Registered Trademark vs. Trade Name

Distinctive signs, as a means of communicating the origin and quality of products or services, are becoming increasingly strategically important. In practice, however, the terminological confusion between a “trademark” and a “trade name” often generates legal and economic risks. Although both tools contribute to protecting the elements of a company’s commercial identity, they refer to different legal institutions, with distinct objects, acquisition mechanisms, and effects.

1. Fundamental Concepts: Trademark and Trade Name

Trademark – under Romanian law and European law, a trademark is a sign capable of distinguishing the products or services of one enterprise from those of other enterprises. A trademark can be verbal, figurative, or combined; it may include colors, shapes, sounds, or even three-dimensional elements, provided they can be represented clearly and precisely. Protection is primarily achieved through registration (with OSIM for a national trademark or with EUIPO as a European Union trademark; international extension is also possible through the Madrid System – WIPO).

Trade Name – (or “commercial name,” referred to as “firm” in the language of the Trade Registry) denotes the name under which a merchant (either an authorized natural person or a legal entity) conducts business. The trade name is established through registration with the Trade Registry (Law no. 31/1990 on commercial companies). Its purpose is to identify a legal entity or a merchant, not necessarily to indicate the origin of products or services in the market, although in practice these functions can overlap.

2. Legal Sources and the Relationship Between Domestic and European Law

Trademark law in Romania is regulated on two levels: (i) national regulation – primarily the Trademark Law (Law no. 84/1998, consolidated); and (ii) European law – notably Regulation (EU) 2017/1001 on the European Union Trademark and Directive (EU) 2015/2436, which impose interpretive and harmonization standards directly affecting national practice.

Trade name protection, in turn, is based on company law (Law no. 31/1990), the Civil Code (general rules on legal entities and the effects of trade names), and the Unfair Competition Law (Law no. 11/1991), which sanctions the use of trade names or emblems contrary to fair commercial practices.

From a hierarchy perspective, the effects of a trademark registered at the European level are governed directly by the EU Regulation (direct effect). However, enforcement actions and remedies can employ national procedural tools, including provisions on unfair competition and civil law.

3. Legal Nature and Methods of Acquiring Rights

3.1 Registered Trademark

A registered trademark grants its owner an exclusive right over the sign for the products/services for which it is registered. The right derives from the administrative registration procedure: through publication in OSIM’s Trademark Register and issuance of the registration certificate, or through the effects conferred by the EU trademark. Protection is essentially an industrial property right with territorial scope and requires classification of products/services (Nice Classification). Correctly choosing classes is crucial for determining the scope of protection.

3.2 Trade Name

A trade name derives from the use of a specific name in conducting business and, formally, from registration with the Trade Registry. There is usually no administrative procedure for “classifying” a trade name in relation to relevant products/services for each enterprise; protection is closely tied to its use in the economic-administrative environment and the scope of its use. Effects manifest as rights enforceable against third parties, but challenges and sanctions for unlawful use are mainly based on unfair competition rules.

4. What Happens When a Trademark and Trade Name Coincide?

In practice, distinctive signs can coincide: a business may use a registered trademark as its trade name (or vice versa), or third parties may register a company name at the Trade Registry very similar to a trademark registered with OSIM or EUIPO. Conflicts arise when the use of a trade name creates a risk of confusion with a third party’s trademark, threatening the essential function of the trademark: guaranteeing the origin of products and/or services offered under a specific name.

Romanian case law has recognized that a trade name actively used on the market can infringe rights to a registered trademark at OSIM or EUIPO. This determination is based on a cumulative analysis of the similarity of the signs and the identity or similarity of the products or services involved (see Court of Appeal and High Court of Cassation and Justice decisions). Courts have also emphasized that mere registration with the Trade Registry does not automatically legitimize the use of a name if it infringes prior rights. This jurisprudential approach reflects principles of commercial responsibility and consumer protection.

In assessing conflicts, courts generally apply criteria similar to those used in trademark infringement cases: visual, phonetic, and conceptual similarity; commercial area; product/service similarity; and notoriety of the prior sign. The key practical difference lies in the legal basis: trademark infringement is based on the exclusive right resulting from registration, while challenges to a trade name are often grounded in unfair competition law.

5. Legal Effects and Remedies

A registered trademark provides its owner with clear remedies: actions to establish infringement, prohibit use of the mark, claim damages, secure seizures of counterfeit products, and, in severe cases, even criminal measures. Trademark owners may also license or assign the trademark.

Trade name infringement is generally addressed through unfair competition actions (Law no. 11/1991): prohibiting the use of the name, ordering damages, and potentially requiring the deregistration of a trade name if its use actually infringes third-party rights.

Importantly, the trademark owner is not necessarily unprotected against a previously registered trade name; the law and case law allow challenges based on actual public confusion and trademark rights infringement.

