Understanding and delineation
Every corporation (or association) must choose a corporate name (or association name) at incorporation. This is also called the corporate or administrative name. This name is mentioned, among other things, in the deed of incorporation published in the Belgian Official Gazette and consultable via the Crossroads Bank for Enterprises (see Article III.29 §1, 2° Economic Law Code). The company name serves to identify a legal entity in legal transactions.
This company name is also required to be mentioned within the framework of the information and transparency obligation incumbent on every company (see Article III.74 §1, 1° Economic Law Code).
The corporate name is not the same as the trade name or commercial name, being the name under which a company trades. In many cases the company name will be the same as the trade name (e.g. the Nv Telenet (company name) trades under the name Telenet) but a company can also choose to operate in the market under a completely different trade name.
A company name or trade name should also not be confused with a brand name. Whereas a trade name serves to distinguish a company on the market from another company, a brand name is used to distinguish certain goods or certain services offered by a company. For example, Nv Orange Belgium (company name), operating under the trade name Orange, offers telecom products under the brand name Love Duo/Love Trio.
The following will only elaborate on the (protection) of the corporate name
Legal framework
Company name protection is governed by the Companies and Associations Code of March 23, 2019.
Article 2:3 states:
§ 1. Each legal entity shall have a name distinct from that of any other legal entity.
If the name is the same as another or so similar to it as to cause confusion, any interested party may have it changed and, if there are grounds for doing so, claim damages from the legal entity.
A legal entity may not use in its name or in any other way a legal form other than the one it has validly adopted. In case of violation of this rule, any interested party may claim the cessation of such use before the corporate court of the registered office of the legal entity.
§ 2. Notwithstanding any provision to the contrary, the founders of a company or, in the event of a subsequent change of name, the members of the governing body shall be jointly and severally liable to the interested parties for payment of the compensation referred to in paragraph 2 of Section 1.
Each legal entity (company or association) must therefore choose a name that is different from that of another legal entity. Here, of course, the anteriority rule applies: the youngest company must choose a name that is different from the corporate name of an older company.
The protection offered to the first user of the company name is not limited to the region where this name appears, but extends to the whole of Belgium. This is different from a trade name (where protection can only be invoked in the region where the company operates) and a brand name (which, depending on the type of brand, offers protection in the Benelux or the European Union). In this sense, article 2:3 W.Venn. can only be applied in a conflict between two Belgian companies (Vz. Rb. Leuven March 1, 2007).
It has been held that the protection of the company name (but possibly the trade name) cannot be invoked for an abbreviation used, even if it was already included in the company's deed of incorporation (Antwerp February 24, 2011; Brussels May 29, 2001).
How to act against a similar corporate name?
If it is established that a company has adopted an identical corporate name when it is incorporated, action can be taken against it. If the (younger) company does not refuse to change its name, the company court can be asked to order the younger company to change its name.
Where the trade name has a commercial interest, the function of the company name is to identify the company in its public appearance, which is of interest to society as a whole. Neither the prominence of the company name in a particular commercial market nor the geographic expanse of that prominence is relevant in the context of enforcing the protection of the company name.
Thus, an infringement of the company name was decided in a dispute between the bvba Victus and the Vof Victus (Antwerp April 4, 2019). Neither the fact that the companies conduct different business activities nor their geographical location played and role in this assessment.
What if a (younger) company does not adopt an identical company name but one that is very similar? In that case, the court can also order the company to change its name if this similar company name causes confusion. It is then up to the company with the oldest company name to prove this confusion.
In assessing the likelihood of confusion, the following 3 criteria are taken into account: 1) the similarity between the names themselves, 2) the nature of the respective commercial activities, and 3) the territory in which the activities are carried out. It was held that the similarity between appellations may also include the visual and aural distinction between the parties' trade names (Ghent May 27, 2013).
Thus, confusion was shown between the (older) company name 'De Fakkels' and the (younger) company name 't Fakkelhuis', both used to operate a restaurant (Antwerp 1 April 2020). The same applies to 'Axis' and 'Axxes' (Vz. Kh. Antwerpen Nov. 4, 2004). Then again, there is no similarity/confusion between 'All Cars' and 'All Car Service' (Liège Oct. 27, 2003) as well as between 'Arophar' and 'Aprophar' (Kh. Gent Apr. 24, 2001).
The court can be asked not only to order the company with the youngest company name to change its name. The court can also be asked to order this company to pay damages if the use of this identical or similar company name has caused damage to the company with the oldest company name. However, it is again up to the latter company to prove this damage.
However, it was held that if the defendant company can show that, despite the similarity of the names, the plaintiff de facto does not suffer or risk suffering the slightest disadvantage, that the name change claim constitutes an abuse of law and must be dismissed (Liege April 25, 2015).
Liability of founders and directors
The choice of an identical or similar company name that causes confusion with an older company name may also affect the founders of the (younger) company or the directors of that company, if an existing company decides to change its company name.
In that case, the founders or directors can be jointly and severally liable with the company for the damages caused by the identical or similar company name to the company with the older company name. The limitation of liability within a limited liability company or public limited company, for example, does not come into play in that case.
Assistance from a lawyer
If, when choosing a (new) company name, you are in doubt as to whether or not it is identical or similar to an existing company name, it is advisable to seek legal advice on this from a lawyer. We can help you with a risk analysis of using a particular company name.
If you want to take legal action against an identical or similar company name, we as lawyers can assist you in a procedure before the corporate court. Although article 2:3 W. Venn. cannot be enforced through a strike procedure as in summary proceedings, the infringing use could possibly be considered as an unfair market practice within the meaning of Article VI.104 of the Economic Law Code, which does empower the strike judge to change the cessation of an infringing name more quickly than in a procedure on the merits. As a lawyer, we can advise you on the most efficient procedure.
Even if your company is itself declared in default because of an identical or similar company name, as a lawyer we can assist you in defending against such a claim, including the question of whether there is confusion.
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