OGH on the misleading nature of a company name

Mar 4, 2022 Benn-Ibler Rechtsanwälte

If companies are located in the same place or the same municipality, the distinctiveness as a question of the concrete capacity to mislead is not to be examined according to Section 18 para 2 of the Austrian Commercial Code (Unternehmensgesetzbuch, UGB), but only according to Sec. 29 UGB.

In the present case, three companies with similar company wording and with their registered office in the same town or municipality were registered in the company register. In the applicant’s general meeting, it was decided to change the company name, specifically to omit the component 'consulting'. The court of first instance rejected the company's application for registration of the change of the company name, stating that the changed company name was misleading within the meaning of Sec. 18 para 2 UGB, because the deletion of the clarifying addition 'Consulting' gave the incorrect impression that the applicant was also active in the same field of business as the companies at the same registered office. The appellate court upheld this decision.

The Austrian Supreme Court (Oberster Gerichtshof, OGH) considered the following: Pursuant to Sec. 18 para 1 UGB, the company name must be suitable for identifying the entrepreneur and have distinctive character. Sec. 18 UGB applies not only to newly formed companies, but also to company changes.

Distinctiveness means that the company name is capable of evoking in readers and listeners the association with a very specific company among many others.

Distinctiveness from other companies in the sense of the exclusivity of the company under Sec. 29 UGB must be separated from the distinctive character to be assessed abstractly according to Sec. 18 para 1 UGB. This is because only Sec. 29 UGB specifically focuses on the confusability with companies already registered in the same place or in the same municipality, and with regard to the concrete capability to mislead, only Sec. 29 UGB is to be examined as lex specialis in the case of companies within the same place or the same municipality.

The prohibition of misleading statements in Sec. 18 para 2 UGB is violated if a not inconsiderable part of the public addressed can be given an incorrect idea about the company by its name.

For the misleading statement to be objectionable, it must also be substantial. The materiality threshold ensures that information of little relevance under competition law or information which is only of minor importance for the economic decision or the target public is not classified as misleading. However, the distinctiveness of companies within the same place or the same municipality are only to be examined according to Sec. 29 UGB as lex specialis. The procedural "rough grid" of Sec. 18 para 2 second sentence UGB in terms of the materiality threshold does not apply there. In the present case, there was sufficient distinctness.

OGH 6 Ob 128/21y (15.11.2021)