Introduction
One of the most common confusions among entrepreneurs and business owners is the difference between a registered trademark and a trade name (fantasy name). Many assume that registering a business with a trade name automatically grants them exclusive rights to that name, but this is not the case.
A trade name is the legal name under which a company operates, while a registered trademark provides exclusive rights to use a brand name, logo, or symbol in commercial activities. Understanding the differences between these two forms of business identification is crucial for legal protection and brand security.
This article explores the key differences between a trade name and a registered trademark, their legal implications, and why businesses should consider trademark registration to ensure complete protection of their brand identity.
What is a Trade Name (Nome Fantasia)?
A trade name, also known as a fantasy name (nome fantasia) in Brazil, is the name a company chooses to identify itself commercially. It is registered with the Board of Trade (Junta Comercial) or Receita Federal during business registration.
Characteristics of a Trade Name:
- It serves as the official identification of a business entity.
- It is registered with the CNPJ (Cadastro Nacional da Pessoa Jurídica).
- It does not grant exclusive rights to the name beyond the company’s registration.
- Other businesses may use similar trade names if they operate in different locations or industries.
Example of a Trade Name:
- A bakery registered as “Delícia Pães Ltda.” can use “Delícia Pães” as its trade name.
- However, another bakery in a different state might also use the same name legally.
What is a Registered Trademark?
A registered trademark is a distinctive sign (name, logo, slogan, or symbol) that identifies and differentiates products or services in the marketplace. It is registered with the National Institute of Industrial Property (INPI – Instituto Nacional da Propriedade Industrial).
Characteristics of a Registered Trademark:
- Grants exclusive rights to use the name, logo, or brand identity nationwide.
- Prevents other businesses from using a similar mark in the same industry.
- Is legally protected under Brazilian intellectual property law.
- Can be licensed, franchised, or sold as an asset.
Example of a Registered Trademark:
- Nike® is a registered trademark that prevents other companies from using the name “Nike” for clothing and footwear.
- If “Delícia Pães” registers its trademark, no other bakery can legally use that name in Brazil.
Key Differences Between a Trade Name and a Registered Trademark
| Feature | Trade Name (Nome Fantasia) | Registered Trademark (Marca Registrada) |
|---|---|---|
| Purpose | Identifies a business legally | Protects brand identity and commercial use |
| Registration Authority | Receita Federal / Junta Comercial | INPI (Instituto Nacional da Propriedade Industrial) |
| Legal Protection | Limited to business registration | Grants nationwide exclusive rights |
| Prevents Others from Using It? | No, similar names can exist | Yes, prevents similar marks in the same industry |
| Validity | Exists as long as the business operates | 10 years (renewable) |
| Exclusive Ownership? | No, does not guarantee exclusivity | Yes, provides exclusive rights to use the mark |
| Can Be Sold or Licensed? | No | Yes, as an intellectual property asset |
Why Register a Trademark if You Have a Trade Name?
Many businesses assume that registering a CNPJ and trade name is enough to secure their brand, but this is a risky misconception. Without a registered trademark, another company could register the name as a trademark and legally prevent its use.
Scenario Without Trademark Registration:
- João owns a clothing store called “Estilo Único”, registered as a trade name.
- Five years later, another company registers “Estilo Único” as a trademark with INPI.
- João receives a legal notice to stop using the name because he does not own the trademark.
- João must rebrand his business, losing customers and brand recognition.
Scenario With Trademark Registration:
- João registers “Estilo Único” as a trademark with INPI.
- No other company in the clothing industry can legally use this name.
- João’s brand gains legal exclusivity and market value.
- He can sell, license, or franchise his trademark in the future.
How to Register a Trademark in Brazil
To secure exclusive rights over a brand, business owners should register their trademarks with INPI.
Step 1: Conduct a Trademark Search
Before applying, check if the name is available using INPI’s trademark database.
- If a similar mark already exists, consider modifying the name.
Step 2: Select the Trademark Classification
Trademarks are categorized based on Nice Classification (NCL).
- Ensure you choose the correct class for your industry.
Step 3: Submit the Application
- File the application via INPI’s e-INPI system.
- Pay the application fee (BRL 355 for small businesses, BRL 1,415 for large corporations).
Step 4: Trademark Publication and Opposition Period
- INPI publishes the application in the Official Gazette.
- Third parties have 60 days to file oppositions.
Step 5: INPI Examination and Approval
- If no opposition occurs, INPI conducts a substantive examination.
- If the application is approved, the applicant must pay the final registration fee.
Step 6: Trademark Registration Certificate
- INPI issues the Trademark Registration Certificate.
- The trademark is valid for 10 years, renewable indefinitely.
Can a Business Have Both a Trade Name and a Registered Trademark?
Yes! In fact, most successful businesses register both.
- The trade name is used for legal business operations (CNPJ, taxes, contracts).
- The trademark protects the brand identity in the market.
Example:
A company is legally registered as “Tech Solutions LTDA” (trade name) but operates under the brand “TechPro”, which is a registered trademark.
Common Myths About Trade Names and Trademarks
- “If I have a trade name, no one else can use it.” – ❌ False! Without a trademark, others can legally use a similar name.
- “Trademark registration is unnecessary for small businesses.” – ❌ False! Any business can benefit from exclusive rights.
- “A domain name registration protects my brand.” – ❌ False! Owning a website domain does not prevent others from registering the same name as a trademark.
- “Trademark registration is automatic with business registration.” – ❌ False! A CNPJ does not provide trademark protection.
Conclusion
Understanding the difference between a trade name and a registered trademark is essential for business owners who want to protect their brand identity and avoid legal disputes.
- A trade name is only for legal identification and does not provide exclusive rights.
- A registered trademark ensures nationwide exclusivity and prevents competitors from using a similar name.
For long-term brand security, businesses should register their trademark with INPI to guarantee legal protection, market exclusivity, and brand recognition.
