The law distinguishes between the two: a TRADENAME relates to a company’s official name, but a TRADEMARK provides legal protection to a company’s brand and image.
The legal definition of intellectual property rights has been expanded over time by the addition of new terms. The phrase “Trade Name” is one of these additions. A trade name is typically defined as the name of an organisation or an individual that is used in business operations to set that corporate entity apart from others operating in the same industry. For instance, the massive cola company Pepsi is established under the trade name “PepsiCo.”
The World Intellectual Property Office (WIPO) states that the following requirements must typically be met by a trade name:
- It should consist of a proper name, except where it has been widely known as a result of use;
- It is not identical with or confusingly similar to another person’s Trade Name prior used in the same field and locality of business; and;
- It is not identical with or confusingly similar to another person’s trademark or a geographical indication having been protected prior to the date such Trade Name is used.
Benefits for Registering a Tradename.
A Trade Name does not afford any brand name protection or provide you with unlimited rights for the use of that name. However, registering a Trade Name is an important step for providing protection to the same. A Trade Mark affords protection to your brand name. In most of the cases, for a company, the Trade Name often becomes its Trade Mark.
- Offers Privacy: It gives the owner, especially a lone proprietor, privacy. Even though they must use the corporate name, having a trading name allows them to conduct business while maintaining their anonymity.
- Flexibility: It gives the business flexibility because different goods or business types can be divided within a corporation by using distinct trade names.
- Enhanced Worth: It increases the perceived value of the goods and can shield the brand name from unfavourable publicity.
As a general rule, you should avoid choosing a Tradename for your business or organisation that is confusingly similar to one that is already being used by another entity in a comparable industry. Since there was minimal possibility that customers would confuse the two, Due to a legal doctrine known as “anti-dilution,” the owner of a well-known trademark/tradename may prevent you from using it in any industry, including one that is unrelated to your own.
Traditionally, the law permitted multiple companies to use a given tradename in different geographical areas of the country, but the global nature of the Internet breaks down the importance of geographical isolation and makes it more likely that an Internet use of a tradename or trademark could be confusing regardless of where the businesses or organizations are physically located.
Therefore, even if the other person or organisation is far away from you, you should usually avoid using a tradename and or tradename that is the same as or similar to one used by someone else.
The difference between trade names and trademarks is that when a corporate entity starts using its trade name to identify goods and services, the trade name is acting as a trademark. In these situations, extreme caution must be exercised to ensure that the “new trade mark” (i.e., the trade name) does not infringe on any already-existing trade names or well-known marks.
Protection of Unregistered Trade Names in India: Passing Off Action
The trade name, which is protected by law, is frequently linked to the reputation or goodwill of the Businesses. As law puts it – “no man is entitled to carry on his business in such a way as to represent that it is the business of another, or is in any way connected to the business of another.”
The law of passing off applies whenever there is the prospect of confusion between two Tradenames or Trademarks and trade dress or where there is the prospect of confusion of identity through the unauthorised use of similar Tradenames or Trademarks or trade dress. The main function of Passing Off is to act as a remedy for unregistered Trade Names in cases of deception or confusion.
In a passing off action, the registration of similar tradename or a similar trademark is irrelevant. Here, the priority in adoption and use of Tradename or the trademark is superior to priority in registration. Generally, protection against passing off of goods/services is granted where the parties are engaged in the trade of the same or similar products or closely related products and services. The essential elements to avail the remedy of passing off are:
- Goodwill: Plaintiff is required to establish before court his goodwill or reputation
- Misrepresentation: Plaintiff needs to demonstrate a misrepresentation by the defendant
- Damage: Plaintiff to demonstrate that he suffered or he is likely to suffer damages by reason of defendant’s misrepresentation
Sometimes, companies or people using trade names may not be aware that doing business under their company name could violate the rights of others to their trade name or any registered trade mark. A firm or company may be forced to stop using its Trade Name if it infringes on another person’s registered Trade Mark or well-known Trade Name. The market reputation may suffer as a result of this. A firm or company will also need to rebrand, which will inevitably cost a lot of money. Furthermore, the firm or company can even be required to compensate the party whose rights were violated.
If your business name/tradename and trademark is valuable to you, please feel free to connect with us for more information and details.
If you have further questions about your Intellectual Property Rights and Legal Rights, please contact us at firstname.lastname@example.org and we will be happy to assist you.