Peculiarities of disposition of intellectual property rights to commercial name

Before answering this question, we note such a concept as a commercial name in accordance with the norms of current legislation. So, the Economic Code of Ukraine defines the following provisions regarding the commercial name:

Art. 155 of the Civil Code of Ukraine defines a list of intellectual property objects in the field of management, among which paragraph 5 belongs to a commercial name and notes that the conditions for protecting intellectual property rights to these objects are determined by the Civil Code of Ukraine.

Art. 159 of the Civil Code of Ukraine, in which the powers of business entities regarding the commercial name are determined:

“1. Business entity – a legal entity or citizen-entrepreneur may have a commercial name.

A citizen entrepreneur has the right to declare his last name or first name as a commercial name.

Information on the commercial name of the business entity is entered on its submission into the registers, the procedure for maintaining which is established by law. A business entity whose commercial name was included in the register earlier has

priority right of protection over 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 the business entity, if it is actually used by it in economic circulation.
If the commercial name of the business entity is an element of its trademark, then legal protection of both the commercial name and the trademark is carried out.
A person who uses someone else’s commercial name, at the request of its owner, is obliged to stop such use and compensate for the losses caused.”

Now let’s draw attention to the provisions of the Civil Code of Ukraine regarding the definition of the concept of commercial name and the scope of its legal regulation by national legislation:

Art. 420 of the Civil Code of Ukraine identifies, again, intellectual property rights, to which the commercial (corporate) name also belongs, is marked together with trademarks (signs for goods and services) and geographical indications.

And in chapter 43 of the Civil Code of Ukraine (Art. 489-491) states the following:

Art. 489 Legal protection of 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 present activities.

The intellectual property right to the commercial name is valid from the moment of the first use of this name and is protected without obligatory application for it or its registration and regardless of whether the commercial name is part of the trademark.
Information on the commercial name may be entered in the registers, the procedure for maintaining which is established by law.
Persons may have the same commercial names if it does not mislead consumers about the goods they produce and/or the selling and services they provide.”

Art. 490 Intellectual Property Rights to Commercial Name:

“1. Property rights of intellectual property to the commercial name: 1) the right to use the commercial name; 2) the right to prevent other persons from illegally using a commercial name, including prohibiting such use; 3) other property rights of intellectual property established by law.

Property rights of intellectual property to a commercial name are transferred to another person only together with the integral property complex of the person to whom these rights belong, or its corresponding part.”

Art. 491 Termination of intellectual property rights to commercial name:

“1. Property rights of intellectual property to a commercial name shall be terminated in case of liquidation of a legal entity and on other grounds established by law.”

And also note the norm of the Civil Code of Ukraine regarding the disposal of property rights of intellectual property (Article 1107):

Types of contracts regarding the management of property rights of intellectual property:

The management of property rights of intellectual property is carried out on the basis of such agreements: 1) a license for the use of an object of intellectual property right; 2) license agreement; 3) an agreement on the creation of an order and the use of an object of intellectual property law; 4) agreement on the transfer of exclusive property rights of intellectual property; 5) another agreement regarding the disposal of property rights of intellectual property.
An agreement regarding the disposal of property rights of intellectual property is 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 regarding the disposal of property rights of intellectual property can be concluded orally.

In accordance with Art. 489 of the Civil Code of Ukraine, legal protection is provided to a commercial name if it makes it possible to distinguish one person from others and does not mislead consumers about its present activities. Thus, a commercial name is a name under which a person acts in civil circulation and which individualizes that person among other participants. It must be true and meet the requirement of exclusivity and constancy.

The principle of truth is that the name must correspond to the type of activity of the person and not mislead. In accordance with the principle of exclusivity, the name must differ from others in order to prevent mixing. However, in some cases, an exception to this rule is allowed: persons may have the same commercial names, if this does not mislead consumers about the goods they produce and/or selling and the services they provide. This is possible, in particular, when the subjects operate in different spheres or in different territories. The constancy of the commercial name is that the right to it is not limited to the period.

Property rights of intellectual property to the commercial name: the right to use the commercial name; the right to prevent other persons from illegally using a commercial name, including prohibiting such use; other property rights of intellectual property provided for by law.

Unlike other legal means of individualization, the acquisition of intellectual property rights to a commercial name does not require formal actions. The right to a commercial name is valid from the moment of its first use and is protected without obligatory application for it or its registration, regardless of whether the commercial name is part of the trademark. Information on the commercial name may be entered in the registers, the procedure for maintaining which is established by law.

As for the order and features related to the disposal of property rights of intellectual property to commercial names, the following:

1) legislation establishes restrictions on the disposal of property rights to a commercial name – they can be transferred to another person together with a single property complex of the person to whom these rights belong or its corresponding part. This is due to the inadmissibility of misleading consumers. Therefore, in the event of the liquidation of a legal entity, the force of property rights of intellectual property to a commercial name ceases (Article 491 of the Civil Code of Ukraine);

2) the form of disposal of intellectual property rights to a commercial name is also the transfer of rights to a commercial name at succession in the event of a reorganization of a legal entity, if the conditions for its holding 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 agreement.

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