Before answering this question, let’s outline such a concept as a commercial name in accordance with the norms of current legislation. Therefore, the Commercial Code of Ukraine defines the following provisions regarding the commercial name:
Art. 155 of the Civil Code of Ukraine defines the list of objects of intellectual property in the field of business, among which item 5 belongs to the commercial name and notes that the conditions of protection of intellectual property rights for the specified objects are determined by the Central Committee of Ukraine.
Art. 159 of the Civil Code of Ukraine, which outlines the powers of business entities regarding the commercial name:
“1. A business entity – a legal entity or a citizen-entrepreneur may have a commercial name.
A citizen-entrepreneur has the right to declare his surname or first name as a commercial name.
- Information on the commercial name of the business entity is entered upon its submission to the registers, the procedure for which is established by law. A business entity, the commercial name of which was included in the register earlier, has priority right of protection before any other subject, identical the commercial name of which is included in the register later.
- Legal protection is subject to both the full and abbreviated commercial name of a business entity, if it is actually used by it in business circulation.
- If the commercial name of the business entity is an element of its trademark, then the commercial name is also legally protected, and trademark.
- A person who uses someone else’s commercial name, at the request of its owner, is obliged to stop such use and to compensate for the losses incurred.”
Now let’s pay attention to the provisions of the Civil Code of Ukraine regarding the definition of the concept of a commercial name and the scope of its legal regulation by national legislation:
Art. 420 of the Civil Code of Ukraine once again singles out the objects of intellectual property law, which include the commercial (brand) name, which is indicated together with trademarks (marks for goods and services) and geographical indications.
And in Chapter 43 of the Civil Code of Ukraine (Articles 489-491) the following is stated:
Art. 489 Legal protection of a commercial name
“1. Legal protection is granted to a commercial name if it makes it possible to distinguish one person from others and does not mislead consumers about its true activity.
2. The intellectual property right to a commercial name is valid from the moment of the first use of this name and is protected without the mandatory submission of an application for it or its registration and regardless of whether or not the commercial name is part of a trademark.
3. Information on the commercial name may be entered into the registers, the procedure for which is established by law.
4. Persons may have the same commercial names, if this does not mislead consumers regarding the goods they produce and (or) sell and the services they provide.”
Art. 490 Property rights of intellectual property on a commercial name
“1. Intellectual property rights to a commercial name are: 1) the right to use the commercial name; 2) the right to prevent other persons from illegally using the commercial name, including prohibiting such use; 3) other intellectual property rights established by law.
2. Intellectual property rights to a commercial name are transferred to another person only together with the whole property complex of the person to whom these rights belong, or its corresponding part.”
Art. 491 Termination of intellectual property rights to a commercial name:
“1. The validity of intellectual property rights to a commercial name shall be terminated in the event of the liquidation of a legal entity and for other reasons established by law.”
And we will also note the norm of the Civil Code of Ukraine regarding the disposition of property rights of intellectual property (Article 1107):
Types of contracts regarding the disposition of property rights of intellectual property
- Intellectual property property rights are disposed of on the basis of the following agreements: 1) license to use the object of intellectual property rights; 2) license agreement; 3) an agreement on the creation to order and use of an object of intellectual property rights; 4) agreement on the transfer of exclusive intellectual property rights; 5) another agreement regarding the disposition of property rights of intellectual property.
- The agreement on the disposal of property rights of intellectual property shall be concluded in writing. In case of non-compliance with the written form of the contract regarding the disposal of property rights of intellectual property, such contract is null and void.
The law may establish cases in which an agreement on the disposition of property rights of intellectual property may be concluded orally.
According to Art. 489 of the Civil Code of Ukraine, legal protection is granted to a commercial name if it makes it possible to distinguish one person from others and does not mislead consumers about its true activity. Thus, a commercial name is a name under which a person acts in civil circulation and which individualizes this person among its other participants. It must be true and meet the requirements of exclusivity and permanence.
The principle of truth is that the name should correspond to the person’s activity and not mislead consumers. According to the principle of exclusivity, the name must be different from others in order to avoid confusion. However, in some cases, an exception to this rule is allowed: persons may have the same commercial names, as long as this does not mislead consumers about the goods they produce and/or sell and the services they provide. This is possible, in particular, when the subjects operate in different spheres or in different territories. The permanence of a commercial name lies in the fact that the right to it is not limited by time.
Intellectual property rights to a commercial name are: the right to use a commercial name; the right to prevent other persons from illegally using the commercial name, including prohibiting such use; other intellectual property rights provided for by law.
Unlike other legal means of individualization, no formal actions are required to acquire the intellectual property right to a commercial name. The right to a trade name is effective from the moment of its first use and is protected without the need to apply for it or register it, regardless of whether the trade name is part of a trademark. Information about the commercial name can be entered into the registers, the procedure for which is established by law.
As for the disposition and specifics related to the disposition of intellectual property rights to commercial names, then:
1) the legislation establishes restrictions on the disposal of property rights to a commercial name – they can be transferred to another person together with the single property complex of the person to whom these rights belong or its corresponding part. This is explained by the inadmissibility of misleading consumers. Therefore, in the event of the liquidation of a legal entity, the validity of intellectual property rights to a commercial name is terminated (Article 491 of the Civil Code of Ukraine);
2) the transfer of rights to a commercial name upon legal succession in the case of reorganization of a legal entity is also a form of disposal of intellectual property rights to a commercial name, if the conditions of its implementation do not provide for the preservation of such a name by a person;
3) the next form of disposal of intellectual property rights to a commercial name is the granting of rights to a commercial name along with other exclusive rights on the basis of a commercial concession contract.
