Trade Names in Saudi Arabia: A Comprehensive Guide to Registration and Legal Protection

Trade names play a major role in distinguishing businesses from one another and protecting traders against infringement of their establishments. The 21st century has seen trade names whose fame has spread far beyond their home countries, such as Amazon, Alibaba and Apple. Because trade names are an intangible element of a business and one of the most important industrial property rights, and are now valued in the millions, Saudi Arabia issued the new Trade Names Law of 1446H (Royal Decree No. M/83) with important changes to strengthen protection. In this article Shehab Alsaleh Lawyers & Legal Advisors explains the legal framework governing trade names.

1. The Concept of a Trade Name

Article 1 of the Law defines a trade name as the name a trader uses in conducting business to distinguish itself from other traders.

Every trader must adopt a trade name and register it in the Commercial Register. A trade name may also be reserved temporarily with the Registrar without being registered; the Implementing Regulations set the reservation period and its conditions.

2. How Is a Trade Name Formed?

Article 4 of the Law and Articles 2, 3 and 4 of the Implementing Regulations set out the rules for forming a trade name:

  1. A trade name is derived from the trader’s personal name, a distinctive name, or both, and consists of Arabic or Arabized words, Arabic letters or numerals, or a combination of them.
  2. A trade name made of numerals may not exceed (nine) digits.
  3. A trade name may be reserved or registered in Arabic or English.
  4. A trade name reserved or registered in English must be written in English letters accompanied by the name in Arabic letters.
  5. A foreign investor may reserve or register its trade name provided it is accompanied by the name in Arabic letters.
  6. A trader’s personal name is reserved or registered exactly as the three- or four-part name shown on the personal ID.
  7. A family name may be reserved or registered as a trade name if it is composed of two or more family names, in accordance with the Law, provided the beneficiaries carry the same family name on their IDs.
  8. Ownership of a family name may be transferred only to persons carrying the same family name on their IDs.
  9. “Saudi Arabia” or the names of cities, regions or public places in the Kingdom may be reserved or registered subject to the following:
    • The name must not be identical or similar to that of a government entity or equivalent body.
    • The name must not be the main component or essential element of the trade name.
    • The trader must undertake not to harm, distort or damage the reputation of the Kingdom, its cities, regions or public places.
    • Approval of the Royal Commission for Makkah City and Holy Sites or the Madinah Region Development Authority, as applicable, is required to use the names “Makkah” or “Madinah”.

3. Prohibited Trade Names

Article 7 of the Law prohibits reserving or registering a trade name that is contrary to public order or morals, misleading, or prohibited under the relevant laws, including where the name:

  1. Is similar to a trade name already reserved or registered in the Commercial Register, whatever the activity. The Regulations set the criteria for similarity and distinguishing features.
  2. Is similar to a globally well-known trade name or trademark, or to a trademark registered or well-known in the Kingdom, unless the trademark is owned by the applicant.
  3. Carries a political, military or religious meaning, connotation or content.
  4. Is similar to a name, honorary emblem or symbol of any local, regional or international organization or one of its institutions.

4. Criteria for Similarity Between Trade Names

The Law protects registered and well-known trade names. Article 5 of the Regulations provides that a trade name is similar to another if its spelling resembles a reserved, registered or globally well-known trade name, according to criteria set by the Registrar, including:

  1. Identical spelling with a different word order.
  2. Identical spelling with a one-letter difference.
  3. Identical spelling with the addition, deletion or change of pronouns, dual or plural forms, or the definite article.
  4. A numeral or letter pronounced the same as a word, or vice versa.

The Registrar must reject an application if the name is similar to another reserved or registered trade name, and the Ministry of Commerce is required to publish and regularly update a list of the most common words that are not considered distinctive.

How Can Shehab Alsaleh Law Firm Help You Register and Protect Your Trade Name?

Many traders choose a sentimental name without checking its legal validity. This is where we come in:

  1. We search the Ministry of Commerce and Saudi Authority for Intellectual Property databases to confirm the name is not reserved or confusingly similar to another name.
  2. We check the name’s compliance with the regulations and word it to be protectable, recommending a “distinctive” rather than “descriptive” name, which is legally stronger in a dispute and easier to register as a trademark later.
  3. We complete the forms accurately on the Saudi Business Center or Ministry of Commerce platform and select the activity precisely (since the trade name is tied to the activity).
  4. We deal with special authorities where the name requires approval (such as “Makkah”, “Engineer” or “Medical”), preparing the files and obtaining no-objection letters.
  5. If the Ministry rejects the name as “misleading” or “similar”, we draft a legal memorandum explaining the differences and the client’s entitlement and file a request for reconsideration.

A trade name is an investment asset that needs ongoing legal management:

  • Franchise agreements: if you wish to license your name to others to operate branches, we draft franchise agreements that precisely define the rights of use and the conditions for protecting its reputation.
  • Mergers and acquisitions: when a company is sold or merged, we oversee the transfer of the trade name to ensure goodwill passes properly to the new owner.
  • Change of legal form: when a sole establishment converts into a company, we amend the name registration to match the new form (for example, adding “LLC”).

Protection (Defense and Litigation)

  • Monitoring infringements and sending formal notices: before going to court, we send the infringer a formal notice demanding that it stop using the name immediately and pay compensation; the matter is often resolved at this stage.
  • Litigation before the commercial courts: if the infringement continues, we file a trade name cancellation or unfair competition claim and seek compensation for damage to the company’s reputation.
  • Protecting the name as a trademark: beyond the Commercial Register, we register the name as a trademark with the Saudi Authority for Intellectual Property, since trademark protection is stronger and broader (locally and internationally) than trade name protection alone.

We are here to help you at every stage of registering, protecting and managing your trade name. Do not hesitate to contact Shehab Alsaleh Law Firm through our contact page.