Trade mark, trade name and company name: what to register, and where

Trade mark, trade name and company name are three separate legal concepts, kept in different registers and producing different effects, and confusing them is behind a large share of the disputes businesses have over the use of a name. Reserving a company name at the Central Commercial Register grants no trade mark rights; registering a trade mark at the Spanish Patent and Trade Mark Office does not reserve the company's corporate name. We set out what each one identifies, where it is registered and what is worth registering.

What does each one identify, and where does it live?

A trade mark is, under article 4 of Law 17/2001 of 7 December on Trade Marks, a sign capable of "distinguishing the goods or services of one undertaking from those of other undertakings" and of being represented on the Register of Trade Marks so that the subject matter of the protection is clear and precise. It identifies what is offered to the market.

A trade name (nombre comercial) is, under article 87.1 of the Trade Marks Act, the sign "which identifies an undertaking in the course of trade and serves to distinguish it from other undertakings carrying on identical or similar activities": it identifies who is offering, not what is offered. Article 87.2 expressly allows corporate names and the names of legal persons to serve as trade names, which accounts for much of the confusion. Both are industrial property rights and share a register: article 1 of the Trade Marks Act provides for those two categories only, entered on the Register of Trade Marks, which is single for the whole country and kept by the Spanish Patent and Trade Mark Office (OEPM).

The company name (denominación social) belongs to a different family: it is the name of the legal person and lives in another register, the Names Section of the Central Commercial Register, which under article 395 of the Commercial Register Regulations (Royal Decree 1784/1996) contains the names of registered entities and those temporarily reserved. A company may have only one, under article 398.1 of the same Regulations.

Why does reserving a company name not protect the name?

Because the Central Commercial Register's screening is for identity, not for likelihood of confusion. Article 407 of the Commercial Register Regulations bars the registration of companies whose name is identical to one already in the Names Section, and article 408 defines that identity through an exhaustive list: full coincidence; the same words in a different order, gender or number; the addition or removal of generic terms and insignificant particles; and different words with marked phonetic similarity. Article 7.1 of the Companies Act likewise only prohibits a name identical to that of a pre-existing company. No deed of incorporation may be executed without the Central Commercial Register's certificate, under articles 409 and 413 of the Commercial Register Regulations; the reservation lasts six months and the certificate three, under articles 412.1 and 414.1 of the same Regulations.

Two consequences follow, and they surprise business owners. First, two companies with very similar names may coexist without any registry obstacle if there is no identity within the meaning of article 408, because the Central Commercial Register does not examine the sector in which each of them operates. Second, and more expensively, the reservation does not prevent a third party from registering that same name as a trade mark.

The only industrial property filter that applies when a company name is granted is a narrow one: the fourteenth additional provision of the Trade Marks Act requires the competent registries to refuse a corporate name if it coincides with, or may cause confusion with, a trade mark or trade name with a reputation, unless the owner consents. The reverse is no easier: article 9.1(d) of the Trade Marks Act allows a company name to be relied on in opposition to a later trade mark, but requires evidence of "use or well-known character of those signs throughout the national territory", a burden of proof that a locally established company will rarely discharge.

What exactly does a trade mark protect against someone using your name?

Article 34 of the Trade Marks Act grants the proprietor an exclusive right and entitles it to prevent any third party from using, in the course of trade, an identical sign for identical goods or services, or a similar sign where there is a likelihood of confusion; where the mark has a reputation in Spain, the prohibition extends even to dissimilar goods where use without due cause takes unfair advantage of, or is detrimental to, its distinctive character or reputation. What matters most, however, is article 34.3, which lists what may be prohibited in particular. Point (d) allows the proprietor to prohibit "using the sign as a trade name or company name, or as part of a trade name or company name"; point (e), "using the sign on business papers and in advertising"; and point (f), using it "on telematic communication networks and as a domain name". A trade mark therefore covers ground that a company name does not cover at all.

That scope comes with a judicial qualification. In its judgment of 11 September 2007 (Grand Chamber), Case C-17/06, Céline (ECLI:EU:C:2007:497), the Court of Justice of the European Union held that the unauthorised use by a third party of a company name, trade name or shop name identical to an earlier mark, in connection with the marketing of goods identical to those for which the mark was registered, may be prohibited where it amounts to use in relation to goods which affects or is liable to affect the functions of the mark, and is saved only where it is in accordance with honest practices in industrial or commercial matters. The dispute is therefore decided not by the fact that a name appears on the Commercial Register, but by how it is used in the market. The consequence of losing is fixed by statute: under the seventeenth additional provision of the Trade Marks Act, if a judgment for trade mark infringement orders a change of company name and it is not carried out within one year, the company is dissolved by operation of law and the Commercial Registrar cancels its entry of its own motion.

Is it worth registering the trade name as well?

Its regime brings it close to a trade mark without matching its reach. Article 90 grants the exclusive right to use it in the course of trade and article 87.3 applies the rules on trade marks in so far as they are compatible with its nature: hence article 89 requires activities to be grouped in classes, with the same fees as trade marks, and article 91 provides for invalidity and revocation on the same grounds, genuine use included.

At equal cost and procedure, a trade mark offers two decisive advantages. The first concerns content: the ius prohibendi (the right to prevent third parties from using the sign) under article 34 extends to use of the sign as a trade name or company name, on business papers and in advertising, so the mark also covers the ground proper to a trade name. The second is territorial: Regulation (EU) 2017/1001 creates a right with unitary character throughout the Union, under its article 1.2, whereas the trade name is a purely Spanish figure with no unitary European equivalent. By default, therefore, we advise prioritising trade mark registration; the technical criteria behind that choice — distinctiveness, earlier rights, classes and territorial scope — are developed in our guide on registering a trade mark in Spain.

Decide also in whose name to register: a trade mark may be jointly owned pro indiviso by several persons, under article 46.1 of the Trade Marks Act, but registering it in the company's name prevents a departing shareholder from taking the business's sign with them.

What became of the shop sign?

It ceased to exist as a registrable category: article 1 of the Trade Marks Act recognises only trade marks and trade names. Its third transitional provision ordered the phased extinction of shop signs already granted — once their registration expired, the entry is "definitively cancelled", with a referral to the unfair competition rules in articles 6 and 12 of Law 3/1991 — and the fourth preserved a limited off-register protection confined to the municipality. Today a shop front is protected by registering the sign as a trade mark, whether word, figurative or composite.

How we can help with trade mark and trade name registration at RCM Legal

Two situations recur, and both cost money. The first: a company is incorporated under a given name, invests in signage, a domain and advertising, and then discovers that a third party holds that very expression as a registered trade mark in its sector; the outcome may be a cease-and-desist letter, litigation and an order to change its name. The second is the mirror image: a business registers its trade mark and later finds that another company has entered the Commercial Register under an almost identical name, because the identity filter does not examine likelihood of confusion or the field of activity.

At RCM Legal we settle that decision before it becomes a problem: we check availability in both registers — the OEPM Register of Trade Marks and the Names Section of the Central Commercial Register — decide with you what to register and with what territorial scope, file the application before the OEPM or the EUIPO and, where a conflict arises, file opposition or bring the actions available under article 34 of the Trade Marks Act. As lawyers specialising in industrial property and commercial law in Murcia, if you are about to incorporate a company or launch a brand, tell us about your case and we will tell you what to register, and where.