Right to create a trade name using specific terms
RULING Nº 139/04
10 of March of 2004
The Constitutional guarantee of the right to private property as set out in Article 62.1 of the Constitution includes not only proprietas rerum (limited rights in rem, intellectual property and industrial property) but also such other rights as the right to credit and "social rights" (thus including shares, such as shares in companies or business associations). Irrespective of the exact nature of the right to a trade name as protected by the Constitution (and specifically, regardless of whether such protection derives solely from property right or is intended to protect the identity of legal persons), it is recognised that Constitutional protection of property rights also covers the right to a trade name (as a "distinctive trade emblem") that enables the holder to be identified and embodies specific commercial use interests). By the same token, it is acknowledged that protecting property rights or the right of access to property also embraces the right to obtain or "acquire" a trade name.
The right of appropriation - or the right of access to property - is of a different nature from the rights, freedoms and safeguards set out in the Constitution. To that extent it lacks the legal force conferred by Article 18 of the Constitution.
The instant case concerns practical verification of the constitutionality of the provision on the "General system of financial institutions and finance companies", which is intended to protect the "veracity of trade names" and therefore only allows bodies officially recognised as financial institutions or finance companies to include in their trade or company name or to use in the context of their operations "expressions which suggest the specific activities of credit institutions or finance companies, such as 'bank', 'banker', 'credit', 'deposit', 'financial leasing', 'leasing' and 'factoring'". According to the applicant, the right to private property secured under Article 62 of the Constitution is restricted by this provision, and this right to ownership includes the right to a trade or company name as a right similar to the rights, freedoms and guarantees set out in the Constitution, even though the above-mentioned restriction does not stem from any explicit Constitutional provision and is not confined to what is necessary in order to safeguard other rights or interests protected by the Constitution.
The point at issue is not the right to retain ownership of the trade name - or the protection of confidence in or even of the right to a previous trade name - but more specifically the right to create such a name by using specific terms. The fact is that the option of extending constitutional protection of property rights to the creation of a trade name is insufficient to answer the question whether the right to create the trade name can enjoy the specific protection granted to rights, freedoms and guarantees, particularly by the rules set out in Article 18 of the Constitution.
The Constitutional Court held that the provision in question was not unconstitutional in terms of violating the proportionality rule.
First of all, the restriction on non-banking institutions is the corollary of the obligation on banking institutions to use the same designations. In this case, the veracity principle (which has a quasi-absolute overriding effect in Portuguese law) applicable to company names, which is generally used to promote the defence and protection of consumers and other economic operators, is a means of promoting the consumer's right to information, helping the State and the Bank of Portugal to accomplish their specific duties, and also protecting citizens' savings. The restriction on the creation of trade names by non-banking institutions is therefore an appropriate means of pursuing the desired objectives.
Secondly, there is no guarantee that other restrictive or non-restrictive measures would be equally effective in protecting the veracity principle, particularly since this solution is based on traditions rooted in both Portuguese and other national legal systems and is even in line with the approach adopted by Community law (see Article 15 of Directive 2000/12/EC of the European Parliament and the Council of 20 March 2000 relating to the taking up and pursuit of the business of credit institutions, Official Journal no. L-126 of 26 May 2000, pp. 1-59).
Thirdly, in connection with "fair measures" and proportionality in the strict sense of the term, it should be noted not only that certainty, security, clarity and veracity are essential values for the official names of banking institutions, but also that the obligation on some of these institutions to include specific terms in their company names and the prohibition on others of including the same terms in their company names clearly benefit both trading certainty and security and consumer information and protection.