Court of Appeals Rules on Trade Names

The Lisbon Court of Appeals(1) was recently asked to rule on, among other issues, the application of Article 8 of the Paris Convention for the Protection of Industrial Property, which states that "a trade name shall be protected in all the countries of the union without the obligation of filing or registration, whether or not it forms part of a trademark".

The wording of the provision has raised questions about the correct interpretation of the term 'trade name'; some experts maintain that the expression covers not only an establishment's trade name (ie, its brand name or logo), but also its corporate (or firm) name.

The two plaintiffs took action in respect of the firm name of the defendant's branch in Portugal. The plaintiffs alleged that the firm name infringed the rights in the first plaintiff's firm name and the second plaintiff's trade name. The court of first instance found for the plaintiffs and ordered the cancellation of the firm name of the defendant's branch.

On appeal, the defendant argued that its firm name and that of its Portuguese branch were protected under Article 8 of the convention, as (i) expert opinion and case law have held that firm names are regarded as trade names for the purpose of the article, and (ii) the firm had been incorporated under the name in question in Spain in 1957, before the incorporation of the plaintiffs.

The appeal court conceded that a firm name may be considered a trade name for the purpose of protection under the convention. However, it held that a trade name may be granted protection only if it is well known or used commercially in the country in which protection is sought. The court noted that it would be a paradox to afford greater (ie, extraterritorial) protection to trade names than to trademarks, which are subject to registration.

The court found that the defendant had not used its trade name in Portugal before the incorporation of the first plaintiff or the registration of the second plaintiff's trade name. Furthermore, it found that the defendant had failed to prove that its firm had been well known (ie, generally known among potential clients) in Portugal before the incorporation of the first plaintiff or the registration of the second plaintiff's trade name. Therefore, the court dismissed the appeal and upheld the first instance decision.

This decision partly follows the Supreme Court ruling issued on December 11 1979.(2)

For further information on this topic please contact Armando Martins Ferreira or Guilherme Mata da Silva at Abreu Advogados by telephone (+351 21 7231800) or by fax (+ 351 21 7231899) or by email (armando.m.ferreira@abreucardigos.com or guilherme.m.silva@abreucardigos.com).

Endnotes

(1) In Decision 4599/06-2.

(2) Further details are available at www.dgsi.pt.