Doing business under your own name

In general, everyone is free to conduct his business under his own name. It is a common practice that entrepreneurs choose their own name as denomination of their company.

This raises the question to which level the use of a family name is protected and to which level this use could be prohibited by third parties.

Obviously, every company is obligated to carry a name. In this regard, it is allowed to use the family name officially as the company name. Furthermore, the family name can be used as a trade-name, and moreover it is also possible to register the family name as a trademark. The choice of protection, which shall be attributed to the family name will depend on the function that the name has to carry out during the course of trade. In other words, if a company rather wants to make itself known to the public, it will opt for a trade-name. If the company however wants to bring its specific products or services into the market under its own name, the choice of trademark will be more logical. Evidently, a combination of both is also possible.

Finally, chances are that a third party with the same family name has also the intention to carry out his activities under his name. The main question is whether this can be prevented by the first user or trademark owner, or to which extent this has to be tolerated by them.

1.    Own name as company name

By virtue of article 65 Belgian Code of Companies, every company has to carry a name, different from other companies. This article allows all parties concerned to ask the name change of a company, which violates this principle. Before the entry into force of this article, a limited liability company was prohibited to make use of the family names of its shareholders. In practice however, it became quite clear that everyone ignored this particular rule. Hence, the legislator dropped this ban. Nonetheless, it should be noted that regarding other kind of companies, such as the limited partnerships, the use of family name is still subjected to specific regulations.

2.         Own name as trade-name

A trade-name can be defined as the name under which a company is known to the public, and under which it conducts its business. It is sort of the first sign of the company. There is no obstacle to use the family name as trade- name. The right of protection starts by first use, which has been made of the name, without fulfilling any formality in this regard. At that moment, the name obtains an economical value, and as a result, a company will even be able to transfer the name.

In general, it is possible that a competitor, carrying the same family name, applies it as well to conduct its business. The use of a family name can only be limited if it would cause confusion in the minds of the public. Three risk factors are being taken into consideration in order to determine whether or not the public might have been confused. More specific, it concerns the degree of resemblance between the trade-names, the nature of the commercial activities of both companies and the territory on which their actvities are being carried out.

Consequently, the last user will have to supplement enough elements to his name in order to prevent the danger of confusion by the public, and he has to retain from using certain elements, which are already part of the name of the first user. In the assessment of both names, attention will also be paid to the total impression raised by the trade-names. In this regard, it has been decided that the addition to the name of “& Sons” does not automatically suffice to prevent confusion.

In sum, a trader is justified to use his family name as trade-name, provided that the necessary steps are being taken in order to exclude all confusion with identical names.

3.         Own name as trademark

Where a trade-name rather serves as the sign of the company, a trademark is used to identify certain products or services of the company. Just as a family name can be applied as a trade-name, it is eligible for registration as a trademark as well. This however implies that the specific trademark regulation has to be respected, and thus that the family name is required to have a distinctive character.

In practice, it is not unthinkable that different persons with the same name share the intention to use it to launch their products or services.

In order to make this possible, the so-called own-name defense has been foreseen, on the basis of which a trademark owner principally is not entitled to prohibit a third party from using his own name, provided he uses it in accordance with honest practices. Hence, it is basically not possible to monopolize a certain family name, simply by protecting it as a trademark.

Although, a couple of ground rules have to be respected. First of all, it has to be the name of the concerning third party. After all, it can be regarded as illegitimate to register someone else’s name as trademark. Subsequently, the confusion criterion applies as well. The impression cannot be raised that there would be a commercial connection between the user of that particular name and the trademark. Moreover, the user has to make sure he does not gain an unfair advantage from the distinctive character of the trademark, nor harms the reputation of the trademark.

If these principles are being respected, one is allowed to use his family name in his sole discretion.

28 September 2012

Griet Verfaillie - griet.verfaillie@peeters-law.be
Lynn Pype - lynn.pype@peeters-law.be

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