Scope of protection of company names

Published onJanuary 2013

Last summer, the French Cour de cassation issued a very important ruling regarding the scope of protection that may be granted to a company name.

According to the Supreme Court, “the company name is protected only in connection with the activities actually performed by the company, and not in connection with those listed in its statutes” (Commercial chamber, July 10, 2012, case No.08-12010).

We believe this decision deserves an entire approval.

Although the company name can be considered as a personality right attached to the company it designates, such as the name of an individual, it would be wrong to conclude it may receive an absolute protection, regardless of the actual activities carried out by said company. This would undoubtedly deny that the function of a company name is to identify a company and distinguish it from the others, especially in their relationships with their respective clients.

So beyond the fact that there is no distinctiveness requirement for the adoption of a company name, one must admit that a company name cannot be protected beyond the scope of activities of the company which adopts it.

For that matter, company names are not part of industrial property rights and when their protection is sought, one must bring unfair competition actions before the courts and prove the defendant’s misconduct which is usually evidenced by confusion on the part of the public or at least by a likelihood of confusion.

This is also why Article L.711-4 of the French Intellectual Property Code provides that “Signs may not be adopted as trademarks where they infringe earlier rights, particularly: […] b) The name or style of a company, where there is a risk of confusion in the public mind; […]”.

The aim of that provision is indeed to avoid that the use of two signs by two separate commercial entities could mislead the public as to the origin of the proposed products or services.

It should therefore be recommended to newly established companies to quickly define a strategy to protect their industrial property assets, particularly as far as trademarks are concerned, and to avoid relying only on their other distinctive signs such as company names, trade names or signboards.

© INSCRIPTA