Cancellation and Deletion of Trade Names in Saudi Arabia: Grounds, Procedures and Legal Protection

A trade name is a commercial property right, but it may be cancelled or deleted for failure to comply with certain statutory obligations. In this article Shehab Alsaleh Lawyers & Legal Advisors explains when a trade name may be cancelled or deleted, to raise awareness among traders and companies in Saudi Arabia.

1. Cancellation of a Trade Name Reservation

Article 12 of the Trade Names Law provides that the Registrar shall, on its own initiative or at the request of an interested party, cancel a trade name reservation in either of the following cases:

1. If the name is contrary to public order or morals, is misleading, or is prohibited under the relevant laws.
2. If the reservation period expires without being extended.

The grounds for cancellation therefore include:

1. The name is contrary to public order and morals in Saudi Arabia.
2. The name misleads consumers.
3. The statutory reservation period of (sixty) days from the Registrar’s acceptance has expired without extension.
4. The name is prohibited.

Article 7 of the Law lists the prohibited trade names, namely 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.

2. Deletion of a Registered Trade Name

Article 13 of the Law provides that the Registrar shall, on its own initiative or at the request of an interested party, delete the registration of a trade name in any of the following cases:

1. If it is contrary to public order or morals, is misleading, or is prohibited under the relevant laws.
2. If a final decision or judgment orders its deletion.
3. If the trader’s Commercial Registration is cancelled.

The Registrar notifies the person whose trade name has been deleted as specified in the Regulations.

Where a trade name is deleted because it is contrary to public order or morals, misleading or prohibited, or under a final decision or judgment, the trader must register a replacement trade name within (30) days. If the trader fails to do so, the Registrar deletes the trade name and registers in its place, as the case may be:

1. The personal name of the trader, if a natural person.
2. The Commercial Registration number of the trader, if a legal person.

Where the trader’s Commercial Registration is cancelled, the Registrar reserves the trader’s trade name for (sixty) days. The trader may request an extension of the reservation and may use or dispose of the name after registering it in the Commercial Register.

The Registrar notifies the owner of the cancellation or deletion by:

1. Text message to the registered mobile number.
2. The registered email address.
3. Any account registered in government electronic systems.
4. Licensed postal services to the establishment’s address in the registration application or license, or the National Address; notification is proven by a delivery notice from the postal service provider.

How Can Shehab Alsaleh Law Firm Help You Protect and Manage 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.