Some trade names are best at sufficient distance

The Van der Valk hospitality chain, which owns hotels, motels and restaurants, is well known in the Netherlands. The chain's businesses are easy to recognise by the name and the well-known toucan logo. The place name, which forms part of the name of each of its hotels, distinguishes them in terms of location, but can sometimes result in conflict.

Recently, the Oost-Brabant Court held that a new Van der Valk hotel could open under the name Van der Valk Hotel Eindhoven-Best, even though another hotel, Van der Valk Hotel Eindhoven, had been established since 1973 15 kilometres from the location of the Van der Valk Hotel Eindhoven-Best.

The court took into account agreements which apply within the Van der Valk organisation about using corresponding elements for the trade names of businesses within the organisation.

Confusion in Trade Name Law
A competitor may not use a trade name which is the same as, or similar to, the trade name of another company that is already using it (Article 5 of the Dutch Trade Name Law). Where there is a conflict between two trade names, the issue is whether the similarity between the trade names might confuse the public. When determining the risk of confusion, a number of factors are taken into account, including the nature of the company and the location.

The question was whether somebody from a different town booking a room at the Van der Valk Hotel Eindhoven could make a mistake in the booking due to the existence of the Van der Valk Hotel Eindhoven-Best.

Dispute
The plaintiff had run a hotel/restaurant in Eindhoven under the name Van der Valk Hotel Eindhoven since 1973. The defendant founded his company in 2012. He intended to open a hotel on Eindhovenseweg in Best, near the municipal border with Eindhoven. According to the plaintiff, the public would be confused by the use of the trade name Van der Valk Hotel Eindhoven-Best because of its resemblance to the trade name Van der Valk Hotel Eindhoven.

Agreements about corresponding elements
Both enterprises were part of the Van der Valk organisation. All the Van der Valk companies may use the elements 'Van der Valk' and 'Hotel' in their trade names. The plaintiff recognised that the defendant could use the elements 'Van der Valk' and 'Hotel', but objected to the addition 'Eindhoven'. Under the agreements which applied within the organisation, the place name was the only distinguishing element of each business.  

The court considered the agreements which applied within the Van der Valk organisation and held that there was no risk of confusion. In its decision, the court emphasised the comparison between the distinguishing elements of both trade names – namely, 'Eindhoven' and 'Eindhoven-Best'. The use of the name Van der Valk-hotel Eindhoven-Best was allowed because the court felt that the addition of the element 'Best' created enough distance to remove any confusion.

Operating under franchise formula
Therefore, the agreements that apply can help to decide whether the public could be confused by the use of two trade names. This could be important for entrepreneurs operating under a franchise formula.