A recent ruling by the European Court of Justice has cast light on the often shadowy no-man’s land between trade marks on the one hand and company names on the other.

The complainant, a French clothing manufacturer, owned the French trade mark registration CÉLINE. The defendant opened a shop under the name “Céline” from which it sold clothing and accessories, and registered “Céline” as a company name; it did not, however, affix the brand CÉLINE to the merchandise that it sold.

The claimant sued for trade mark infringement in the French courts, and succeeded at first instance. But on appeal the court decided to refer the matter to the ECJ for a ruling.

The question at issue was whether the unauthorised adoption of a registered trade mark as a company name, trade name or shop sign in the context of a business marketing identical goods constituted infringement pursuant to the EC Trade Marks Directive. The Advocate General’s answer to this question was “no”, and in its ruling in September 2007 the ECJ agreed in principle with her. The court held that the purpose of a company, trade name or shop name was not to distinguish goods or services; it was simply to designate or identify a business or a company. And, provided that this purpose was adhered to, then the name was not being used in respect of goods, and could not therefore constitute infringement.

The ruling is a useful exposition of an uncertain area of law. However, it should be noted that when section 69 of the Companies Act 2006 comes into force next year, it will create new rights for any person to object if a company name is the same as or confusingly similar to a name in which the complainant has goodwill. We shall report on this in future bulletins.