Supreme Court recognized the interest of individual participant in LLC in terminating the legal protection of trademark

According to the procedure established in paragraph 1 and paragraph 2 of Art. 1513 of the Civil Code of the Russian Federation [1], the granting of legal protection to a trademark (service mark) may be challenged by an interested person by filing an objection against such granting to Rospatent.

The absence of a legal definition of an "interested party" leads to litigation related to the refusal of Rospatent to satisfy the objection on the grounds of the applicant's lack of interest.

Thus, Rospatent refused to satisfy the individual founder of the company in satisfying the objection to granting legal protection to a trademark confusingly similar to the key element of the trade name of this company and the identical key element in English. He motivated by the fact that an individual who does not conduct homogeneous activities as an individual entrepreneur cannot have an economic / commercial interest. The fact of participation in the creation of society is not a basis for opposing the rights to a means of individualization belonging to society, because the exclusive right to a company name arises at the time of registration of a legal entity in the Unified State Register of Legal Entities and cannot be granted for use or alienated in favor of another person.

However, the court, when considering case N SIP-932/2019 [2], recognized the decision of Rospatent as illegal. Referring to the legal position of the Supreme Arbitration Court of the Russian Federation [3], the court noted that the norm of paragraph 2 of Art. 1513 of the Civil Code of the Russian Federation does not specify the concept of “interested person” and does not contain restrictions on the types of interest, in connection with which any person who proves the existence of an actual interest in terminating the legal protection of a trademark can be recognized as interested.

The court found that the trademark owner, also being the founder of the company and at the same time its leader, took a set of actions to transfer all the activities of the company, including the client base, to himself, which indicates an abuse of the right on his part. Under such circumstances, the court agreed with the individual founder of the company that he had an interest in challenging the granting of legal protection to a trademark, Rospatent's decision was canceled on the basis of Art. 10 of the Civil Code of the Russian Federation, recognizing the actions for registering a trademark as unfair.

It is noteworthy that the IP Court board [4] did not agree with the conclusion of the court of first instance that there were grounds for applying Art. 10 of the Civil Code of the Russian Federation, referring to the fact that bad faith cannot be assessed administratively. In addition, she noted that the chosen method of protection would not restore the applicant's rights as a member of the company, but he could demand compensation for damages and exclusion of the unscrupulous member from the company.

However, the Supreme Court of the Russian Federation canceled the decision of the colleagues, left the decision of the court of first instance in force, arguing as follows: recognition of the actions of a person for registering a trademark as an abuse of the right is impossible within the framework of consideration of a separate claim, but is considered in the case of challenging the decision of Rospatent made as a result of consideration of the relevant objection; the choice of the method of protection of the right belongs to the applicant, whose interest in this case is established.

Sources:

1."Civil Code of the Russian Federation (Part Four)" dated December 18, 2006 N 230-FZ (as amended on December 5, 2022) // ConsultantPlus SPS

2.Decision of the Court for Intellectual Property Rights dated September 14, 2020 in case No. SIP-932/2019 // SPS "ConsultantPlus"

3.Resolution of the Presidium of the Supreme Arbitration Court of the Russian Federation of April 3, 2012 N 16133/11 in case N A40-4717 / 11-67-39 // ConsultantPlus ATP

4.Resolution of the Presidium of the Court for Intellectual Property Rights dated March 26, 2021 N C01-1651/2020 in case N SIP-932/2019 // ConsultantPlus SPS