Often, during scrutiny and examination of an intellectual property portfolio, trade names will be found among the trademarks. Although these assets are similar, their purpose is not identical, and this fact should be taken into consideration when designing an effective protective strategy to ensure that the rights in these signs are enforced in respect of third parties..

It is not uncommon when reviewing a client’s intellectual property portfolio to find distinctive signs which in Spain are protected by trade names rather than trademarks. Therefore, first of all, it is important to distinguish them correctly.

A trademark is a distinctive sign which identifies the goods and services of a company, and differentiates them from those of competitors, whereas a trade name identifies a company operating in trade and serves to distinguish it from other companies carrying out identical or similar activities. Furthermore, it is important to bear in mind that a trade name is not equivalent to a corporate name.

Trade names are described in Trademark Law 17/2001, of 7 December 01 (Trademark Law) and were also defined as a distinctive sign in the preceding law on trademarks. Nevertheless, current regulation of this distinctive sign has approximated trade names to trademarks, including application of the International Classification of Goods and Services to this mode of registration. As with trademarks, the rights in a trade name are acquired through valid registration, so that mere use of the sign, barring a scant handful of exceptions, does not serve to protect it.

From a strategic perspective, and when analyzing a trademark portfolio, it is important to take into account that trade names grant protection against subsequent third party applications, for example, trademarks, thus helping to maintain the exclusive rights granted. In particular, article 7.1 of the Trademark Law states as follows:

“The following may not be registered as trademarks:

  1. a) Signs that are identical to a prior trade name that covers identical activities to the goods or services for which the trademark was filed.
  2. b) Signs that are identical or similar to a prior trademark and, since the goods or services which they designate are identical or similar, there is a likelihood of confusion among the public; the likelihood of confusion includes the likelihood of association with the prior trade name.”

Given this context, in an administrative opposition procedure filed at the Spanish Patents and Trademarks Office (OEPM) it could be said that there is no variation between the protection and defense of the rights granted under a trade name and those granted to a trademark, either in content or procedure. That is, it is possible to defend the rights of an earlier trade name in respect of a subsequent trademark application which is identical or similar to the point where it could give rise to confusion with the trade name.

However, the situation differs with European Union Trademarks, and the corresponding application procedures at the European Union Intellectual Property Office (EUIPO). Regulation (EU) of the European Parliament and of the Council of 14 June 2017 on the European Union trademark (EUTMR) recognizes trade names as a prior right within a member state which may serve as the basis for an opposition to an EU trademark filing, but with some specific conditions that do not apply when the opposition is based on a registered trademark or an application in another member state. European legislation does not enumerate or indicate the type of prior rights that can be used as the basis for an opposition in member states that differ from those of the trademarks, however it does include protection of Spanish trade names in the event of EU trademark applications, provided that they fulfil and attest to the following conditions:

  1. Firstly, and from a merely formal perspective, when filing an opposition at the EUIPO, the opponent must inform the Office of the applicable national right regulating protection of the sign in question, in this case a trade name, which is the right intended to prevent use of a later trademark application in accordance with national regulations;
  2. Secondly, irrespective of the period of time that the trade name has been registered, it will be necessary to prove that said trade name is being used in trade. In the case of a trademark, the holder of the prior right would not have to provide proof of use of said mark unless the opponent requires it do so and its trademark has been registered for more than five years.

Proof of use does not differ from that required of a trademark in respect of the means and material evidence that may be submitted in similar circumstances. However, European regulations establish an additional requirement which is that use of the trade name in trade should not be confined to an exclusively local scope. Although this criterion does not solely imply a geographic examination, and other factors are involved such as the financial impact of the sign, the intensity of use or advertising, it is in fulfilling this criterion that the holders of trade names may sometimes encounter difficulties when claiming their prior rights. In practice, decisions at a European level generally fail to recognize use in one city, region or province alone as valid, despite such use being extensive.

As we have indicated, trade names are distinctive signs that identify a company in trade and which serve to distinguish it from other companies, and it has been common practice for businesses operating exclusively in limited territories within Spain’s geographical scope to obtain and register a trade name. Therefore, in order to adequately protect industrial property rights, not only trademarks, but also trade names should be taken into account, and it might be a good idea, aside from maintenance requirements, to file an application for a trademark identical to the sign in question, as among other reasons, this would facilitate any actions against similar trademarks detected at a European level, and in this way it would be possible to ensure adequate protection of a portfolio of distinctive signs.