My business name is similar to another, who has the better right?

My business name is similar to another, who has the better right?

One of the categories of distinctive signs (communication vehicles that allow you to differentiate your business, its products or its characteristics and transmit its reputation) is the commercial name.

Most likely, you as a businessman or entrepreneur have had a business name since you started your business, but you did not recognize it as such.

Let's clarify basic concepts

A commercial name is a sign that distinguishes the economic activity of a company or a commercial establishment. In our legal system, it is not necessary to be registered (its registration is optional, as well as that of the works) to be protected, because the right to this sign arises with its use in the market.

It differs from the brand in that the trade name distinguishes the company in the exercise of its economic activities, but does not directly distinguish a type of service. A natural person or a legal entity may be the owner of one or more trademarks to identify their products or services; as well as one or more trade names, to distinguish yourself as a company or its business activities.

Depending on the case, how can a conflict be resolved or prevented if your business name is similar or coexists with another? Let's look at the following criteria on the scope of the right of the trade name, which are not found in the standard but have been established through jurisprudence:

It is possible that two or more small companies that operate in different geographical areas use identical or similar commercial names, without there being a risk of confusion or association, as recognized by the Andean Court, in Process 44-IP-2018, with the exception that must be determined on a case-by-case basis, depending on the extent of the respective operations. for example: Small businesses such as restaurants, wineries, bazaars, bars or hostels, mainly related to the names and surnames of natural persons. This exception must consider that there have been no prior claims, among other conditions.

It is also possible that owners of trade names that coexist and are operating in different territorial areas may expand or expand their economic activities, provided that they act in good faith and all other conditions that gave rise to their coexistence are maintained.

If the owners of the trade names or one of them begins its territorial expansion reaching the territorial sphere of influence of the other, they can sign a coexistence agreement, which must include clauses that allow clearly differentiating the signs in conflict, an agreement that must be brought to the attention of the competent authority so that it can approve or reject it, observing the parameters that the Court has established on the matter.

On the other hand, let's analyze a particular case: Your company that owns a trade name wants to oppose a trademark registration application. Who will have the right: your trade name or the competitor's sign?

The Specialized Intellectual Property Chamber has established, as a precedent of mandatory observance, what is stated in its Resolution No. 1688-2021/TPI-INDECOPI that:

The use of the trade name must be evaluated taking into account the following: (i) The previous use of the trade name on the date of application for the questioned sign or trademark; and, ii) The real, effective and continuous use of the invoked trade name.

According to the Chamber, it must be understood that the use of the commercial name is permanent or constant until, at least, the date on which it was intended to assert its right (whether in an opposition procedure or in any other action).

However, in order for the aforementioned continuity to be reflected in a prudent period in favor of the administrator, the Court established that when a right is sought to be asserted based on a commercial name, whether it is registered or not, its Continuous use may be accredited if up to 6 months maximum has elapsed between the most recent use and the date on which the right was sought to be asserted.

This means that, if until today you have been using a commercial name, and after more than six months (seven months, one year, two years), you become aware of the existence of an application for registration of a trademark similar or identical to your name. commercial, if you wish to present an eventual opposition, it would be declared INAPPROPRIATE if you do not have proof of minimum use in that period.

Our recommendations

It is valuable for everyone, whether we are consumers or entrepreneurs, that there is legal certainty and predictability in the decisions issued by the authority, therefore, it is useful to consider the criteria previously addressed when managing your commercial name at a marketing or legal level.

Understanding that the entrepreneur is the main person responsible for promoting the economy, it is important that he has the necessary legal conditions for his development and thus, face the challenges of countries like ours.

Finally, although a high degree of distinctiveness is not required to protect a trade name, we recommend that when creating your trade name it enjoys the same strength that you could seek with a brand: do not use generic elements, common, descriptive or usual. , to demonstrate a better right if someone imitates or copies your business name (using it as a name or trademark, by any means, in person or digitally).


Yajaira Saavedra