Trade Name and Its Protection: What You Should Know
Trade Name and Its Protection: What You Should Know
When starting a business, choosing a name can feel like a purely creative decision. In reality, a trade name is much more than that: it identifies the company in the marketplace, and the exclusive right to it means that no other company may use a confusingly similar name. Trade names are therefore subject to more regulation than many expect, and it is worth familiarising oneself with the rules well in advance.
What is a Trade Name?
A trade name is the name a company uses when conducting its business in the marketplace. Limited liability companies, cooperatives and other entities all have trade names, just as sole proprietors do. Exclusive rights to a trade name in Finland can be obtained either by registering it in the Trade Register maintained by the Finnish Patent and Registration Office or by establishing it through use.
Establishing a trade name through use requires the company to use the name for long enough and extensively enough for it to become generally known in its field. It should be noted that protection gained through use is territorial, and it only covers the area in which the name has become known through use.
Registration is a considerably more effective means of protection than establishing a trade name through use, as a registered trade name enjoys protection throughout Finland. A trade name is usually registered when the company is incorporated. A registered trade name remains in force indefinitely.
What Does the Finnish Patent and Registration Office Examine When Processing a Registration?
The Trade Names Act sets out the general requirements for registering a trade name. The applicant must be engaged in business activity, and the trade name must satisfy the requirements set out in law as to its form and structure. For example, the name of a private limited liability company must include the word “limited liability company” or the abbreviation “Ltd”. In addition, the trade name must be capable of identifying its holder and must not be contrary to public policy or morality.
When processing a registration application, the PRH examines several aspects, the most important of which relate to the requirement that the name must identify its holder. That assessment largely mirrors the one applied to trademark registrations, beginning with an evaluation of distinctiveness. A name that merely describes the company’s field of business or its products does not meet this requirement, and the Finnish Patent and Registration Office may reject it on grounds of lack of distinctiveness.
A trade name must also not be confusingly similar to an already registered name. The Finnish Patent and registration Office compares the application against the Trade Register and may reject a name that too closely resembles an existing registered trade name in the same or a related field. Likelihood of confusion is assessed on the basis of overall impression, and even phonetic similarity alone may be sufficient grounds for rejection.
A trade name must not contain certain protected expressions and must not be misleading. For example, the words “bank” and “university” require special authorisation or legal status, and expressions referring to the state or public authorities may also lead to rejection. A trade name is considered misleading if it is liable to give a false impression of, for example, the company form or its business activities, the products or services offered, or the scale of its operations.
Before formal registration, the Finnish Patent and Registration Office can provide an advance ruling on whether a trade name is registrable on the terms set out in the application. If the name does not pass the initial review, the applicant may at this stage propose one or two alternative names.
Trade Name and Trademark: Two Separate Systems
Although the requirements for registering a trade name and a trademark are aligned, registering a trade name does not automatically protect it as a trademark, nor does registering a trademark prevent others from using the same name as a trade name in a different field. These are two separate systems of protection that operate in parallel. A company seeking comprehensive protection for its name should register it both as a trade name in the Trade Register and separately as a trademark. Companies planning international operations should also note that trade name protection is limited to Finland, whereas an EU trademark provides protection across all member states.
Auxiliary Company Name
In addition to its trade name, a company may register auxiliary company names for use in a specific part of its operations, such as for a particular product line or customer segment. An auxiliary company name can be protected by registration or through use, just like a primary trade name.
Transfer of a Trade Name and Termination of Protection
A trade name may be transferred to another company, but the transfer is always tied to the business. Transferring a trade name without also transferring the associated business is not permitted, as the purpose of a trade name is specifically to identify the business of its holder.
Since a trade name cannot be registered for a fixed term, its protection only ceases when the company is removed from the Trade Register or when its holder relinquishes the trade name by notifying the Trade Register accordingly. Protection may also cease under certain conditions if a registered or established trade name that originally met the requirements becomes misleading, for example, where the business bearing a particular trade name moves entirely into a different field of business.
Tips for the Best Protection
Advance planning and thorough preliminary research are the most important building blocks when choosing a trade name. A name should be carefully checked before registration, as problems typically emerge only later, when addressing them has already become costly and time-consuming.
In practice, preliminary research means conducting a name search. The Finnish Patent and Registration Office’s name search service is a good starting point, but it does not cover trademarks, for example. Where necessary, it is worth seeking professional advice on whether the name under consideration is sufficiently distinctive and free from third-party rights.
The most common practical problem is that a company chooses a name that is already in use or too similar to an existing one. A second common pitfall arises later, when a company wants to extend protection for its name, but a competitor has already registered the same or a very similar name as a trademark. The company may then find itself having to change its name or seek to acquire the relevant trademark rights.
Our specialists are happy to assist with questions relating to trade names and trademarks — whether in preliminary research, the registration process, or in the event of any conflicts.
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