The importance of early trademark registration for long-term success and cost-efficiency
Company name vs. Trademark law
The "company name" or "business name" is the designation of a company chosen by the company itself and registered in the Commercial Register. Unlike a trademark, the company name serves to identify the company as such and not to individualise or identify the goods and services of this company.
The registered company name gives the company the exclusive right to use that name for the company. If a third party subsequently registers a similar or identical company name, this may give rise for defences under company name law, such as an injunction against the use of the company name, as well as potential claims for damages.
However, such defences in the field of company law are only available if the use of the infringed designation occurs in a company name context. This means that the third party has used the infringing designation to identify its company to third parties in the course of business operations. The use of the infringing designation for goods and services (including, for example, on packaging materials) is not automatically considered as use in a company name context, rendering defences on the basis of company name law insufficient in such a case. If the company wishes to use its company name also to identify its goods and services, thereby functioning as a trademark, the registration of a trademark is necessary.
In contrast to a company name, a trademark is used to distinguish the goods or services of one company from those of other companies. The owner of a registered (Swiss) trademark has the right to prohibit others throughout Switzerland from using an identical or similar designation for identical or similar goods or services.
Collision of designations or signs
A common issue in dealing with company designations is the question: What happens when there is a conflict between designations or signs of different natures?
In the event of a conflict between an older company name and a younger trademark, the owner of the company name retains the right to continue to use the designation in its existing scope, but only to that extent. The registration of the company name itself does not confer additional rights, and the protection against the trademark owner is significantly limited.
In the event of a conflict between an older trademark and a younger company name, the trademark owner can oppose the use of the third party's company name in connection with the protected goods and services (without restriction). In such a case, the owner of the company name may not use its company name in any way in a trademark context.
Conclusion
Therefore, a company name alone does not provide sufficient protection if the owner of the company name intends to offer goods and services under the same designation (and thus, in a trademark context). In such a case, the registration of a trademark is crucial. The trademark registration should ideally take place at an early stage before significant time and effort has been invested in building the brand. A registered trademark creates a legally guaranteed monopoly of use, thus providing planning security. Additionally, a good trademark strategy can save a company from high costs in the long run and is a key success factor for any business. Rebranding and trademark disputes are costly and can be avoided if a company deals with trademark protection at an early stage.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
