Be careful with descriptive trade names!

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Descriptive trade names have become increasingly popular in the current trade practice. Usually, the use of descriptive trade or brand names is motivated by marketing and communication consultants with the argument that companies are easier to find for customers searching for a product of service with that descriptive name.

However, the Amsterdam Court of Appeal has recently confirmed that there are certain legal disadvantages in the protection of a descriptive trade name in the Netherlands.

Dutch trade name law 

The main rule in Dutch trade name law is, in short, that an priorly used trade name may prohibit the use of a younger trade name, if the use of that younger trade name may lead to a likelihood of confusion among the relevant public.

However, recently the Amsterdam Court of Appeal ruled that, in addition to the likelihood of confusion, ‘purely descriptive trade names’ face another requirement to prohibit a younger trade name, namely that additional circumstances are required to justify a ban.

This judgment further clarifies a previous judgement of the Supreme Court in the case “Artiestenverloningen”. In that case a domain name was not used as a trade name but merely concerned the question whether a descriptive domain name could be prohibited by a company with an earlier trade name. In that case, the Supreme Court ruled that the use of descriptive domain name may be prohibited if additional circumstances occur which make the use unlawful.

The Court of Appeal in Amsterdam has now ruled (Dutch link), that the same requirement should also be made in the case of mere descriptive trade name. This is striking because the Dutch Trade name Act itself does not require a trade name to have distinctive character, (or cannot be descriptive) to be able to function as a trade name.

Judging a descriptive trade name

In order to be able to judge whether a trade name is “purely descriptive”, we may look to the company’s activities. For example, in the case of the trade name “Parfumwinkel” (Perfume Shop), the court ruled that the trade name is purely descriptive because the trade name describes one of the company’s main activities (which in fact was the sale of perfumes).

Judging the “additional circumstances”

It will depend on the specific case details, whether a trade name ban can be invoked based on a purely descriptive trade name and the “additional circumstances” criterion. For instance, these circumstances could be the breach or unlawful disclosure of personal data (Dutch link), or to misuse of someone else's Google ranking (Dutch link).

Clearly, this judgment is one to keep in mind when choosing the trade name of a new business as well as in determining whether a descriptive brand of trade name can be legally used by competitors.

Would you like more information about when trade names are considered to be ‘purely descriptive’? Or would you like to exchange thoughts about other aspects of your trade name, please do not hesitate to contact WiseMen’s attorneys-at-law.

Wilt u meer informatie over wanneer een handelsnaam als ‘louter beschrijvend’ wordt aangemerkt? Of wilt u van gedachten wisselen over andere aspecten van uw handelsnaam, neem dan vooral contact op met WiseMen advocaten.