The Dutch Supreme Court issued a groundbreaking ruling on 19 February 2021, regarding the scope of protection of “descriptive” trade names.
Under the Dutch Trade Names Act, a company operating under a particular trade name could take action against other parties who later start operating under an identical or similar trade name if, given the nature of the companies and their location, there is a risk of confusion. No threshold for distinctiveness is mentioned in the Tradename Act. Dutch case law showed that a very low threshold was applied, but that for fully descriptive tradenames, only a tort law action was available. For a successful action on that basis additional circumstances were required, such as a prior contractual relationship between the parties.
With the rise of the Internet, descriptive trade names have become increasingly popular over the years. At the same time, society feels that descriptive terms should not be monopolised by one entity and should be freely available for everyone to use, like is the case with trademarks.
In Dairy Partners/DOC Dairy Partners, the Supreme Court considered the question of whether additional circumstances are required in addition to a likelihood of confusion in order to act successfully on the basis of a descriptive trade name. The Supreme Court briefly answered that this is not the case. It ruled that the requirement of likelihood of confusion is sufficient to meet the need to remain available. The Supreme Court noted that in assessing the likelihood of confusion, sufficient account is taken of the general interest in allowing descriptive trade names to be used freely. That assessment must take into account all the circumstances, including the degree of distinctiveness of the earlier trade name.
The decision can be found here (Dutch only). For more information, contact Tobias Cohen Jehoram, who submitted written comments in these proceedings.