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Who is a person concerned?

June 5, 2013

Today no large company does without a trademark. For all that a designation is often registered at once for the entire set of goods and services and is used just for their part. Such state of affairs can prevent registration of another similar or identical designation in relation to homogeneous goods. To regulate such situations the Civil Code of RF provides for article 1486, stipulating an opportunity to cancel trademarks due to their being unused. According to this article, an application for a trademark cancellation can be filed by any person concerned, but the criteria of interest are controversial.

To understand the essence of a problem let us remind of the issue history. Several years ago the applications for marks cancellation due to being  unused were considered by the Chamber for Patent Disputes that regarded any persons who paid a state fee for an application consideration, to be persons concerned. Company Zuykov & partners was one of many legal firms that when filing applications for the sake of their appointers' interests, drawn them up from their behalf. For all that we have become the first organization that was rejected the filed applications consideration in a year after coming into force of the 4th part of the Civil Code of RF, because Zuykov & partners is not a person concerned.

In 2009 (a year later after the 4th part of the Civil Code of RF came into force) Rospatent came to a conclusion that to file an application for a mark cancellation due to its being unused, a company-applicant was necessary first and foremost to prove its interest. In accordance with an information letter released by the office, henceforth only those companies were recognized to be the persons concerned who either filed an international application for the similar or identical designations registration, or who were manufacturers of the goods with similar marks. In essence, Rospatent determined that to prove one's interest in an unused designation cancellation, a company was to provide an evidence that it had manufactured infringing merchandise with a similar mark.

Thus, after the case consideration of trademark "Strizament"  the decision of the Office was contested and the Supreme Arbitration Court ruled that the criterion of interest would be the fact of the homogeneous goods manufacture by a company and an application filing for a similar trademark registration. Thus, today it can be said with confidence that a court decree of the Supreme Arbitration Court on a concrete case determines insufficiently precisely the notion of interest and courts have started construing it in a different way. Many courts have decided for themselves that in accordance with the ruling of the Supreme Arbitration Court, only the companies that are manufacturers of the goods may file applications for loss of effect of unused trademarks. For all that our country's (and many other countries') realia are such that many firms – owners of the trademarks don't have productive capacities and are not manufacturers in the true sense of this word. So, for example, cases are not rare when a mark owner is one company and it is used by another organization. Relations of these two legal entities are regulated by a contract as a rule. Besides that, many companies order goods in China or in other countries, and courts reject their application consideration on loss of effect of the trademarks due to their being unused, motivating its decision by the fact that a plaintiff is not a manufacturer and therefore is not a person concerned, and in this case the persons concerned are the Chinese manufacturers.

Premised on such approach, to draw up an application that took just 1 sheet earlier, now it is needed to gather a huge number of the documents and proofs, for all that not many companies are ready to provide them.

But why actually the judge's attention was paid to a criterion on interest? The matter is the marks cancellation due to non-use became in due time a certain means of racketeering – "greenmail" and it was necessary to stop this activity. In essence, any company had an opportunity to file an application for contestation registration of unused designations and the burden of proof, according to our law, is imposed on a respondent. It means that an owner of the marks had to deflect attention away from the work and expend energy and time to prove the fact of a designation use owned by it. In due time the applications for cancellation of a group of marks were filed against the operation of trademark Lavazza. An applicant contested the legal protection of several tens trademarks, and a right holder, in his/her turn, having proved the use of five marks, abandoned the struggle for the rest ones, because that work took too much time. For all that, a company that filed an application had had nothing to do with production of tea or coffee, but the problems were created for the Italian brand. Precisely because of such cases they started paying attention to the criterion of interest.

Today the administrative- judicial system, in essence, has stepped over from one extreme aspect to the other one. If earlier anyone could contest a mark registration, then now it can't be done even by those companies that are truly interested in exemption from an unused designation. So, having made the criteria of interest to be more rigorous, the judicial authorities put applicants into an embarrassing situation, when nobody knows who is a person concerned? The same judges take conflicting decisions in respect of absolutely the same circumstances, as a result the judicial system ceases to be focused on the legitimate interests protection of the business and laws observance. The antimonopoly principle, declared by the government, of mandatory use of a trademark as a criterion of its protection ceases to function.

But a legislator who wrote the 4th part of the Civil Code who had wanted to state in the law that only a manufacturer of the goods or services could address with an application on loss of effect of a trademark due to being unused, what for was it needed to specify some person "concerned"? In all appearances, a broader sense was put into this notion, that today is "narrowed" intentionally  by courts. The first dismal results of such approach are already notable: the quantity of considerations of applications on the trademarks non-use has decreased (from 2500 to 700 per year). Those people who are truly interested in cancellation of unused marks can't defend their interests because they are not regarded to be persons concerned according to the criteria adopted by the courts. For example, a founder of a company -manufacturer is not a person concerned, courts reject a suit, advising that the very manufacturer rather than a founder shall file a legal action.

The main goal of the criterion of interest change was countermeasure to the trademark piracy. But I'm sure that the very criterion shall be maximally simple  – a company shall prove that its goal – is not abuse of its rights and raising difficulties to business conducting of a right holder of a disputable mark, but upholding of its legitimate interests and a wish to use a not used designation in the economic activity.

For me it is evident that a person concerned is a person who will provide n evidence to court that, for example:

  • he/she is ready to organize deliveries of homogeneous goods to the Russian market  and has filed an application for a similar designation;
  • right holder has submitted claims or filed a suit to an applicant on prohibition of an unused mark use;
  • right holder of an unused mark has filed an objection on loss of effect of an applicant's trademark etc.

Courts need to soften requirements to an interest, only in this case this criterion will meet the interests of the entrepreneurs and the norms of the Civil Code, that means the antimonopoly instrument for monopoly divestiture for an unused trademark will function. And the most important thing is that the Supreme Arbitration Court of RF or at least the Intellectual Property Rights Court shall adopt the information letter that will determine: who is a person concerned?

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Sergey Zuykov

Sergey Zuykov

Managing Partner / Patent Attorney of the Russian Federation / Eurasian Patent Attorney