6. Practical Strategies and Due Diligence

6.1 Prior Clearance Searches

Before registering a trade name with the Trade Registry or a trademark with OSIM or international offices, a thorough prior search is essential to identify pre-existing rights and reduce the risk of costly litigation. This involves checking official registers (Trade Registry for similar trade names, OSIM for national trademarks, EUIPO for European trademarks, and WIPO for international protection) and consulting search engines, commercial databases, digital platforms, and social networks. Analysis should consider not only visual or identity similarity but also the likelihood of confusion among the relevant public, targeted classes, and geographic area of use.

A carefully conducted prior search serves as a preventive tool and as evidence of good faith before courts or authorities, demonstrating diligence in protecting distinctive signs.

6.2 Distinct Use of Signs and Names

It is essential to use signs with different functions separately and coherently to avoid legal conflicts and market confusion. A trademark identifies and protects the company’s products or services, granting formal and exclusive protection through registration with OSIM, EUIPO, or WIPO. A trade name, in contrast, identifies the economic entity as a whole and serves as a legal and commercial recognition tool.

Unjustified overlap, e.g., using a trade name as a product/service trademark without checking availability, can lead to costly litigation, market confusion, and potential infringement penalties. Businesses should adopt an integrated strategy including clearance checks, strategic registration planning, and ongoing portfolio monitoring.

Clear separation of functions optimizes legal protection, enhances brand image consistency, and strengthens corporate reputation.

6.3 Strategic Registration with OSIM, EUIPO, or WIPO

Effective protection requires registering the trademark in the relevant product/service classes according to the updated Nice Classification. This allows anticipating business expansion and launching new products/services without risking legal conflict or incurring additional registration costs later.

Strategic registration involves not only selecting appropriate classes but also analyzing portfolio compatibility with development plans, market expansion, and long-term branding strategies. This prevents legal disputes, facilitates IP management, and demonstrates good faith in protecting distinctive signs.

6.4 Preventive Contractual Measures

Agreements with third parties—suppliers, distributors, or franchisees—should include preventive clauses guaranteeing non-infringement of third-party rights and indemnification obligations. They should also outline dispute resolution mechanisms such as negotiation, mediation, arbitration, or judicial recourse. Implementing such clauses reduces litigation risk and demonstrates diligence and good faith, reinforcing legal certainty and IP protection.

6.5 Monitoring and Rapid Response

Businesses should constantly monitor the market and new trademark registrations, both nationally and internationally, to detect potential conflicts or unauthorized uses. Immediate actions—objections, oppositions, or cancellation requests—can prevent escalation and demonstrate diligence and good faith. Integrated monitoring and rapid response is central to proactive management of trademark and trade name portfolios.

7. Conflicts in Practice: Judicial and Extrajudicial Solutions

Conflict resolution can be amicable or judicial. Amicably, parties may negotiate, conclude settlements, coexistence agreements, or licensing contracts, or adapt/modify the name used. Judicially, actions may seek prohibition of the conflicting use, damages, deregistration, or declaration of nullity (in case of bad-faith registration), and modification of a trade name registered with the Trade Registry.

Recent Romanian case law shows that courts do not grant automatic “immunity” to trade names against registered trademarks. When actual use and real confusion risk exist, the trademark owner may obtain concrete legal remedies. Outcomes depend on context, including brand notoriety, geographic scope, product/service nature, and timing of rights acquisition.

7.1 Mediation and Arbitration

Mediation allows flexible agreements including coexistence, territorial or sector limits, and collaborative arrangements. Arbitration provides fast, specialized resolution while avoiding public exposure and reducing long-term costs.

7.2 Coexistence Agreements

These contractual tools establish precise limits on the use of distinctive signs, including geographic areas, product/service classes, graphical formats, or presentation methods. Well-drafted agreements prevent future conflicts and demonstrate good faith before courts.

7.3 Branding and Rebranding Strategies

Where confusion risk is significant, proactive rebranding—partial or complete—may be optimal to avoid prolonged litigation and protect company reputation. Industrial property advisors should work closely with marketing to balance legal security and commercial appeal.

8. Recommendations for Internal Policies and Contracts

Naming Policy: Establish clear, uniform rules governing selection and use of trade names, trademarks, and other signs. Include clearance procedures to reduce conflicts with pre-existing rights and ensure compliance with law and brand strategy.

Contractual Regulation of Rights: Employment and collaboration contracts should include clauses transferring proprietary rights over distinctive signs to the company and require notification of development outcomes.

Internal Authorization Procedures: Use of distinctive signs in marketing or public materials should require prior approval by a specialized department or committee, ensuring proper use and brand consistency.

Internal Registry of Distinctive Signs: Maintain a centralized registry of all used or registered signs (trademarks, trade names, domain names), including rights holders, protection areas, product/service classes, and renewal dates. This facilitates portfolio monitoring and planning.

The distinction between a trademark and a trade name has both legal and practical dimensions. A trademark enjoys protection through registration mechanisms, while a trade name identifies a legal entity but may be prohibited if it creates confusion with prior rights. The optimal approach for businesses is an integrated strategy: prevention (availability checks and registration planning), consolidation (effective registration), and response (market monitoring and prompt legal or negotiated action).

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