, the Trade Name Law protects the undertaker. This means that another company is not allowed to use the same or a similar name if the risk of confusion exists.
A trade name does not need to be registered in the (Dutch) Trade Register in order to be protected; the undertaker who uses the name first can invoke the protection. The name has to be effectively been used in public though. Forms of public use are the mentioning of the name on stationary, display at the company’s premises or in advertisement.
A name has to comply with certain rules before it is protected. Firstly, it is prohibited to use a trade name that is misleading about the legal entity of the company. A sole trader, for example, cannot use the word “limited” in his trade name. Nor can the name be misleading about the nature of products or services (Billy Beef Burgers is misleading when –deliberately- selling horse meat burgers). And, obviously, a trade name cannot be already in use by someone else.
What if you find out another company is using the same name as yours? Provided of course that you are the first one using this name, you can take enforcement measures against the other company. But for a successful action you must prove that there is a risk of confusion of the public. Whether this is the case need to be assessed by looking at different aspects: are the companies trading similar businesses? A pet shop with the same name as an accountancy firm is unlikely going to cause confusion. And the fact that a trade name is only known in a specific region or town also matters. Chinese restaurant The Blue Lotus in the north of the Netherlands will not likely cause confusion among the clientele of the Chinese restaurant with the same name in the south of the Netherlands. But it all depends on the circumstances.
Sometimes a trade name is a trademark as well. Trademarks are separately protected by trademark rights but only if the trademark in question is registered. A trade name is transferable, e.g. in case a company is sold. You can also license a trade name, which is commonly done in franchising programs when the franchiser is granted the right to use a trade name (like the McDonalds formula). For more information on how to protect your trade name, expert advise in choosing a trade name and what to do in case of infringement of your rights, please feel free to contact on of our lawyers Intellectual Property.